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SECURITIESAND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

(Mark One)

|                                                                                 |                                                                                       |
|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|         X      | QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934 |

For the quarterly period ended:September 30, 2004

OR

|                                                                                                        |                                                                                        |
|--------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|
|                   | TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934 |

For the transition period from                                    to                              

Commission file number 333-23451

REV HOLDINGS LLC

(Exact name of registrant as specifiedin its charter)

|                                                              |  |                                     |  |  |  |  |
|--------------------------------------------------------------|--|-------------------------------------|--|--|--|--|
| **Delaware**                                                 |  | **13-3933701**                      |
| (Stateor other jurisdiction of incorporation ororganization) |  | (I.R.S.Employer Identification No.) |
| **35 East 62ndStreet, New York, New York**                   |  | **10021**                           |
| (Address of principal executiveoffices)                      |  | (ZipCode)                           |
|                                                              |

Registrant's telephonenumber, including area code:    **212-572-8600**

Indicateby check mark whether the registrant (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period thatthe registrant was required to file such reports) and (2) has beensubject to such filing requirements for the past 90 days. Yes    X        No            

Indicate by check mark whether the registrant is an acceleratedfiler (as defined in Rule 12b-2 of the Securities Exchange Act of1934). Yes                No    X    

As of September 30, 2004, theregistrant's membership interest is held by Revlon HoldingsLLC.

Total Pages –44

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PART I FINANCIALINFORMATION

Item 1. Financial Statements

REV HOLDINGSLLC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars inmillions)

|                                                                                                                 |  |                  |          |                 |  |        |          |         |  |  |
|-----------------------------------------------------------------------------------------------------------------|--|------------------|----------|-----------------|--|--------|----------|---------|--|--|
|                                                                                                            |  | September30,2004 |          | December31,2003 |
|                                                                                                            |  | (Unaudited)      |          |            |
| **ASSETS**                                                                                                      |  |             |     |            |  |   |     |    |
| Currentassets:                                                                                                  |  |             |     |            |  |   |     |    |
| Cash and cashequivalents                                                                                        |  | $                | 83.8     |            |  | $      | 56.5     |    |
| Tradereceivables, less allowances of $18.5 and $19.4 as of September 30,2004 and December 31, 2003,respectively |  |             | 171.8    |            |  |   | 182.5    |    |
| Inventories                                                                                                     |  |             | 159.8    |            |  |   | 142.7    |    |
| Prepaidexpenses andother                                                                                        |  |             | 55.2     |            |  |   | 34.0     |    |
| Totalcurrent assets                                                                                             |  |             | 470.6    |            |  |   | 415.7    |    |
| Property,plant and equipment,net                                                                                |  |             | 120.8    |            |  |   | 132.1    |    |
| Otherassets                                                                                                     |  |             | 159.6    |            |  |   | 158.4    |    |
| Goodwill,net                                                                                                    |  |             | 186.1    |            |  |   | 186.1    |    |
| Totalassets                                                                                                     |  | $                | 937.1    |            |  | $      | 892.3    |    |
|                                                                                                            |  |
| **LIABILITIESAND MEMBER'SDEFICIENCY**                                                                           |  |             |     |            |  |   |     |    |
|                                                                                                            |  |
| Currentliabilities:                                                                                             |  |             |     |            |  |   |     |    |
| Short-termborrowings – thirdparties                                                                       |  | $                | 32.5     |            |  | $      | 28.0     |    |
| Advancesfromaffiliate                                                                                           |  |             | —  |            |  |   | 23.9     |    |
| Accountspayable                                                                                                 |  |             | 80.4     |            |  |   | 97.4     |    |
| Accruedexpenses andother                                                                                        |  |             | 299.5    |            |  |   | 329.2    |    |
| Totalcurrentliabilities                                                                                         |  |             | 412.4    |            |  |   | 478.5    |    |
| Long-termdebt – thirdparties                                                                              |  |             | 1,337.2  |            |  |   | 1,803.8  |    |
| Long-termdebt –affiliates                                                                                 |  |             | 1.2      |            |  |   | 146.2    |    |
| Other long-termliabilities                                                                                      |  |             | 299.7    |            |  |   | 306.3    |    |
|                                                                                                            |  |             |     |            |  |   |     |    |
| Member'sdeficiency:                                                                                             |  |             |     |            |  |   |     |    |
| Member'sinterest                                                                                                |  |             | —  |            |  |   | —  |    |
| Additionalpaid-in-capital                                                                                       |  |             | 939.3    |            |  |   | 370.0    |    |
| Accumulateddeficit                                                                                              |  |             | (1,914.6 | )          |  |   | (2,086.3 | )  |
| Deferredcompensation                                                                                            |  |             | (14.3    | )          |  |   | (4.2     | )  |
| Accumulatedother comprehensiveloss                                                                              |  |             | (123.8   | )          |  |   | (122.0   | )  |
| Totalmember'sdeficiency                                                                                         |  |             | (1,113.4 | )          |  |   | (1,842.5 | )  |
| Totalliabilities and member'sdeficiency                                                                         |  | $                | 937.1    |            |  | $      | 892.3    |    |
|                                                                                                                 |

SeeAccompanying Notes to Unaudited Consolidated FinancialStatements.

2

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REV HOLDINGS LLC AND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (dollars inmillions)

|                                            |  |                                |         |                              |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------|--|--------------------------------|---------|------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                       |  | ThreeMonths EndedSeptember 30, |         | Nine MonthsEndedSeptember30, |
|                                       |  | 2004                           |         | 2003                         |  | 2004   |         | 2003    |
| Netsales                                   |  | $                              | 294.4   |                         |  | $      | 316.5   |    |  | $      | 918.9   |    |  | $      | 930.8   |    |
| Costofsales                                |  |                           | 117.9   |                         |  |   | 127.1   |    |  |   | 353.4   |    |  |   | 363.8   |    |
| Grossprofit                                |  |                           | 176.5   |                         |  |   | 189.4   |    |  |   | 565.5   |    |  |   | 567.0   |    |
| Selling,general and administrativeexpenses |  |                           | 177.9   |                         |  |   | 196.9   |    |  |   | 549.2   |    |  |   | 581.3   |    |
| Restructuringcosts                         |  |                           | 0.6     |                         |  |   | 0.4     |    |  |   | — |    |  |   | 0.9     |    |
| Operating(loss)income                      |  |                           | (2.0    | )                       |  |   | (7.9    | )  |  |   | 16.3    |    |  |   | (15.2   | )  |
|                                       |  |
| Otherexpenses(income):                     |  |                           |    |                         |  |   |    |    |  |   |    |    |  |   |    |    |
| Interestexpense                            |  |                           | 29.4    |                         |  |   | 46.8    |    |  |   | 104.8   |    |  |   | 136.0   |    |
| Interestincome                             |  |                           | (1.3    | )                       |  |   | (0.9    | )  |  |   | (3.4    | )  |  |   | (3.1    | )  |
| Amortizationof debt issuancecosts          |  |                           | 1.7     |                         |  |   | 2.2     |    |  |   | 7.6     |    |  |   | 6.6     |    |
| Foreigncurrency (gains) losses,net         |  |                           | (1.2    | )                       |  |   | (0.8    | )  |  |   | 0.4     |    |  |   | (3.2    | )  |
| Losson early extinguishment ofdebt         |  |                           | 58.8    |                         |  |   | — |    |  |   | 91.4    |    |  |   | — |    |
| Gainon issuance of subsidiarystock         |  |                           | — |                         |  |   | — |    |  |   | (363.6  | )  |  |   | — |    |
| Miscellaneous,net                          |  |                           | (0.1    | )                       |  |   | (0.3    | )  |  |   | 2.4     |    |  |   | 0.1     |    |
| Otherexpenses (income),net                 |  |                           | 87.3    |                         |  |   | 47.0    |    |  |   | (160.4  | )  |  |   | 136.4   |    |
| (Loss)income before incometaxes            |  |                           | (89.3   | )                       |  |   | (54.9   | )  |  |   | 176.7   |    |  |   | (151.6  | )  |
| Provision(benefit) for incometaxes         |  |                           | 2.9     |                         |  |   | 2.3     |    |  |   | 5.0     |    |  |   | (2.9    | )  |
| Net(loss)income                            |  | $                              | (92.2   | )                       |  | $      | (57.2   | )  |  | $      | 171.7   |    |  | $      | (148.7  | )  |
|                                            |

SeeAccompanying Notes to Unaudited Consolidated FinancialStatements.

3

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REV HOLDINGS LLC AND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF MEMBER'S DEFICIENCY ANDCOMPREHENSIVE INCOME (dollars inmillions)

|                                                       |  |                           |        |                    |  |                      |          |                                      |  |                         |        |         |  |        |        |         |  |        |          |         |  |  |
|-------------------------------------------------------|--|---------------------------|--------|--------------------|--|----------------------|----------|--------------------------------------|--|-------------------------|--------|---------|--|--------|--------|---------|--|--------|----------|---------|--|--|
|                                                  |  | AdditionalPaid-In-Capital |        | AccumulatedDeficit |  | DeferredCompensation |          | AccumulatedOtherComprehensiveLoss(a) |  | TotalMember'sDeficiency |
|                                                  |  |                      |   |               |  |                 |     |                                 |  |                    |   |    |  |   |   |    |  |   |     |    |
| Balance,December 31,2003                              |  | $                         | 370.0  |               |  | $                    | (2,086.3 | )                               |  | $                       | (4.2   | )  |  | $      | (122.0 | )  |  | $      | (1,842.5 | )  |
| DebtReduction Transactions (See Note 9)(b)            |  |                      | 464.1  |               |  |                 |     |                                 |  |                    |   |    |  |   |   |    |  |   | 464.1    |    |
| Capitalcontributions from affiliate (See Note 9)(c)   |  |                      | 90.4   |               |  |                 |     |                                 |  |                    |   |    |  |   |   |    |  |   | 90.4     |    |
| Stock-basedcompensation                               |  |                      | 14.8   |               |  |                 |     |                                 |  |                    | (14.8  | )  |  |   |   |    |  |   | —  |    |
| Amortizationof deferredcompensation                   |  |                      |   |               |  |                 |     |                                 |  |                    | 4.7    |    |  |   |   |    |  |   | 4.7      |    |
| Comprehensiveincome:                                  |  |                      |   |               |  |                 |     |                                 |  |                    |   |    |  |   |   |    |  |   |     |    |
| Netincome (See Note 9)(b)                             |  |                      |   |               |  |                 | 171.7    |                                 |  |                    |   |    |  |   |   |    |  |   | 171.7    |    |
| Currencytranslationadjustment                         |  |                      |   |               |  |                 |     |                                 |  |                    |   |    |  |   | (2.3   | )  |  |   | (2.3     | )  |
| Netgain on foreign currency forward exchangecontracts |  |                      |   |               |  |                 |     |                                 |  |                    |   |    |  |   | 0.5    |    |  |   | 0.5      |    |
| Totalcomprehensiveincome                              |  |                      |   |               |  |                 |     |                                 |  |                    |   |    |  |   |   |    |  |   | 169.9    |    |
| Balance,September 30,2004                             |  | $                         | 939.3  |               |  | $                    | (1,914.6 | )                               |  | $                       | (14.3  | )  |  | $      | (123.8 | )  |  | $      | (1,113.4 | )  |
|                                                       |

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| (a) | Accumulatedother comprehensive loss includes net unrealized losses on revaluationsof foreign currency forward exchange contracts of $1.0 and $0.8 as ofSeptember 30, 2004 and December 31, 2003, respectively, net realizedgains (losses) of $0.1 and $(0.6) on foreign currency forward exchangecontracts, as of September 30, 2004 and December 31, 2003,respectively, cumulative net translation losses of $10.8 and $8.5 as ofSeptember 30, 2004 and December 31, 2003, respectively, and adjustmentsfor the minimum pension liability of $112.1 as of September 30, 2004and December 31, 2003, respectively. |

|     |                                                                                                                                                                |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Thechanges in Additional Paid-in-Capital and a portion of AccumulatedDeficit are a result of the consummation of the Debt ReductionTransactions. (See Note 9). |

|     |                                                                   |
|-----|-------------------------------------------------------------------|
| (c) | Relates to theREV Holdings Exchange Offer and Keepwell Agreement. |

See Accompanying Notes to Unaudited Consolidated FinancialStatements.

4

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REV HOLDINGS LLC AND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars inmillions)

|                                                                                                  |  |                              |          |         |  |        |         |         |  |  |
|--------------------------------------------------------------------------------------------------|--|------------------------------|----------|---------|--|--------|---------|---------|--|--|
|                                                                                             |  | NineMonths EndedSeptember30, |
|                                                                                             |  | 2004                         |          | 2003    |
| **CASHFLOWS FROM OPERATINGACTIVITIES:**                                                          |  |                         |     |    |  |   |    |    |
| Net income(loss)                                                                                 |  | $                            | 171.7    |    |  | $      | (148.7  | )  |
| Adjustmentsto reconcile net income (loss) to net cash used for operatingactivities:              |  |                         |     |    |  |   |    |    |
| Depreciationandamortization                                                                      |  |                         | 79.7     |    |  |   | 78.9    |    |
| Stock-basedcompensation                                                                          |  |                         | 4.7      |    |  |   | 1.5     |    |
| Debtdiscountamortization                                                                         |  |                         | 1.8      |    |  |   | 2.4     |    |
| Loss onearly extinguishment ofdebt                                                               |  |                         | 77.3     |    |  |   | — |    |
| Gain onissuance of subsidiarystock                                                               |  |                         | (363.6   | )  |  |   | — |    |
| Changein assets andliabilities:                                                                  |  |                         |     |    |  |   |    |    |
| Decrease intradereceivables                                                                      |  |                         | 10.4     |    |  |   | 38.6    |    |
| Increaseininventories                                                                            |  |                         | (17.2    | )  |  |   | (24.9   | )  |
| (Increase)decrease in prepaid expenses and other currentassets                                   |  |                         | (21.6    | )  |  |   | 1.5     |    |
| Decrease inaccountspayable                                                                       |  |                         | (16.8    | )  |  |   | (6.2    | )  |
| Decreasein accrued expenses and other currentliabilities                                         |  |                         | (22.7    | )  |  |   | (77.8   | )  |
| Purchaseof permanentdisplays                                                                     |  |                         | (40.3    | )  |  |   | (56.8   | )  |
| Other,net                                                                                        |  |                         | (4.4     | )  |  |   | (2.1    | )  |
| Netcash used for operatingactivities                                                             |  |                         | (141.0   | )  |  |   | (193.6  | )  |
| **CASHFLOWS FROM INVESTINGACTIVITIES:**                                                          |  |                         |     |    |  |   |    |    |
| Capitalexpenditures                                                                              |  |                         | (12.5    | )  |  |   | (19.7   | )  |
| Netcash used for investingactivities                                                             |  |                         | (12.5    | )  |  |   | (19.7   | )  |
| **CASHFLOWS FROM FINANCINGACTIVITIES:**                                                          |  |                         |     |    |  |   |    |    |
| Net increase inshort-term borrowings – thirdparties                                        |  |                         | 3.9      |    |  |   | 0.4     |    |
| Proceeds from theissuance of long-term debt – thirdparties                                 |  |                         | 1,135.9  |    |  |   | 187.3   |    |
| Repayment oflong-term debt – third parties, includingpremiums                              |  |                         | (1,014.3 | )  |  |   | (186.7  | )  |
| Proceedsfrom the issuance of long-term debt –affiliates                                    |  |                         | 42.7     |    |  |   | 99.7    |    |
| Repayment oflong-term debt –affiliates                                                     |  |                         | (19.5    | )  |  |   | — |    |
| NetProceeds from the RightsOffering                                                              |  |                         | —  |    |  |   | 46.9    |    |
| Issuance ofSeries C preferredstock                                                               |  |                         | —  |    |  |   | 50.0    |    |
| Redemption ofSeries C preferredstock                                                             |  |                         | —  |    |  |   | (50.0   | )  |
| Capitalcontribution fromparent                                                                   |  |                         | 54.1     |    |  |   | — |    |
| Advances underthe Keepwell Agreement and New KeepwellAgreement                                   |  |                         | 5.7      |    |  |   | 9.7     |    |
| Payment offinancingcosts                                                                         |  |                         | (30.7    | )  |  |   | (3.4    | )  |
| Netcash provided by financingactivities                                                          |  |                         | 177.8    |    |  |   | 153.9   |    |
| Effectof exchange rate changes on cash and cashequivalents                                       |  |                         | 3.0      |    |  |   | 8.2     |    |
| Netincrease (decrease) in cash and cashequivalents                                               |  |                         | 27.3     |    |  |   | (51.2   | )  |
| Cashand cash equivalents at beginning ofperiod                                                   |  |                         | 56.5     |    |  |   | 85.8    |    |
| Cashand cash equivalents at end ofperiod                                                         |  | $                            | 83.8     |    |  | $      | 34.6    |    |
| Supplementalschedule of cash flowinformation:                                                    |  |                         |     |    |  |   |    |    |
| Cashpaid during the periodfor:                                                                   |  |                         |     |    |  |   |    |    |
| Interest                                                                                         |  | $                            | 116.6    |    |  | $      | 132.9   |    |
| Incometaxes, net ofrefunds                                                                       |  |                         | 8.1      |    |  |   | 4.3     |    |
|                                                                                             |  |
| Supplementalschedule of noncash investing and financingactivities:                               |  |                         |     |    |  |   |    |    |
| Conversionof long-term debt and accrued interest as a result of the DebtReductionTransactions    |  | $                            | 813.8    |    |  | $      | — |    |
| Noncashcapital contribution from parent of REV Holdings related to the REVHoldings ExchangeOffer |  |                         | 7.9      |    |  |   | — |    |
| Issuance ofNew REV Holdings Notes in exchange for REV HoldingsNotes                              |  |                         | 18.5     |    |  |   | — |    |
| Noncashcapital contribution from parent of REV Holdings related to theKeepwellAgreement          |  |                         | 28.4     |    |  |   | — |    |
|                                                                                                  |

SeeAccompanying Notes to Unaudited Consolidated FinancialStatements.

5

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS(dollars in millions,except per share data)

(1)    Basis ofPresentation

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

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

On March 25, 2004, in connection with the Revlon ExchangeTransactions (as hereinafter defined), Revlon, Inc. issued 299,969,493shares of Class A Common Stock (**See Note 9 to the UnauditedConsolidated Financial Statements)**, including 9,169,333 shares ofClass A Common Stock to REV Holdings in exchange for all of the SeriesA Preferred Stock and Series B Preferred Stock. As a result ofconsummating the Revlon Exchange Transactions, the Company owned, asMarch 25, 2004 and as of September 30, 2004, 20,819,333 shares of ClassA Common Stock and 31,250,000 shares of Class B Common Stock(representing approximately 14% of the Common Stock andapproximately 51% of the combined voting power of the CommonStock). Accordingly, the consolidated financial statements of theCompany continue to include the financial results of Revlon, Inc. andits subsidiaries on a consolidated basis.

The REV Holdingsmembership interest is owned by its sole member, Revlon Holdings LLC("Holdings"), whose membership interest, inturn, is owned indirectly by Mafco Holdings Inc. ("MafcoHoldings" and, together with its affiliates,"MacAndrews & Forbes"), a corporationowned by Ronald O. Perelman. Until March 24, 2004, Mafco Holdingsbeneficially indirectly owned approximately 83% of the CommonStock (which represented approximately 97% of the combinedvoting power of the Common Stock), including shares held directly byits wholly owned subsidiary, MacAndrews & Forbes Holdings Inc.("MacAndrews Holdings"). As a result of theRevlon Exchange Transactions, Mafco Holdings beneficially indirectlyowned, as March 25, 2004 and as of September 30, 2004, approximately59.9% of the Common Stock (representing approximately77.2% of the combined voting power of the Common Stock).

The accompanying Consolidated Financial Statements areunaudited. In management's opinion, all adjustments (consistingof only normal recurring adjustments) necessary for a fair presentationhave been made.

The Unaudited Consolidated Financial Statementsinclude the accounts of the Company after elimination of allintercompany balances and transactions. The Company has made a numberof estimates and assumptions relating to the assets and liabilities,the disclosure of contingent assets and liabilities and the reportingof revenues and expenses to prepare these financial statements inconformity with accounting principles generally accepted in the UnitedStates. Actual results could differ from those estimates. The UnauditedConsolidated Financial Statements should be read in conjunction withthe consolidated financial statements and related notes contained inthe Company's Annual Report on Form 10-K for the year endedDecember 31, 2003.

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

6

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

Statement of Financial Accounting Standards("SFAS") No. 123, "Accountingfor Stock-Based Compensation," encourages, but does notrequire, companies to record compensation cost for stock-based employeecompensation plans at fair value. The Company has chosen to account forstock-based compensation plans using the intrinsic value methodprescribed in Accounting Principles Board("APB") Opinion No. 25,"Accounting for Stock Issued to Employees,"and related interpretations. Accordingly, compensation cost for stockoptions issued to employees is measured as the excess, if any, of thequoted market price of Class A Common Stock at the date of the grantover the amount an employee must pay to acquire such stock.

Thefollowing table illustrates the effect on net (loss) income as if theCompany had applied the fair value method to its stock-basedcompensation (including 23.1 million stock option awards and 4.5million restricted shares issued under the Amended and Restated Revlon,Inc. Stock Plan during the second quarter of 2004) under the disclosureprovisions of SFAS No. 123 and amended disclosure provisions of SFASNo. 148, "Accounting for Stock-Based Compensation –Transition and Disclosure, an amendment of FASB Statements No.123":

|                                                                                                              |  |                                 |        |                                |  |        |       |         |  |        |       |         |  |        |        |         |  |  |
|--------------------------------------------------------------------------------------------------------------|--|---------------------------------|--------|--------------------------------|--|--------|-------|---------|--|--------|-------|---------|--|--------|--------|---------|--|--|
|                                                                                                         |  | Three Months EndedSeptember 30, |        | Nine Months Ended September30, |
|                                                                                                         |  | 2004                            |        | 2003                           |  | 2004   |       | 2003    |
| Net(loss) income asreported                                                                                  |  | $                               | (92.2  | )                         |  | $      | (57.2 | )  |  | $      | 171.7 |    |  | $      | (148.7 | )  |
| Add:Stock-based employee compensation included in reported net (loss)income                                  |  |                            | 2.6    |                           |  |   | 0.5   |    |  |   | 4.7   |    |  |   | 1.5    |    |
| Deduct:Total stock-based employee compensation expense determined under fairvalue based method for allawards |  |                            | (11.4  | )                         |  |   | (1.5  | )  |  |   | (21.9 | )  |  |   | (6.1   | )  |
| Proforma net (loss)income                                                                                    |  | $                               | (101.0 | )                         |  | $      | (58.2 | )  |  | $      | 154.5 |    |  | $      | (153.3 | )  |
|                                                                                                              |

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

(2)    Post-retirement Benefits

Pension:

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

Other Post-retirement Benefits:

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

In December of 2003, theMedicare Prescription Drug Improvement and Modernization Act of 2003(the "Medicare Act") was enacted in the U.S.The Medicare Act introduced both a Medicare prescription-drug benefitand a federal subsidy to sponsors of retiree health-care plans thatprovide a benefit at least "actuariallyequivalent" to the Medicare benefit. Certain of theCompany's post-retirement benefit plans do provide for suchprescription-drug benefits. The Company has made a one-time election todefer accounting for the economic effects of the Medicare Act, aspermitted by the Financial Accounting Standards Board("FASB") Staff Position 106-1,"Accounting and Disclosure Requirements Related to theMedicare Prescription Drug Improvement and Modernization Act of2003".

7

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

In May 2004, the FASB issued Staff Position106-2, "Accounting and Disclosure Requirements Related tothe Medicare Prescription Drug Improvement and Modernization Act of2003" which provides guidance on the accounting for theeffects of the Medicare Act. FASB Staff Position 106-2, which requiresmeasurement of the Accumulated Postretirement Benefit Obligation("APBO") and net periodic postretirementbenefit cost to reflect the effects of the Medicare Act, supercedesFASB Staff Position 106-1. FASB Staff Position 106-2 is effective forinterim or annual periods beginning after June 15, 2004. The Companyhas not fully evaluated the impact of the Medicare Act's benefitsand subsidies on the Company's accumulated benefit obligation forapplicable post-retirement benefits. The Company has also notdetermined what changes would be required to the current benefitsprovided to allow the Company to qualify for the federal subsidy.Management believes that the provisions of the Medicare Act will nothave a material effect on the Company's consolidated financialstatements.

The components of net periodic benefit cost for thepension and the other post-retirement benefit plans for the threemonths ended September 30, 2004 and 2003 are asfollows:

|                                  |  |              |         |                                    |  |        |      |         |  |        |         |        |  |        |         |        |  |  |
|----------------------------------|--|--------------|---------|------------------------------------|--|--------|------|---------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                             |  | PensionPlans |         | Other Post-retirement BenefitPlans |
|                             |  | 2004         |         | 2003                               |  | 2004   |      | 2003    |
| Servicecost                      |  | $            | 2.5     |                               |  | $      | 2.3  |    |  | $      | — |   |  | $      | 0.1     |   |
| Interestcost                     |  |         | 7.6     |                               |  |   | 7.4  |    |  |   | 0.2     |   |  |   | 0.2     |   |
| Expectedreturn on planassets     |  |         | (6.2    | )                             |  |   | (5.4 | )  |  |   | — |   |  |   | — |   |
| Amortizationof prior servicecost |  |         | (0.1    | )                             |  |   | (0.2 | )  |  |   | — |   |  |   | — |   |
| Amortizationof actuarialloss     |  |         | 2.1     |                               |  |   | 2.3  |    |  |   | — |   |  |   | — |   |
|                             |  |         | 5.9     |                               |  |   | 6.4  |    |  |   | 0.2     |   |  |   | 0.3     |   |
| Portionallocated toHoldings      |  |         | — |                               |  |   | (0.1 | )  |  |   | — |   |  |   | — |   |
|                             |  | $            | 5.9     |                               |  | $      | 6.3  |    |  | $      | 0.2     |   |  | $      | 0.3     |   |
|                                  |

Thecomponents of net periodic benefit cost for the pension and the otherpost-retirement benefit plans for the nine months ended September 30,2004 and 2003 are asfollows:

|                                  |  |              |       |                                    |  |        |       |         |  |        |         |         |  |        |         |        |  |  |
|----------------------------------|--|--------------|-------|------------------------------------|--|--------|-------|---------|--|--------|---------|---------|--|--------|---------|--------|--|--|
|                             |  | PensionPlans |       | Other Post-retirement BenefitPlans |
|                             |  | 2004         |       | 2003                               |  | 2004   |       | 2003    |
| Servicecost                      |  | $            | 7.5   |                               |  | $      | 9.8   |    |  | $      | (1.9    | )  |  | $      | 0.3     |   |
| Interestcost                     |  |         | 22.8  |                               |  |   | 22.2  |    |  |   | (1.0    | )  |  |   | 0.6     |   |
| Expectedreturn on planassets     |  |         | (19.0 | )                             |  |   | (16.2 | )  |  |   | — |    |  |   | — |   |
| Amortizationof prior servicecost |  |         | (0.3  | )                             |  |   | (0.6  | )  |  |   | — |    |  |   | — |   |
| Amortizationof actuarialloss     |  |         | 6.3   |                               |  |   | 6.9   |    |  |   | — |    |  |   | — |   |
|                             |  |         | 17.3  |                               |  |   | 22.1  |    |  |   | (2.9    | )  |  |   | 0.9     |   |
| Portionallocated toHoldings      |  |         | (0.1  | )                             |  |   | (0.3  | )  |  |   | — |    |  |   | — |   |
|                             |  | $            | 17.2  |                               |  | $      | 21.8  |    |  | $      | (2.9    | )  |  | $      | 0.9     |   |
|                                  |

TheCompany recognized $3.3 of income for the nine months ended September30, 2004 related to a reduction in the liability for an Internationalpost-retirement benefit arrangement whose terms were modified.

8

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

Employer Contributions:

TheCompany previously disclosed in the notes to its financial statementsfor the year ended December 31, 2003, that it expected to contributeapproximately $40 in cash to its pension plans and $1 to itspost-retirement benefit plans in 2004. As a result of the PensionFunding Equity Act of 2004 that was passed in April 2004, the Companylowered its estimate of expected contributions in 2004 to $34. As ofSeptember 30, 2004, a total of $30 of contributions had been made tothe pension and post-retirement benefit plans. The Company presentlyanticipates contributing the remaining $4 to the pension andpost-retirement benefit plans by December 2004.

(3)    Inventories

|                           |  |                    |       |                   |  |        |       |        |  |  |
|---------------------------|--|--------------------|-------|-------------------|--|--------|-------|--------|--|--|
|                      |  | September 30, 2004 |       | December 31, 2003 |
| Raw materials andsupplies |  | $                  | 51.7  |              |  | $      | 48.3  |   |
| Work-in-process           |  |               | 12.6  |              |  |   | 11.6  |   |
| Finishedgoods             |  |               | 95.5  |              |  |   | 82.8  |   |
|                      |  | $                  | 159.8 |              |  | $      | 142.7 |   |
|                           |

(4)    OtherAssets

Included in other assets are trademarks and patents, netof accumulated amortization. The amounts outstanding for theseintangible assets at September 30, 2004 and December 31, 2003 were asfollows: for trademarks, net, $7.7 and $7.5, respectively, and forpatents, net, $3.3 and $3.9, respectively. Amortization expense for thethird quarter and nine months ended September 30, 2004 and 2003 was$0.4 and $1.3, respectively, and $0.5 and $1.3, respectively. TheCompany's intangible assets other than goodwill continue to besubject to amortization, which is anticipated to be approximately $1.5annually through December 31, 2009.

(5)    Comprehensive(Loss) Income

The components of comprehensive (loss) income forthe three months and nine months ended September 30, 2004 and 2003 areasfollows:

|                                                              |  |                                 |        |                                |  |        |        |         |  |        |        |         |  |        |        |         |  |  |
|--------------------------------------------------------------|--|---------------------------------|--------|--------------------------------|--|--------|--------|---------|--|--------|--------|---------|--|--------|--------|---------|--|--|
|                                                         |  | Three Months EndedSeptember 30, |        | Nine Months Ended September30, |
|                                                         |  | 2004                            |        | 2003                           |  | 2004   |        | 2003    |
| Net(loss)income                                              |  | $                               | (92.2  | )                         |  | $      | (57.2  | )  |  | $      | 171.7  |    |  | $      | (148.7 | )  |
| Othercomprehensive (loss)income:                             |  |                            |   |                           |  |   |   |    |  |   |   |    |  |   |   |    |
| Currencytranslationadjustment                                |  |                            | 0.2    |                           |  |   | (0.3   | )  |  |   | (2.3   | )  |  |   | 5.2    |    |
| Net(loss) gain on foreign currency forward exchangecontracts |  |                            | (1.4   | )                         |  |   | 0.4    |    |  |   | 0.5    |    |  |   | (1.7   | )  |
| Othercomprehensive (loss) income                             |  |                            | (1.2   | )                         |  |   | 0.1    |    |  |   | (1.8   | )  |  |   | 3.5    |    |
| Comprehensive(loss)income                                    |  | $                               | (93.4  | )                         |  | $      | (57.1  | )  |  | $      | 169.9  |    |  | $      | (145.2 | )  |
|                                                              |

9

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

(6)    Restructuring Costs

During the third quarter of 2000, the Company initiated a newrestructuring program in line with the original restructuring plandeveloped in late 1998, designed to improve profitability by reducingpersonnel and consolidating manufacturing facilities. The 2000restructuring program focused on the Company's plans to close itsmanufacturing operations in Phoenix, Arizona and Mississauga, Canadaand to consolidate its cosmetics production into its plant in Oxford,North Carolina. The 2000 restructuring program also includes theremaining obligation for excess leased real estate in theCompany's headquarters, consolidation costs associated with theCompany closing its facility in New Zealand, and the elimination ofseveral domestic and international executive and operational positions,each of which were effected to reduce and streamline corporate overheadcosts.

During the nine months ended September 30, 2004, theCompany revised its estimate of the cost to be incurred related to theprevious restructuring program. Additionally, during the third quarterand nine months ended September 30, 2004 the Company recorded $0.6 and$0.9, respectively, for employee severance and other personnelbenefits. In 2003, the Company recorded separate charges of $5.9 ($0.9of which was recorded during the nine months ended September 30, 2003)for employee severance and other personnel benefits for 421 employeesin certain International operations, as to which 363 employees had beenterminated as of September 30, 2004.

Details of the activitiesdescribed above during the nine-month period ended September 30, 2004are asfollows:

|                                                |  |                              |         |               |  |               |         |                               |  |        |         |         |  |        |         |        |  |        |        |        |  |  |
|------------------------------------------------|--|------------------------------|---------|---------------|--|---------------|---------|-------------------------------|--|--------|---------|---------|--|--------|---------|--------|--|--------|--------|--------|--|--|
|                                           |  | Balance As ofJanuary 1, 2004 |         | Expenses, Net |  | Utilized, Net |         | Balance As ofSeptember30,2004 |
|                                           |  | Cash                         |         | Noncash       |  |
| Employeeseverance and other personnelbenefits: |  |                         |    |          |  |          |    |                          |  |   |    |    |  |   |    |   |  |   |   |   |
| 2000program                                    |  | $                            | 1.8     |          |  | $             | — |                          |  | $      | (1.1    | )  |  | $      | — |   |  | $      | 0.7    |   |
| 2003program                                    |  |                         | 5.0     |          |  |          | 0.1     |                          |  |   | (2.0    | )  |  |   | 0.2     |   |  |   | 3.3    |   |
| 2004program                                    |  |                         | — |          |  |          | 0.8     |                          |  |   | — |    |  |   | — |   |  |   | 0.8    |   |
|                                           |  |                         | 6.8     |          |  |          | 0.9     |                          |  |   | (3.1    | )  |  |   | 0.2     |   |  |   | 4.8    |   |
| Leasesand equipmentwrite-offs                  |  |                         | 2.2     |          |  |          | (0.9    | )                        |  |   | 0.6     |    |  |   | 0.1     |   |  |   | 2.0    |   |
|                                           |  | $                            | 9.0     |          |  | $             | — |                          |  | $      | (2.5    | )  |  | $      | 0.3     |   |  | $      | 6.8    |   |
|                                                |

10

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

(7)    Geographic Information

The Company manages its business on the basis of one reportableoperating segment. The Company's results of operations and thevalue of its foreign assets and liabilities may be adversely affectedby, among other things, weak economic conditions, politicaluncertainties, military actions, terrorist activities, adverse currencyfluctuations, competitive activities and changes in consumer purchasinghabits.

|                                   |  |                                 |       |                                |  |        |       |        |  |        |       |        |  |        |       |        |  |  |
|-----------------------------------|--|---------------------------------|-------|--------------------------------|--|--------|-------|--------|--|--------|-------|--------|--|--------|-------|--------|--|--|
|                              |  | Three Months EndedSeptember 30, |       | Nine Months Ended September30, |
| Geographicareas:                  |  | 2004                            |       | 2003                           |  | 2004   |       | 2003   |
| Netsales:                         |  |
| UnitedStates                      |  | $                               | 174.9 |                           |  | $      | 198.6 |   |  | $      | 557.6 |   |  | $      | 604.3 |   |
| Canada                            |  |                            | 17.1  |                           |  |   | 13.5  |   |  |   | 47.1  |   |  |   | 37.5  |   |
| UnitedStates andCanada            |  |                            | 192.0 |                           |  |   | 212.1 |   |  |   | 604.7 |   |  |   | 641.8 |   |
| International                     |  |                            | 102.4 |                           |  |   | 104.4 |   |  |   | 314.2 |   |  |   | 289.0 |   |
|                              |  | $                               | 294.4 |                           |  | $      | 316.5 |   |  | $      | 918.9 |   |  | $      | 930.8 |   |
|                              |  |
|                              |  | September30, 2004               |       | December 31, 2003              |  |
| Long-livedassets:                 |  |
| UnitedStates                      |  | $                               | 385.9 |                           |  | $      | 392.9 |   |  |
| Canada                            |  |                            | 4.4   |                           |  |   | 3.9   |   |  |
| UnitedStates andCanada            |  |                            | 390.3 |                           |  |   | 396.8 |   |  |
| International                     |  |                            | 76.2  |                           |  |   | 79.8  |   |  |
|                              |  | $                               | 466.5 |                           |  | $      | 476.6 |   |  |
|                              |  |
|                              |  | ThreeMonths Ended September 30, |       | Nine Months EndedSeptember 30, |
| Classesof similarproducts:        |  | 2004                            |       | 2003                           |  | 2004   |       | 2003   |
| Net sales:                        |  |
| Cosmetics, skincare andfragrances |  | $                               | 198.6 |                           |  | $      | 210.0 |   |  | $      | 615.8 |   |  | $      | 616.2 |   |
| Personalcare                      |  |                            | 95.8  |                           |  |   | 106.5 |   |  |   | 303.1 |   |  |   | 314.6 |   |
|                              |  | $                               | 294.4 |                           |  | $      | 316.5 |   |  | $      | 918.9 |   |  | $      | 930.8 |   |
|                                   |

(8)    DerivativeFinancial Instruments

The Company uses derivative financialinstruments, primarily foreign currency forward exchange contracts, toreduce the effects of fluctuations in foreign currency exchange rates.These contracts, which have been designated as cash flow hedges, wereentered into primarily to hedge anticipated inventory purchases andcertain intercompany payments denominated in foreign currencies, whichhave maturities of less than one year. Any unrecognized income (loss)related to these contracts are recorded in the Statement of Operationsprimarily in cost of goods sold when the underlying transactions hedgedare realized (e.g., when inventory is sold or intercompany transactionsare settled). Products Corporation enters into these contracts with acounterparty that is a major financial institution, and accordingly theCompany believes that the risk of counterparty nonperformance isremote. The notional amount of the foreign currency forward exchangecontracts outstanding at September 30, 2004 and December 31, 2003 was$38.0 and $8.3, respectively. The fair value of the foreign currencyforward exchange contracts outstanding at September 30, 2004 andDecember 31, 2003 was $(1.0) and $(0.8), respectively.

11

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

(9)    Long-term Debt

Asdescribed in detail below, the Company completed four significantfinancing transactions during the nine months ended September 30, 2004:(i) in the Revlon Exchange Transactions (as defined below), among otherthings, holders exchanged approximately $804 of indebtedness and $54.6of preferred stock each in exchange for Class A Common Stock, (ii) theExchange Offer (as defined below) of REV Holdings' 12%Senior Secured Notes due 2004, (iii) Products Corporation completed atender offer and subsequent redemption to retire all of ProductsCorporation's 12% Senior Secured Notes due 2005 and (iv)Products Corporation entered into a new credit agreement consisting ofan $800 term loan facility and a $160 asset based multi-currencyrevolving credit facility. As a result of these transactions and asshown in the following table, debt levels have been reduced and certainmaturities extended:

|                                                     |  |                   |         |                   |  |        |         |        |  |  |
|-----------------------------------------------------|--|-------------------|---------|-------------------|--|--------|---------|--------|--|--|
|                                                |  | September 30,2004 |         | December 31, 2003 |
| 2001 CreditAgreement due2005                        |  | $                 | — |              |  | $      | 217.3   |   |
| NewCredit Agreement:                                |  |              |    |              |  |   |    |   |
| Term LoanFacility due2010                           |  |              | 800.0   |              |  |   | — |   |
| Multi-CurrencyFacility due2009                      |  |              | — |              |  |   | — |   |
| 8 1/8%Senior Notes due2006                          |  |              | 116.2   |              |  |   | 249.8   |   |
| 9% SeniorNotes due2006                              |  |              | 75.5    |              |  |   | 250.0   |   |
| 8 5/8%Senior Subordinated Notes due2008             |  |              | 327.0   |              |  |   | 649.9   |   |
| 12% SeniorSecured Notes due2004                     |  |              | — |              |  |   | 80.5    |   |
| 13% SeniorSecured Notes due2007                     |  |              | 18.5    |              |  |   | — |   |
| Advances under theNew KeepwellAgreement             |  |              | 1.2     |              |  |   | — |   |
| 12%Senior Secured Notes due2005                     |  |              | — |              |  |   | 356.3   |   |
| 12% SeniorUnsecured Multiple-Draw Term Loan due2005 |  |              | — |              |  |   | 106.6   |   |
| 8%MacAndrews & Forbes Line of Credit due2005    |  |              | — |              |  |   | 15.5    |   |
| Advances fromaffiliates                             |  |              | — |              |  |   | 24.1    |   |
|                                                |  |              | 1,338.4 |              |  |   | 1,950.0 |   |
| Lesscurrentportion.                                 |  |              | — |              |  |   | — |   |
|                                                |  | $                 | 1,338.4 |              |  | $      | 1,950.0 |   |
|                                                     |

RevlonExchange Transactions

On February 12, 2004, Revlon, Inc.announced that its Board of Directors had approved agreements withFidelity Management & Research Co.("Fidelity") and MacAndrews & Forbesintended to dramatically strengthen Products Corporation'sbalance sheet (the "Debt ReductionTransactions"). As a result, Products Corporation'sdebt was reduced by approximately $804 on March 25, 2004.

Fidelity and MacAndrews & Forbes agreed to tender or to cause tobe tendered for exchange in exchange offers (together with the othercontemporaneously closed Debt Reduction Transactions described below,the "Revlon Exchange Transactions") anaggregate of approximately $441 of Products Corporation'soutstanding 8 1/8% Senior Notes,9% Senior Notes and 8 5/8% SeniorSubordinated Notes (each as hereinafter defined and collectively, the"Revlon Exchange Notes") for shares of ClassA Common Stock, at a ratio of 400 shares of Class A Common Stock foreach $1,000 principal amount of Products Corporation's8 1/8% Senior Notes or 9% Senior Notestendered for exchange and 300 shares of Class A Common Stock for each$1,000 principal amount of Products Corporation's8 5/8% Senior Subordinated Notes tendered forexchange. The agreements gave Fidelity the right to elect to receivecash or additional shares of Class A Common Stock in respect of accruedinterest payable on the notes it tendered. MacAndrews & Forbesreceived Class A Common Stock in respect of its accrued interest.

12

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

In the Revlon Exchange Transactions, whichclosed on March 25, 2004, holders other than MacAndrews & Forbesand Fidelity were offered the opportunity to exchange their RevlonExchange Notes for (i) shares of Class A Common Stock at the sameexchange ratios or, under certain conditions, (ii) cash up to a maximumof $150 aggregate principal amount of tendered Revlon Exchange Notes,subject to proration. Notes tendered for cash were to receive $830 per$1,000 principal amount for the 8 1/8% SeniorNotes, $800 per $1,000 principal amount for the 9% Senior Notesand $620 per $1,000 principal amount for the8 5/8% Senior Subordinated Notes. Accruedinterest was also to be paid on tendered notes in cash or additionalshares of Class A Common Stock, at the holder's option. Asdiscussed in more detail below, at the close of the Revlon ExchangeTransactions, no cash was paid for any principal amount of the RevlonExchange Notes.

As part of the Revlon Exchange Transactions,MacAndrews & Forbes also received Class A Common Stock in respectof any and all outstanding amounts owing to it, as of the closing dateof the Revlon Exchange Transactions, under the Mafco $100 million termloan (which was approximately $109.7 at March 25, 2004, includingaccrued interest), the 2004 Mafco $125 million term loan (which wasapproximately $38.9 at March 25, 2004, including accrued interest), theMafco $65 million line of credit (which was nil at March 25, 2004)(each as such loan and line of credit is hereinafter defined) andapproximately $24.1 of subordinated promissory notes (the"Loan Conversion Transactions"). Each $1,000principal amount of indebtedness outstanding under the Mafco $100million term loan and the 2004 Mafco $125 million term loan wasexchanged for 400 shares of Class A Common Stock, and each $1,000principal amount of indebtedness outstanding under the subordinatedpromissory notes was exchanged for 300 shares of Class A Common Stock.The portions of the 2004 Mafco $125 million term loan and the Mafco $65million line of credit not exchanged in the Loan ConversionTransactions remained available to Products Corporation, subject to the"Borrowing Limitation" (as hereinafterdefined), which Borrowing Limitation was subsequently eliminated.

Revlon, Inc. agreed with Fidelity not to permit Products Corporationto have outstanding aggregate borrowings, at any time following theclose of the Revlon Exchange Transactions and until the termination ofthe Stockholders Agreement (as described below), under the Mafco $65million line of credit and the 2004 Mafco $125 million term loan inexcess of approximately $87 (the "BorrowingLimitation"). Such Borrowing Limitation was subsequentlyeliminated.

REV Holdings owned all of Revlon, Inc.'soutstanding Series A Preferred Stock, with an aggregate liquidationpreference of $54.6, and all of the Series B Preferred Stock. As partof the Revlon Exchange Transactions, MacAndrews & Forbes agreed tocause REV Holdings to exchange each $1,000 of liquidation preference onits shares of Series A Preferred Stock for 160 shares of Class A CommonStock and to convert its shares of Series B Preferred Stock into anaggregate of 433,333 shares of Class A Common Stock.

In anothercontemporaneous transaction to the Revlon Exchange Transactions,Revlon, Inc. and Fidelity entered into a stockholders agreement (the"Stockholders Agreement") pursuant to which,among other things, (i) Revlon, Inc. agreed to continue to maintain amajority of independent directors (as defined by New York StockExchange listing standards) on its Board of Directors, as it currentlydoes; and (ii) Revlon, Inc. would establish and maintain a Nominatingand Corporate Governance Committee of the Board of Directors, which itformed in March 2004. The Stockholders Agreement will terminate at suchtime as Fidelity ceases to be the beneficial holder of at least5% of Revlon, Inc.'s outstanding voting stock. Also, inconjunction with the Revlon Exchange Transactions, in February 2004,Products Corporation entered into various amendments to a creditagreement that it entered into on November 30, 2001 and which wasscheduled to mature on May 30, 2005 (as amended, the "2001Credit Agreement"), one of which added a new $64.4 termloan facility to the 2001 Credit Agreement (the "ExchangeBank Amendments"), which agreement was subsequentlyrefinanced in July 2004, as discussed below.

13

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

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

MacAndrews& Forbes also exchanged approximately $109.7 of existingindebtedness (including principal and accrued interest) under the Mafco$100 million term loan for approximately 43.9 million shares of Class ACommon Stock, approximately $38.9 of existing indebtedness (includingprincipal and accrued interest) under the 2004 Mafco $125 million termloan for approximately 15.6 million shares of Class A Common Stock andapproximately $24.1 of indebtedness under certain subordinatedpromissory notes payable to MacAndrews & Forbes for approximately7.2 million shares of Class A Common Stock. REV Holdings exchanged allof Revlon, Inc.'s previously outstanding Series A Preferred Stockfor an aggregate of approximately 8.7 million shares of Class A CommonStock and converted all of its shares of Revlon, Inc.'spreviously outstanding Series B Preferred Stock into 433,333 shares ofClass A Common Stock. In connection with closing the Revlon ExchangeTransactions on March 25, 2004, Mafco Holdings executed a joinderagreement to the Revlon, Inc. registration rights agreement pursuant towhich all Class A Common Stock beneficially owned by Mafco Holdingswill be deemed to be registerable securities.

The consummationof the Revlon Exchange Transactions on March 25, 2004, in which Revlon,Inc. issued 299,969,493 shares of Class A Common Stock (and transferredthe Revlon Exchange Notes and other exchanged indebtedness to ProductsCorporation for cancellation) resulted in (i) the reduction ofindebtedness of $803.9 and accrued interest thereon of $9.9, (ii) theexchange of the Series A Preferred Stock, (iii) the conversion of theSeries B Preferred Stock, (iv) an increase to additionalpaid-in-capital of $414.2 which resulted from such issuance of Class ACommon Stock to MacAndrews & Forbes and other entities related toit, (v) a gain of $363.6 resulting from such issuance of Class A CommonStock to third parties, (vi) an increase in additional paid-in-capitalof $49.9 which resulted from the exchange of indebtedness and accruedinterest thereon by MacAndrews & Forbes and other entities relatedto it and represented the difference between the market value at March25, 2004 of the shares of Class A Common Stock issued and the principalamount of the indebtedness together with accrued interest thereon and(vii) a loss on early extinguishment of debt of $15.5 which resultedfrom the exchange of indebtedness and accrued interest thereon by thirdparties and represented the difference between the market value atMarch 25, 2004 of the shares of Class A Common Stock issued and theprincipal amount of the indebtedness exchanged together with accruedinterest thereon. Additionally, the Company recognized a loss on earlyextinguishment of debt of $17.1 in connection with the write-off ofunamortized debt issuance costs and debt discount, estimated fees andexpenses.

In connection with consummating the Revlon ExchangeTransactions, Revlon, Inc. announced that its previously announced planto launch a rights offering and use the proceeds to reduce debt by afurther $50 by year-end 2004 was reduced to $9.7, as a result of $190.3of Revlon Exchange Notes having been exchanged in excess of the RevlonExchange Notes committed to be exchanged by MacAndrews & Forbes andFidelity under their respective support agreements. This $190.3 morethan satisfied Revlon, Inc.'s plan to reduce debt through theRevlon Exchange Offers by $150 in addition to the Revlon Exchange Notesthat were committed to be exchanged in the support agreements withMacAndrews & Forbes and Fidelity. The $40.3 difference satisfiedall but $9.7 of the Company's plan to reduce debt (in addition tothe Revlon Exchange Notes) by a further $50 by year-end 2004. Becausethe costs and 

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

expenses, as well as the use oforganizational resources, associated with a $9.7 rights offering wouldhave been unduly disproportionate, Revlon, Inc.'s support andinvestment agreements with MacAndrews & Forbes and Fidelityrelating to the Company's debt reduction plan were amended toenable Revlon, Inc. to satisfy the remaining $9.7 of debt reduction aspart of the final stage of the Company's debt reduction plan.Therefore, the Company now intends to conduct an equity offering ofapproximately $110 by the end of March 2006 and to use such proceeds toreduce debt. Consistent with agreements between MacAndrews & Forbesand Revlon, Inc. entered into contemporaneously with the agreementsrelating to the Revlon Exchange Transactions, MacAndrews & Forbesagreed to back-stop the $110 equity offering.

Prior to theRevlon Exchange Transactions, in December 2003, Revlon, Inc.'sBoard approved two loans from MacAndrews Holdings, one to provide up to$100 million, if needed, to enable the Company to continue to implementand refine its plan, and the other to provide an additional $25 millionto be used for general corporate purposes. In January 2004, such loanswere consolidated into one term loan agreement (the "2004Mafco $125 million term loan"). In July 2004, inconnection with the New Credit Agreement (as hereinafter defined), the2004 Mafco $125 million term loan and the Mafco $65 million line ofcredit were consolidated into a single 2004 Senior UnsecuredSupplemental Line of Credit (the "Consolidated Mafco lineof credit") with availability of $152, representing thebalance of remaining principal available under the 2004 Mafco $125million term loan (after giving effect to the portion of such loan thatwas exchanged for equity) and the Mafco $65 million line of creditfollowing the Revlon Exchange Transactions. Principal and accruedinterest of $38.9 under the 2004 Mafco $125 million term loan wasconverted into shares of Class A Common Stock in connection with theRevlon Exchange Transactions.

Products Corporation'sEBITDA (as defined in the 2001 Credit Agreement) was $144.4 for thefour consecutive fiscal quarters ended December 31, 2003, which wasless than the minimum of $230 required under the 2001 Credit Agreementfor that period and Products Corporation's leverage ratio was1.66:1.00, which was in excess of the maximum ratio of 1.10:1.00permitted under the 2001 Credit Agreement for that period. Accordingly,Products Corporation sought and on January 28, 2004 secured waivers ofcompliance with these covenants for the four quarters ended December31, 2003. In light of the Company's expectation that its planwould affect Products Corporation's ability to comply with thesecovenants during 2004, Products Corporation also secured an amendmentto eliminate the EBITDA and leverage ratio covenants under the 2001Credit Agreement for the first three quarters of 2004 and a waiver ofcompliance with such covenants for the four quarters ending December31, 2004, expiring on January 31, 2005 (the "January 2004Bank Amendment"). In July 2004, the 2001 Credit Agreementwas repaid and refinanced.

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

The New REV Holdings Notes, which bear interest semi-annually andmature on February 1, 2007, are secured by a pledge of 104 shares ofClass A Common Stock per $1,000 principal amount of New REV HoldingsNotes, including all dividends, cash instruments and property andproceeds from 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 

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

things, limit, subject to certain exceptionsset forth in the New Indenture, the following: (i) the issuance ofadditional debt and redeemable stock by REV Holdings, (ii) the creationof additional liens on the Collateral (other than the lien created bythe New Indenture), (iii) the payment of dividends on capital stock ofREV Holdings and the redemption of capital stock of REV Holdings or anyof its direct or indirect parents, (iv) the sale of assets andsubsidiary stock (including by way of consolidations, mergers andsimilar transactions), and (v) transactions with affiliates.

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

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

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

The New Keepwell Agreementwill terminate at such time as there are no New REV Holdings Notesoutstanding, at which time GSB Investments Corp. may require repaymentof advances under the New Keepwell Agreement. On February 1, 2004, GSBInvestments Corp. made a non-interest bearing advance of $4.5 to REVHoldings under the Keepwell Agreement, which was used to make theinterest payment due on the REV Holdings Notes on February 1, 2004. Theobligation under the Keepwell Agreement of $28.4 at maturity of the REVHoldings Notes on February 1, 2004 was contributed to the capital ofREV Holdings in April 2004. On August 1, 2004, GSB Investments Corp.made a non-interest bearing advance of $1.2 under the New KeepwellAgreement, which was used to make the interest payment due on the NewREV Holdings Notes on August 1, 2004.

Tender Offer andNew Credit Agreement

On June 22, 2004, Products Corporationcommenced a cash tender offer (the "TenderOffer") to purchase any and all of the $363.0 aggregateprincipal amount outstanding of its 12% Senior Secured Notes, aspart of a planned comprehensive debt refinancing designed to extend thematurities of a significant amount of its debt which would otherwise bedue in 2005.

On July 8, 2004, Products Corporation announcedthat the total consideration payable in the Tender Offer would be$1,122.24 for each $1,000 principal amount of its 12% SeniorSecured Notes purchased in 

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

the Tender Offer, plus accrued but unpaidinterest up to, but not including, the settlement date. Such purchaseprice included a consent payment of $20.00 per $1,000 principal amountof Products Corporation's 12% Senior Secured Notes payableto holders who validly tendered and did not withdraw their 12%Senior Secured Notes before 5:00 p.m. EDT on July 8, 2004. Suchpurchase price was determined by reference to a fixed spread of 75basis points over the bid side yield (as quoted on Bloomberg screen PX4at 2:00 p.m. EDT on July 8, 2004) of the 1.875% U.S. Treasurynote due November 30, 2005.

On July 9, 2004, in connection withthe initial settlement of the Tender Offer (the "InitialSettlement"), Products Corporation purchased approximately$298 aggregate principal amount of its 12% Senior Secured Notes,representing approximately 82% of the total outstandingprincipal amount of such 12% Senior Secured Notes, and equal tothe notes tendered through 5:00 p.m. EDT on July 8, 2004 for a purchaseprice of approximately $338.3 (including the applicable premium andaccrued interest).

The Tender Offer expired at 5:00 p.m. EDT onJuly 21, 2004. On July 22, 2004, Products Corporation purchasedapproximately $0.4 aggregate principal amount of its 12% SeniorSecured Notes, which was the amount of such notes tendered followingthe Initial Settlement through the expiration of the Tender Offer, fora purchase price of approximately $0.5 (including the applicablepremium and accrued interest).

In connection with the expirationof the Tender Offer, Products Corporation also redeemed on August 23,2004 all of the approximately $64.5 aggregate principal amount of its12% Senior Secured Notes that remained outstanding following theJuly 21, 2004 expiration of the Tender Offer at the redemption price ofapproximately $73.5 (including the applicable premium and accruedinterest), calculated in accordance with the indenture governingProducts Corporation's 12% Senior Secured Notes (the"12% Notes Indenture").

On July9, 2004, Products Corporation entered into a new credit agreement (the"New Credit Agreement") with certain of itssubsidiaries as local borrowing subsidiaries, a syndicate of lenders,whose individual members change from time to time, and Citicorp USA,Inc., as multi-currency administrative agent, term loan administrativeagent and collateral agent. The New Credit Agreement provides up to$960.0 and consists of a $800.0 term loan facility (the"Term Loan Facility") and a $160.0 assetbased multi-currency revolving credit facility (the"Multi-Currency Facility") (the Term LoanFacility and the Multi-Currency Facility are referred to as the"New Credit Facilities"). The Multi-CurrencyFacility is available to: (i) Products Corporation in revolving creditloans denominated in U.S. dollars, (ii) Products Corporation in standbyand commercial letters of credit denominated in U.S. dollars up to$50.0 and (iii) Products Corporation and certain of its internationalsubsidiaries designated from time to time in revolving credit loans andbankers' acceptances denominated in U.S. dollars and othercurrencies (the "Local Loans"), in each casesubject to borrowing base availability that is determined based on thevalue of eligible accounts receivable, eligible inventory and eligiblereal property and equipment from time to time.

TheMulti-Currency Facility will terminate on July 9, 2009 and the loansunder the Term Loan Facility will mature on July 9, 2010; provided thatthe New Credit Facilities will terminate on October 31, 2005 ifProducts Corporation's 8 1/8% Senior Notesare not redeemed, repurchased or defeased in full on or before suchdate, on July 31, 2006 if Products Corporation's 9% SeniorNotes are not redeemed, repurchased or defeased in full on or beforesuch date, and on October 30, 2007 if Products Corporation's8 5/8% Senior Subordinated Notes are notredeemed, repurchased or defeased on or before such date such that notmore than $25.0 in aggregate principal amount of such8 5/8% Senior Subordinated Notes remainsoutstanding.

Products Corporation used the proceeds ofborrowings under the New Credit Agreement to repay in full the $290.5of outstanding indebtedness (including accrued interest) under ProductsCorporation's 2001 Credit Agreement, to purchase theapproximately $298 aggregate principal amount of Products 

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

Corporation's 12% SeniorSecured Notes tendered at the Initial Settlement of the Tender Offerfor a purchase price of approximately $338.3 (including the applicablepremium and accrued interest), to purchase the additional approximately$0.4 aggregate principal amount of Products Corporation's12% Senior Secured Notes tendered following the InitialSettlement through the expiration of the Tender Offer for a purchaseprice of approximately $0.5 (including the applicable premium andaccrued interest), to redeem the approximately $64.5 aggregateprincipal amount of Products Corporation's 12% SeniorSecured Notes that were outstanding after the expiration of the TenderOffer for a redemption price of approximately $73.5 (including theapplicable premium and accrued interest), and to pay fees and expensesincurred in connection with the New Credit Agreement, the Tender Offerand the Revlon Exchange Transactions, including the payment of expensesrelated to a refinancing that Products Corporation launched in May 2004but did not consummate. The balance of such proceeds is available toProducts Corporation for general corporate purposes.

Borrowingsunder the Multi-Currency Facility (other than loans in foreigncurrencies) bear interest at a rate equal to, at ProductsCorporation's option, either (A) the Alternate Base Rate plus1.50%; or (B) the Eurodollar Rate plus 2.50%. Loans inforeign currencies bear interest in certain limited circumstances or ifmutually acceptable to Products Corporation and the relevant foreignlenders at the Local Rate, and otherwise at the Eurocurrency Rate, ineach case plus 2.50%. The loans under the Term Loan Facilitybear interest at a rate equal to, at Products Corporation'soption, either (A) the Alternate Base Rate plus 5.00%; or (B)the Eurodollar Rate plus 6.00%. At September 30, 2004, theweighted average rate for borrowings under the Term Loan Facility was7.73%. Products Corporation pays to those lenders under theMulti-Currency Facility a commitment fee of 0.50% of the averagedaily unused portion of the Multi-Currency Facility, which fee ispayable quarterly in arrears. Under the Multi-Currency Facility,Products Corporation pays (i) to foreign lenders a fronting fee of0.25% per annum on the aggregate principal amount of specifiedLocal Loans (which fee is retained by the foreign lenders out of theportion of the Applicable Margin payable to such foreign lender), (ii)to foreign lenders an administrative fee of 0.25% per annum onthe aggregate principal amount of specified Local Loans, (iii) to themulti-currency lenders a letter of credit commission equal to (a) theApplicable Margin for revolving credit loans that are Eurodollar Rateloans (adjusted for the term that the letter of credit is outstanding)times (b) the aggregate undrawn face amount of letters of credit and(iv) to the issuing lender a letter of credit fronting fee of0.25% per annum of the aggregate undrawn face amount of lettersof credit (which fee is paid out of the letter of creditcommission).

Prior to the termination date of the Term LoanFacility, on October 15, January 15, April 15 and July 15 of each year(commencing October 15, 2005) Products Corporation shall repay $2.0 inaggregate principal amount of the term loans outstanding under the TermLoan Facility on each respective date. In addition, the loans under theTerm Loan Facility are required to be prepaid with: (i) the netproceeds in excess of $10.0 each year (subject to limited carryover tosubsequent years) received during such year from sales of Term LoanFirst Lien Collateral (as defined below) by Products Corporation or anyof its subsidiary guarantors (and in excess of an additional $25.0 inthe aggregate during the term of the New Credit Facilities with respectto certain specified dispositions), subject to certain limitedexceptions, (ii) certain net proceeds from equity offerings by Revlon,Inc. that are not used to redeem, repurchase or defease the8 1/8% Senior Notes, the 9% Senior Notes,the 8 5/8% Senior Subordinated Notes or certainother indebtedness, (iii) the net proceeds from the issuance byProducts Corporation or any of its subsidiaries of certain additionaldebt and (iv) 50% of Products Corporation's Excess CashFlow (as defined in the New Credit Agreement) for any fiscal year.

The New Credit Facilities are supported by, among other things,guarantees from Revlon, Inc. and, subject to certain limitedexceptions, the domestic subsidiaries of Products Corporation. Theobligations of Products Corporation under the New Credit Facilities andthe obligations under the guarantees are secured by, subject to certainlimited exceptions, substantially all of the assets of ProductsCorporation 

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

and the subsidiary guarantors, including (i)mortgages on owned real property, including ProductsCorporation's facility in Oxford, North Carolina; (ii) thecapital stock of Products Corporation and the subsidiary guarantors and66% of the capital stock of Products Corporation's and thesubsidiary guarantors' first-tier foreign subsidiaries; (iii)intellectual property and other intangible property of ProductsCorporation and the subsidiary guarantors; and (iv) inventory, accountsreceivable, equipment, investment property and deposit accounts ofProducts Corporation and the subsidiary guarantors. The liens oninventory, accounts receivable, deposit accounts, investment property(other than the capital stock of Products Corporation and itssubsidiaries), real property, equipment, fixtures and certainintangible property related thereto secure the Multi-Currency Facilityon a first priority basis and the Term Loan Facility on a secondpriority basis, while the liens on the capital stock of ProductsCorporation and its subsidiaries and intellectual property and certainother intangible property (the "Term Loan First LienCollateral") secure the Term Loan Facility on a firstpriority basis and the Multi-Currency Facility on a second prioritybasis, all as set forth in an Intercreditor and Collateral AgencyAgreement by and among Products Corporation and the lenders, which alsoprovides that the first priority liens referred to above may be sharedfrom time to time, subject to certain limitations, with specified typesof other obligations incurred or guaranteed by Products Corporation,such as foreign exchange and interest rate hedging obligations andforeign working capital lines, provided that to the extent suchobligations and lines share in the collateral, the borrowing base isreduced by a reserve established from time to time by the bank agent inrespect of such obligations and lines.

The New Credit Agreementcontains various restrictive covenants prohibiting Products Corporationand its subsidiaries from (i) incurring additional indebtedness orguarantees, with certain exceptions, (ii) making dividend and otherpayments or loans to Revlon, Inc. or other affiliates, with certainexceptions, including among others, exceptions permitting ProductsCorporation to pay dividends or make other payments to Revlon, Inc. tofinance the actual payment by Revlon, Inc. of expenses and obligationsincurred by Revlon, Inc. to enable Revlon, Inc. to, among other things,pay expenses incidental to being a public holding company, including,among other things, professional fees such as legal and accountingfees, regulatory fees such as Commission filing fees and othermiscellaneous expenses related to being a public holding company and,subject to certain circumstances, to finance the purchase by Revlon,Inc. of its Class A Common Stock in connection with the delivery ofsuch Class A Common Stock to grantees under the Amended and RestatedRevlon, Inc. Stock Plan, and, subject to certain limitations, to paydividends or make other payments to finance the purchase, redemption orother retirement for value by Revlon, Inc. of stock or other equityinterests or equivalents in Revlon, Inc. held by any current or formerdirector, employee or consultant in his or her capacity as such, (iii)creating liens or other encumbrances on Products Corporation's orits subsidiaries' assets or revenues, granting negative pledgesor selling or transferring any of Products Corporation's or itssubsidiaries' assets, except in the ordinary course of business,all subject to certain exceptions, (iv) with certain exceptions,engaging in merger or acquisition transactions, (v) prepayingindebtedness and modifying the terms of certain indebtedness andspecified material contractual obligations, subject to certainexceptions (including, without limitation, prepaying one or more of the8 1/8% Notes, 9% Notes or8 5/8% Senior Subordinated Notes with the $110equity offering to be back-stopped by MacAndrews & Forbes), (vi)making investments, subject to certain exceptions, and (vii) enteringinto transactions with affiliates of Products Corporation other thanupon terms no less favorable to Products Corporation or itssubsidiaries than it would obtain in an arms' length transaction.In addition to the foregoing, the New Credit Agreement containsfinancial covenants limiting the senior secured leverage ratio ofProducts Corporation (the ratio of Products Corporation's SeniorSecured Debt to EBITDA, as each such term is defined in the New CreditAgreement) to 5.50 to 1.00 for the four consecutive quarters endingduring the period from December 31, 2004 to September 30, 2005; 5.00 to1.00 for the four consecutive quarters ending during the period fromDecember 31, 2005 to December 31, 2006; and 4.50 to 1.00 for the fourconsecutive quarters ending March 31, 2007 and each subsequent quarteruntil the maturity date of the New Credit Agreement, and, undercircumstances when 

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

the excess borrowing base under theMulti-Currency Facility is less than $30.0 for a period of 30consecutive days or more, requiring Products Corporation to maintain aconsolidated fixed charge coverage ratio (the ratio of EBITDA minusCapital Expenditures to Cash Interest Expense for such period, as eachsuch term is defined in the New Credit Agreement) of 1.00 to 1.00.

The events of default under the New Credit Agreement include aChange of Control (as defined in the New Credit Agreement) of ProductsCorporation and other customary events of default for such types ofagreements. Among such customary events of default under the New CreditAgreement is a cross default provision which provides that it is anevent of default under the New Credit Agreement if Products Corporationor any of its subsidiaries (i) defaults in the payment of certainindebtedness when due (whether at maturity or by acceleration) inexcess of $5.0 in aggregate principal amount or (ii) defaults in theobservance or performance of any other agreement or condition relatingto such debt, provided that the amount of debt involved is in excess of$5.0 in aggregate principal amount, or any other event occurs, theeffect of such default or other event would cause or permit the holdersof such debt to accelerate payment of such debt.

In connectionwith the tender for and redemption of Products Corporation's12% Senior Secured Notes and the repayment of the 2001 CreditAgreement, the Company recorded a loss on early extinguishment of debtfor the third quarter 2004, of $58.8, which represents the premium,fees, expenses and the write-off of deferred financing costs related tosuch transactions.

Consolidated Mafco Line ofCredit

On July 9, 2004, Products Corporation and MacAndrewsHoldings entered into an agreement, which effective as of August 10,2004 amended, restated and consolidated the facilities for the Mafco$65 million line of credit and the 2004 Mafco $125 million term loan(as to which after the Revlon Exchange Transactions the total term loanavailability was $87) into the single Consolidated Mafco line of creditwith availability of $152, the commitment under which reduces to $87 asof July 1, 2005 and terminates on December 1, 2005. Loans are availableunder the Consolidated Mafco line of credit if (i) the Multi-CurrencyFacility under the New Credit Agreement has been substantially drawn(after taking into account anticipated needs for Local Loans andletters of credit), (ii) such borrowing is necessary to cause theexcess borrowing base under the Multi-Currency Facility to remaingreater than $30, (iii) additional revolving loans are not availableunder the Multi-Currency Facility or (iv) such borrowing is reasonablynecessary to prevent or to cure a default or event of default under theNew Credit Agreement. Loans under the Consolidated Mafco line of creditbear interest (which is not payable in cash but is capitalizedquarterly in arrears) at a rate per annum equal to the lesser of (a)12.0% and (b) 0.25% less than the rate payable from timeto time on Eurodollar loans under the Term Loan Facility under the NewCredit Agreement, which on September 30, 2004 was 7.48%,provided, that at any time that the Eurodollar Base Rate under the NewCredit Agreement is equal to or greater than 3.0%, theapplicable rate to loans under the Consolidated Mafco line of creditwill be equal to the lesser of (x) 12.0% and (y) 5.25%over the Eurodollar Base Rate then in effect. In connection with theConsolidated Mafco line of credit, on July 15, 2004, Revlon, Inc.,Fidelity and MacAndrews & Forbes agreed to eliminate the BorrowingLimitation.

(10)    Tax Deconsolidation

As a resultof the closing of the Revlon Exchange Transactions, as of the end ofthe day on March 25, 2004, Revlon Inc., Products Corporation and itsU.S. subsidiaries were no longer included in the Mafco Holdingsconsolidated group (the "Mafco Group") forfederal income tax purposes. The Internal Revenue Code of 1986, asamended (the "Code") and the Treasuryregulations issued thereunder govern both the calculation of the amountand allocation to the members of the Mafco Group of any consolidatedfederal net operating losses of the group("CNOLs") that will be available to offsetRevlon, Inc.'s taxable 

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REVHOLDINGS LLC AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATEDFINANCIAL STATEMENTS —(Continued)(dollars in millions,except per share data)

income and the taxable income of its U.S.subsidiaries for the taxable years beginning after March 25, 2004. Itis impossible to estimate accurately the amount of CNOLs that will beallocated to Revlon, Inc. as of December 31, 2004 because variousfactors could increase or decrease or eliminate these amounts. Thesefactors include, but are not limited to, the amount and nature of theincome, gains or losses that the other members of the Mafco Grouprecognize in the 2004 taxable year because any CNOLs are, pursuant toTreasury regulations, used to offset the taxable income of the MafcoGroup for the entire consolidated return year ending December 31, 2004.Only the amount of any CNOLs that the Mafco Group does not absorb byDecember 31, 2004 will be available to be allocated to Revlon, Inc. andits U.S. subsidiaries for taxable years beginning on March 26, 2004.Subject to the foregoing, it is currently estimated that Revlon, Inc.will have approximately $330 in U.S. federal net operating losses andnil for alternative minimum tax losses available to Revlon, Inc. andits U.S. subsidiaries as of March 25, 2004. Any losses that Revlon,Inc. and its U.S. subsidiaries may generate after March 25, 2004 willbe available to Revlon, Inc. for its use and its U.S.subsidiaries' use and will not be available for the use of theMafco Group. Following the closing of the Revlon Exchange Transactions,Revlon, Inc. became the parent of a new consolidated group for federalincome tax purposes and Products Corporation's federal taxableincome and loss will be included in such group's consolidated taxreturns. Accordingly, Revlon, Inc. and Products Corporation enteredinto a new tax sharing agreement pursuant to which Products Corporationwill be required to pay to Revlon, Inc. amounts equal to the taxes thatProducts Corporation would otherwise have had to pay if ProductsCorporation were to file separate federal, state or local income taxreturns, limited to the amount, and payable only at such times, asRevlon, Inc. will be required to make payments to the applicable taxingauthorities.

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS(dollars in millions, except per sharedata)

Item 2. Management's Discussionand Analysis of Financial Condition and Results of Operations

Overview

The Company is providing this overview inaccordance with the SEC's December 2003 interpretive guidanceregarding Management's Discussion and Analysis of FinancialCondition and Results of Operations.

The Company operates in asingle segment and manufactures, markets and sells an extensive arrayof cosmetics and skin care, fragrances and personal care products. Inaddition, the Company has a licensing group.

The Company hasaccelerated the implementation of its three-part plan to rationalizecosts and to grow the business. In 2002, the Company began theimplementation of the stabilization and growth phase of its plan.

The Company intends to capitalize on the actions taken during thestabilization and growth phase of its plan, with the objective ofincreasing revenues and achieving profitability over the long term. TheCompany currently anticipates that the continued growth momentum andaccelerated growth stage of its plan will include various actions thatrepresent refinements of and additions to the actions taken during thestabilization and growth phase of its plan, with the objective ofbalancing top-line growth with improved operating margins anddeveloping and implementing the Company's productivityinitiatives. These ongoing initiatives include, among other things,actions to: (i) further improve the new product development andimplementation process; (ii) continue to increase the effectiveness andreduce the cost of the Company's display walls; (iii) driveefficiencies across the Company's overall supply chain, includingreducing manufacturing costs by streamlining components and sourcingstrategically and rationalizing its supply chain in Europe, which willinclude moving certain production for the European markets to ProductsCorporation's Oxford, North Carolina facility (on September 22,2004, the Company exercised its contractual rights to terminate itssupply agreement, dated as of October 31, 2002, with CreativeOutsourcing Solutions International Limited("COSi"), by giving COSi thecontractually-stipulated six months' written notice oftermination that is scheduled to become effective on April 1, 2005;Products Corporation intends to transition such manufacturing primarilyto one or more of Products Corporation's other facilities anddoes not currently expect any disruption in its supply chain); and (iv)optimize the effectiveness of the Company's marketing andpromotions. This stage will also include strengthening theCompany's balance sheet and capital structure, much of which, asdiscussed in **Note 9 to the Unaudited Consolidated FinancialStatements**, has been accomplished during the nine months endedSeptember 30, 2004.

The Company believes that it hasstrengthened its organizational capability and it intends to continuedoing so. The Company also believes that it has strengthened itsrelationships with its key retailers in the U.S., which has led tospace gains and increased distribution for 2004 for certain of theCompany's products.

In June 2004, Products Corporationcommenced a cash tender offer for its 12% Senior Secured Notesand announced its intention to refinance its 2001 Credit Agreement. OnJuly 9, 2004, Products Corporation entered into the New CreditAgreement and on July 9, 2004, July 22, 2004 and August 23, 2004 usedthe proceeds of borrowings under the New Credit Agreement to repay infull the $290.5 of outstanding indebtedness (including accruedinterest) under Products Corporation's 2001 Credit Agreement, topurchase and redeem all $363 aggregate principal amount of ProductsCorporation's 12% Senior Secured Notes, and to pay feesand expenses incurred in connection with the New Credit Agreement, theTender Offer and the Revlon Exchange Transactions, including thepayment of expenses related to a refinancing that Products Corporationlaunched in May 2004 but did not consummate. The balance of suchproceeds in connection with the Term Loan Facility are available toProducts Corporation for general corporate purposes.

22

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

On March 25, 2004 Revlon, Inc. consummatedthe Revlon Exchange Transactions and reduced ProductsCorporation's debt by approximately $804. Revlon, Inc. issued anadditional 299,969,493 shares of Class A Common Stock and as ofSeptember 30, 2004 Revlon, Inc. had outstanding approximately338,867,944 shares of Class A Common Stock and 31.25 million shares ofClass B Common Stock. MacAndrews & Forbes beneficially ownedapproximately 221.4 million shares of the Common Stock (representingapproximately 59.8% of the outstanding shares of the CommonStock and approximately 77.2% of the combined voting power ofthe Common Stock) as of September 30, 2004. Of the shares beneficiallyowned by MacAndrews & Forbes, REV Holdings currently ownsapproximately 20.8 million shares of Class A Common Stock and 31.25million shares of Class B Common Stock. (**See Note 9 to the UnauditedConsolidated Financial Statements)**.

In the third quarter of2004, net sales decreased $22.1, or 7.0%, to $294.4, as comparedto $316.5 in the third quarter of 2003, driven principally by highertotal returns, allowances and discounts. For the nine months endedSeptember 30, 2004, net sales decreased $11.9, or 1.3%, to$918.9, as compared to $930.8 for the nine months ended September 30,2003, with the decrease for the nine months ended September 30, 2004being driven by lower shipments in the U.S. and higher total returns,allowances and discounts, partially offset by sales growth andfavorable foreign currency translation in International, as well as theprepayment of certain minimum royalties and renewal fees bylicensees.

In the United States and Canada, third quarter of2004 net sales decreased to $192.0 from $212.1 in the third quarter of2003, and for the nine months ended September 30, 2004, net salesdecreased to $604.7 from $641.8 for the nine months ended September 30,2003. The decrease in the third quarter 2004 was due to higher totalreturns, allowances and discounts. The decrease in the nine monthsended September 30, 2004 was due to lower shipments and higher totalreturns, allowances and discounts, partially offset by the prepaymentof certain minimum royalties and renewal fees by licensees of $10.0 inthe nine months ended September 30, 2004. In International, in thethird quarter of 2004, net sales decreased to $102.4 from $104.4 in thethird quarter of 2003, and for the nine months ended September 30,2004, net sales increased to $314.2 from $289.0 for the nine monthsended September 30, 2003. The decrease in the third quarter of 2004 wasdue primarily to higher total returns, allowances and discounts in theEurope and Latin America regions, partially offset by higher sales inthe Far East and Africa region and favorable foreign currencytranslation. The increase in the nine months ended September 30, 2004was driven largely by higher shipments and favorable foreign currencytranslation.

In terms of U.S. marketplace performance, accordingto ACNielsen, the U.S. color cosmetics category for the third quarterof 2004 declined approximately 3.1% versus the same period lastyear and declined approximately 2.0% for the nine-month periodended September 30, 2004 versus the same period last year. Combinedshare for the Revlon and Almay brands totaled 21.3% for thethird quarter of 2004, compared with 22.5% in the third quarterof 2003. For the nine months ended September 30, 2004, combined marketshare for the Revlon and Almay brands totaled 21.7%, comparedwith 22.6% for the nine months ended September 30, 2003. TheCompany's share performance reflected less share contributionfrom new products this year, while the Company's market share onexisting businesses advanced solidly. In hair color and beauty tools,the Company gained market share in the third quarter and nine monthsended September 30, 2004, compared with the third quarter and ninemonths ended September 30, 2003, while market share was down foranti-perspirants/deodorants. ACNielsen measures retail sales volume ofproducts sold in the U.S. mass-market distribution channel. Such datarepresent 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 datado not reflect sales volume from Wal-Mart, Inc., which is theCompany's largest customer, representing approximately20.6% of the Company's 2003 worldwide net sales.

Net sales in the Company's domestic and internationaloperations in the normal course are subject to the risk of beingadversely affected by, among other things, one or more of thefollowing: weak 

23

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

economic conditions, political uncertainties,military actions, terrorist activities, adverse currency fluctuations,competitive activities and changes in consumer purchasing habits.

Operating loss in the third quarter of 2004 was $2.0, as compared toan operating loss of $7.9 in the third quarter of 2003, and for thenine months ended September 30, 2004 operating income was $16.3, ascompared to an operating loss of $15.2 for the nine months endedSeptember 30, 2003. The improvement for the third quarter of 2004reflected the absence of growth plan charges, which increased theoperating loss in the third quarter of 2003 by approximately $5.6, aswell as lower cost of goods sold and brand support, partially offset bylower net sales and higher depreciation and amortization. Theimprovement for the nine months ended September 30, 2004 reflected theabsence of growth plan charges, which increased the operating loss forthe nine months ended September 30, 2003 by approximately $31.2, theaforementioned higher licensing revenues, which included the prepaymentof $10.0 of minimum royalties and renewal fees by licensees for thenine months ended September 30, 2004 and lower advertising, partiallyoffset by higher total returns, allowances and discounts.

Theloss on early extinguishment of debt for the nine months endedSeptember 30, 2004 represents the loss on the exchange of equity forcertain indebtedness in the Revlon Exchange Transactions (such loss wasequal to the difference between the fair value of the equity securitiesissued and the book value of the related indebtedness exchanged bythird parties other than MacAndrews & Forbes or related parties)and fees, expenses and the write-off of deferred financing costsrelated to the Revlon Exchange Transactions, the tender for andredemption of Products Corporation's 12% Senior SecuredNotes (including the applicable premium) and the repayment of the 2001Credit Agreement. **(See Note 9 to the Unaudited ConsolidatedFinancial Statements)**.

Discussion of Critical AccountingPolicies

For a discussion of the Company's criticalaccounting policies, see the Company's Annual Report on Form 10-Kfor the year ended December 31, 2003.

Results ofOperations

In the tables, numbers in parenthesis ( ) denoteunfavorable variances.

Netsales:

|                        |  |                                |        |        |  |        |        |        |  |        |        |         |  |        |            |            |  |  |
|------------------------|--|--------------------------------|--------|--------|--|--------|--------|--------|--|--------|--------|---------|--|--------|------------|------------|--|--|
|                   |  | ThreeMonths Ended September30, |        |   |  |   |
|                   |  | 2004                           |        | 2003   |  | Change |        | Change |
|                   |  |                           |   |   |  |   |   |   |  |   |   |    |  |   |       |       |
| UnitedStates andCanada |  | $                              | 192.0  |   |  | $      | 212.1  |   |  | $      | (20.1  | )  |  |   | −9.5 | %     |
| International          |  |                           | 102.4  |   |  |   | 104.4  |   |  |   | (2.0   | )  |  |   | −1.9 | %(1)  |
|                   |  | $                              | 294.4  |   |  | $      | 316.5  |   |  | $      | (22.1  | )  |  |   | −7.0 | %(2)  |
|                        |

|  |
|--|
|  |  |
|  |

|     |                                                                                      |
|-----|--------------------------------------------------------------------------------------|
| (1) | Excludingthe impact of currency fluctuations, International net sales decreased7.7%. |

|     |                                                                                     |
|-----|-------------------------------------------------------------------------------------|
| (2) | Excluding the impactof currency fluctuations, consolidated net sales decreased9.2%. |

24

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

|                        |  |                               |        |        |  |        |        |        |  |        |        |         |  |        |            |            |  |  |
|------------------------|--|-------------------------------|--------|--------|--|--------|--------|--------|--|--------|--------|---------|--|--------|------------|------------|--|--|
|                   |  | NineMonths Ended September30, |        |   |  |   |
|                   |  | 2004                          |        | 2003   |  | Change |        | Change |
|                   |  |                          |   |   |  |   |   |   |  |   |   |    |  |   |       |       |
| UnitedStates andCanada |  | $                             | 604.7  |   |  | $      | 641.8  |   |  | $      | (37.1  | )  |  |   | −5.8 | %     |
| International          |  |                          | 314.2  |   |  |   | 289.0  |   |  |   | 25.2   |    |  |   | 8.7        | %(1)  |
|                   |  | $                             | 918.9  |   |  | $      | 930.8  |   |  | $      | (11.9  | )  |  |   | −1.3 | %(2)  |
|                        |

|  |
|--|
|  |  |
|  |

|     |                                                                                      |
|-----|--------------------------------------------------------------------------------------|
| (1) | Excludingthe impact of currency fluctuations, International net sales increased0.6%. |

|     |                                                                                     |
|-----|-------------------------------------------------------------------------------------|
| (2) | Excluding the impactof currency fluctuations, consolidated net sales decreased4.1%. |

United States and Canada.

The decrease in net sales in the U.S. and Canada in the thirdquarter of 2004, as compared with the third quarter of 2003, was drivenprimarily by higher total returns, allowances and discounts of $18.5(including the favorable impact in the third quarter of 2003 ofapproximately $4 of lower returns and allowances than originallyestimated related to the stabilization and growth phase of theCompany's plan, which began in December 2002) largely due toprovisions for returns associated with the Company's larger newproducts program for 2005 versus 2004, requiring space at the wall.Also driving the increase in returns provision was lower sell-throughof promotional products related to the softness in the U.S. mass-market color cosmetics category. The decrease in net sales in the U.S.and Canada for the nine months ended September 30, 2004 was driven bylower shipments of approximately $23 (due in part to the mass colorcategory softness and less contribution from 2004 new productintroductions, as compared to 2003 new product introductions), andhigher total returns, allowances and discounts of approximately $24(including the unfavorable impact for the nine months ended September30, 2003 of approximately $10 related to the stabilization and growthphase of the Company's plan, which began in December 2002),partially offset by the favorable impact of foreign currencytranslation and increased licensing revenue of $9.8, primarily from theprepayment of $10.0 of certain minimum royalties and renewal fees bylicensees.

In terms of U.S. marketplace performance, accordingto ACNielsen, the mass color cosmetics category for the third quarterof 2004 declined approximately 3.1% versus the same period lastyear and declined approximately 2.0% for the nine-month periodended September 30, 2004 versus the same period last year. Combinedshare for the Revlon and Almay brands totaled 21.3% for thethird quarter of 2004, compared with 22.5% in the third quarterof 2003. For the nine months ended September 30, 2004, combined marketshare for the Revlon and Almay brands totaled 21.7%, comparedwith 22.6% for the nine months ended September 30, 2003. Theshare performance reflected less share contribution from new productsthis year, while the Company's market share on existingbusinesses advanced solidly. In hair color and beauty tools, theCompany gained market share in the third quarter and nine months endedSeptember 30, 2004, compared to the third quarter and nine months endedSeptember 30, 2003, while market share was down foranti-perspirants/deodorants. All U.S. market share and market positiondata herein for the Company's brands are based upon retail dollarsales, which are derived from ACNielsen data.

International.

Net sales in the Company'sinternational operations were $102.4 for the third quarter of 2004,compared with $104.4 for the third quarter of 2003, a decrease of $2.0or 1.9%, and were $314.2 for the nine months ended September 30,2004, compared with $289.0 for the nine months ended September 30,2003, an increase of $25.2 or 8.7%. Excluding the impact offoreign currency fluctuations, international sales decreased by7.7% in the third quarter and increased by 0.6% for thenine months ended 

25

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

September  30, 2004, as compared to thethird quarter and the nine months ended September 30, 2003,respectively. Sales in the Company's international operations aredivided by the Company into three geographic regions.

In Europe,which is comprised of Europe and the Middle East, net sales decreasedby $5.5, or 17.5%, to $26.0 for the third quarter of 2004, ascompared with the third quarter of 2003. Excluding the impact offoreign currency fluctuations, net sales declined by $8.2 or26.0% in the third quarter of 2004, as compared to the thirdquarter of 2003. The decline in net sales excluding the impact offoreign currency fluctuations was due to lower sales in the U.K.,stemming in part from higher returns, allowances and discounts (whichfactor the Company estimates contributed to an approximate 21.3%reduction in net sales for the region, as compared with the thirdquarter of 2003) and lower sales to distributors in Russia and Germany(which factor the Company estimates contributed to an approximate8.1% reduction in net sales for the region, as compared with thethird quarter of 2003), which was partially offset by increased salesin Israel (which factor the Company estimates contributed to anapproximate 2.0% increase in net sales for the region in thethird quarter of 2004, as compared with the third quarter of 2003).

In Latin America, which is comprised of Mexico, Central America andSouth America, net sales declined by $3.1, or 12.8%, to $21.1for the third quarter of 2004, as compared with the third quarter of2003. Excluding the impact of foreign currency fluctuations, net salesdecreased by $2.0 or 8.3% in the third quarter of 2004, ascompared to the third quarter of 2003. The decrease in net salesexcluding the impact of foreign currency fluctuations was drivenprimarily by higher returns, allowances and discounts in Mexico andBrazil (which factor the Company estimates contributed to anapproximate 11.8% reduction in net sales for the region, ascompared with the third quarter of 2003), which was partially offset byincreased sales in certain distributor markets and in Brazil (whichfactor the Company estimates contributed to an approximate 7.5%increase in net sales for the region in the third quarter of 2004, ascompared with the third quarter of 2003).

In the Far East andAfrica, net sales increased by $6.6, or 13.6%, to $55.3 for thethird quarter of 2004, as compared with the third quarter of 2003.Excluding the impact of foreign currency fluctuations, net salesincreased $2.2 or 4.5% in the third quarter of 2004, as comparedto the third quarter of 2003. This increase in net sales excluding theimpact of foreign currency fluctuations was driven by higher sales inSouth Africa, Australia and Japan (which factor the Company estimatescontributed to an approximate 6.1% increase in net sales for theregion, as compared with the third quarter of 2003).

For thenine months ended September 30, 2004, as compared with the nine monthsended September 30, 2003, net sales in Europe decreased by $3.2 or3.6%, to $86.7. Excluding the impact of foreign currencyfluctuations, net sales declined by $12.2 or 13.6% for the ninemonths ended September 30, 2004, as compared to the nine months endedSeptember 30, 2003. The decline in net sales excluding the impact offoreign currency fluctuations was due to lower sales in the U.K.,stemming in part from reduced customer inventory levels and higherallowances granted to customers (which factor the Company estimatescontributed to an approximate 10.5% reduction in net sales forthe region, as compared with the nine months ended September 30, 2003)and lower sales to distributors in Russia and Germany (which factor theCompany estimates contributed to an approximate 5.7% reductionin net sales for the region, as compared with the nine months endedSeptember 30, 2003), which was partially offset by increased sales inIsrael (which factor the Company estimates contributed to anapproximate 1.4% increase in net sales for the region for thenine months ended September 30, 2004, as compared with the nine monthsended September 30, 2003).

In Latin America, net sales increasedby $1.7, or 2.6%, to $67.0 for the nine months ended September30, 2004, as compared with the nine months ended September 30, 2003.Excluding the impact of foreign currency fluctuations, net salesincreased by $3.1 or 4.7% for the nine months ended September30, 2004, as compared to the nine months ended September 30, 2003. Theincrease in net sales excluding the impact 

26

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

of foreign currency fluctuations is primarilydue to increased sales in Brazil, Venezuela and certain distributormarkets (which factor the Company estimates contributed to anapproximate 12.0% increase in net sales for the region for thenine months ended September 30, 2004, as compared with the nine monthsended September 30, 2003) due to improved local economic and businessconditions, which was partially offset by lower sales in Mexico (whichfactor the Company estimates contributed to an approximate 6.1%reduction in net sales for the region, as compared with the nine monthsended September 30, 2003).

In the Far East and Africa, net salesincreased by $26.7 or 20.0%, to $160.5 for the nine months endedSeptember 30, 2004, as compared with the nine months ended September30, 2003. Excluding the impact of foreign currency fluctuations, netsales increased $10.8 or 8.1% for the nine months endedSeptember 30, 2004, as compared to the nine months ended September 30,2003. This increase was driven by higher sales in South Africa, Japanand Australia related to favorable economic conditions (which factorthe Company estimates contributed to an approximate 7.3%increase in net sales for the region, as compared with the nine monthsended September 30, 2003).

Gross profit:

|             |  |                                 |       |        |  |                               |       |        |  |      |       |         |  |   |       |        |  |   |       |        |  |   |      |         |  |  |
|-------------|--|---------------------------------|-------|--------|--|-------------------------------|-------|--------|--|------|-------|---------|--|---|-------|--------|--|---|-------|--------|--|---|------|---------|--|--|
|        |  | ThreeMonths Ended September 30, |       |   |  | NineMonths Ended September30, |       |   |
|        |  | 2004                            |       | 2003   |  | Change                        |       | 2004   |  | 2003 |       | Change  |
| Grossprofit |  | $                               | 176.5 |   |  | $                             | 189.4 |   |  | $    | (12.9 | )  |  | $ | 565.5 |   |  | $ | 567.0 |   |  | $ | (1.5 | )  |
|             |

Excludingforeign exchange fluctuations, gross profit decreased $17.1 for thethird quarter of 2004, as compared to the third quarter of 2003,primarily due to higher total returns, allowances and discounts.Excluding foreign exchange fluctuations, gross profit for the ninemonths ended September 30, 2004 decreased $17.5, as compared to thenine months ended September 30, 2003, reflecting lower volumes andhigher total returns, allowances and discounts, partially offset by theprepayment of certain minimum royalties and renewal fees by licenseesand other revenue of $10.0 in 2004 and lower cost of goods sold. Thenine months ended September 30, 2003 was adversely impacted byincreased returns in connection with the stabilization and growth phaseof the Company's plan.

SG&A expenses:

|                  |  |                                 |       |        |  |                               |       |        |  |      |      |        |  |   |       |        |  |   |       |        |  |   |      |        |  |  |
|------------------|--|---------------------------------|-------|--------|--|-------------------------------|-------|--------|--|------|------|--------|--|---|-------|--------|--|---|-------|--------|--|---|------|--------|--|--|
|             |  | ThreeMonths Ended September 30, |       |   |  | NineMonths Ended September30, |       |   |
|             |  | 2004                            |       | 2003   |  | Change                        |       | 2004   |  | 2003 |      | Change |
| SG&Aexpenses |  | $                               | 177.9 |   |  | $                             | 196.9 |   |  | $    | 19.0 |   |  | $ | 549.2 |   |  | $ | 581.3 |   |  | $ | 32.1 |   |
|                  |

Thedecrease in selling, general and administrative expenses("SG&A") for third quarter of 2004, ascompared to third quarter of 2003, is due primarily to lowerprofessional fees of $3.9 (the third quarter of 2003 includedprofessional fees and expenses related to the stabilization and growthphase of the Company's plan) and lower brand support of $18.1,partially offset by higher compensation and benefit costs primarilyrelated to stock-based compensation amortization, higher displayamortization of $2.7 and other selling and general expenses, including$3.0 of unfavorable foreign exchange fluctuations. The decrease inSG&A expenses for the nine months ended September 30, 2004, ascompared to the nine months ended September 30, 2003, is due primarilyto lower professional fees of $11.1 (the nine months ended September30, 2003 included professional fees and expenses related to thestabilization and growth phase of the Company's plan), lowerbrand support of $22.9, and lower employee-related compensation andbenefit charges, partially offset by stock-based compensationamortization, distribution costs, and $12.5 of unfavorable foreignexchange fluctuations.

27

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

Restructuringcosts:

|                    |  |                                 |     |        |  |                               |     |        |  |      |      |         |  |   |                     |        |  |   |     |        |  |   |     |        |  |  |
|--------------------|--|---------------------------------|-----|--------|--|-------------------------------|-----|--------|--|------|------|---------|--|---|---------------------|--------|--|---|-----|--------|--|---|-----|--------|--|--|
|               |  | ThreeMonths Ended September 30, |     |   |  | NineMonths Ended September30, |     |   |
|               |  | 2004                            |     | 2003   |  | Change                        |     | 2004   |  | 2003 |      | Change  |
| Restructuringcosts |  | $                               | 0.6 |   |  | $                             | 0.4 |   |  | $    | (0.2 | )  |  | $ |   — |   |  | $ | 0.9 |   |  | $ | 0.9 |   |
|                    |

Duringthe third quarter and the nine months ended September 30, 2004, theCompany revised its estimate of the cost to be incurred related to its2000 restructuring program. Additionally, during the third quarter of2004, the Company recorded $0.6 for employee severance and otherpersonnel benefits. In 2003, the Company recorded separate charges of$5.9 ($0.9 of which was recorded for the nine months ended September30, 2003) for employee severance and other personnel benefits foremployees in certain International operations.

Otherexpenses(income):

|                 |  |                                 |      |        |  |                               |      |        |  |      |      |        |  |   |       |        |  |   |       |        |  |   |      |        |  |  |
|-----------------|--|---------------------------------|------|--------|--|-------------------------------|------|--------|--|------|------|--------|--|---|-------|--------|--|---|-------|--------|--|---|------|--------|--|--|
|            |  | ThreeMonths Ended September 30, |      |   |  | NineMonths Ended September30, |      |   |
|            |  | 2004                            |      | 2003   |  | Change                        |      | 2004   |  | 2003 |      | Change |
| Interestexpense |  | $                               | 29.4 |   |  | $                             | 46.8 |   |  | $    | 17.4 |   |  | $ | 104.8 |   |  | $ | 136.0 |   |  | $ | 31.2 |   |
|                 |

Thedecrease in interest expense of $17.4 for the third quarter and $31.2for the nine months ended September 30, 2004, as compared to the thirdquarter and the nine months ended September 30, 2003, is primarily dueto lower consolidated debt during the third quarter and the nine monthsended September 30, 2004, resulting from the Revlon ExchangeTransactions and the REV Holdings Exchange Offer, partially offset byhigher borrowings under Products Corporation's New CreditAgreement to repay the 2001 Credit Agreement, tender for and redeemProducts Corporation's 12% Senior Secured Notes (includingapplicable premium and accrued interest) and to pay fees and expenses.**(See Note 9 to the Unaudited Consolidated FinancialStatements)**.

|                                    |  |                                 |      |        |  |                               |                     |        |  |      |       |         |  |   |      |        |  |   |                     |        |  |   |       |         |  |  |
|------------------------------------|--|---------------------------------|------|--------|--|-------------------------------|---------------------|--------|--|------|-------|---------|--|---|------|--------|--|---|---------------------|--------|--|---|-------|---------|--|--|
|                               |  | ThreeMonths Ended September 30, |      |   |  | NineMonths Ended September30, |                     |   |
|                               |  | 2004                            |      | 2003   |  | Change                        |                     | 2004   |  | 2003 |       | Change  |
| Losson early extinguishment ondebt |  | $                               | 58.8 |   |  | $                             |   — |   |  | $    | (58.8 | )  |  | $ | 91.4 |   |  | $ |   — |   |  | $ | (91.4 | )  |
|                                    |

Theloss on early extinguishment of debt for the third quarter consists offees, expenses and the write-off of deferred financing costs related tothe tender for and redemption of Products Corporation's12% Senior Secured Notes and the repayment of the 2001 CreditAgreement. The loss on early extinguishment of debt for the nine monthsended September 30, 2004 represents the loss on the exchange of equityfor certain indebtedness in the Revlon Exchange Transactions (such losswas equal to the difference between the fair value of the equitysecurities issued and the book value of the related indebtednessexchanged by third parties other than MacAndrews & Forbes orrelated parties) and fees, expenses and the write-off of deferredfinancing costs related to the Revlon Exchange Transactions, the tenderfor and redemption of the 12% Senior Secured Notes (includingthe applicable premium) and the repayment of the 2001 Credit Agreement.**(See Note 9 to the Unaudited Consolidated FinancialStatements)**.

28

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

|                   |  |                                 |      |         |  |                               |      |         |  |      |      |         |  |   |     |        |  |   |     |        |  |   |      |         |  |  |
|-------------------|--|---------------------------------|------|---------|--|-------------------------------|------|---------|--|------|------|---------|--|---|-----|--------|--|---|-----|--------|--|---|------|---------|--|--|
|              |  | ThreeMonths Ended September 30, |      |    |  | NineMonths Ended September30, |      |    |
|              |  | 2004                            |      | 2003    |  | Change                        |      | 2004    |  | 2003 |      | Change  |
| Miscellaneous,net |  | $                               | (0.1 | )  |  | $                             | (0.3 | )  |  | $    | (0.2 | )  |  | $ | 2.4 |   |  | $ | 0.1 |   |  | $ | (2.3 | )  |
|                   |

Theincrease in miscellaneous, net for the nine months ended September 30,2004, as compared to the comparable 2003 period, is primarily due tofees and expenses associated with the refinancing that ProductsCorporation launched in May 2004 but did not consummate.

|                                    |  |                                 |                     |        |  |                               |                     |        |  |      |                     |        |  |   |        |         |  |   |                     |        |  |   |       |        |  |  |
|------------------------------------|--|---------------------------------|---------------------|--------|--|-------------------------------|---------------------|--------|--|------|---------------------|--------|--|---|--------|---------|--|---|---------------------|--------|--|---|-------|--------|--|--|
|                               |  | ThreeMonths Ended September 30, |                     |   |  | NineMonths Ended September30, |                     |   |
|                               |  | 2004                            |                     | 2003   |  | Change                        |                     | 2004   |  | 2003 |                     | Change |
| Gainon issuance of subsidiarystock |  | $                               |   — |   |  | $                             |   — |   |  | $    |   — |   |  | $ | (363.6 | )  |  | $ |   — |   |  | $ | 363.6 |   |
|                                    |

REVHoldings recognized a gain on issuance of Class A Common Stock to thirdparties in connection with the Revlon Exchange Transactions. **(SeeNote 9 to the Unaudited Consolidated FinancialStatements).**

Provision (benefit) for incometaxes:

|                                    |  |                                 |     |        |  |                               |     |        |  |      |      |         |  |   |     |        |  |   |      |         |  |   |      |         |  |  |
|------------------------------------|--|---------------------------------|-----|--------|--|-------------------------------|-----|--------|--|------|------|---------|--|---|-----|--------|--|---|------|---------|--|---|------|---------|--|--|
|                               |  | ThreeMonths Ended September 30, |     |   |  | NineMonths Ended September30, |     |   |
|                               |  | 2004                            |     | 2003   |  | Change                        |     | 2004   |  | 2003 |      | Change  |
| Provision(benefit) for incometaxes |  | $                               | 2.9 |   |  | $                             | 2.3 |   |  | $    | (0.6 | )  |  | $ | 5.0 |   |  | $ | (2.9 | )  |  | $ | (7.9 | )  |
|                                    |

Theincrease in the provision for income taxes in the third quarter and thenine months ended September 30, 2004 is due to higher taxable income incertain markets outside the U.S. in the 2004 periods. The benefit forincome taxes in the nine months ended September 30, 2003 wasattributable to the resolution of various tax audits.

FinancialCondition, Liquidity and Capital Resources

Net cash used foroperating activities for the nine months ended September 30, 2004decreased to $141.0, as compared to $193.6 for the nine months endedSeptember 30, 2003. This improvement resulted primarily from higheroperating income, lower purchases of permanent displays, lower accruedexpenses and lower cash spending in connection with the stabilizationand growth phase of the Company's plan and lower interestpayments. Also, the Company received $10.0 during the nine months endedSeptember 30, 2004 related to the prepayment of certain minimumroyalties and renewal fees by licensees.

Net cash used forinvesting activities was $12.5 and $19.7 for the nine months endedSeptember 30, 2004 and 2003, respectively, which consisted of capitalexpenditures.

Net cash provided by financing activities was$177.8 and $153.9 for the nine months ended September 30, 2004 and2003, respectively. Net cash provided by financing activities for thenine months ended September 30, 2004 included cash drawn under each ofthe 2001 Credit Agreement (including the additional $64.4 term loanpursuant to the Exchange Bank Amendments), the 2004 $125 million MafcoLoan, the $65 million Mafco line of credit, and the Term Loan under theNew Credit Agreement and a capital contribution from an affiliate toretire the REV Holdings Notes and advances under the Keepwell Agreementand the New Keepwell Agreement, partially offset by the repayment ofborrowings under the 2001 Credit Agreement (in connection with therefinancing thereof), the $125 million Mafco Loan, the Mafco $65million line of credit, payment of the redemption price, the applicablepremium and interest 

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

in connection with the tender for andredemption of Products Corporation's 12% Senior SecuredNotes and payment of financing costs in connection with each of theJanuary 2004 Bank Amendment, the Exchange Bank Amendments, the RevlonExchange Transactions, the New Credit Agreement, the tender for andredemption of Products Corporation's 12% Senior SecuredNotes and the REV Holdings Exchange Offer. Net cash provided byfinancing activities for the nine months ended September 30, 2003included cash drawn under the 2001 Credit Agreement and the MacAndrews& Forbes $100 million term loan, net proceeds from the 2003 RightsOffering (as hereinafter defined) and advances under the KeepwellAgreement, partially offset by the repayment of borrowings under the2001 Credit Agreement and payment of financing costs.

AtSeptember 30, 2004, Products Corporation had a liquidity position,excluding restricted cash, of approximately $346.1, consisting of cashand cash equivalents as well as available borrowings from theMulti-Currency Facility and the Consolidated Mafco line of credit.

New Credit Agreement

On July 9, 2004, ProductsCorporation entered into the New Credit Agreement with certain of itssubsidiaries as local borrowing subsidiaries, a syndicate of lenders,and Citicorp USA, Inc., as multi-currency administrative agent, termloan administrative agent and collateral agent. Products Corporationused the proceeds of borrowings under the $800 Term Loan Facility ofthe New Credit Agreement to repay in full the $290.5 of outstandingindebtedness (including accrued interest) under ProductsCorporation's 2001 Credit Agreement, to purchase approximately$298 aggregate principal amount of Products Corporation's12% Senior Secured Notes tendered at the Initial Settlement ofthe Tender Offer, for a purchase price of approximately $338.3(including the applicable premium and accrued interest), to purchasethe additional approximately $0.4 aggregate principal amount ofProducts Corporation's 12% Senior Secured Notes tenderedfollowing the Initial Settlement through the expiration of the TenderOffer, for a purchase price of approximately $0.5 (including theapplicable premium and accrued interest), to redeem the approximately$64.5 aggregate principal amount of Products Corporation's12% Senior Secured Notes remaining outstanding at the expirationof the Tender Offer for a redemption price of approximately $73.5(including the applicable premium and accrued interest), and paid feesand expenses incurred in connection with the New Credit Agreement, theTender Offer and the Revlon Exchange Transactions, including thepayment of expenses related to a refinancing that Products Corporationlaunched in May 2004 but did not consummate. The balance of suchproceeds is available to Products Corporation for general corporatepurposes. The Multi-Currency Facility was undrawn at September 30,2004.

The New Credit Agreement provides up to $960.0 andconsists of an $800.0 Term Loan Facility and a $160.0 asset-basedMulti-Currency Facility, the availability under which varies based uponthe borrowing base. The Multi-Currency Facility is available to: (i)Products Corporation in revolving credit loans denominated in U.S.dollars, (ii) Products Corporation in standby and commercial letters ofcredit denominated in U.S. dollars and other currencies up to $50.0 and(iii) Products Corporation and certain of its internationalsubsidiaries designated from time to time in revolving credit loans andbankers' acceptances denominated in U.S. dollars and othercurrencies, in each case subject to borrowing base availability that isdetermined based on the value of eligible accounts receivable, eligibleinventory and eligible real property and equipment in the U.S. and theU.K. from time to time. The Multi-Currency Facility will terminate onJuly 9, 2009 and the loans under the Term Loan Facility will mature onJuly 9, 2010; provided that the New Credit Facilities will terminate onOctober 31, 2005 if the 8 1/8% Senior Notes arenot redeemed, repurchased or defeased in full on or before such date,on July 31, 2006 if the 9% Senior Notes are not redeemed,repurchased or defeased in full on or before such date, and on October30, 2007 if the 8 5/8% Senior Subordinated Notesare not redeemed, repurchased or defeased on or before such date suchthat not more than $25.0 in aggregate principal amount of the8 5/8% Senior Subordinated Notes remainoutstanding. (**See Note 9 to the Unaudited Consolidated FinancialStatements).**

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

The 2004 Debt ReductionTransactions

As a result of the Debt Reduction Transactions,Revlon, Inc. reduced Products Corporation's debt by approximately$804 on March 25, 2004.

As part of the Revlon ExchangeTransactions, MacAndrews & Forbes received Class A Common Stock inrespect of any and all outstanding amounts owing to it, as of theclosing date of the Revlon Exchange Transactions, under the Mafco $100million term loan (which was approximately $109.7 at March 25, 2004,including accrued interest), the 2004 Mafco $125 million term loan(which was approximately $38.9 at March 25, 2004, including accruedinterest), the Mafco $65 million line of credit (which was nil at March25, 2004) and approximately $24.1 of subordinated promissory notes. Theportions of the 2004 Mafco $125 million term loan and the Mafco $65million line of credit not exchanged in the Loan ConversionTransactions remained available to Products Corporation (which loanswere consolidated into the Consolidated Mafco line of credit in July2004), subject to the Borrowing Limitation, which was subsequentlyeliminated. (**See Note 9 to the Unaudited Consolidated FinancialStatements).**

Revlon, Inc. agreed to the Borrowing Limitationwith Fidelity not to permit Products Corporation to have outstandingaggregate borrowings, at any time following the close of the RevlonExchange Transactions and until the termination of the StockholdersAgreement, under the Mafco $65 million line of credit and the 2004Mafco $125 million term loan in excess of approximately $87, whichBorrowing Limitation was subsequently eliminated in July 2004. (**SeeNote 9 to the Unaudited Consolidated Financial Statements).**

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

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

In connection with consummating the RevlonExchange Transactions, Revlon, Inc. announced that its previouslyannounced plan to launch a rights offering and use the proceeds toreduce debt by a further $50 by year-end 2004 was reduced to $9.7, as aresult of $190.3 of Revlon Exchange Notes having been exchanged inexcess of the Revlon Exchange Notes committed to be exchanged byMacAndrews & Forbes and Fidelity under their respective supportagreements. This $190.3 more than satisfied Revlon, Inc.'s planto reduce debt through the Revlon Exchange Offers by $150 in additionto the Revlon Exchange Notes that were committed to be exchanged in thesupport agreements with MacAndrews & Forbes and Fidelity. The $40.3difference satisfied all but $9.7 of the Company's plan to reducedebt (in 

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

addition to the Revlon Exchange Notes) by afurther $50 by year-end 2004. Because the costs and expenses, as wellas the use of organizational resources, associated with a $9.7 rightsoffering would have been unduly disproportionate, Revlon, Inc.'ssupport and investment agreements with MacAndrews & Forbes andFidelity relating to the Company's debt reduction plan wereamended to enable Revlon, Inc. to satisfy the remaining $9.7 of debtreduction as part of the final stage of the Company's debtreduction plan. Therefore, the Company now intends to conduct an equityoffering of approximately $110 by the end of March 2006 and to use suchproceeds to reduce debt. Consistent with agreements between MacAndrews& Forbes and Revlon, Inc. entered into contemporaneously with theagreements relating to the Revlon Exchange Transactions, MacAndrews& Forbes agreed to back-stop the $110 equity offering. 

Also,in conjunction with the Revlon Exchange Transactions, ProductsCorporation obtained the Exchange Bank Amendments to provide anadditional $64.4 term loan facility, the proceeds of which were used torepay outstanding revolving indebtedness under ProductsCorporation's 2001 Credit Agreement without a reduction inrevolving credit commitments. The Exchange Bank Amendments alsopermitted various aspects of the transactions relating to the RevlonExchange Transactions. (**See Note 9 to the Unaudited ConsolidatedFinancial Statements).**

On June 22, 2004, ProductsCorporation commenced the Tender Offer. On the July 9, 2004 InitialSettlement, Products Corporation purchased approximately $298 aggregateprincipal amount of Products Corporation's 12% SeniorSecured Notes, representing approximately 82% of the totaloutstanding principal amount of Products Corporation's 12%Senior Secured Notes, for a purchase price of approximately $338.3(including the applicable premium and accrued interest). On July 22,2004, Products Corporation purchased approximately $0.4 aggregateprincipal amount of Products Corporation's 12% SeniorSecured Notes, the amount of such notes tendered following the InitialSettlement through the expiration of the Tender Offer, for a purchaseprice of approximately $0.5 (including the applicable premium andaccrued interest). In connection with the expiration of the TenderOffer, Products Corporation on August 23, 2004 redeemed all of theapproximately $64.5 aggregate principal amount of its 12% SeniorSecured Notes that remained outstanding following the July 21, 2004expiration of the Tender Offer at a redemption price calculated inaccordance with the 12% Notes Indenture for a redemption priceof approximately $73.5 (including the applicable premium and accruedinterest). **(See Note 9 to the Unaudited Consolidated FinancialStatements).**

Products Corporation's EBITDA (as definedin the 2001 Credit Agreement) was $144.4 for the four consecutivefiscal quarters ended December 31, 2003, which was less than theminimum of $230 required under the 2001 Credit Agreement for thatperiod and Products Corporation's leverage ratio was 1.66:1.00,which was in excess of the maximum ratio of 1.10:1.00 permitted underthe 2001 Credit Agreement for that period. Accordingly, ProductsCorporation sought and on January 28, 2004 secured the January 2004Bank Amendment that included waivers of compliance with these covenantsfor the four quarters ended December 31, 2003 and, in light of theCompany's expectation that its plan would affect ProductsCorporation's ability to comply with these covenants under the2001 Credit Agreement during 2004, an amendment to eliminate the EBITDAand leverage ratio covenants of the 2001 Credit Agreement for the firstthree quarters of 2004 and a waiver of compliance with such covenantsfor the four quarters ending December 31, 2004 expiring on January 31,2005.

The 2004 Mafco $125 million term loan, as discussed inNote 9, was consolidated with the Mafco $65 million line of credit intothe Consolidated Mafco line of credit in July 2004, with availabilityof $152. **(See Note 9 to the Unaudited Consolidated FinancialStatements)**.

2003 Financing Transactions

In February 2003, Revlon, Inc. entered into an investment agreementwith MacAndrews Holdings (the "2003 InvestmentAgreement") pursuant to which Revlon, Inc. undertook and,on June 20, 2003, 

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

completed, a $50 equity rights offering (the"2003 Rights Offering"), pursuant to whichRevlon, Inc. issued an additional 17,605,650 shares of its Class ACommon Stock, including 3,015,303 shares subscribed for by the publicand 14,590,347 shares issued to MacAndrews Holdings in a privateplacement (representing the number of shares of Revlon, Inc.'sClass A Common Stock that MacAndrews Holdings would otherwise have beenentitled to purchase pursuant to its basic subscription privilege,which was approximately 83% of the shares of Revlon,Inc.'s Class A Common Stock offered in the 2003 RightsOffering).

In addition, in connection with the 2003 InvestmentAgreement, MacAndrews Holdings also made available a $100 term loan toProducts Corporation (the "Mafco $100 million termloan"). The Mafco $100 million term loan was exchanged forequity in connection with the Revlon Exchange Transactions. **(SeeNote 9 to the Unaudited Consolidated Financial Statements)**.

Additionally, MacAndrews Holdings also provided Products Corporationwith an additional $40 line of credit during 2003, which amount wasoriginally to increase to $65 on January 1, 2004 (the"Mafco $65 million line of credit") (theMafco $100 million term loan and the Mafco $65 million line of credit,each as amended, are referred to as the "2003 MafcoLoans") and which was originally to be available toProducts Corporation through December 31, 2004 (which, as discussed inNote 9, was consolidated with the 2004 Mafco $125 million term loaninto the Consolidated Mafco line of credit in July 2004).

Sources and Uses

The Company's principalsources of funds are expected to be operating revenues, cash on hand,funds available for borrowing under the New Credit Agreement, theConsolidated Mafco line of credit, other permitted lines of credit andadvances under the New Keepwell Agreement. **(See Note 9 to theUnaudited Consolidated Financial Statements)**. The New CreditAgreement, the Consolidated Mafco line of credit, ProductsCorporation's 8 5/8% Senior SubordinatedNotes due 2008 (the "8 5/8% SeniorSubordinated Notes"), Products Corporation's8 1/8% Senior Notes due 2006 (the"8 1/8% Senior Notes")and Products Corporation's 9% Senior Notes due 2006 (the"9% Senior Notes") contain certainprovisions that by their terms limit Products Corporation's andits subsidiaries' ability to, among other things, incuradditional debt. The New REV Holdings Notes contain certain provisionsthat by their terms limit REV Holdings' ability to, among otherthings, incur additional debt.

The Company's principaluses of funds are expected to be the payment of operating expenses,including expenses in connection with the continued implementation of,and refinement to, the Company's plan, purchases of permanentwall displays, capital expenditure requirements, payments in connectionwith the Company's restructuring programs referred to herein, anddebt service payments and costs. Cash contributions to theCompany's pension and post-retirement benefit plans were $21 in2003 and the Company expects them to be approximately $34 in 2004.

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

TheCompany previously estimated that charges related to the implementationof the stabilization and growth phase of its plan for 2002, 2003 and2004 would not exceed $160. The Company recorded charges ofapproximately $104 in 2002 and approximately $31 in 2003 related to theimplementation of the stabilization and growth phase of its plan. TheCompany currently does not expect to record any additional chargesduring 2004 in connection with its plan. The Company expects that cashpayments related to the foregoing charges that it has previouslyrecorded with respect to its plan will be approximately $100 during2003 and 2004, of which the Company paid approximately $80 in 2003 andapproximately $16 for the nine months ended September 30, 2004.

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

The Company developed a new design forits wall displays (which the Company is continuing to refine as part ofthe implementation of its plan) and began installing them at certaincustomers' retail stores during 2002. While most of the new walldisplays were installed during 2002 and 2003, the Company is continuingto install the remainder of the new wall displays during 2004. TheCompany is also reconfiguring existing wall displays at its retailcustomers. Accordingly, the Company has accelerated the amortization ofits old wall displays. The Company estimates that purchases of walldisplays for 2004 will be approximately $50 to $60.

The Companyestimates that capital expenditures for 2004 will be approximately $20to $25. The Company estimates that cash payments related to therestructuring programs referred to in Note 6 to the UnauditedConsolidated Financial Statements and executive separation costs willbe approximately $10 to $15 in 2004.

The Company expects thatoperating revenues, cash on hand, funds available for borrowing underthe New Credit Agreement, the Consolidated Mafco line of credit andother permitted lines of credit and advances under the New KeepwellAgreement will be sufficient to enable the Company to cover itsoperating expenses, including cash requirements in connection with theCompany's operations, the continued implementation of, andrefinement to, the Company's plan, cash requirements inconnection with the Company's restructuring programs referred toabove and the debt service requirements of the Company and itssubsidiaries for 2004, including without limitation, interest on theNew REV Holdings Notes. **(See Note 9 to the Unaudited ConsolidatedFinancial Statements)**. However, there can be no assurance that suchfunds will be sufficient to meet the Company's cash requirementson a consolidated basis. If the Company's anticipated level ofrevenue growth is not achieved because, for example, of decreasedconsumer spending in response to weak economic conditions or weaknessin the cosmetics category, increased competition from theCompany's competitors or the Company's marketing plans arenot as successful as anticipated, or if the Company's expensesassociated with the continued implementation of, and refinement to, theCompany's plan exceed the anticipated level of expenses, theCompany's current sources of funds may be insufficient to meetthe Company's cash requirements.

The U.S. mass-marketcolor cosmetics category during 2003 and the nine months endedSeptember 30, 2004 was softer than the Company expected. Despite thissoftness in the U.S. mass-market color cosmetics category, based uponthe Company's belief that its continued implementation of itsplan is proving effective, the Company intends to continue to supportits plan. Additionally, in the event of a decrease in demand forProducts Corporation's products or reduced sales or lack ofincreases in demand and sales as a result of the continuedimplementation of, and refinement to, the Company's plan, anysuch development, if significant, could reduce ProductsCorporation's operating revenues and could adversely affectProducts Corporation's ability to achieve certain financialcovenants under the New Credit Agreement and in such event the Companycould be required to take measures, including reducing discretionaryspending.

If the Company is unable to satisfy its cashrequirements from the sources identified above, the Company could berequired to adopt one or more alternatives, such as delaying theimplementation of or revising aspects of its plan, reducing or delayingpurchases of wall displays or advertising or promotional expenses,reducing or delaying capital spending, delaying, reducing or revisingrestructuring programs, restructuring indebtedness, selling assets oroperations, seeking additional capital contributions or loans fromMacAndrews & Forbes, the Company's other affiliates and/orthird parties, selling additional equity or debt securities of Revlon,Inc. (or debt securities of Products Corporation) or reducing otherdiscretionary spending. There can be no assurance that the Companywould be able to take any of the actions referred to above because of avariety of commercial or market factors or constraints in theCompany's debt instruments, including, for example, marketconditions being unfavorable for an equity or debt offering, or thatthe transactions may not be permitted under the terms of theCompany's various debt instruments then in effect, because ofrestrictions on the incurrence of debt, incurrence of liens, asset

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

dispositions and related party transactions.In addition, such actions, if taken, may not enable the Company tosatisfy its cash requirements if the actions do not generate asufficient amount of additional capital.

The Company may havedebt maturing in 2005 if and to the extent it draws under theConsolidated Mafco line of credit. The Company intends to refinanceProducts Corporation's 8 1/8% Senior Notesand 9% Senior Notes, with $116.1 and $75.5 aggregate principalamount outstanding, respectively, prior to their respective maturitiesin 2006, and to likewise refinance Products Corporation's8 1/8% Senior Subordinated Notes, with anaggregate principal amount outstanding of $327.0, prior to theirmaturity in 2008. Under the New Credit Agreement, the Company mustrefinance the 8 1/8% Senior Notes by October 31,2005, the 9% Senior Notes by July 31, 2006 and the8 5/8% Senior Subordinated Notes by October 30,2007. As of September 30, 2004, Products Corporation had drawn $800.0under the Term Loan Facility of the New Credit Agreement and theMulti-Currency Facility and the Consolidated Mafco line of credit wereundrawn. **(See Note 9 to the Unaudited Consolidated FinancialStatements)**.

Revlon, Inc., as a holding company, will bedependent on the earnings and cash flow of, and dividends anddistributions from, Products Corporation to pay its expenses and to payany cash dividend or distribution on Revlon, Inc.'s Class ACommon Stock that may be authorized by the Board of Directors ofRevlon, Inc. The terms of the New Credit Agreement, the ConsolidatedMafco line of credit, the 8 5/8% SeniorSubordinated Notes, the 8 1/8% Senior Notes andthe 9% Senior Notes generally restrict Products Corporation frompaying dividends or making distributions, except that ProductsCorporation is permitted to pay dividends and make distributions toRevlon, Inc. to enable Revlon, Inc., among other things, to payexpenses incidental to being a public holding company, including, amongother things, professional fees such as legal and accounting fees,regulatory fees such as Commission filing fees and other miscellaneousexpenses related to being a public holding company and, subject tocertain limitations, to pay dividends or make distributions in certaincircumstances to finance the purchase by Revlon, Inc. of its Class ACommon Stock in connection with the delivery of such Class A CommonStock to grantees under the Amended and Restated Revlon, Inc. StockPlan.

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

The New REVHoldings Notes, which bear interest semi-annually and mature onFebruary 1, 2007, are secured by the Collateral. In addition, the NewIndenture contains covenants that, among other things, limit, subjectto certain exceptions set forth in the New Indenture, the following:(i) the issuance of additional debt and redeemable stock by REVHoldings, (ii) the creation of additional liens on the Collateral(other than the lien created by the New Indenture), (iii) the paymentof dividends on capital stock of REV Holdings and the redemption ofcapital stock of REV Holdings or any of its direct or indirect parents,(iv) the sale of assets and subsidiary stock (including by way ofconsolidations, mergers and similar transactions), and (v) transactionswith affiliates.

In connection with the REV Holdings ExchangeOffer, GSB Investments Corp., an affiliate of the Company, entered intothe New Keepwell Agreement, pursuant to which GSB Investments Corp. hasagreed to provide REV Holdings with funds equal to any interest paymentdue on the New REV Holdings Notes, to the extent that REV Holdings doesnot have sufficient funds on hand to make such payment on theapplicable due date. REV Holdings currently anticipates that it willuse advances under the New Keepwell Agreement to pay interest when dueunder the New REV Holdings Notes.

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

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

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

The New Keepwell Agreementwill terminate at such time as there are no New REV Holdings Notesoutstanding, at which time GSB Investments Corp. may require repaymentof advances under the New Keepwell Agreement. On February 1, 2004, GSBInvestments Corp. made a non-interest bearing advance of $4.5 to REVHoldings under the Keepwell Agreement, which was used to make theinterest payment due on the REV Holdings Notes on February 1, 2004. Theobligation under the Keepwell Agreement of $28.4 at maturity of the REVHoldings Notes on February 1, 2004 was contributed to the capital ofREV Holdings in April 2004. On August 1, 2004, GSB Investments Corp.made a non-interest bearing advance of $1.2 under the New KeepwellAgreement, which was used to make the interest payment due on the NewREV Holdings Notes on August 1, 2004.

REV Holdings, as a holdingcompany, will be dependent on advances from affiliates to pay itsexpenses and will also be dependent upon advances under the NewKeepwell Agreement to pay interest when due on the New REV HoldingsNotes. REV Holdings anticipates that it will be required to adopt oneor more alternatives to pay the principal amount at maturity of the NewREV Holdings Notes, such as refinancing its indebtedness, repaying itsindebtedness with the proceeds from the sale of assets or operations ofRevlon, Inc., selling its equity securities or equity securities ofRevlon, Inc. or seeking additional capital contributions or loans fromMacAndrews & Forbes, the Company's other affiliates and/orthird parties. There can be no assurance that any of the foregoingactions could be effected on satisfactory terms, that any of theforegoing actions would enable REV Holdings to pay the principal amountat maturity of the New REV Holdings Notes or that any of such actionswould be permitted by the terms of the New Indenture or any other debtinstrument of the Company and the Company's subsidiaries then ineffect, because, among other reasons, market conditions may beunfavorable for an equity or debt offering or the transactions may notbe permitted under the terms of the Company's various debtinstruments then in effect, because of restrictions on the incurrenceof debt, incurrence of liens, asset dispositions and related partytransactions. In addition, such actions, if taken, may not enable theCompany to satisfy its cash requirements if the actions do not generatea sufficient amount of additional capital. None of the Company'saffiliates, including MacAndrews & Forbes, is required to make anycapital contribution, loan or other payment to REV Holdings withrespect to principal or interest on the New REV Holdings Notes (otherthan as provided in the New Keepwell Agreement).

REV Holdings,as a single-member limited liability company, is a disregarded entityfor federal and state income tax purposes. REV Holdings' incomeand loss are included in the consolidated federal 

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

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

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

As a result ofdealing with suppliers and vendors in a number of foreign countries,Products Corporation enters into foreign currency forward exchangecontracts and option contracts from time to time to hedge certain cashflows denominated in foreign currencies. There were foreign currencyforward exchange contracts with a notional amount of $38.0 outstandingat September 30, 2004. The fair value of foreign currency forwardexchange contracts outstanding at September 30, 2004 was $(1.0).

Disclosures about Contractual Obligations and CommercialCommitments

As of September 30, 2004, there had been nomaterial changes outside the ordinary course of the Company'sbusiness to the Company's total contractual cash obligationswhich are set forth in the table included in the Company's AnnualReport on Form 10-K for the year ended December 31, 2003 **(See Note 9to the Unaudited Consolidated Financial Statements)**, with theexception of the elimination of (i) 

37

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REVHOLDINGS LLC AND SUBSIDIARIES MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS —(Continued)(dollars in millions, except per sharedata)

approximately $804 in debt in conjunctionwith the Revlon Exchange Transactions; (ii) the repayment of borrowingsby Products Corporation under its 2001 Credit Agreement of $289.9;(iii) borrowings by Products Corporation under the Term Loan Facilityof its New Credit Agreement of $800.0; and (iv) the repayment byProducts Corporation of $363.0 aggregate principal amount of its12% Senior Secured Notes. The following table reflects theimpact on long-term debt obligations, which reflect the transactionsreferred to above as of September 30,2004:

|                                                |  |                                           |         |                 |  |           |     |           |  |              |       |        |  |   |       |        |  |   |       |        |  |  |
|------------------------------------------------|--|-------------------------------------------|---------|-----------------|--|-----------|-----|-----------|--|--------------|-------|--------|--|---|-------|--------|--|---|-------|--------|--|--|
|                                           |  | PaymentsDue by Period(dollars inmillions) |
| ContractualObligationsAs of September 30, 2004 |  | Total                                     |         | Lessthan 1 year |  | 1-3 years |     | 4-5 years |  | After 5years |
| **Long-termDebt**                              |  | $                                         | 1,338.4 |            |  |      | Nil |      |  | $            | 211.4 |   |  | $ | 327.0 |   |  | $ | 800.0 |   |
|                                                |

Off-BalanceSheet Transactions

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

Effect of ProposedAccounting Standard

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

38

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

Item 3.    Quantitative andQualitative Disclosures About Market Risk

The Company hasexposure to market risk both as a result of changing interest rates andmovements in foreign currency exchange rates. The Company'spolicy is to manage market risk through a combination of fixed andfloating rate debt, the use of derivative financial instruments andforeign exchange forward and option contracts. The Company does nothold or issue financial instruments for trading purposes. Thequalitative and quantitative information presented in Item 7A of theCompany's Annual Report on Form 10-K for the year ended December31, 2003 ("Item 7A") describes significantaspects of the Company's financial instrument programs that havematerial market risk as of December 31, 2003. As a result of the RevlonExchange Transactions, Products Corporation's retirement of allof its 12% Senior Secured Notes and Products Corporation'sentering into the New Credit Agreement, the Company's long-termvariable rate debt now comprises a larger percentage of theCompany's overall indebtedness than it did at December 31, 2003.The following table presents the information required by Item 7A as ofSeptember 30, 2004 **(See Note 9 to the Unaudited ConsolidatedFinancial Statements)**:

|                                                 |  |                                                      |        |         |  |                        |         |        |  |        |        |            |  |        |        |         |  |        |        |         |  |        |        |         |  |        |         |        |  |        |         |        |  |  |
|-------------------------------------------------|--|------------------------------------------------------|--------|---------|--|------------------------|---------|--------|--|--------|--------|------------|--|--------|--------|---------|--|--------|--------|---------|--|--------|--------|---------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                            |  | Expectedmaturity date for the year ended December31, |        |    |  | Fair ValueSept.30,2004 |
|                                            |  | 2004                                                 |        | 2005    |  | 2006                   |         | 2007   |  | 2008   |        | Thereafter |  | Total  |        |
|                                            |  | (dollarsinmillions)                                  |
| Debt                                            |  |                                                 |        |    |  |                   |         |   |  |   |        |       |  |   |        |    |
| Short-termvariable rate (variouscurrencies)     |  | $                                                    | 32.5   |    |  |                   |    |   |  |   |   |       |  |   |   |    |  |   |   |    |  |   |   |    |  | $      | 32.5    |   |  | $      | 32.5    |   |
| Averageinterest rate(a)                         |  |                                                 | 4.5    | %  |  |                   |    |   |  |   |   |       |  |   |   |    |  |   |   |    |  |   |   |    |  |   |    |   |  |   |    |   |
| Long-termfixed rate – third party($US)    |  |                                                 |   |    |  |                   |    |   |  | $      | 191.7  |       |  | $      | 18.5   |    |  | $      | 327.0  |    |  |   |   |    |  |   | 537.2   |   |  |   | 489.4   |   |
| Averageinterestrate                             |  |                                                 |   |    |  |                   |    |   |  |   | 8.5    | %     |  |   | 13.0   | %  |  |   | 8.6    | %  |  |   |   |    |  |   |    |   |  |   |    |   |
| Long-termvariable rate – third party($US) |  |                                                 |   |    |  |                   |    |   |  |   |   |       |  |   |   |    |  |   |   |    |  | $      | 800.0  |    |  |   | 800.0   |   |  |   | 800.0   |   |
| Averageinterest rate(a)                         |  |                                                 |   |    |  |                   |    |   |  |   |   |       |  |   |   |    |  |   |   |    |  |   | 9.9    | %  |  |   |    |   |  |   |    |   |
| Totaldebt (b)                                   |  | $                                                    | 32.5   |    |  | $                      | — |   |  | $      | 191.7  |       |  | $      | 18.5   |    |  | $      | 327.0  |    |  | $      | 800.0  |    |  | $      | 1,369.7 |   |  | $      | 1,321.9 |   |
|                                                 |

|                                               |  |                            |        |        |  |        |        |        |  |        |        |        |  |                                |        |                           |  |                        |        |        |  |        |        |        |  |        |      |        |  |        |      |        |  |        |
|-----------------------------------------------|--|----------------------------|--------|--------|--|--------|--------|--------|--|--------|--------|--------|--|--------------------------------|--------|---------------------------|--|------------------------|--------|--------|--|--------|--------|--------|--|--------|------|--------|--|--------|------|--------|--|--------|
| ForwardContracts                              |  | AverageContractualRate$/FC |        |   |  |   |        |   |  |   |        |   |  | OriginalUSDollarNotionalAmount |        | ContractValueSept.30,2004 |  | Fair ValueSept.30,2004 |
| Sell Hong Kong Dollars/BuyUSD                 |  |                       | 0.1282 |   |  |   |   |   |  |   |   |   |  |                           |   |                      |  |                   |   |   |  |   |   |   |  | $      | 0.2  |   |  | $      | 0.2  |   |  | $      | — |   |
| Buy Euros/SellUSD                             |  |                       | 1.1939 |   |  |   |   |   |  |   |   |   |  |                           |   |                      |  |                   |   |   |  |   |   |   |  |   | 2.6  |   |  |   | 2.7  |   |  |   | 0.1 |   |
| SellBritish Pounds/BuyUSD                     |  |                       | 1.7879 |   |  |   |   |   |  |   |   |   |  |                           |   |                      |  |                   |   |   |  |   |   |   |  |   | 6.4  |   |  |   | 6.4  |   |  |   | — |   |
| SellAustralian Dollars/BuyUSD                 |  |                       | 0.7183 |   |  |   |   |   |  |   |   |   |  |                           |   |                      |  |                   |   |   |  |   |   |   |  |   | 9.9  |   |  |   | 9.9  |   |  |   | — |   |
| SellCanadian Dollars/BuyUSD                   |  |                       | 0.7497 |   |  |   |   |   |  |   |   |   |  |                           |   |                      |  |                   |   |   |  |   |   |   |  |   | 9.1  |   |  |   | 8.6  |   |  |   | (0.5 | )  |
| SellSouth African Rand/BuyUSD                 |  |                       | 0.1410 |   |  |   |   |   |  |   |   |   |  |                           |   |                      |  |                   |   |   |  |   |   |   |  |   | 4.7  |   |  |   | 4.3  |   |  |   | (0.4 | )  |
| BuyAustralian Dollars/Sell New ZealandDollars |  |                       | 1.1221 |   |  |   |   |   |  |   |   |   |  |                           |   |                      |  |                   |   |   |  |   |   |   |  |   | 2.5  |   |  |   | 2.4  |   |  |   | (0.1 | )  |
| BuyBritish Pounds/SellEuros                   |  |                       | 0.6778 |   |  |   |   |   |  |   |   |   |  |                           |   |                      |  |                   |   |   |  |   |   |   |  |   | 2.6  |   |  |   | 2.5  |   |  |   | (0.1 | )  |
| Totalforwardcontracts                         |  |                       |   |   |  |   |   |   |  |   |   |   |  |                           |   |                      |  |                   |   |   |  |   |   |   |  | $      | 38.0 |   |  | $      | 37.0 |   |  | $      | (1.0 | )  |
|                                               |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                 |
|-----|-----------------------------------------------------------------------------------------------------------------|
| (a) | Weightedaverage variable rates are based upon implied forward rates from theyield curves at September 30, 2004. |

|     |                                                                                                               |
|-----|---------------------------------------------------------------------------------------------------------------|
| (b) | Excludes an advance under the New KeepwellAgreement of $1.2, for which fair value is not readilydeterminable. |

39

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

Item 4.    Controls and Procedures

(a) Disclosure Controls and Procedures. The Company'smanagement, with the participation of the Company's ChiefExecutive Officer and Chief Financial Officer, has evaluated theeffectiveness of the Company's disclosure controls and procedures(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) asof the end of the fiscal period covered by this Quarterly Report onForm 10-Q. Based upon such evaluation, the Chief Executive Officer andChief Financial Officer have concluded that, as of the end of suchperiod, the Company's disclosure controls and procedures areeffective in recording, processing, summarizing and reportinginformation required to be disclosed by the Company in the reports itfiles or submits under the Exchange Act within the time periodsspecified in the Commission's rules and forms.

(b)Internal Control Over Financial Reporting. There have not been anychanges in the Company's internal control over financialreporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)under the Exchange Act) during the fiscal period covered by thisQuarterly Report on Form 10-Q that have materially affected, or arereasonably likely to materially affect, the Company's internalcontrol over financial reporting.

Forward-LookingStatements

This Quarterly Report on Form 10-Q for the quarterended September 30, 2004, as well as other public documents andstatements of the Company, contain forward-looking statements thatinvolve risks and uncertainties. The Company's actual results maydiffer materially from those discussed in such forward-lookingstatements. Such statements include, without limitation, theCompany's expectations and estimates (whether qualitative orquantitative) as to:

|  |           |                                                                                                                                                                                                                                                                                              |
|--|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (i)  | theCompany's future financial performance, including theCompany's belief that its plan is proving effective and that ithas strengthened its organizational capability (and its expectation todo so in 2004) and that it has strengthened its relationships with itskey retailers in theU.S.; |

|  |            |                                                                                                                                                                                                                                               |
|--|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ii)  | the effect onsales of political and/or economic conditions, political uncertainties,military actions, terrorist activities, adverse currency fluctuations,competitive activities, category weakness and changes in consumerpurchasing habits; |

|  |             |                                                                                                                                                                                                                                                                                                                                  |
|--|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iii)  | thecharges and the cash costs resulting from implementing and refining theCompany's plan and the timing of such costs, as well as theCompany's expectations as to improved revenues and achievingprofitability over the long term as a result of such phase of its planand the Company's plans to continue to fund brandsupport; |

|  |            |                                                                                                    |
|--|------------|----------------------------------------------------------------------------------------------------|
|  | (iv)  | theCompany's plans regarding the continued growth momentum andaccelerated growth phase of itsplan; |

|  |           |                                                                                                       |
|--|-----------|-------------------------------------------------------------------------------------------------------|
|  | (v)  | the Company'splans to continue to increase the effectiveness and reduce the cost ofits display walls; |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (vi)  | theCompany's plans to drive efficiencies across its overall supplychain, including reducing manufactory costs by streamlining componentsand sourcing strategically and rationalizing its supply chain inEurope, including the Company's plan to transition its Europeanmanufacturing from COSi to one or more of Products Corporation'sother facilities and its expectation that such transition will notresult in any disruption to its supplychain; |

|  |             |                                                                                 |
|--|-------------|---------------------------------------------------------------------------------|
|  | (vii)  | theCompany's plans to optimize the effectiveness of its marketingandpromotions; |

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

40

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

|  |            |                                                                                                                                                                                                                                                                                          |
|--|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ix)  | operatingrevenues, cash on hand and availability of borrowings under theConsolidated Mafco line of credit, Products Corporation's NewCredit Agreement, other permitted lines of credit and the New KeepwellAgreement being sufficient to satisfy the Company's cashrequirements in 2004; |

|  |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (x)  | the availability of fundsfrom Products Corporation's New Credit Agreement, theConsolidated Mafco line of credit, other permitted lines of credit andadvances under the New Keepwell Agreement, restructuring indebtedness,selling assets or operations, capital contributions and/or loans fromMacAndrews & Forbes, the Company's other affiliates and/orthird parties and/or the sale of additional equity or debt securitiesof Revlon, Inc. and/or REV Holdings (or debt securities of ProductsCorporation); |

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xi)  | 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 HoldingsNotes; |

|  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xii)  | theCompany's uses of funds, including amounts required for thepayment of operating expenses, including expenses in connection withthe continued implementation of, and refinement to, the Company'splan, payments in connection with the Company's purchases ofpermanent wall displays, capital expenditures, restructuring programsand debt service payments, and its estimates of operating expenses,working capital expenses, wall display costs, capital expenditures,restructuring costs, cash contributions to the Company's pensionplans, debt service payments (including payments required underProducts Corporation's debt instruments and interest paymentsunder the New REV Holdings Notes) and charges in connection with theCompany's growthplan; |

|  |              |                                                                   |
|--|--------------|-------------------------------------------------------------------|
|  | (xiii)  | mattersconcerning the Company's market-risk sensitiveinstruments; |

|  |             |                                                                       |
|--|-------------|-----------------------------------------------------------------------|
|  | (xiv)  | theeffects of the Company's adoption of certain accountingprinciples; |

|  |            |                                                                                                                                           |
|--|------------|-------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xv)  | theCompany's estimates of the amount of U.S. federal net operatinglosses and the alternative minimum tax losses available to Revlon,Inc.; |

|  |             |                                                                                                                                                                                                                                               |
|--|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xvi)  | theCompany's plan to refinance certain of ProductsCorporation's debt, including its plans to refinance ProductsCorporation's 8 1/8% Senior Notes,9% Senior Notes and 8 5/8% SeniorSubordinated Notes prior to their respective maturities;and |

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

Statements that are not historicalfacts, including statements about the Company's beliefs andexpectations, are forward-looking statements. Forward-lookingstatements can be identified by, among other things, the use offorward-looking language, such as "believes,""expects,""estimates,""projects,""forecast," "may,""will," "should,""seeks," "plans,""scheduled to,""anticipates" or"intends" or the negative of those terms, orother variations of those terms or comparable language, or bydiscussions of strategy or intentions. Forward-looking statements speakonly as of the date they are made, and except for the Company'songoing obligations under the U.S. federal securities laws, the Companyundertakes no obligation to publicly update any forward-lookingstatements, whether as a result of new information, future events orotherwise. Investors are advised, however, to consult any additionaldisclosures the 

41

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

Company makes in its Quarterly Reports onForm 10-Q filed in 2004 and Current Reports on Form 8-K filed with theCommission in 2004 (which, among other places, can be found on theCommission's website at http://www.sec.gov). The informationavailable from time to time on such website shall not be deemedincorporated by reference into this Quarterly Report on Form 10-Q. Anumber of important factors could cause actual results to differmaterially from those contained in any forward-looking statement. Inaddition to factors that may be described in the Company'sfilings with the Commission, including this filing, the followingfactors, among others, could cause the Company's actual resultsto differ materially from those expressed in any forward-lookingstatements made by theCompany:

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

|  |            |                                                                                                                                                                                                                                                       |
|--|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ii)  | theeffects of and changes in political and/or economic conditions,including inflation, monetary conditions, military actions, terroristactivities, consumer purchasing habits and in trade, monetary, fiscaland tax policies in internationalmarkets; |

|  |             |                                                                                                                                                                                                                                                                           |
|--|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (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 suchplan; |

|  |            |                                                                                                                                                                |
|--|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iv)  | difficulties,delays or unanticipated costs in implementing the Company's plansregarding the continued growth momentum and accelerated growth phase ofits plan; |

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

|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (vi)  | difficulties,delays or unanticipated costs in implementing the Company's plansto drive efficiencies across its overall supply chain, includingreducing manufactory costs by streamlining components and sourcingstrategically and rationalizing its supply chain in Europe, includingunexpected difficulties, delays, unanticipated costs or disruptions inconnection with its plans to transition European manufacturing fromCOSi to one or more of Products Corporation's otherfacilities; |

|  |             |                                                                                                                                             |
|--|-------------|---------------------------------------------------------------------------------------------------------------------------------------------|
|  | (vii)  | difficulties,delays or unanticipated costs in implementing the Company's plansto optimize the effectiveness of its marketing andpromotions; |

|  |              |                                                                                                                                                  |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (viii)  | difficulties,delays or unanticipated costs or less than expected savings and otherbenefits resulting from the Company's restructuringactivities; |

|  |            |                                                                                                                                                                               |
|--|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (ix)  | lower thanexpected operating revenues, the inability to secure capitalcontributions or loans from MacAndrews & Forbes, theCompany's other affiliates and/or thirdparties; |

|  |           |                                                                                                                                                                                                                                                                        |
|--|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (x)  | theunavailability of funds under Products Corporation's New CreditAgreement, the Consolidated Mafco line of credit, other permitted linesof credit or the New Keepwell Agreement or from selling additionalshares of Revlon, Inc. or equity securities of REVHoldings; |

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

42

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

|  |             |                                                                                                                                                                                                                             |
|--|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xii)  | higherthan expected operating expenses, sales returns, working capitalexpenses, wall display costs, capital expenditures, restructuringcosts, cash pension plan contributions, growth plan charges, or debtservicepayments; |

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

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

|  |            |                                                                                                                 |
|--|------------|-----------------------------------------------------------------------------------------------------------------|
|  | (xv)  | lower thanexpected U.S. federal net operating losses or alternative minimum taxlosses available to Revlon,Inc.; |

|  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (xvi)  | difficulties,delays or the inability of the Company to refinance certain of ProductsCorporation's debt, including its plans to refinance ProductsCorporation's 8 1/8% Senior Notes,9% Senior Notes and 8 5/8% SeniorSubordinated Notes prior to their respective maturities and theinability to issue equity or debt securities, including Class A CommonStock, for cash or in exchange for indebtedness of Products Corporationand difficulties, delays or the inability of the Company to consummatethe remaining Debt Reduction Transactions;and |

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

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

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REV HOLDINGS LLC ANDSUBSIDIARIES

PART II — OTHER INFORMATION

Item1.    Legal Proceedings −

The Company isinvolved in various routine legal proceedings incident to the ordinarycourse of its business. The Company believes that the outcome of allpending legal proceedings in the aggregate is unlikely to have amaterial adverse effect on the business or consolidated financialcondition of the Company. A purported class action lawsuit was filed onSeptember 27, 2000, in the United States District Court for theSouthern District of New York on behalf of Dan Gavish, Tricia Fontanand Walter Fontan individually and allegedly on behalf of all otherssimilarly situated who purchased the securities of Revlon, Inc. and REVHoldings Inc. (a Delaware corporation and the predecessor of REVHoldings) between October 2, 1998 and September 30, 1999 (the"Second Gavish Action"). The complaint,amended by the plaintiffs in November 2001, alleged, among otherthings, that Revlon, Inc., certain of its present and former officersand directors and REV Holdings Inc. violated, among other things, Rule10b-5 under the Securities Exchange Act of 1934, as amended. OnSeptember 29, 2004, the United States District Court for the SouthernDistrict of New York dismissed the Second Gavish Action, withoutprejudice. In light of the settlement of the defendants'insurance claim for this matter and the other purported class actionsfiled in 1999 and settled in June 2003, which the Company recorded inthe fourth quarter of 2002, the Company does not expect to incur anyfurther expense in this matter.

Item 2.    Changes inSecurities, Use of Proceeds and Issuer Purchases of Equity Securities– None

Item 4.    Submission of Matters to aVote of Security Holders − None

Item6.    Exhibits and Reports on Form 8-K.

(a)    Exhibits

|      |  |                                                  |  |  |  |  |
|------|--|--------------------------------------------------|--|--|--|--|
| 31.1 |  | Section302 CEO certification. Filedherewith.     |
| 31.2 |  | Section 302 CFOcertification. Filedherewith.     |
| 32.1 |  | Section 906 CEOcertification. Furnishedherewith. |
| 32.2 |  | Section 906 CFOcertification. Furnishedherewith. |
|      |

S  I  G  N  A  T  U  R  E  S

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

Dated: November 12, 2004

|  | REV HOLDINGSLLC |
|--|-----------------|

|  | Registrant |
|--|------------|

|  |                          |                                                                                                                                                                                                                      |
|--|--------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | By:/s/    | Todd J.Slotkin                 Todd J. SlotkinExecutive Vice President, Chief Financial Officer, ChiefAccounting Officer and Manager |

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