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SECURITIESAND EXCHANGE COMMISSION

Washington, D.C.20549

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FORM10-Q

(Mark One)

|        |                                                                                           |
|--------|-------------------------------------------------------------------------------------------|
|   | **QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934** |

|        |                                               |
|--------|-----------------------------------------------|
|   | For the quarterly periodended: March 31, 2004 |

OR

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

|        |                                                                                                                                                                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | For the transition periodfrom                      to                     |

Commission file number 333-23451

REV HOLDINGS LLC

(Exact name of registrant as specified in itscharter)

|                                                              |  |                                   |  |  |  |  |
|--------------------------------------------------------------|--|-----------------------------------|--|--|--|--|
| **Delaware**                                                 |  | **13-3933701**                    |
| (Stateor other jurisdiction of incorporation ororganization) |  | (I.R.S.EmployerIdentificationNo.) |
| **35 East62nd Street, New York, NewYork**                    |  | **10021**                         |
| (Addressof principal executive offices)                      |  | (ZipCode)                         |
|                                                              |

Registrant'stelephone number, including area code: **212-572-8600**

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

Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule12b-2 of the Securities Exchange Act of 1934). Yes       No   X  

As of March 31, 2004, the registrant'smembership interest is held by Revlon Holdings LLC.

Total Pages –37

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REV HOLDINGS LLC ANDSUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (dollarsinmillions)

|                                                                   |  |              |            |                 |  |        |          |         |  |  |
|-------------------------------------------------------------------|--|--------------|------------|-----------------|--|--------|----------|---------|--|--|
| **ASSETS**                                                        |  | March31,2004 |            | December31,2003 |
| Currentassets:                                                    |  |         | (Unaudited | )          |  |   |     |    |
| Cashand cashequivalents                                           |  | $            | 53.8       |            |  | $      | 56.5     |    |
| Tradereceivables, less allowances of $18.3 and $19.4,respectively |  |         | 154.6      |            |  |   | 182.5    |    |
| Inventories                                                       |  |         | 151.8      |            |  |   | 142.7    |    |
| Prepaidexpenses andother                                          |  |         | 50.7       |            |  |   | 34.0     |    |
| Totalcurrent assets                                               |  |         | 410.9      |            |  |   | 415.7    |    |
| Property,plant and equipment,net                                  |  |         | 128.3      |            |  |   | 132.1    |    |
| Otherassets                                                       |  |         | 159.6      |            |  |   | 158.4    |    |
| Goodwill,net                                                      |  |         | 186.1      |            |  |   | 186.1    |    |
| Totalassets                                                       |  | $            | 884.9      |            |  | $      | 892.3    |    |
| **LIABILITIESAND MEMBER'SDEFICIENCY**                             |  |         |       |            |  |   |     |    |
| Currentliabilities:                                               |  |         |       |            |  |   |     |    |
| Short-termborrowings – thirdparties                         |  | $            | 29.8       |            |  | $      | 28.0     |    |
| Advancesfromaffiliate                                             |  |         | 28.4       |            |  |   | 23.9     |    |
| Accountspayable                                                   |  |         | 95.9       |            |  |   | 97.4     |    |
| Accruedexpenses andother                                          |  |         | 318.7      |            |  |   | 329.2    |    |
| Totalcurrentliabilities                                           |  |         | 472.8      |            |  |   | 478.5    |    |
| Long-termdebt – thirdparties                                |  |         | 1,122.1    |            |  |   | 1,803.8  |    |
| Long-termdebt –affiliates                                   |  |         | —    |            |  |   | 146.2    |    |
| Otherlong-termliabilities                                         |  |         | 302.6      |            |  |   | 306.3    |    |
| Member'sdeficiency:                                               |  |         |       |            |  |   |     |    |
| Member'sinterest                                                  |  |         | —    |            |  |   | —  |    |
| Additionalpaid-in-capital                                         |  |         | 896.1      |            |  |   | 370.0    |    |
| Accumulateddeficit                                                |  |         | (1,782.2   | )          |  |   | (2,086.3 | )  |
| Deferredcompensation                                              |  |         | (3.6       | )          |  |   | (4.2     | )  |
| Accumulatedother comprehensiveloss                                |  |         | (122.9     | )          |  |   | (122.0   | )  |
| Totalmember'sdeficiency                                           |  |         | (1,012.6   | )          |  |   | (1,842.5 | )  |
| Totalliabilities and member'sdeficiency                           |  | $            | 884.9      |            |  | $      | 892.3    |    |
|                                                                   |

SeeAccompanying Notes to Unaudited Consolidated Condensed FinancialStatements.

1

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REV HOLDINGS LLC AND SUBSIDIARIESUNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (dollarsinmillions)

|                                            |  |                            |        |         |  |        |         |         |  |  |
|--------------------------------------------|--|----------------------------|--------|---------|--|--------|---------|---------|--|--|
|                                       |  | ThreeMonths Ended March31, |
|                                       |  | 2004                       |        | 2003    |
| Netsales                                   |  | $                          | 308.4  |    |  | $      | 292.0   |    |
| Cost ofsales                               |  |                       | 117.1  |    |  |   | 111.5   |    |
| Grossprofit                                |  |                       | 191.3  |    |  |   | 180.5   |    |
| Selling, generaland administrativeexpenses |  |                       | 171.9  |    |  |   | 184.2   |    |
| Restructuring(benefit)costs                |  |                       | (0.7   | )  |  |   | 0.5     |    |
| Operatingincome(loss)                      |  |                       | 20.1   |    |  |   | (4.2    | )  |
| Otherexpenses (income):                    |  |                       |   |    |  |   |    |    |
| Interestexpense                            |  |                       | 45.9   |    |  |   | 43.9    |    |
| Interestincome                             |  |                       | (1.0   | )  |  |   | (0.5    | )  |
| Amortizationof debt issuancecosts          |  |                       | 2.6    |    |  |   | 2.0     |    |
| Foreigncurrency (gains) losses,net         |  |                       | (1.4   | )  |  |   | 0.3     |    |
| Loss on earlyextinguishment ofdebt         |  |                       | 32.6   |    |  |   | — |    |
| Gain onissuance of subsidiarystock         |  |                       | (363.6 | )  |  |   | — |    |
| Miscellaneous,net                          |  |                       | 0.1    |    |  |   | 0.4     |    |
| Other(income) expenses,net                 |  |                       | (284.8 | )  |  |   | 46.1    |    |
| Income(loss) before incometaxes            |  |                       | 304.9  |    |  |   | (50.3   | )  |
| Provisionfor incometaxes                   |  |                       | 0.8    |    |  |   | 0.9     |    |
|                                       |  |                       |   |    |  |   |    |    |
| Netincome(loss)                            |  | $                          | 304.1  |    |  | $      | (51.2   | )  |
|                                            |

SeeAccompanying Notes to Unaudited Consolidated Condensed FinancialStatements.

2

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REV HOLDINGS LLC AND SUBSIDIARIESUNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF MEMBER'SDEFICIENCY AND COMPREHENSIVE INCOME (LOSS) (dollars inmillions)

|                                                       |  |                            |        |                    |  |                       |          |                                         |  |                          |        |         |  |        |        |         |  |        |          |         |  |  |
|-------------------------------------------------------|--|----------------------------|--------|--------------------|--|-----------------------|----------|-----------------------------------------|--|--------------------------|--------|---------|--|--------|--------|---------|--|--------|----------|---------|--|--|
|                                                  |  | AdditionalPaid-In- Capital |        | AccumulatedDeficit |  | Deferred Compensation |          | AccumulatedOther Comprehensive Loss (a) |  | TotalMember's Deficiency |
| Balance, January 1,2003                               |  | $                          | 316.2  |               |  | $                     | (1,919.1 | )                                  |  | $                        | (6.4   | )  |  | $      | (132.7 | )  |  | $      | (1,742.0 | )  |
| Amortizationof deferredcompensation                   |  |                       |   |               |  |                  |     |                                    |  |                     | 0.6    |    |  |   |   |    |  |   | 0.6      |    |
| Comprehensiveloss:                                    |  |                       |   |               |  |                  |     |                                    |  |                     |   |    |  |   |   |    |  |   |     |    |
| Netloss                                               |  |                       |   |               |  |                  | (51.2    | )                                  |  |                     |   |    |  |   |   |    |  |   | (51.2    | )  |
| Currencytranslationadjustment                         |  |                       |   |               |  |                  |     |                                    |  |                     |   |    |  |   | 2.2    |    |  |   | 2.2      |    |
| Netloss on foreign currency forward exchangecontracts |  |                       |   |               |  |                  |     |                                    |  |                     |   |    |  |   | (0.4   | )  |  |   | (0.4     | )  |
| Totalcomprehensiveloss                                |  |                       |   |               |  |                  |     |                                    |  |                     |   |    |  |   |   |    |  |   | (49.4    | )  |
| Balance,March 31,2003                                 |  | $                          | 316.2  |               |  | $                     | (1,970.3 | )                                  |  | $                        | (5.8   | )  |  | $      | (130.9 | )  |  | $      | (1,790.8 | )  |
| Balance,January 1,2004                                |  | $                          | 370.0  |               |  | $                     | (2,086.3 | )                                  |  | $                        | (4.2   | )  |  | $      | (122.0 | )  |  | $      | (1,842.5 | )  |
| DebtReduction Transactions (See Note 8)(b)            |  |                       | 464.1  |               |  |                  |     |                                    |  |                     |   |    |  |   |   |    |  |   | 464.1    |    |
| Amortizationof deferredcompensation                   |  |                       |   |               |  |                  |     |                                    |  |                     | 0.6    |    |  |   |   |    |  |   | 0.6      |    |
| Capitalcontribution from affiliate (See Note8)        |  |                       | 62.0   |               |  |                  |     |                                    |  |                     |   |    |  |   |   |    |  |   | 62.0     |    |
| Comprehensiveincome:                                  |  |                       |   |               |  |                  |     |                                    |  |                     |   |    |  |   |   |    |  |   |     |    |
| Netincome (See Note 8)(b)                             |  |                       |   |               |  |                  | 304.1    |                                    |  |                     |   |    |  |   |   |    |  |   | 304.1    |    |
| Currencytranslationadjustment                         |  |                       |   |               |  |                  |     |                                    |  |                     |   |    |  |   | (1.6   | )  |  |   | (1.6     | )  |
| Netloss on foreign currency forward exchangecontracts |  |                       |   |               |  |                  |     |                                    |  |                     |   |    |  |   | 0.7    |    |  |   | 0.7      |    |
| Totalcomprehensiveincome                              |  |                       |   |               |  |                  |     |                                    |  |                     |   |    |  |   |   |    |  |   | 303.2    |    |
| Balance,March 31,2004                                 |  | $                          | 896.1  |               |  | $                     | (1,782.2 | )                                  |  | $                        | (3.6   | )  |  | $      | (122.9 | )  |  | $      | (1,012.6 | )  |
|                                                       |

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| (a) | Accumulatedother comprehensive income (loss) includes net unrealized losses onrevaluations of foreign currency forward exchange contracts of $0.4 and$0.4 as of March 31, 2004 and 2003, respectively, net realized lossesof $0.3 on foreign currency forward exchange contracts as of March 31,2004, cumulative net translation losses of $10.1 and $16.9 as of March31, 2004 and 2003, respectively, and adjustments for the minimumpension liability of $112.1 and $113.6 as of March 31, 2004 and 2003,respectively. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | The changes inAdditional Paid-in-Capital and a portion of Accumulated Deficit are aresult of the consummation of the Debt Reduction Transactions. (SeeNote 8). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

See Accompanying Notes to UnauditedConsolidated Condensed Financial Statements.

3

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REV HOLDINGS LLC AND SUBSIDIARIESUNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (dollarsinmillions)

|                                                                                                   |  |                            |        |         |  |        |         |         |  |  |
|---------------------------------------------------------------------------------------------------|--|----------------------------|--------|---------|--|--------|---------|---------|--|--|
|                                                                                              |  | ThreeMonths Ended March31, |
| **CASH FLOWS FROMOPERATINGACTIVITIES:**                                                           |  | 2004                       |        | 2003    |
| Netincome(loss)                                                                                   |  | $                          | 304.1  |    |  | $      | (51.2   | )  |
| Adjustmentsto reconcile net income (loss) to net cash (used for) provided byoperatingactivities:  |  |                       |   |    |  |   |    |    |
| Depreciationandamortization                                                                       |  |                       | 27.0   |    |  |   | 29.6    |    |
| Debtdiscountamortization                                                                          |  |                       | 0.8    |    |  |   | 0.8     |    |
| Loss onearly extinguishment ofdebt                                                                |  |                       | 32.6   |    |  |   | — |    |
| Gain onissuance of subsidiarystock                                                                |  |                       | (363.6 | )  |  |   | — |    |
| Changein assets and liabilities, net of acquisitions anddispositions:                             |  |                       |   |    |  |   |    |    |
| Decrease intradereceivables                                                                       |  |                       | 28.4   |    |  |   | 13.4    |    |
| Increaseininventories                                                                             |  |                       | (9.0   | )  |  |   | (21.9   | )  |
| Increasein prepaid expenses and other currentassets                                               |  |                       | (10.6  | )  |  |   | (10.1   | )  |
| (Decrease)increase in accountspayable                                                             |  |                       | (1.8   | )  |  |   | 19.7    |    |
| Decreasein accrued expenses and other currentliabilities                                          |  |                       | (22.1  | )  |  |   | (20.3   | )  |
| Purchaseof permanentdisplays                                                                      |  |                       | (20.6  | )  |  |   | (21.0   | )  |
| Other,net                                                                                         |  |                       | (5.3   | )  |  |   | (4.3    | )  |
| Netcash used for operatingactivities                                                              |  |                       | (40.1  | )  |  |   | (65.3   | )  |
| **CASHFLOWS FROM INVESTINGACTIVITIES:**                                                           |  |                       |   |    |  |   |    |    |
| Capitalexpenditures                                                                               |  |                       | (2.7   | )  |  |   | (4.7    | )  |
| Netcash used for investingactivities                                                              |  |                       | (2.7   | )  |  |   | (4.7    | )  |
| **CASHFLOWS FROM FINANCINGACTIVITIES:**                                                           |  |                       |   |    |  |   |    |    |
| Net increase inshort-term borrowings – thirdparties                                         |  |                       | 1.8    |    |  |   | 0.7     |    |
| Proceeds from theissuance of long-term debt – thirdparties                                  |  |                       | 163.8  |    |  |   | 16.3    |    |
| Repayment oflong-term debt – thirdparties                                                   |  |                       | (207.4 | )  |  |   | (17.5   | )  |
| Proceeds fromthe issuance of long-term debt –affiliates                                     |  |                       | 38.7   |    |  |   | 15.0    |    |
| Repayment oflong-term debt –affiliates                                                      |  |                       | (15.5  | )  |  |   | — |    |
| Capitalcontribution fromaffiliate                                                                 |  |                       | 54.1   |    |  |   | — |    |
| Advancesunder the KeepwellAgreement                                                               |  |                       | 4.5    |    |  |   | 4.8     |    |
| Payment offinancingcosts                                                                          |  |                       | (3.5   | )  |  |   | (4.8    | )  |
| Netcash provided by financingactivities                                                           |  |                       | 36.5   |    |  |   | 14.5    |    |
| Effectof exchange rate changes on cash and cashequivalents                                        |  |                       | 3.6    |    |  |   | 4.5     |    |
| Netdecrease in cash and cashequivalents                                                           |  |                       | (2.7   | )  |  |   | (51.0   | )  |
| Cashand cash equivalents at beginning ofperiod                                                    |  |                       | 56.5   |    |  |   | 85.8    |    |
| Cashand cash equivalents at end ofperiod                                                          |  | $                          | 53.8   |    |  | $      | 34.8    |    |
| Supplementalschedule of cash flowinformation:                                                     |  |                       |   |    |  |   |    |    |
| Cashpaid during the periodfor:                                                                    |  |                       |   |    |  |   |    |    |
| Interest                                                                                          |  | $                          | 51.0   |    |  | $      | 47.6    |    |
| Incometaxes, net ofrefunds                                                                        |  |                       | 1.9    |    |  |   | 0.6     |    |
| Supplementalschedule of noncash investing and financingactivities:                                |  |                       |   |    |  |   |    |    |
| Conversionof long-term debt and accrued interest as a result of the DebtReduction Transactions    |  | $                          | 813.8  |    |  | $      | — |    |
| Noncash capital contributions fromparent of REV Holdings Notes and issuance of stock toaffiliates |  |                       | 7.9    |    |  |   | — |    |
| Issuanceof New REV Holdings Notes in exchange for REV HoldingsNotes                               |  |                       | 18.5   |    |  |   | — |    |
|                                                                                                   |

SeeAccompanying Notes to Unaudited Consolidated Condensed FinancialStatements.

4

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REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS(dollars in millions,except per share data)

(1)    Basis ofPresentation

REV Holdings LLC ("REVHoldings" and, together with its subsidiaries, the"Company") is a Delaware limited liabilitycompany. REV Holdings conducts its business exclusively through itsindirect subsidiary, Revlon Consumer Products Corporation and itssubsidiaries ("Products Corporation").Products Corporation is a wholly owned subsidiary of Revlon, Inc.

Until March 24, 2004, the Company owned (a)  11,650,000 sharesof Revlon, Inc. Class A common stock (the "Class A CommonStock"), (b)  all of the outstanding 31,250,000shares of Revlon Inc. Class B common stock (the "Class BCommon Stock" and, together with the Class A Common Stock,the "Common Stock"), (c)  all of theoutstanding 546 shares of Revlon, Inc. Series A preferred stock (the"Series A Preferred Stock") and (d)all of the outstanding 4,333 shares of Revlon, Inc. Series Bconvertible preferred stock (the "Series B PreferredStock") (which were convertible, in the aggregate, into433,333 shares of Class A Common Stock). This ownership representedapproximately 62% of the outstanding shares of the Common Stockand approximately 92% of the combined voting power of the CommonStock.

On March 25, 2004, in connection with the Revlon ExchangeTransactions (as hereinafter defined) Revlon, Inc. issued 299,969,493shares of Class A Common Stock (see Note 8), including 9,169,333 sharesof Class A Common Stock to REV Holdings in exchange for all of theRevlon, Inc. Series A Preferred Stock and Series B Preferred Stock. Asa result of consummating the Revlon Exchange Transactions, the Companyowns 20,819,333 shares of Class A Common Stock and 31,250,000 shares ofClass B Common Stock (representing approximately 14% of theCommon Stock and approximately 51% of the combined voting powerof the Common Stock). Accordingly, the consolidated financialstatements of the Company continue to include the financial results ofRevlon, Inc. and its subsidiaries on a consolidated basis.

TheREV Holdings membership interest is owned by its sole member, RevlonHoldings LLC ("Holdings"), whose membershipinterest, in turn, is owned indirectly by Mafco Holdings Inc.("Mafco Holdings" and, together with itsaffiliates, "MacAndrews & Forbes"), acorporation owned by Ronald O. Perelman. Until March 24, 2004, MafcoHoldings beneficially indirectly owned approximately 83% of theCommon Stock (which represented approximately 97% of thecombined voting power of the Common Stock), including shares helddirectly by its wholly owned subsidiary, MacAndrews & ForbesHoldings Inc. ("MacAndrews Holdings"). As aresult of the Revlon Exchange Transactions, Mafco Holdings beneficiallyindirectly owns approximately 59.9% of the Common Stock(representing approximately 77.2% of the combined voting powerof the Common Stock).

The accompanying Consolidated CondensedFinancial Statements are unaudited. In management's opinion, alladjustments (consisting of only normal recurring accruals) necessaryfor a fair presentation have been made.

The UnauditedConsolidated Condensed Financial Statements include the accounts of theCompany after elimination of all material intercompany balances andtransactions. The Company has made a number of estimates andassumptions relating to the assets and liabilities, the disclosure ofcontingent assets and liabilities and the reporting of revenues andexpenses to prepare these financial statements in conformity withaccounting principles generally accepted in the United States. Actualresults could differ from those estimates. The Unaudited ConsolidatedCondensed Financial Statements should be read in conjunction with theconsolidated financial statements and related notes contained in theCompany's Annual Report on Form 10-K for the year ended December31, 2003.

The results of operations and financial position,including working capital, for interim periods are not necessarilyindicative of those to be expected for a full year.

Statement ofFinancial Accounting Standards ("SFAS") No.123, "Accounting for Stock-BasedCompensation," encourages, but does not require, companiesto record compensation cost for stock-based employee compensation plansat fair value. The Company has chosen to account for stock-based

5

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REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS**—Continued**(dollars in millions,except per share data)

compensation plans using the intrinsic valuemethod prescribed in Accounting Principles Board("APB") Opinion No. 25,"Accounting for Stock Issued to Employees,"and related interpretations. Accordingly, compensation cost for stockoptions issued to employees is measured as the excess, if any, of thequoted market price of Revlon, Inc.'s Class A Common Stock at thedate of the grant over the amount an employee must pay to acquire suchstock. The following table illustrates the effect on net loss as if theCompany had applied the fair value method to its stock-basedcompensation under the disclosure provisions of SFAS No.123:

|                                                                                                              |  |                           |       |         |  |        |       |         |  |  |
|--------------------------------------------------------------------------------------------------------------|--|---------------------------|-------|---------|--|--------|-------|---------|--|--|
|                                                                                                         |  | ThreeMonths EndedMarch31, |
|                                                                                                         |  | 2004                      |       | 2003    |
| Netincome (loss) asreported                                                                                  |  | $                         | 304.1 |    |  | $      | (51.2 | )  |
| Add:Stock-based employee compensation included in reported net income(loss)                                  |  |                      | 0.6   |    |  |   | 0.6   |    |
| Deduct: Totalstock-based employee compensation expense determined under fair valuebased method for allawards |  |                      | (1.5  | )  |  |   | (2.6  | )  |
| Proforma net income(loss)                                                                                    |  | $                         | 303.2 |    |  | $      | (53.2 | )  |
|                                                                                                              |

Theeffects of applying SFAS No. 123 in this pro forma disclosure are notnecessarily indicative of future amounts.

(2)    Post-retirement Benefits

Pension:

Asubstantial portion of Products Corporation's employees in theU.S. are covered by defined benefit pension plans. The Company usesSeptember 30 as its measurement date for plan obligations andassets.

Other Post-retirement Benefits:

ProductsCorporation also has sponsored an unfunded retiree benefit plan, whichprovides death benefits payable to beneficiaries of a very limitednumber of employees and former employees. Participation in this plan islimited to participants enrolled as of December 31, 1993. ProductsCorporation also administers a medical insurance plan on behalf ofHoldings, the cost of which has been apportioned to Holdings under thereimbursement agreements among Revlon, Inc., Products Corporation andMacAndrews Holdings. The Company uses September 30 as its measurementdate for plan obligations and assets.

The Medicare Act becamelaw in December 2003 and introduced both a Medicare prescription-drugbenefit and a federal subsidy to sponsors of retiree health-care plansthat provide a benefit at least "actuariallyequivalent" to the Medicare benefit. The Company'sother postretirement benefit plans do provide for suchprescription-drug benefits. The Company has made a one-time election todefer accounting for the economic effects of the Medicare Act, aspermitted by the Financial Accounting Standards Board("FASB") Staff Position 106-1. The FASB plansto issue authoritative guidance on the accounting for the subsidies in2004. The issued guidance could require the Company to changepreviously reported information.

6

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REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS**—Continued**(dollars in millions,except per share data)

The components of net periodic benefit costfor the plans for the three months ended March 31, 2004 and 2003 are asfollows:

|                                   |  |              |         |               |  |        |      |         |  |        |         |         |  |        |         |        |  |  |
|-----------------------------------|--|--------------|---------|---------------|--|--------|------|---------|--|--------|---------|---------|--|--------|---------|--------|--|--|
|                              |  | PensionPlans |         | OtherBenefits |
|                              |  | 2004         |         | 2003          |  | 2004   |      | 2003    |
| Servicecost                       |  | $            | 2.5     |          |  | $      | 2.3  |    |  | $      | (1.9    | )  |  | $      | 0.1     |   |
| Interestcost                      |  |         | 7.6     |          |  |   | 7.4  |    |  |   | (1.4    | )  |  |   | 0.2     |   |
| Expectedreturn on plan assets     |  |         | (6.4    | )        |  |   | (5.4 | )  |  |   | — |    |  |   | — |   |
| Amortizationof prior service cost |  |         | (0.1    | )        |  |   | (0.2 | )  |  |   | — |    |  |   | — |   |
| Amortizationof actuarial loss     |  |         | 2.1     |          |  |   | 2.3  |    |  |   | — |    |  |   | — |   |
|                              |  |         | 5.7     |          |  |   | 6.4  |    |  |   | (3.3    | )  |  |   | 0.3     |   |
| Portionallocated to Holdings      |  |         | — |          |  |   | (0.1 | )  |  |   | — |    |  |   | — |   |
|                              |  | $            | 5.7     |          |  | $      | 6.3  |    |  | $      | (3.3    | )  |  | $      | 0.3     |   |
|                                   |

TheCompany recognized $3.3 of income in the first quarter of 2004 relatedto a reduction in the liability for an International post-retirementbenefit arrangement whose terms were modified.

(3)    Inventories

|                          |  |              |       |                  |  |        |       |        |  |  |
|--------------------------|--|--------------|-------|------------------|--|--------|-------|--------|--|--|
|                     |  | March31,2004 |       | December 31,2003 |
| Rawmaterials andsupplies |  | $            | 48.3  |             |  | $      | 48.3  |   |
| Work-in-process          |  |         | 12.8  |             |  |   | 11.6  |   |
| Finishedgoods            |  |         | 90.7  |             |  |   | 82.8  |   |
|                     |  | $            | 151.8 |             |  | $      | 142.7 |   |
|                          |

(4)    OtherAssets

Included in other assets are trademarks, net, andpatents, net. The amounts outstanding for these intangible assets atMarch 31, 2004 and December 31, 2003 were as follows: for trademarks,net, $7.4 and $7.5, respectively, and for patents, net, $3.7 and $3.9,respectively. Amortization expense for the three months ended March 31,2004 and 2003 was $0.4 and $0.4, respectively. The Company'sintangible assets other than goodwill continue to be subject toamortization, which is anticipated to be approximately $1.5 annuallythrough December 31, 2009.

(5)    Restructuring and OtherCosts, Net

During the first quarter of 2004, the Companyrevised its estimate of the cost to be incurred related to a previousrestructuring program. In 2003, the Company recorded separate chargesof $5.9 ($0.5 of which was recorded in the first quarter of 2003) foremployee severance and other personnel benefits for 421 employees incertain International operations, as to which 331 employees have beenterminated as of March 31, 2004.

During the third quarter of2000, the Company initiated a new restructuring program in line withthe original restructuring plan developed in late 1998, designed toimprove profitability by reducing personnel and consolidatingmanufacturing facilities. The 2000 restructuring program focused on theCompany's plans to close its manufacturing operations in Phoenix,Arizona and Mississauga, Canada and to consolidate its cosmeticsproduction into its plant in Oxford, North Carolina. The 2000restructuring program also includes the remaining obligation for excessleased real estate in the Company's headquarters, consolidationcosts associated with the Company closing its facility in New Zealand,and the elimination of several domestic and international executive andoperational positions, each of which were effected to reduce andstreamline corporate overhead costs. In connection with the 2000restructuring 

7

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REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS**—Continued**(dollars in millions,except per share data)

program, termination benefits for 2,457employees were included in the Company's restructuring charges,and all such employees that were to be terminated had been terminatedas of December 31, 2003.

|                                               |  |                     |        |              |  |              |         |                    |  |        |        |         |  |        |         |        |  |        |        |        |  |  |
|-----------------------------------------------|--|---------------------|--------|--------------|--|--------------|---------|--------------------|--|--------|--------|---------|--|--------|---------|--------|--|--------|--------|--------|--|--|
|                                          |  | BalanceAs of 1/1/04 |        | Expense, Net |  | Utilized,Net |         | BalanceAsof3/31/04 |
|                                          |  | Cash                |        | Noncash      |  |
| Employeeseverance and otherpersonnelbenefits: |  |                |   |         |  |         |    |               |  |   |   |    |  |   |    |   |  |   |   |   |
| 2000program                                   |  | $                   | 1.8    |         |  | $            | — |               |  | $      | (0.5   | )  |  | $      | — |   |  | $      | 1.3    |   |
| 2003program                                   |  |                | 5.0    |         |  |         | — |               |  |   | (0.2   | )  |  |   | 0.2     |   |  |   | 5.0    |   |
|                                          |  |                | 6.8    |         |  |         | — |               |  |   | (0.7   | )  |  |   | 0.2     |   |  |   | 6.3    |   |
| Leasesand equipmentwrite-offs                 |  |                | 2.2    |         |  |         | (0.7    | )             |  |   | 1.0    |    |  |   | 0.2     |   |  |   | 2.7    |   |
|                                          |  | $                   | 9.0    |         |  | $            | (0.7    | )             |  | $      | 0.3    |    |  | $      | 0.4     |   |  | $      | 9.0    |   |
|                                               |

Detailsof the activities described above during the three-month period endedMarch 31, 2004 are as follows:

(6)    GeographicInformation

The Company manages its business on the basis ofone reportable operating segment. The Company's results ofoperations and the value of its foreign assets and liabilities may beadversely affected by, among other things, weak economic conditions,political uncertainties, military actions, terrorist activities,adverse currency fluctuations and competitiveactivities.

|                                    |  |                               |       |                  |  |        |       |        |  |  |
|------------------------------------|--|-------------------------------|-------|------------------|--|--------|-------|--------|--|--|
| Geographicareas:                   |  | Three MonthsEndedMarch31,     |
| Netsales:                          |  | 2004                          |       | 2003             |
| UnitedStates                       |  | $                             | 190.6 |             |  | $      | 194.8 |   |
| Canada                             |  |                          | 15.3  |             |  |   | 10.1  |   |
| UnitedStates and Canada            |  |                          | 205.9 |             |  |   | 204.9 |   |
| International                      |  |                          | 102.5 |             |  |   | 87.1  |   |
|                               |  | $                             | 308.4 |             |  | $      | 292.0 |   |
|                               |  | March31,2004                  |       | December 31,2003 |
| Long-livedassets:                  |  |
| United States                      |  | $                             | 390.6 |             |  | $      | 392.9 |   |
| Canada                             |  |                          | 4.6   |             |  |   | 3.9   |   |
| UnitedStates and Canada            |  |                          | 395.2 |             |  |   | 396.8 |   |
| International                      |  |                          | 78.8  |             |  |   | 79.8  |   |
|                               |  | $                             | 474.0 |             |  | $      | 476.6 |   |
| **Classesof similarproducts:**     |  | **ThreeMonths EndedMarch31,** |
| Netsales:                          |  |                          | 2004  |             |  |   | 2003  |   |
| Cosmetics,skin care and fragrances |  | $                             | 206.9 |             |  | $      | 197.7 |   |
| Personal care                      |  |                          | 101.5 |             |  |   | 94.3  |   |
|                               |  | $                             | 308.4 |             |  | $      | 292.0 |   |
|                                    |

8

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REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS**—Continued**(dollars in millions,except per share data)

(7)    Derivative FinancialInstruments

The Company uses derivative financial instruments,primarily foreign currency forward exchange contracts, to reduce theeffects of fluctuations in foreign currency exchange rates. Thesecontracts, which have been designated as cash flow hedges, were enteredinto primarily to hedge anticipated inventory purchases and certainintercompany payments denominated in foreign currencies, which havematurities of less than one year. Any unrecognized income (loss)related to these contracts are recorded in the Statement of Operationsprimarily in cost of goods sold when the underlying transactions hedgedare realized (e.g., when inventory is sold or intercompany transactionsare settled). Products Corporation enters into these contracts with acounterparty that is a major financial institution, and accordingly theCompany believes that the risk of counterparty nonperformance isremote. The notional amount of the foreign currency forward exchangecontracts outstanding at March 31, 2004 and 2003 was $60.8 and $43.1,respectively. The fair value of the foreign currency forward exchangecontracts outstanding at March 31, 2004 and 2003 was $(0.4) and $(0.4),respectively.

(8)    Long-term Debt

On February 12,2004, Revlon, Inc. announced that its Board of Directors had approvedagreements with Fidelity Management & Research Co.("Fidelity") and MacAndrews & Forbesintended to dramatically strengthen Products Corporation'sbalance sheet (the "Debt ReductionTransactions"). As a result, Products Corporation'sdebt was reduced by approximately $804 on March 25, 2004. Revlon, Inc.is committed to reduce Products Corporation's debt byapproximately an additional $110 by the end of March 2006.

Fidelity and MacAndrews & Forbes agreed to tender or to cause tobe tendered for exchange in exchange offers (together with the othercontemporaneously closed Debt Reduction Transactions described below,the "Revlon Exchange Transactions") anaggregate of approximately $441 of outstanding8 1/8% Senior Notes, 9% Senior Notes and8 5/8% Senior Subordinated Notes (each ashereinafter defined and collectively, the "Revlon ExchangeNotes") for shares of Class A Common Stock, at a ratio of400 shares of Class A Common Stock for each $1,000 principal amount of8 1/8% Senior Notes or 9% Senior Notestendered for exchange and 300 shares of Class A Common Stock for each$1,000 principal amount of 8 5/8% SeniorSubordinated Notes tendered for exchange. The agreements gave Fidelitythe right to elect to receive cash or additional shares of Class ACommon Stock in respect of accrued interest payable on the notes ittendered. MacAndrews & Forbes received Class A Common Stock inrespect of its accrued interest.

In the Revlon ExchangeTransactions, which commenced on February 20, 2004, expired on March19, 2004 and, as discussed in further detail below, closed on March 25,2004, holders other than MacAndrews & Forbes and Fidelity wereoffered the opportunity to exchange their Revlon Exchange Notes for (i)shares of Class A Common Stock at the same exchange ratios or, undercertain conditions, (ii) cash up to a maximum of $150 aggregateprincipal amount of tendered Revlon Exchange Notes, subject toproration. Notes tendered for cash were to receive $830 per $1,000principal amount for the 8 1/8% Senior Notes,$800 per $1,000 principal amount for the 9% Senior Notes and$620 per $1,000 principal amount for the 8 5/8%Senior Subordinated Notes. Accrued interest was also to be paid ontendered notes in cash or additional shares of Class A Common Stock, atthe holder's option. As discussed in more detail below, at theclose of the Revlon Exchange Transactions, no cash was paid for anyprincipal amount of the Revlon Exchange Notes.

As part of theRevlon Exchange Transactions, MacAndrews & Forbes also receivedClass A Common Stock in respect of any and all outstanding amountsowing to it, as of the closing date of the Revlon ExchangeTransactions, under the Mafco $100 million term loan (which wasapproximately $109.7 at March 25, 2004), the 2004 Mafco $125 millionterm loan (which was approximately $38.9 at March 25, 

9

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REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS**—Continued**(dollars in millions,except per share data)

2004), the Mafco $65 million line of credit(which was nil at March 25, 2004) (each as such loan and line of creditis hereinafter defined) and approximately $24.1 of subordinatedpromissory notes (the "Loan ConversionTransactions"). Each $1,000 principal amount ofindebtedness outstanding under the Mafco $100 million term loan and the2004 Mafco $125 million term loan was exchanged for 400 shares of ClassA Common Stock, and each $1,000 principal amount of indebtednessoutstanding under the subordinated promissory notes was exchanged for300 shares of Class A Common Stock. The portions of the 2004 Mafco $125million term loan and the Mafco $65 million line of credit notexchanged in the Loan Conversion Transaction remain available toProducts Corporation, subject to the "BorrowingLimitation" (as hereinafter defined).

Revlon, Inc.agreed with Fidelity not to permit Products Corporation to haveoutstanding aggregate borrowings, at any time following the close ofthe Revlon Exchange Transactions and until the termination of theStockholders Agreement (as described below), under the Mafco $65million line of credit and the 2004 Mafco $125 million term loan inexcess of approximately $86.9, which amount represents: (a) $190 (thetotal commitment under the Mafco $65 million line of credit and the2004 Mafco $125 million term loan) minus (b) approximately $38.7(representing the aggregate principal amount of borrowings under the2004 Mafco $125 million term loan and the Mafco $65 million line ofcredit exchanged by MacAndrews & Forbes for Class A Common Stock inthe Loan Conversion Transactions) minus (c) $64.4 (representing theoriginal commitment amount of certain term loan commitments borrowed byProducts Corporation on March 25, 2004 under the Credit Agreement (ashereinafter defined) pursuant to the Exchange Bank Amendments discussedbelow (the "Borrowing Limitation").

REV Holdings owned all of Revlon, Inc.'s outstanding Series APreferred Stock, which had a par value of $0.01 per share with anaggregate liquidation preference of $54.6, and all of the Series BPreferred Stock. As part of the Revlon Exchange Transactions,MacAndrews & Forbes agreed to cause REV Holdings to exchange each$1,000 of liquidation preference on its shares of Series A PreferredStock for 160 shares of Class A Common Stock and to convert its sharesof Series B Preferred Stock into an aggregate of 433,333 shares ofClass A Common Stock.

In another contemporaneous transaction,Revlon, Inc. and Fidelity entered into a stockholders agreement (the"Stockholders Agreement") pursuant to which,among other things, (i) Revlon, Inc. agreed to continue to maintain amajority of independent directors (as defined by NYSE listingstandards) on its Board of Directors, as it currently does; and (ii)Revlon, Inc. would establish and maintain a Nominating and CorporateGovernance Committee of the Board of Directors, which it formed inMarch 2004. The Stockholders Agreement will terminate at such time asFidelity ceases to be the beneficial holder of at least 5% ofRevlon, Inc.'s outstanding voting stock.

On March 25,2004, Revlon, Inc. consummated the Revlon Exchange Transactions. As aresult of the consummation of these transactions, approximately $133.8principal amount of the 8 1/8% Senior Notes,approximately $174.5 principal amount of the 9% Senior Notes andapproximately $322.9 principal amount of the8 5/8% Senior Subordinated Notes were exchangedfor an aggregate of approximately 224.1 million shares of Class ACommon Stock, including such shares issued in exchange for accruedinterest on the Revlon Exchange Notes. Such amount of Revlon ExchangeNotes exchanged included approximately $1.0 of the 9% SeniorNotes and approximately $286.7 of the 8 5/8%Senior Subordinated Notes tendered by MacAndrews & Forbes and otherentities related to it; and approximately $85.9 of the 9% SeniorNotes, approximately $77.8 of the 8 1/8% SeniorNotes and approximately $32.1 of the 8 5/8%Senior Subordinated Notes tendered by funds and accounts managed byFidelity.

MacAndrews & Forbes also exchanged approximately$109.7 of existing indebtedness (including principal and accruedinterest) under the Mafco $100 million term loan for approximately 43.9million shares of Class A Common Stock, approximately $38.9 of existingindebtedness (including principal and accrued interest) under the 2004Mafco $125 million term loan for approximately 15.6 million shares of

10

----

REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS**—Continued**(dollars in millions,except per share data)

Class A Common Stock and approximately $24.1of indebtedness under certain subordinated promissory notes payable toMacAndrews & Forbes for approximately 7.2 million shares of Class ACommon Stock. REV Holdings exchanged all of Revlon, Inc.'spreviously outstanding Series A Preferred Stock for an aggregate ofapproximately 8.7 million shares of Class A Common Stock and convertedall of its shares of Revlon, Inc.'s previously outstanding SeriesB Preferred Stock into 433,333 shares of Class A Common Stock.

The consummation of the Revlon Exchange Transactions on March 25,2004, in which Revlon, Inc. issued 299,969,493 shares of Class A CommonStock (and transferred of the Revlon Exchange Notes and other exchangedindebtedness to Products Corporation for cancellation) resulted in (i)the reduction of indebtedness of $803.9 and accrued interest thereon of$9.9, (ii) the exchange of the Series A Preferred Stock, (iii) theconversion of the Series B Preferred Stock, (iv) an increase toadditional paid-in-capital of $414.2 which resulted from such issuanceof Class A Common Stock to MacAndrews & Forbes and other entitiesrelated to it, (v) a gain of $363.6 resulting from such issuance ofClass A Common Stock to third parties, (vi) an increase in additionalpaid-in-capital of $49.9 which resulted from the exchange ofindebtedness and accrued interest thereon by MacAndrews & Forbesand other entities related to it and represented the difference betweenthe market value at March 25, 2004 of the shares of Class A CommonStock issued and the principal amount of the indebtedness together withaccrued interest thereon and (vii) a loss on early extinguishment ofdebt of $15.5 which resulted from the exchange of indebtedness andaccrued interest thereon by third parties and represented thedifference between the market value at March 25, 2004 of the shares ofClass A Common Stock issued and the principal amount of theindebtedness exchanged together with accrued interest thereon.Additionally, the Company recognized a loss on early extinguishment ofdebt of $17.1 in connection with the write-off of unamortized debtissuance costs and debt discount, estimated fees and expenses.

In connection with consummating the Revlon Exchange Transactions,Revlon, Inc. announced that its previously announced plan to launch arights offering to reduce debt by a further $50 by year-end 2004 wasreduced to $9.7, as a result of $190.3 of Revlon Exchange Notes havingbeen exchanged in excess of the Revlon Exchange Notes committed to beexchanged by MacAndrews & Forbes and Fidelity under theirrespective support agreements. This $190.3 more than satisfied Revlon,Inc.'s plan to reduce debt through the Revlon Exchange Offers by$150 in addition to the Revlon Exchange Notes that were committed to beexchanged in the support agreements with MacAndrews & Forbes andFidelity. The $40.3 difference satisfied all but $9.7 of theCompany's plan to reduce debt by a further $50 by year-end 2004.Because the costs and expenses, as well as the use of organizationalresources, associated with a $9.7 rights offering would be undulydisproportionate, Revlon, Inc. indicated that its support andinvestment agreements with MacAndrews & Forbes and Fidelityrelating to the Company's debt reduction plan were amended toenable Revlon, Inc. to satisfy the remaining $9.7 of debt reduction aspart of the final stage of the Company's debt reduction plan.Therefore, the Company now intends to reduce debt by approximately anadditional $110 by the end of March 2006. Consistent with agreementsbetween MacAndrews & Forbes and Revlon, Inc. entered intocontemporaneously with the agreements relating to the Revlon ExchangeTransactions, MacAndrews & Forbes agreed to back-stop theadditional $110 of debt reduction.

In connection with closingthe Revlon Exchange Transactions on March 25, 2004, Mafco Holdingsexecuted a joinder agreement to the Revlon, Inc. registration rightsagreement pursuant to which all Class A Common Stock beneficially ownedby Mafco Holdings will be deemed to be registerable securities.

Also, in conjunction with the Revlon Exchange Transactions, inFebruary 2004 Products Corporation entered into amendments to itsCredit Agreement (the "Exchange BankAmendments") to provide an additional $64.4 term loanfacility, the proceeds of which were used to repay outstandingrevolving indebtedness under Products Corporation's CreditAgreement without a reduction in revolving credit commitments. Theseamendments also reduced the interest rates payable on such loanfacility by 0.5%, 

11

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REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS**—Continued**(dollars in millions,except per share data)

as compared to other loans under the existingterm loan facility of Products Corporation's Credit Agreement,with such rates on these new term loans being, at ProductsCorporation's option, either (A) the Alternate Base Rate plus4.0%; or (B)  the Eurodollar Rate plus 5.0%. Theseadditional term loans mature on May 30, 2005 and require anamortization payment of $0.7 on November 30, 2004. The Exchange BankAmendments also permit various aspects of the transactions relating tothe Revlon Exchange Transactions, including permitting: (i) theprepayment of the Mafco $100 million term loan and the Mafco $125million term loan occurring as a result of the indebtedness thereunderoutstanding at the consummation of the Revlon Exchange Transactionsbeing fully converted to equity; (ii) the reduction of the commitmentof the Mafco $65 million line of credit to its undrawn amount at theconsummation of the Revlon Exchange Transactions (which reduction wasnil as there was no amount outstanding under the Mafco $65 million lineof credit upon the consummation of the Revlon Exchange Transactions);(iii) any proceeds remaining after such transactions to be contributedto Products Corporation and used to prepay or repurchase any of itsoutstanding indebtedness; (iv) Revlon, Inc. to enter into certaininvestment or subscription agreements in connection with the RevlonExchange Transactions; and (v) the aggregate term loan commitmentsunder the Credit Agreement to be increased by $64.4. (**See Note 10 tothe Unaudited Consolidated Condensed Financial Statements**).

Prior to the Revlon Exchange Transactions, in December 2003, Revlon,Inc.'s Board approved two loans from MacAndrews Holdings, one toprovide up to $100 million (the "2004 M&FLoan"), if needed, to enable the Company to continue toimplement and refine its plan, and the other to provide an additional$25 million (the "$25 million M&F Loan")to be used for general corporate purposes. In January 2004, the 2004M&F Loan and the $25 million M&F Loan were consolidated intoone term loan agreement (the "2004 Mafco $125 million termloan"). The 2004 Mafco $125 million term loan is a seniorunsecured multiple-draw term loan with an interest rate of 12%per annum and is on substantially the same terms as the Mafco $100million term loan provided by MacAndrews & Forbes in 2003,including that interest on such loans is not payable in cash, butaccrues, is added to the principal amount each quarter and will be paidin full at final maturity on December 1, 2005. $38.9 of principal andaccrued interest under the 2004 Mafco $125 million term loan wasconverted into shares of Class A Common Stock in connection with theRevlon Exchange Transactions.

EBITDA (as defined in the CreditAgreement) was $144.4 for the four consecutive fiscal quarters endedDecember 31, 2003, which was less than the minimum of $230 requiredunder the EBITDA covenant of the Credit Agreement for that period andProducts Corporation's leverage ratio was 1.66:1.00, which was inexcess of the maximum ratio of 1.10:1.00 permitted under the leverageratio covenant of the Credit Agreement for that period. Accordingly,Products Corporation sought and on January 28, 2004 secured waivers ofcompliance with these covenants for the four quarters ended December31, 2003. In light of the Company's expectation that its planwould affect Products Corporation's ability to comply with thesecovenants during 2004, Products Corporation also secured an amendmentto eliminate the EBITDA and leverage ratio covenants for the firstthree quarters of 2004 and a waiver of compliance with such covenantsfor the four quarters ending December 31, 2004 expiring on January 31,2005 (the "January 2004 Bank Amendment"). TheJanuary 2004 Bank Amendment to the Credit Agreement included certainother amendments to allow for the continued implementation of theCompany's plan, including, among other things: (i) providingexceptions from the limitations under the indebtedness covenant topermit the 2004 Mafco $125 million term loan, (ii) permitting ProductsCorporation to borrow up to an additional $50 in working capital loansfrom MacAndrews Holdings or its affiliates, if necessary, (iii)extending the maturity of the Mafco $65 million line of credit untilJune 30, 2005 and providing that as a condition to Products Corporationborrowing under such line from and after the effective date of theJanuary 2004 Bank Amendment that at least $100 shall have been borrowedunder the 2004 Mafco $125 million term loan, (iv) continuing the $20minimum liquidity covenant, (v) increasing the applicable margin onloans under the Credit Agreement by 0.25%, the incremental costof which to Products Corporation, assuming 

12

----

REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS**—Continued**(dollars in millions,except per share data)

the Credit Agreement is fully drawn, would beapproximately $0.5 from February 1, 2004 through the end of 2004, and(vi) permitting Revlon, Inc. to guarantee certain classes of ProductsCorporation's public indebtedness to enable Products Corporationto consummate the Revlon Exchange Transactions and relatedtransactions. (**See Note 10 to the Unaudited Consolidated CondensedFinancial Statements**.)

On October 17, 2003, REV Holdingsfiled a registration statement on Form S-4 with the Securities &Exchange Commission (the "Commission") withrespect to an offer to exchange (the "REV HoldingsExchange Offer") its 12% Senior Secured Notes due2004 (the "REV Holdings Notes") for13% Senior Secured Notes due 2007 (the "New REVHoldings Notes"). The REV Holdings Exchange Offer wasconsummated on January 21, 2004. In connection therewith, REV Holdingsissued $18.5 principal amount of New REV Holdings Notes in exchange fora like principal amount of REV Holdings Notes. In addition, at maturityon February 1, 2004, the Company's parent contributed $7.9principal amount of REV Holdings Notes it held and $54.1 of cash toretire the remaining outstanding REV Holdings Notes. Accordingly, theREV Holdings Notes were classified as a long-term liability in theaudited consolidated balance sheet at December 31, 2003.

The NewREV Holdings Notes, which bear interest semi-annually and mature onFebruary 1, 2007, are secured by a pledge of 104 shares of Class ACommon Stock of Revlon, Inc. per $1,000 principal amount of New REVHoldings Notes, including all dividends, cash instruments and propertyand proceeds from time to time received in respect of the foregoingshares (collectively, the "Collateral"). Inaddition, the indenture governing the New REV Holdings Notes (the"New Indenture") contains covenants that,among other things, limit (i) the issuance of additional debt andredeemable stock by REV Holdings, (ii) the creation of additional lienson the Collateral (other than the lien created by the New Indenture),(iii) the payment of dividends on capital stock of REV Holdings and theredemption of capital stock of REV Holdings or any of its direct orindirect parents, (iv) the sale of assets and subsidiary stock(including by way of consolidations, mergers and similar transactions),and (v) transactions with affiliates. All of these limitations andprohibitions, however, are subject to a number of qualifications, whichare set forth in the New Indenture.

In connection with the REVHoldings Exchange Offer, GSB Investments Corp., an affiliate of theCompany, entered into an agreement with REV Holdings (the"New Keepwell Agreement") which replaced theprior keepwell agreement (the "KeepwellAgreement"), pursuant to which GSB Investments Corp. hasagreed to provide REV Holdings with funds equal to any interest paymentdue on the New REV Holdings Notes, to the extent that REV Holdings doesnot have sufficient funds on hand to make such payment on theapplicable due date. REV Holdings currently anticipates that it willuse advances under the New Keepwell Agreement to pay interest when dueunder the New REV Holdings Notes.

The New Indenture containscustomary events of default for debt instruments of such type. The NewIndenture includes a cross-acceleration provision, which provides thatit shall be an event of default under the New Indenture if any debt ofREV Holdings or any of its significant subsidiaries (as defined in theNew Indenture), is not paid within any applicable grace period afterfinal maturity or is accelerated by the holders of such debt because ofa default and the total principal amount of the portion of such debtthat is unpaid or accelerated exceeds $25.0 and such default continuesfor 10 days after notice from the trustee under the New Indenture. Ifany such event of default occurs, the trustee under the New Indentureor the holders of at least 25% in principal amount of theoutstanding New REV Holdings Notes may declare all such notes to be dueand payable immediately, provided that the holders of a majority inaggregate principal amount of the New REV Holdings Notes may, by noticeto the trustee, waive any such default or event of default and itsconsequences under the New Indenture.

GSB Investments Corp. hasadvised REV Holdings that it expects either to have cash flow fromdividends on its investments or to obtain capital contributions fromits affiliates that, in the aggregate, will be sufficient to satisfyits obligations under the New Keepwell Agreement. There can be noassurance, 

13

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REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS**—Continued**(dollars in millions,except per share data)

however, that GSB Investments Corp.(a)  will have such cash flow, because, among other things, aportion of its investments are pledged and its investees are under noobligation to pay dividends, or (b)  could obtain any suchcontribution or loan because, among other things, its affiliates areunder no obligation to provide them to GSB Investments Corp.

TheNew Keepwell Agreement will terminate at such time as there are no NewREV Holdings Notes outstanding, at which time GSB Investments Corp. mayrequire repayment of advances under the New Keepwell Agreement. InFebruary 2004, GSB Investments Corp. made non-interest bearing advancesof $4.5 to REV Holdings under the Keepwell Agreement, which were usedto make the interest payments on the REV Holdings Notes. The obligationunder the Keepwell Agreement of $28.4 at maturity on February 1, 2004of the REV Holdings Notes was contributed to the capital of REVHoldings in April 2004.

(9)    Tax Deconsolidation

Asa result of the closing of the Revlon Exchange Transactions, as of theend of the day on March 25, 2004, Revlon Inc., Products Corporation andits U.S. subsidiaries were no longer included in the Mafco Holdingsconsolidated group (theMafcoGroup") for federal income tax purposes. The InternalRevenue Code of 1986, as amended (the "Code")and the Treasury regulations issued thereunder govern both thecalculation of the amount and allocation to the members of the MafcoGroup of any consolidated federal net operating losses of the group(CNOLs")that will be available to offset Revlon Inc.'s taxable income andthe taxable income of its U.S. subsidiaries for the taxable yearsbeginning after March 25, 2004. It is impossible to estimate accuratelythe amount of CNOLs that will be allocated to Revlon, Inc. and its U.S.subsidiaries as of December 31, 2004 because various factors couldincrease or decrease or eliminate these amounts. These factors include,but are not limited to, the amount and nature of the income, gains orlosses that the other members of the Mafco Group recognize in the 2004taxable year because any CNOLs are, pursuant to Treasury regulations,used to offset the taxable income of the Mafco Group for the entireconsolidated return year ending December 31, 2004. Only the amount ofany CNOLs that the Mafco Group does not absorb by December 31, 2004will be available to be allocated to Revlon, Inc. and its U.S.subsidiaries for taxable years beginning on March 26, 2004. Subject tothe foregoing, it is currently estimated that Revlon, Inc. and its U.S.subsidiaries will have approximately $330 in U.S. federal net operatinglosses and nil for alternative minimum tax losses available as of March25, 2004. Any losses that Revlon, Inc. and its U.S. subsidiaries maygenerate after March 25, 2004 will be available for their use and willnot be available for the use of the Mafco Group. Following the closingof the Revlon Exchange Transactions, Revlon, Inc. became the parent ofa new consolidated group for federal income tax purposes and ProductsCorporation's federal taxable income and loss will be included insuch group's consolidated tax returns. Accordingly, Revlon, Inc.and Products Corporation entered into a new tax sharing agreementpursuant to which Products Corporation will be required to pay toRevlon, Inc. amounts equal to the taxes that Products Corporation wouldotherwise have had to pay if Products Corporation were to file separatefederal, state or local income tax returns, limited to the amount, andpayable only at such times, as Revlon, Inc. will be required to makepayments to the applicable taxing authorities.

(10)    Subsequent Events

In April 2004, in order to takeadvantage of what was then a relatively favorable market forrefinancings, Products Corporation commenced cash tender offers (the"Tender Offers") to purchase approximately$555 of its senior notes, consisting of any and all of the $363.0aggregate principal amount outstanding of its 12% Senior SecuredNotes, any and all of the $116.2 aggregate principal amount outstandingof its 8 1/8% Senior Notes, and any and all ofthe $75.5 aggregate principal amount outstanding of its 9%Senior Notes. Products Corporation also announced that in connectionwith the Tender Offers it expected to enter into a new credit facility(the "New Credit Agreement") to replace itsexisting $312 

14

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REVHOLDINGS LLCNOTES TO UNAUDITED CONSOLIDATEDCONDENSEDFINANCIAL STATEMENTS**—Continued**(dollars in millions,except per share data)

Credit Agreement and to privately placeapproximately $400 in aggregate principal amount of senior notes (the"New Senior Notes", which together with theTender Offers and the New Credit Agreement are referred to as the"2004 Refinancing Transactions"). Subsequentto the commencement of the Tender Offers, market conditions for debtrefinancings worsened considerably and, as a result, on May 13, 2004,Products Corporation announced that due to these unfavorable marketconditions it was terminating the Tender Offers and that it waspostponing its previously-announced offering of the New Senior Notesandits proposed New Credit Agreement.

15

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS(dollars in millions, except per sharedata)

Overview

The Company isproviding this overview in accordance with the SEC's December2003 interpretive guidance regarding Management's Discussion andAnalysis of Financial Condition and Results of Operations.

TheCompany operates in a single segment and manufactures, markets andsells an extensive array of cosmetics and skin care, fragrances andpersonal care products. In addition, the Company has a licensinggroup.

The Company has accelerated the implementation of itsthree-part plan. In 2002, the Company began the implementation of thestabilization and growth phase of its plan, which, following detailedevaluations and research, includes the following key actions andinvestments, among others: (i) increasing advertising and mediaspending and effectiveness; (ii) increasing the marketing effectivenessof the Company's wall displays, by among other things,reconfiguring wall displays at its existing retail customers,streamlining its product assortment and reconfiguring product placementon its wall displays and rolling out the new wall displays; (iii)enhancing the effectiveness of its merchandiser coverage to improvein-store stock levels and work with its retail customers to improvereplenishment of the Company's products on the wall displays andto minimize out-of-stocks at its retail customers; (iv) selectivelyadjusting prices on certain SKUs (or stock keeping units); (v) furtherstrengthening the Company's new product development process; and(vi) implementing a comprehensive program to develop and train theCompany's employees. 

In the first quarter of 2004, netsales increased $16.4 or 5.6% to $308.4 as compared to $292.0 inthe first quarter of 2003, driven by sales growth in International,including the benefits of favorable foreign currency translation andhigher licensing revenues.

In the United States and Canada, netsales increased to $205.9 from $204.9 despite modestly lower shipments,with the increase driven by higher licensing revenues, including fromthe prepayment of a license renewal fee of $4.7, lower returns andallowances of approximately $9.8, partially offset by theCompany's increased brand support of $9.4. In International, netsales increased from $87.1 to $102.5, driven largely by the impact offoreign currency translation and increased unit sales.

Operatingincome in the first quarter of 2004 was $20.1, as compared to anoperating loss of $4.2 in the first quarter of 2003. This improvementreflected the absence in the first quarter of 2004 of growth plancharges, which reduced operating income in the first quarter of 2003 byapproximately $11, as well as the benefits of higher net sales in thefirst quarter of 2004 (including the lower returns and allowances andincrease in licensing revenues mentioned above), lower displayamortization, and favorability relating to a $3.4 reduction of aliability associated with a modification to an International benefitarrangement. Partially offsetting these drivers of the profitabilityimprovement was higher brand support in the first quarter of 2004.

Market share in the U.S. mass-market for color cosmetics for theAlmay and Revlon brands combined was 22.4% for the first quarterof 2004, a decrease of 0.6 share points, as compared with the firstquarter of 2003 and an increase of 0.6 share points as compared to thefirst quarter of 2002. The U.S. mass-market color cosmetics category,as measured by ACNielsen (which excludes certain mass-marketretailers), declined by 0.5% for the first quarter of 2004, ascompared to the first quarter of 2003. The Company currently expectsthat the 2004 full-year growth of the total mass-market color cosmeticscategory, including mass-market retailers which are excluded fromACNielsen's data, will be approximately 3%, as compared tothe Company's previous estimate of approximately 4%.

The Company believes that it has strengthened its organizationalcapability and it intends to continue doing so in 2004. The Companyalso strengthened its relationships with its key retailers in the U.S.,which has led to space gains and increased distribution for 2004 forcertain of the Company's products.

The Company intends tocapitalize on the actions taken during the stabilization and growthphase of its plan, with the objective of increasing revenues andachieving profitability over the long term. The 

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

Company currently anticipates that thecontinued growth momentum and accelerated growth stage of its plan willinclude various actions that represent refinements of and additions tothe actions taken during the stabilization and growth phase of itsplan, with the objective of improving the Company's operatingmargins. The Company currently anticipates that these initiatives willinclude, among other things, actions to: (i) further improve the newproduct development and implementation process; (ii) continue toincrease the effectiveness and reduce the cost of the Company'sdisplay walls; (iii) drive efficiencies across the Company'soverall supply chain, including reducing manufacturing costs bystreamlining components and sourcing strategically and rationalizingits supply chain in Europe, which could include moving certainproduction for the European markets to the Company's Oxford,North Carolina facility; and (iv) optimize the effectiveness of theCompany's marketing and promotions. This stage will also includestrengthening the Company's balance sheet and capital structure.Finally, the Company expects that it will continue the training anddevelopment of its organization to continue to improve theorganization's capability to execute the Company'sstrategies, while providing enhanced job satisfaction for theCompany's employees.

On March 25, 2004 Revlon, Inc.consummated the Revlon Exchange Transactions and reduced ProductCorporation's debt by approximately $804. As a result ofconsummating the Revlon Exchange Transactions, Revlon, Inc. issued anadditional 299,969,493 shares of Class A Common Stock and after takingsuch shares into account now currently has outstanding approximately338,177,944 shares of Class A Common Stock and 31.25 million shares ofClass B Common Stock. MacAndrews & Forbes beneficially ownsapproximately 221.2 million shares of the Common Stock (representingapproximately 59.9% of the outstanding shares of the CommonStock and approximately 77.2% of the combined voting power ofthe Common Stock); funds and accounts managed by Fidelity beneficiallyown approximately 78.4 million shares of Class A Common Stock(representing approximately 21.2% of the outstanding shares ofCommon Stock and approximately 12.1% of the combined votingpower of the Common Stock); and other stockholders beneficially ownapproximately 69.8 million shares of Class A Common Stock (representingapproximately 18.9% of the outstanding shares of Common Stockand approximately 10.7% of the combined voting power of theCommon Stock). Of the shares beneficially owned by MacAndrews &Forbes, REV Holdings currently owns approximately 20.8 million sharesof Class A Common Stock and 31.25 million shares of Class B CommonStock. The Company received an additional commitment from MacAndrews& Forbes to provide funds to support its business plan for 2004 inthe form of the 2004 Mafco $125 million term loan. In the first quarterof 2004, the Company also secured the January 2004 Bank Amendment andthe Exchange Bank Amendments. **(See Note 8 to the UnauditedConsolidated Condensed Financial Statements)**.

Discussion ofCritical Accounting Policies

For a discussion of theCompany's critical accounting policies, see the Company'sAnnual Report on Form 10-K for the year ended December 31,2003.

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

Results of Operations

In thetables, numbers in parenthesis ( ) denote unfavorable variances.

Net sales:

|                         |  |                           |       |        |  |        |       |        |  |        |      |        |  |        |      |                  |  |  |
|-------------------------|--|---------------------------|-------|--------|--|--------|-------|--------|--|--------|------|--------|--|--------|------|------------------|--|--|
|                    |  | ThreeMonths EndedMarch31, |       |
|                    |  | 2004                      |       | 2003   |  | Change |       | Change |
| United States andCanada |  | $                         | 205.9 |   |  | $      | 204.9 |   |  | $      | 1.0  |   |  |   | 0.5  | %           |
| International           |  |                      | 102.5 |   |  |   | 87.1  |   |  |   | 15.4 |   |  |   | 17.7 | % (1)  |
|                    |  | $                         | 308.4 |   |  | $      | 292.0 |   |  | $      | 16.4 |   |  |   | 5.6  | % (2)  |
|                         |

|  |
|--|
|  |  |
|  |

| (1) | Excluding the impact of currency fluctuations, Internationalnet sales increased 4.2%. |
|-----|---------------------------------------------------------------------------------------|

| (2) | Excluding the impact of currencyfluctuations, consolidated net sales increased 1.0%. |
|-----|--------------------------------------------------------------------------------------|

United States and Canada.

The increase innet sales in the U.S. and Canada in the first quarter of 2004 wasdriven by higher licensing revenues of $4.4 in the first quarter of2004, primarily from prepayment of $4.7 of a license renewal fee, lowerreturns and allowances and discounts of $9.8 (including the impact inthe first quarter of 2003 of $6.0 related to the stabilization andgrowth phase of the Company's plan, which began in December 2002)and the favorable impact of foreign currency translation, partiallyoffset by increased brand support of $9.4 and modestly lower shipments.Market share in the U.S. mass-market for color cosmetics for the Revlonand Almay brands combined decreased by 0.6 share points for the firstquarter of 2004, as compared to the first quarter of 2003 and anincrease of 0.6 share points as compared to the first quarter of 2002.The Revlon brand share declined 0.1 share points in the first quarterof 2004, in part due to lower shipments stemming from new products withfewer SKUs this quarter, as compared to the first quarter of 2003. TheCompany's Almay brand was down 0.5 share points in the firstquarter of 2004, as compared to the first quarter of 2003, partiallydue to the loss of key retail space at a large U.S. customer. The spacehas been successfully regained commencing late in the second quarter of2004. The U.S. mass-market color cosmetics category, as measured byACNielsen (which excludes certain mass-market retailers), declined by0.5% for the first quarter of 2004 as compared to the firstquarter of 2003. The Company currently expects that the 2004 full-yeargrowth of the total mass-market color cosmetics category, includingmass-market retailers which are excluded from ACNielsen's data,will be approximately 3%, as compared to the Company'sprevious estimate of approximately 4%. In other key categories,the Company gained share in hair color and beauty tools, while marketshare declined for antiperspirants/deodorants. All U.S. market shareand market position data herein for the Company's brands arebased upon retail dollar sales, which are derived from ACNielsen data.ACNielsen measures retail sales volume of products sold in the U.S.mass-market distribution channel. Such data represent ACNielsen'sestimates based upon data gathered by ACNielsen from market samples andare therefore subject to some degree of variance. Additionally, as ofAugust 4, 2001, ACNielsen's data do not reflect sales volume fromWal-Mart, Inc., which is the Company's largest customer,representing approximately 20.6% of the Company's 2003worldwide net sales.

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

International.

Net salesin the Company's international operations were $102.5 for thefirst quarter of 2004, compared with $87.1 for the first quarter of2003, an increase of $15.4 or 17.7%. Excluding the impact offoreign currency fluctuations, international sales increased by4.2% in the first quarter of 2004, as compared to the firstquarter of 2003. Sales in the Company's international operationsare divided by the Company into three geographic regions.

InEurope, which is comprised of Europe and the Middle East, net salesincreased by $0.7, or 2.4%, to $30.3 for the first quarter of2004, as compared with the first quarter of 2003. Excluding the impactof foreign currency fluctuations, sales declined by $3.3 or11.1% in the first quarter of 2004, as compared to the firstquarter of 2003. The decline in net sales net of foreign currencyfluctuations was due to lower sales in the U.K., stemming from reducedcustomer inventory levels (which factor the Company estimatescontributed to an approximate 7.5% reduction in net sales forthe region) and lower sales to distributors in Russia and Germany(which factor the Company estimates contributed to an approximate5.5% reduction in net sales for the region).

In LatinAmerica, which is comprised of Mexico, Central America and SouthAmerica, net sales increased by $5.1, or 32.3%, to $20.9 for thefirst quarter of 2004, as compared with the first quarter of 2003.Excluding the impact of foreign currency fluctuations, sales increasedby $4.1 or 26.0% in the first quarter of 2004, as compared tothe first quarter of 2003. The increase is primarily due to increasedsales in Brazil (which factor the Company estimates contributed to anapproximate 16.0% increase in net sales for the region in thefirst quarter of 2004, as compared with the first quarter of 2003) andincreased sales in Venezuela (which factor the Company estimatescontributed to an approximate 8.4% increase in net sales for theregion in the first quarter of 2004, as compared with the first quarterof 2003) due to improved local economic and business conditions.

In the Far East and Africa, net sales increased by $9.6, or23.0%, to $51.3 for the first quarter of 2004 as compared withthe first quarter of 2003. Excluding the impact of foreign currencyfluctuations, sales increased $2.8 or 6.7% in the first quarterof 2004, as compared to the first quarter of 2003. This increase wasdriven by higher sales in Australia, Japan, New Zealand and SouthAfrica related to favorable economic conditions and strong brandmarketing activities (which factor the Company estimates contributed toan approximate 8.6% increase in net sales for the region).

Net sales in the Company's international operations in thenormal course are subject to the risk of being adversely affected by,among other things, weak economic conditions, political uncertainties,military actions, terrorist activities, adverse currency fluctuationsand competitive activities.

During 2002, the Company experiencedproduction difficulties with its principal third-party manufacturer forEurope and certain other international markets. On October 31, 2002,Products Corporation and such manufacturer terminated the long-termsupply agreement and entered into a new, more flexible agreement. Thisnew agreement has significantly reduced volume commitments and, amongother things, Products Corporation loaned such supplier approximately$2.0. To address the past production difficulties, under the newarrangement, the supplier can earn performance-based payments ofapproximately $6.3 over a 4-year period contingent upon the supplierachieving specific production service level objectives. During 2003,the Company paid approximately $1.6, and in 2004 paid approximately anadditional $1.8. Under the new arrangement, Products Corporation alsosources certain products from its Oxford facility and other suppliers.Under the new supply arrangement, the Company believes that theproduction difficulties with this third-party manufacturer wereresolved during 2003.

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

Gross profit:

|             |  |                            |       |        |  |        |       |        |  |   |      |        |  |  |
|-------------|--|----------------------------|-------|--------|--|--------|-------|--------|--|---|------|--------|--|--|
|        |  | ThreeMonths Ended March31, |       |   |
|        |  | 2004                       |       | 2003   |  | Change |
| Grossprofit |  | $                          | 191.3 |   |  | $      | 180.5 |   |  | $ | 10.8 |   |
|             |

The$10.8 increase in gross profit for first quarter of 2004 is primarilydue to favorable exchange of $8.1, higher licensing and other revenueof $4.7 in 2004 (primarily from the prepayment of a $4.7 licenserenewal fee), a $2.0 benefit to gross profit as a result of theaforementioned reduction of an International benefit liability andlower sales returns, allowances and discounts of $9.7. The firstquarter of 2003 was adversely impacted by increased returns inconnection with the stabilization and growth phase of theCompany's plan. Such increases in gross profit in first quarterof 2004 were partially offset by higher brand support of $11.0 andunfavorable product sales mix.

SG&Aexpenses:

|                  |  |                            |       |        |  |        |       |        |  |   |      |        |  |  |
|------------------|--|----------------------------|-------|--------|--|--------|-------|--------|--|---|------|--------|--|--|
|             |  | ThreeMonths Ended March31, |       |   |
|             |  | 2004                       |       | 2003   |  | Change |
| SG&Aexpenses |  | $                          | 171.9 |   |  | $      | 184.2 |   |  | $ | 12.3 |   |
|                  |

Thedecrease in selling, general and administrative expenses("SG&A") for first quarter of 2004, ascompared to first quarter of 2003, is due primarily to lowerprofessional fees of $4.8 (the first quarter of 2003 included expensesrelated to the stabilization and growth phase of the Company'splan), lower consumer promotion spending of $3.7, the reduction of $1.4due to the aforementioned reduction of an International benefitliability and lower depreciation and amortization of $2.8.

Restructuring (benefit)costs:

|                              |  |                            |      |         |  |        |     |        |  |   |     |        |  |  |
|------------------------------|--|----------------------------|------|---------|--|--------|-----|--------|--|---|-----|--------|--|--|
|                         |  | ThreeMonths Ended March31, |      |    |
|                         |  | 2004                       |      | 2003    |  | Change |
| Restructuring (benefit)costs |  | $                          | (0.7 | )  |  | $      | 0.5 |   |  | $ | 1.2 |   |
|                              |

Duringthe first quarter of 2004, the Company revised its estimate of the costto be incurred related to a previous restructuring program. In thefirst quarter of 2003, the Company recorded a charge of $0.5 foremployee severance and other personnel benefits in certainInternational operations.

During the third quarter of 2000, theCompany initiated a new restructuring program in line with the originalrestructuring plan developed in late 1998, designed to improveprofitability by reducing personnel and consolidating manufacturingfacilities. The 2000 restructuring program focused on closing theCompany's manufacturing operations in Phoenix, Arizona andMississauga, Canada and to consolidate its cosmetics production intoits plant in Oxford, North Carolina. The 2000 restructuring programalso includes the remaining obligation for excess leased real estate inthe Company's headquarters, consolidation costs associated withthe Company closing its facility in New Zealand, and the elimination ofseveral domestic and international executive and operational positions,each of which were effected to reduce and streamline corporate overheadcosts.

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

Other expenses(income):

|                 |  |                            |      |        |  |        |      |        |  |   |      |         |  |  |
|-----------------|--|----------------------------|------|--------|--|--------|------|--------|--|---|------|---------|--|--|
|            |  | ThreeMonths Ended March31, |      |   |
|            |  | 2004                       |      | 2003   |  | Change |
| Interestexpense |  | $                          | 45.9 |   |  | $      | 43.9 |   |  | $ | (2.0 | )  |
|                 |

Theincrease in interest expense for the first quarter of 2004, as comparedto the first quarter of 2003, is primarily due to higher overallborrowings during the first quarter of 2004, including amounts borrowedunder the Credit Agreement and the 2003 Mafco Loans (as defined below)and higher interest rates under the Credit Agreement as a result of theJanuary 2004 BankAmendment.

|                                     |  |                            |      |        |  |        |         |        |  |   |       |         |  |  |
|-------------------------------------|--|----------------------------|------|--------|--|--------|---------|--------|--|---|-------|---------|--|--|
|                                |  | ThreeMonths Ended March31, |      |   |
|                                |  | 2004                       |      | 2003   |  | Change |
| Loss on early extinguishment ondebt |  | $                          | 32.6 |   |  | $      | — |   |  | $ | (32.6 | )  |
|                                     |

Theloss on early extinguishment of debt in the first quarter of 2004represents the loss on the exchange of equity for certain indebtednessin the Revlon Exchange Transactions (such loss was equal to thedifference between the fair value of the equity securities issued andthe book value of the related indebtedness exchanged by third partiesother than MacAndrews & Forbes or related parties) and fees,expenses and the write-off of deferred financing costs related to theRevlon Exchange Transactions. **(See Note 8 to the UnauditedConsolidated Condensed Financial Statements)**.

Gain onissuance of subsidiarystock:

|                                     |  |                            |        |         |  |        |         |        |  |   |       |        |  |  |
|-------------------------------------|--|----------------------------|--------|---------|--|--------|---------|--------|--|---|-------|--------|--|--|
|                                |  | ThreeMonths Ended March31, |        |    |
|                                |  | 2004                       |        | 2003    |  | Change |
| Gain on issuance of subsidiarystock |  | $                          | (363.6 | )  |  | $      | — |   |  | $ | 363.6 |   |
|                                     |

REVHoldings recognized a gain on issuance of Revlon, Inc. Class A CommonStock to third parties in connection with the Revlon ExchangeTransactions. **(See Note 8 to the Unaudited Consolidated CondensedFinancial Statements).**

Provision for incometaxes:

|                           |  |                            |     |        |  |        |     |        |  |   |     |        |  |  |
|---------------------------|--|----------------------------|-----|--------|--|--------|-----|--------|--|---|-----|--------|--|--|
|                      |  | ThreeMonths Ended March31, |     |   |
|                      |  | 2004                       |     | 2003   |  | Change |
| Provision for incometaxes |  | $                          | 0.8 |   |  | $      | 0.9 |   |  | $ | 0.1 |   |
|                           |

Thedecrease in the provision for income taxes in the first quarter of2004, as compared with the first quarter of 2003, was primarilyattributable to the resolution of various tax audits, which reduced taxexpense by approximately $1.7, partially offset by higher taxableincome in certain markets outside the U.S.

Financial Condition,Liquidity and Capital Resources

Net cash used for operatingactivities in the first quarter of 2004 decreased to $40.1, as comparedto $65.3 for the first quarter 2003. This improvement resultedprimarily from higher operating income, lower 

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

accounts receivable and inventories,partially offset by lower accounts payable. The Company received $4.7in the first quarter of 2004 related to a license renewal fee under alicensing agreement.

Net cash used for investing activities was$2.7 and $4.7 for the first quarters of 2004 and 2003, respectively.Net cash used for investing activities for the first quarters of 2004and 2003 consisted of capital expenditures.

Net cash provided byfinancing activities was $36.5 and $14.5 for the first quarters of 2004and 2003, respectively. Net cash provided by financing activities forthe first quarter of 2004 included cash drawn under the CreditAgreement, including the additional $64.4 term loan pursuant to theExchange Bank Amendments, the 2004 $125 million Mafco Loan and the $65million Mafco line of credit, a capital contribution from an affiliateto retire the REV Holdings Notes and advances under the New KeepwellAgreement, partially offset by the repayment of borrowings under theCredit Agreement and the Mafco $65 million line of credit and paymentof financing costs. Net cash provided by financing activities for thefirst quarter of 2003 included cash drawn under the Credit Agreement,the MacAndrews & Forbes $100 million term loan and an advance underthe Keepwell Agreement, partially offset by the repayment of borrowingsunder the Credit Agreement and payment of financing costs.

OnNovember 30, 2001, Products Corporation entered into a credit agreement(the "2001 Credit Agreement") with asyndicate of lenders, whose individual members change from time totime, which agreement amended and restated the credit agreement enteredinto by Products Corporation in May 1997 (as amended, the"1997 Credit Agreement"; the 2001 CreditAgreement and the 1997 Credit Agreement are sometimes referred to asthe "Credit Agreement"), and which matures onMay 30, 2005. As of March 31, 2004, the 2001 Credit Agreement providedup to $311.9, which is comprised of a $179.8 term loan facility (the"Term Loan Facility") and a $132.1multi-currency revolving credit facility (the"Multi-Currency Facility"). ProductsCorporation had utilized $245 under the 2001 Credit Agreement and hadapproximately $249 of available liquidity from available sources atMarch 31, 2004. (**See Note 10 to the Unaudited Consolidated CondensedFinancial Statements.)**

The 2004 Debt ReductionTransactions

As a result of the Debt ReductionTransactions, Revlon, Inc. reduced Products Corporation's debt byapproximately $804 on March 25, 2004. Revlon, Inc. is committed toreduce Products Corporation's debt by approximately an additional$110 by the end of March 2006.

As part of the Revlon ExchangeTransactions, MacAndrews & Forbes received Class A Common Stock inrespect of any and all outstanding amounts owing to it, as of theclosing date of the Revlon Exchange Transactions, under the Mafco $100million term loan (which was approximately $109.7 at March 25, 2004),the 2004 Mafco $125 million term loan (which was approximately $38.9 atMarch 25, 2004), the Mafco $65 million line of credit (which was nil atMarch 25, 2004) and approximately $24.1 of subordinated promissorynotes. The portions of the 2004 Mafco $125 million term loan and theMafco $65 million line of credit not exchanged in the Loan ConversionTransactions remain available to Products Corporation, subject to theBorrowing Limitation.

Revlon, Inc. agreed with Fidelity not topermit Products Corporation to have outstanding aggregate borrowings,at any time following the close of the Revlon Exchange Transactions anduntil the termination of the Stockholders Agreement, under the Mafco$65 million line of credit and the 2004 Mafco $125 million term loan inexcess of approximately $86.9, which amount represents: (a) $190 (thetotal commitment under the Mafco $65 million line of credit and the2004 Mafco $125 million term loan) minus (b) approximately $38.7(representing the aggregate principal amount of borrowings under the2004 Mafco $125 million term loan and the Mafco $65 million line ofcredit exchanged by MacAndrews & Forbes for Class A Common Stock inthe Loan Conversion Transactions) minus (c) $64.4 (representing theoriginal commitment amount of certain term loan commitments borrowed byProducts Corporation on March 25, 2004 under the Credit Agreementpursuant to the Exchange Bank Amendments).

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

On March 25, 2004, Revlon, Inc.consummated the Revlon Exchange Transactions. As a result of theconsummation of these transactions, approximately $133.8 principalamount of the 8 1/8% Senior Notes, approximately$174.5 principal amount of the 9% Senior Notes and approximately$322.9 principal amount of the 8 5/8% SeniorSubordinated Notes were exchanged for an aggregate of approximately224.1 million shares of Class A Common Stock, including such sharesissued in exchange for accrued interest on the Revlon Exchange Notes.Such amount of Revlon Exchange Notes exchanged included approximately$1.0 of the 9% Senior Notes and approximately $286.7 of the8 1/8% Senior Subordinated Notes tendered byMacAndrews & Forbes and other entities related to it; andapproximately $85.9 of the 9% Senior Notes, approximately $77.8of the 8 1/8% Senior Notes and approximately$32.1 of the 8 5/8% Senior Subordinated Notestendered by funds and accounts managed by Fidelity.

MacAndrews& Forbes also exchanged approximately $109.7 of existingindebtedness (including principal and accrued interest) under the Mafco$100 million term loan for approximately 43.9 million shares of Class ACommon Stock, approximately $38.9 of existing indebtedness (includingprincipal and accrued interest) under the 2004 Mafco $125 million termloan for approximately 15.6 million shares of Class A Common Stock andapproximately $24.1 of indebtedness under certain subordinatedpromissory notes payable to MacAndrews & Forbes for approximately7.2 million shares of Class A Common Stock. REV Holdings exchanged allof Revlon, Inc.'s previously outstanding Series A Preferred Stockfor an aggregate of approximately 8.7 million shares of Class A CommonStock and converted all of its shares of Revlon, Inc.'spreviously outstanding Series B Preferred Stock into 433,333 shares ofClass A Common Stock.

In connection with consummating the RevlonExchange Transactions, Revlon, Inc. announced that its previouslyannounced plan to launch a rights offering to reduce debt by a further$50 by year-end 2004 was reduced to $9.7, as a result of $190.3 ofRevlon Exchange Notes having been exchanged in excess of the RevlonExchange Notes committed to be exchanged by MacAndrews & Forbes andFidelity under their respective support agreements. This $190.3 morethan satisfied Revlon, Inc.'s plan to reduce debt through theRevlon Exchange Offers by $150 in addition to the Revlon Exchange Notesthat were committed to be exchanged in the support agreements withMacAndrews & Forbes and Fidelity. The $40.3 difference satisfiedall but $9.7 of the Company's plan to reduce debt by a further$50 by year-end 2004. Because the costs and expenses, as well as theuse of organizational resources, associated with a $9.7 rights offeringwould be unduly disproportionate, Revlon, Inc. indicated that itssupport and investment agreements with MacAndrews & Forbes andFidelity relating to the Company's debt reduction plan wereamended to enable Revlon, Inc. to satisfy the remaining $9.7 of debtreduction as part of the final stage of the Company's debtreduction plan. Therefore, the Company now intends to reduce debt byapproximately an additional $110 by the end of March 2006. Consistentwith agreements between MacAndrews & Forbes and Revlon, Inc.entered into contemporaneously with the agreements relating to theRevlon Exchange Transactions, MacAndrews & Forbes agreed toback-stop the additional $110 of debt reduction.

Also, inconjunction with the Revlon Exchange Transactions, Products Corporationobtained the Exchange Bank Amendments to provide an additional $64.4term loan facility, the proceeds of which were used to repayoutstanding revolving indebtedness under Products Corporation'sCredit Agreement without a reduction in revolving credit commitments.These amendments also reduced the interest rates payable on such termloan facility by 0.5%, as compared to the interest rates payableon loans under the existing term loan facility of ProductsCorporation's Credit Agreement, with such rates on these new termloans being, at Products Corporation's option, either (A) theAlternate Base Rate plus 4.0%; or (B)  the Eurodollar Rateplus 5.0%. These new additional term loans mature on May 30,2005 and require an amortization payment of $0.7 on November 30, 2004.The Exchange Bank Amendments also permit various aspects of thetransactions relating to the Revlon Exchange Transactions, includingpermitting: (i) the prepayment of the Mafco $100 million term loan andthe Mafco $125 million term loan occurring as 

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

a result of the indebtedness thereunderoutstanding at the consummation of the Revlon Exchange Transactionsbeing fully converted to equity; (ii) the reduction of the commitmentof the Mafco $65 million line of credit to its undrawn amount at theconsummation of the Revlon Exchange Transactions (which reduction wasnil as there was no amount outstanding under the Mafco $65 million lineof credit at the consummation of the Revlon Exchange Transactions);(iii) any proceeds remaining after such transactions to be contributedto Products Corporation and used to prepay or repurchase any of itsoutstanding indebtedness; (iv) Revlon, Inc. to enter into certaininvestment or subscription agreements in connection with the RevlonExchange Transactions; and (v) the aggregate term loan commitmentsunder the Credit Agreement to be increased by $64.4 million. (**SeeNote 10 to the Unaudited Consolidated Condensed FinancialStatements.)**

EBITDA (as defined in the Credit Agreement) was$144.4 for the four consecutive fiscal quarters ended December 31,2003, which was less than the minimum of $230 required under the EBITDAcovenant of the Credit Agreement for that period and ProductsCorporation's leverage ratio was 1.66:1.00, which was in excessof the maximum ratio of 1.10:1.00 permitted under the leverage ratiocovenant of the Credit Agreement for that period. Accordingly, ProductsCorporation sought and on January 28, 2004 secured the January 2004Bank Amendment that included waivers of compliance with these covenantsfor the four quarters ended December 31, 2003 and, in light of theCompany's expectation that its plan would affect ProductsCorporation's ability to comply with these covenants during 2004,an amendment to eliminate the EBITDA and leverage ratio covenants forthe first three quarters of 2004 and a waiver of compliance with suchcovenants for the four quarters ending December 31, 2004 expiring onJanuary 31, 2005. The January 2004 Bank Amendment to the CreditAgreement included certain other amendments to allow for the continuedimplementation of the Company's plan, including, among otherthings: (i) providing exceptions from the limitations under theindebtedness covenant to permit the 2004 Mafco $125 million term loan,(ii) permitting Products Corporation to borrow up to an additional $50in working capital loans from MacAndrews Holdings or its affiliates, ifnecessary, (iii) extending the maturity of the Mafco $65 million lineof credit until June 30, 2005 and providing that as a condition toProducts Corporation borrowing under such line from and after theeffective date of the January 2004 Bank Amendment that at least $100shall have been borrowed under the 2004 Mafco $125 million term loan,(iv) continuing the $20 minimum liquidity covenant, (v) increasing theapplicable margin on loans under the Credit Agreement by 0.25%,the incremental cost of which to Products Corporation, assuming theCredit Agreement is fully drawn, would be approximately $0.5 fromFebruary 1, 2004 through the end of 2004, and (vi) permitting Revlon,Inc. to guarantee certain classes of Products Corporation'spublic indebtedness to enable Products Corporation to consummate theRevlon Exchange Transactions and related transactions.

The 2004M&F Loan and $25 million M&F Loan were consolidated into the2004 Mafco $125 million term loan. The 2004 Mafco $125 million termloan is a senior unsecured multiple-draw term loan at an interest rateof 12% per annum, and which is on substantially the same termsas the Mafco $100 million term loan provided by MacAndrews & Forbesearlier in 2003 (the latter of which was fully converted into equity inconnection with the Revlon Exchange Transactions), including thatinterest on such loans is not payable in cash, but accrues and is addedto the principal amount each quarter and will be paid in full at finalmaturity on December 1, 2005. **(See Note 8 to the UnauditedConsolidated Condensed Financial Statements for important informationconcerning the 2004 Mafco $125 million term loan.)**

2003Financing Transactions

In February 2003 Revlon, Inc.entered into an investment agreement with MacAndrews Holdings (the"2003 Investment Agreement") pursuant towhich Revlon, Inc. undertook and, on June 20, 2003, completed, a $50equity rights offering (the "2003 RightsOffering"), pursuant to which Revlon, Inc. issued anadditional 17,605,650 shares of its Class A Common Stock, including3,015,303 shares subscribed 

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

for by the public and 14,590,347 sharesissued to MacAndrews Holdings in a private placement (representing thenumber of shares of Revlon, Inc.'s Class A Common Stock thatMacAndrews Holdings would otherwise have been entitled to purchasepursuant to its basic subscription privilege, which was approximately83% of the shares of Revlon, Inc.'s Class A Common Stockoffered in the 2003 Rights Offering).

In addition, in connectionwith the 2003 Investment Agreement, MacAndrews Holdings also madeavailable a $100 term loan to Products Corporation (the"Mafco $100 million term loan"). Until it wasexchanged for equity in connection with the Revlon ExchangeTransactions, the Mafco $100 million term loan had a final maturitydate of December 1, 2005 and interest on such loan of 12.0% wasnot payable in cash, but accrued and was added to the principal amounteach quarter and was to have been paid in full at final maturity.**(See Note 8 to the Unaudited Consolidated Condensed FinancialStatements for important information concerning the Mafco $100 millionterm loan.)**

Additionally, MacAndrews Holdings also providedProducts Corporation with an additional $40 line of credit during 2003,which amount was originally to increase to $65 on January 1, 2004 (the"Mafco $65 million line of credit") (theMafco $100 million term loan and the Mafco $65 million line of credit,each as amended, are referred to as the "2003 MafcoLoans") and which was originally to be available toProducts Corporation through December 31, 2004. The Mafco $65 millionline of credit bears interest payable in cash at a rate of the lesserof (i) 12.0% and (ii) 0.25% less than the rate payablefrom time to time on Eurodollar loans under ProductsCorporation's Credit Agreement (which rate was 8.50% as ofMarch 31, 2004). However, in connection with the January 2004 BankAmendment of Products Corporation's Credit Agreement, ProductsCorporation and MacAndrews Holdings agreed to extend the maturity ofthe Mafco $65 million line of credit to June 30, 2005 and to subjectthe availability of funds under such line of credit to the conditionthat an aggregate principal amount of $100 have been drawn under the2004 Mafco $125 million term loan.

Sources andUses

The Company's principal sources of fundsare expected to be operating revenues, cash on hand, funds availablefor borrowing under the Credit Agreement, the Mafco $65 million line ofcredit, the 2004 Mafco $125 million term loan, other permitted lines ofcredit and advances under the New Keepwell Agreement. **(See Note 8 tothe Unaudited Consolidated Condensed Financial Statements.)** TheCredit Agreement, the Mafco $65 million line of credit, the 2004 Mafco$125 million term loan, Products Corporation's 12% SeniorSecured Notes, Products Corporation's8 5/8% Senior Subordinated Notes due 2008 (the"8 5/8% Senior SubordinatedNotes"), Products Corporation's8 1/8% Senior Notes due 2006 (the"8 1/8% Senior Notes")and Products Corporation's 9% Senior Notes due 2006 (the"9% Senior Notes") contain certainprovisions that by their terms limit Products Corporation's andits subsidiaries' ability to, among other things, incuradditional debt. The New REV Holdings Notes contain certain provisionsthat by their terms limit REV Holdings' ability to, among otherthings, incur additional debt.

The Company's principaluses of funds are expected to be the payment of operating expenses,including expenses in connection with the continued implementation of,and refinement to, the Company's plan, purchases of permanentwall displays, capital expenditure requirements, payments in connectionwith the Company's restructuring programs referred to herein,debt service payments and costs of the Company and its subsidiaries,including payments required under Products Corporation's debtinstruments and interest payments under the New REV Holdings Notes.Cash contributions to the Company's pension plans were $21 in2003 and the Company expects them to be approximately $40 in 2004.

The Company has undertaken a number of programs to efficientlymanage its cash and working capital including, among other things,programs to carefully manage and reduce inventory levels, 

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

centralized purchasing to secure discountsand efficiencies in procurement, and providing additional discounts toU.S. customers for more timely payment of receivables and carefulmanagement of accounts payable.

The Company previously estimatedthat charges related to the implementation of its plan for 2002, 2003and 2004 would not exceed $160. The Company recorded charges ofapproximately $104 in 2002 and approximately $31 in 2003 related to theimplementation of the stabilization and growth phase of its plan. TheCompany currently does not expect to record any additional chargesduring 2004 in connection with its plan. The Company expects that cashpayments related to the foregoing charges that it has previouslyrecorded with respect to its plan will be approximately $100 during2003 and 2004, of which the Company paid approximately $80 in 2003 andapproximately $5 in the first quarter of 2004.

The Companydeveloped a new design for its wall displays (which the Company iscontinuing to refine as part of the implementation of its plan) andbegan installing them at certain customers' retail stores during2002, which it continued during 2003 and 2004. While most of the newwall displays were installed during 2002 and 2003, the Company iscontinuing to install the remainder of the new wall displays during2004. The Company is also reconfiguring existing wall displays at itsretail customers. Accordingly, the Company has accelerated theamortization of its old wall displays. The Company estimates thatpurchases of wall displays for 2004 will be approximately $50 to$60.

The Company estimates that capital expenditures for 2004will be approximately $20 to $25. The Company estimates that cashpayments related to the restructuring programs referred to in Note 5 tothe Unaudited Consolidated Condensed Financial Statements and executiveseparation costs will be approximately $15 to $22 in 2004.

TheCompany expects that operating revenues, cash on hand and fundsavailable for borrowing under the Credit Agreement, the Mafco $65million line of credit, the 2004 Mafco $125 million term loan, otherpermitted lines of credit and advances under the New Keepwell Agreementwill be sufficient to enable the Company to cover its operatingexpenses, including cash requirements in connection with theCompany's operations, the continued implementation of, andrefinement to, the Company's plan, cash requirements inconnection with the Company's restructuring programs referred toabove and the debt service requirements of the Company and itssubsidiaries for 2004 and interest on the New REV Holdings Notes.**(See Note 8 to the Unaudited Consolidated Condensed FinancialStatements.)** The U.S. mass-market color cosmetics category during2003 and the first quarter of 2004 was softer than expected. Despitethis softness in the U.S. mass-market color cosmetics category, basedupon the Company's belief that its continued implementation ofits plan is proving effective, the Company intends to continue tosupport its plan. To help fund the costs and expenses of the continuedimplementation of the Company's plan, in July 2003, MacAndrewsHoldings agreed to make available to Products Corporation in 2003 thefull $65 under the Mafco $65 million line of credit, $25 of which wasscheduled to become available on January 1, 2004. Additionally,MacAndrews & Forbes has provided Products Corporation with the 2004Mafco $125 million term loan, which is on terms that are substantiallythe same as the Mafco $100 million term loan (the latter of which wasfully converted into equity in connection with the Revlon ExchangeTransactions). As of May 3, 2004, Products Corporation had drawn $270.0under the Credit Agreement, none of the Mafco $65 million line ofcredit and none of the 2004 Mafco $125 million term loan. **(See Note8 to the Unaudited Consolidated Condensed Financial Statements forimportant information concerning the Mafco $100 million term loan,Mafco $65 million line of credit and the 2004 Mafco $125 million termloan.)** The Credit Agreement, the Mafco $65 million line of creditand the 2004 Mafco $125 million term loan are intended to continue tohelp fund the continued implementation of, and refinement to, theCompany's plan and to decrease the risk that would otherwiseexist if the Company were to fail to meet its debt and ongoingobligations as they become due in 2004 and 2005. However, there can beno assurance that such funds will be sufficient to meet theCompany's cash requirements on a consolidated basis. If theCompany's anticipated level of revenue growth is not achievedbecause, for example, of decreased 

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

consumer spending in response to weakeconomic conditions or weakness in the cosmetics category, increasedcompetition from the Company's competitors or the Company'smarketing plans are not as successful as anticipated, or if theCompany's expenses associated with the continued implementationof, and refinement to, the Company's plan exceed the anticipatedlevel of expenses, the Company's current sources of funds may beinsufficient to meet the Company's cash requirements.Additionally, in the event of a decrease in demand for ProductsCorporation's products or reduced sales or lack of increases indemand and sales as a result of the continued implementation of, andrefinement to, the Company's plan, such development, ifsignificant, could reduce Products Corporation's operatingrevenues and could adversely affect Products Corporation'sability to achieve certain financial covenants under the CreditAgreement and in such event the Company could be required to takemeasures, including reducing discretionary spending. If the Company isunable to satisfy such cash requirements from these sources, theCompany could be required to adopt one or more alternatives, such asdelaying the implementation of or revising aspects of its plan,reducing or delaying purchases of wall displays or advertising orpromotional expenses, reducing or delaying capital spending, delaying,reducing or revising restructuring programs, restructuring its or itssubsidiaries' indebtedness, selling assets or operations, seekingadditional capital contributions or loans from MacAndrews & Forbes,the Company's other affiliates and/or third parties, sellingadditional equity or debt securities of Revlon, Inc. or selling itsequity securities or reducing other discretionary spending. The Companywill have substantial debt maturing in 2005, which will requirerefinancing, consisting of $309.9 (assuming the maximum amount isborrowed) under the Credit Agreement and $363.0 of 12% SeniorSecured Notes, as well as any amounts borrowed under the Mafco $65million line of credit and the 2004 Mafco $125 million term loan.**(See Note 8 to the Unaudited Consolidated Condensed FinancialStatements for important information concerning recent amendments tothe Credit Agreement.)** **(See Note 10 to the UnauditedConsolidated Condensed Financial Statements.)**

ProductsCorporation's EBITDA, as defined in the Credit Agreement, wasapproximately $144.4 for the four quarters ended December 31, 2003. Asa result, Products Corporation would not have been in compliance withthe Credit Agreement's EBITDA and leverage ratio covenants, hadthey been in effect at that time. The Company expects that ProductsCorporation will need to seek a further amendment to the CreditAgreement or a waiver of the EBITDA and leverage ratio covenants underthe Credit Agreement prior to the expiration of the existing waiver onJanuary 31, 2005 because Products Corporation does not expect that itsoperating results, including after giving effect to various actionsunder the Company's plan, will allow Products Corporation tosatisfy those covenants for the four consecutive fiscal quarters endingDecember 31, 2004. The minimum EBITDA required to be maintained byProducts Corporation under the Credit Agreement was $230 for each ofthe four consecutive fiscal quarters ending on December 31, 2003 (whichcovenant was waived through January 31, 2004 and thereafter eliminatedfor the four quarters ending March 31, 2004, June 30, 2004 andSeptember 30, 2004) and $250 for any four consecutive fiscal quartersending December 31, 2004 and thereafter (which covenant was waivedthrough January 31, 2005). The leverage ratio covenant under the CreditAgreement will permit a maximum ratio of 1.10:1.00 for any fourconsecutive fiscal quarters ending on or after December 31, 2003 (whichlimit was eliminated for the four quarters ending March 31, 2004, June30, 2004 and September 30, 2004 and waived through January 31, 2005 forthe four fiscal quarters ending December 31, 2004). In addition, aftergiving effect to the January 2004 Bank Amendment, the Credit Agreementalso contains a $20 minimum liquidity covenant. While ProductsCorporation's expects that its bank lenders will consent to suchamendment or waiver, there can be no assurance that they will or thatthey will do so on terms that are favorable to Products Corporation. IfProducts Corporation is unable to obtain such amendment or waiver, itcould be required to refinance the Credit Agreement or repay it withproceeds from the sale of assets or operations, or additional capitalcontributions and/or loans from MacAndrews & Forbes, Revlon, Inc.or other affiliates and/or third parties or the sale of additionalequity or debt securities of Revlon, Inc. In the event that ProductsCorporation is unable obtain such a waiver 

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

or amendment and Products Corporation werenot able to refinance or repay the Credit Agreement, ProductsCorporation's inability to meet the financial covenants for thefour consecutive fiscal quarters ending December 31, 2004 wouldconstitute an event of default under Products Corporation'sCredit Agreement, which would permit the bank lenders to accelerate theCredit Agreement, which in turn would constitute an event of defaultunder the indentures governing Products Corporation's 12%Senior Secured Notes, 9% Senior Notes,8 1/8% Senior Notes and8 5/8% Senior Subordinated Notes if the amountaccelerated exceeds $25.0 and such default remains uncured within 10days of notice from the trustee under the applicable indenture.Further, the lenders under Products Corporation's CreditAgreement could proceed against the collateral securing indebtednessunder the Credit Agreement. If these lenders were to foreclose uponthis collateral, which includes the capital stock of ProductsCorporation, the value of Revlon, Inc.'s Common Stock would besubstantially diminished or eliminated. **(See "The 2004Debt Reduction Transactions" above and Note 10 to theUnaudited Consolidated Condensed Financial Statements.)**

There can be no assurance that the Company would be able to take anyof the actions referred to in the preceding two paragraphs because of avariety of commercial or market factors or constraints in theCompany's debt instruments, including, for example, ProductsCorporation's inability to reach agreement with its bank lenderson refinancing terms that are acceptable to the Company before thewaiver of its financial covenants expires on January 31, 2005, marketconditions being unfavorable for an equity or debt offering, or thatthe transactions may not be permitted under the terms of theCompany's various debt instruments then in effect, because ofrestrictions on the incurrence of debt, incurrence of liens, assetdispositions and related party transactions. In addition, such actions,if taken, may not enable the Company to satisfy its cash requirementsif the actions do not generate a sufficient amount of additionalcapital.

Revlon, Inc., as a holding company, will be dependenton the earnings and cash flow of, and dividends and distributions from,Products Corporation to pay its expenses and to pay any cash dividendor distribution. The terms of the Credit Agreement, the Mafco $65million line of credit, the 2004 Mafco $125 million term loan, the12% Senior Secured Notes, the 8 5/8%Senior Subordinated Notes, the 8 1/8% SeniorNotes and the 9% Senior Notes generally restrict ProductsCorporation from paying dividends or making distributions, except thatProducts Corporation is permitted to pay dividends and makedistributions to Revlon, Inc., among other things, to enable Revlon,Inc. to pay expenses incidental to being a public holding company,including, among other things, professional fees such as legal andaccounting fees, regulatory fees such as Commission filing fees andother miscellaneous expenses related to being a public holding companyand, subject to certain limitations, to pay dividends or makedistributions in certain circumstances to finance the purchase byRevlon, Inc. of its Class A Common Stock in connection with thedelivery of such Class A Common Stock to grantees under the Revlon,Inc. Stock Plan.

On October 17, 2003, REV Holdings filed aregistration statement on Form S-4 with the SEC with respect to the REVHoldings Exchange Offer. The REV Holdings Exchange Offer wasconsummated on January 21, 2004. In connection therewith, REV Holdingsissued $18.5 principal amount of New REV Holdings Notes in exchange fora like principal amount of REV Holdings Notes. In addition, at maturityon February 1, 2004, the Company's parent contributed $7.9principal amount of REV Holdings Notes it held and $54.1 of cash toretire the remaining outstanding REV Holdings Notes.

The New REVHoldings Notes, which bear interest semi-annually and mature onFebruary 1, 2007, are secured by the Collateral. In addition, the NewIndenture contains covenants that, among other things, limit (i) theissuance of additional debt and redeemable stock by REV Holdings, (ii)the creation of additional liens on the Collateral (other than the liencreated by the New Indenture), (iii) the payment of dividends oncapital stock of REV Holdings and the redemption of capital stock ofREV Holdings or any of its direct or indirect parents, (iv) the sale ofassets and subsidiary stock (including by way of 

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

consolidations, mergers and similartransactions), and (v) transactions with affiliates. All of theselimitations and prohibitions, however, are subject to a number ofqualifications, which are set forth in the New Indenture.

Inconnection with the REV Holdings Exchange Offer, GSB Investments Corp.,an affiliate of the Company, entered into the New Keepwell Agreement,pursuant to which GSB Investments Corp. has agreed to provide REVHoldings with funds equal to any interest payment due on the New REVHoldings Notes, to the extent that REV Holdings does not havesufficient funds on hand to make such payment on the applicable duedate. REV Holdings currently anticipates that it will use advancesunder the New Keepwell Agreement to pay interest when due under the NewREV Holdings Notes.

The New Indenture contains customary eventsof default for debt instruments of such type. The New Indentureincludes a cross-acceleration provision, which provides that it shallbe an event of default under the New Indenture if any debt of REVHoldings or any of its significant subsidiaries (as defined in the NewIndenture), is not paid within any applicable grace period after finalmaturity or is accelerated by the holders of such debt because of adefault and the total principal amount of the portion of such debt thatis unpaid or accelerated exceeds $25.0 and such default continues for10 days after notice from the trustee under the New Indenture. If anysuch event of default occurs, the trustee under the New Indenture orthe holders of at least 25% in principal amount of theoutstanding New REV Holdings Notes may declare all such notes to be dueand payable immediately, provided that the holders of a majority inaggregate principal amount of the New REV Holdings Notes may, by noticeto the trustee, waive any such default or event of default and itsconsequences under the New Indenture.

GSB Investments Corp. hasadvised REV Holdings that it expects either to have cash flow fromdividends on its investments or to obtain capital contributions fromits affiliates that, in the aggregate, will be sufficient to satisfyits obligations under the New Keepwell Agreement. There can be noassurance, however, that GSB Investments Corp. (a)  will havesuch cash flow, because, among other things, a portion of itsinvestments are pledged and its investees are under no obligation topay dividends, or (b)  could obtain any such contribution or loanbecause, among other things, its affiliates are under no obligation toprovide them to GSB Investments Corp.

The New Keepwell Agreementwill terminate at such time as there are no New REV Holdings Notesoutstanding, at which time GSB Investments Corp. may require repaymentof advances under the New Keepwell Agreement. In February 2004, GSBInvestments Corp. made non-interest bearing advances of $4.5 to REVHoldings under the Keepwell Agreement, which were used to make theinterest payments on the REV Holdings Notes. The obligation under theKeepwell Agreement of $28.4 at maturity on February 1, 2004 of the REVHoldings Notes was contributed to the capital of REV Holdings inApril  2004.

REV Holdings, as a holding company, will bedependent on advances from affiliates to pay its expenses and will alsobe dependent upon advances under the New Keepwell Agreement to payinterest when due on the New REV Holdings Notes. The Companyanticipates that it will be required to adopt one or more alternativesto pay the principal amount at maturity of the New REV Holdings Notes,such as refinancing its indebtedness, repaying its indebtedness withthe proceeds from the sale of assets or operations of Revlon, Inc.,selling its equity securities or equity securities of Revlon, Inc. orseeking additional capital contributions or loans from MacAndrews &Forbes, the Company's other affiliates and/or third parties.There can be no assurance that any of the foregoing actions could beeffected on satisfactory terms, that any of the foregoing actions wouldenable the Company to pay the principal amount at maturity of the NewREV Holdings Notes or that any of such actions would be permitted bythe terms of the New Indenture or any other debt instrument of theCompany and the Company's subsidiaries then in effect, because,among other reasons, market conditions may be unfavorable for an equityor debt offering or the transactions may not be permitted under theterms of the Company's various 

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

debt instruments then in effect, because ofrestrictions on the incurrence of debt, incurrence of liens, assetdispositions and related party transactions. In addition, such actions,if taken, may not enable the Company to satisfy its cash requirementsif the actions do not generate a sufficient amount of additionalcapital. None of the Company's affiliates, including MacAndrews& Forbes, is required to make any capital contribution, loan orother payment to REV Holdings with respect to principal or interest onthe New REV Holdings Notes (other than as provided in the New KeepwellAgreement).

REV Holdings, as a single-member limited liabilitycompany, is a disregarded entity for federal and state income taxpurposes. REV Holdings' income and loss are included in theconsolidated federal income tax return filed by the affiliated group ofwhich Mafco Holdings is the common parent (the "MafcoGroup"). In March 1993, REV Holdings and Mafco Holdingsentered into a tax sharing agreement (as amended, the"1993 Tax Sharing Agreement") pursuant towhich, for all taxable periods beginning on or after January 1, 1993,REV Holdings will pay to Mafco Holdings amounts equal to the taxes thatREV Holdings would otherwise have had to pay if it were to fileseparate federal, state and local income tax returns for itself,excluding Revlon, Inc. and its subsidiaries (including any amountdetermined to be due as a result of a redetermination arising from anaudit or otherwise of the tax liability relating to any such periodthat is attributable to REV Holdings). In connection with theconversion of REV Holdings Inc. into a limited liability company inDecember 2002, the 1993 Tax Sharing Agreement was amended to providethat REV Holdings will make any tax sharing payment to Mafco Holdingsas if it were a taxable corporation. No tax sharing payment wasrequired to be paid for 2004 pursuant to the 1993 Tax SharingAgreement.

As a result of the closing of the Revlon ExchangeTransactions, as of the end of the day on March 25, 2004, Revlon Inc.,Products Corporation and its U.S. subsidiaries were no longer includedin the Mafco Group for federal income tax purposes. The Code and theTreasury regulations issued thereunder govern both the calculation ofthe amount and allocation to the members of the Mafco Group of anyCNOLs that will be available to offset the Revlon Inc.'s taxableincome and the taxable income of its U.S. subsidiaries for the taxableyears beginning after March 25, 2004. It is impossible to estimateaccurately the amount of CNOLs that will be allocated to Revlon, Inc.as of December 31, 2004 because various factors could increase ordecrease or eliminate these amounts. These factors include, but are notlimited to, the amount and nature of the income, gains or losses thatthe other members of the Mafco Group recognize in the 2004 taxable yearbecause any CNOLs are, pursuant to Treasury regulations, used to offsetthe taxable income of the Mafco Group for the entire consolidatedreturn year ending December 31, 2004. Only the amount of any CNOLs thatthe Mafco Group does not absorb by December 31, 2004 will be availableto be allocated to Revlon, Inc. and its U.S. subsidiaries for Revlon,Inc.'s taxable years beginning on March 26, 2004. Subject to theforegoing, it is currently estimated that Revlon, Inc. will haveapproximately $330 in U.S. federal net operating losses and nil foralternative minimum tax losses available to Revlon, Inc. as of March25, 2004. Any losses that Revlon, Inc. and its U.S. subsidiaries maygenerate after March 25, 2004 will be available to Revlon, Inc. for itsuse and its U.S. subsidiaries' use and will not be available forthe use of the Mafco Group. Following the closing of the RevlonExchange Transactions, Revlon, Inc. became the parent of a newconsolidated group for federal income tax purposes and ProductsCorporation's federal taxable income and loss will be included insuch group's consolidated tax returns. Accordingly, Revlon, Inc.and Products Corporation entered into a new tax sharing agreementpursuant to which Products Corporation will be required to pay toRevlon, Inc. amounts equal to the taxes that Products Corporation wouldotherwise have had to pay if Products Corporation were to file separatefederal, state or local income tax returns, limited to the amount, andpayable only at such times, as Revlon, Inc. will be required to makepayments to the applicable taxing authorities.

As a result ofdealing with suppliers and vendors in a number of foreign countries,Products Corporation enters into foreign currency forward exchangecontracts and option contracts from time to time to hedge certain cashflows denominated in foreign currencies. There were foreign currencyforward 

30

----

REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

exchange contracts with a notional amount of$60.8 outstanding at March 31, 2004. The fair value of foreign currencyforward exchange contracts outstanding at March 31, 2004 was$(0.4).

Disclosures about Contractual Obligations andCommercial Commitments

There have been no material changes(with the exception of the elimination of approximately $804 in debt inconjunction with the Revlon Exchange Transactions) outside the ordinarycourse of the Company's business to the Company's totalcontractual cash obligations which are set forth in the table includedin the Company's Annual Report on Form 10-K for the year endedDecember 31, 2003. **(See Note 8 to the Unaudited ConsolidatedCondensed Financial Statements.)** The following table reflects thematerially reduced long-term debt obligations after the Revlon ExchangeTransactions:

|                                            |  |                                           |         |                 |  |           |     |           |  |              |       |        |  |   |       |        |  |        |     |        |  |  |
|--------------------------------------------|--|-------------------------------------------|---------|-----------------|--|-----------|-----|-----------|--|--------------|-------|--------|--|---|-------|--------|--|--------|-----|--------|--|--|
|                                       |  | PaymentsDue by Period(dollars inmillions) |
| ContractualObligationsAs of March 31, 2004 |  | Total                                     |         | Less than 1year |  | 1-3 years |     | 4-5 years |  | After 5years |
| **Long-termDebt**                          |  | $                                         | 1,122.1 |            |  |      | Nil |      |  | $            | 795.1 |   |  | $ | 327.0 |   |  |   | Nil |   |
|                                            |

Off-BalanceSheet Transactions

The Company does not maintain anyoff-balance sheet transactions, arrangements, obligations or otherrelationships with unconsolidated entities or others that arereasonably likely to have a material current or future effect on theCompany's financial condition, changes in financial condition,revenues or expenses, results of operations, liquidity, capitalexpenditures or capital resources.

Effect of ProposedAccounting Standard

In April 2003, the FASB announced it willrequire all companies to expense the fair value of employeeequity-based awards. The FASB issued an exposure draft in the firstquarter of 2004 that could become effective in 2005. Until a newstatement is issued, the provisions of APB Opinion No. 25 and SFAS No.123 will remain in effect. The Company will evaluate the impact of anynew statement regarding employee equity-based awards when a newstatement is issued.

31

----

REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

Item 3.    Quantitative andQualitative Disclosures About Market Risk

The Company hasexposure to market risk both as a result of changing interest rates andmovements in foreign currency exchange rates. The Company'spolicy is to manage market risk through a combination of fixed andfloating rate debt, the use of derivative financial instruments andforeign exchange forward and option contracts. The Company does nothold or issue financial instruments for trading purposes. Thequalitative and quantitative information presented in Item 7A of theCompany's Annual Report on Form 10-K for the year ended December31, 2003 ("Item 7A") describes significantaspects of the Company's financial instrument programs that havematerial market risk as of December 31, 2003. The following tablepresents the information required by Item 7A as of March 31, 2004:

|                                                                |  |                                                      |        |         |  |                        |        |         |  |        |        |            |  |        |        |         |  |        |        |         |  |        |         |        |  |        |         |        |  |        |         |        |  |  |
|----------------------------------------------------------------|--|------------------------------------------------------|--------|---------|--|------------------------|--------|---------|--|--------|--------|------------|--|--------|--------|---------|--|--------|--------|---------|--|--------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                                           |  | Expectedmaturity date for the year ended December31, |        | Total   |  | Fair ValueMarch31,2004 |
|                                                           |  | 2004                                                 |        | 2005    |  | 2006                   |        | 2007    |  | 2008   |        | Thereafter |  |
|                                                           |  | (dollarsin millions)                                 |
| **Debt**                                                       |  |                                                 |        |    |  |                   |        |    |  |   |        |       |  |   |        |    |
| Short-termvariable rate (variouscurrencies)                    |  | $                                                    | 29.8   |    |  |                   |   |    |  |   |   |       |  |   |   |    |  |   |   |    |  |   |    |   |  | $      | 29.8    |   |  | $      | 29.8    |   |
| Averageinterest rate(a)                                        |  |                                                 | 3.4    | %  |  |                   |   |    |  |   |   |       |  |   |   |    |  |   |   |    |  |   |    |   |  |   |    |   |  |   |    |   |
| Long-termfixed rate – third party($US)                   |  |                                                 |   |    |  | $                      | 357.1  |    |  | $      | 191.7  |       |  | $      | 18.5   |    |  | $      | 327.0  |    |  |   |    |   |  |   | 894.3   |   |  |   | 889.2   |   |
| Averageinterestrate                                            |  |                                                 |   |    |  |                   | 12.0   | %  |  |   | 8.5    | %     |  |   | 13.0   | %  |  |   | 8.6    | %  |  |   |    |   |  |   |    |   |  |   |    |   |
| Long-termvariable rate – third party($US)                |  |                                                 |   |    |  |                   | 224.4  | *  |  |   |   |       |  |   |   |    |  |   |   |    |  |   |    |   |  |   | 224.4   |   |  |   | 224.4   |   |
| Averageinterest rate(a)                                        |  |                                                 |   |    |  |                   | 6.7    | %  |  |   |   |       |  |   |   |    |  |   |   |    |  |   |    |   |  |   |    |   |  |   |    |   |
| Long-termvariable rate – third party (variouscurrencies) |  |                                                 |   |    |  |                   | 3.4    | *  |  |   |   |       |  |   |   |    |  |   |   |    |  |   |    |   |  |   | 3.4     |   |  |   | 3.4     |   |
| Averageinterest rate(a)                                        |  |                                                 |   |    |  |                   | 9.5    | %  |  |   |   |       |  |   |   |    |  |   |   |    |  |   |    |   |  |   |    |   |  |   |    |   |
| Totaldebt                                                      |  | $                                                    | 29.8   |    |  | $                      | 584.9  |    |  | $      | 191.7  |       |  | $      | 18.5   |    |  | $      | 327.0  |    |  | $      | — |   |  | $      | 1,151.9 |   |  | $      | 1,146.8 |   |
|                                                                |

|                                               |  |                            |        |        |  |        |        |                                |  |                           |        |                         |  |        |      |        |  |        |      |        |  |        |         |         |  |  |
|-----------------------------------------------|--|----------------------------|--------|--------|--|--------|--------|--------------------------------|--|---------------------------|--------|-------------------------|--|--------|------|--------|--|--------|------|--------|--|--------|---------|---------|--|--|
| ForwardContracts                              |  | AverageContractualRate$/FC |        |   |  |   |        | OriginalUSDollarNotionalAmount |  | ContractValueMarch31,2004 |        | Fair ValueMarch 31,2004 |
| Sell Hong Kong Dollars/BuyUSD                 |  |                       | 0.1287 |   |  |   |   |                           |  |                      |   |                    |  | $      | 0.2  |   |  | $      | 0.2  |   |  | $      | — |    |
| BuyEuros/SellUSD                              |  |                       | 1.2152 |   |  |   |   |                           |  |                      |   |                    |  |   | 4.1  |   |  |   | 4.1  |   |  |   | — |    |
| SellBritish Pounds/BuyUSD                     |  |                       | 1.7999 |   |  |   |   |                           |  |                      |   |                    |  |   | 6.4  |   |  |   | 6.4  |   |  |   | — |    |
| SellAustralian Dollars/BuyUSD                 |  |                       | 0.7531 |   |  |   |   |                           |  |                      |   |                    |  |   | 12.6 |   |  |   | 12.7 |   |  |   | 0.1     |    |
| SellCanadian Dollars/BuyUSD                   |  |                       | 0.7515 |   |  |   |   |                           |  |                      |   |                    |  |   | 20.0 |   |  |   | 19.8 |   |  |   | (0.2    | )  |
| SellSouth African Rand/BuyUSD                 |  |                       | 0.1431 |   |  |   |   |                           |  |                      |   |                    |  |   | 6.9  |   |  |   | 6.5  |   |  |   | (0.4    | )  |
| BuyAustralian Dollars/Sell New ZealandDollars |  |                       | 1.1219 |   |  |   |   |                           |  |                      |   |                    |  |   | 4.9  |   |  |   | 5.0  |   |  |   | 0.1     |    |
| BuyBritish Pounds/SellEuros                   |  |                       | 0.6737 |   |  |   |   |                           |  |                      |   |                    |  |   | 5.7  |   |  |   | 5.7  |   |  |   | — |    |
| Totalforwardcontracts                         |  |                       |   |   |  |   |   |                           |  |                      |   |                    |  | $      | 60.8 |   |  | $      | 60.4 |   |  | $      | (0.4    | )  |
|                                               |

|  |
|--|
|  |  |
|  |

| (a) | Weightedaverage variable rates are based upon implied forward rates from theyield curves at March 31, 2004. |
|-----|-------------------------------------------------------------------------------------------------------------|

| * | Represents Products Corporation's CreditAgreement which matures in May 2005. |
|---|------------------------------------------------------------------------------|

Item4.    Controls and Procedures

(a)    Disclosure Controlsand Procedures. The Company's management, with the participationof the Company's Chief Executive Officer and Chief FinancialOfficer, has evaluated the effectiveness of the Company'sdisclosure controls and procedures (as defined in Rules 13a-15(e) and15d-15(e) under the Exchange Act) as of the end of the fiscal periodcovered by this Quarterly Report on Form 10-Q. Based 

32

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

upon such evaluation, the Chief ExecutiveOfficer and Chief Financial Officer have concluded that, as of the endof such period, the Company's disclosure controls and proceduresare effective in recording, processing, summarizing and reportinginformation required to be disclosed by the Company in the reports itfiles or submits under the Exchange Act within the time periodsspecified in the Commission's rules and forms.

(b)    Internal Control Over Financial Reporting. There have notbeen any changes in the Company's internal control over financialreporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)under the Exchange Act) during the fiscal period covered by thisQuarterly Report on Form 10-Q that have materially affected, or arereasonably likely to materially affect, the Company's internalcontrol over financial reporting.

Forward-LookingStatements

This Quarterly Report on Form 10-Q for the quarterended March 31, 2004, as well as other public documents and statementsof the Company, contain forward-looking statements that involve risksand uncertainties. The Company's actual results may differmaterially from those discussed in such forward-looking statements.Such statements include, without limitation, the Company'sexpectations and estimates (whether qualitative or quantitative) asto:

|           |                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (i)  | the Company's plans to updateits retail presence and improve the marketing effectiveness of itsretail wall displays by installing newly-reconfigured wall displays andreconfiguring existing wall displays at its retail customers (and itsestimates of the costs of such wall displays, the effects of such planson the accelerated amortization of existing wall displays and theestimated amount of suchamortization); |

|            |                                                                                                                    |
|------------|--------------------------------------------------------------------------------------------------------------------|
| (ii)  | the Company's plansto increase its advertising and media spending and improve theeffectiveness of its advertising; |

|             |                                                                                                         |
|-------------|---------------------------------------------------------------------------------------------------------|
| (iii)  | theCompany's plans to introduce new products and further strengthenits new product development process; |

|            |                                                                                                                                                                       |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (iv)  | theCompany's plans to streamline its product assortment andreconfigure product placement on its wall displays and selectivelyadjust prices on certain of itsproducts; |

|           |                                                                                           |
|-----------|-------------------------------------------------------------------------------------------|
| (v)  | the Company's plans toimplement comprehensive programs to develop and train itsemployees; |

|            |                                                                                                                                                                                                                                                                                               |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (vi)  | the Company's futurefinancial performance, including the Company's belief that itsplan is proving effective and that it has strengthened itsorganizational capability (and its expectation to do so in 2004) andthat it has strengthened its relationships with its key retailers inthe U.S.; |

|             |                                                                                                                                                                                                        |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (vii)  | the effect on sales ofpolitical and/or economic conditions, political uncertainties, militaryactions, terrorist activities, adverse currency fluctuations,competitive activities and categoryweakness; |

|              |                                                                                                                                                                                                                                                                                                                                  |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (viii)  | the charges and the cashcosts resulting from implementing and refining the Company's planand the timing of such costs, as well as the Company'sexpectations as to improved revenues and achieving profitability overthe long term as a result of such phase of its plan and theCompany's plans to continue to fund brandsupport; |

|            |                                                                                                                                                                  |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ix)  | the Company's plansregarding the continued growth momentum and accelerated growth phase ofits plan, with the objective of improving its operating profitmargins; |

|           |                                                                                              |
|-----------|----------------------------------------------------------------------------------------------|
| (x)  | the Company's plans tofurther improve the new product development and implementationprocess; |

33

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

|            |                                                                                                      |
|------------|------------------------------------------------------------------------------------------------------|
| (xi)  | theCompany's plans to continue to increase the effectiveness andreduce the cost of its displaywalls; |

|             |                                                                                                                                                                     |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xii)  | the Company'splans to drive efficiencies across its overall supply chain, includingreducing manufactory costs by streamlining components and sourcingstrategically; |

|              |                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------|
| (xiii)  | theCompany's plans to optimize the effectiveness of its marketingand promotions and merchandisercoverage; |

|             |                                                                                                                                              |
|-------------|----------------------------------------------------------------------------------------------------------------------------------------------|
| (xiv)  | restructuringactivities, restructuring costs, the timing of restructuring paymentsand annual savings and other benefits from suchactivities; |

|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xv)  | operating revenues,cash on hand and availability of borrowings under the Mafco $65 millionline of credit, the 2004 Mafco $125 million term loan, ProductsCorporation's Credit Agreement, other permitted lines of creditand advances under the New Keepwell Agreement being sufficient tosatisfy the Company's cash requirements in 2004, and theavailability of funds from Products Corporation's CreditAgreement, the Mafco $65 million line of credit, the 2004 Mafco $125million term loan, other permitted lines of credit and advances underthe New Keepwell Agreement, restructuring indebtedness, selling assetsor operations, capital contributions and/or loans from MacAndrews &Forbes, the Company's other affiliates and/or third partiesand/or the sale of additional equity or debt securities of Revlon,Inc.; |

|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xvi)  | the availability ofadvances under the New Keepwell Agreement being sufficient to satisfyREV Holdings' cash requirements, GSB Investments Corp.'splan to obtain capital contributions or loans from its affiliates tomake advances under the New Keepwell Agreement if it does not havesufficient cash flow from dividends on its investments or the sale ofequity securities of REV Holdings to pay the principal amount atmaturity of the New REV Holdings Notes; |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xvii)  | the Company's uses offunds, including amounts required for the payment of operatingexpenses, including expenses in connection with the continuedimplementation of, and refinement to, the Company's plan, such asthe purchase and reconfiguration of wall displays and increases inadvertising and media, capital expenditure requirements, includingcharges and costs in connection with the ERP System, payments inconnection with the Company's restructuring programs and debtservice payments, and its estimates of operating expenses, workingcapital expenses, wall display costs, capital expenditures,restructuring costs and debt service payments (including paymentsrequired under Products Corporation's debt instruments andinterest payments under the New REV HoldingsNotes); |

|               |                                                                   |
|---------------|-------------------------------------------------------------------|
| (xviii)  | matters concerningthe Company's market-risk sensitiveinstruments; |

|             |                                                                       |
|-------------|-----------------------------------------------------------------------|
| (xix)  | the effects ofthe Company's adoption of certain accountingprinciples; |

|            |                                                                                                                                                                                                                                                                               |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xx)  | ProductsCorporation obtaining a further waiver or amendment of variousprovisions of its Credit Agreement, including the EBITDA and leverageratio covenants, or refinancing or repaying such debt before January31, 2005 in the event such waiver or amendment is notobtained; |

|             |                                                                                                                                                                                                              |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xxi)  | the Company'splan to refinance certain of Products Corporation's debt and theamounts and timing of such transactions and the estimated impact ofsuch transactions on the Company's financial performance;and |

|              |                                                                                                                                                                                                                                                                                                                                                                        |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xxii)  | theCompany's plan to efficiently manage its cash and workingcapital, including, among other things, by carefully managing andreducing inventory levels, centralizing purchasing to secure discountsand efficiencies in procurement, and providing additional discounts toU.S. customers for more timely payment of receivables and carefullymanaging accounts payable. |

Statements that arenot historical facts, including statements about the Company'sbeliefs and expectations, are forward-looking statements.Forward-looking statements can be identified by, among 

34

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

other things, the use of forward-lookinglanguage, such as "believes,""expects,""estimates,""projects,""forecast," "may,""will," "should,""seeks," "plans,""scheduled to,""anticipates" or"intends" or the negative of those terms, orother variations of those terms or comparable language, or bydiscussions of strategy or intentions. Forward-looking statements speakonly as of the date they are made, and except for the Company'songoing obligations under the U.S. federal securities laws, the Companyundertakes no obligation to publicly update any forward-lookingstatements, whether as a result of new information, future events orotherwise. Investors are advised, however, to consult any additionaldisclosures the Company makes in its Quarterly Reports on Form 10-Qfiled in 2004 and Current Reports on Form 8-K filed with the Commissionin 2004 (which, among other places, can be found on theCommission's website at http://www.sec.gov). The informationavailable from time to time on such website shall not be deemedincorporated by reference into this Quarterly Report on Form 10-Q. Anumber of important factors could cause actual results to differmaterially from those contained in any forward-looking statement. Inaddition to factors that may be described in the Company'sfilings with the Commission, including this filing, the followingfactors, among others, could cause the Company's actual resultsto differ materially from those expressed in any forward-lookingstatements made by theCompany:

|           |                                                                                                                                  |
|-----------|----------------------------------------------------------------------------------------------------------------------------------|
| (i)  | difficulties or delaysor unanticipated costs associated with improving the marketingeffectiveness of the Company's walldisplays; |

|            |                                                                                                                                                                                                 |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  | difficultiesor delays in, or unanticipated costs associated with, developing and/orpresenting the Company's increased advertising programs and/orimproving the effectiveness of itsadvertising; |

|             |                                                                                                                                                                                                                                                            |
|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (iii)  | difficultiesor delays in, or unanticipated costs associated with, developing andintroducing new products or failure of the Company's customers toaccept new product offerings and/or in further strengthening theCompany's new product developmentprocess; |

|            |                                                                                                                                                                                                                                                      |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (iv)  | difficulties ordelays in, or unanticipated costs associated with, implementing theCompany's plans to streamline its product assortment andreconfigure product placement on its wall displays and selectivelyadjust prices on certain of itsproducts; |

|           |                                                                                                                                       |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------|
| (v)  | difficulties ordelays in, or unanticipated costs associated with, implementingcomprehensive programs to train the Company'semployees; |

|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (vi)  | unanticipatedcircumstances or results affecting the Company's financialperformance, including decreased consumer spending in response to weakeconomic conditions or weakness in the category, changes in consumerpreferences, such as reduced consumer demand for the Company'scolor cosmetics and other current products, and actions by theCompany's competitors, including business combinations,technological breakthroughs, new products offerings, promotionalspending and marketing and promotional successes, including increasesin market share; |

|             |                                                                                                                                                                                                                               |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (vii)  | theeffects of and changes in political and/or economic conditions,including inflation, monetary conditions, military actions andterrorist activities, and in trade, monetary, fiscal and tax policiesin internationalmarkets; |

|              |                                                                                                                                                                                                                                                                           |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (viii)  | unanticipated costsor difficulties or delays in completing projects associated with thecontinued implementation of, and refinement to, the Company'splan or lower than expected revenues or inability to achieveprofitability over the long term as a result of suchplan; |

|            |                                                                                                                                                                                               |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ix)  | difficulties, delays orunanticipated costs in implementing the Company's plans regardingthe accelerated growth phase of its plan, with the objective ofimproving its operating profitmargins; |

|           |                                                                                                                                                         |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| (x)  | difficulties, delays orunanticipated costs in implementing the Company's plans tofurther improve the new product development and implementationprocess; |

35

----

REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIALCONDITION AND RESULTS OFOPERATIONS**—Continued**(dollars in millions, except per sharedata)

|            |                                                                                                                                                                  |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xi)  | difficulties,delays or unanticipated costs in implementing the Company's plansto continue to increase the effectiveness and reduce the cost of itsdisplay walls; |

|             |                                                                                                                                                                                                                                |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xii)  | difficulties,delays or unanticipated costs in implementing the Company's plansto drive efficiencies across its overall supply chain, includingreducing manufactory costs by streamlining components and sourcingstrategically; |

|              |                                                                                                                                                                     |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xiii)  | difficulties,delays or unanticipated costs in implementing the Company's plansto optimize the effectiveness of its marketing and promotions ormerchandisercoverage; |

|             |                                                                                                                                                  |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| (xiv)  | difficulties, delaysor unanticipated costs or less than expected savings and other benefitsresulting from the Company's restructuringactivities; |

|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xv)  | lower than expectedoperating revenues, the inability to secure capital contributions orloans from MacAndrews & Forbes, the Company's otheraffiliates and/or third parties, or the unavailability of funds underProducts Corporation's Credit Agreement, the Mafco $65 millionline of credit, the 2004 Mafco $125 million term loan or otherpermitted lines of credit selling additional shares of Revlon, Inc. orequity securities of REVHoldings; |

|             |                                                                                                                                                                                                                                                                                                                               |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xvi)  | advances under theNew Keepwell Agreement being insufficient to satisfy REVHoldings' cash requirements or GSB Investments Corp.'sinability to obtain capital contributions or loans from its affiliatesto make advances under the New Keepwell Agreement if it has notreceived sufficient dividend income from itsinvestments; |

|              |                                                                                                                                                                        |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xvii)  | higher thanexpected operating expenses, sales returns, working capital expenses,wall display costs, capital expenditures, restructuring costs or debtservice payments; |

|               |                                                                                                                   |
|---------------|-------------------------------------------------------------------------------------------------------------------|
| (xviii)  | interestrate or foreign exchange rate changes affecting the Company and itsmarket sensitive financialinstruments; |

|             |                                                                                    |
|-------------|------------------------------------------------------------------------------------|
| (xix)  | unanticipatedeffects of the Company's adoption of certain new accountingstandards; |

|            |                                                                                                                                                                                                                                                                      |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xx)  | difficulties, delaysor inability to obtain a further waiver or amendment of the EBITDA andleverage ratio covenants under the Credit Agreement or refinancing orrepaying such debt on or before January 31, 2005 in the event suchwaiver or amendment is notobtained; |

|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xxi)  | difficulties, delaysor the inability of the Company to refinance certain of ProductsCorporation's debt maturing in 2005 and 2006, including theinability to issue equity or debt securities, including Revlon, Inc.Class A Common Stock, for cash or in exchange for indebtedness ofProducts Corporation and difficulties, delays or the inability of theCompany to consummate the remaining Debt Reduction Transactions and tosecure any required Board, stockholder, lender or regulatory approvals;and |

|              |                                                                                                        |
|--------------|--------------------------------------------------------------------------------------------------------|
| (xxii)  | difficulties, delays orthe inability of the Company to efficiently manage its cash and workingcapital. |

Factors other than those listed above couldalso cause the Company's results to differ materially fromexpected results. This discussion is provided as permitted by thePrivate Securities Litigation Reform Act of1995.

36

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REVHOLDINGS LLC AND SUBSIDIARIES

PART II — OTHERINFORMATION

Item 2. Changes in Securities, Use ofProceeds and Issuer Purchases of Equity Securities – None

Item 4. Submission of Matters to a Vote of Security Holders –None

Item 6. Exhibits and Reports on Form 8-K.

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

|            |                                              |
|------------|----------------------------------------------|
| 31.1  | Section302 CEO certification. Filedherewith. |

|            |                                               |
|------------|-----------------------------------------------|
| 31.2  | Section 302 CFO certification.Filed herewith. |

|            |                                                  |
|------------|--------------------------------------------------|
| 32.1  | Section 906 CEOcertification. Furnishedherewith. |

|            |                                                   |
|------------|---------------------------------------------------|
| 32.2  | Section 906 CFO certification.Furnished herewith. |

|               |                                     |
|---------------|-------------------------------------|
| **(b)**  | **Reports on Form8-K – None** |

S I G N A T U R E S

Pursuant to the requirements of the Securities Exchange Act of 1934,as amended, the registrant has duly caused this report to be signed onits behalf by the undersigned thereunto duly authorized.

Dated: May 17, 2004

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |  |  |
|--------|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
|   |  | **REVHOLDINGSLLC**                                                                                                                                                                                                                                                                                                                                                                                  |
|   |  |             Registrant                                                                                                                                                                                                                                                                                                                  |
|   |  | By:/s/ Todd J. Slotkin                                                                                                                                                                                                                                                                                                                                                                              |
|   |  |             Todd J.Slotkin             Executive Vice President,            Chief Financial Officer,             ChiefAccounting Officer andManager |
|        |

37

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