Table of Contents

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UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

(Mark One)

|        |  |                                                                                      |
|--------|--|--------------------------------------------------------------------------------------|
|   |  | QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGEACT OF 1934 |

For the quarterly period endedMarch  31,  2006

OR

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

For the transition period from                         to                        

Commission File Number: 333-23451

REV HOLDINGS LLC

(Exactname of registrant as specified in its charter)

|                                                              |  |                                   |  |  |  |  |
|--------------------------------------------------------------|--|-----------------------------------|--|--|--|--|
| Delaware                                                     |  | 13-3933701                        |
| (State orother jurisdiction ofincorporation or organization) |  | (I.R.S.EmployerIdentificationNo.) |
|                                                         |  |                              |
| 35 East 62ndStreet, New York, New York                       |  | 10021                             |
| (Addressof principal executive offices)                      |  | (ZipCode)                         |
|                                                              |

212-572-8600

(Registrant's telephone number,including area code)

Indicate by check mark whether theregistrant (1) has filed all reports required to be filed by Section 13or 15(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 is a largeaccelerated filer, an accelerated filer, or a non-accelerated filer.See definition of ‘‘accelerated filer’’ and‘‘large accelerated filer’’ in Rule 12b-2 ofthe Exchange Act. (Check one):

Large acceleratedfiler             Acceleratedfiler            Non-acceleratedfiler    

Indicate by check mark whetherthe registrant is a shell company (as defined in Rule 12b-2 of theAct).Yes     No 

As of March31,  2006, the registrant’s entire membership interest isheld by an affiliate of MacAndrews & Forbes Holdings Inc.

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REV HOLDINGSLLC AND SUBSIDIARIESINDEX

|                                     |  |                                                                                                                              |        |        |        |        |  |  |  |  |
|-------------------------------------|--|------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--|--|--|--|
| PART I – FinancialInformation |  |                                                                                                                         |   |   |
| Item1.                              |  | FinancialStatements                                                                                                          |        |   |   |   |
|                                |  | Consolidated BalanceSheets as of March 31, 2006 (Unaudited) and December31, 2005                                             |        |   | 2      |   |
|                                |  | UnauditedConsolidated Statements of Operations for the Three Months EndedMarch 31, 2006 and 2005                             |        |   | 3      |   |
|                                |  | Unaudited Consolidated Statement ofMember’s Deficiency and Comprehensive Loss for the Three MonthsEnded March 31, 2006 |        |   | 4      |   |
|                                |  | Unaudited Consolidated Statements of Cash Flowsfor the Three Months Ended March 31, 2006 and2005                             |        |   | 5      |   |
|                                |  | Notes to UnauditedConsolidated Financial Statements                                                                          |        |   | 6      |   |
| Item 2.                             |  | Management’sDiscussion and Analysis of Financial Condition and Results ofOperations                                    |        |   | 15     |   |
| Item3.                              |  | Quantitative and Qualitative Disclosures About MarketRisk                                                                    |        |   | 30     |   |
| Item4.                              |  | Controls and Procedures                                                                                                      |        |   | 31     |   |
| PART II – OtherInformation    |  |                                                                                                                         |   |   |
| Item1A.                             |  | Risk Factors                                                                                                                 |        |   | 36     |   |
| Item 6.                             |  | Exhibits                                                                                                                     |        |   | 36     |   |
|                                |  | Signatures                                                                                                                   |        |   | 37     |   |
|                                     |

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Table of Contents

PART I – FINANCIALINFORMATION

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|---------------|----------------------|
| Item 1.  | FinancialStatements. |

REV HOLDINGS LLC AND SUBSIDIARIESCONSOLIDATEDBALANCE SHEETS(dollars in millions)

|                                                                                                                  |  |               |          |                 |  |        |          |         |  |  |
|------------------------------------------------------------------------------------------------------------------|--|---------------|----------|-----------------|--|--------|----------|---------|--|--|
|                                                                                                             |  | March 31,2006 |          | December31,2005 |
|                                                                                                             |  | (Unaudited)   |          |            |
| ASSETS                                                                                                           |  |          |     |            |  |   |     |    |
| Currentassets:                                                                                                   |  |          |     |            |  |   |     |    |
| Cash and cashequivalents                                                                                         |  | $             | 137.2    |            |  | $      | 32.5     |    |
| Trade receivables, less allowances of $16.3 and $18.9 asof March  31,  2006 and December  31,  2005,respectively |  |          | 167.2    |            |  |   | 282.2    |    |
| Inventories                                                                                                      |  |          | 239.7    |            |  |   | 220.6    |    |
| Prepaid expenses and other                                                                                       |  |          | 65.4     |            |  |   | 56.7     |    |
| Total current assets                                                                                             |  |          | 609.5    |            |  |   | 592.0    |    |
| Property, plant and equipment,net                                                                                |  |          | 119.2    |            |  |   | 119.7    |    |
| Otherassets                                                                                                      |  |          | 171.6    |            |  |   | 146.8    |    |
| Goodwill                                                                                                         |  |          | 186.0    |            |  |   | 186.0    |    |
| Total assets                                                                                                     |  | $             | 1,086.3  |            |  | $      | 1,044.5  |    |
| LIABILITIES AND MEMBER’SDEFICIENCY                                                                         |  |          |     |            |  |   |     |    |
| Currentliabilities:                                                                                              |  |          |     |            |  |   |     |    |
| Short-term borrowings                                                                                            |  | $             | 10.8     |            |  | $      | 9.0      |    |
| Current portionof long-term debt                                                                                 |  |          | 129.2    |            |  |   | —  |    |
| Current portion of long-termdebt-affiliates                                                                      |  |          | 4.8      |            |  |   | —  |    |
| Accountspayable                                                                                                  |  |          | 120.6    |            |  |   | 133.1    |    |
| Accruedexpenses and other                                                                                        |  |          | 330.5    |            |  |   | 329.4    |    |
| Total current liabilities                                                                                        |  |          | 595.9    |            |  |   | 471.5    |    |
| Long-term debt                                                                                                   |  |          | 1,303.9  |            |  |   | 1,431.9  |    |
| Long-termdebt-affiliates                                                                                         |  |          | —  |            |  |   | 3.6      |    |
| Otherlong-term liabilities                                                                                       |  |          | 259.5    |            |  |   | 263.7    |    |
| Member’sdeficiency:                                                                                        |  |          |     |            |  |   |     |    |
| Member’sinterest                                                                                           |  |          | —  |            |  |   | —  |    |
| Additional paid-in capital                                                                                       |  |          | 1,018.1  |            |  |   | 948.9    |    |
| Accumulated deficit                                                                                              |  |          | (1,970.0 | )          |  |   | (1,953.4 | )  |
| Accumulated other comprehensive loss                                                                             |  |          | (121.1   | )          |  |   | (121.7   | )  |
| Total member’s deficiency                                                                                  |  |          | (1,073.0 | )          |  |   | (1,126.2 | )  |
| Total liabilities and member’s deficiency                                                                  |  | $             | 1,086.3  |            |  | $      | 1,044.5  |    |
|                                                                                                                  |

See Accompanying Notes toUnaudited Consolidated Financial Statements

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Table of Contents

REV HOLDINGS LLC ANDSUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OFOPERATIONS(dollars in millions)

|                                              |  |                            |         |         |  |        |         |         |  |  |
|----------------------------------------------|--|----------------------------|---------|---------|--|--------|---------|---------|--|--|
|                                         |  | Three Months EndedMarch31, |
|                                         |  | 2006                       |         | 2005    |
| Net sales                                    |  | $                          | 325.5   |    |  | $      | 300.9   |    |
| Cost of sales                                |  |                       | 117.3   |    |  |   | 114.2   |    |
| Gross profit                                 |  |                       | 208.2   |    |  |   | 186.7   |    |
| Selling, general and administrative expenses |  |                       | 216.5   |    |  |   | 187.1   |    |
| Restructuring costs,net                      |  |                       | 9.0     |    |  |   | 1.7     |    |
| Operating loss                               |  |                       | (17.3   | )  |  |   | (2.1    | )  |
| Other (income)expenses:                      |  |                       |    |    |  |   |    |    |
| Interest expense                             |  |                       | 35.8    |    |  |   | 30.3    |    |
| Interest income                              |  |                       | (0.3    | )  |  |   | (1.6    | )  |
| Amortization of debtissuance costs           |  |                       | 1.8     |    |  |   | 1.6     |    |
| Foreigncurrency (gains) losses, net          |  |                       | (0.8    | )  |  |   | 2.5     |    |
| Gain on issuance of subsidiary stock         |  |                       | (42.3   | )  |  |   | — |    |
| Loss on early extinguishment ofdebt          |  |                       | — |    |  |   | 7.5     |    |
| Miscellaneous,net                            |  |                       | (0.3    | )  |  |   | 1.4     |    |
| Other (income) expenses, net                 |  |                       | (6.1    | )  |  |   | 41.7    |    |
| Lossbefore income taxes                      |  |                       | (11.2   | )  |  |   | (43.8   | )  |
| Provision for income taxes                   |  |                       | 5.4     |    |  |   | 3.6     |    |
| Netloss                                      |  | $                          | (16.6   | )  |  | $      | (47.4   | )  |
|                                              |

See Accompanying Notes toUnaudited Consolidated Financial Statements

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Table of Contents

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

|                                                           |  |                           |         |                    |  |                                   |          |                                 |  |        |        |         |  |        |          |         |  |  |
|-----------------------------------------------------------|--|---------------------------|---------|--------------------|--|-----------------------------------|----------|---------------------------------|--|--------|--------|---------|--|--------|----------|---------|--|--|
|                                                      |  | AdditionalPaid-In-Capital |         | AccumulatedDeficit |  | AccumulatedOtherComprehensiveLoss |          | Total Member’s Deficiency |
| Balance, January  1,  2006                                |  | $                         | 948.9   |               |  | $                                 | (1,953.4 | )                          |  | $      | (121.7 | )  |  | $      | (1,126.2 | )  |
| Net proceeds from the 2006 Rights Offering (see Note9)    |  |                      | 65.5    |               |  |                              |     |                            |  |   |   |    |  |   | 65.5     |    |
| Stock-based compensation                                  |  |                      | 2.4     |               |  |                              |     |                            |  |   |   |    |  |   | 2.4      |    |
| Amortization of deferredcompensation for restricted stock |  |                      | 1.3     |               |  |                              |     |                            |  |   |   |    |  |   | 1.3      |    |
| Comprehensiveloss:                                        |  |                      |    |               |  |                              |     |                            |  |   |   |    |  |   |     |    |
| Net loss                                                  |  |                      |    |               |  |                              | (16.6    | )                          |  |   |   |    |  |   | (16.6    | )  |
| Revaluation of foreign currency forward exchangecontracts |  |                      |    |               |  |                              |     |                            |  |   | 0.6    |    |  |   | 0.6      |    |
| Totalcomprehensive loss                                   |  |                      |    |               |  |                              |     |                            |  |   |   |    |  |   | (16.0    | )  |
| Balance, March  31,  2006                                 |  | $                         | 1,018.1 |               |  | $                                 | (1,970.0 | )                          |  | $      | (121.1 | )  |  | $      | (1,073.0 | )  |
|                                                           |

SeeAccompanying Notes to Unaudited Consolidated FinancialStatements

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Table of Contents

REV HOLDINGS LLC ANDSUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF CASHFLOWS(dollars in millions)

|                                                                                         |  |                            |         |         |  |        |         |         |  |  |
|-----------------------------------------------------------------------------------------|--|----------------------------|---------|---------|--|--------|---------|---------|--|--|
|                                                                                    |  | Three Months EndedMarch31, |
|                                                                                    |  | 2006                       |         | 2005    |
| CASHFLOWS FROM OPERATING ACTIVITIES:                                                    |  |                       |    |    |  |   |    |    |
| Netloss                                                                                 |  | $                          | (16.6   | )  |  | $      | (47.4   | )  |
| Adjustments to reconcile net loss to net cashprovided by (used in) operatingactivities: |  |                       |    |    |  |   |    |    |
| Depreciation andamortization                                                            |  |                       | 30.5    |    |  |   | 23.5    |    |
| Amortization of debt discount                                                           |  |                       | 0.2     |    |  |   | — |    |
| Stock compensationamortization                                                          |  |                       | 3.7     |    |  |   | 1.7     |    |
| Losson early extinguishment of debt                                                     |  |                       | — |    |  |   | 7.5     |    |
| Gain on issuance of subsidiarystock                                                     |  |                       | (42.3   | )  |  |   | — |    |
| Change in assets andliabilities:                                                        |  |                       |    |    |  |   |    |    |
| Decrease in tradereceivables                                                            |  |                       | 115.9   |    |  |   | 45.6    |    |
| Increase in inventories                                                                 |  |                       | (18.3   | )  |  |   | (17.3   | )  |
| Increase in prepaid expenses andother current assets                                    |  |                       | (8.2    | )  |  |   | (3.2    | )  |
| (Decrease) increase in accounts payable                                                 |  |                       | (7.1    | )  |  |   | 7.0     |    |
| Decrease in accruedexpenses and other current liabilities                               |  |                       | (13.3   | )  |  |   | (9.6    | )  |
| Purchase of permanent displays                                                          |  |                       | (48.3   | )  |  |   | (17.5   | )  |
| Other, net                                                                              |  |                       | 11.1    |    |  |   | 0.9     |    |
| Net cashprovided by (used in) operating activities                                      |  |                       | 7.3     |    |  |   | (8.8    | )  |
| CASH FLOWS FROM INVESTINGACTIVITIES:                                                    |  |                       |    |    |  |   |    |    |
| Capital expenditures                                                                    |  |                       | (4.8    | )  |  |   | (2.7    | )  |
| Investment in debtdefeasance trust                                                      |  |                       | — |    |  |   | (197.9  | )  |
| Net cash used in investingactivities                                                    |  |                       | (4.8    | )  |  |   | (200.6  | )  |
| CASH FLOWS FROM FINANCINGACTIVITIES:                                                    |  |                       |    |    |  |   |    |    |
| Net decrease in short-termborrowings and overdraft – third parties                |  |                       | (4.3    | )  |  |   | (2.3    | )  |
| Proceeds from long-term debtborrowings                                                  |  |                       | 1.0     |    |  |   | — |    |
| Proceedsfrom the issuance of long-term debt – third parties                       |  |                       | — |    |  |   | 310.0   |    |
| Repayment of long-termdebt – third parties, including prepayment fee              |  |                       | — |    |  |   | (105.0  | )  |
| Advances under the NewKeepwell Agreement                                                |  |                       | 1.2     |    |  |   | 1.2     |    |
| Payment of financing costs                                                              |  |                       | (3.1    | )  |  |   | (9.0    | )  |
| Net proceeds from the 2006 RightsOffering                                               |  |                       | 107.7   |    |  |   | — |    |
| Proceedsfrom exercise of stock options for common stock                                 |  |                       | 0.1     |    |  |   | — |    |
| Netcash provided by financing activities                                                |  |                       | 102.6   |    |  |   | 194.9   |    |
| Effectof exchange rate changes on cash and cash equivalents                             |  |                       | (0.4    | )  |  |   | (2.2    | )  |
| Net increase (decrease) in cash and cashequivalents                                     |  |                       | 104.7   |    |  |   | (16.7   | )  |
| Cash and cash equivalents at beginning of period                                        |  |                       | 32.5    |    |  |   | 120.8   |    |
| Cash and cash equivalents at end of period                                              |  | $                          | 137.2   |    |  | $      | 104.1   |    |
| Supplemental schedule of cash flowinformation:                                          |  |                       |    |    |  |   |    |    |
| Cash paidduring the period for:                                                         |  |                       |    |    |  |   |    |    |
| Interest                                                                                |  | $                          | 33.7    |    |  | $      | 37.7    |    |
| Income taxes, net ofrefunds                                                             |  | $                          | 2.4     |    |  | $      | 1.0     |    |
| Supplemental schedule of noncash investing andfinancing activities:                     |  |                       |    |    |  |   |    |    |
| Treasurystock received by Revlon, Inc. to satisfy tax withholdingliabilities            |  | $                          | (0.1    | )  |  | $      | — |    |
|                                                                                         |

See Accompanying Notes toUnaudited Consolidated FinancialStatements

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS(all tabular amounts in millions, except forshare and per share amounts)

(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 and personal careproducts. The Company's principal customers include large massvolume retailers and chain drug stores, as well as certain departmentstores and other specialty stores, such as perfumeries. The Companyalso sells consumer products to U.S. military exchanges andcommissaries and has a licensing group, pursuant to which the Companylicenses certain of its key brand names to third parties forcomplimentary beauty-related products and accessories. ProductsCorporation is a wholly-owned subsidiary of Revlon, Inc.

Theaccompanying Consolidated Financial Statements are unaudited. Inmanagement’s opinion, all adjustments (consisting of only normalrecurring adjustments) necessary for a fair presentation have beenmade. The Unaudited Consolidated Financial Statements include theaccounts of the Company after elimination of all material intercompanybalances and transactions.

The preparation of financialstatements in conformity with accounting principles generally acceptedin the U.S. requires management to make estimates and assumptions thataffect amounts of assets and liabilities and disclosures of contingentassets and liabilities as of the date of the financial statements andreported amounts of revenues and expenses during the periods presented.Actual results could differ from these estimates. The UnauditedConsolidated Financial Statements should be read in conjunction withthe consolidated financial statements and related notes contained inREV Holdings' 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.Estimates and assumptions are reviewed periodically and the effects ofrevisions are reflected in the consolidated financial statements in theperiod they are determined to be necessary. Significant estimates madein the accompanying Unaudited Consolidated Financial Statementsinclude, but are not limited to, allowances for doubtful accounts,inventory valuation reserves, expected sales returns and allowances,certain assumptions related to the recoverability of intangible andlong-lived assets, reserves for estimated tax liabilities, certainestimates and assumptions used in the calculation of the fair value ofstock options issued to employees and the derived compensation expenseand certain estimates regarding the calculation of the net periodicbenefit costs and the projected benefit obligation for theCompany’s pension and other post-retirement plans.

As ofMarch  31,  2006, REV Holdings owned 20,819,333 shares ofClass A Common Stock of Revlon, Inc. (‘‘Class A CommonStock’’) and 31,250,000 shares of Class B Common Stock(together with the Class A Common Stock, the ‘‘CommonStock’’) of Revlon, Inc. (representing approximately13% of the Common Stock and approximately 48% of thecombined voting power of the Common Stock). The REV Holdings membershipinterest is owned by its sole member, Revlon Holdings LLC(‘‘Revlon Holdings’’), whose membershipinterest, in turn, is owned indirectly by MacAndrews & ForbesHoldings Inc. (‘‘MacAndrews & ForbesHoldings’’ and, together with its affiliates,‘‘MacAndrews & Forbes’’), a corporationwholly owned by Ronald O. Perelman. As of March  31,  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.

The results ofoperations and financial position, including working capital, forinterim periods are not necessarily indicative of those to be expectedfor a full year.

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS(all tabular amounts in millions, except forshare and per share amounts)

Stock-Based Compensation

Prior to January  1,  2006 (including the fiscal quarterended March  31,  2005), the Company applied the intrinsicvalue method as outlined in Accounting Principles Board Opinion No. 25,‘‘Accounting for Stock Issued to Employees’’(‘‘APB No. 25’’) and related interpretations inaccounting for stock options granted. Under the intrinsic value method,no compensation expense was recognized in fiscal periods ended prior toJanuary  1,  2006 if the exercise price of theCompany’s employee stock options equaled the market price ofRevlon, Inc.’s Class A common stock, par value of $0.01 pershare on the date 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 cost was recognized in the accompanyingconsolidated statements of operations for the fiscal periods ended onor before December  31,  2005 (including the fiscal quarterended March  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 fiscal periods endingafter December  31,  2005 all stock-based compensation berecognized as an expense in the financial statements and that such costbe measured at the fair value of the Company’s stock-basedawards. The Company adopted SFAS No. 123(R) effective for fiscalperiods ending after December  31,  2005 using the modifiedprospective method of application, which requires recognition ofcompensation expense on a prospective basis. Therefore, theCompany’s financial statements for fiscal periods ended on orbefore December  31,  2005 have not been restated to reflectcompensation expense in respect of awards of stock options under theStock Plan. Under this method, in addition to reflecting compensationexpense for new share-based awards granted on or after January1,  2006, expense is also recognized to reflect the remainingservice period (generally, the vesting period of the award) of awardsthat had been included in the Company’s pro-forma disclosures infiscal periods ended on or before December  31,  2005. SFASNo. 123(R) also requires that excess tax benefits related to stockoption exercises be reflected as financing cash inflows instead ofoperating cash inflows. For the three-month fiscal period endedMarch  31,  2006, no adjustments have been made to the cashflow 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.

(2)Stock Compensation Plan

Stock options:

Totalnet stock-based compensation expense includes amounts attributable tothe granting of, and the remaining requisite service period of, stockoptions issued under the Amended and Restated Revlon, Inc. Stock Plan(the ‘‘Stock Plan’’) (which provides for theissuance of awards of shares of Revlon, Inc.'s Class A CommonStock in the form of stock options, stock appreciation rights andrestricted or unrestricted stock to eligible employees and directors ofRevlon, Inc. and its subsidiaries, including Products Corporation),which awards were unvested at January  1,  2006 or granted onor after such date. Net stock-based compensation expense in thethree-month fiscal period ended March  31,  2006 was$2.4  million. As of March  31,  2006, the totalunrecognized compensation cost related to unvested stock awards in theaggregate was $11.7  million.

Prior to the Company'sadoption of SFAS No. 123(R), SFAS No. 123 required that the Companyprovide pro forma information regarding net loss as if compensationcost for the Company's stock-based awards had been determined inaccordance with the fair value method prescribed therein. The Companyhad previously adopted the disclosure portion of SFAS No. 148,‘‘Accounting for Stock-Based 

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS(all tabular amounts in millions, except forshare and per share amounts)

Compensation – Transition andDisclosure, an amendment of FASB Statements No. 123’’(‘‘SFAS No. 148’’), requiring quarterly SFASNo. 123 pro forma disclosure. The pro forma charge for compensationcost related to stock-based awards granted was recognized over theservice period. For stock options, the service period represents theperiod of time between the date of grant and the date each optionbecomes exercisable without consideration of acceleration provisions(e.g., retirement, change of control and similar types of events).

A summary of the status of grants under the Stock Plan as ofMarch  31,  2006 and changes during the three-month fiscalperiod then ended is presented below:

|                                  |  |                      |          |                                |  |        |      |        |  |  |
|----------------------------------|--|----------------------|----------|--------------------------------|--|--------|------|--------|--|--|
|                             |  | Shares (000’s) |          | Weighted AverageExercise Price |
| Outstanding at January  1,  2006 |  |                 | 33,033.1 |                           |  | $      | 4.25 |   |
| Granted                          |  |                 | 12.5     |                           |  |   | 3.05 |   |
| Exercised                        |  |                 | (47.2    | )                         |  |   | 3.02 |   |
| Forfeited and expired            |  |                 | (593.2   | )                         |  |   | 4.84 |   |
| Outstanding at March  31,  2006  |  |                 | 32,405.2 |                           |  |   | 4.24 |   |
|                                  |

The weighted average grant date fairvalue of options granted during the three-month fiscal periods endedMarch  31,  2006 and 2005 approximated $1.67 and $1.63,respectively, and were estimated using the Black-Scholes optionvaluation model with the following weighted-average assumptions:

|                         |  |                             |  |            |  |  |  |  |  |  |
|-------------------------|--|-----------------------------|--|------------|--|--|--|--|--|--|
|                    |  | Three Months Ended March31, |
|                    |  | 2006                        |  | 2005       |
| Expected life of option |  | 4.75 years                  |  | 4.75 years |
| Risk-free interest rate |  | 4.61%                       |  | 3.95%      |
| Expected volatility     |  | 62%                         |  | 61%        |
| Expecteddividend yield  |  | N/A                         |  | N/A        |
|                         |

Thefollowing table summarizes information about the Stock Plan'soptions outstanding at March  31,  2006:

|                                                              |  |                              |          |                                |  |                               |        |                              |  |                               |        |        |  |        |          |        |  |        |        |        |  |  |
|--------------------------------------------------------------|--|------------------------------|----------|--------------------------------|--|-------------------------------|--------|------------------------------|--|-------------------------------|--------|--------|--|--------|----------|--------|--|--------|--------|--------|--|--|
|                                                         |  | Outstanding                  |          | Exercisable                    |
| Rangeof Exercise Prices                                      |  | NumberofOptions(000’s) |          | WeightedAverageYears Remaining |  | WeightedAverageExercise Price |        | NumberofOptions(000’s) |  | WeightedAverageExercise Price |
| $  2.31to $  3.78                        |  |                         | 29,086.4 |                           |  |                          | 5.34   |                         |  | $                             | 2.99   |   |  |   | 14,043.8 |   |  | $      | 3.07   |   |
|     3.82 to     6.88 |  |                         | 1,453.9  |                           |  |                          | 5.47   |                         |  |                          | 4.87   |   |  |   | 976.7    |   |  |   | 5.31   |   |
|     7.06 to  15.00             |  |                         | 1,023.5  |                           |  |                          | 3.63   |                         |  |                          | 10.56  |   |  |   | 1,023.5  |   |  |   | 10.56  |   |
|   18.50 to  50.00                        |  |                         | 841.4    |                           |  |                          | 1.69   |                         |  |                          | 38.67  |   |  |   | 841.4    |   |  |   | 38.67  |   |
|     2.31 to   50.00            |  |                         | 32,405.2 |                           |  |                          |   |                         |  |                          |   |   |  |   | 16,885.4 |   |  |   |   |   |
|                                                              |

Restricted stock awards:

TheStock Plan also allows for awards of restricted stock to employees anddirectors of Revlon, Inc. and its subsidiaries, including ProductsCorporation. The restricted stock awards vest over service periods thatrange from three to five years.

In 2002, Revlon, Inc. adoptedthe Revlon, Inc. 2002 Supplemental Stock Plan (the‘‘Supplemental Stock Plan’’), the purpose ofwhich was to provide Mr.  Jack  Stahl, the sole eligibleparticipant, with 

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inducement awards to entice him to joinRevlon, Inc. as its President and Chief Executive Officer to enhanceRevlon, Inc.'s long-term performance and profitability. TheSupplemental Stock Plan covers 530,000 shares of Class A Common Stock.All of the 530,000 shares were issued in the form of restricted sharesof Class A Common Stock to Mr.  Stahl in February  2002. Theterms of the Supplemental Stock Plan and the foregoing grant ofrestricted shares to Mr.  Stahl are substantially the same as theStock Plan. Pursuant to the terms of the Supplemental Stock Plan, suchgrant was made conditioned upon his execution of the Revlon,Inc.'s standard Employee Agreement as to Confidentiality andNon-Competition. At March  31,  2006, there were 3,510,002shares of restricted stock unvested under the Stock Plan and theSupplemental Stock Plan.

Generally, no dividends will be paid onunvested restricted stock, provided, however, that in connection withthe 2002 grants to Mr.  Stahl of 470,000 shares of restrictedstock under the Stock Plan and 530,000 shares of restricted stock underthe Supplemental Stock Plan (of which an aggregate 500,000 shares ofrestricted stock from both plans remained unvested at March31,  2006), in the event any cash or in-kind distributions aremade in respect of Common Stock prior to the lapse of the restrictionson such shares, such dividends will be held by the Company and paid toMr.  Stahl when and if such restrictions lapse.

The Companyrecognizes non-cash compensation expense related to restricted stockawards under the Stock Plan and Supplemental Stock Plan using thestraight-line method over the remaining service period. The Companyrecorded compensation expense related to restricted stock awards underthe Stock Plan and Supplemental Stock Plan of $1.3  million and$1.7  million during the three-month fiscal periods endedMarch  31,  2006 and 2005, respectively, and deferredstock-based compensation related to restricted stock awards of$5.2  million at March  31,  2006.

Treasurystock:

During the three-month fiscal period endedMarch  31,  2006, an executive, in lieu of paying withholdingtaxes on the vesting of certain restricted stock, authorized thewithholding of an aggregate 17,594 shares of Revlon, Inc. Class ACommon Stock to satisfy the minimum statutory tax withholdingrequirements related to such vesting in accordance with the sharewithholding provisions of the Stock Plan. These shares were recorded astreasury stock by Revlon, Inc. using the cost method, at $3.56, themarket price on the vesting date, for a total of approximately$0.1  million.

Pro forma net loss:

Thefollowing table illustrates the pro forma effect on net loss as if theCompany had applied the fair value method to its stock-basedcompensation under the disclosure provisions of SFAS No. 123 andamended disclosure provisions of SFAS No. 148 to all outstanding awardsfor the three-month fiscal period ended March  31,  2005:

|                                                                                                                |  |                                  |       |         |  |  |
|----------------------------------------------------------------------------------------------------------------|--|----------------------------------|-------|---------|--|--|
|                                                                                                           |  | Three Months Ended March 31,2005 |
| Net loss as reported                                                                                           |  | $                                | (47.4 | )  |
| Add: Stock-based employee compensationexpense included in reported net loss                                    |  |                             | 1.7   |    |
| Deduct: Total stock-based employee compensation expensedetermined under fair value based method for all awards |  |                             | (5.7  | )  |
| Pro forma netloss                                                                                              |  | $                                | (51.4 | )  |
|                                                                                                                |

(3)Post-retirement Benefits

Revlon, Inc. sponsors pension plansand certain other post-retirement benefit plans for a substantialportion of its U.S. employees, as well as certain other non-U.S.employees. Descriptions of these plans are 

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disclosed in the Company’s AnnualReport on Form 10-K for the year ended December  31,  2005.Currently, Revlon, Inc. expects to contribute approximately $32.2million to its pension plans and approximately $1.0  million toother post-retirement plans in 2006.

The components of netperiodic benefit cost for the pension and the other post-retirementbenefit plans for the three-month fiscal period ended March31,  2006 and 2005, respectively, are as follows:

|                                         |  |               |         |                                    |  |        |         |         |  |        |         |        |  |        |         |         |  |  |
|-----------------------------------------|--|---------------|---------|------------------------------------|--|--------|---------|---------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                    |  | Pension Plans |         | OtherPost-retirement Benefit Plans |
|                                    |  | 2006          |         | 2005                               |  | 2006   |         | 2005    |
| Service cost                            |  | $             | 2.6     |                               |  | $      | 2.6     |    |  | $      | — |   |  | $      | (0.2    | )  |
| Interestcost                            |  |          | 7.9     |                               |  |   | 7.8     |    |  |   | 0.2     |   |  |   | 0.1     |    |
| Expected return on plan assets          |  |          | (7.9    | )                             |  |   | (7.1    | )  |  |   | — |   |  |   | — |    |
| Amortization of prior service cost      |  |          | (0.1    | )                             |  |   | (0.1    | )  |  |   | — |   |  |   | — |    |
| Amortization of actuarial loss          |  |          | 1.7     |                               |  |   | 2.0     |    |  |   | — |   |  |   | — |    |
|                                    |  |          | 4.2     |                               |  |   | 5.2     |    |  |   | 0.2     |   |  |   | (0.1    | )  |
| Portion allocated to Revlon HoldingsLLC |  |          | — |                               |  |   | — |    |  |   | — |   |  |   | — |    |
|                                    |  | $             | 4.2     |                               |  | $      | 5.2     |    |  | $      | 0.2     |   |  | $      | (0.1    | )  |
|                                         |

(4) Inventories

|                            |  |                |       |                 |  |        |       |        |  |  |
|----------------------------|--|----------------|-------|-----------------|--|--------|-------|--------|--|--|
|                       |  | March 31, 2006 |       | December31,2005 |
| Raw materials and supplies |  | $              | 66.4  |            |  | $      | 60.7  |   |
| Work-in-process            |  |           | 15.2  |            |  |   | 17.6  |   |
| Finished goods             |  |           | 158.1 |            |  |   | 142.3 |   |
|                       |  | $              | 239.7 |            |  | $      | 220.6 |   |
|                            |

(5) Comprehensive Loss

Thecomponents of comprehensive loss for the three-month fiscal periodended March  31,  2006 and 2005 are as follows:

|                                                           |  |                             |         |         |  |        |        |         |  |  |
|-----------------------------------------------------------|--|-----------------------------|---------|---------|--|--------|--------|---------|--|--|
|                                                      |  | Three Months Ended March31, |
|                                                      |  | 2006                        |         | 2005    |
| Net loss                                                  |  | $                           | (16.6   | )  |  | $      | (47.4  | )  |
| Other comprehensive income(loss):                         |  |                        |    |    |  |   |   |    |
| Revaluation of foreigncurrency forward exchange contracts |  |                        | 0.6     |    |  |   | 1.1    |    |
| Currency translation adjustment                           |  |                        | — |    |  |   | (1.5   | )  |
| Other comprehensive income (loss)                         |  |                        | 0.6     |    |  |   | (0.4   | )  |
| Comprehensive loss                                        |  | $                           | (16.0   | )  |  | $      | (47.8  | )  |
|                                                           |

(6) Restructuring Costs, net

During the three-month fiscal period ended March  31,2006, the Company recorded net charges of $9.0  million primarilyfor employee severance and other personnel benefits, relating to theorganizational realignment announced by Revlon, Inc. in February2006. The organizational realignment largely involves 

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the consolidation of certain functions withinthe Company’s sales, marketing and creative groups, as well ascertain headquarters functions, which changes are designed tostreamline internal processes and to enable the Company to continue tobe more effective and efficient in meeting the needs of its consumersand retail customers (the ‘‘2006 program’’).During the three-month fiscal period ended March  31,  2005,the Company recorded separate charges of $1.7  million primarilyfor employee severance and other personnel benefits related to the 2004program.

Details of the activities described above during thethree-month fiscal period ended March  31,  2006 are asfollows:

|                                                 |  |                               |         |               |  |               |         |                              |  |        |         |         |  |        |         |        |  |        |        |        |  |  |
|-------------------------------------------------|--|-------------------------------|---------|---------------|--|---------------|---------|------------------------------|--|--------|---------|---------|--|--------|---------|--------|--|--------|--------|--------|--|--|
|                                            |  | Balance as ofJanuary  1, 2006 |         | Expenses, Net |  | Utilized, Net |         | Balanceas of March  31, 2006 |
|                                            |  | Cash                          |         | Noncash       |
| Employee severance and other personnelbenefits: |  |                          |    |          |  |          |    |                         |  |   |    |    |  |   |    |   |  |   |   |   |
| 2003program                                     |  | $                             | 1.2     |          |  | $             | — |                         |  | $      | — |    |  | $      | — |   |  | $      | 1.2    |   |
| 2004 program                                    |  |                          | 2.4     |          |  |          | — |                         |  |   | (0.5    | )  |  |   | — |   |  |   | 1.9    |   |
| 2006 program                                    |  |                          | — |          |  |          | 9.0     |                         |  |   | (1.5    | )  |  |   | — |   |  |   | 7.5    |   |
|                                            |  |                          | 3.6     |          |  |          | 9.0     |                         |  |   | (2.0    | )  |  |   | — |   |  |   | 10.6   |   |
| Leases andequipment write-offs                  |  |                          | 0.6     |          |  |          | — |                         |  |   | — |    |  |   | — |   |  |   | 0.6    |   |
|                                            |  | $                             | 4.2     |          |  | $             | 9.0     |                         |  | $      | (2.0    | )  |  | $      | — |   |  | $      | 11.2   |   |
|                                                 |

(7)Geographic Information

The Company manages its business on thebasis of one reportable operating segment. The Company has operationsestablished in 16 countries outside of the U.S. and its products aresold throughout the world. The Company’s results of operationsand the value of its assets and liabilities may be adversely affectedby, among other things, weak economic conditions, politicaluncertainties, military actions, terrorist activities, adverse currencyfluctuations, category weakness, competitive activities, retailerinventory management and changes in consumer purchasing habits,including with respect to shopping channels.

|                          |  |                            |        |        |  |        |        |        |  |  |
|--------------------------|--|----------------------------|--------|--------|--|--------|--------|--------|--|--|
|                     |  | Three Months EndedMarch31, |
|                     |  | 2006                       |        | 2005   |
| Geographicarea:          |  |                       |        |   |
| Netsales:                |  |                       |   |   |  |   |   |   |
| United States            |  | $                          | 198.4  |   |  | $      | 179.3  |   |
| Canada                   |  |                       | 17.8   |   |  |   | 14.9   |   |
| United States and Canada |  |                       | 216.2  |   |  |   | 194.2  |   |
| International            |  |                       | 109.3  |   |  |   | 106.7  |   |
|                     |  | $                          | 325.5  |   |  | $      | 300.9  |   |
|                          |

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|                          |  |                |        |                 |  |        |        |        |  |  |
|--------------------------|--|----------------|--------|-----------------|--|--------|--------|--------|--|--|
|                     |  | March 31, 2006 |        | December31,2005 |
| Long-livedassets:        |  |           |   |            |  |   |   |   |
| United States            |  | $              | 388.5  |            |  | $      | 366.9  |   |
| Canada                   |  |           | 5.2    |            |  |   | 3.8    |   |
| United States and Canada |  |           | 393.7  |            |  |   | 370.7  |   |
| International            |  |           | 82.2   |            |  |   | 81.0   |   |
|                     |  | $              | 475.9  |            |  | $      | 451.7  |   |
|                          |

|                                    |  |                            |        |        |  |        |        |        |  |  |
|------------------------------------|--|----------------------------|--------|--------|--|--------|--------|--------|--|--|
|                               |  | Three Months EndedMarch31, |
|                               |  | 2006                       |        | 2005   |
| Classesof similar products:        |  |                       |        |   |
| Netsales:                          |  |                       |   |   |  |   |   |   |
| Cosmetics, skin care andfragrances |  | $                          | 216.6  |   |  | $      | 201.2  |   |
| Personal care                      |  |                       | 108.9  |   |  |   | 99.7   |   |
|                               |  | $                          | 325.5  |   |  | $      | 300.9  |   |
|                                    |

(8) Derivative FinancialInstruments

The Company uses derivative financial instruments,primarily foreign currency forward exchange contracts, to reduce theeffects of fluctuations in foreign currency exchange rates. Thesecontracts, which have been designated as cash flow hedges, are enteredinto primarily to hedge anticipated inventory purchases and certainintercompany payments denominated in foreign currencies and havematurities 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 March  31,  2006 and December31,  2005 was $33.4  million and $31.9  million,respectively. The fair value of the foreign currency forward exchangecontracts outstanding at March  31,  2006 and December31,  2005 was $0.4  million and $(0.2) million,respectively.

(9) Long-term Debt and Rights Offering

|                                                          |  |               |         |                 |  |        |         |        |  |  |
|----------------------------------------------------------|--|---------------|---------|-----------------|--|--------|---------|--------|--|--|
|                                                     |  | March 31,2006 |         | December31,2005 |
| 2004 CreditAgreement:                                    |  |          |    |            |  |   |    |   |
| Term Loan Facility due2010                               |  | $             | 700.0   |            |  | $      | 700.0   |   |
| Multi-Currency Facility due 2009                         |  |          | 1.0     |            |  |   | — |   |
| 8 5/8% SeniorSubordinated Notes due 2008                 |  |          | 327.1   |            |  |   | 327.0   |   |
| 91⁄2% Senior Notes due 2011, net ofdiscounts        |  |          | 386.5   |            |  |   | 386.4   |   |
| 13%Senior Secured Notes due 2007                         |  |          | 18.5    |            |  |   | 18.5    |   |
| 2004 Consolidated MacAndrews & Forbes Line of Credit |  |          | — |            |  |   | — |   |
| Advances under the NewKeepwell Agreement                 |  |          | 4.8     |            |  |   | 3.6     |   |
|                                                     |  |          | 1,437.9 |            |  |   | 1,435.5 |   |
| Less current portion                                     |  |          | (134.0  | )          |  |   | — |   |
|                                                     |  | $             | 1,303.9 |            |  | $      | 1,435.5 |   |
|                                                          |

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS(all tabular amounts in millions, except forshare and per share amounts)

Amendment to CreditAgreement

In February  2006, Products Corporationsecured an amendment to the credit agreement that it and certain of itssubsidiaries entered into in 2004, with a syndicate of lenders, andCiticorp USA, Inc., as multi-currency administrative agent, term loanadministrative agent and collateral agent (the ‘‘2004Credit Agreement’’). The amendment excludes from variousfinancial covenants certain charges in connection with ProductsCorporation’s organizational realignment described in Note 6above, as well as some start-up costs incurred by the Company in 2005related to the launch of its new Vital Radiance brand and there-launch of the Almay brand. Specifically, the amendmentprovides for the add-back to the definition of‘‘EBITDA’’ the lesser of (i) $50  million;or (ii) the cumulative one-time charges associated with (a) theaforementioned organizational realignment and (b) the non-recurringcosts in the third and fourth quarters of 2005 associated with thelaunch of the Company's new Vital Radiance brand and there-launch of the Almay brand. Under the 2004 Credit Agreement,EBITDA is used in the determination of Products Corporation'ssenior secured leverage ratio and the consolidated fixed chargecoverage ratio. (See Note 10).

Rights Offering

On March  22,  2006, Revlon, Inc. completed the $110million rights offering (including the private placement to MacAndrews& Forbes, the ‘‘Rights Offering’’) that itlaunched in February  2006 which allowed stockholders to purchaseadditional shares of Class A Common Stock. The subscription price foreach share of Class A Common Stock purchased in the Rights Offering,including shares 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 it used as described in Note 10.

In completing the RightsOffering, Revlon, Inc. issued an additional 39,285,714 shares of itsClass A Common Stock, 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. pursuant to a stock purchase agreementbetween MacAndrews & Forbes and Revlon, Inc. The shares issued toMacAndrews & Forbes represented the number of shares of Revlon,Inc.'s Class A Common Stock that MacAndrews & Forbes wouldotherwise have been entitled to purchase pursuant to its basicsubscription privilege in the Rights Offering (which was approximately60% of the shares of Revlon, Inc.'s Class A Common Stockoffered in the Rights Offering).

As a result of completing theRights Offering, Revlon, Inc.'s total number of outstanding sharesof Class A Common Stock increased to 380,041,688 shares and the totalnumber of shares of Common Stock outstanding, including Revlon,Inc.'s existing 31,250,000 shares of Class B Common Stock,increased to 411,291,688 shares. Following the completion of thesetransactions, MacAndrews & Forbes beneficially owned approximately56% of Revlon, Inc.'s outstanding Class A Common Stock andapproximately 60% of Revlon Inc.'s total outstanding CommonStock, which shares together represent approximately 76% of thecombined voting power of such shares.

(10) SubsequentEvents

Redemption of 8 5/8 SeniorSubordinated Notes

On April  21,  2006, usingthe proceeds of the Rights Offering, together with available cash,Products Corporation completed the redemption of $109.7  millionaggregate principal amount of its 8 5/8% SeniorSubordinated Notes due 2008 (the‘‘8 5/8% Senior SubordinatedNotes’’) in satisfaction of the applicable requirementsunder its 2004 Credit Agreement, at an aggregate redemption price of$111.8  million, including $2.1  million of accrued andunpaid interest up to, but not including, the redemption date.

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Following such redemption there remainedoutstanding $217.4  million in aggregate principal amount of the8 5/8% Senior Subordinated Notes.

Commitment for New 2006 Credit Facility

InMay  2006, Products Corporation signed a commitment letter (the‘‘Bank Commitment’’) with Citigroup GlobalMarkets Inc. (‘‘Citigroup’’), J.P. MorganSecurities Inc. and JPMorgan Chase Bank, N.A. (together,‘‘JPMorgan’’), in which Citigroup and JPMorganhave agreed to arrange a $960.0  million credit facility (the‘‘New 2006 Credit Facility’’), pursuant to anamendment and restatement of Products Corporation's existing 2004Credit Agreement. Citigroup and JPMorgan have committed to provide theentire amount of the New 2006 Credit Facility, subject to a number ofcustomary conditions, including, among other things: (1) that no event,development or circumstance occur which could reasonably be expected tohave a material adverse effect on Revlon, Inc.'s business,operations, property or condition, taken as a whole; (2) that Revlon,Inc. consummates the issuance of $75  million in equitysecurities; and (3) that the necessary credit agreement and securitydocuments be finalized and signed. The Bank Commitment provides for a7-year $800  million term loan facility and a 6-year $160million asset-based revolving credit facility. It is expected that theNew 2006 Credit Facility would be secured by substantially the samecollateral package as secures the 2004 Credit Agreement.

Whilethere can be no assurances that the New 2006 Credit Facility will befinalized and closed, if Products Corporation completes thisrefinancing, the Company believes that it will result in annualinterest savings due to lower interest margins, provide the Companywith greater financial and other covenant flexibility and extend thematurity dates of Products Corporation's 2004 Credit Agreement.Products Corporation expects to use the proceeds of the New 2006 CreditFacility to: (1) repay in full the $700.0  million of outstandingindebtedness (plus accrued interest and the prepayment fee) under theTerm Loan Facility of its current 2004 Credit Agreement; (2) redeemapproximately $75.0  million aggregate principal amount ofProducts Corporation's 8 5/8% SeniorSubordinated Notes; and (3) pay fees and expenses incurred inconnection with the New 2006 Credit Facility. The balance of suchproceeds is expected to be available for general corporate purposes,including investment in the Company’s brands. ProductsCorporation expects to close and fund the New 2006 Credit Facility inJuly  2006.

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REVHOLDINGS LLC AND SUBSIDIARIESMANAGEMENT’S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(alltabular amounts in millions)

|              |                                                                                            |
|--------------|--------------------------------------------------------------------------------------------|
| Item2.  | Management’s Discussion and Analysis ofFinancial Condition and Results of Operations |

Overview

Overview of the Business

The Company isproviding this overview in accordance with the SEC'sDecember  2003 interpretive guidance regarding Management'sDiscussion and Analysis of Financial Condition and Results ofOperations.

REV Holdings LLC (and together with itssubsidiaries, the ‘‘Company’’) conducts itsbusiness exclusively through its indirect operating subsidiary, RevlonConsumer Products Corporation and its subsidiaries(‘‘Products Corporation’’), a wholly-ownedsubsidiary of Revlon, Inc. Revlon, Inc. is an indirectly majority-ownedsubsidiary of MacAndrews & Forbes Holdings Inc.(‘‘MacAndrews & Forbes Holdings’’ and,together with its affiliates, ‘‘MacAndrews &Forbes’’), a corporation wholly-owned by Ronald O.Perelman.

The Company operates in a single segment andmanufactures, markets and sells an extensive array of cosmetics,skincare, fragrances, beauty tools, hair color and personal careproducts. The Company's principal customers include large massvolume retailers and chain drug stores, as well as certain departmentstores and other specialty stores, such as perfumeries. The Companyalso sells beauty products to U.S. military exchanges and commissariesand has a licensing group, pursuant to which the Company licensescertain of its key brand names to third parties for complimentarybeauty-related products and accessories.

Revlon is one ofthe world's leading mass-market beauty brands. Revlonbelieves that its global brand name recognition, product quality andmarketing experience have enabled it to create one of the strongestconsumer brand franchises in the world. The Company's products aresold worldwide and marketed under such brand names as Revlon,ColorStay, Fabulash, Super Lustrous and Revlon Age Defyingmakeup with Botafirm, as well as the newly re-launchedAlmay brand, including the Company’s new Almay Intensei-Color collection, and the Company’s latest brand, VitalRadiance, in cosmetics; a new Almay skincare line, as wellas Ultima II and Gatineau in skincare; Charlieand Jean Naté in fragrances; Revlon andExpert Effect in beauty tools; Colorsilk and CustomEffects in hair color; and Mitchum, Flex and Bozzanoin personal care products.

In 2005, Revlon, Inc. launched twomajor brand initiatives (the ‘‘brandinitiatives’’). One initiative involved a complete relaunchof the Almay brand and builds on Almay’s healthybeauty heritage and the desire among consumers for simplicity andpersonalization. The second initiative focused on the more matureconsumer and involved the launch of a complete line of cosmetics undera new brand name, Vital Radiance, that is designed to serve thisaffluent and growing consumer demographic currently underserved in themarketplace.

Overview of the Company’sPlan

The Company intends to capitalize on the actions takenduring the earlier phases of its plan, with the objective of increasingrevenues and achieving profitability over the long term. TheCompany’s plan includes various actions that representrefinements of and additions to the actions taken during the earlierphases of the plan, with the objective of balancing top-line growthwith an improved operating profit margin. These ongoing initiativesinclude, among other things, actions to:

|  |           |                                                                                                                                                                          |
|--|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (i)  | further improve the new productdevelopment and introduction process with even deeper insights into theCompany’s consumers and the categories in which it competes; |

|  |            |                                                                                                                       |
|--|------------|-----------------------------------------------------------------------------------------------------------------------|
|  | (ii)  | continue to increase theeffectiveness and reduce the cost of the Company's display wallsacross categories and brands; |

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|  |             |                                                                                                                                                                                               |
|--|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iii)  | driveefficiencies across the Company's overall supply chain, includingreducing manufacturing costs by, among other things, continuing torationalize components and by sourcing strategically; |

|  |            |                                                                                         |
|--|------------|-----------------------------------------------------------------------------------------|
|  | (iv)  | optimize the effectiveness of theCompany’s advertising, marketing and promotions; |

|  |           |                                                                                                                                                                                                                                |
|--|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (v)  | continue the training and developmentof the organization so that the Company may continue to improve itscapabilities to execute its strategies while providing enhanced jobsatisfaction for the Company’s employees; and |

|  |            |                                                                                                                                                                                                      |
|--|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (vi)  | continue to strengthen theCompany’s balance sheet and capital structure. (See‘‘Recent Developments’’ and‘‘Overview of Financing Activities’’). |

The Company believes that it has strengthened its organizationalcapabilities and it intends to continue doing so. In February2006, Revlon, Inc. announced an organizational realignment which isintended to enable the Company to be more effective and efficient inmeeting the needs of its consumers and retail customers. The Companyalso believes that it has strengthened its relationships with its keyretailers in the U.S.

Overview of Net Sales andEarnings Results

Net sales in the first quarter of 2006increased $24.6  million, or 8.2%, to $325.5  million,as compared with $300.9  million in the first quarter of 2005,driven by higher shipments and lower returns, partially offset byhigher allowances and discounts and unfavorable foreign currencytranslation.

In the United States and Canada, net sales for thefirst quarter of 2006 increased $22.0  million, or 11.3%,to $216.2  million, from $194.2  million in the first quarterof 2005. This increase was primarily due to higher shipments of colorcosmetics, stemming from the rollout of the Company’s newVital Radiance brand and the re-stage of the Almay brand,partially offset by lower shipments of Revlon-branded cosmeticsand higher allowances and discounts related to the launch of theVital Radiance brand and the re-stage of the Almay brand.The increase in net sales was also driven by higher shipments in otherkey categories and lower returns due in part to lower promotionalshipments. In the Company’s international operations, net salesfor the first quarter of 2006 increased $2.6  million, or2.4%, to $109.3  million, from $106.7  million in thefirst quarter of 2005. The increase in the first quarter of 2006, ascompared with the first quarter of 2005, was due primarily to highershipments, partially offset by unfavorable foreign currencytranslation.

Net loss for the first quarter of 2006 decreased$30.8  million to $16.6  million, as compared with$47.4  million in the first quarter of 2005. The decrease in netloss reflects a gain on issuance of subsidiary stock of $42.3million in 2006 primarily from the Rights Offering (as hereinafterdefined), higher net sales and higher gross profit, and a lower loss onearly extinguishment of debt. These amounts were partially offset by anincrease in selling, general and administrative expenses(‘‘SG&A’’), higher restructuring costs(primarily due to the organizational realignment previously announcedin February  2006) and higher interest expense. SG&A expenseswere higher in 2006 primarily due to costs incurred to support thelaunch of the brand initiatives, including costs for advertising,consumer promotion and accelerated amortization on certain existingpermanent displays, and higher compensation expenses.

Overview of U.S. Market Share Data 

In termsof U.S. marketplace performance, the U.S. color cosmetics category forthe first quarter of 2006 increased approximately 3.8% versusthe first quarter of 2005. Combined U.S. mass-market share for theRevlon, Almay and Vital Radiance brandstotaled 21.3% for the first quarter of 2006, comparedwith 22.1% for the first quarter of 2005, with theRevlon    brand registering a share of 14.3% for thefirst quarter of 2006, compared with 15.6% for the first quarterof 2005; the Almay brand registering a share of 6.4% forthe first quarter of 2006, which was even with the first quarter of2005; and the newly-launched Vital Radiance brand registering ashare of 0.6% for the first quarter of 2006. In women’shair color and 

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beauty tools, the Company gained market sharein the first quarter of 2006, compared with the first quarter of 2005,increasing, respectively, from a 8.3% market share for the firstquarter of 2005 to 8.8% for the first quarter of 2006, and24.6% market share for the first quarter of 2005 to 26.5%for the first quarter of 2006. Market share performance foranti-perspirants/deodorants was essentially even, at 6.1% in thefirst quarter of 2006, as compared to 6.2% in the first quarterof 2005.

All U.S. market share and market position data hereinfor the Company's brands are based upon retail dollar sales, whichare derived from ACNielsen data. ACNielsen measures retail sales volumeof products sold in the U.S. mass-market distribution channel. Suchdata represent ACNielsen's estimates based upon data gathered byACNielsen from market samples and are therefore subject to some degreeof variance. Additionally, as of August  4,  2001,ACNielsen's data do not reflect sales volume from Wal-Mart, Inc.,which is the Company’s largest customer, representingapproximately 24% of the Company's 2005 worldwide netsales. From time to time, ACNielsen adjusts its methodology for datacollection and reporting, which may result in adjustments to thecategories and market shares tracked by ACNielsen for both current andprior periods. The category and market share data contained herein hasbeen updated to reflect 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 through the first quarter of 2006, including mostrecently the Rights Offering (as hereinafter defined) completed inMarch  2006. (See ‘‘Financial Condition, Liquidity andCapital Resources-2006 Financing Transactions’’ and‘‘Recent Developments’’).

On March22,  2006, Revlon, Inc. completed its $110  million rightsoffering (including the private placement to MacAndrews & Forbes,the ‘‘Rights Offering’’) and issued anadditional 39,285,714 shares of its Class A common stock, par value of$0.01 per share (the ‘‘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. Revlon, Inc. promptly transferred the proceeds of such RightsOffering to Products Corporation which it used in April  2006,together with available cash, to redeem $109.7  million aggregateprincipal amount of its 8 5/8% SeniorSubordinated Notes due 2008 (the‘‘8 5/8% Senior SubordinatedNotes’’). (See ‘‘Recent Developments-Redemptionof 8 5/8% Senior Subordinated Notes’’and ‘‘Financial Condition, Liquidity and Capital Resources– 2006 Financing Transactions’’).

RecentDevelopments

Redemption of8 5/8% Senior Subordinated Notes

OnApril  21,  2006, using the proceeds of the Rights Offering,together with available cash, Products Corporation completed theredemption of $109.7  million aggregate principal amount of its8 5/8% Senior Subordinated Notes in satisfactionof the applicable requirements under its 2004 Credit Agreement (ashereinafter defined), at an aggregate redemption price of $111.8million, including $2.1  million of accrued and unpaid interest upto, but not including, the redemption date. Following such redemptionthere remained outstanding $217.4  million in aggregate principalamount of the 8 5/8% Senior SubordinatedNotes.

Commitment for New 2006 CreditFacility

In May  2006, Products Corporation signed acommitment letter (the ‘‘Bank Commitment’’)with Citigroup Global Markets Inc.(‘‘Citigroup’’), J.P. Morgan Securities Inc.and JPMorgan Chase Bank, N.A. (together,‘‘JPMorgan’’), in which Citigroup and JPMorganhave agreed to arrange a $960.0  million 

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credit facility (the ‘‘New 2006Credit Facility’’), pursuant to an amendment andrestatement of Products Corporation's existing 2004 CreditAgreement. Citigroup and JPMorgan have committed to provide the entireamount of the New 2006 Credit Facility, subject to a number ofcustomary conditions, including, among other things: (1) that no event,development or circumstance occur which could reasonably be expected tohave a material adverse effect on Revlon, Inc.'s business,operations, property or condition, taken as a whole; (2) that Revlon,Inc. consummates the issuance of $75  million in equity securitiesas referred to in ‘‘Financial Condition, Liquidity andCapital Resources – 2006 Financing Transactions’’;and (3) that the necessary credit agreement and security documents befinalized and signed. The Bank Commitment provides for a 7-year$800  million term loan facility and a 6-year $160  millionasset-based revolving credit facility. It is expected that the New 2006Credit Facility would be secured by substantially the same collateralpackage as secures the 2004 Credit Agreement.

While there can beno assurances that the New 2006 Credit Facility will be finalized andclosed, if Products Corporation completes this refinancing, the Companybelieves that it will result in annual interest savings due to lowerinterest margins, provide the Company with greater financial and othercovenant flexibility and extend the maturity dates of ProductsCorporation's 2004 Credit Agreement. Products Corporation expectsto use the proceeds of the New 2006 Credit Facility to: (1) repay infull the $700.0  million of outstanding indebtedness (plus accruedinterest and the prepayment fee) under the Term Loan Facility of itscurrent 2004 Credit Agreement; (2) redeem approximately $75.0million aggregate principal amount of Products Corporation's8 5/8% Senior Subordinated Notes; and (3) payfees and expenses incurred in connection with the New 2006 CreditFacility. The balance of such proceeds is expected to be available forgeneral corporate purposes, including investment in theCompany’s brands. Products Corporation expects to close and fundthe New 2006 Credit Facility in July  2006.

Discussion ofCritical Accounting Policies

Stock-BasedCompensation

Prior to January  1,  2006(including the fiscal quarter ended March  31,  2005), theCompany applied the intrinsic value method as outlined in AccountingPrinciples Board Opinion No. 25, ‘‘Accounting for StockIssued to Employees,’’ (‘‘APB No.25’’) and related interpretations in accounting for stockoptions granted under the Amended and Restated Revlon, Inc. Stock Plan(the ‘‘Stock Plan’’), which provides for theissuance 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 January  1,2006 if the exercise price of the Company’s employee stockoptions 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 cost 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 fiscal periods endingafter December  31,  2005 all stock-based compensation berecognized as an expense in the financial statements and that such costbe measured at the fair value of the Company’s stock basedawards. The Company adopted SFAS No. 123(R) effective for fiscalperiods ending after December  31,  2005 using the modifiedprospective method of application, which requires recognition ofcompensation expense on a prospective basis. Therefore, theCompany’s financial statements for fiscal periods ended on orbefore December  31,  2005 have not been restated to reflectcompensation expense in respect of awards of stock options under theStock Plan. 

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Under this method, in addition to reflectingcompensation expense for new share-based awards granted on or afterJanuary  1,  2006, expense is also recognized to reflect theremaining service period (generally, the vesting period of the award)of awards that had been included in the Company's pro-formadisclosures 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 three-month fiscalperiod ended March  31,  2006, no adjustments have been madeto the cash flow statement, as any excess tax benefits that would havebeen realized have been fully provided for, given the Company’shistorical losses and deferred tax valuation allowance.

For adiscussion of REV Holdings’ other critical accounting policies,see REV Holdings’ Annual Report on Form 10-K for the year endedDecember  31,  2005.

Results of Operations

Inthe tables, numbers in parenthesis ( ) denote unfavorablevariances.

Net sales:

Net sales in the firstquarter of 2006 increased $24.6  million, or 8.2%, to$325.5  million, as compared with $300.9  million in thefirst quarter of 2005, driven by higher shipments, primarilyattributable to the Almay and Vital Radiance brandinitiatives in the U.S., from the Company’s internationaloperations and lower returns company-wide. These increases werepartially offset by higher allowances and discounts, primarilyattributable to the launch of the brand initiatives in the U.S., andunfavorable foreign currency translation.

|                          |  |                             |       |        |  |        |       |        |  |        |      |        |  |        |      |           |  |  |
|--------------------------|--|-----------------------------|-------|--------|--|--------|-------|--------|--|--------|------|--------|--|--------|------|-----------|--|--|
|                     |  | Three Months Ended March31, |       | Change |
|                     |  | 2006                        |       | 2005   |  | $      |       | %      |
| United States and Canada |  | $                           | 216.2 |   |  | $      | 194.2 |   |  | $      | 22.0 |   |  |   | 11.3 | (1)  |
| International            |  |                        | 109.3 |   |  |   | 106.7 |   |  |   | 2.6  |   |  |   | 2.4  | (2)  |
|                     |  | $                           | 325.5 |   |  | $      | 300.9 |   |  | $      | 24.6 |   |  |   | 8.2  | (3)  |
|                          |

|  |
|--|
|  |  |
|  |

|     |                                                                                                 |
|-----|-------------------------------------------------------------------------------------------------|
| (1) | Excludingthe impact of foreign currency fluctuations, U.S. and Canada net salesincreased 10.8%. |

|     |                                                                                              |
|-----|----------------------------------------------------------------------------------------------|
| (2) | Excluding the impactof foreign currency fluctuations, International net sales increased4.9%. |

|     |                                                                                             |
|-----|---------------------------------------------------------------------------------------------|
| (3) | Excluding the impactof foreign currency fluctuations, consolidated net sales increased8.7%. |

United States and Canada.

In the U.S. and Canada, net sales were $216.2  million for thefirst quarter of 2006, compared with $194.2  million for the firstquarter of 2005, an increase of $22.0  million or 11.3%.Excluding the impact of Canadian currency fluctuations, net salesincreased $21.0  million, or 10.8%, in the first quarter of2006, as compared with the first quarter of 2005. The increase in netsales in the U.S. and Canada in the first quarter of 2006, as comparedwith the first quarter of 2005, was driven by higher shipments of colorcosmetics, stemming from the rollout of the Company’s newVital Radiance brand and the re-stage of the Almay brand,partially offset by lower shipments of Revlon-branded cosmeticsand higher allowances and discounts related to the launch of theVital Radiance brand and the re-stage of the Almay brand.The increase in net sales was also driven by higher shipments in otherkey categories and lower returns due in part to lower promotionalshipments.

International. 

In theCompany’s international operations, net sales were $109.3million for the first quarter of 2006, compared with $106.7million for the first quarter of 2005, an increase of $2.6million or 2.4%. Excluding 

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the impact of foreign currency fluctuations,international sales increased by $5.2  million, or 4.9%, inthe first quarter of 2006, as compared with the first quarter 2005. Theincrease in net sales from the Company’s internationaloperations in the first quarter of 2006, as compared with the firstquarter of 2005, was driven primarily from higher shipments and lowerreturns.

In Asia Pacific and Africa, net sales decreased by$2.5  million, or 4.3%, to $56.3  million for thefirst quarter of 2006, as compared with $58.8  million for thefirst quarter of 2005. Excluding the impact of foreign currencyfluctuations, net sales in Asia Pacific and Africa decreased $0.6million, or 0.9%, in the first quarter of 2006, as compared withthe first quarter of 2005. This decline in net sales, excluding theimpact of foreign currency fluctuations, was due to lower shipments inAustralia, New Zealand and certain distributor markets (which theCompany estimates contributed to an approximate 2.4% reductionin net sales for the region for the first quarter of 2006, as comparedwith the first quarter of 2005), which was partially offset byincreased shipments in South Africa and China (which the Companyestimates contributed to an approximate 1.8% increase in netsales for the region for the first quarter of 2006, as compared withthe first quarter of 2005).

In Europe, which is comprised ofEurope and the Middle East, net sales were unchanged at $27.0million for the first quarter of 2006, as compared with the firstquarter of 2005. Excluding the impact of foreign currency fluctuations,net sales in Europe increased by $2.3  million, or 8.7%, inthe first quarter of 2006, as compared with the first quarter of 2005.The increase in net sales, excluding the impact of foreign currencyfluctuations, was due to increased shipments and lower returns,allowances and discounts in the U.K. and in certain distributor markets(which the Company estimates contributed to an approximate 9.2%increase in net sales for the region for the first quarter of 2006, ascompared with the first quarter of 2005), which increase was partiallyoffset by lower shipments in France (which contributed to approximately0.7% reduction in net sales for the region for the first quarterof 2006).

In Latin America, which is comprised of Mexico,Central America and South America, net sales increased by $5.1million, or 24.4%, to $26.0  million for the first quarterof 2006, as compared with $20.9  million for the first quarter of2005. Excluding the impact of foreign currency fluctuations, net salesin Latin America increased by $3.4  million, or 16.4%, inthe first quarter of 2006, as compared with the first quarter of 2005.The increase in net sales, excluding the impact of foreign currencyfluctuations, was driven primarily by increased shipments in Venezuela,Argentina and in certain distributor markets (which the Companyestimates contributed to an approximate 14.0% increase in netsales for the region in the first quarter of 2006, as compared with thefirst quarter of 2005).

Gross profit: 

|              |  |                            |       |        |  |        |       |        |  |   |      |        |  |  |
|--------------|--|----------------------------|-------|--------|--|--------|-------|--------|--|---|------|--------|--|--|
|         |  | Three Months EndedMarch31, |       |   |
|         |  | 2006                       |       | 2005   |  | Change |
| Gross profit |  | $                          | 208.2 |   |  | $      | 186.7 |   |  | $ | 21.5 |   |
|              |

Grossprofit increased $21.5  million to $208.2  million for thefirst quarter 2006, as compared with $186.7  million for the firstquarter of 2005, primarily due to higher shipments, lower returns and alower costs of sales percentage as a result of favorable changes insales mix and lower manufacturing costs, partially offset by higherallowances and discounts. Excluding foreign currency fluctuations,gross profit increased $22.9  million for the first quarter of2006, as compared with the first quarter of 2005. Gross profit as apercent of net sales, excluding the impact of foreign currencyfluctuations, increased to 64.1% in the first quarter of 2006from 62.1% in the first quarter 2005 primarily due to theaforementioned lower returns and a lower cost of sales percentage,partially offset by higher allowances and discounts.

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SG&A expenses:

|                   |  |                            |       |        |  |        |       |        |  |   |       |         |  |  |
|-------------------|--|----------------------------|-------|--------|--|--------|-------|--------|--|---|-------|---------|--|--|
|              |  | Three Months EndedMarch31, |       |   |
|              |  | 2006                       |       | 2005   |  | Change |
| SG&A expenses |  | $                          | 216.5 |   |  | $      | 187.1 |   |  | $ | (29.4 | )  |
|                   |

SG&A expenses increased$29.4  million, or 15.7%, to $216.5  million for thefirst quarter of 2006, as compared to $187.1  million in the firstquarter of 2005, in part due to higher brand support of $21.6million, including higher advertising and consumer promotionalspending, as well as higher display amortization, primarily to supportthe launch of the brand initiatives. In addition, SG&A was higherdue to increased compensation expenses of $6.3  million, whichincludes $2.4  million of amortized costs attributable to theCompany’s expensing of stock options, resulting from theaforementioned adoption of SFAS No. 123(R) effective January1,  2006.

Restructuring costs, net:

|                          |  |                            |     |        |  |        |     |        |  |   |      |         |  |  |
|--------------------------|--|----------------------------|-----|--------|--|--------|-----|--------|--|---|------|---------|--|--|
|                     |  | Three Months EndedMarch31, |     |   |
|                     |  | 2006                       |     | 2005   |  | Change |
| Restructuring costs, net |  | $                          | 9.0 |   |  | $      | 1.7 |   |  | $ | (7.3 | )  |
|                          |

Duringthe first quarter of 2006, the Company recorded charges of $9.0million primarily for employee severance and other personnel benefits(See Note 6 to the unaudited consolidated financial statementsregarding the organizational realignment announced by Revlon, Inc. inFebruary  2006). During the first quarter of 2005, the Companyrecorded additional charges of $1.7  million primarily foremployee severance and other personnel benefits.

Other (income) expenses:

|                  |  |                            |      |        |  |        |      |        |  |   |      |         |  |  |
|------------------|--|----------------------------|------|--------|--|--------|------|--------|--|---|------|---------|--|--|
|             |  | Three Months EndedMarch31, |      |   |
|             |  | 2006                       |      | 2005   |  | Change |
| Interest expense |  | $                          | 35.8 |   |  | $      | 30.3 |   |  | $ | (5.5 | )  |
|                  |

Theincrease in interest expense of $5.5  million for the firstquarter of 2006, as compared to the first quarter of 2005, wasprimarily due to higher average debt outstanding and higher weightedaverage borrowing rates during the first quarter of 2006, as comparedto first quarter of 2005.

|                                     |  |                            |         |        |  |        |     |        |  |   |     |        |  |  |
|-------------------------------------|--|----------------------------|---------|--------|--|--------|-----|--------|--|---|-----|--------|--|--|
|                                |  | Three Months EndedMarch31, |         |   |
|                                |  | 2006                       |         | 2005   |  | Change |
| Loss on earlyextinguishment of debt |  | $                          | — |   |  | $      | 7.5 |   |  | $ | 7.5 |   |
|                                     |

The loss on early extinguishment of debtfor the first quarter of 2005 represents the $5.0  millionprepayment fee related to the prepayment of $100.0  million ofindebtedness outstanding under the Term Loan Facility (as hereinafterdefined) of the 2004 Credit Agreement in March  2005, as well asthe write-off of the portion of deferred financing costs related tosuch prepaid amount.

|                                     |  |                            |       |         |  |        |         |        |  |   |      |        |  |  |
|-------------------------------------|--|----------------------------|-------|---------|--|--------|---------|--------|--|---|------|--------|--|--|
|                                |  | Three Months EndedMarch31, |       |    |
|                                |  | 2006                       |       | 2005    |  | Change |
| Gain on issuance ofsubsidiary stock |  | $                          | (42.3 | )  |  | $      | — |   |  | $ | 42.3 |   |
|                                     |

During the first quarter of 2006, REVHoldings recognized a gain of $42.2  million on the issuance byRevlon, Inc. of Class A Common Stock to third parties in the RightsOffering. REV Holdings also recognized a gain of $0.1  millionduring the first quarter of 2006 in connection with the exercise ofRevlon, Inc. stock options.

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Provision for incometaxes:

|                           |  |                            |     |        |  |        |     |        |  |   |      |         |  |  |
|---------------------------|--|----------------------------|-----|--------|--|--------|-----|--------|--|---|------|---------|--|--|
|                      |  | Three Months EndedMarch31, |     |   |
|                      |  | 2006                       |     | 2005   |  | Change |
| Provision for incometaxes |  | $                          | 5.4 |   |  | $      | 3.6 |   |  | $ | (1.8 | )  |
|                           |

The increase in the provision forincome taxes in the first quarter of 2006, as compared with the firstquarter of 2005, was primarily attributable to higher taxable income incertain markets outside the U.S.

Financial Condition, Liquidityand Capital Resources

Net cash provided by operating activitiesin the first quarter of 2006 improved to $7.3  million, ascompared to $8.8  million used in the first quarter of 2005. Netloss improved $30.8  million primarily due to a $42.2million noncash gain related to the Rights Offering in the firstquarter of 2006. In addition, this improvement resulted from cashprovided by changes in working capital of $69.0  million in thefirst quarter of 2006, compared with cash provided by changes inworking capital of $22.5  million in the first quarter of 2005,with the improvement in the first quarter of 2006 due primarily tohigher collections on accounts receivable, partially offset by theincrease in net loss before non-cash charges and the increase inpurchases of permanent displays.

Net cash used in investingactivities was $4.8  million and $200.6  million for thefirst quarters of 2006 and 2005, respectively. Net cash used ininvesting activities of $4.8  million in the first quarter of 2006was for capital expenditures. Net cash used in investing activities inthe first quarter of 2005 included a $197.9  million payment intoa debt defeasance trust in respect of the principal, interest andapplicable premium necessary to redeem all of ProductsCorporation’s 8 1/8% Senior Notes due 2006and all of Products Corporation’s 9% Senior Notes due2006, as well as $2.7  million in capital expenditures.

Netcash provided by financing activities was $102.6  million and$194.9  million for the first quarters of 2006 and 2005,respectively. Net cash provided by financing activities for the firstquarter of 2006 included net proceeds of $107.7  million, from theissuance of Class A Common Stock as a result of the closing of theRights Offering on March  22,  2006, partially offset by bankoverdrafts and the payment of certain financing costs. Revlon,Inc.’s proceeds from the Rights Offering were promptlytransferred to Products Corporation, which it used in April  2006,together with available cash, to redeem $109.7  million aggregateprincipal amount of its 8 5/8% SeniorSubordinated Notes at an aggregate redemption price of $111.8million, including $2.1  million of accrued and unpaid interest upto, but not including, the redemption date. (See ‘‘RecentDevelopments-Redemption of 8 5/8% SeniorSubordinated Notes’’ and ‘‘Financial Condition,Liquidity and Capital Resources – 2006 FinancingTransactions’’). Net cash provided by financing activitiesfor the first quarter of 2005 included proceeds from the issuance inMarch  2005 of $310  million aggregate principal amount ofProducts Corporation’s 91⁄2% Senior Notesdue 2011 (the ‘‘91⁄2% SeniorNotes’’), offset by the prepayment of $100  million ofindebtedness under the Term Loan Facility of ProductsCorporation’s 2004 Credit Agreement, the defeasance of all ofProducts Corporation’s 8 1/8% Senior Notesand all of Products Corporation’s 9% Senior Notes, alongwith the $5.0  million prepayment fee in connection with thepartial prepayment of the Term Loan Facility described above, and thepayment of financing costs.

At March  31,  2006,Revlon, Inc. had a liquidity position, excluding cash in compensatingbalance accounts, of approximately $241.8  million, consisting ofcash and cash equivalents (net of any outstanding checks) of$11.8  million, as well as $143.0  million in availableborrowings under the Multi-Currency Facility (as hereinafter defined)and $87.0  million in available borrowings under the 2004Consolidated MacAndrews & Forbes Line of Credit (as hereinafterdefined). Excluded from the Company’s liquidity position atMarch  31,  2006 is the aforementioned $109.7  millionin aggregate principal amount used in April  2006 to redeem anequivalent principal amount of Products Corporation’s8 5/8% Senior Subordinated Notes.

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2004 Credit Agreement

Products Corporation’s credit agreement that it and certainof its subsidiaries entered into in 2004 with a syndicate of lenders,and Citicorp USA, Inc., as multi-currency administrative agent, termloan administrative agent and collateral agent (the ‘‘2004Credit Agreement’’) originally provided up to $960.0million, which consisted of a term loan facility of $800.0million (prior to being reduced to $700.0  million followingProducts Corporation’s March  2005 prepayment of$100.0  million) (the ‘‘Term LoanFacility’’) and a $160.0  million multi-currencyfacility, the availability under which varies based upon the borrowingbase that is determined based upon the value of eligible accountsreceivable, eligible inventory and eligible real property and equipmentin the U.S. and the U.K. from time to time (the‘‘Multi-Currency Facility’’). ProductsCorporation may request the Multi-Currency Facility to be increasedfrom time to time in an aggregate principal amount not to exceed$50.0  million subject to certain exceptions and subject to thelenders’ agreement. (For further discussions on the terms of the2004 Credit Agreement, see Note 9 ‘‘Long-TermDebt’’ to the Consolidated Financial Statements in REVHoldings’ Annual Report on Form 10-K for the year endedDecember  31,  2005) (See ‘‘RecentDevelopments-Commitment for New 2006 CreditFacility’’).

The Multi-Currency Facility willterminate on July  9,  2009 and the loans under the Term LoanFacility will mature on July  9,  2010; provided that the2004 Credit Agreement will terminate on October  30,  2007 ifProducts Corporation’s 8 5/8% SeniorSubordinated Notes are not redeemed, repurchased, defeased or repaid onor before such date such that not more than $25.0  million inaggregate principal amount of the 8 5/8% SeniorSubordinated Notes remain outstanding. In March  2006, Revlon,Inc. completed its $110  million Rights Offering and promptlytransferred the proceeds from the Rights Offering to ProductsCorporation which it used in April  2006, together with availablecash, to redeem $109.7  million aggregate principal amount of its8 5/8% Senior Subordinated Notes, in satisfactionof the applicable requirements under the 2004 Credit Agreement, at anaggregate redemption price of $111.8  million, including$2.1  million of accrued and unpaid interest up to, but notincluding, the redemption date. (See ‘‘RecentDevelopments-Redemption of 8 5/8% SeniorSubordinated Notes’’ and ‘‘Financial Condition,Liquidity and Capital Resources – 2006 FinancingTransactions’’). Accordingly, at April  30,  2006there remained outstanding $217.4  million in aggregate principalamount of the 8 5/8% Senior SubordinatedNotes.

Borrowings under the Multi-Currency Facility (other thanloans in foreign currencies) bear interest at a rate equal to, atProducts Corporation’s option, either (A) the Alternate BaseRate plus 1.50%; or (B) the Eurodollar Rate plus 2.50%.Loans in foreign currencies bear interest in certain limitedcircumstances or if mutually acceptable to Products Corporation and therelevant foreign lenders at the Local Rate, and otherwise at theEurocurrency Rate, in each case plus 2.50%. The loans under theTerm Loan Facility bear interest at a rate equal to, at ProductsCorporation’s option, either (A) the Alternate Base Rate plus5.00%; or (B) the Eurodollar Rate plus 6.00%. AtMarch  31,  2006, the weighted average rate for borrowingsunder the Term Loan Facility and the Multi-Currency Facility was10.7% and 9.3%, respectively (See ‘‘RecentDevelopments-Commitment for New 2006 CreditFacility’’).

At March  31,  2006, the TermLoan Facility was fully drawn and availability under the Multi-CurrencyFacility, based upon the calculated borrowing base less approximately$16  million of outstanding letters of credit and approximately$1  million then drawn on the Multi-Currency Facility, wasapproximately $143  million. (See ‘‘Overview ofFinancing Activities’’ and ‘‘2006 FinancingTransactions’’ for certain amendments to the 2004 CreditAgreement in February  2006, including amendments to certainfinancial covenants).

2004 Consolidated MacAndrews& Forbes Line of Credit

Products Corporation has a lineof credit with MacAndrews & Forbes Inc., which had an initialcommitment of $152.0  million, which reduced to $87.0million in July  2005 (as amended, the ‘‘2004

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Consolidated MacAndrews & Forbes Line ofCredit’’). As of March  31,  2006, the 2004Consolidated MacAndrews & Forbes Line of Credit was undrawn. InFebruary  2006, Products Corporation entered into an amendment toits 2004 Consolidated MacAndrews & Forbes Line of Credit extendingthe term of such agreement until the consummation of Revlon,Inc.’s planned $75  million equity issuance. (For furtherdetail regarding the 2004 Consolidated MacAndrews & Forbes Line ofCredit, see Note 9 ‘‘Long-Term Debt’’ to theConsolidated Financial Statements in REV Holdings’ Annual Reporton Form 10-K for the year ended December  31,  2005 and‘‘2006 Financing Transactions’’).

2006 Financing Transactions

On March22,  2006, Revlon, Inc. completed the $110  million RightsOffering that it launched in February  2006 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 theproceed to Products Corporation, which it used as described in‘‘Recent Developments-Redemption of8 5/8% Senior SubordinatedNotes’’.

In completing the Rights Offering, Revlon,Inc. issued an additional 39,285,714 shares of its Class A CommonStock, 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. pursuant to a stock purchase agreement between MacAndrews& Forbes and Revlon, Inc. The shares issued to MacAndrews &Forbes represented the number of shares of Revlon, Inc.’s ClassA Common Stock that MacAndrews & Forbes would otherwise have beenentitled to purchase pursuant to its basic subscription privilege inthe Rights Offering (which was approximately 60% of the sharesof Revlon, Inc.’s Class A Common Stock offered in the RightsOffering).

As a result of completing the Rights Offering,Revlon, Inc.’s total number of outstanding shares of Class ACommon Stock increased to 380,041,688 shares and the total number ofshares of common stock outstanding, including Revlon, Inc.’sexisting 31,250,000 shares of Class B common stock, with a par value of$0.01 per share (together with the Class A Common Stock, the‘‘Common Stock’’), increased to 411,291,688shares. Following the completion of these transactions, MacAndrews& Forbes beneficially owned approximately 56% of Revlon,Inc.’s outstanding Class A Common Stock and approximately60% of Revlon, Inc.’s total outstanding Common Stock,which shares together represent approximately 76% of thecombined voting power of such shares.

In February  2006,Products Corporation secured an amendment to the credit agreement thatit and certain of its subsidiaries entered into in 2004, with asyndicate of lenders, and Citicorp USA, Inc., as multi-currencyadministrative agent, term loan administrative agent and collateralagent. The amendment excludes from various financial covenants certaincharges in connection with Products Corporation’s organizationalrealignment described in Note 6 to the unaudited consolidated financialstatements, as well as some start-up costs incurred by the Company in2005 related to the launch of its new Vital Radiance brand andthe re-launch of the Almay brand. Specifically, the amendmentprovides for the add-back to the definition of‘‘EBITDA’’ the lesser of (i) $50  million;or (ii) the cumulative one-time charges associated with (a) theaforementioned organizational realignment; and (b) the non-recurringcosts in the third and fourth quarters of 2005 associated with thelaunch of the Company’s new Vital Radiance brand and there-launch of the Almay brand. Under the 2004 Credit Agreement,EBITDA is used in the determination of Products Corporation’ssenior secured leverage ratio and the consolidated fixed chargecoverage ratio. (See ‘‘Recent Developments-Commitment forNew 2006 Credit Facility’’).

In February  2006,Revlon, Inc. announced that it intends to conduct a further $75million equity issuance through an underwritten public offering byJune  30,  2006. In connection with such further equityissuance, Revlon, Inc. also announced in February  2006 that ithad entered into an amendment to its Investment Agreement withMacAndrews & Forbes, which extends MacAndrews & Forbes’back-stop of 

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Revlon, Inc.’s planned $75million equity issuance from March  31,  2006 untilJune  30,  2006 to, among other things, provide Revlon, Inc.with sufficient time to complete, following the Rights Offering, anunderwritten public offering of its Class A Common Stock, the proceedsof which would be transferred by Revlon, Inc. to Products Corporationto be available for general corporate purposes. Revlon, Inc. alsoannounced that Products Corporation had entered into an amendment toits 2004 Consolidated MacAndrews & Forbes Line of Credit extendingthe term of such agreement until the consummation of Revlon,Inc.’s planned $75  million equity issuance.

Sources and Uses

The Company’sprincipal sources of funds are expected to be operating revenues, cashon hand, net cash proceeds from Revlon, Inc.’s planned $75million equity issuance described in ‘‘2006 FinancingTransactions’’ and funds available for borrowing under the2004 Credit Agreement, the 2004 Consolidated MacAndrews & ForbesLine of Credit, other permitted lines of credit, and advances under theNew Keepwell Agreement (as hereinafter defined). The 2004 CreditAgreement, the 2004 Consolidated MacAndrews & Forbes Line of Creditand the indentures governing the 91⁄2% SeniorNotes and the 8 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 fundsare expected to be the payment of operating expenses, includingexpenses in connection with the continued implementation of, andrefinement to, the Company’s plan (including theCompany’s brand initiatives referred to in ‘‘–Overview – Overview of the Business’’),purchases of permanent wall displays, capital expenditure requirements,payments in connection with the Company’s restructuring programs(including the Company’s organizational realignment announced inFebruary  2006), debt service payments and costs and regularlyscheduled pension and post-retirement benefit plan contributions. Cashcontributions to Products Corporation’s pension andpost-retirement benefit plans were approximately $29  million in2005 and Products Corporation expects them to be approximately$33  million in the aggregate in 2006. The Company’sworking capital increased significantly during the second half of 2005,due principally to the brand initiatives, and is expected to return tomore normalized levels in relation to sales during the second half of2006. Products Corporation estimates that for 2006 purchases of walldisplays will be approximately $85  million to $95  millionand capital expenditures will be approximately $35  million.

The Company has undertaken 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.

Continuing to implement and refine the Company’s plan couldinclude taking advantage of additional opportunities to reposition,repackage or reformulate one or more brands or product lines, launchingadditional new brands or products, further refining theCompany’s approach to retail merchandising and/or taking furtheractions to optimize its manufacturing, sourcing and organizationalstructure. Any of these actions, whose intended purpose would be tocreate value through profitable growth, could result in the Companymaking investments and/or recognizing charges related to executingagainst such opportunities.

The Company expects that operatingrevenues, cash on hand, net cash proceeds from the aforementionedplanned Revlon, Inc. $75  million equity issuance and fundsavailable for borrowing under the 2004 Credit Agreement, the 2004Consolidated MacAndrews & Forbes Line of Credit, other permittedlines of credit and advances under the New Keepwell Agreement will besufficient to enable the Company to cover its operating expenses for2006, including cash requirements in connection with the 

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Company’s operations, the continuedimplementation of, and refinement to, the Company’s plan(including the Company’s brand initiatives referred to in‘‘– Overview – Overview of theBusiness’’), cash requirements in connection with theCompany’s restructuring programs (including the Company’sorganizational realignment announced in February  2006), the debtservice requirements of the Company and its subsidiaries for 2006,including without limitation, interest on the New REV Holdings Notes,and regularly scheduled pension and post-retirement plan contributions.However, there can be no assurance that such funds will be sufficientto meet the Company’s cash requirements on a consolidated basis.If the Company’s anticipated level of revenue growth is notachieved because, for example, of decreased consumer spending inresponse to weak economic conditions or weakness in the mass-marketcosmetics category, adverse changes in currency, increased competitionfrom the Company’s competitors, changes in consumer purchasinghabits, including with respect to shopping channels, retailer inventorymanagement or the Company’s advertising and marketing plans orbrand initiatives are not as successful as anticipated, or if theCompany’s expenses associated with the continued implementationof, and refinement to, the Company’s plan exceed the anticipatedlevel of expenses, the Company’s current sources of funds may beinsufficient to meet the Company’s cash requirements.

Inthe event of a decrease in demand for the Company’s products,reduced sales, lack of increases in demand and sales, changes inconsumer purchasing habits, including with respect to shoppingchannels, retailer inventory management and/or increased returns orexpenses associated with the continued implementation of, andrefinement to, the Company’s plan exceeding its expectations,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 Companyis unable 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, including one or more aspects ofits brand initiatives referred to in the‘‘Overview’’, 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 equity securities of Revlon, Inc. (or debtsecurities of Products Corporation) or reducing other discretionaryspending. There can be no assurance that the Company would be able totake any of the actions referred to above because of a variety ofcommercial or market factors or constraints in ProductsCorporation’s debt instruments, including, for example, marketconditions being unfavorable for an equity or debt issuance, additionalcapital contributions or loans not being available from affiliates orthird parties, or that the transactions may not be permitted under theterms of Products Corporation’s various debt instruments then ineffect, because of restrictions on the incurrence of debt, incurrenceof liens, asset dispositions and related party transactions. Inaddition, such actions, if taken, may not enable Products Corporationto satisfy its cash requirements or comply with its debt covenants ifthe actions do not generate a sufficient amount of additional capital.(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).

Upon completionof the Rights Offering, Revlon, Inc. promptly transferred the proceedsfrom the Rights Offering to Products Corporation which it used inApril  2006, together with available cash, to redeem $109.7million 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 

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$111.8  million, including $2.1million of accrued and unpaid interest up to, but not including, theredemption date. (See ‘‘Recent Developments-Redemption of8 5/8% Senior Subordinated Notes’’and ‘‘Financial Condition, Liquidity and Capital Resources– 2006 Financing Transactions’’).

Revlon,Inc., as a holding company, will be dependent on the earnings and cashflow of, and dividends and distributions from, Products Corporation topay its expenses and to pay any cash dividend or distribution onRevlon, Inc.’s Class A Common Stock that may be authorized bythe Board of Directors of Revlon, Inc. The terms of the 2004 CreditAgreement, the 2004 Consolidated MacAndrews & Forbes Line of Creditand the indentures governing Products Corporation’s91⁄2% Senior Notes and its8 5/8% Senior Subordinated Notes generallyrestrict Products Corporation from paying dividends or makingdistributions, except that Products Corporation is permitted to paydividends 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 feesand 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, the Company'sother affiliates and/or third parties. There can be no assurance thatany of the foregoing actions could be effected on satisfactory terms,that any of the foregoing actions would enable REV Holdings to pay theprincipal amount at maturity of the New REV Holdings Notes or that anyof such actions would be permitted by the terms of the New Indenture(as hereinafter defined) or any other debt instrument of the Companyand the Company's subsidiaries then in effect, because, amongother reasons, market conditions may be unfavorable for an equity ordebt offering or the transactions may not be permitted under the termsof the Company'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 requirementsif the actions do not generate a sufficient amount of additionalcapital. None of the Company's affiliates, including MacAndrews& Forbes, is required to make any capital contribution, loan orother payment to REV Holdings with respect to principal or interest onthe New REV Holdings Notes (other than as provided in the New KeepwellAgreement).

On January  21,  2004, REV Holdingsconsummated an exchange offer (the ‘‘REV Holdings ExchangeOffer’’) with respect to its 12% Senior SecuredNotes due 2004 (the ‘‘REV Holdings Notes’’) for13% Senior Secured Notes due 2007 (the ‘‘New REVHoldings Notes’’). In connection therewith, REV Holdingsissued $18.5  million principal amount of New REV Holdings Notesin exchange 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 to retirethe remaining outstanding REV Holdings Notes.

As of March31,  2006, the New REV Holdings Notes, which bear interestsemi-annually and mature on February  1,  2007, are securedby a pledge of 2,325,291 shares of Revlon, Inc. Class A Common Stock,including all dividends, cash instruments and property and proceedsfrom time to time received in respect of the foregoing shares(collectively, the ‘‘Collateral’’). Inaddition, the indenture governing the New REV Holdings Notes (the‘‘New Indenture’’) contains covenants that,among other things, limit, subject to 

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certain exceptions set forth in the NewIndenture, the following: (i) the issuance of additional debt andredeemable stock by REV Holdings, (ii) the creation of additional lienson the Collateral (other than the lien created by the New Indenture),(iii) the payment of dividends on capital stock of REV Holdings and theredemption of capital stock of REV Holdings or any of its direct orindirect parents, (iv) the sale of assets and subsidiary stock(including by way of consolidations, mergers and similar transactions),and (v) transactions with affiliates.

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 to whichGSB Investments Corp. has 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 thatit expects either to have cash flow from dividends on its investmentsor to obtain capital contributions from its affiliates that, in theaggregate, will 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. As ofMarch  31,  2006, advances under the New Keepwell Agreementwere $4.8  million.

As a result of dealing with suppliersand vendors in a number of foreign countries, Products Corporationenters into foreign currency forward exchange contracts and optioncontracts from time to time to hedge certain cash flows denominated inforeign currencies. There were foreign currency forward exchangecontracts with a notional amount of $33.4  million outstanding atMarch  31,  2006. The fair value of foreign currency forwardexchange contracts outstanding at March  31,  2006 was$0.4  million.

Disclosures about Contractual Obligationsand Commercial Commitments

As of March  31,  2006,there had been no material changes to the Company’s totalcontractual cash obligations, as set forth in the contractualobligations and commercial commitments table included in REVHoldings’ Annual Report on Form 10-K for the year endedDecember  31,  2005. However, as previously described, onApril  21,  2006, Products Corporation redeemed $109.7million aggregate principal amount of its 8 5/8%Senior Subordinated Notes. (See ‘‘Recent Developments– Redemption of 8 5/8% Senior SubordinatedNotes’’ and ‘‘Financial Condition, Liquidityand Capital Resources – 2006 FinancingTransactions’’). The following table reflects the impact ofsuch redemption on the Company’s 

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long-term debt obligations, as ofApril  30,  2006:

|                                             |  |                                            |         |                 |  |          |      |           |  |              |       |         |  |   |       |        |  |   |       |        |  |  |
|---------------------------------------------|--|--------------------------------------------|---------|-----------------|--|----------|------|-----------|--|--------------|-------|---------|--|---|-------|--------|--|---|-------|--------|--|--|
|                                        |  | Payments Due byPeriod(dollars in millions) |
| Contractual Obligations As of April30, 2006 |  | Total                                      |         | Less than 1year |  | 1-3years |      | 3-5 years |  | After 5years |
| Long-term Debt                              |  | $                                          | 1,326.9 |            |  | $        | 18.5 |      |  | $            | 217.4 | *  |  | $ | 701.0 |   |  | $ | 390.0 |   |
|                                             |

|  |
|--|
|  |  |
|  |

|         |                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *  | Amountreflects the aforementioned redemption on April  21,  2006 of$109.7  million aggregate principal amount of ProductsCorporation’s 8 5/8% Senior SubordinatedNotes. |

Off-Balance Sheet Transactions

The Company doesnot maintain any off-balance sheet transactions, arrangements,obligations or other relationships with unconsolidated entities orothers that are reasonably likely to have a material current or futureeffect on the Company's financial condition, changes in financialcondition, revenues or expenses, results of operations, liquidity,capital expenditures or capitalresources.

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(alltabular amounts in millions, except per share amounts)

|              |                                                           |
|--------------|-----------------------------------------------------------|
| Item3.  | Quantitative and Qualitative Disclosures AboutMarket Risk |

The Company has exposure to market risk both as aresult of changing interest rates and movements in foreign currencyexchange rates. The Company’s policy is to manage market riskthrough a combination of fixed and floating rate debt, the use ofderivative financial instruments and foreign exchange forward andoption contracts. The Company does not hold or issue financialinstruments for trading purposes. The qualitative and quantitativeinformation presented in Item 7A of REV Holdings’ Annual Reporton Form 10-K for the year ended December  31,  2005(‘‘Item 7A’’) describes significant aspects ofthe Company’s financial instrument programs that have materialmarket risk as of December  31,  2005. The following tablepresents the information required by Item 7A as of March31,  2006 (See ‘‘Recent Developments-Redemption of8 5/8% Senior Subordinated Notes’’and ‘‘Financial Condition, Liquidity and Capital Resources– 2006 Financing Transactions’’ as to the redemptionin April  2006 of $109.7  million aggregate principal amountof Products Corporation’s 8 5/8% SeniorSubordinated Notes):

|                                                  |  |                                                        |        |         |  |                         |        |         |  |        |        |            |  |        |                                 |        |  |        |        |         |  |        |        |         |  |        |         |        |  |        |         |        |  |  |
|--------------------------------------------------|--|--------------------------------------------------------|--------|---------|--|-------------------------|--------|---------|--|--------|--------|------------|--|--------|---------------------------------|--------|--|--------|--------|---------|--|--------|--------|---------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                             |  | Expected Maturity date forthe year ended December  31, |        | Total   |  | Fair Value March31,2006 |
|                                             |  | 2006                                                   |        | 2007    |  | 2008                    |        | 2009    |  | 2010   |        | Thereafter |
| Debt                                             |  |                                                   |   |    |  |                    |   |    |  |   |   |       |  |   |                            |   |  |   |   |    |  |   |   |    |  |   |    |   |  |   |    |   |
| Short-termvariable rate (various currencies)     |  | $                                                      | 10.8   |    |  |                    |   |    |  |   |   |       |  |   |                            |   |  |   |   |    |  |   |   |    |  | $      | 10.8    |   |  | $      | 10.8    |   |
| Average interest rate (a)                        |  |                                                   | 12.8   | %  |  |                    |   |    |  |   |   |       |  |   |                            |   |  |   |   |    |  |   |   |    |  |   |    |   |  |   |    |   |
| Long-term fixed rate– third party ($US)    |  | $                                                      | 109.7  | *  |  | $                       | 18.5   |    |  | $      | 217.4  |       |  |   |                            |   |  |   |   |    |  | $      | 390.0  |    |  | $      | 735.6   |   |  |   | 715.2   |   |
| Average interest rate (a)                        |  |                                                   | 8.6    | %  |  |                    | 13.0   | %  |  |   | 8.6    | %     |  |   |                            |   |  |   |   |    |  |   | 9.5    | %  |  |   |    |   |  |   |    |   |
| Long-termvariable rate – third party ($US) |  | $                                                      | 1.0    |    |  |                    |   |    |  |   |   |       |  |   |                            |   |  | $      | 700.0  |    |  |   |   |    |  | $      | 701.0   |   |  |   | 701.0   |   |
| Average interest rate (a)                        |  |                                                   | 9.5    | %  |  |                    |   |    |  |   |   |       |  |   |                            |   |  |   | 11.2   | %  |  |   |   |    |  |   |    |   |  |   |    |   |
| Total debt (excluding affiliatedebt)             |  | $                                                      | 121.5  |    |  | $                       | 18.5   |    |  | $      | 217.4  |       |  |   |     — |   |  | $      | 700.0  |    |  | $      | 390.0  |    |  | $      | 1,447.4 |   |  | $      | 1,427.0 |   |
|                                                  |

|                                                 |  |                            |        |                                 |  |                              |      |                        |  |        |      |        |  |        |         |         |  |  |
|-------------------------------------------------|--|----------------------------|--------|---------------------------------|--|------------------------------|------|------------------------|--|--------|------|--------|--|--------|---------|---------|--|--|
| ForwardContracts                                |  | AverageContractualRate$/FC |        | OriginalUS DollarNotionalAmount |  | ContractValue March 31, 2006 |      | FairValueMarch 31,2006 |
| Sell Hong KongDollars/Buy USD                   |  |                       | 0.1289 |                            |  | $                            | 0.8  |                   |  | $      | 0.8  |   |  | $      | — |    |
| Sell Euros/Buy USD                              |  |                       | 1.2197 |                            |  |                         | 1.2  |                   |  |   | 1.2  |   |  |   | — |    |
| Sell British Pounds/Buy USD                     |  |                       | 1.7692 |                            |  |                         | 4.2  |                   |  |   | 4.3  |   |  |   | 0.1     |    |
| Sell Australian Dollars/BuyUSD                  |  |                       | 0.7398 |                            |  |                         | 6.1  |                   |  |   | 6.3  |   |  |   | 0.2     |    |
| Sell Canadian Dollars/Buy USD                   |  |                       | 0.8620 |                            |  |                         | 12.6 |                   |  |   | 12.6 |   |  |   | — |    |
| Sell SouthAfrican Rand/Buy USD                  |  |                       | 0.1520 |                            |  |                         | 4.0  |                   |  |   | 3.8  |   |  |   | (0.2    | )  |
| Sell New Zealand Dollars/Buy USD                |  |                       | 0.6591 |                            |  |                         | 0.6  |                   |  |   | 0.6  |   |  |   | — |    |
| Buy Australian Dollars/Sell New Zealand Dollars |  |                       | 1.0986 |                            |  |                         | 3.9  |                   |  |   | 4.2  |   |  |   | 0.3     |    |
| Total forward contracts                         |  |                       |   |                            |  | $                            | 33.4 |                   |  | $      | 33.8 |   |  | $      | 0.4     |    |
|                                                 |

|  |
|--|
|  |  |
|  |

|     |                                                                                                               |
|-----|---------------------------------------------------------------------------------------------------------------|
| (a) | Weightedaverage variable rates are based upon implied forward rates from theyield curves at March  31,  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, atApril  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 Financing Transactions’’ and‘‘Recent Developments-Redemption of8 5/8% Senior SubordinatedNotes’’). |

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REVHOLDINGS LLC AND SUBSIDIARIES

|               |                        |
|---------------|------------------------|
| Item 4.  | Controls andProcedures |

(a)    Disclosure Controls andProcedures.    The Company maintains disclosure controlsand procedures that are designed to ensure that information required tobe disclosed in the Company's reports under the SecuritiesExchange Act of 1934, as amended, is recorded, processed, summarizedand reported within the time periods specified in the SEC's rulesand forms, 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 March  31,  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 quarter ended March  31,  2006,as well as other public documents and statements of the Company,contain forward-looking statements that involve risks anduncertainties, which are based on the beliefs, expectations, estimates,projections, forecasts, plans, anticipations, targets, outlooks,initiatives, destination model, 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 future financialperformance, including the Company's belief that it hasstrengthened its organizational capabilities (and its expectation tocontinue to do so) and that it has strengthened its relationships withits key retailers in the U.S.; |

|  |            |                                                                                                                                                                                                                                                                                                              |
|--|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ii)  | the effect on sales of weak economicconditions, political uncertainties, military actions, terroristactivities, adverse currency fluctuations, category weakness,competitive activities, retailer inventory management and changes inconsumer purchasing habits, including with respect to shoppingchannels; |

|  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iii)  | the Company'sbelief that the continued implementation and refinement to its plancould include taking advantage of additional opportunities toreposition, repackage or reformulate one or more of its brands orproduct lines, launching new brands or product lines, further refiningits approach to retail merchandising, including, without limitation,the Company’s plans to re-enter the U.S. prestige fragrancemarket in 2006, and/or taking further actions to optimize itsmanufacturing, sourcing and organizational structure, any of which,whose intended purpose would be to create value through profitablegrowth, could result in the Company making investments and/orrecognizing charges related to executing against suchopportunities; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iv)  | theCompany's expectations regarding its plan, including theCompany's plans to capitalize on the actions taken during theprevious phases of its plan with the objective of increasing revenuesand achieving profitability over the long term, and the Company'sexpectation that such actions would help it achieve the objective ofbalancing top-line growth with an improved ‘‘DestinationModel’’ operating profit margin; |

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REVHOLDINGS LLC AND SUBSIDIARIES

|  |           |                                                                                            |
|--|-----------|--------------------------------------------------------------------------------------------|
|  | (v)  | theCompany's plans to further improve its new product development andintroduction process; |

|  |            |                                                                                                                |
|--|------------|----------------------------------------------------------------------------------------------------------------|
|  | (vi)  | theCompany's plans to continue to increase the effectiveness of itsdisplay walls across categories and brands; |

|  |             |                                                                                                                                                                                                            |
|--|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (vii)  | the Company's plans to driveefficiencies across its overall supply chain, including reducingmanufacturing costs by, among other things, continuing to rationalizecomponents and by sourcing strategically; |

|  |              |                                                                                               |
|--|--------------|-----------------------------------------------------------------------------------------------|
|  | (viii)  | the Company's plans tooptimize the effectiveness of its advertising, marketing andpromotions; |

|  |            |                                                                                                                                                                                                                                |
|--|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ix)  | the Company'splans to continue training and development of its organization so thatit may continue to improve its capabilities to execute theCompany's strategies, while providing enhanced job satisfactionfor its employees; |

|  |           |                                                                                                                                                            |
|--|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (x)  | theCompany's belief that the Almay brand initiative will buildon its healthy beauty heritage and desire among consumers forsimplicity and personalization; |

|  |            |                                                                                                                                                                                                              |
|--|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xi)  | the Company's belief that itsVital Radiance brand initiative, focused on the more maturecosmetics consumer, will serve an affluent and growing consumerdemographic currently underserved in the marketplace; |

|  |             |                                                                                                                                                                                        |
|--|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xii)  | the Company’s expectationthat in connection with the brand initiatives, working capital willreturn to more normalized levels in relation to sales during the secondhalf of 2006; |

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xiii)  | theCompany’s plans to continue to strengthen its balance sheet andcapital structure, including Revlon, Inc.’s plans to refinancethe balance of Products Corporation’s8 5/8% Senior Subordinated Notes beforeOctober  30,  2007 prior to their maturity, Revlon,Inc.’s plans to conduct an additional equity issuance of$75  million by June  30,  2006 and ProductsCoporation’s plans to enter into the New 2006 Credit Facilityand the terms thereof, and its expected use of the proceeds thereof,including, among other things, to redeem approximately $75million of Products Corporation’s 8 5/8%Senior Subordinated Notes and the expected benefits from suchrefinancing, including resulting in annual interest savings due tolower interest margins, providing the Company with greater financialand covenant flexibility and extending the maturity dates underProducts Corporation’s 2004 Credit Agreement; |

|  |             |                                                                                                                                               |
|--|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xiv)  | restructuring activities,restructuring costs, the timing of restructuring payments and annualsavings and other benefits from such activities; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xv)  | the Company’s expectationthat operating revenues, cash on hand, net cash proceeds of the planned$75  million equity issuance, and funds available for borrowingunder Products Corporation's 2004 Credit Agreement, the 2004Consolidated MacAndrews & Forbes Line of Credit, other permittedlines of credit and advances under the New Keepwell Agreement will besufficient to satisfy the Company's operating expenses in 2006,including cash requirements referred to in item (xviii) below; |

|  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xvi)  | the Company’s expectedsources of funds, including the availability of funds from ProductsCorporation's 2004 Credit Agreement, the 2004 ConsolidatedMacAndrews & Forbes Line of Credit, other permitted lines ofcredit, 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 additional equitysecurities of Revlon, Inc. and/or REV Holdings or additional debtsecurities of Products Corporation and the net cash proceeds of theplanned Revlon, Inc. $75  million equity issuance described in‘‘2006 Financing Transactions’’; |

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|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xvii)  | theavailability of advances under the New Keepwell Agreement beingsufficient to satisfy REV Holdings' cash requirements, GSBInvestments Corp.'s plan to obtain capital contributions or loansfrom its affiliates to make advances under the New Keepwell Agreementif it does not have sufficient cash flow from dividends on itsinvestments and the sale of equity securities of REV Holdings to paythe principal amount at maturity of the New REV Holdings Notes; |

|  |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xviii)  | the Company's expected usesof funds, including amounts required for the payment of operatingexpenses, including expenses in connection with the continuedimplementation of, and refinement to, the Company's plan(including in connection with its brand initiatives), payments inconnection with the Company's purchases of permanent walldisplays, capital expenditure requirements, restructuring programs(including the organizational realignment announced in February2006), debt service payments and costs and regularly scheduled pensionand post-retirement plan contributions, and its estimates of operatingexpenses, working capital expenses, wall display costs, capitalexpenditures, cash contributions to the Company's pension plansand post-retirement benefit plans and debt service payments (includingpayments required under Products Corporation's debt instrumentsand interest payments under the New REV Holdings Notes); |

|  |             |                                                                    |
|--|-------------|--------------------------------------------------------------------|
|  | (xix)  | matters concerning theCompany's market-risk sensitive instruments; |

|  |            |                                                                                     |
|--|------------|-------------------------------------------------------------------------------------|
|  | (xx)  | the expected effects of theCompany's adoption of certain accounting principles; and |

|  |             |                                                                                                                                                                                                                                                                                                                                                            |
|--|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xxi)  | the Company's plan toefficiently manage its cash and working capital, including, among otherthings, by carefully managing inventory levels, centralizing purchasingto secure discounts and efficiencies in procurement, and providingadditional discounts to U.S. customers for more timely payment ofreceivables and carefully managing accounts payable. |

Statementsthat are not historical facts, including statements about theCompany's beliefs and expectations, are forward-lookingstatements. Forward-looking statements can be identified by, amongother things, the use of forward-looking language such as‘‘estimates,’’‘‘objectives,’’‘‘visions,’’‘‘projects,’’‘‘forecasts,’’‘‘plans,’’ ‘‘targets,’’‘‘strategies,’’‘‘opportunities,’’‘‘drivers,’’‘‘believes,’’‘‘intends,’’ ‘‘destinationmodel,’’ ‘‘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’s |

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REVHOLDINGS LLC AND SUBSIDIARIES

|  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |   | existing products as a result of theCompany’s brand initiatives; the Company’s advertising ormarketing plans are not as successful as anticipated; actions by theCompany’s customers, such as retailer inventory management; andchanges in the competitive environment and actions by theCompany's competitors, including business combinations,technological breakthroughs, new products offerings, promotionalspending and marketing and promotional successes, including increasesin market share; |

|  |            |                                                                                                                                                                                                                                                                                        |
|--|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ii)  | the effects ofand changes in economic conditions (such as inflation, monetaryconditions and foreign currency fluctuations, as well as in trade,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, further refining itsapproach to retail merchandising, including, without limitation,difficulties, delays or the inability to complete, or unanticipatedcircumstances or costs in connection with the Company’s plans tore-enter the prestige fragrance market in 2006 and/or difficulties,delays or increased costs in connection with taking further actions tooptimize the Company’s manufacturing, sourcing or organizationalstructure; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iv)  | difficulties, delaysor unanticipated costs in implementing the Company's plan,including difficulties, delays or unanticipated costs in taking actionsto capitalize on the actions taken during the previous phases of itsplan, which could affect the Company's ability to achieve itsobjectives of increasing revenues and achieving profitability over thelong term and balancing top-line growth with an improved operatingprofit margin under its ‘‘DestinationModel’’; |

|  |           |                                                                                                                                                                                                                                                                                                                                                                                              |
|--|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (v)  | difficulties, delays or unanticipatedcosts in connection with the Company's plans to further improveits new product development and introduction process, which couldaffect the Company's ability to effectively launch new andrestaged products and/or reposition, repackage and/or reformulate oneor more of the Company's brands or product lines and generaterevenues from such sources; |

|  |            |                                                                                                                                               |
|--|------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|  | (vi)  | difficulties, delays orunanticipated costs in implementing the Company's plans tocontinue to increase the effectiveness of its display walls; |

|  |             |                                                                                                                                                                                                                                                           |
|--|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (vii)  | difficulties, delays orunanticipated costs in implementing the Company's plans to driveefficiencies across its overall supply chain, including reducingmanufacturing costs by, among other things, rationalizing componentsand by sourcing strategically; |

|  |              |                                                                                                                                                          |
|--|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (viii)  | difficulties, delays orunanticipated costs in implementing the Company's plans tooptimize the effectiveness of its advertising, marketing andpromotions; |

|  |            |                                                                                                                                                                                                                                                               |
|--|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ix)  | difficulties, delaysor unanticipated costs in the Company continuing to train and developits organization so that it may continue to improve its capabilities toexecute the Company's strategies, while providing enhanced jobsatisfaction for its employees; |

|  |           |                                                                                                                                                       |
|--|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (x)  | the Almay brand initiativedoes not achieve its anticipated marketing effects and less thananticipated consumer or retail customer acceptance thereof; |

|  |            |                                                                                                                                                                                                    |
|--|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xi)  | the Vital Radiance brandinitiative targeted to the more mature consumer does not achieve itsanticipated marketing effects and less than anticipated consumer orretail customer acceptance thereof; |

|  |             |                                                                                                           |
|--|-------------|-----------------------------------------------------------------------------------------------------------|
|  | (xii)  | higher than anticipated workingcapital or unforeseen circumstances affecting the timing or levelsthereof; |

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|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xiii)  | difficulties,delays or 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’s8 5/8% Senior Subordinated Notes beforeOctober  30,  2007 prior to their maturity, or difficulties,delays or increased costs associated with conducting, or Revlon,Inc.’s inability to consummate, in whole or in part, theadditional planned Revlon, Inc. $75  million equity issuance byJune  30,  2006 or difficulties delays or ProductsCorporation’s inability to consummate, in whole or in part, itsentering into of the New 2006 Credit Facility or less than anticipatedbenefits from such refinancing, such as difficulties, delays or theinability to redeem $75  million of the8 5/8% Senior Subordinated Notes or higher thananticipated interest rates, less than anticipated financial and/orcovenant flexibility or shorter than anticipated maturity dates; |

|  |             |                                                                                                                                                   |
|--|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xiv)  | difficulties, delays orunanticipated costs or less than expected savings and other benefitsresulting from the Company's restructuring activities; |

|  |            |                                                                                                                                                                                |
|--|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xv)  | lower than expected operatingrevenues, the inability to secure capital contributions or loans fromMacAndrews & Forbes, the Company's other affiliates and/orthird parties; |

|  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xvi)  | theunavailability of funds under Products Corporation's 2004 CreditAgreement, the 2004 Consolidated MacAndrews & Forbes Line ofCredit, other permitted lines of credit, advances under the NewKeepwell Agreement, or from selling additional shares of Revlon, Inc.,restructuring indebtedness, selling assets or operations, the sale ofadditional equity or debt securities or from Revlon, Inc.’splanned $75  million equity issuance; |

|  |              |                                                                                                                                                                                                                                                                                                                                |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xvii)  | advances under the New KeepwellAgreement being insufficient to satisfy REV Holdings' cashrequirements or GSB Investments Corp.'s inability to obtaincapital contributions or loans from its affiliates to make advancesunder the New Keepwell Agreement if it has not received sufficientdividend income from its investments; |

|  |               |                                                                                                                                                                                                                                                                                                                            |
|--|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xviii)  | higher than expected operatingexpenses (including in connection with the brand initiatives), salesreturns, working capital expenses, wall display costs, capitalexpenditures, restructuring costs, regularly scheduled cash pensionplan contributions, post-retirement benefit plan contributions or debtservice payments; |

|  |             |                                                                                                                         |
|--|-------------|-------------------------------------------------------------------------------------------------------------------------|
|  | (xix)  | interest rateor foreign exchange rate changes affecting the Company and itsmarket-risk sensitive financial instruments; |

|  |            |                                                                                         |
|--|------------|-----------------------------------------------------------------------------------------|
|  | (xx)  | unanticipated effects of theCompany's adoption of certain new accounting standards; and |

|  |             |                                                                                                        |
|--|-------------|--------------------------------------------------------------------------------------------------------|
|  | (xxi)  | difficulties, delays or theinability of the Company to efficiently manage its cash and workingcapital. |

Factors other than those listed above could also causethe Company's results to differ materially from expected results.This discussion is provided as permitted by the Private SecuritiesLitigation Reform Act of1995.

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PART II – OTHERINFORMATION

|                |               |
|----------------|---------------|
| Item 1A.  | Risk Factors. |

For a discussion of the Company’s risk factors, see REVHoldings’ Annual Report on Form 10-K for the year endedDecember  31,  2005.

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

|                           |  |                                                                                                                                                                                           |  |  |  |  |
|---------------------------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| *31.1                     |  | Certification of Ronald O. Perelman, Chief Executive Officer, datedMay  12,  2006, pursuant to Rule 13a-14(a)/15d-14(a) of theExchange Act.                                               |
| *31.2                     |  | Certification of PaulG. Savas, Chief Financial Officer, dated May  12,  2006,pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.                                                    |
| 32.1 (furnished herewith) |  | Certification ofRonald O. Perelman, Chief Executive Officer, dated May  12,2006, pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002. |
| 32.2 (furnished herewith) |  | Certification of PaulG. Savas, Chief Financial Officer, dated May  12,  2006,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906of the Sarbanes-Oxley Act of2002.      |
|                           |

|  |
|--|
|  |  |
|  |

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

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REVLON HOLDINGS LLC ANDSUBSIDIARIES

S I G N A T U R E S

Pursuant to therequirements of the Securities Exchange Act of 1934, as amended, theregistrant has duly caused this report to be signed on its behalf bythe undersigned thereunto duly authorized.

Dated:May 12, 2006

REV HOLDINGS LLCRegistrant

|        |  |                             |  |        |  |  |  |  |  |  |
|--------|--|-----------------------------|--|--------|--|--|--|--|--|--|
| By:/s/ |  | Paul G. Savas               |  |   |
|   |  | Paul G.Savas                |  |   |
|   |  | Executive VicePresident,    |  |   |
|   |  | Chief FinancialOfficer,     |  |   |
|   |  | Chief Accounting Officerand |  |   |
|   |  | Manager                     |  |   |
|        |

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