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UNITEDSTATES SECURITIES AND EXCHANGECOMMISSION

Washington, D.C.20549

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FORM10-Q

(MarkOne)

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

For the quarterly period ended June30,2006

OR

    TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934

For the transition period from______________ to ______________

Commission File Number: 333-23451

REVHOLDINGS LLC

(Exact name ofregistrant as specified in itscharter)

|                                                              |  |  |                                    |
|--------------------------------------------------------------|--|--|------------------------------------|
| Delaware                                                     |  |  | 13-3933701                         |
| (Stateor other jurisdiction of incorporation ororganization) |  |  | (I.R.S.Employer IdentificationNo.) |
|                                                              |

|                                         |  |  |           |
|-----------------------------------------|--|--|-----------|
| 35East 62nd Street, New York, NewYork   |  |  | 10021     |
| (Addressof principal executive offices) |  |  | (ZipCode) |
|                                         |

212-572-8600

(Registrant'stelephone number, including area code)

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filingrequirements for the past 90 days.    Yes     No

Indicate by check mark whether the registrant isa large accelerated filer, an accelerated filer, or a non-acceleratedfiler. See definition of ‘‘acceleratedfiler’’ and ‘‘large acceleratedfiler’’ in Rule 12b-2 of the Exchange Act. (Checkone):

                    Large acceleratedfiler                 Accelerated filer                Non-accelerated filer        

Indicate by check mark whether theregistrant is a shell company (as defined in Rule 12b-2 of the Act).Yes  No 

As of June  30,2006, the registrant’s entire membership interest is held by anaffiliate of MacAndrews & Forbes Holdings Inc.

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REV HOLDINGSLLC AND SUBSIDIARIES

INDEX

PART I – FinancialInformation

|                                 |  |  |                                                                                                                          |  |  |        |
|---------------------------------|--|--|--------------------------------------------------------------------------------------------------------------------------|--|--|--------|
| Item1.                          |  |  | FinancialStatements                                                                                                      |  |  |   |
|                            |  |  | Consolidated Balance Sheetsas of June 30, 2006 (Unaudited) and December31,2005                                           |  |  | 2      |
|                            |  |  | UnauditedConsolidated Statements of Operations for the Three and Six MonthsEnded June 30, 2006 and2005                   |  |  | 3      |
|                            |  |  | Unaudited ConsolidatedStatement of Member’s Deficiency and Comprehensive Loss for theSix Months Ended June 30,2006 |  |  | 4      |
|                            |  |  | Unaudited ConsolidatedStatements of Cash Flows for the Six Months Ended June30, 2006 and2005                             |  |  | 5      |
|                            |  |  | Notes to UnauditedConsolidated FinancialStatements                                                                       |  |  | 6      |
| Item2.                          |  |  | Management’s Discussion and Analysis of FinancialCondition and Results ofOperations                                |  |  | 17     |
| Item3.                          |  |  | Quantitative and Qualitative Disclosures About MarketRisk                                                                |  |  | 34     |
| Item4.                          |  |  | Controls andProcedures                                                                                                   |  |  | 35     |
| PARTII – OtherInformation |  |  |                                                                                                                     |
| Item1A.                         |  |  | RiskFactors                                                                                                              |  |  | 40     |
| Item6.                          |  |  | Exhibits                                                                                                                 |  |  | 40     |
|                            |  |  | Signatures                                                                                                               |  |  | 41     |
|                                 |

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Table of Contents

PART I –FINANCIAL INFORMATION

ITEM 1.    FINANCIALSTATEMENTS

REV HOLDINGS LLC ANDSUBSIDIARIESCONSOLIDATED BALANCE SHEETS(dollars inmillions)

|                                                                                                                |  |  |              |   |          |                  |  |  |  |   |          |   |
|----------------------------------------------------------------------------------------------------------------|--|--|--------------|---|----------|------------------|--|--|--|---|----------|---|
|                                                                                                           |  |  | June30, 2006 |   |          | December 31,2005 |
|                                                                                                           |  |  | (Unaudited)  |   |          |             |
| ASSETS                                                                                                         |  |  |              |   |     |                  |  |  |  |   |     |   |
| Currentassets:                                                                                                 |  |  |              |   |     |                  |  |  |  |   |     |   |
| Cash andcashequivalents                                                                                        |  |  |              | $ | 21.2     |                  |  |  |  | $ | 32.5     |   |
| Tradereceivables, less allowances of $16.2 and $18.9 as of June30,  2006 and December  31,  2005, respectively |  |  |              |   | 173.0    |                  |  |  |  |   | 282.2    |   |
| Inventories                                                                                                    |  |  |              |   | 230.2    |                  |  |  |  |   | 220.6    |   |
| Prepaidexpenses and other                                                                                      |  |  |              |   | 56.9     |                  |  |  |  |   | 56.7     |   |
| Totalcurrent assets                                                                                            |  |  |              |   | 481.3    |                  |  |  |  |   | 592.0    |   |
| Property, plant andequipment, net                                                                              |  |  |              |   | 120.5    |                  |  |  |  |   | 119.7    |   |
| Otherassets                                                                                                    |  |  |              |   | 174.2    |                  |  |  |  |   | 146.8    |   |
| Goodwill,net                                                                                                   |  |  |              |   | 186.1    |                  |  |  |  |   | 186.0    |   |
| Totalassets                                                                                                    |  |  |              | $ | 962.1    |                  |  |  |  | $ | 1,044.5  |   |
| LIABILITIESAND MEMBER’SDEFICIENCY                                                                        |  |  |              |   |     |                  |  |  |  |   |     |   |
| Currentliabilities:                                                                                            |  |  |              |   |     |                  |  |  |  |   |     |   |
| Short-termborrowings                                                                                           |  |  |              | $ | 12.1     |                  |  |  |  | $ | 9.0      |   |
| Currentportion of long-term debt                                                                               |  |  |              |   | 23.8     |                  |  |  |  |   | —  |   |
| Current portion oflong-term debt –affiliates                                                             |  |  |              |   | 4.8      |                  |  |  |  |   | —  |   |
| Accountspayable                                                                                                |  |  |              |   | 110.2    |                  |  |  |  |   | 133.1    |   |
| Accrued expensesandother                                                                                       |  |  |              |   | 299.3    |                  |  |  |  |   | 329.4    |   |
| Totalcurrentliabilities                                                                                        |  |  |              |   | 450.2    |                  |  |  |  |   | 471.5    |   |
| Long-termdebt                                                                                                  |  |  |              |   | 1,403.3  |                  |  |  |  |   | 1,431.9  |   |
| Long-term debt–affiliates                                                                                |  |  |              |   | —  |                  |  |  |  |   | 3.6      |   |
| Otherlong-termliabilities                                                                                      |  |  |              |   | 266.2    |                  |  |  |  |   | 263.7    |   |
| Member’sdeficiency:                                                                                      |  |  |              |   |     |                  |  |  |  |   |     |   |
| Member’sinterest                                                                                         |  |  |              |   | —  |                  |  |  |  |   | —  |   |
| Additionalpaid-in capital                                                                                      |  |  |              |   | 1,021.5  |                  |  |  |  |   | 948.9    |   |
| Accumulateddeficit                                                                                             |  |  |              |   | (2,058.1 | )                |  |  |  |   | (1,953.4 | ) |
| Accumulatedother comprehensiveloss                                                                             |  |  |              |   | (121.0   | )                |  |  |  |   | (121.7   | ) |
| Totalmember’sdeficiency                                                                                  |  |  |              |   | (1,157.6 | )                |  |  |  |   | (1,126.2 | ) |
| Totalliabilities and member’sdeficiency                                                                  |  |  |              | $ | 962.1    |                  |  |  |  | $ | 1,044.5  |   |
|                                                                                                                |

SeeAccompanying Notes to Unaudited Consolidated FinancialStatements

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REV HOLDINGS LLC ANDSUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OFOPERATIONS(dollars inmillions)

|                                            |  |  |                            |   |        |                          |  |  |      |   |         |      |  |  |  |   |        |   |  |  |  |   |         |   |
|--------------------------------------------|--|--|----------------------------|---|--------|--------------------------|--|--|------|---|---------|------|--|--|--|---|--------|---|--|--|--|---|---------|---|
|                                       |  |  | ThreeMonths Ended June 30, |   |        | Six Months Ended June30, |
|                                       |  |  | 2006                       |   |        | 2005                     |  |  | 2006 |   |         | 2005 |
| Netsales                                   |  |  |                            | $ | 321.1  |                          |  |  |      | $ | 318.3   |      |  |  |  | $ | 646.6  |   |  |  |  | $ | 619.2   |   |
| Costofsales                                |  |  |                            |   | 138.0  |                          |  |  |      |   | 118.9   |      |  |  |  |   | 255.3  |   |  |  |  |   | 233.1   |   |
| Grossprofit                                |  |  |                            |   | 183.1  |                          |  |  |      |   | 199.4   |      |  |  |  |   | 391.3  |   |  |  |  |   | 386.1   |   |
| Selling,general and administrativeexpenses |  |  |                            |   | 228.5  |                          |  |  |      |   | 200.0   |      |  |  |  |   | 445.0  |   |  |  |  |   | 387.1   |   |
| Restructuringcosts (benefit),net           |  |  |                            |   | 0.5    |                          |  |  |      |   | (0.2    | )    |  |  |  |   | 9.5    |   |  |  |  |   | 1.5     |   |
| Operatingloss                              |  |  |                            |   | (45.9  | )                        |  |  |      |   | (0.4    | )    |  |  |  |   | (63.2  | ) |  |  |  |   | (2.5    | ) |
| Otherexpenses(income):                     |  |  |                            |   |   |                          |  |  |      |   |    |      |  |  |  |   |   |   |  |  |  |   |    |   |
| Interestexpense                            |  |  |                            |   | 36.5   |                          |  |  |      |   | 32.4    |      |  |  |  |   | 72.3   |   |  |  |  |   | 62.7    |   |
| Interestincome                             |  |  |                            |   | (0.5   | )                        |  |  |      |   | (1.8    | )    |  |  |  |   | (0.8   | ) |  |  |  |   | (3.4    | ) |
| Amortizationof debt issuancecosts          |  |  |                            |   | 1.8    |                          |  |  |      |   | 1.7     |      |  |  |  |   | 3.6    |   |  |  |  |   | 3.3     |   |
| Foreigncurrency (gains) losses,net         |  |  |                            |   | (0.4   | )                        |  |  |      |   | (1.2    | )    |  |  |  |   | (1.2   | ) |  |  |  |   | 1.3     |   |
| Gainon issuance of subsidiary stock,net    |  |  |                            |   | 0.4    |                          |  |  |      |   | — |      |  |  |  |   | (41.9  | ) |  |  |  |   | — |   |
| Losson early extinguishment ofdebt         |  |  |                            |   | 0.4    |                          |  |  |      |   | 1.5     |      |  |  |  |   | 0.4    |   |  |  |  |   | 9.0     |   |
| Miscellaneous,net                          |  |  |                            |   | 0.7    |                          |  |  |      |   | 0.2     |      |  |  |  |   | 0.4    |   |  |  |  |   | 1.6     |   |
| Otherexpenses (income), net                |  |  |                            |   | 38.9   |                          |  |  |      |   | 32.8    |      |  |  |  |   | 32.8   |   |  |  |  |   | 74.5    |   |
| Lossbefore incometaxes                     |  |  |                            |   | (84.8  | )                        |  |  |      |   | (33.2   | )    |  |  |  |   | (96.0  | ) |  |  |  |   | (77.0   | ) |
| Provisionfor incometaxes                   |  |  |                            |   | 3.3    |                          |  |  |      |   | 3.3     |      |  |  |  |   | 8.7    |   |  |  |  |   | 6.9     |   |
| Netloss                                    |  |  |                            | $ | (88.1  | )                        |  |  |      | $ | (36.5   | )    |  |  |  | $ | (104.7 | ) |  |  |  | $ | (83.9   | ) |
|                                            |

SeeAccompanying Notes to Unaudited Consolidated FinancialStatements

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REV HOLDINGS LLC ANDSUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENT OF MEMBER’SDEFICIENCYAND COMPREHENSIVE LOSS(dollars inmillions)

|                                                          |  |  |                           |   |         |                    |  |  |                                   |   |          |                               |  |  |  |   |        |   |  |  |  |   |          |   |
|----------------------------------------------------------|--|--|---------------------------|---|---------|--------------------|--|--|-----------------------------------|---|----------|-------------------------------|--|--|--|---|--------|---|--|--|--|---|----------|---|
|                                                     |  |  | AdditionalPaid-In-Capital |   |         | AccumulatedDeficit |  |  | AccumulatedOtherComprehensiveLoss |   |          | TotalMember’sDeficiency |
| Balance,January  1,2006                                  |  |  |                           | $ | 948.9   |                    |  |  |                                   | $ | (1,953.4 | )                             |  |  |  | $ | (121.7 | ) |  |  |  | $ | (1,126.2 | ) |
| Netproceeds from RightsOffering                          |  |  |                           |   | 65.5    |                    |  |  |                                   |   |     |                               |  |  |  |   |   |   |  |  |  |   | 65.5     |   |
| Stockoptioncompensation                                  |  |  |                           |   | 4.5     |                    |  |  |                                   |   |     |                               |  |  |  |   |   |   |  |  |  |   | 4.5      |   |
| Amortizationof deferred compensation for restrictedstock |  |  |                           |   | 2.6     |                    |  |  |                                   |   |     |                               |  |  |  |   |   |   |  |  |  |   | 2.6      |   |
| Comprehensiveloss:                                       |  |  |                           |   |    |                    |  |  |                                   |   |     |                               |  |  |  |   |   |   |  |  |  |   |     |   |
| Netloss                                                  |  |  |                           |   |    |                    |  |  |                                   |   | (104.7   | )                             |  |  |  |   |   |   |  |  |  |   | (104.7   | ) |
| Revaluationof foreign currency forward exchangecontracts |  |  |                           |   |    |                    |  |  |                                   |   |     |                               |  |  |  |   | 0.6    |   |  |  |  |   | 0.6      |   |
| Currencytranslationadjustment                            |  |  |                           |   |    |                    |  |  |                                   |   |     |                               |  |  |  |   | 0.1    |   |  |  |  |   | 0.1      |   |
| Totalcomprehensiveloss                                   |  |  |                           |   |    |                    |  |  |                                   |   |     |                               |  |  |  |   |   |   |  |  |  |   | (104.0   | ) |
| Balance,June  30,2006                                    |  |  |                           | $ | 1,021.5 |                    |  |  |                                   | $ | (2,058.1 | )                             |  |  |  | $ | (121.0 | ) |  |  |  | $ | (1,157.6 | ) |
|                                                          |

SeeAccompanying Notes to Unaudited Consolidated FinancialStatements

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REV HOLDINGS LLC ANDSUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF CASHFLOWS(dollars inmillions)

|                                                                              |  |  |                         |   |         |      |  |  |  |   |         |   |
|------------------------------------------------------------------------------|--|--|-------------------------|---|---------|------|--|--|--|---|---------|---|
|                                                                         |  |  | SixMonths Ended June30, |
|                                                                         |  |  | 2006                    |   |         | 2005 |
| CASHFLOWS FROM OPERATINGACTIVITIES:                                          |  |  |                         |   |    |      |  |  |  |   |    |   |
| Netloss                                                                      |  |  |                         | $ | (104.7  | )    |  |  |  | $ | (83.9   | ) |
| Adjustmentsto reconcile net loss to net cash used for operatingactivities:   |  |  |                         |   |    |      |  |  |  |   |    |   |
| Depreciationandamortization                                                  |  |  |                         |   | 54.8    |      |  |  |  |   | 48.6    |   |
| Amortizationof debtdiscount                                                  |  |  |                         |   | 0.3     |      |  |  |  |   | — |   |
| Stockcompensationamortization                                                |  |  |                         |   | 7.1     |      |  |  |  |   | 3.1     |   |
| Loss onearly extinguishment ofdebt                                           |  |  |                         |   | 0.4     |      |  |  |  |   | 9.0     |   |
| Gain on issuanceof subsidiary stock,net                                      |  |  |                         |   | (41.9   | )    |  |  |  |   | — |   |
| Changein assets andliabilities:                                              |  |  |                         |   |    |      |  |  |  |   |    |   |
| Decrease intradereceivables                                                  |  |  |                         |   | 110.4   |      |  |  |  |   | 47.5    |   |
| Increaseininventories                                                        |  |  |                         |   | (8.3    | )    |  |  |  |   | (39.7   | ) |
| Decrease(increase) in prepaid expenses and other currentassets               |  |  |                         |   | 0.7     |      |  |  |  |   | (0.3    | ) |
| (Decrease)increase in accountspayable                                        |  |  |                         |   | (17.9   | )    |  |  |  |   | 6.9     |   |
| Decreasein accrued expenses and other currentliabilities                     |  |  |                         |   | (50.2   | )    |  |  |  |   | (11.9   | ) |
| Purchaseof permanentdisplays                                                 |  |  |                         |   | (68.9   | )    |  |  |  |   | (28.5   | ) |
| Other,net                                                                    |  |  |                         |   | 21.5    |      |  |  |  |   | 1.2     |   |
| Netcash used for operatingactivities                                         |  |  |                         |   | (96.7   | )    |  |  |  |   | (48.0   | ) |
| CASHFLOWS FROM INVESTINGACTIVITIES:                                          |  |  |                         |   |    |      |  |  |  |   |    |   |
| Capitalexpenditures                                                          |  |  |                         |   | (11.3   | )    |  |  |  |   | (9.6    | ) |
| Investmentin debt defeasancetrust                                            |  |  |                         |   | — |      |  |  |  |   | (197.9  | ) |
| Liquidationof investment in debt defeasancetrust                             |  |  |                         |   | — |      |  |  |  |   | 197.9   |   |
| Netcash used for investingactivities                                         |  |  |                         |   | (11.3   | )    |  |  |  |   | (9.6    | ) |
| CASHFLOWS FROM FINANCINGACTIVITIES:                                          |  |  |                         |   |    |      |  |  |  |   |    |   |
| Net (decrease)increase in short-term borrowings andoverdraft                 |  |  |                         |   | (2.7    | )    |  |  |  |   | 2.2     |   |
| Borrowings underthe Multi-Currency Facility,net                              |  |  |                         |   | 104.6   |      |  |  |  |   | — |   |
| Proceeds from theissuance of long – term debt                          |  |  |                         |   | — |      |  |  |  |   | 310.0   |   |
| Repayment of long-termdebt, including prepayment fee andpremiums             |  |  |                         |   | (109.7  | )    |  |  |  |   | (297.9  | ) |
| Advancesunder the New KeepwellAgreement                                      |  |  |                         |   | 1.2     |      |  |  |  |   | 1.2     |   |
| Payment offinancing costs                                                    |  |  |                         |   | (3.3    | )    |  |  |  |   | (8.9    | ) |
| Netproceeds from the 2006 RightsOffering                                     |  |  |                         |   | 107.2   |      |  |  |  |   | — |   |
| Proceedsfrom exercise of stock options for commonstock                       |  |  |                         |   | 0.2     |      |  |  |  |   | — |   |
| Netcash provided by financingactivities                                      |  |  |                         |   | 97.5    |      |  |  |  |   | 6.6     |   |
| Effectof exchange rate changes on cash and cashequivalents                   |  |  |                         |   | (0.8    | )    |  |  |  |   | (3.1    | ) |
| Netdecrease in cash and cashequivalents                                      |  |  |                         |   | (11.3   | )    |  |  |  |   | (54.1   | ) |
| Cashand cash equivalents at beginning ofperiod                               |  |  |                         |   | 32.5    |      |  |  |  |   | 120.8   |   |
| Cashand cash equivalents at end ofperiod                                     |  |  |                         | $ | 21.2    |      |  |  |  | $ | 66.7    |   |
| Supplementalschedule of cash flowinformation:                                |  |  |                         |   |    |      |  |  |  |   |    |   |
| Cashpaid during the periodfor:                                               |  |  |                         |   |    |      |  |  |  |   |    |   |
| Interest                                                                     |  |  |                         | $ | 73.9    |      |  |  |  | $ | 61.5    |   |
| Income taxes, net ofrefunds                                                  |  |  |                         | $ | 8.0     |      |  |  |  | $ | 8.1     |   |
| Supplementalschedule of noncash investing and financingactivities:           |  |  |                         |   |    |      |  |  |  |   |    |   |
| Treasurystock received by Revlon, Inc. to satisfy tax withholdingliabilities |  |  |                         | $ | 0.6     |      |  |  |  | $ | 0.6     |   |
|                                                                              |

SeeAccompanying Notes to Unaudited Consolidated FinancialStatements

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS(except where otherwise noted, all tabularamounts in millions, except for share and per shareamounts)

(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’’). TheCompany manufactures and sells an extensive array of cosmetics,skincare, fragrances, beauty tools, hair color,anti-perspirants/deodorants and other personal care products. TheCompany's principal customers include large mass volume retailersand chain drug stores, as well as certain department stores and otherspecialty stores, such as perfumeries. The Company also sells consumerproducts to U.S. military exchanges and commissaries and has alicensing group, pursuant to which the Company licenses certain of itskey brand names to third parties for complementary beauty-relatedproducts and accessories. Products Corporation is a wholly-ownedsubsidiary of Revlon, Inc.

The accompanying ConsolidatedFinancial Statements are unaudited. In management’s opinion, alladjustments (consisting of only normal recurring adjustments) necessaryfor a fair presentation have been made. The Unaudited ConsolidatedFinancial Statements include the accounts of the Company afterelimination of all material intercompany balances and transactions.

The preparation of financial statements in conformity withaccounting principles generally accepted in the U.S. requiresmanagement to make estimates and assumptions that affect amounts ofassets and liabilities and disclosures of contingent assets andliabilities as of the date of the financial statements and reportedamounts of revenues and expenses during the periods presented. Actualresults could differ from these estimates. Estimates and assumptionsare reviewed periodically and the effects of revisions are reflected inthe consolidated financial statements in the period they are determinedto be necessary. Significant estimates made in the accompanyingUnaudited Consolidated Financial Statements include, but are notlimited to, allowances for doubtful accounts, inventory valuationreserves, expected sales returns and allowances, certain assumptionsrelated to the recoverability of intangible and long-lived assets,reserves for estimated tax liabilities, certain estimates andassumptions used in the calculation of the fair value of stock optionsissued to employees and the derived compensation expense and certainestimates regarding the calculation of the net periodic benefit costsand the projected benefit obligation for the Company’s pensionand other post-retirement plans. The Unaudited Consolidated FinancialStatements should be read in conjunction with the consolidatedfinancial statements and related notes contained in REVHoldings’ Annual Report on Form 10-K for the year endedDecember  31,  2005. All terms not defined elsewhere hereinhave the same meaning ascribed to them in REV Holdings’ AnnualReport on Form 10-K for the year ended December  31,2005.

As of June  30,  2006, REV Holdings owned20,819,333 shares of Class A Common Stock of Revlon, Inc.(‘‘Class A Common Stock’’) and 31,250,000shares of Class B Common Stock (together with the Class A Common Stock,the ‘‘Common Stock’’) of Revlon, Inc. TheREV Holdings membership interest is owned by its sole member, RevlonHoldings LLC (‘‘Revlon Holdings’’), whosemembership interest, in turn, is owned indirectly by MacAndrews &Forbes Holdings Inc. (‘‘MacAndrews & ForbesHoldings’’ and, together with its affiliates,‘‘MacAndrews & Forbes’’), a corporationwholly owned by Ronald O. Perelman. As of June  30,  2006,MacAndrews & Forbes Holdings beneficially owned approximately60% of the Common Stock (representing approximately 76%of the combined voting power of the Common Stock).

In accordancewith Accounting Research Bulletin No. 51, the Company does not reflectthe minority owners’ interest in Revlon, Inc. on theaccompanying Consolidated Financial Statements because the lossesapplicable to the minority interest have exceeded the minority interestin the equity capital of Revlon, Inc. and there is no obligation of theminority interest to make good such losses.

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS(except where otherwise noted, all tabularamounts in millions, except for share and per shareamounts)

The results of operations and financialposition, including working capital, for interim periods are notnecessarily indicative of those to be expected for a fullyear.

Certain prior year amounts have been reclassified toconform to the current period's presentation, due to thetransfer, during the second quarter of 2006, of managementresponsibility for the Company’s Canadian operations from theCompany’s North American operations to the European region ofits international operations.

Stock-BasedCompensation

Prior to January  1,  2006(including the three- and six-month periods ended June30,  2005), the Company applied the intrinsic value method asoutlined in Accounting Principles Board(‘‘APB’’) Opinion No. 25,‘‘Accounting for Stock Issued toEmployees’’ (‘‘APB No. 25’’)and related interpretations in accounting for stock options granted.Under the intrinsic value method, no compensation expense wasrecognized in fiscal periods ended prior to January  1,2006 if the exercise price of the Company’s employee stockoptions was greater than or equal to the market price of Revlon,Inc.’s Class A common stock, par value of $0.01 per share on thedate of the grant. Since all options granted under Revlon,Inc.’s Stock Plan (as hereinafter defined) had an exercise priceequal to the market value of the underlying Class A Common Stock on thedate of grant, no compensation expense was recognized in theaccompanying consolidated statements of operations for the fiscalperiods ended on or before December  31,  2005 (includingthe three- and six-month periods ended June  30,  2005) onstock options granted to employees.

Effective January1,  2006, the Company adopted Statement of Financial AccountingStandards (‘‘SFAS’’) No. 123(R),‘‘Share-Based Payment’’ (‘‘SFAS No.123(R)’’). This statement, which replaces SFAS No. 123,‘‘Accounting for Stock-Based Compensation’’(‘‘SFAS No. 123’’) and supersedes APB No. 25.SFAS No. 123(R), requires that effective for fiscal periods endingafter December  31,  2005 all stock-based compensation berecognized as an expense, net of the effect of expected forfeitures, inthe financial statements and that such expense be measured at the fairvalue of the Company’s stock-based awards. The Company uses themodified prospective method of application, which requires recognitionof compensation expense on a prospective basis. Therefore, theCompany’s financial statements for fiscal periods ended on orbefore December  31,  2005 have not been restated toreflect compensation expense in respect of awards of stock optionsunder the Stock Plan. Under this method, in addition to reflectingcompensation expense for new share-based awards granted on or afterJanuary  1,  2006, expense is also recognized to reflectthe remaining service period (generally, the vesting period of theaward) of awards that had been included in the Company’s proforma disclosures in fiscal periods ended on or before December31,  2005. SFAS No. 123(R) also requires that excess tax benefitsrelated to stock option exercises be reflected as financing cashinflows instead of operating cash inflows. For the six-month periodended June  30,  2006, no adjustments have been made to thecash flow statement, as any excess tax benefits that would have beenrealized have been fully provided for, given the Company’shistorical losses and deferred tax valuationallowance.

Recent Accounting Pronouncements

InJune  2006, the FASB issued Financial Interpretation Number(‘‘FIN’’) 48, ‘‘Accountingfor Uncertainty in Income Taxes – an interpretation of SFAS No.109’’. This interpretation clarifies the accounting foruncertainty in income taxes recognized in an enterprise’sfinancial statements in accordance with FASB Statement No. 109,‘‘Accounting for Income Taxes.’’ FIN 48prescribes a recognition threshold and measurement attribute for thefinancial statement recognition and measurement of a tax position takenor expected to be taken in a tax return. FIN 48 also provides guidanceon derecognition, classification, interest and penalties, accounting ininterim periods, disclosure and transition. The provisions of FIN 48are effective for fiscal years beginning after December15,  2006. The Company is currently evaluating the impact of FIN48.

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS(except where otherwise noted, all tabularamounts in millions, except for share and per shareamounts)

(2)    Stock CompensationPlan

Revlon, Inc. maintains an Amended and Restated Revlon, Inc.Stock Plan (the ‘‘Stock Plan’’) whichprovides for the issuance of awards of shares of Revlon, Inc.'sClass A Common Stock in the form of stock options, stock appreciationrights and restricted or unrestricted stock to eligible employees anddirectors of Revlon, Inc. and its subsidiaries, including ProductsCorporation.

Stock options

Total net stockoption compensation expense includes amounts attributable to thegranting of, and the remaining requisite service period of, stockoptions issued under the Stock Plan, which awards were unvested atJanuary  1,  2006 or granted on or after such date. Netstock option compensation expense in the three- and six-month periodsended June  30,  2006 was $2.1  million and$4.5  million, respectively. As of June  30,  2006,the total unrecognized stock option compensation expense related tounvested stock options in the aggregate was $8.8million.

Prior to the Company's adoption of SFAS No.123(R), SFAS No. 123 required that the Company provide pro formainformation regarding net loss as if compensation expense for theCompany's stock-based awards had been determined in accordancewith the fair value method prescribed therein. The Company hadpreviously adopted the disclosure portion of SFAS No. 148,‘‘Accounting for Stock-Based Compensation —Transition and Disclosure, an amendment of FASB Statements No.123’’ (‘‘SFAS No. 148’’), requiringquarterly SFAS No. 123 pro forma disclosure. The pro forma charge forcompensation expense related to stock-based awards granted wasrecognized over the service period. For stock options, the serviceperiod represents the period of time between the date of grant and thedate each stock option becomes exercisable without consideration ofacceleration provisions (e.g., retirement, change of control andsimilar types of acceleration events).

A summary of the status ofstock option grants under the Stock Plan as of June  30,2006 and changes during the six-month period then ended is presentedbelow:

|                                |  |  |                     |  |          |                              |  |  |  |   |      |  |
|--------------------------------|--|--|---------------------|--|----------|------------------------------|--|--|--|---|------|--|
|                           |  |  | Shares(000’s) |  |          | WeightedAverageExercisePrice |
| Outstanding at January  1,2006 |  |  |                     |  | 33,033.1 |                              |  |  |  | $ | 4.25 |  |
| Granted                        |  |  |                     |  | 12.5     |                              |  |  |  |   | 3.05 |  |
| Exercised                      |  |  |                     |  | (47.2    | )                            |  |  |  |   | 3.02 |  |
| Forfeitedandexpired            |  |  |                     |  | (593.2   | )                            |  |  |  |   | 4.84 |  |
| Outstandingat March  31,2006   |  |  |                     |  | 32,405.2 |                              |  |  |  |   | 4.24 |  |
| Granted                        |  |  |                     |  | 10.0     |                              |  |  |  |   | 1.46 |  |
| Exercised                      |  |  |                     |  | (13.3    | )                            |  |  |  |   | 2.59 |  |
| Forfeitedandexpired            |  |  |                     |  | (1,351.8 | )                            |  |  |  |   | 3.51 |  |
| Outstandingat June  30,2006    |  |  |                     |  | 31,050.1 |                              |  |  |  |   | 4.27 |  |
|                                |

Theweighted average grant date fair value of options granted during thesix-month periods ended June  30,  2006 and 2005approximated $1.30 and $1.37, respectively, and was estimated using theBlack-Scholes option valuation model with the followingweighted-average assumptions:

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|                            |  |  |                         |  |  |           |
|----------------------------|--|--|-------------------------|--|--|-----------|
|                       |  |  | SixMonths Ended June30, |
|                       |  |  | 2006                    |  |  | 2005      |
| Expectedlife of option(a)  |  |  | 4.75years               |  |  | 4.75years |
| Risk-free interest rate(b) |  |  | 4.84%                   |  |  | 3.95%     |
| Expectedvolatility(c)      |  |  | 64%                     |  |  | 61%       |
| Expecteddividend yield(d)  |  |  | N/A                     |  |  | N/A       |
|                            |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                         |
|-----|-------------------------------------------------------------------------------------------------------------------------|
| (a) | Theexpected life of an option is calculated using a formula based on thevesting term and contractual life of theoption. |

|     |                                                                                                                                                                                          |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | The risk-free interest rate is basedupon the rate in effect at the time of the option grant on a zerocoupon U.S. Treasury bill for periods approximating the expected lifeof the option. |

|     |                                                                                                                                                                                 |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c) | Expected volatility is basedon the daily historical volatility of the NYSE closing price of Revlon,Inc.’s Class A Common Stock price over the expected life of theoption. |

|     |                                                                                                                                                                         |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (d) | Assumes a dividend rate of nil onRevlon, Inc.’s Class A Common Stock for options granted duringthe six-month periods ended June  30,  2006 and 2005,respectively. |

The following table summarizes informationabout the Stock Plan's options outstanding at June30,  2006:

|                         |  |  |                              |  |          |                               |  |  |                              |  |        |                              |  |  |                              |   |        |  |  |  |  |  |          |  |  |  |  |   |        |  |
|-------------------------|--|--|------------------------------|--|----------|-------------------------------|--|--|------------------------------|--|--------|------------------------------|--|--|------------------------------|---|--------|--|--|--|--|--|----------|--|--|--|--|---|--------|--|
|                    |  |  | Outstanding                  |  |          | Exercisable                   |
| Rangeof Exercise Prices |  |  | NumberofOptions(000’s) |  |          | WeightedAverageYearsRemaining |  |  | WeightedAverageExercisePrice |  |        | NumberofOptions(000’s) |  |  | WeightedAverageExercisePrice |
| $1.46to$3.78            |  |  |                              |  | 27,832.4 |                               |  |  |                              |  | 5.09   |                              |  |  |                              | $ | 2.99   |  |  |  |  |  | 13,869.7 |  |  |  |  | $ | 3.07   |  |
| 3.82to6.88              |  |  |                              |  | 1,400.6  |                               |  |  |                              |  | 5.36   |                              |  |  |                              |   | 4.84   |  |  |  |  |  | 972.1    |  |  |  |  |   | 5.28   |  |
| 7.06to15.00             |  |  |                              |  | 992.4    |                               |  |  |                              |  | 3.38   |                              |  |  |                              |   | 10.62  |  |  |  |  |  | 992.4    |  |  |  |  |   | 10.62  |  |
| 18.50to50.00            |  |  |                              |  | 824.7    |                               |  |  |                              |  | 1.44   |                              |  |  |                              |   | 38.85  |  |  |  |  |  | 824.7    |  |  |  |  |   | 38.85  |  |
| 1.46to50.00             |  |  |                              |  | 31,050.1 |                               |  |  |                              |  |   |                              |  |  |                              |   |   |  |  |  |  |  | 16,658.9 |  |  |  |  |   |   |  |
|                         |

Restrictedstock awards 

The Stock Plan also allows for awards ofrestricted stock to employees and directors of Revlon, Inc. and itssubsidiaries, including Products Corporation. The restricted stockawards vest over service periods that range from three to fiveyears.

A summary of the status of grants of restricted stockunder the Stock Plan and Supplemental Stock Plan (as hereinafterdefined) as of June  30,  2006 and changes during thesix-month period then ended is presented below:

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|                              |  |  |                     |  |          |   |
|------------------------------|--|--|---------------------|--|----------|---|
|                         |  |  | Shares(000’s) |
| Outstanding at January1,2006 |  |  |                     |  | 3,810.0  |   |
| Granted                      |  |  |                     |  | —  |   |
| Vested(a)(b)                 |  |  |                     |  | (300.0   | ) |
| Forfeited andexpired.        |  |  |                     |  | —  |   |
| Outstandingat March  31,2006 |  |  |                     |  | 3,510.0  |   |
| Granted                      |  |  |                     |  | —  |   |
| Vested(b)                    |  |  |                     |  | (1,421.7 | ) |
| Forfeited andexpired.        |  |  |                     |  | (63.3    | ) |
| Outstandingat June  30,2006  |  |  |                     |  | 2,025.0  |   |
|                              |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                                                                                                                                                      |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) | Ofthe amount vested during the three-month period ended March31,  2006, 17,594 shares were withheld by Revlon, Inc. to satisfya certain grantee’s minimum withholding tax requirements. (Seediscussion under ‘‘Treasury Stock’’below). |

|     |                                                                                                                                                                                                                                                                                                         |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Of the amount vested during thethree- and six-month periods ended June  30,  2006, 156,857and 174,451 shares, respectively were withheld by Revlon, Inc. tosatisfy certain grantees’ minimum withholding tax requirements.(See discussion under ‘‘Treasury Stock’’below). |

In 2002, Revlon, Inc. adopted the Revlon, Inc. 2002Supplemental Stock Plan (the ‘‘Supplemental StockPlan’’), the purpose of which was to provide Mr.Jack  Stahl, the sole eligible participant, with inducementawards to entice him to join Revlon, Inc. as its President and ChiefExecutive Officer to enhance Revlon, Inc.'s long-term performanceand profitability. The Supplemental Stock Plan covers 530,000 shares ofClass A Common Stock. All of the 530,000 shares were issued in the formof restricted shares of Class A Common Stock to Mr.  Stahl inFebruary  2002. The terms of the Supplemental Stock Plan and theforegoing grant of restricted shares to Mr.  Stahl aresubstantially the same as the terms and grants under the Stock Plan.Pursuant to the terms of the Supplemental Stock Plan, such grant wasmade conditioned upon his execution of Revlon, Inc.'s standardEmployee Agreement as to Confidentiality and Non-Competition.

Generally, no dividends will be paid on unvested restricted stock,provided, however, that in connection with the 2002 grants toMr.  Stahl of 470,000 shares of restricted stock under the StockPlan and 530,000 shares of restricted stock under the SupplementalStock Plan (of which an aggregate 500,000 shares of restricted stockfrom both plans remained unvested at June  30,  2006), inthe event any cash or in-kind distributions are made in respect ofCommon Stock prior to the lapse of the restrictions on such shares,such dividends will be held by the Company and paid to Mr.  Stahlwhen and if such restrictions lapse.

The Company recognizesnon-cash compensation expense related to restricted stock awards underthe Stock Plan and Supplemental Stock Plan using the straight-linemethod over the remaining service period. The Company recordedcompensation expense related to restricted stock awards under the StockPlan and Supplemental Stock Plan of $2.6  million and $2.9million during the six-month periods ended June  30,  2006and 2005, respectively. The deferred stock-based compensation relatedto restricted stock awards is $3.8  million at June30,  2006. At June  30,  2006, there were 2,025,004shares of restricted stock unvested under the Stock Plan and theSupplemental Stock Plan.

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS(except where otherwise noted, all tabularamounts in millions, except for share and per shareamounts)

Treasury stock

In thefirst and second fiscal quarters of 2006, certain executives, in lieuof paying withholding taxes on the vesting of certain restricted stock,authorized the withholding of an aggregate 17,594 and 156,857 shares,respectively, of Revlon, Inc. Class A Common Stock to satisfy theminimum statutory tax withholding requirements related to such vestingin accordance with the share withholding provisions of the Stock Plan.These shares were recorded as treasury stock by Revlon, Inc. using thecost method, at $3.56 and $3.16 per share, respectively, the marketprice on the respective vesting dates, for a total of approximately$0.1 and $0.5  million, respectively.

Pro forma netloss

The following table illustrates the effect on net lossas if the Company had applied the fair value method to its stock-basedcompensation under the disclosure provisions of SFAS No. 123 andamended disclosure provisions of SFAS No.148:

|                                                                                                              |  |  |                                |   |       |                              |  |  |  |   |       |   |
|--------------------------------------------------------------------------------------------------------------|--|--|--------------------------------|---|-------|------------------------------|--|--|--|---|-------|---|
|                                                                                                         |  |  | ThreeMonths EndedJune 30, 2005 |   |       | Six Months EndedJune 30,2005 |
| Net loss asreported                                                                                          |  |  |                                | $ | (36.5 | )                            |  |  |  | $ | (83.9 | ) |
| Add:Stock-based employee compensation expense included in reported netloss                                   |  |  |                                |   | 1.4   |                              |  |  |  |   | 3.1   |   |
| Deduct: Totalstock-based employee compensation expense determined under fair valuebased method for allawards |  |  |                                |   | (5.2  | )                            |  |  |  |   | (10.9 | ) |
| Proforma netloss                                                                                             |  |  |                                | $ | (40.3 | )                            |  |  |  | $ | (91.7 | ) |
|                                                                                                              |

(3)    Post-retirementBenefits

Revlon, Inc. sponsors pension plans and certain otherpost-retirement benefit plans for a substantial portion of its U.S.employees, as well as certain other non-U.S. employees. Relevantaspects of these plans are disclosed in REV Holdings’ AnnualReport on Form 10-K for the year ended December  31,  2005.Currently, Revlon, Inc. expects to contribute approximately$32.3  million to its pension plans and approximately $1.0million to other post-retirement plans in 2006.

The components ofnet periodic benefit cost for the pension and the other post-retirementbenefit plans for the three-month periods ended June  30,2006 and 2005, respectively, are asfollows:

|                                        |  |  |              |   |      |                                   |  |  |      |   |      |      |  |  |  |   |         |  |  |  |  |   |         |  |
|----------------------------------------|--|--|--------------|---|------|-----------------------------------|--|--|------|---|------|------|--|--|--|---|---------|--|--|--|--|---|---------|--|
|                                   |  |  | PensionPlans |   |      | OtherPost-retirement BenefitPlans |
|                                   |  |  | 2006         |   |      | 2005                              |  |  | 2006 |   |      | 2005 |
| Servicecost                            |  |  |              | $ | 2.6  |                                   |  |  |      | $ | 2.6  |      |  |  |  | $ | 0.1     |  |  |  |  | $ | — |  |
| Interestcost                           |  |  |              |   | 7.9  |                                   |  |  |      |   | 7.8  |      |  |  |  |   | 0.2     |  |  |  |  |   | 0.2     |  |
| Expectedreturn on planassets           |  |  |              |   | (7.9 | )                                 |  |  |      |   | (7.1 | )    |  |  |  |   | — |  |  |  |  |   | — |  |
| Amortizationof prior servicecost       |  |  |              |   | (0.1 | )                                 |  |  |      |   | (0.1 | )    |  |  |  |   | — |  |  |  |  |   | — |  |
| Amortizationof actuarialloss           |  |  |              |   | 1.7  |                                   |  |  |      |   | 2.0  |      |  |  |  |   | — |  |  |  |  |   | — |  |
|                                   |  |  |              |   | 4.2  |                                   |  |  |      |   | 5.2  |      |  |  |  |   | 0.3     |  |  |  |  |   | 0.2     |  |
| Portionallocated to Revlon HoldingsLLC |  |  |              |   | (0.1 | )                                 |  |  |      |   | (0.1 | )    |  |  |  |   | — |  |  |  |  |   | — |  |
|                                   |  |  |              | $ | 4.1  |                                   |  |  |      | $ | 5.1  |      |  |  |  | $ | 0.3     |  |  |  |  | $ | 0.2     |  |
|                                        |

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The components of net periodic benefitcost for the pension and the other post-retirement benefit plans forthe six-month periods ended June  30,  2006 and 2005,respectively, are asfollows:

|                                        |  |  |              |   |       |                                   |  |  |      |   |       |      |  |  |  |   |         |  |  |  |  |   |         |   |
|----------------------------------------|--|--|--------------|---|-------|-----------------------------------|--|--|------|---|-------|------|--|--|--|---|---------|--|--|--|--|---|---------|---|
|                                   |  |  | PensionPlans |   |       | OtherPost-retirement BenefitPlans |
|                                   |  |  | 2006         |   |       | 2005                              |  |  | 2006 |   |       | 2005 |
| Servicecost                            |  |  |              | $ | 5.2   |                                   |  |  |      | $ | 5.2   |      |  |  |  | $ | 0.1     |  |  |  |  | $ | (0.2    | ) |
| Interestcost                           |  |  |              |   | 15.8  |                                   |  |  |      |   | 15.6  |      |  |  |  |   | 0.4     |  |  |  |  |   | 0.3     |   |
| Expectedreturn on planassets           |  |  |              |   | (15.8 | )                                 |  |  |      |   | (14.2 | )    |  |  |  |   | — |  |  |  |  |   | — |   |
| Amortizationof prior servicecost       |  |  |              |   | (0.2  | )                                 |  |  |      |   | (0.2  | )    |  |  |  |   | — |  |  |  |  |   | — |   |
| Amortizationof actuarialloss           |  |  |              |   | 3.4   |                                   |  |  |      |   | 4.0   |      |  |  |  |   | — |  |  |  |  |   | — |   |
|                                   |  |  |              |   | 8.4   |                                   |  |  |      |   | 10.4  |      |  |  |  |   | 0.5     |  |  |  |  |   | 0.1     |   |
| Portionallocated to Revlon HoldingsLLC |  |  |              |   | (0.1  | )                                 |  |  |      |   | (0.1  | )    |  |  |  |   | — |  |  |  |  |   | — |   |
|                                   |  |  |              | $ | 8.3   |                                   |  |  |      | $ | 10.3  |      |  |  |  | $ | 0.5     |  |  |  |  | $ | 0.1     |   |
|                                        |

(4)    Inventories

|                          |  |  |             |   |       |                  |  |  |  |   |       |  |
|--------------------------|--|--|-------------|---|-------|------------------|--|--|--|---|-------|--|
|                     |  |  | June30,2006 |   |       | December 31,2005 |
| Rawmaterials andsupplies |  |  |             | $ | 59.1  |                  |  |  |  | $ | 60.7  |  |
| Work-in-process          |  |  |             |   | 18.7  |                  |  |  |  |   | 17.6  |  |
| Finishedgoods            |  |  |             |   | 152.4 |                  |  |  |  |   | 142.3 |  |
|                     |  |  |             | $ | 230.2 |                  |  |  |  | $ | 220.6 |  |
|                          |

(5)    ComprehensiveLoss

The components of comprehensive loss for the three- andsix-month periods ended June  30,  2006 and 2005,respectively, are asfollows:

|                                                          |  |  |                           |   |         |                         |  |  |      |   |        |      |  |  |  |   |        |   |  |  |  |   |        |   |
|----------------------------------------------------------|--|--|---------------------------|---|---------|-------------------------|--|--|------|---|--------|------|--|--|--|---|--------|---|--|--|--|---|--------|---|
|                                                     |  |  | ThreeMonths EndedJune 30, |   |         | Six Months EndedJune30, |
|                                                     |  |  | 2006                      |   |         | 2005                    |  |  | 2006 |   |        | 2005 |
| Netloss                                                  |  |  |                           | $ | (88.1   | )                       |  |  |      | $ | (36.5  | )    |  |  |  | $ | (104.7 | ) |  |  |  | $ | (83.9  | ) |
| Othercomprehensive (loss)income:                         |  |  |                           |   |    |                         |  |  |      |   |   |      |  |  |  |   |   |   |  |  |  |   |   |   |
| Revaluationof foreign currency forward exchangecontracts |  |  |                           |   | — |                         |  |  |      |   | 1.5    |      |  |  |  |   | 0.6    |   |  |  |  |   | 2.6    |   |
| Currencytranslationadjustment                            |  |  |                           |   | 0.1     |                         |  |  |      |   | (3.5   | )    |  |  |  |   | 0.1    |   |  |  |  |   | (5.0   | ) |
| Othercomprehensive (loss)income                          |  |  |                           |   | 0.1     |                         |  |  |      |   | (2.0   | )    |  |  |  |   | 0.7    |   |  |  |  |   | (2.4   | ) |
| Comprehensiveloss                                        |  |  |                           | $ | (88.0   | )                       |  |  |      | $ | (38.5  | )    |  |  |  | $ | (104.0 | ) |  |  |  | $ | (86.3  | ) |
|                                                          |

(6)    RestructuringCosts, Net

During the six-month period ended June30,  2006, the Company recorded net charges of $9.5million, primarily for employee severance and other personnel benefitsrelated to the organizational realignment announced by Revlon, Inc. inFebruary  2006. The organizational realignment largely involvedthe consolidation of certain functions within the Company’ssales, marketing and creative groups, as well as certain headquartersfunctions, which changes were designed to streamline internal processesand to 

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enable the Company to continue to be moreeffective and efficient in meeting the needs of its consumers andretail customers (the ‘‘2006 program’’).During the six months ended June  30,  2005, the Companyrecorded $1.5  million in restructuring expense for employeeseverance and other personnel benefits related to the 2004program.

Details of the activities described above during thesix-month period ended June  30,  2006 are asfollows:

|                                                |      |  |                            |         |         |              |  |  |               |   |                                 |                           |  |  |  |   |         |   |  |  |  |   |                                 |  |  |  |  |   |        |  |
|------------------------------------------------|------|--|----------------------------|---------|---------|--------------|--|--|---------------|---|---------------------------------|---------------------------|--|--|--|---|---------|---|--|--|--|---|---------------------------------|--|--|--|--|---|--------|--|
|                                           |      |  | Balanceas ofJanuary1, 2006 |         |         | Expenses,Net |  |  | Utilized, Net |   |                                 | Balance as ofJune30, 2006 |
|                                                | Cash |  |                            | Noncash |
| Employeeseverance and other personnelbenefits: |      |  |                            |         |    |              |  |  |               |   |                            |                           |  |  |  |   |    |   |  |  |  |   |                            |  |  |  |  |   |   |  |
| 2003program                                    |      |  |                            | $       | 1.2     |              |  |  |               | $ |     — |                           |  |  |  | $ | (0.6    | ) |  |  |  | $ |     — |  |  |  |  | $ | 0.6    |  |
| 2004program                                    |      |  |                            |         | 2.4     |              |  |  |               |   | —                         |                           |  |  |  |   | (0.7    | ) |  |  |  |   | —                         |  |  |  |  |   | 1.7    |  |
| 2006program                                    |      |  |                            |         | — |              |  |  |               |   | 9.7                             |                           |  |  |  |   | (3.5    | ) |  |  |  |   | —                         |  |  |  |  |   | 6.2    |  |
|                                           |      |  |                            |         | 3.6     |              |  |  |               |   | 9.7                             |                           |  |  |  |   | (4.8    | ) |  |  |  |   | —                         |  |  |  |  |   | 8.5    |  |
| Leasesand equipmentwrite-offs                  |      |  |                            |         | 0.6     |              |  |  |               |   | (0.2                            | )                         |  |  |  |   | — |   |  |  |  |   | —                         |  |  |  |  |   | 0.4    |  |
|                                           |      |  |                            | $       | 4.2     |              |  |  |               | $ | 9.5                             |                           |  |  |  | $ | (4.8    | ) |  |  |  | $ | —                         |  |  |  |  | $ | 8.9    |  |
|                                                |

(7)    GeographicInformation

The Company manages its business on the basis of onereportable operating segment. The Company has operations established in16 countries outside of the U.S. and its products are sold throughoutthe world. Certain prior year amounts have been reclassified to conformto the current period's presentation, due to the transfer, duringthe second quarter of 2006, of management responsibility for theCompany’s Canadian operations from the Company’s NorthAmerican operations to the European region of its internationaloperations.

|                 |  |  |                            |   |        |                         |  |  |      |   |        |      |  |  |  |   |        |  |  |  |  |   |        |  |
|-----------------|--|--|----------------------------|---|--------|-------------------------|--|--|------|---|--------|------|--|--|--|---|--------|--|--|--|--|---|--------|--|
|            |  |  | ThreeMonths Ended June 30, |   |        | Six Months EndedJune30, |
|            |  |  | 2006                       |   |        | 2005                    |  |  | 2006 |   |        | 2005 |
| Geographicarea: |  |  |                            |   |   |                         |  |  |      |   |   |      |  |  |  |   |   |  |  |  |  |   |   |  |
| Netsales:       |  |  |                            |   |   |                         |  |  |      |   |   |      |  |  |  |   |   |  |  |  |  |   |   |  |
| UnitedStates    |  |  |                            | $ | 180.0  |                         |  |  |      | $ | 181.2  |      |  |  |  | $ | 378.3  |  |  |  |  | $ | 360.5  |  |
| International   |  |  |                            |   | 141.1  |                         |  |  |      |   | 137.1  |      |  |  |  |   | 268.3  |  |  |  |  |   | 258.7  |  |
|            |  |  |                            | $ | 321.1  |                         |  |  |      | $ | 318.3  |      |  |  |  | $ | 646.6  |  |  |  |  | $ | 619.2  |  |
|                 |

|                   |  |  |             |   |        |                 |  |  |  |   |        |  |
|-------------------|--|--|-------------|---|--------|-----------------|--|--|--|---|--------|--|
|              |  |  | June30,2006 |   |        | December31,2005 |
| Long-livedassets: |  |  |             |   |   |                 |  |  |  |   |   |  |
| UnitedStates      |  |  |             | $ | 390.8  |                 |  |  |  | $ | 366.9  |  |
| International     |  |  |             |   | 90.0   |                 |  |  |  |   | 84.8   |  |
|              |  |  |             | $ | 480.8  |                 |  |  |  | $ | 451.7  |  |
|                   |

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|                                   |  |  |                            |   |        |                         |  |  |      |   |        |      |  |  |  |   |        |  |  |  |  |   |        |  |
|-----------------------------------|--|--|----------------------------|---|--------|-------------------------|--|--|------|---|--------|------|--|--|--|---|--------|--|--|--|--|---|--------|--|
|                              |  |  | ThreeMonths Ended June 30, |   |        | Six Months EndedJune30, |
|                              |  |  | 2006                       |   |        | 2005                    |  |  | 2006 |   |        | 2005 |
| Classesof similarproducts:        |  |  |                            |   |   |                         |  |  |      |   |   |      |  |  |  |   |   |  |  |  |  |   |   |  |
| Netsales:                         |  |  |                            |   |   |                         |  |  |      |   |   |      |  |  |  |   |   |  |  |  |  |   |   |  |
| Cosmetics,skin care andfragrances |  |  |                            | $ | 197.5  |                         |  |  |      | $ | 208.6  |      |  |  |  | $ | 414.1  |  |  |  |  | $ | 409.8  |  |
| Personalcare                      |  |  |                            |   | 123.6  |                         |  |  |      |   | 109.7  |      |  |  |  |   | 232.5  |  |  |  |  |   | 209.4  |  |
|                              |  |  |                            | $ | 321.1  |                         |  |  |      | $ | 318.3  |      |  |  |  | $ | 646.6  |  |  |  |  | $ | 619.2  |  |
|                                   |

(8)    DerivativeFinancial Instruments

The Company uses derivative financialinstruments, primarily foreign currency forward exchange contracts, toreduce the effects of fluctuations in foreign currency exchange rates.These contracts, which have been designated as cash flow hedges, wereentered into primarily to hedge anticipated inventory purchases andcertain intercompany payments denominated in foreign currencies andhave maturities of less than one year. Any unrecognized income (loss)related to these contracts is 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 withcounterparties that are major financial institutions, and accordinglythe Company believes that the risk of counterparty nonperformance isremote. The notional amount of the foreign currency forward exchangecontracts outstanding at June  30,  2006 andDecember  31,  2005 was $37.4  million and$31.9  million, respectively. The fair value of the foreigncurrency forward exchange contracts outstanding at June30,  2006 and December  31,  2005 was $0.4million and $(0.2) million, respectively.

(9)    Long-termDebt

|                                                        |  |  |             |   |         |                 |  |  |  |   |         |  |
|--------------------------------------------------------|--|--|-------------|---|---------|-----------------|--|--|--|---|---------|--|
|                                                   |  |  | June30,2006 |   |         | December31,2005 |
| 2004 CreditAgreement:                                  |  |  |             |   |    |                 |  |  |  |   |    |  |
| Term LoanFacility due2010                              |  |  |             | $ | 700.0   |                 |  |  |  | $ | 700.0   |  |
| Multi-CurrencyFacility due 2009                        |  |  |             |   | 104.6   |                 |  |  |  |   | — |  |
| 8 5/8%Senior Subordinated Notes due2008                |  |  |             |   | 217.4   |                 |  |  |  |   | 327.0   |  |
| 91⁄2%Senior Notes due 2011, net ofdiscounts       |  |  |             |   | 386.6   |                 |  |  |  |   | 386.4   |  |
| 13%Senior Secured Notes due2007                        |  |  |             |   | 18.5    |                 |  |  |  |   | 18.5    |  |
| 2004 ConsolidatedMacAndrews & Forbes Line ofCredit |  |  |             |   | — |                 |  |  |  |   | — |  |
| Advancesunder the New KeepwellAgreement                |  |  |             |   | 4.8     |                 |  |  |  |   | 3.6     |  |
|                                                   |  |  |             |   | 1,431.9 |                 |  |  |  |   | 1,435.5 |  |
| Lesscurrentportion                                     |  |  |             |   | (28.6   | )               |  |  |  |   | — |  |
|                                                   |  |  |             | $ | 1,403.3 |                 |  |  |  | $ | 1,435.5 |  |
|                                                        |

Amendmentto Credit Agreement

In February  2006, ProductsCorporation secured an amendment to the credit agreement that it andcertain of its subsidiaries entered into in 2004 with a syndicate oflenders and Citicorp USA, Inc., as multi-currency administrative agent,term loan administrative agent and collateral agent (the‘‘2004 Credit Agreement’’). The amendmentexcludes from various financial covenants certain charges in connectionwith Products Corporation’s organizational realignment announcedin February  2006 described in Note 6 above, as well as somestart-up costs incurred by the Company in 2005 related to the launch ofits Vital 

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Radiance brand and the re-stage of theAlmay brand. Specifically, the amendment provides for theadd-back to the definition of ‘‘EBITDA’’ thelesser of (i) $50  million; or (ii) the cumulative one-timecharges associated with (a) the aforementioned February  2006organizational realignment and (b) the non-recurring costs in the thirdand fourth quarters of 2005 associated with the launch of theCompany's Vital Radiance brand and the re-stage of theAlmay brand. Under the 2004 Credit Agreement, EBITDA is used inthe determination of Products Corporation's senior securedleverage ratio and the consolidated fixed charge coverage ratio. (Seealso ‘‘Subsequent Events’’, Note 11 for adescription of a second amendment to the 2004 CreditAgreement).

Products Corporation’s 2004 Credit Agreementoriginally provided up to $960.0  million, which consisted of aterm loan facility of $800.0  million (the ‘‘TermLoan Facility’’) and a $160.0  million asset-based,multi-currency revolving credit facility (the‘‘Multi-Currency Facility’’ and, togetherwith the Term Loan Facility, the ‘‘2004 CreditFacilities’’). Availability under the Multi-CurrencyFacility varies based upon the borrowing base that is determined by thevalue of eligible accounts receivable, eligible inventory and eligiblereal property and equipment in the U.S. and the U.K. from time to time.In March  2005, the Term Loan Facility was reduced to$700.0  million following Products Corporation’sMarch  2005 prepayment of $100.0  million and inJuly  2006, as described in ‘‘SubsequentEvents’’ in Note 11 to the Unaudited Consolidated FinancialStatements, the Term Loan Facility was increased to $800  millionas a result of the $100  million Term Loan Add-on (as hereinafterdefined). Products Corporation may request the Multi-Currency Facilityto be increased from time to time in an aggregate principal amount notto exceed $50.0  million subject to certain exceptions andsubject to the lenders’ agreement.

The Multi-CurrencyFacility will terminate on July  9,  2009 and the loansunder the Term Loan Facility will mature on July  9,  2010;provided that the 2004 Credit Agreement will terminate onOctober  30,  2007, if Products Corporation’s8 5/8% Senior Subordinated Notes (as hereinafterdefined) are not redeemed, repurchased, defeased or repaid on or beforesuch date such that not more than $25.0  million in aggregateprincipal amount of the 8 5/8% SeniorSubordinated Notes remain outstanding. 

Redemption of8 5/8% Senior Subordinated Notes

InMarch  2006, Revlon, Inc. completed its $110  millionRights Offering (as hereinafter defined) and promptly transferred theproceeds from the Rights Offering to Products Corporation which it usedin April  2006, together with available cash, to complete theredemption of $109.7  million aggregate principal amount of its8  5/8% Senior Subordinated Notesdue 2008 (the ‘‘8 5/8% SeniorSubordinated Notes’’) in satisfaction of the applicablerequirements under its 2004 Credit Agreement, at an aggregateredemption price of $111.8  million, including $2.1million of accrued and unpaid interest up to, but not including, theredemption date. Following such redemption there remained outstanding$217.4  million in aggregate principal amount of the8 5/8% Senior SubordinatedNotes.

(10)    Rights Offering

In March  2006,Revlon, Inc. completed the $110  million rights offering(including the private placement to MacAndrews & Forbes, the‘‘Rights Offering’’) that it launched inFebruary  2006 which allowed stockholders to purchase additionalshares of Class A Common Stock. The subscription price for each shareof Class A Common Stock purchased in the Rights Offering, includingshares purchased in the private placement by MacAndrews & Forbes,was $2.80 per share. Upon completing the Rights Offering, Revlon, Inc.promptly transferred the proceeds to Products Corporation, which itused as described under Note 9 – ‘‘Redemption of8 5/8% Senior SubordinatedNotes’’.

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In completing the Rights Offering,Revlon, Inc. issued an additional 39,285,714 shares of its Class ACommon Stock, including 15,885,662 shares subscribed for by publicshareholders (other than MacAndrews & Forbes) and 23,400,052 sharesissued to MacAndrews & Forbes in a private placement directly fromRevlon, Inc. The shares issued to MacAndrews & Forbes representedthe number of shares of Revlon, Inc.'s Class A Common Stock thatMacAndrews & Forbes would otherwise have been entitled to purchasepursuant to its basic subscription privilege in the Rights Offering(which was approximately 60% of the shares of Revlon,Inc.'s Class A Common Stock offered in the RightsOffering).

(11)    Subsequent Events

On July28,  2006, Revlon, Inc. announced that Products Corporation hadsecured an amendment to its 2004 Credit Agreement to, among otherthings, add an additional $100  million to the 2004 CreditAgreement's Term Loan Facility (the ‘‘Term LoanAdd-on’’). While not required, the amendment also reset theSenior Secured Leverage Ratio covenant to 5.5 to 1.0 throughJune  30,  2007, stepping down to 5.0 to 1.0 for theremainder of the term of the 2004 Credit Agreement. The amendment alsoamended the EBITDA definition to enable Products Corporation to excludeup to $25  million related to restructuring charges (in additionto the restructuring charges permitted to be added back pursuant to thefirst amendment to the 2004 Credit Agreement – See Note 9) andcharges for certain product returns and/or product discontinuances.Products Corporation used the net proceeds from the Term Loan Add-on torepay amounts outstanding under the Multi-Currency Facility, withoutany reduction in the commitment under that facility.

InJuly  2006, Revlon, Inc. also reiterated that it currentlyintends to conduct a further $75  million equity issuance in late2006 or early 2007, the net proceeds of which are intended to be usedto reduce Products Corporation's indebtedness. As previouslydisclosed, the backstop obligations of MacAndrews & Forbes underthe 2004 Investment Agreement between Revlon, Inc. and MacAndrews &Forbes will remain in effect to ensure that Revlon, Inc. issues anadditional $75  million of equity by March  31,2007. The existing $87  million line of credit from MacAndrews& Forbes, which was undrawn as of June  30,  2006, willremain available to Products Corporation through the completion of the$75  million equity issuance.

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Item2.    Management’s Discussion and Analysis of FinancialCondition and Results ofOperations

Overview

Overview of theBusiness

The Company is providing this overview inaccordance with the SEC's December  2003 interpretiveguidance regarding Management's Discussion and Analysis ofFinancial Condition and Results of Operations.

REV Holdings LLC(and together with its subsidiaries, the‘‘Company’’) conducts its business exclusivelythrough its indirect operating subsidiary, Revlon Consumer ProductsCorporation and its subsidiaries (‘‘ProductsCorporation’’), a wholly-owned subsidiary of Revlon, Inc.Revlon, Inc. is an indirect majority-owned subsidiary of MacAndrews& Forbes Holdings Inc. (‘‘MacAndrews & ForbesHoldings’’ and, together with its affiliates,‘‘MacAndrews & Forbes’’), a corporationwholly-owned by Ronald O. Perelman.

The Company operates in asingle segment and manufactures, markets and sells an extensive arrayof cosmetics, skincare, fragrances, beauty tools, hair color,anti-perspirants/deodorants and other personal care products. TheCompany's principal customers include large mass volume retailersand chain drug and food stores, as well as certain department storesand other specialty stores, such as perfumeries. The Company also sellsbeauty products to U.S. military exchanges and commissaries and has alicensing group, pursuant to which the Company licenses certain of itskey brand names to third parties for complementary beauty-relatedproducts and accessories.

Revlon is one of theworld's leading mass-market beauty brands. Revlon believesthat its global brand name recognition, product quality and marketingexperience have enabled it to create one of the strongest consumerbrand franchises in the world. The Company's products are soldworldwide and marketed under such brand names as Revlon, ColorStay,Fabulash, Super Lustrous and Revlon Age Defying makeupwith Botafirm, as well as the re-staged Almay brand,including the Company’s Almay Intense i-Color collection,and the Company’s latest brand, Vital Radiance, incosmetics; Almay, Ultima II and Gatineau in skincare;Charlie and Jean Naté in fragrances; Revlonand Expert Effect in beauty tools; Colorsilk andCustom Effects in hair color; and Mitchum, Flex andBozzano in personal care products.

The Company’sobjective is to increase revenues and achieve profitability over thelong-term, capitalizing on actions taken during the earlier phases ofits plan. The Company intends to assess and take appropriate actionstoward this objective in response to marketplace conditions, includingcompetitive activities. These actions include optimizing theeffectiveness of all of its brands, including the Revlon brandacross the various product categories in which it competes, includingcolor cosmetics, women’s hair color, beauty tools andfragrances, as well as its newly-restaged Almay brand and itsnew Vital Radiance brand.

In July  2006, Revlon,Inc. announced that the performance of its Vital Radiance brandin large format mass retailers has been well below Revlon, Inc’sexpectations. In response, Revlon, Inc. is seeking to optimize theVital Radiance brand in the categories and retail formats inwhich it has been most successful. Given the underperformance incertain stores, Revlon, Inc. announced that it expects a reduction ofsome of the retail space it gained for Vital Radiance. Revlon,Inc.’s plan moving forward for Vital Radiance is to focusresources on its revised retail footprint, its most effective marketingdrivers and the most productive products in the line. As a result ofRevlon, Inc.’s modified approach to Vital Radiance, theCompany recorded charges in the second quarter of 2006 of approximately$25  million comprised of $11.2  million for returns andallowances associated with the Vital Radiance retail spacereduction, approximately $6  million for returns and allowancesrelated to the modification to the Vital Radiance brand for 2007in connection with new product offerings, approximately $4.3million of inventory obsolescence related to estimated excessinventory, and approximately $3.5  million for the accelerationof amortization and write-off of certain permanent displays, as well asthe write-off of certain excess marketing and promotionalmaterials.

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In July  2006, Revlon, Inc. alsoindicated that the restage of its Almay brand, while trackingbehind Revlon, Inc.'s expectations, is contributing toconsumption growth at retail in the first half of 2006, following thestrong year the brand achieved in 2005. As a result of the less thanexpected performance of Almay, the Company recognizedapproximately $6.1  million of obsolescence charges in the secondquarter of 2006 related to estimated excess inventory. Revlon, Inc.believes that Almay, with its restaged position in themarketplace, provides an important platform for futuregrowth.

Revlon, Inc. has delayed the launch of its newfragrance for 2007 and it is currently evaluating various options forthis launch. As a result of this delay, the Company recorded charges ofapproximately $1  million in the second quarter of 2006 primarilydue to the write-off of certain marketing and promotionalmaterial.

The Company intends to continue to focus on theopportunities that the Company believes exist to increase its operatingprofit margin over time, with key areas of focus being actions intendedto improve results in the areas of cost of goods sold and returns, aswell as overhead and administrative expenses. The Company’s costsavings initiatives include, among other things, actions intended toimprove product life cycle management, improve in-store merchandising,improve on cost of goods sold (through, among other things, valueanalysis, package rationalization and strategic sourcing), improve theeffectiveness and efficiency of trade promotions, focus on savings fromstrategic procurement in general and administrative costs, optimize theCompany’s international supply chain and optimize theCompany's overall cost structure. In February  2006,Revlon, Inc. announced an organizational realignment largely involvingthe consolidation of certain functions within the Company’s U.S.sales, marketing and creative groups, as well as certain headquartersfunctions. These changes are designed to streamline internal processesto enable the Company to continue to be more effective and efficient inmeeting the needs of its consumers and retail customers. The Companyestimates that ongoing annualized savings associated with thisrealignment should be approximately $15  million, most of whichthe Company expects to realize in 2006. (See Note 6 to the UnauditedConsolidated Financial Statements).

Certain prior yearamounts have been reclassified to conform to the current period'spresentation, due to the transfer, during the second quarter of 2006,of management responsibility for the Company's Canadianoperations from the Company’s North American operations to theEuropean region of its internationaloperations.

Overview of Net Sales and EarningsResults

Net sales in the second quarter of 2006increased $2.8  million, or 0.9%, to $321.1million, as compared with $318.3  million in the second quarterof 2005, driven by approximately $38  million of higher shipmentsand favorable foreign currency translation, partially offset byapproximately $34  million of higher returns and allowances. Netsales for the first half of 2006 increased $27.4  million, or4.4%, to $646.6  million, as compared with $619.2million for the first half of 2005, driven by approximately $67million of higher shipments and favorable foreign currency translation,partially offset by approximately $38  million of higher returnsand allowances.

In the U.S., net sales for the secondquarter of 2006 decreased $1.2  million, or 0.7%, to$180.0  million, from $181.2  million in the second quarterof 2005. In the first half of 2006, net sales increased $17.8million, or 4.9%, to $378.3  million from $360.5million in the first half of 2005. The decrease in net sales in thesecond quarter of 2006 was primarily due to approximately $17.3million of higher returns and allowances related to the reduction ofVital Radiance retail distribution and modification to theofferings of Vital Radiance-branded products for 2007 newproducts and higher allowances and discounts primarily related to theAlmay and Vital Radiance brands, partially offset by thehigher dollar value of shipments of Revlon-branded cosmetics,Vital Radiance-branded cosmetics and key beauty care products,including hair color and beauty tools. The increase in net sales forthe first half of 2006 was primarily due to the higher dollar value ofshipments of color cosmetics, stemming from the Company’sre-stage of the Almay brand, and the launch of the VitalRadiance brand, and the higher dollar value of shipments of otherkey 

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beauty care products, partially offset by theaforementioned approximately $17.3  million of higher returns andallowances related to Vital Radiance-branded products and higherallowances and discounts primarily related to the launch of theAlmay and Vital Radiance brand initiatives.

In the Company’s international operations, net salesfor the second quarter of 2006 increased $4.0  million, or2.9%, to $141.1  million from $137.1  million in thesecond quarter of 2005. In the first half of 2006, net sales increased$9.6  million, or 3.7%, to $268.3  million from$258.7  million in the first half of 2005. The increase in netsales in the second quarter and first half of 2006, as compared withthe second quarter and first half of 2005, was due primarily to thehigher dollar value of shipments, partially offset by higher returnsand allowances.

Net loss for the second quarter of 2006increased $51.6  million to $88.1  million, as comparedwith a net loss of $36.5  million in the second quarter of 2005.In the first half of 2006 net loss increased $20.8  million to$104.7  million, as compared with a net loss of $83.9million in the first half of 2005. The increase in net loss for thesecond quarter reflected the higher dollar value of shipments and lowercompensation and other general and administrative expenses, which wasmore than offset by higher returns and allowances, increased inventoryobsolescence charges, primarily related to estimated excess inventoryof Almay and Vital Radiance-branded products, and higherselling, general and administrative expenses(‘‘SG&A’’), primarily related to higheradvertising and promotion in support of the Almay and VitalRadiance brand initiatives. The increase in net loss for the firsthalf of 2006 reflected a net gain of $41.9  million on theissuance of subsidiary stock primarily from the Rights Offering (ashereinafter defined) and the higher dollar value of shipments, whichwere more than offset by higher returns and allowances, inventoryobsolescence charges primarily related to the aforementionedAlmay and Vital Radiance-branded products, higherSG&A primarily related to advertising and promotion expenseincurred to support the launch of the Almay and VitalRadiance brand initiatives, higher restructuring expense and higherinterest expense.

Overview of U.S. Market ShareData

In terms of U.S. marketplace performance, theU.S. color cosmetics category for the second quarter of 2006 increasedapproximately 4.2% versus the second quarter of 2005 and4.4% for the first half of 2006 versus the first half of 2005.Combined U.S. mass-market share for the Revlon, Almay andVital Radiance brands totaled 22.0% for the secondquarter of 2006, compared with 22.2% for the second quarter of2005, with the Revlon brand registering a share of 14.2%for the second quarter of 2006, compared to 15.7% for the secondquarter of 2005; the Almay brand registering a share of6.4% for the second quarter of 2006, compared to 6.5% forthe second quarter of 2005; and the newly-launched VitalRadiance brand registering a share of 1.4% for the secondquarter of 2006, compared to nil for the 2005 period. Combined U.S.mass-market share for the Revlon, Almay, and VitalRadiance brands totaled 21.8% for the first half of 2006,compared with 22.2% for the first half of 2005, with theRevlon brand registering a share of 14.4% for the firsthalf of 2006, compared to 15.6% for the first half of 2005; theAlmay brand registering a share of 6.4% for the firsthalf of 2006, compared to 6.5% for the first half of 2005; andthe newly-launched Vital Radiance brand registering a share of1.0% for the first half of 2006, compared to nil for the 2005period. In women’s hair color and beauty tools, the Companygained market share in the second quarter of 2006, compared with thesecond quarter of 2005, increasing respectively, from a 8.5%market share for the second quarter of 2005 to 9.0% for thesecond quarter of 2006 and 25.6% market share for the secondquarter of 2005 to 27.0% for the second quarter of 2006. Marketshare for anti-perspirants/deodorants was essentially even, at6.4% in the second quarter of 2006, as compared to 6.3%in the second quarter of 2005. In women’s hair color and beautytools, the Company gained market share in the first half of 2006,compared with the first half of 2005, increasing respectively, from a8.4% market share for the first half of 2005 to 8.9% forthe first half of 2006 and 25.1% market share for the first halfof 2005 to 26.7% for the first half of 2006. Market share foranti-perspirants/deodorants was even, at 6.2% in the first halfof 2006, as compared to 6.2% in the first half of2005.

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All U.S. market share and marketposition data herein for the Company's brands are based uponretail dollar sales, which are derived from ACNielsen data. ACNielsenmeasures retail sales volume of products sold in the U.S. mass-marketdistribution channel. Such data represent ACNielsen's estimatesbased upon data gathered by ACNielsen from market samples and aretherefore subject to some degree of variance. ACNielsen's datadoes not reflect sales volume from Wal-Mart, Inc., which is theCompany’s largest customer, representing approximately24% of the Company's 2005 worldwide net sales. From timeto time, ACNielsen adjusts its methodology for data collection andreporting, which may result in adjustments to the categories and marketshares tracked by ACNielsen for both current and prior periods. Thecategory and market share data contained herein has been updated toreflect ACNielsen's July  2005adjustments.

Overview of FinancingActivities

The Company’s plan includes actionsintended to, among other things, strengthen the Company's balancesheet and capital structure. Many of these actions were accomplishedduring 2004, 2005 and the first half of 2006, including most recentlythe Rights Offering (as hereinafter defined) completed in March2006 and the related redemption of approximately $110  million ofProducts Corporation's 8 5/8% SeniorSubordinated Notes due 2008 (the‘‘8 5/8% Senior SubordinatedNotes’’) completed in April  2006. (See‘‘Financial Condition, Liquidity and Capital Resources− 2006 Refinancing Transactions’’).

InMarch  2006, Revlon, Inc. completed its $110  millionrights offering (including the private placement to MacAndrews &Forbes, the ‘‘Rights Offering’’) and issuedan additional 39,285,714 shares of its Class A common stock, par valueof $0.01 per share (the ‘‘Class A CommonStock’’), including 15,885,662 shares subscribed for bypublic shareholders (other than MacAndrews & Forbes) and 23,400,052shares issued to MacAndrews & Forbes in a private placementdirectly from Revlon, Inc. Revlon, Inc. promptly transferred the netproceeds of such Rights Offering to Products Corporation which it usedin April  2006, together with available cash, to redeem$109.7  million in aggregate outstanding principal amount of its8 5/8% Senior Subordinated Notes (See‘‘Financial Condition, Liquidity and Capital Resources– 2006 RefinancingTransactions’’).

RecentDevelopments

On July  28,  2006, Revlon, Inc.announced that Products Corporation had secured an amendment to its2004 Credit Agreement (as hereinafter defined) to, among other things,add an additional $100  million to the 2004 CreditAgreement's Term Loan Facility (as hereinafter defined) (the‘‘Term Loan Add-on’’). While not required, theamendment also reset the Senior Secured Leverage Ratio covenant to 5.5to 1.0 through June  30,  2007, stepping down to 5.0 to 1.0for the remainder of the term of the 2004 Credit Agreement. Theamendment also amended the EBITDA definition to enable ProductsCorporation to exclude up to $25  million related torestructuring charges (in addition to the restructuring chargespermitted to be added back pursuant to the first amendment to the 2004Credit Agreement – See Note 9 to the Unaudited ConsolidatedFinancial Statements) and charges for certain product returns and/orproduct discontinuances. Products Corporation used the net proceedsfrom the Term Loan Add-on to repay amounts outstanding under theMulti-Currency Facility (as hereinafter defined), without any reductionin the commitment under that facility.

In July  2006,Revlon, Inc. also reiterated that it currently intends to conduct afurther $75  million equity issuance in late 2006 or early 2007,the net proceeds of which are intended to be used to reduce ProductsCorporation's indebtedness. As previously disclosed, the backstopobligations of MacAndrews & Forbes under the 2004 InvestmentAgreement between Revlon, Inc. and MacAndrews & Forbes will remainin effect to ensure that Revlon, Inc. issues an additional $75million of equity by March  31,  2007. The existing$87  million line of credit from MacAndrews & Forbes, whichwas undrawn on June  30,  2006, will remain available toProducts Corporation through the completion of the $75  millionequity issuance.

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Discussion of Critical AccountingPolicies

Stock-BasedCompensation

Prior to January  1,  2006(including the fiscal quarter ended June  30,  2005), theCompany applied the intrinsic value method as outlined in AccountingPrinciples Board (‘‘APB’’) Opinion No. 25,‘‘Accounting for Stock Issued toEmployees,’’ (‘‘APB No. 25’’)and related interpretations in accounting for stock options grantedunder Revlon, Inc.'s Amended and Restated Revlon, Inc. Stock Plan(the ‘‘Stock Plan’’), which provides forthe issuance of awards in the form of stock options, stock appreciationrights and restricted or unrestricted stock to eligible employees anddirectors of Revlon, Inc. and its subsidiaries, including ProductsCorporation. Under the intrinsic value method, no compensation expensewas recognized in fiscal periods ended prior to January1,  2006 if the exercise price of the Company’s employeestock options equaled the market price of Revlon, Inc.’s Class ACommon Stock on the date of the grant. Since all options granted underRevlon, Inc.’s Stock Plan had an exercise price equal to themarket value of the underlying Class A Common Stock on the date ofgrant, no compensation expense was recognized in the accompanyingconsolidated statements of operations for the fiscal periods ended onor before December  31,  2005 on stock options granted toemployees.

Effective January  1,  2006, the Companyadopted Statement of Financial Accounting Standards(‘‘SFAS’’) No. 123(R),‘‘Share-Based Payment’’ (‘‘SFAS No.123(R)’’). This statement, which replaces SFAS No. 123,‘‘Accounting for Stock-Based Compensation’’(‘‘SFAS No. 123’’) and supersedes APB No. 25.SFAS  No.  123(R), requires that effective for fiscalperiods ending after December  31,  2005 all stock-basedcompensation be recognized as an expense, net of the effect of expectedforfeitures, in the financial statements and that such expense bemeasured at the fair value of the Company’s stock based awards.The Company uses the modified prospective method of application, whichrequires recognition of compensation expense on a prospective basis.Therefore, the Company’s financial statements for fiscal periodsended on or before December  31,  2005 have not beenrestated to reflect compensation expense in respect of awards of stockoptions under the Stock Plan. Under this method, in addition toreflecting compensation expense for new share-based awards granted onor after January  1,  2006, expense is also recognized toreflect the remaining service period (generally, the vesting period ofthe award) of awards that had been included in the Company's proforma disclosures in fiscal periods ended on or before December31,  2005. SFAS No. 123(R) also requires that excess tax benefitsrelated to stock option exercises be reflected as financing cashinflows instead of operating cash inflows. For the six-month periodended June  30,  2006, no adjustments have been made to thecash flow statement, as any excess tax benefits that would have beenrealized have been fully provided for, given the Company’shistorical losses and deferred tax valuation allowance.

The fairvalue of each option grant is estimated on the date of grant using theBlack-Scholes option-pricing model based on the weighted-averageassumptions listed in Note 2 to the Unaudited Consolidated FinancialStatements. Expected volatilities are based on the daily historicalvolatility of the NYSE closing stock price of Revlon, Inc.’sClass A Common Stock, over the expected life of the option. Theexpected life of the options represents the period of time that optionsgranted are expected to be outstanding, which the Company calculatedusing a formula based on the vesting term and the contractual life ofthe respective option. The risk-free interest rate for periods duringthe expected life of the option is based upon the rate in effect at thetime of the grant on a zero coupon U.S. Treasury bill for periodsapproximating the expected life of the option. If factors change andthe Company employs different assumptions in the application of SFAS123(R) in future periods, the compensation expense that the Companyrecords under SFAS 123(R) may differ significantly from what has beenrecorded in the current period. In addition, judgment is also requiredin estimating the amount of share-based awards that are expected to beforfeited. If actual results differ significantly from these estimates,stock-based compensation expense and the Company’s results ofoperations could be materially impacted.

For a discussion of REVHoldings’ other critical accounting policies, see REVHoldings’ Annual Report on Form 10-K for the year endedDecember  31,  2005.

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Results of Operations

In thetables, numbers in parenthesis ( ) denote unfavorable variances.Certain prior year amounts have been reclassified to conform to thecurrent period's presentation, due to the transfer, during thesecond quarter of 2006, of management responsibility for theCompany's Canadian operations from the Company’s NorthAmerican operations to the European region of its internationaloperations.

Net sales:

Net sales in thesecond quarter of 2006 increased $2.8  million, or 0.9%,to $321.1  million, as compared with $318.3  million in thesecond quarter of 2005, driven by approximately $38  million ofhigher shipments and favorable foreign currency translation, partiallyoffset by approximately $34  million of higher returns andallowances. Net sales for the first half of 2006 increased $27.4million, or 4.4%, to $646.6  million, as compared with$619.2  million for the first half of 2005, driven byapproximately $67  million of higher shipments and favorableforeign currency translation, partially offset by approximately$38  million of higher returns andallowances.

|               |  |  |                          |   |       |        |  |  |   |   |       |   |  |  |  |   |      |   |  |  |  |  |      |     |
|---------------|--|--|--------------------------|---|-------|--------|--|--|---|---|-------|---|--|--|--|---|------|---|--|--|--|--|------|-----|
|          |  |  | ThreeMonths EndedJune30, |   |       | Change |
|          |  |  | 2006                     |   |       | 2005   |  |  | $ |   |       | % |
| UnitedStates  |  |  |                          | $ | 180.0 |        |  |  |   | $ | 181.2 |   |  |  |  | $ | (1.2 | ) |  |  |  |  | (0.7 | )   |
| International |  |  |                          |   | 141.1 |        |  |  |   |   | 137.1 |   |  |  |  |   | 4.0  |   |  |  |  |  | 2.9  | (1) |
|          |  |  |                          | $ | 321.1 |        |  |  |   | $ | 318.3 |   |  |  |  | $ | 2.8  |   |  |  |  |  | 0.9  | (2) |
|               |

|  |
|--|
|  |  |
|  |

|     |                                                                                              |
|-----|----------------------------------------------------------------------------------------------|
| (1) | Excludingthe impact of foreign currency fluctuations, International net salesincreased 2.0%. |

|     |                                                                                            |
|-----|--------------------------------------------------------------------------------------------|
| (2) | Excludingthe impact of foreign currency fluctuations, consolidated net salesincreased0.5%. |

|               |  |  |                        |   |       |        |  |  |   |   |       |   |  |  |  |   |      |  |  |  |  |  |     |     |
|---------------|--|--|------------------------|---|-------|--------|--|--|---|---|-------|---|--|--|--|---|------|--|--|--|--|--|-----|-----|
|          |  |  | SixMonths EndedJune30, |   |       | Change |
|          |  |  | 2006                   |   |       | 2005   |  |  | $ |   |       | % |
| UnitedStates  |  |  |                        | $ | 378.3 |        |  |  |   | $ | 360.5 |   |  |  |  | $ | 17.8 |  |  |  |  |  | 4.9 |     |
| International |  |  |                        |   | 268.3 |        |  |  |   |   | 258.7 |   |  |  |  |   | 9.6  |  |  |  |  |  | 3.7 | (1) |
|          |  |  |                        | $ | 646.6 |        |  |  |   | $ | 619.2 |   |  |  |  | $ | 27.4 |  |  |  |  |  | 4.4 | (2) |
|               |

|  |
|--|
|  |  |
|  |

|     |                                                                                              |
|-----|----------------------------------------------------------------------------------------------|
| (1) | Excludingthe impact of foreign currency fluctuations, International net salesincreased 3.8%. |

|     |                                                                                             |
|-----|---------------------------------------------------------------------------------------------|
| (2) | Excludingthe impact of foreign currency fluctuations, consolidated net salesincreased 4.5%. |

UnitedStates

Second quarter results

In theU.S., for the second quarter of 2006, net sales decreased $1.2million, or 0.7%, to $180.0  million, from $181.2million in the second quarter of 2005. The decrease in net sales in thesecond quarter was primarily due to the approximately $17.3million of higher returns and allowances related to the reduction ofVital Radiance retail distribution in 2006 and the modificationto the brand offerings of Vital Radiance-branded products for2007 related to the introduction of new products. The decrease in netsales was also impacted by higher allowances and discounts ofapproximately $13  million primarily related to the Almayand Vital Radiance brand initiatives. These were almostcompletely offset by the higher dollar value of shipments ofRevlon-branded cosmetics and of key beauty care products,including hair color and beauty tools, as well as VitalRadiance-branded products.

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Year-to-dateresults

In the U.S., for the six months ended June30,  2006, net sales were $378.3  million, compared with$360.5  million for the six months ended June  30,2005, an increase of $17.8  million, or 4.9%. The increasein net sales in the U.S. for the six months ended June30,  2006, as compared with the six months ended June30,  2005, was primarily due to the higher dollar value ofshipments of color cosmetics, stemming from the rollout of theCompany’s re-staged Almay brand, the launch of theVital Radiance-brand and shipments of key beauty care products,including hair color and beauty tools, partially offset by theaforementioned approximately $17.3  million of higher returns andallowances related to Vital Radiance-branded products and higherallowances and discounts of approximately $21  million primarilyrelated to the launch of the Almay and Vital Radiancebrand initiatives.

International 

For thesecond quarter of 2006, net sales in the Company’s internationaloperations were $141.1  million, compared with $137.1million for the second quarter of 2005, an increase of $4.0million, or 2.9%. In the first half of 2006, net sales in theCompany’s international operations were $268.3  million,compared with $258.7  million for the first half of 2005, anincrease of $9.7  million, or 3.7%. Excluding the impactof foreign currency fluctuations, international net sales increased inthe second quarter of 2006 by $2.7  million, or 2.0%, andin the first half of 2006 by $9.9  million, or 3.8%, ascompared to the second quarter and first half of 2005, respectively.The increase in net sales in the second quarter and first half of 2006in the Company’s international operations, as compared with thesecond quarter and first half of 2005, was driven primarily by thehigher dollar value of shipments, which were partially offset by higherreturns and allowances.

Second quarter results byregion

In Asia Pacific and Africa, for the second quarterof 2006, net sales were substantially unchanged at $58.4million, as compared with the second quarter of 2005. Excluding theimpact of foreign currency fluctuations, in the second quarter of 2006net sales in Asia Pacific and Africa increased $1.3  million, or2.2%, as compared with the second quarter of 2005. This increasein net sales, excluding the impact of foreign currency fluctuations,was due to the higher dollar value of shipments in Australia and NewZealand and lower returns in South Africa (which factors the Companyestimates contributed to an approximate 3.8% increase in netsales for the region for the second quarter of 2006, as compared withthe second quarter of 2005), which was partially offset by the lowerdollar value of shipments in Hong Kong and certain distributor marketsand higher returns in Japan (which factors the Company estimatescontributed to an approximate 1.6% decrease in net sales for theregion for the second quarter of 2006, as compared with the secondquarter of 2005).

In Europe, which is comprised of Europe,Canada and the Middle East, for the second quarter of 2006, net salesincreased by $0.9  million, or 1.8%, to $51.7million, as compared with $50.8  million for the second quarterof 2005. Excluding the impact of foreign currency fluctuations, in thesecond quarter of 2006 net sales in Europe decreased by $0.5million, or 1.0%, as compared with the second quarter of 2005.The decrease in net sales, excluding the impact of foreign currencyfluctuations, was due to higher returns, allowances and discounts inCanada and Italy, as well as the lower dollar value of shipments incertain distributor markets (which factors the Company estimatescontributed to an approximate 6.6% decrease in net sales for theregion for the second quarter of 2006, as compared with the secondquarter of 2005). This decrease was partially offset by the higherdollar value of shipments in the U.K. and Israel (which factor theCompany estimates contributed to an approximate 5.6% increase innet sales for the region for the second quarter of2006).

In Latin America, which is comprised of Mexico,Central America and South America, for the second quarter of 2006, netsales increased by $2.9  million, or 10.3%, to$31.0  million, as compared with $28.1  million for thesecond quarter of 2005. Excluding the impact of foreign currencyfluctuations, in the 

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second quarter of 2006 net sales in LatinAmerica increased by $1.9  million, or 6.8%, as comparedwith the second quarter of 2005. The increase in net sales, excludingthe impact of foreign currency fluctuations, was driven primarily bythe higher dollar value of shipments in Mexico, Venezuela, Argentinaand in certain distributor markets (which factor the Company estimatescontributed to an approximate 10.7% increase in net sales forthe region in the second quarter of 2006, as compared with the secondquarter of 2005), which was partially offset by higher returns andallowances in Brazil and Chile (which factor the Company estimatescontributed to an approximate 3.9% decrease in net sales for theregion for the second quarter of 2006).

Year-to-dateresults by region

In Asia Pacific and Africa, for thefirst half of 2006, net sales decreased by $2.4  million, or2.1%, to $114.6 million, as compared with $117.0  millionfor the first half of 2005. Excluding the impact of foreign currencyfluctuations, net sales in Asia Pacific and Africa increased$0.7  million, or 0.6%, in the first half of 2006, ascompared to the first half of 2005. This increase in net sales,excluding the impact of foreign currency fluctuations, was driven bythe higher dollar value of shipments in South Africa, Australia andChina (which factor the Company estimates contributed to an approximate2.3% increase in net sales for the region in the first half of2006, as compared with the first half of 2005), partially offset by thelower dollar value of shipments in Hong Kong, Taiwan and in certaindistributor markets, as well as higher returns in Japan (which factorsthe Company estimates contributed to an approximate 1.7%decrease in net sales for the region for the first half of 2006, ascompared with the first half of 2005).

In Europe, for thefirst half of 2006, net sales increased by $4.1  million, or4.4%, to $96.7  million, as compared to $92.6million for the first half of 2005. Excluding the impact of foreigncurrency fluctuations, in the first half of 2006 net sales in Europeincreased by $3.9  million, or 4.2%, as compared to thefirst half of 2005. The increase in net sales, excluding the impact offoreign currency fluctuations, was due to the higher dollar value ofshipments, as well as lower returns, in the U.K. and Canada (whichfactors the Company estimates contributed to an approximate 6.2%increase in net sales for the region for the first half of 2006, ascompared with the first half of 2005), partially offset by the lowerdollar value of shipments in certain distributor markets, as well ashigher returns and allowances in Italy (which factors the Companyestimates contributed to an approximate 2.0% decrease in netsales for the region for the first half of 2006, as compared with thefirst half of 2005).

In Latin America, for the first halfof 2006, net sales increased by $8.0  million, or 16.3%,to $57.0  million, as compared with $49.0  million for thefirst half of 2005. Excluding the impact of foreign currencyfluctuations, in the first half of 2006 net sales in Latin Americaincreased by $5.4  million, or 11.0%, as compared to thefirst half of 2005. The increase in net sales, excluding the impact offoreign currency fluctuations, was driven primarily by the higherdollar value of shipments in Venezuela, Argentina and in certaindistributor markets, as well as lower returns and allowances in Mexico(which factors the Company estimates contributed to an approximate12.4% increase in net sales for the region in the first half of2006, as compared with the first half of 2005). These were partiallyoffset by higher returns and allowances in Brazil (which factor theCompany estimates contributed to an approximate 1.5% decrease innet sales for the region for the first half of 2006, as compared withthe first half of 2005).

Gross profit:

|             |  |  |                           |   |       |        |  |  |                        |   |       |        |  |  |  |   |       |   |  |  |  |   |       |  |  |  |  |   |       |  |  |  |  |   |     |  |
|-------------|--|--|---------------------------|---|-------|--------|--|--|------------------------|---|-------|--------|--|--|--|---|-------|---|--|--|--|---|-------|--|--|--|--|---|-------|--|--|--|--|---|-----|--|
|        |  |  | ThreeMonths EndedJune 30, |   |       | Change |  |  | SixMonths EndedJune30, |   |       | Change |
|        |  |  | 2006                      |   |       | 2005   |  |  | 2006                   |   |       | 2005   |
| Grossprofit |  |  |                           | $ | 183.1 |        |  |  |                        | $ | 199.4 |        |  |  |  | $ | (16.3 | ) |  |  |  | $ | 391.3 |  |  |  |  | $ | 386.1 |  |  |  |  | $ | 5.2 |  |
|             |

Forthe second quarter of 2006, gross profit decreased $16.3  millionto $183.1  million, as compared with $199.4  million forthe second quarter of 2005. The decrease in gross profit was primarilydue to higher returns and allowances of approximately $34million primarily related to the Company’s Almay andVital 

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Radiance-branded products, as well asinventory obsolescence charges of approximately $6.0  million and$4.3  million, respectively, related to estimated excessinventory levels for these brands, which was partially offset by grossprofit related to the higher dollar value of shipments in the secondquarter of 2006. For the second quarter of 2006, gross profit as apercent of net sales, excluding the impact of foreign currencyfluctuations, decreased to 57.1%, as compared with 62.6%for the second quarter of 2005, primarily due to the aforementionedhigher returns and allowances and the aforementioned higher inventoryobsolescence charges.

For the first half of 2006, grossprofit increased $5.2  million to $391.3  million, ascompared with $386.1  million for the first half of 2005. Theincrease in gross profit was primarily due to the higher dollar valueof shipments, favorable changes in sales mix and lower manufacturingcosts, which was partially offset by higher returns, allowances anddiscounts primarily related to the Company's Almay andVital Radiance-branded products. In addition, gross profit wasnegatively impacted by the aforementioned inventory obsolescencecharges related to the Company’s Almay and VitalRadiance brands. For the first half of 2006, gross profit as apercentage of net sales, excluding the impact of foreign currencyfluctuations, decreased to 60.6% as compared with 62.4%for the first half of 2005, which was primarily due to theaforementioned higher returns and allowances primarily related to theVital Radiance brand.

SG&Aexpenses:

|                  |  |  |                           |   |       |        |  |  |                        |   |       |        |  |  |  |   |       |   |  |  |  |   |       |  |  |  |  |   |       |  |  |  |  |   |       |   |
|------------------|--|--|---------------------------|---|-------|--------|--|--|------------------------|---|-------|--------|--|--|--|---|-------|---|--|--|--|---|-------|--|--|--|--|---|-------|--|--|--|--|---|-------|---|
|             |  |  | ThreeMonths EndedJune 30, |   |       | Change |  |  | SixMonths EndedJune30, |   |       | Change |
|             |  |  | 2006                      |   |       | 2005   |  |  | 2006                   |   |       | 2005   |
| SG&Aexpenses |  |  |                           | $ | 228.5 |        |  |  |                        | $ | 200.0 |        |  |  |  | $ | (28.5 | ) |  |  |  | $ | 445.0 |  |  |  |  | $ | 387.1 |  |  |  |  | $ | (57.9 | ) |
|                  |

Forthe second quarter of 2006, SG&A expenses increased $28.5million, or 14.3%, to $228.5  million, as compared with$200.0  million for the second quarter of 2005. Such increase wasprimarily due to $35.0  million of higher brand support,including higher advertising and consumer promotional spendingprimarily to support the launch of the Almay and VitalRadiance brand initiatives. Additionally, the Company recordedapproximately $4.0  million of accelerated amortization andwrite-off charges for certain permanent displays related to thereduction of retail distribution of the Company's VitalRadiance-branded products. The increase in SG&A was alsoimpacted by $2.1  million of amortization expense for stockoptions, resulting from the Company’s adoption of SFAS No.123(R) effective January  1,  2006. These were partiallyoffset by reductions in compensation and other general andadministrative expenses.

For the first half of 2006,SG&A expenses increased $57.9  million, or 15.0%, to$445.0  million, as compared with $387.1  million for thefirst half of 2005. Such increase was primarily due to higher brandsupport and display amortization of approximately $57  million,including higher advertising and consumer promotional spending,primarily to support the launch of the Almay and VitalRadiance brand initiatives and the aforementioned charges relatedto Vital Radiance and approximately $4.0  million of theaforementioned charges for the accelerated amortization and write-offof certain permanent displays. In addition, in the first half of 2006SG&A was higher due to approximately $4.5  million ofamortization expense attributable to stock options, resulting from theCompany’s aforementioned adoption of SFAS No. 123(R) effectiveJanuary  1,  2006.

Restructuring costs(benefit),net:

|                                  |  |  |                           |   |     |        |  |  |                        |   |      |        |  |  |  |   |      |   |  |  |  |   |     |  |  |  |  |   |     |  |  |  |  |   |      |   |
|----------------------------------|--|--|---------------------------|---|-----|--------|--|--|------------------------|---|------|--------|--|--|--|---|------|---|--|--|--|---|-----|--|--|--|--|---|-----|--|--|--|--|---|------|---|
|                             |  |  | ThreeMonths EndedJune 30, |   |     | Change |  |  | SixMonths EndedJune30, |   |      | Change |
|                             |  |  | 2006                      |   |     | 2005   |  |  | 2006                   |   |      | 2005   |
| Restructuringcosts (benefit),net |  |  |                           | $ | 0.5 |        |  |  |                        | $ | (0.2 | )      |  |  |  | $ | (0.7 | ) |  |  |  | $ | 9.5 |  |  |  |  | $ | 1.5 |  |  |  |  | $ | (8.0 | ) |
|                                  |

Duringthe second quarter and first half of 2006, the Company recorded$0.5  million and $9.5  million, respectively, inrestructuring for employee severance and other personnel benefits (SeeNote 6 to the 

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Unaudited Consolidated Financial Statementsregarding the organizational realignment announced by Revlon, Inc. inFebruary  2006). During the second quarter of 2005, the Companyrevised its estimate of the cost to be incurred related to the 2004restructuring program by $0.2  million. During the first half of2005, the Company recorded $1.5  million in restructuring foremployee severance and other personnel benefits related to the 2004program.

Other expenses (income), net:

|                 |  |  |                           |   |      |        |  |  |                        |   |      |        |  |  |  |   |      |   |  |  |  |   |      |  |  |  |  |   |      |  |  |  |  |   |      |   |
|-----------------|--|--|---------------------------|---|------|--------|--|--|------------------------|---|------|--------|--|--|--|---|------|---|--|--|--|---|------|--|--|--|--|---|------|--|--|--|--|---|------|---|
|            |  |  | ThreeMonths EndedJune 30, |   |      | Change |  |  | SixMonths EndedJune30, |   |      | Change |
|            |  |  | 2006                      |   |      | 2005   |  |  | 2006                   |   |      | 2005   |
| Interestexpense |  |  |                           | $ | 36.5 |        |  |  |                        | $ | 32.4 |        |  |  |  | $ | (4.1 | ) |  |  |  | $ | 72.3 |  |  |  |  | $ | 62.7 |  |  |  |  | $ | (9.6 | ) |
|                 |

Forthe second quarter of 2006, interest expense increased by $4.1million, as compared with the second quarter of 2005. Such increase wasprimarily due to higher average debt outstanding and higher weightedaverage borrowing rates, as compared with second quarter of 2005. Forthe first half of 2006, interest expense increased by $9.6million, as compared with the first half of 2005. Such increase wasprimarily due to higher average debt outstanding and higher weightedaverage interest rates, as compared with the first half of2005.

|                                          |  |  |                           |   |     |        |  |  |                        |   |         |        |  |  |  |   |      |   |  |  |  |   |       |   |  |  |  |   |         |  |  |  |  |   |      |  |
|------------------------------------------|--|--|---------------------------|---|-----|--------|--|--|------------------------|---|---------|--------|--|--|--|---|------|---|--|--|--|---|-------|---|--|--|--|---|---------|--|--|--|--|---|------|--|
|                                     |  |  | ThreeMonths EndedJune 30, |   |     | Change |  |  | SixMonths EndedJune30, |   |         | Change |
|                                     |  |  | 2006                      |   |     | 2005   |  |  | 2006                   |   |         | 2005   |
| Gainon issuance of subsidiary stock,net. |  |  |                           | $ | 0.4 |        |  |  |                        | $ | — |        |  |  |  | $ | (0.4 | ) |  |  |  | $ | (41.9 | ) |  |  |  | $ | — |  |  |  |  | $ | 41.9 |  |
|                                          |

Forthe second quarter of 2006, REV Holdings recognized a net loss of$0.4  million, which represents $0.5  million of additionalfees relating to the Rights Offering, offset in part by a gain of$0.1  million in connection with the exercise of Revlon, Inc.stock options. For the first half of 2006, REV Holdings recognized again, net of fees, of $41.7  million on the issuance by Revlon,Inc. of Class A Common Stock to third parties in the Rights Offering.REV Holdings also recognized a gain of $0.2  million during thefirst half of 2006 in connection with the exercise of Revlon, Inc.stockoptions.

|                                    |  |  |                           |   |     |        |  |  |                        |   |     |        |  |  |  |   |     |  |  |  |  |   |     |  |  |  |  |   |     |  |  |  |  |   |     |  |
|------------------------------------|--|--|---------------------------|---|-----|--------|--|--|------------------------|---|-----|--------|--|--|--|---|-----|--|--|--|--|---|-----|--|--|--|--|---|-----|--|--|--|--|---|-----|--|
|                               |  |  | ThreeMonths EndedJune 30, |   |     | Change |  |  | SixMonths EndedJune30, |   |     | Change |
|                               |  |  | 2006                      |   |     | 2005   |  |  | 2006                   |   |     | 2005   |
| Losson early extinguishment ofdebt |  |  |                           | $ | 0.4 |        |  |  |                        | $ | 1.5 |        |  |  |  | $ | 1.1 |  |  |  |  | $ | 0.4 |  |  |  |  | $ | 9.0 |  |  |  |  | $ | 8.6 |  |
|                                    |

Forthe second quarter and first half of 2006, the loss on earlyextinguishment of debt represents the loss on the redemption inApril  2006 of approximately $110  million in aggregateprincipal amount of Products Corporation’s 8 5/8% SeniorSubordinated Notes. For the second quarter of 2005, the loss on earlyextinguishment of debt represents the loss on the redemption inApril  2005 of all of the $116.2 million in aggregate principalamount outstanding of Products Corporation’s8 1/8% Senior Notes and all of the $75.5million in aggregate principal amount outstanding of ProductsCorporation’s 9% Senior Notes. For the first half of2005, the loss on early extinguishment of debt also includes the$5.0  million prepayment fee related to the prepayment inMarch  2005 of $100.0  million of indebtedness outstandingunder the Term Loan Facility of the 2004 Credit Agreement, as well asthe write-off of the portion of deferred financing costs related tosuch prepaid amount.

Provision for incometaxes:

|                           |  |  |                           |   |     |        |  |  |                        |   |     |        |  |  |  |   |         |  |  |  |  |   |     |  |  |  |  |   |     |  |  |  |  |   |      |   |
|---------------------------|--|--|---------------------------|---|-----|--------|--|--|------------------------|---|-----|--------|--|--|--|---|---------|--|--|--|--|---|-----|--|--|--|--|---|-----|--|--|--|--|---|------|---|
|                      |  |  | ThreeMonths EndedJune 30, |   |     | Change |  |  | SixMonths EndedJune30, |   |     | Change |
|                      |  |  | 2006                      |   |     | 2005   |  |  | 2006                   |   |     | 2005   |
| Provisionfor income taxes |  |  |                           | $ | 3.3 |        |  |  |                        | $ | 3.3 |        |  |  |  | $ | — |  |  |  |  | $ | 8.7 |  |  |  |  | $ | 6.9 |  |  |  |  | $ | (1.8 | ) |
|                           |

Forthe second quarter of 2006 there was no change in the tax provision ascompared with the second quarter of 2005, as a result of the favorableresolution of various international tax matters, which offset

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the effect of higher taxable income incertain markets outside the U.S. The increase in the tax provision forthe first half of 2006, as compared with the first half of 2005, wasprimarily attributable to higher taxable income in certain marketsoutside the U.S., offset in part by the favorable resolution of variousinternational tax matters.

Financial Condition, Liquidity andCapital Resources

In the first half of 2006, net cash used byoperating activities increased to $96.7  million, as comparedwith $48.0  million used in the first half of 2005. This increasewas due to the larger net loss partially offset by a $41.7million non-operating gain related to the issuance of stock to thirdparties in the Rights Offering, increased purchases of permanentdisplays and favorable changes in net working capital.

For thefirst half of 2006 and 2005, net cash used in investing activities was$11.3  million and $9.6  million, respectively, in eachcase for capital expenditures.

For the first half of 2006 and2005, net cash provided by financing activities was $97.5million and $6.6  million, respectively. For the first half of2006, net cash provided by financing activities included net proceedsof $107.2  million from Revlon, Inc.’s issuance of Class ACommon Stock as a result of the completion of the Rights Offering inMarch  2006, and $104.6  million from borrowings during thesecond quarter of 2006 under the Multi-Currency Facility. The netproceeds from Revlon, Inc.’s Rights Offering were promptlytransferred to Products Corporation, which it used in April2006, together with available cash, to redeem $109.7  millionaggregate principal amount of its 8 5/8% SeniorSubordinated Notes at an aggregate redemption price of $111.8million, including $2.1  million of accrued and unpaid interestup to, but not including, the redemption date and paid relatedfinancing costs of $3.3  million. (See ‘‘FinancialCondition, Liquidity and Capital Resources – 2006 RefinancingTransactions’’). For the first half of 2005, net cashprovided by financing activities included proceeds from the issuance inMarch  2005 of $310  million aggregate principal amount ofProducts Corporation’s 91⁄2% SeniorNotes due 2011 (the ‘‘91⁄2% SeniorNotes’’). The proceeds from such issuance of the91⁄2% Senior Notes were used to prepay$100  million of indebtedness under the Term Loan Facility ofProducts Corporation’s 2004 Credit Agreement, along with the$5.0  million prepayment fee. Products Corporation also used suchproceeds to redeem all of the $116.2  million aggregate principalamount outstanding of Products Corporation’s8  1/8% Senior Notes, plusaccrued interest, and all of the $75.5  million aggregateprincipal amount outstanding of Products Corporation’s 9%Senior Notes, plus accrued interest and the applicable premium and thepayment of financing costs.

At July  31,2006, Revlon, Inc. and Products Corporation had a liquidity position,excluding cash in compensating balance accounts, of approximately$213  million, consisting of cash and cash equivalents (net ofany outstanding checks) of approximately $5  million, as well asapproximately $121  million in available borrowings under theMulti-Currency Facility and $87  million in available borrowingsunder the 2004 Consolidated MacAndrews & Forbes Line of Credit (ashereinafter defined).

2004 CreditAgreement

Products Corporation and certain of itssubsidiaries entered into a credit agreement in 2004 with a syndicateof lenders and Citicorp USA, Inc., as multi-currency administrativeagent, term loan administrative agent and collateral agent (the‘‘2004 Credit Agreement’’). The 2004 CreditAgreement consists of an $800  million term loan facility (aftergiving effect to the $100  million Term Loan Add-on described in‘‘Recent Developments’’) (the‘‘Term Loan Facility’’) and a $160.0million asset-based, multi-currency revolving credit facility (the‘‘Multi-Currency Facility’’). Availabilityunder the Multi-Currency Facility varies based upon the borrowing basethat is determined by the value of eligible accounts receivable,eligible inventory and eligible real property and equipment in the U.S.and the U.K. from time to time. Products Corporation may request theMulti-Currency Facility to be increased from time to time in anaggregate principal amount not to exceed $50.0  million subjectto certain exceptions and subject to the lenders’ agreement.(For further discussions on the terms of the 2004 Credit Agreement,

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see ‘‘RecentDevelopments’’ in this Form 10-Q, as well as Note 9 to theUnaudited Consolidated Financial Statements of this Form 10-Q, as wellas Note 9 ‘‘Long-Term Debt’’ to theConsolidated Financial Statements in REV Holdings’ Annual Reporton Form 10-K for the year ended December  31,2005).

The Multi-Currency Facility will terminate on July9,  2009 and the loans under the Term Loan Facility will matureon July  9,  2010; provided that the 2004 Credit Agreementwill terminate on October  30,  2007 if ProductsCorporation’s 8 5/8 Senior Subordinated Notesare not redeemed, repurchased, defeased or repaid on or before suchdate such that not more than $25.0  million in aggregateprincipal amount of the 8 5/8% SeniorSubordinated Notes remain outstanding. As a result of the redemption ofapproximately $110  million of the 8 5/8 SeniorSubordinated Notes using the net proceeds of the Rights Offering (See‘‘2006 Refinancing Transactions’’ below), aswell as available cash, at June  30,  2006 there remainedoutstanding $217.4  million in aggregate principal amount of the8 5/8 Senior Subordinated Notes.

AtJuly  31,  2006, the Term Loan Facility was fully drawn(after giving effect to the $100  million Term Loan Add-ondescribed in ‘‘Recent Developments’’) andavailability under the $160  million Multi-Currency Facility,based upon the calculated borrowing base less approximately $14million of outstanding letters of credit and approximately $25million then drawn on the Multi-Currency Facility, was approximately$121  million. (See ‘‘Overview of FinancingActivities’’, ‘‘2006 RefinancingTransactions’’ and ‘‘RecentDevelopments’’ for certain amendments to the 2004 CreditAgreement).

2004 Consolidated MacAndrews &Forbes Line of Credit

Products Corporation has a$87  million line of credit with MacAndrews & Forbes Inc. (asamended, the ‘‘2004 Consolidated MacAndrews & ForbesLine of Credit’’). As of July  31,  2006, the2004 Consolidated MacAndrews & Forbes Line of Credit was undrawn.In February  2006, Products Corporation entered into an amendmentto its 2004 Consolidated MacAndrews & Forbes Line of Creditextending the term of such agreement until the consummation of Revlon,Inc.’s planned $75  million equity issuance, which iscurrently intended to be conducted in late 2006 or early 2007. (Forfurther detail regarding the 2004 Consolidated MacAndrews & ForbesLine of Credit, see Note 9 ‘‘Long-TermDebt’’ to the Consolidated Financial Statements in REVHoldings’ Annual Report on Form 10-K for the year endedDecember  31,  2005 and ‘‘2006 RefinancingTransactions’’).

2006 RefinancingTransactions

On March  22,  2006, Revlon, Inc.completed a $110  million Rights Offering which allowedstockholders to purchase additional shares of Class A Common Stock. Thesubscription price for each share of Class A Common Stock purchased inthe Rights Offering, including shares purchased in the privateplacement by MacAndrews & Forbes, was $2.80 per share. Uponcompleting the Rights Offering, Revlon, Inc. promptly transferred thenet proceeds to Products Corporation, which it used to redeem$109.7  million aggregate principal amount of its 8 5/8%Senior Subordinated Notes in satisfaction of the applicablerequirements under the 2004 Credit Agreement, at an aggregateredemption price of $111.8  million, including $2.1million of accrued and unpaid interest up to, but not including, theredemption date.

In completing the Rights Offering, Revlon, Inc.issued an additional 39,285,714 shares of its Class A Common Stock,including 15,885,662 shares subscribed for by public shareholders(other than MacAndrews & Forbes) and 23,400,052 shares issued toMacAndrews & Forbes in a private placement directly from Revlon,Inc. The shares issued to MacAndrews & Forbes represented thenumber of shares of Revlon, Inc.’s Class A Common Stock thatMacAndrews & Forbes would otherwise have been entitled to purchasepursuant to its basic subscription privilege in the Rights Offering(which was approximately 60% of the shares of Revlon,Inc.’s Class A Common Stock offered in the RightsOffering).

In February  2006, Products Corporation securedan amendment to the 2004 Credit Agreement which excludes from variousfinancial covenants certain charges in connection with ProductsCorporation’s 

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organizational realignment announced inFebruary  2006 and as described further in Note 6 to theUnaudited Consolidated Financial Statements, as well as some start-upcosts incurred by the Company in 2005 related to the launch of itsVital Radiance brand and the re-stage of the Almay brand.Specifically, the amendment provides for the add-back to the definitionof ‘‘EBITDA’’ the lesser of (i) $50million; or (ii) the cumulative one-time charges associated with (a)the aforementioned February  2006 organizational realignment; and(b) the non-recurring costs in the third and fourth quarters of 2005associated with the launch of the Company’s VitalRadiance brand and the re-stage of its Almay brand. Underthe 2004 Credit Agreement, EBITDA is used in the determination ofProducts Corporation’s senior secured leverage ratio and theconsolidated fixed charge coverage ratio (See ‘‘RecentDevelopments’’ regarding an additional amendment to the2004 Credit Agreement in July  2006).

In July2006, Revlon, Inc. reiterated that it currently intends to conduct afurther $75  million equity issuance in late 2006 or early 2007,the net proceeds of which are intended to be used to reduce ProductsCorporation's indebtedness. In connection with such equityissuance, Revlon, Inc. entered into an amendment to its InvestmentAgreement with MacAndrews & Forbes extending MacAndrews &Forbes’ back-stop obligations to ensure that Revlon, Inc. issuesan additional $75  million of equity by March  31,2007. Additionally, in February  2006 Products Corporationentered into an amendment to its 2004 Consolidated MacAndrews &Forbes Line of Credit, which was undrawn on June  30,2006, to ensure that such line of credit remains available to ProductsCorporation through the completion of Revlon, Inc.'s planned$75  million equity issuance.

Sources andUses

The Company’s principal sources of funds areexpected to be operating revenues, cash on hand and funds available forborrowing under the 2004 Credit Agreement (including after givingeffect to the Term Loan Add-on discussed in ‘‘RecentDevelopments’’), the 2004 Consolidated MacAndrews &Forbes Line of Credit, and other permitted lines of credit, as well asadvances under the New Keepwell Agreement (as hereinafter defined). The2004 Credit Agreement, the 2004 Consolidated MacAndrews & ForbesLine of Credit and the indentures governing the91⁄2% Senior Notes and the8 5/8% Senior Subordinated Notescontain certain provisions that by their terms limit ProductsCorporation and its subsidiaries’ ability to, among otherthings, incur additional debt. The New REV Holdings Notes (ashereinafter defined) contain certain provisions that by their termslimit REV Holdings’ ability to, among other things, incuradditional debt.

The Company’s principal uses of funds areexpected to be the payment of operating expenses, including expenses inconnection with the continued implementation of, and refinement to, theCompany’s plan, purchases of permanent wall displays, capitalexpenditure requirements, payments in connection with theCompany’s restructuring programs (including the Company’sorganizational realignment announced in February  2006 and anyadditional actions), debt service payments and costs and regularlyscheduled pension and post-retirement benefit plan contributions. Cashcontributions to Revlon Inc.’s pension and post-retirementbenefit plans were approximately $29  million in 2005, and RevlonInc. expects these payments to be approximately $33  million inthe aggregate in 2006. The Company’s inventory and accountsreceivable increased significantly during the second half of 2005, dueprincipally to the Vital Radiance and Almay brandinitiatives. Inventory and accounts receivable are expected to returnto more normalized levels in relation to net sales in the second halfof 2006. Products Corporation currently estimates that for 2006purchases of wall displays will be approximately $105  million to$110  million and capital expenditures will be approximately$26  million.

The Company has undertaken, and continues toassess, refine and implement, a number of programs to efficientlymanage its cash and working capital including, among other things,programs to carefully manage inventory levels, centralized purchasingto secure discounts and efficiencies in procurement, and providingadditional discounts to U.S. customers for more timely payment ofreceivables and careful management of accounts payable and mostrecently targeted controls on general and administrative spending.

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Continuing to implement and refine theCompany’s plan could include taking advantage of additionalopportunities to reposition, repackage or reformulate one or morebrands or product lines, launching additional new brands or products,further refining the Company’s approach to retail merchandisingand/or taking further actions to optimize its manufacturing, sourcingand organizational size and structure. Any of these actions, whoseintended purpose would be to create value through profitable growth,could result in the Company making investments and/or recognizingcharges related to executing against such opportunities.

TheCompany expects that operating revenues, cash on hand, funds availablefor borrowing under the 2004 Credit Agreement (including after givingeffect to the Term Loan Add-on discussed in ‘‘RecentDevelopments’’), the 2004 Consolidated MacAndrews &Forbes Line of Credit, and other permitted lines of credit as well asadvances under the New Keepwell Agreement will be sufficient to enablethe Company to cover its operating expenses for 2006, including cashrequirements in connection with the Company’s operations, thecontinued implementation of, and refinement to, the Company’splan, cash requirements in connection with the Company’srestructuring programs (including the Company’s organizationalrealignment announced in February  2006 and any additionalactions), the debt service requirements of the Company and itssubsidiaries for 2006, including without limitation, interest paymentson the New REV Holdings Notes, and regularly scheduled pension andpost-retirement plan contributions. However, there can be no assurancethat such funds will be sufficient to meet the Company’s cashrequirements on a consolidated basis. If the Company’santicipated level of revenue growth is not achieved because, forexample, of decreased consumer spending in response to weak economicconditions or weakness in the mass-market cosmetics category, adversechanges in currency, increased competitive activities from theCompany’s competitors, changes in consumer purchasing habits,including with respect to shopping channels, retailer inventorymanagement, retailer space reconfigurations, less than anticipatedresults from the Company's advertising and marketing plans,including for its Almay and Vital Radiance brandinitiatives, or if the Company’s expenses, including for returnsrelated to the reduction of retail space or product discontinuances,associated with the continued implementation of, and refinement to, theCompany’s plan exceed the anticipated level of expenses, theCompany’s current sources of funds may be insufficient to meetthe Company’s cash requirements.

In the event of adecrease in demand for the Company’s products, reduced sales,lack of increases in demand and sales, changes in consumer purchasinghabits, including with respect to shopping channels, retailer inventorymanagement, retailer space reconfigurations, product discontinuancesand/or returns or expenses associated with the continued implementationof, and refinement to, the Company’s plan, exceeding itsexpectations or less than anticipated results from the Company'sadvertising and marketing plans, including for its brand initiatives,any such development, if significant, could reduce ProductsCorporation’s revenues and could adversely affect ProductsCorporation’s ability to comply with certain financial covenantsunder the 2004 Credit Agreement and in such event the Company could berequired to take measures, including reducing discretionary spending.(See also Item 1A. ‘‘Risk Factors’’ in REVHoldings’ Annual Report on Form 10-K for the fiscal year endedDecember  31,  2005 for further discussion of risksassociated with the Company’s business).

If the Company isunable to satisfy its cash requirements from the sources identifiedabove or comply with its debt covenants, the Company could be requiredto adopt one or more alternatives, such as delaying the implementationof or revising aspects of its plan, reducing or delaying purchases ofwall displays or advertising or promotional expenses, reducing ordelaying capital spending, delaying, reducing or revising restructuringprograms, restructuring indebtedness, selling assets or operations,seeking additional capital contributions or loans from MacAndrews &Forbes, the Company’s other affiliates and/or third parties,selling additional securities of the Company or reducing otherdiscretionary spending. There can be no assurance that the Companywould be able to take any of the actions referred to above because of avariety of commercial or market factors or constraints in REV Holdingsand/or Products Corporation’s debt instruments, including, forexample, market conditions being unfavorable for an equity or debtissuance, additional capital contributions or loans not being availablefrom affiliates or third 

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parties, or that the transactions may not bepermitted under the terms of REV Holdings and/or ProductsCorporation’s various debt instruments then in effect, becauseof restrictions 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 requirementsor comply with its debt covenants if the actions do not generate asufficient amount of additional capital. (See also Item 1A.‘‘Risk Factors’’ in REV Holdings’Annual Report on Form 10-K for the fiscal year ended December31,  2005 for further discussion of risks associated with theCompany’s business).

Revlon, Inc., as a holding company,will be dependent on the earnings and cash flow of, and dividends anddistributions from, Products Corporation to pay its expenses and to payany cash dividend or distribution on Revlon, Inc.’s Class ACommon Stock that may be authorized by the Board of Directors ofRevlon, Inc. The terms of the 2004 Credit Agreement, the 2004Consolidated MacAndrews & Forbes Line of Credit and the indenturesgoverning Products Corporation’s 91⁄2%Senior Notes and its 8 5/8% Senior SubordinatedNotes generally restrict Products Corporation from paying dividends ormaking distributions, except that Products Corporation is permitted topay dividends and make distributions to Revlon, Inc. to enable Revlon,Inc., among other things, to pay expenses incidental to being a publicholding company, including, among other things, professional fees, suchas legal and accounting fees, regulatory fees, such as SEC filing fees,and other miscellaneous expenses related to being a public holdingcompany and, 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 StockPlan.

REV Holdings, as a holding company, will be dependent onadvances from affiliates to pay its expenses and will also be dependentupon advances under the New Keepwell Agreement to pay interest when dueon the New REV Holdings Notes. REV Holdings anticipates that it will berequired to adopt one or more alternatives to pay the principal amountat maturity of the New REV Holdings Notes, such as refinancing itsindebtedness, repaying its indebtedness with the proceeds from the saleof assets or operations of Revlon, Inc., selling its equity securitiesor equity securities of Revlon, Inc. or seeking additional capitalcontributions or loans from MacAndrews & Forbes, theCompany's other affiliates and/or third parties. There can be noassurance that any of the foregoing actions could be effected onsatisfactory terms, that any of the foregoing actions would enable REVHoldings to pay the principal amount at maturity of the New REVHoldings Notes or that any of such actions would be permitted by theterms of the New Indenture (as hereinafter defined) or any other debtinstrument of the Company and the Company's subsidiaries then ineffect, because, among other reasons, market conditions may beunfavorable for an equity or debt offering or the transactions may notbe permitted under the terms of the Company's various debtinstruments then in effect, because of restrictions on the incurrenceof debt, incurrence of liens, asset dispositions and related partytransactions. In addition, such actions, if taken, may not enable theCompany to satisfy its cash requirements if the actions do not generatea sufficient amount of additional capital. None of the Company'saffiliates, including MacAndrews & Forbes, is required to make anycapital contribution, loan or other payment to REV Holdings withrespect to principal or interest on the New REV Holdings Notes (otherthan as provided in the New Keepwell Agreement).

OnJanuary  21,  2004, REV Holdings consummated an exchangeoffer (the ‘‘REV Holdings Exchange Offer’’)with respect to its 12% Senior Secured Notes due 2004 (the‘‘REV Holdings Notes’’) for 13%Senior Secured Notes due 2007 (the ‘‘New REV HoldingsNotes’’). In connection therewith, REV Holdings issued$18.5  million principal amount of New REV Holdings Notes inexchange for a like principal amount of REV Holdings Notes. Inaddition, at maturity on February  1,  2004, REVHoldings' parent contributed $7.9  million principal amountof REV Holdings Notes it held and $54.1  million of cash toretire the remaining outstanding REV Holdings Notes.

As ofJune  30,  2006, the New REV Holdings Notes, which bearinterest semi-annually and mature on February  1,  2007,are secured by a pledge of 2,325,291 shares of Revlon, Inc. Class ACommon Stock, including all dividends, cash instruments and propertyand proceeds from time to time received in respect 

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of the foregoing shares (collectively, the‘‘Collateral’’). In addition, the indenturegoverning the New REV Holdings Notes (the ‘‘NewIndenture’’) contains covenants that, among other things,limit, subject to certain exceptions set forth in the New Indenture,the following: (i) the issuance of additional debt and redeemable stockby REV Holdings, (ii) the creation of additional liens on theCollateral (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 parent companies, (iv) the sale of assets and subsidiary stock(including by way of consolidations, mergers and similar transactions),and (v) transactions with affiliates.

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’’) pursuant towhich GSB Investments Corp. agreed to provide REV Holdings with fundsequal to any interest payment due on the New REV Holdings Notes, to theextent that REV Holdings does not have sufficient funds on hand to makesuch payment on the applicable due date. REV Holdings currentlyanticipates that it will use advances under the New Keepwell Agreementto pay interest when due under the New REV Holdings Notes. The NewKeepwell Agreement, however, is not a guarantee of the payment ofinterest on the New REV Holdings Notes. The obligations of GSBInvestments Corp. under the New Keepwell Agreement are only enforceableby REV Holdings, and may not be enforced by the holders of the New REVHoldings Notes or the trustee under the New Indenture. Any failure ofGSB Investments Corp. to make a payment to REV Holdings under the NewKeepwell Agreement will not be an event of default under the NewIndenture. Further, the New Indenture has no requirement that REVHoldings maintain the New Keepwell Agreement. In addition, although REVHoldings has the right to enforce the New Keepwell Agreement, there canbe no assurance that GSB Investments Corp. will have sufficient fundsto make any payments to REV Holdings under the New Keepwell Agreementor that it will comply with its obligations under the New KeepwellAgreement.

GSB Investments Corp. has advised REV Holdings that itexpects either to have cash flow from dividends on its investments orto obtain capital contributions from its affiliates that, in theaggregate, would be sufficient to satisfy its obligations under the NewKeepwell Agreement. There can be no assurance, however, that GSBInvestments Corp. (a) will have such cash flow, because, among otherthings, a portion of its investments are pledged and its investees areunder no obligation 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.Advances under the New Keepwell Agreement were $4.8  million fromits inception through June  30,  2006 and were $1.2million during the six month period ended June  30,2006.

As a result of dealing with suppliers and vendors ina number of foreign countries, Products Corporation enters into foreigncurrency forward exchange contracts and option contracts from time totime to hedge certain cash flows denominated in foreign currencies.There were foreign currency forward exchange contracts with a notionalamount of $37.4  million outstanding at June  30,2006. The fair value of foreign currency forward exchange contractsoutstanding at June  30,  2006 was $0.4million.

Disclosures about Contractual Obligations andCommercial Commitments

As of June  30,  2006,there had been no material changes to the Company’s totalcontractual cash obligations which are set forth in the table includedin REV Holdings’ Annual Report on Form 10-K for the year endedDecember  31,  2005, with the exception of certainadvertising commitments entered into in the second quarter of 2006, therepayment of approximately $109.7  million of ProductsCorporation’s 8 5/8% Senior Subordinated Notes inApril  2006 and $104.6  million drawn under theMulti-Currency Facility as of June  30,  2006. Thefollowing table reflects the impact of the foregoing:

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|                                            |  |  |                                              |   |         |           |  |  |           |   |      |           |  |  |           |   |       |  |  |  |  |   |       |     |  |  |  |   |         |  |
|--------------------------------------------|--|--|----------------------------------------------|---|---------|-----------|--|--|-----------|---|------|-----------|--|--|-----------|---|-------|--|--|--|--|---|-------|-----|--|--|--|---|---------|--|
|                                       |  |  | Payments Due by Periodin(dollars inmillions) |
| ContractualObligations As of June 30, 2006 |  |  | Total                                        |   |         | 2006Q3-Q4 |  |  | 2007-2008 |   |      | 2009-2010 |  |  | After2010 |
| Long-termDebt(a)                           |  |  |                                              | $ | 1,435.3 |           |  |  |           | $ | 1.7  |           |  |  |           | $ | 254.9 |  |  |  |  | $ | 788.7 | (d) |  |  |  | $ | 390.0   |  |
| Intereston Long-termDebt(b)                |  |  |                                              |   | 543.8   |           |  |  |           |   | 72.1 |           |  |  |           |   | 267.7 |  |  |  |  |   | 194.7 |     |  |  |  |   | 9.3     |  |
| OtherLong-termObligations(c)               |  |  |                                              |   | 68.1    |           |  |  |           |   | 18.1 |           |  |  |           |   | 49.5  |  |  |  |  |   | 0.5   |     |  |  |  |   | — |  |
|                                            |

|     |                                                                                                                                                                                                                                                                      |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) | Amountreflects the impact of the aforementioned redemption in April2006 of $109.7  million aggregate principal amount of ProductsCorporation’s 8 5/8% Senior Subordinated Notes and$104.6  million drawn under the Multi-Currency Facility as ofJune  30,2006. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Consists of interestprimarily on the New REV Holdings Notes, as well as ProductsCorporation’s 91⁄2% Senior Notes and8 5/8% Senior Subordinated Notes, borrowingsunder the Multi-Currency Facility as of June  30,  2006 andthe $700  million Term Loan Facility under the 2004 CreditAgreement (before giving effect to the $100  million Term LoanAdd-on described in ‘‘RecentDevelopments’’) through the respective maturity datesbased upon assumptions regarding the amount of debt outstanding underthe 2004 Credit Agreement and assumed interestrates. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c) | Consists primarily ofobligations related to advertising, insurance, employment contracts andother personnel service contracts. Such amounts exclude severance andother contractual commitments related to restructuring, which arediscussed under ‘‘Restructuring Costs’’.Amount reflects the additional impact of advertising commitmentsentered into in the second quarter of2006. |

|     |                                                                                                                                                                  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (d) | As of July28,  2006, $100  million was added to the 2004 CreditAgreement's Term Loan Facility, which is not reflected in thecontractual obligations table above. |

Off-Balance SheetTransactions

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 Recent AccountingPronouncements

See discussion of recent accountingpronouncements in Note 1 ‘‘Basis ofPresentation’’ to the Unaudited Consolidated FinancialStatements.

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(alltabular amounts in millions)

Item 3.    Quantitative andQualitative Disclosures About Market Risk

TheCompany has exposure to market risk both as a result of changinginterest rates and movements in foreign currency exchange rates. TheCompany’s policy is to manage market risk through a combinationof fixed and floating rate debt, the use of derivative financialinstruments and foreign exchange forward and option contracts. TheCompany does not hold or issue financial instruments for tradingpurposes. The qualitative and quantitative information presented inItem 7A of REV Holdings’ Annual Report on Form 10-K for the yearended December  31,  2005 (‘‘Item7A’’) describes significant aspects of theCompany’s financial instrument programs that have materialmarket risk as of December  31,  2005. The following tablepresents the information required by Item 7A as of June30,  2006 (See ‘‘Financial Condition, Liquidity andCapital Resources – 2006 Refinancing Transactions’’as to the redemption in April  2006 of $109.7  millionaggregate principal amount of Products Corporation’s8 5/8% Senior SubordinatedNotes):

|                                                 |  |  |                                                       |   |        |       |  |  |                       |   |         |      |  |  |      |   |         |            |  |  |  |   |         |   |  |  |  |   |         |    |  |  |  |   |         |   |  |  |  |   |         |  |  |  |  |   |         |  |
|-------------------------------------------------|--|--|-------------------------------------------------------|---|--------|-------|--|--|-----------------------|---|---------|------|--|--|------|---|---------|------------|--|--|--|---|---------|---|--|--|--|---|---------|----|--|--|--|---|---------|---|--|--|--|---|---------|--|--|--|--|---|---------|--|
|                                            |  |  | ExpectedMaturity date for the year ended December 31, |   |        | Total |  |  | Fair ValueJune30,2006 |
|                                            |  |  | 2006                                                  |   |        | 2007  |  |  | 2008                  |   |         | 2009 |  |  | 2010 |   |         | Thereafter |
| Debt                                            |  |  |                                                       |   |   |       |  |  |                       |   |    |      |  |  |      |   |    |            |  |  |  |   |    |   |  |  |  |   |    |    |  |  |  |   |    |   |  |  |  |   |    |  |  |  |  |   |    |  |
| Short-termvariable rate(variouscurrencies)      |  |  |                                                       | $ | 12.1   |       |  |  |                       | $ | — |      |  |  |      | $ | — |            |  |  |  | $ | — |   |  |  |  | $ | — |    |  |  |  | $ | — |   |  |  |  | $ | 12.1    |  |  |  |  | $ | 12.1    |  |
| Averageinterest rate(a)                         |  |  |                                                       |   | 11.1   | %     |  |  |                       |   |    |      |  |  |      |   |    |            |  |  |  |   |    |   |  |  |  |   |    |    |  |  |  |   |    |   |  |  |  |   |    |  |  |  |  |   |    |  |
| Long-termfixed rate – third party($US)    |  |  |                                                       |   |   |       |  |  |                       |   | 18.5    |      |  |  |      |   | 217.4   | *          |  |  |  |   |    |   |  |  |  |   |    |    |  |  |  |   | 390.0   |   |  |  |  |   | 625.9   |  |  |  |  |   | 563.5   |  |
| Averageinterest rate(a)                         |  |  |                                                       |   |   |       |  |  |                       |   | 13.0    | %    |  |  |      |   | 8.6     | %          |  |  |  |   |    |   |  |  |  |   |    |    |  |  |  |   | 9.5     | % |  |  |  |   |    |  |  |  |  |   |    |  |
| Long-termvariable rate – third party($US) |  |  |                                                       |   | 1.7    |       |  |  |                       |   | 7.1     |      |  |  |      |   | 7.1     |            |  |  |  |   | 111.7   |   |  |  |  |   | 677.0   | ** |  |  |  |   |    |   |  |  |  |   | 804.6   |  |  |  |  |   | 804.6   |  |
| Averageinterest rate(a)                         |  |  |                                                       |   | 11.6   | %     |  |  |                       |   | 11.6    | %    |  |  |      |   | 11.6    | %          |  |  |  |   | 8.8     | % |  |  |  |   | 11.6    | %  |  |  |  |   |    |   |  |  |  |   |    |  |  |  |  |   |    |  |
| Totaldebt (excluding affiliatedebt)             |  |  |                                                       | $ | 13.8   |       |  |  |                       | $ | 25.6    |      |  |  |      | $ | 224.5   |            |  |  |  | $ | 111.7   |   |  |  |  | $ | 677.0   |    |  |  |  | $ | 390.0   |   |  |  |  | $ | 1,442.6 |  |  |  |  | $ | 1,380.2 |  |
|                                                 |

|                                               |  |  |                            |  |        |                                |  |  |                          |   |      |                       |  |  |  |   |      |  |  |  |  |   |         |   |
|-----------------------------------------------|--|--|----------------------------|--|--------|--------------------------------|--|--|--------------------------|---|------|-----------------------|--|--|--|---|------|--|--|--|--|---|---------|---|
| ForwardContracts                              |  |  | AverageContractualRate$/FC |  |        | OriginalUSDollarNotionalAmount |  |  | ContractValueJune30,2006 |   |      | Fair ValueJune30,2006 |
| Sell Hong Kong Dollars/BuyUSD                 |  |  |                            |  | 0.1288 |                                |  |  |                          | $ | 0.4  |                       |  |  |  | $ | 0.4  |  |  |  |  | $ | — |   |
| SellEuros/BuyUSD                              |  |  |                            |  | 1.2440 |                                |  |  |                          |   | 1.0  |                       |  |  |  |   | 1.0  |  |  |  |  |   | — |   |
| SellBritish Pounds/BuyUSD                     |  |  |                            |  | 1.8141 |                                |  |  |                          |   | 5.0  |                       |  |  |  |   | 4.9  |  |  |  |  |   | (0.1    | ) |
| SellAustralian Dollars/BuyUSD                 |  |  |                            |  | 0.7519 |                                |  |  |                          |   | 3.9  |                       |  |  |  |   | 3.9  |  |  |  |  |   | — |   |
| SellCanadian Dollars/BuyUSD                   |  |  |                            |  | 0.8904 |                                |  |  |                          |   | 18.6 |                       |  |  |  |   | 18.3 |  |  |  |  |   | (0.3    | ) |
| SellSouth African Rand/BuyUSD                 |  |  |                            |  | 0.1567 |                                |  |  |                          |   | 4.1  |                       |  |  |  |   | 4.6  |  |  |  |  |   | 0.5     |   |
| SellNew Zealand Dollars/BuyUSD                |  |  |                            |  | 0.6286 |                                |  |  |                          |   | 0.6  |                       |  |  |  |   | 0.6  |  |  |  |  |   | — |   |
| BuyAustralian Dollars/Sell New ZealandDollars |  |  |                            |  | 1.1366 |                                |  |  |                          |   | 3.8  |                       |  |  |  |   | 4.1  |  |  |  |  |   | 0.3     |   |
| Totalforwardcontracts                         |  |  |                            |  |   |                                |  |  |                          | $ | 37.4 |                       |  |  |  | $ | 37.8 |  |  |  |  | $ | 0.4     |   |
|                                               |

|  |
|--|
|  |  |
|  |

|     |                                                                                                            |
|-----|------------------------------------------------------------------------------------------------------------|
| (a) | Weightedaverage variable rates are based upon implied forward rates from theyield curves at June  30,2006. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| * | While the8 5/8% Senior Subordinated Notes are due inFebruary  2008, under the 2004 Credit Agreement, ProductsCorporation must refinance such notes by October  30,2007, such that not more than $25.0  million of such notes remainoutstanding. In April  2006, Products Corporation redeemed$109.7  million in aggregate principal amount of its8 5/8% Senior Subordinated Notes. Accordingly,at June  30,  2006 there remained outstanding $217.4million in aggregate principal amount of such notes. (See‘‘Item 2. Management’s Discussion and Analysis ofFinancial Condition and Results of Operations – Overview –Overview of FinancingTransactions’’). |

|    |                                                                                                                                                                                                                   |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** | EffectiveJuly  28,  2006 Products Corporation increased the TermLoan Facility by an additional $100  million to a total Term LoanFacility of $800  million. (See ‘‘RecentDevelopments’’). |

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Item 4.    Controls andProcedures

(a)    Disclosure Controls andProcedures.    The Company maintains disclosure controls andprocedures that are designed to ensure that information required to bedisclosed in the Company's reports under the Securities ExchangeAct of 1934, as amended, is recorded, processed, summarized andreported within the time periods specified in the SEC's rules andforms, and that such information is accumulated and communicated tomanagement, including REV Holdings’ Chief Executive Officer andChief Financial Officer, as appropriate, to allow timely decisionsregarding required disclosure. The Company's management, with theparticipation of REV Holdings’ Chief Executive Officer and ChiefFinancial Officer, has evaluated the effectiveness of REVHoldings’ disclosure controls and procedures as of the end ofthe three-month fiscal period covered by this Quarterly Report on Form10-Q. Based upon such evaluation, the Chief Executive Officer and ChiefFinancial Officer have concluded that, as of the end of such period,the Company's disclosure controls and procedures areeffective.

(b)    Changes in Internal Control OverFinancial Reporting.    There have not been any changes inthe Company’s internal control over financial reporting duringthe three-month fiscal period ended June  30,  2006 thathave materially affected, or are reasonably likely to materiallyaffect, the Company’s internal control over financialreporting.

Forward-Looking Statements

This QuarterlyReport on Form 10-Q for the second quarter and six months endedJune  30,  2006, as well as other public documents andstatements of the Company, contain forward-looking statements thatinvolve risks and uncertainties, which are based on the beliefs,expectations, estimates, projections, forecasts, plans, anticipations,targets, outlooks, initiatives, visions, objectives, strategies,opportunities, drivers and intents of the Company’s management.While the Company believes that its estimates and assumptions arereasonable, the Company cautions that it is very difficult to predictthe impact of known factors, and, of course, it is impossible for theCompany to anticipate all factors that could affect its results. TheCompany's actual results may differ materially from thosediscussed in such forward-looking statements. Such statements include,without limitation, the Company's expectations and estimates(whether qualitative or quantitative) as to:

|  |           |                                            |
|--|-----------|--------------------------------------------|
|  | (i)  | the Company's futurefinancial performance; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                     |
|--|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ii)  | theeffect on sales of weak economic conditions, adverse currencyfluctuations, category weakness, competitive activities, retailerinventory management, retailer space reconfigurations, less thananticipated results from the Company's advertising and marketingplans, including for its brand initiatives, and changes in consumerpurchasing habits, including with respect to shopping channels; |

|  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iii)  | the Company's belief thatthe continued implementation and refinement to its plan could includetaking advantage of additional opportunities to reposition, repackageor reformulate one or more of its brands or product lines, launchingadditional new brands or products, including, without limitation, theCompany’s plans to launch a new fragrance for 2007, furtherrefining its approach to retail merchandising and/or take furtheractions to optimize its manufacturing, sourcing and organizational sizeand structure, any of which, whose intended purpose would be to createvalue through profitable growth, could result in the Company makinginvestments and/or recognizing charges related to executing againstsuch opportunities; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iv)  | theCompany's expectations regarding its plan, including theCompany's objective of increasing revenues and achievingprofitability over the long-term by capitalizing on actions takenduring the earlier phases of its plan, including taking actions tosupport this objective by assessing and taking appropriate actions inresponse to marketplace conditions, including competitive activities,with the objective of optimizing the effectiveness of all of itsbrands, including the Revlon brand across the various productcategories in which it competes, including color cosmetics,women’s hair color and beauty tools, as well as itsnewly-restaged Almay brand and its new Vital Radiancebrand; |

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|  |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (v)  | theCompany's plans to continue to focus on the opportunities thatthe Company believes exist to increase its operating profit margin overtime, with key areas of focus being actions intended to improve resultsin the areas of cost of goods sold and returns, as well as overhead andadministrative expenses and that its cost savings initiatives wouldinclude, among other things, actions intended to improve product lifecycle management, improve in-store merchandising, improve cost of goodssold, improve the effectiveness and efficiency of trade promotions,focus on savings from strategic procurement in general andadministrative costs, optimize the Company’s internationalsupply chain and optimize the Company’s overall coststructure; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (vi)  | the Company'sexpectations and plans as to its Vital Radiance brandinitiative, including seeking to optimize the Vital Radiancebrand in the categories and retail formats in which it has been mostsuccessful and focusing resources on its revised retail footprint, itsmost effective marketing drivers and the most productive products inthe line, as well as its expectations as to a reduction of some of theretail space it gained for VitalRadiance; |

|  |             |                                                                                                                                      |
|--|-------------|--------------------------------------------------------------------------------------------------------------------------------------|
|  | (vii)  | theCompany’s belief that Almay, with its restaged positionin the marketplace, provides an important platform for futuregrowth; |

|  |              |                                                                                                                                                                                    |
|--|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (viii)  | the Company’sexpectation that in connection with the brand initiatives, workingcapital will return to more normalized levels in relation to sales inthe second half of 2006; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ix)  | theCompany’s plans to continue to strengthen its balance sheet andcapital structure, including Revlon, Inc.’s plans to refinancethe balance of Products Corporation’s 8 5/8% SeniorSubordinated Notes before October  30,  2007 prior to theirmaturity, Revlon, Inc.’s plans to conduct an additional equityissuance of $75  million in late 2006 or early 2007 and itsintent to use the net proceeds to reduce debt; |

|  |           |                                                                                                                                                                                                                                                                                                                                                                              |
|--|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (x)  | restructuring activities,restructuring costs, the timing of restructuring payments and annualsavings and other benefits from such activities, including theCompany’s expectations that ongoing annualized savingsassociated with the realignment announced in February  2006should be approximately $15  million, most of which the Companyexpects to realize in 2006; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xi)  | theCompany’s expectation that operating revenues, cash on hand andfunds available for borrowing under Products Corporation's 2004Credit Agreement (including the $100  million Term Loan Add-on),the 2004 Consolidated MacAndrews & Forbes Line of Credit and otherpermitted lines of credit will be sufficient to satisfy theCompany's operating expenses in 2006, including cash requirementsreferred to in item (xiv)below; |

|  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xii)  | the Company’sexpected sources of funds, including the availability of funds fromProducts Corporation's 2004 Credit Agreement (including the$100  million Term Loan Add-on), the 2004 Consolidated MacAndrews& Forbes Line of Credit and other permitted lines of credit, aswell as advances under the New Keepwell Agreement, restructuringindebtedness, selling assets or operations, capital contributionsand/or loans from MacAndrews & Forbes, the Company's otheraffiliates and/or third parties and/or the sale of additionalsecurities of theCompany; |

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xiii)  | 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 and the sale ofequity securities of REV Holdings to pay the principal amount atmaturity of the New REV HoldingsNotes; |

|  |             |                                                                                                                                                                                                                                                                       |
|--|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xiv)  | the Company'sexpected uses of funds, including amounts required for the payment ofoperating expenses, including expenses in connection with the continuedimplementation of, and refinement to, the Company's plan,payments in connection with the Company's purchases |

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|  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |   | of permanent wall displays, capitalexpenditure requirements, restructuring programs (including theorganizational realignment announced in February  2006 and anyadditional actions), debt service payments and costs and regularlyscheduled pension and post-retirement plan contributions, and itsestimates of operating expenses, working capital expenses, wall displaycosts, capital expenditures, cash contributions to the Company'spension plans and post-retirement benefit plans and debt servicepayments (including payments required under ProductsCorporation's debt instruments and interest payments under theNew REV HoldingsNotes); |

|  |            |                                                                   |
|--|------------|-------------------------------------------------------------------|
|  | (xv)  | matters concerning theCompany's market-risk sensitiveinstruments; |

|  |             |                                                                                    |
|--|-------------|------------------------------------------------------------------------------------|
|  | (xvi)  | the expectedeffects of the Company's adoption of certain accountingprinciples; and |

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xvii)  | theCompany's plan to efficiently manage its cash and workingcapital, including, among other things, by carefully managing inventorylevels, centralized purchasing to secure discounts and efficiencies inprocurement, and providing additional discounts to U.S. customers formore timely payment of receivables and carefully managing accountspayable and most recently targeted controls on general andadministrative spending. |

Statements that are not historicalfacts, including statements about the Company's beliefs andexpectations, are forward-looking statements. Forward-lookingstatements can be identified by, among other things, the use offorward-looking language such as ‘‘estimates,’’‘‘objectives,’’‘‘visions,’’‘‘projects,’’‘‘forecasts,’’‘‘plans,’’ ‘‘targets,’’‘‘strategies,’’‘‘opportunities,’’‘‘drivers,’’‘‘believes,’’‘‘intends,’’‘‘outlooks,’’‘‘initiatives,’’‘‘expects,’’ ‘‘scheduledto,’’ ‘‘anticipates,’’‘‘seeks,’’ ‘‘may,’’‘‘will,’’ or ‘‘should’’or the negative of those terms, or other variations of those terms orcomparable language, or by discussions of strategy, targets, models orintentions. Forward-looking statements speak only as of the date theyare made, and except for the Company's ongoing obligations underthe U.S. federal securities laws, the Company undertakes no obligationto publicly update any forward-looking statements, whether as a resultof new information, future events or otherwise. Investors are advised,however, to consult any additional disclosures REV Holdings made in itsAnnual Report on Form 10-K for the fiscal year ended December31,  2005 and makes in its Quarterly Reports on Form 10-Q andCurrent Reports on Form 8-K, in each case filed with the Securities andExchange Commission (the ‘‘SEC’’) in 2006(which, among other places, can be found on the SEC's website athttp://www.sec.gov). A number of important factors could cause actualresults to differ materially from those contained in anyforward-looking statement. See also Item 1A. ‘‘RiskFactors’’ in REV Holdings’ Annual Report on Form10-K for the fiscal year ended December  31,  2005 forfurther discussion of risks associated with the Company’sbusiness. In addition to factors that may be described in theCompany's filings with the SEC, including this filing, thefollowing factors, among others, could cause the Company's actualresults to differ materially from those expressed in anyforward-looking statements made by the Company:

|  |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (i)  | unanticipated circumstances orresults affecting the Company's financial performance, includingdecreased consumer spending in response to weak economic conditions orweakness in the mass-market cosmetics category; changes in consumerpreferences, such as reduced consumer demand for the Company'scolor cosmetics and other current products; changes in consumerpurchasing habits, including with respect to shopping channels; lowerthan expected retail customer acceptance or consumer acceptance of theCompany’s brand initiatives and other product offerings; higherthan expected returns or decreased sales of the Company’sexisting Revlon, Almay and/or Vital Radiancebranded products, including less than anticipated results from theCompany's advertising and marketing plans, including for itsbrand initiatives; actions by the Company’s customers, such asretailer inventory management and greater than anticipated retailerspace reconfigurations and/or product discontinuances; and changes inthe competitive environment and actions by the Company'scompetitors, including business combinations, technologicalbreakthroughs, new products offerings, continued increased advertising,marketing and promotional spending and marketing and promotionalsuccesses, including increases in market share; |

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|  |            |                                                                                                                                                                                                                                                                                        |
|--|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ii)  | theeffects of and changes in economic conditions (such as inflation,monetary conditions and foreign currency fluctuations, as well as intrade, monetary, fiscal and tax policies in international markets) andpolitical conditions (such as military actions and terroristactivities); |

|  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iii)  | unanticipatedcosts or difficulties or delays in completing projects associated withthe continued 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 such plan, includinglower than expected sales, or higher than expected costs, including asmay arise from any additional repositioning, repackaging orreformulating of one or more of the Company's brands or productlines, launching of new brands or product lines, including difficultiesor delays in launching its new products in 2007, further refining itsapproach to retail merchandising, and/or difficulties, delays orincreased costs in connection with taking further actions to optimizethe Company’s manufacturing, sourcing or organizational size andstructure; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iv)  | difficulties, delaysor unanticipated costs in implementing and refining the Company'splan, including difficulties, delays or unanticipated costs in takingactions to capitalize on the actions taken during the earlier phases ofits plan, which could affect the Company's ability to achieve itsobjectives of increasing revenues and achieving profitability over thelong-term, including less than anticipated results, such as lower thanexpected revenues, from actions intended to optimize the Revlonbrand across the various product categories in which it competes,including color cosmetics, women’s hair color and/or beautytools, as well as its newly-restaged Almay brand and its newVital Radiancebrand; |

|  |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (v)  | difficulties, delays orunanticipated costs in connection with the Company's plans toincrease its operating profit margin over time, such as difficulties,delays or the inability to take actions intended to improve results incost of goods sold, returns and/or overhead and administrativeexpenses, including as a result of difficulties, delays or theinability to take actions intended to improve product life cyclemanagement, in-store merchandising, costs of goods sold, theeffectiveness and efficiency of trade promotions and/or generatesavings from strategic procurement in general and administrative costs,from improvements in the Company’s international supply chainand/or from improvements in the Company’s overall coststructure; |

|  |            |                                                                                                                                                                                                                                  |
|--|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (vi)  | less thananticipated results of the Vital Radiance brand, such as lessthan anticipated consumer or retail customer acceptance thereof and/orgreater than anticipated reduction of retail shelf space for theVital Radiancebrand; |

|  |             |                                                                                                                                                                                 |
|--|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (vii)  | less than expectedresults from the Company’s Almay brand, including as aresult of less than anticipated consumer or retail customer acceptanceof the restaged Almaybrand; |

|  |              |                                                                                                          |
|--|--------------|----------------------------------------------------------------------------------------------------------|
|  | (viii)  | higher thananticipated working capital or unforeseen circumstances affecting thetiming or levelsthereof; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ix)  | difficulties, delaysor unanticipated costs in, or the Company's inability toconsummate, transactions to strengthen its balance sheet and capitalstructure, including difficulties, delays or increased costs associatedwith, or the inability to consummate, in whole or in part, therefinancing of the balance of Products Corporation’s 85/8% Senior Subordinated Notes before October  30,2007 prior to their maturity, or difficulties, delays or increasedcosts associated with conducting, or Revlon, Inc.’s inability toconsummate, in whole or in part, the additional Revlon, Inc. $75million equity issuance in late 2006 or early2007; |

|  |           |                                                                                                                                                                                                                                                                 |
|--|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (x)  | difficulties, delays orunanticipated costs or less than expected savings and other benefitsresulting from the Company's restructuring activities, such asless than anticipated annualized savings from the organizationalrealignment announced in February2006; |

|  |            |                                                                                                                                                                                |
|--|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xi)  | lower than expectedoperating revenues, the inability to secure capital contributions orloans from MacAndrews & Forbes, the Company's otheraffiliates and/or third parties; |

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|  |             |                                                                                                                                                                                                                                                                                                                                                       |
|--|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xii)  | theunavailability of funds under Products Corporation's 2004 CreditAgreement, the 2004 Consolidated MacAndrews & Forbes Line of Creditand/or other permitted lines of credit or advances under the NewKeepwell Agreement, or from restructuring indebtedness, selling assetsor operations and/or the sale of additional securities of theCompany; |

|  |              |                                                                                                                                                                                                                                                                                                                               |
|--|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xiii)  | 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; |

|  |             |                                                                                                                                                                                                                                                                                                                           |
|--|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xiv)  | higher thanexpected operating expenses (including in connection with the brandinitiatives), sales returns, working capital expenses, wall displaycosts, capital expenditures, restructuring costs, regularly scheduledcash pension plan contributions, post-retirement benefit plancontributions or debt servicepayments; |

|  |            |                                                                                                                        |
|--|------------|------------------------------------------------------------------------------------------------------------------------|
|  | (xv)  | interest rate orforeign exchange rate changes affecting the Company and its market-risksensitive financialinstruments; |

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

|  |              |                                                                                                        |
|--|--------------|--------------------------------------------------------------------------------------------------------|
|  | (xvii)  | difficulties,delays or the inability of the Company to efficiently manage its cashand working capital. |

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.

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REV HOLDINGS LLCAND SUBSIDIARIES

PART II – OTHER INFORMATION

|               |              |
|---------------|--------------|
| Item1A.  | Risk Factors |

For a discussion of theCompany’s risk factors, see REV Holdings’ Annual Reporton Form 10-K for the year ended December  31,2005.

|              |          |
|--------------|----------|
| Item6.  | Exhibits |

|                          |
|--------------------------|
|                          |  |  |  |  |  |  |
|                          | 4 | .1 |  |  |  | AmendmentNo. 2 dated July  28,  2006 to the 2004 Credit Agreement(incorporated by reference to Exhibit 4.1 to the Current Report on Form8-K of Products Corporation filed with the SEC on July28,  2006). |
|                          | 10 | .1 |  |  |  | Fifth Amendment,dated June  1,  2006, to the Investment Agreement, dated asof February  20,  2004, by and between Revlon, Inc. andMacAndrews & Forbes Holdings Inc. (incorporated by reference toExhibit 10.1 to the Current Report on Form 8-K of Revlon, Inc. filedwith the SEC on June  2,  2006). |
|                          | *31 | .1 |  |  |  | Certification of Ronald O. Perelman, ChiefExecutive Officer, dated August 10, 2006, pursuant to Rule13a-14(a)/15d-14(a) of the ExchangeAct. |
|                          | *31 | .2 |  |  |  | Certification of Paul G. Savas,Chief Financial Officer, dated August 10, 2006, pursuant to Rule13a-14(a)/15d-14(a) of the ExchangeAct. |
| 32.1(furnished herewith) |  |  | Certification of Ronald O. Perelman, ChiefExecutive Officer, dated August 10, 2006, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002. |
| 32.2 (furnishedherewith) |  |  | Certification of Paul G. Savas, Chief FinancialOfficer, dated August 10, 2006, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002. |
|                          |

|  |
|--|
|  |  |
|  |

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

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S I G N A T U R ES

Pursuant to the requirements of the Securities Exchange Act of1934, as amended, the registrant has duly caused this report to besigned on its behalf by the undersigned thereunto duly authorized.

Dated: August 10, 2006

REV HOLDINGSLLCRegistrant

|                                                        |  |  |                                                                                                                                                                                                                                                                                                                  |
|--------------------------------------------------------|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| By:   /s/   PaulG. Savas |
|                                                   |  |  |        Paul G.Savas       Executive Vice President,       ChiefFinancial Officer,       Chief Accounting Officerand       Manager |
|                                                        |

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