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SECURITIES
AND EXCHANGE COMMISSION

Washington, D.C.
20549

FORM 10-K

FOR ANNUAL AND TRANSITION
REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

(Mark One)

[X]    ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31,
2003

OR

[ ]    TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
                                    
to

Commission file number 1-11178

REVLON, INC.

(Exact
name of registrant as specified in its
charter)

DELAWARE

13-3662955(State
or other jurisdiction ofincorporation or
organization)

(I.R.S. EmployerIdentification
No.)237 Park
Avenue, New York, New York

10017(Address of
principal executive offices)

(Zip
Code)


Registrant's telephone number,
including area code: (212) 527-4000

Securities registered
pursuant to Section 12(b) or 12(g) of the
Act:

Title
of each class

Name of each exchange on which
registeredClass A Common Stock

New York
Stock Exchange


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

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K.    [X]

Indicate
by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of
1934).    Yes    [ ]     No    [X]

As
of December 31, 2003, 38,208,451 shares of Class A Common Stock and
31,250,000 shares of Class B Common Stock were outstanding. 11,650,000
shares of Class A Common Stock and all of the shares of Class B Common
Stock were held by REV Holdings LLC, a Delaware limited liability
company and an indirectly wholly-owned subsidiary of Mafco Holdings
Inc., and 14,590,347 shares of Class A Common Stock were held by
MacAndrews & Forbes Holdings Inc., which is a direct wholly-owned
subsidiary of Mafco Holdings Inc. The aggregate market value of the
registrant's Class A Common Stock held by non-affiliates (using
the New York Stock Exchange closing price as of June 30, 2003, the last
business day of the registrant's most recently completed second
fiscal quarter) was approximately
$35,644,314.

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Part I

Item 1.    Description of Business

Background

Revlon, Inc. (and together with its subsidiaries, the "Company") conducts
		its business exclusively through its direct subsidiary, Revlon Consumer
		Products Corporation ("Products Corporation"), which manufactures, markets and
		sells an extensive array of cosmetics and skin care, fragrances and personal
		care products. Revlon is one of the world's leading mass-market
		cosmetics brands. Revlon believes that its global brand name
		recognition, product quality and marketing experience have enabled it to create
		one of the strongest consumer brand franchises in the world. The Company's
		products are sold worldwide and marketed under such well-known brand names as
		Revlon, ColorStay, Revlon Age DefyingandSkinlights, as well as
		Almay in cosmetics; Almay Kinetin, Vitamin C Absolutes, Eterna
		27, Ultima II and Jeanne Gatineau in skin care; Charlie in
		fragrances; and High Dimension, Flex, Mitchum, Colorsilk, Jean Natéand Bozzano in personal care products.

The Company was founded by Charles Revson, who revolutionized the
		cosmetics industry by introducing nail enamels matched to lipsticks in fashion
		colors over 70 years ago. Today, the Company has leading market positions in a
		number of its principal product categories in the U.S. mass-market distribution
		channel, including the lip, face makeup and nail enamel categories. The Company
		also has leading market positions in several product categories in certain
		markets outside of the U.S., including in Australia, Canada, Mexico and South
		Africa. The Company's products are sold in more than 100 countries across six
		continents.

All U.S. market share and market position data herein for the Company's
		brands are based upon retail dollar sales, which are derived from ACNielsen
		data. ACNielsen measures retail sales volume of products sold in the U.S.
		mass-market distribution channel. Such data represent ACNielsen's estimates
		based upon data gathered by ACNielsen from market samples and are therefore
		subject to some degree of variance. Additionally, as of August 4, 2001,
		ACNielsen's data does not reflect sales volume from Wal-Mart, Inc., which is
		Revlon's largest customer.

The Company's Plan

The Company's plan consists of three main components: (1) the cost
		rationalization phase; (2) the stabilization and growth phase; and (3) the
		accelerated growth phase.

Phase 1 — Cost Rationalization

In 1999 and 2000, the Company faced a number of strategic challenges.
		Accordingly, through 2001 the Company focused its plan on lowering costs and
		improving operating efficiency. The Company believes that the actions taken
		during 2000 and 2001 lowered aspects of the Company's cost structure and
		improved the Company's manufacturing and operating efficiency, creating a
		platform for the stabilization and growth stage of its plan.

Phase 2 — Stabilization and Growth

In February 2002, the Company announced the appointment of Jack L. Stahl,
		former president and chief operating officer of The Coca-Cola Company, as the
		Company's new President and Chief Executive Officer.

Following the appointment of Mr. Stahl, the Company undertook an
		extensive review and evaluation of the Company's business to establish specific
		integrated objectives and actions to advance the next stage in the Company's
		plan. As a result of this review, the Company established three principal
		objectives:

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|• | creating
			 and developing the most consumer-preferred brands;

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|• | becoming
			 the most valuable partner to the Company's retailers; and

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|- | -------------------------------------------------------
|• | becoming
			 a top company where people choose to work.

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The Company also conducted detailed evaluations and research of the
		strengths of the Revlon brand and the Almay brand; the Company's advertising
		and promotional efforts; the Company's relationships with the Company's
		retailers and consumers; its retail in-store presence; and the strength and
		skills of the Company's organization. As a result, the Company developed the
		following key actions and investments to support the stabilization and growth
		phase of its plan:

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | Increase advertising and media
			 spending and effectiveness.    The Company increased
			 its media spending and advertising support in 2003 and latter half of 2002. The
			 Company is also seeking to improve the effectiveness of its marketing,
			 including its advertising, by, among other things, ensuring consistent
			 messaging and imagery in its advertising, in the graphics included in the
			 Company's wall displays and in other marketing materials.

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | Increase the marketing
			 effectiveness of the Company's wall
			 displays.    Beginning in the first quarter of 2003,
			 the Company has begun and intends to continue to make significant improvements
			 to its retail wall displays by streamlining its product assortment and
			 reconfiguring product placement, which the Company believes will optimize
			 cross-selling among the Company's various product categories on the wall
			 displays and make the displays easier to merchandise and stock. The Company
			 also intends to continue to roll out its new wall displays, which the Company
			 began in 2002. In addition, beginning in the first quarter of 2003, the Company
			 has begun and intends to continue to focus on enhancing the effectiveness of
			 its merchandiser coverage to improve in-store stock levels and work with its
			 retail customers to improve replenishment of the Company's products on the wall
			 displays and to minimize out-of-stocks at its retail customers.

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|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | Adopt revised pricing
			 strategies.    The Company has been selectively
			 adjusting prices on certain stock keeping units, or SKUs, to better align the
			 Company's pricing with product benefits and competitive benchmarks.

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|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | Further strengthen the
			 Company's new product development process.    The
			 Company has developed and is implementing a new cross-functional product
			 development process intended to optimize the Company's ability to bring to
			 market its new product offerings and to ensure that the Company has products in
			 key trend categories.

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|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | Implement a comprehensive
			 program to develop and train the Company's
			 employees.    The Company is implementing a
			 comprehensive program to further develop the management, leadership and
			 communication skills of its employees, which the Company will regularly assess
			 as part of its goal to become a top company where people choose to work.

In December 2002, the Company announced that it would accelerate aspects
		of the implementation of the stabilization and growth phase of its plan. The
		Company recorded charges of approximately $100 million in the fourth quarter of
		2002 and approximately $31 million during 2003. These charges primarily related
		to various aspects of the stabilization and growth phase of the Company's plan,
		primarily stemming from sales returns and inventory writedowns from a selective
		reduction of SKUs, reduced distribution of the Ultima II brand, higher
		allowances stemming from selective price adjustments on certain products,
		professional expenses associated with the development of, and research in
		relation to, and execution of the stabilization and growth phase of the
		Company's plan, and writedowns associated with reconfiguring existing wall
		displays at the Company's retail customers. These charges exclude brand support
		expenses and training and development costs.

Phase 3 — Continued Growth Momentum and Accelerated Growth

The Company intends to capitalize on the actions taken during the
		stabilization and growth phase of the Company's plan, with the objective of
		increasing revenues and achieving profitability over the long term.

The Company currently anticipates that the continued growth momentum and
		accelerated growth stage of its plan will include various actions that
		represent refinements of and additions to the actions taken during the
		stabilization and growth phase of its plan, with the objective of improving the
		Company's operating margins. The Company currently anticipates that these
		initiatives will include, among other

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things, actions to: (i) further improve the new product development and
		implementation process; (ii) continue to increase the effectiveness and reduce
		the cost of the Company's display walls; (iii) drive efficiencies across the
		Company's overall supply chain, including reducing manufacturing costs by
		streamlining components and sourcing strategically; and (iv) optimize the
		effectiveness of the Company's marketing and promotions. This stage will also
		include strengthening the Company's balance sheet. (See "Recent
		Developments")

Finally, the Company expects that it will continue the training and
		development of its organization to continue to improve the organization's
		capability to execute its strategies, while providing enhanced job satisfaction
		for its employees.

Recent Developments

On February 12, 2004, the Company announced that its Board of Directors
		had approved agreements with Fidelity Management & Research Co.
		("Fidelity") and Mafco Holdings Inc. ("Mafco Holdings" and, together with its
		affiliates, "MacAndrews & Forbes"), which is wholly owned by Ronald O.
		Perelman, Revlon's principal stockholder, intended to dramatically strengthen
		the Company's balance sheet (the "Debt Reduction Transactions"). As a result of
		the agreements reached, the Company expects that Products Corporation's debt
		will be reduced by approximately $930 million and the Company anticipates that
		approximately $780 million of Products Corporation's debt will be eliminated
		during the first quarter of 2004 through a debt-for-equity exchange.

In connection with the Debt Reduction Transactions, MacAndrews &
		Forbes has agreed to exchange an aggregate of approximately $475 million of
		Products Corporation's indebtedness for shares of Revlon, Inc.'s Class A Common
		Stock. Fidelity has also agreed to exchange an aggregate of $155 million of
		Products Corporation's indebtedness for shares of Revlon, Inc.'s Class A Common
		Stock. The Company intends to commence exchange offers to holders of any and
		all of Products Corporation's outstanding 8 1/8% Senior Notes due 2006, 9%
		Senior Notes due 2006 and 8 5/8% Senior Subordinated Notes due 2008 (each as
		hereinafter defined), each of which has been fully and unconditionally
		guaranteed by Revlon, Inc., on the same terms as agreed with Fidelity and
		MacAndrews & Forbes.

Fidelity and MacAndrews & Forbes have agreed to tender for exchange
		in the exchange offers an aggregate of approximately $440 million of
		outstanding 8 1/8% Senior Notes, 9% Senior Notes and 8 5/8% Senior Subordinated
		Notes for shares of Revlon, Inc. Class A Common Stock, at a ratio of 400 shares
		of Revlon, Inc. Class A Common Stock for each $1,000 principal amount of 8 1/8%
		Senior Notes or 9% Senior Notes tendered for exchange or 300 shares of Revlon,
		Inc. Class A Common Stock for each $1,000 principal amount of 8 5/8% Senior
		Subordinated Notes tendered for exchange. Fidelity may elect to receive cash or
		additional shares of Revlon, Inc. Class A Common Stock in respect of accrued
		interest payable on the notes tendered by it.

MacAndrews & Forbes and its affiliates (other than Revlon, Inc. and
		its subsidiaries) as of February 12, 2004 held approximately nil, $1 million
		and $285 million, respectively, and Fidelity and its affiliates and
		consolidated funds as of February 12, 2004 held approximately $76 million, $47
		million and $32 million, respectively, in principal amount of the 8 1/8% Senior
		Notes, 9% Senior Notes and 8 5/8% Senior Subordinated Notes.

In the exchange offers for the outstanding 8 1/8% Senior Notes, 9% Senior
		Notes and 8 5/8% Senior Subordinated Notes, holders other than MacAndrews &
		Forbes and Fidelity will be offered the opportunity to exchange their notes for
		(i) shares of Revlon, Inc. Class A Common Stock at the same ratios applicable
		to Fidelity and MacAndrews & Forbes in the support agreements, or (ii) cash
		up to a maximum of $150 million aggregate principal amount of tendered notes,
		subject to proration. Notes tendered for cash would receive $830 per $1,000
		face amount for the 8 1/8% Senior Notes, $800 per $1,000 face amount for the 9%
		Senior Notes and $620 per $1,000 face amount for the 8 5/8% Senior Subordinated
		Notes. Accrued interest will also be paid on tendered notes in cash or
		additional shares of Revlon, Inc. Class A Common Stock, at the holder's option.
		The maximum principal amount of notes that may be exchanged for cash is $150
		million reduced by the aggregate principal amount of any notes tendered and
		exchanged in the exchange offers for shares of Revlon, Inc. Class A Common
		Stock in excess of the amounts Fidelity and MacAndrews & Forbes currently
		hold and have agreed to tender for exchange. The exchange offers are expected
		to commence on or before March 1, 2004.

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To the extent that $150 million aggregate principal amount of notes,
		other than the notes to be tendered by Fidelity and MacAndrews & Forbes,
		are not tendered in the exchange offers, MacAndrews & Forbes has agreed to
		subscribe for additional shares of Revlon, Inc. Class A Common Stock at a
		purchase price of $2.50 per share to make up any such shortfall, with the
		proceeds of such investment to be used to repay Products Corporation's
		indebtedness. MacAndrews & Forbes has also agreed to subscribe for
		additional shares of Revlon, Inc. Class A Common Stock in an aggregate
		subscription amount equal to the amount of cash required to be paid by Revlon,
		Inc. in exchange for notes which are tendered for cash, excluding cash payable
		with respect to accrued interest. If, as a result of these transactions,
		MacAndrews & Forbes makes an investment in Revlon, Inc. Class A Common
		Stock for cash, the other stockholders of record of Revlon, Inc. as of a date
		prior to the termination of the exchange offer will be provided the opportunity
		to subscribe for Revlon, Inc. Class A Common Stock at the same $2.50
		subscription price.

In addition to the exchange offers which the Company expects will reduce
		indebtedness by an aggregate of approximately $780 million, the Company plans
		to conduct further rights and equity offerings in such amounts as to ensure
		that the total debt reduction will be approximately $830 million by the end of
		2004 and approximately $930 million by March 2006. The terms of the rights
		offering to be consummated prior to December 31, 2004 and any other equity
		offerings to be undertaken in connection with the Debt Reduction Transactions,
		including the subscription prices, will be determined by the Company's Board of
		Directors at the appropriate times.

Included in the obligations to be exchanged for Revlon, Inc. Class A
		Common Stock are any and all outstanding amounts owing to MacAndrews &
		Forbes, as of the closing date of the exchange offers, under the Mafco $100
		million term loan (which the Company currently expects will be approximately
		$110 million at March 31, 2004), the 2004 Mafco $125 million term loan (which
		the Company currently expects will be approximately $55 million at March 31,
		2004), the Mafco $65 million line of credit (which the Company currently
		expects will be approximately nil at March 31, 2004) (each as hereinafter
		defined) and approximately $24 million of certain subordinated promissory notes
		payable to MacAndrews & Forbes. Each $1,000 principal amount of
		indebtedness outstanding under the Mafco $100 million term loan, Mafco $65
		million line of credit and 2004 Mafco $125 million term loan will be exchanged
		for 400 shares of Revlon, Inc. Class A Common Stock and each $1,000 principal
		amount of indebtedness outstanding under the subordinated promissory notes will
		be exchanged for 300 shares of Revlon, Inc. Class A Common Stock. The remainder
		of the 2004 Mafco $125 million term loan and the Mafco $65 million line of
		credit which is not exchanged in the exchange offers shall remain available to
		Products Corporation in accordance with their respective terms. As part of the
		Debt Reduction Transactions, under the stockholders agreement Revlon, Inc.
		agreed with Fidelity to cause Products Corporation to limit outstanding
		aggregate borrowings under the Mafco $65 million line of credit and the Mafco
		2004 $125 million term loan to an amount not greater than $125 million less the
		indebtedness under such loans that is exchanged in the exchange offers, at any
		time after closing the Debt Reduction Transactions. MacAndrews & Forbes,
		which beneficially owns 100% of the outstanding shares of Revlon, Inc.'s Series
		A preferred stock, having an aggregate liquidation preference of $54.6 million
		, and 100% of Revlon, Inc.'s outstanding Series B convertible preferred stock,
		has also agreed to exchange its shares of Revlon, Inc.'s Series A preferred
		stock for 160 shares of Revlon, Inc. Class A Common Stock for each $1,000 of
		liquidation preference and to convert its shares of Revlon, Inc. Series B
		convertible preferred stock into an aggregate of 433,333 shares of Revlon, Inc.
		Class A Common Stock.

As part of the Debt Reduction Transactions, Revlon, Inc., MacAndrews
		& Forbes and Fidelity will also enter into a stockholders agreement
		pursuant to which, among other things, (i) Revlon, Inc. will agree to continue
		to maintain a majority of independent directors (as defined by New York Stock
		Exchange ("NYSE") listing standards) on its Board of Directors as it currently
		does; (ii) Fidelity will be entitled to nominate to Revlon, Inc.'s Board of
		Directors (A) two directors for so long as Fidelity holds at least 10% of
		Revlon, Inc.'s outstanding voting stock or (B) one director for so long as
		Fidelity holds at least 5% but less than 10% of Revlon, Inc.'s outstanding
		voting stock, one of which will be entitled to sit on all standing committees
		of Revlon, Inc.'s Board of Directors (subject to satisfaction of applicable
		listing standards and

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other applicable laws, rules and regulations); and (iii) Revlon, Inc.
		would establish within 30 days of the consummation of the exchange offers and
		maintain a Nominating and Corporate Governance Committee of the Board of
		Directors.

MacAndrews & Forbes has agreed to act by written consent to approve
		the Debt Reduction Transactions to the extent that such approval is required,
		including the approval of the issuance of the necessary additional shares of
		Revlon, Inc. Class A Common Stock as consideration in the exchange offers and
		the transactions contemplated by the support agreements with Fidelity and
		MacAndrews & Forbes. The Board of Directors has fixed February 17, 2004 as
		the record date for the determination of stockholders entitled to notice of the
		action by written consent. The decision to enter into the transactions
		described above follows the announcement in December 2003 that the Board of
		Directors had authorized management to begin exploring various alternatives to
		strengthen the Company's balance sheet and increase equity. The Company
		currently expects to file an Information Statement with the Securities and
		Exchange Commission and mail exchange offer materials to note holders by March
		1, 2004. The Company indicated that certain aspects of the refinancing may be
		subject to Board of Director, stockholder, lender, and regulatory approvals.

As a result of the Debt Reduction Transactions, in February 2004 the
		Company sought and secured amendments of its Credit Agreement to permit various
		aspects of such transactions, including permitting (i) the prepayment of the
		Mafco $100 million term loan and the Mafco $125 million term loan as a result
		of the indebtedness thereunder outstanding at the consummation of the exchange
		offers being fully converted to equity in connection with the exchange offers;
		(ii) the reduction of the commitment of the Mafco $65 million line of credit to
		its undrawn amount at the consummation of the exchange offers; (iii) the
		exclusion from Revlon Inc.'s obligation to make capital contributions to
		Products Corporation using the proceeds from Revlon, Inc.'s equity offerings
		raised by Revlon, Inc. in connection with the Debt Reduction Transactions; (iv)
		any proceeds remaining after such transactions to be contributed to Products
		Corporation and used by Products Corporation to prepay or repurchase any of its
		outstanding indebtedness, provided that Products Corporation takes action to
		make such prepayment or repurchase within 30 days after receipt of such
		contribution and grants a first-priority security interest in the amount
		contributed pending its application to such prepayment or repurchase; (v)
		permitting Revlon, Inc. to enter into certain investment or subscription
		agreements in connection with the Debt Reduction Transactions, including the
		support agreements and any other investment or subscription agreements; and
		(vi) the aggregate term loan commitments under the Credit Agreement to be
		increased by $64.4 million.

In December 2003, Revlon, Inc. announced that its Board of Directors
		approved two loans from MacAndrews & Forbes Holdings Inc. ("MacAndrews
		Holdings") one to provide up to $100 million (the "2004 M&F Loan"), if
		needed, to enable the Company to continue to implement and refine its plan, and
		the other to provide an additional $25 million (the "$25 million M&F Loan")
		to be used for general corporate purposes. The 2004 M&F Loan and $25
		million M&F Loan were consolidated into one term loan agreement
		(hereinafter referred to as the "2004 Mafco $125 million term loan"). The 2004
		Mafco $125 million term loan is a senior unsecured multiple-draw term loan at
		an interest rate of 12% per annum and which is on substantially the same terms
		as the Mafco $100 million term loan (as hereinafter defined) provided by
		MacAndrews & Forbes earlier in 2003, including that interest on such loans
		is not payable in cash, but will accrue and be added to the principal amount
		each quarter and be paid in full at final maturity on December 1, 2005,
		provided that the final $25 million of such loan may be repaid at the option of
		the Company prior to December 1, 2005.

EBITDA (as defined in the Credit Agreement) was $144.4 million for the
		four consecutive fiscal quarters ended December 31, 2003, which was less than
		the minimum of $230 million required under the EBITDA covenant of the Credit
		Agreement for that period and the Company's leverage ratio was 1.66:1.00, which
		was in excess of the maximum ratio of 1.10:1.00 permitted under the leverage
		ratio covenant of the Credit Agreement for that period. Accordingly, the
		Company sought and on January 28, 2004 secured waivers of compliance with these
		covenants for the four quarters ended December 31, 2003 and, in light of the
		Company's expectation that its plan would affect the ability of Products
		Corporation to comply with these covenants during 2004, the Company also
		secured an amendment to eliminate the EBITDA and leverage ratio covenants for
		the first three quarters of 2004 and a waiver of compliance with such covenants
		for the four quarters ending December 31, 2004 expiring on January 31, 2005
		(the "2004

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Bank Amendment"). The 2004 Bank Amendment to the Credit Agreement
		included certain other amendments to allow for the continued implementation of
		its plan, including, among other things: (i) providing exceptions from the
		limitations under the indebtedness covenant to permit the 2004 Mafco $125
		million term loan, (ii) permitting Products Corporation to borrow up to an
		additional $50 million in working capital loans from MacAndrews Holdings or its
		affiliates, if necessary, (iii) extending the maturity of the Mafco $65 million
		line of credit until June 30, 2005 and providing that as a condition to
		Products Corporation borrowing under such line from and after the effective
		date of the 2004 Bank Amendment that at least $100 million shall have been
		borrowed under the 2004 Mafco $125 million term loan, (iv) continuing the $20
		million minimum liquidity covenant, (v) increasing the applicable margin on
		loans under the Credit Agreement by 0.25%, the incremental cost of which to the
		Company, assuming the Credit Agreement is fully drawn, would be approximately
		$0.5 million from February 1, 2004 through the end of 2004, and (vi) permitting
		Revlon, Inc. to guarantee certain classes of Products Corporation's public
		indebtedness, to consummate the Debt Reduction Transactions.

Products

The Company manufactures and markets a variety of products worldwide. The
		following table sets forth the Company's principal brands and certain selected
		products.

BRAND
			 
			 COSMETICS
			 
			 SKIN CARE
			 
			 FRAGRANCES
			 
			 PERSONAL CAREPRODUCTSRevlon
			 
			 RevlonColorStayStay
				NaturalAlways OnRevlon Age DefyingSuper LustrousNew Complexion
				SkinlightsHigh DimensionIlluminanceLipglideMoisturous
			 
			 Eterna 27Vitamin C Absolutes
			 
			 CharlieCiara
			 
			 High Dimension ColorsilkFrost
				& GlowFlexOutrageous Aquamarine MitchumHi & DriJean
				NatéRevlon Beauty ToolsAlmay
			 
			 Almay Time-OffAmazing LastingOne
				CoatSkin Stays CleanAlmay Lip VitalityClear ComplexionSkin
				Smoothing Pure Tints
			 
			 Almay Kinetin Almay Milk Plus
			 
			 
			 
			 AlmayOther Brands
			 
			 Ultima II Jeanne
				GatineauCutex
			 
			 Ultima IIJeanne Gatineau
			 
			 
			 
			 BozzanoJuvena


Cosmetics and Skin
		Care.    The Company sells a broad range of
		cosmetics and skin care products designed to fulfill specifically identified
		consumer needs, principally priced in the upper range of the mass-market
		distribution channel, including lip makeup, nail color and nail care products,
		eye and face makeup and skin care products such as lotions, cleansers, creams,
		toners and moisturizers. Many of the Company's products incorporate patented,
		patent-pending or proprietary technology.

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The Company markets several different lines of Revlon lip makeup
		(which address different segments of the lip makeup category). The Company's
		ColorStay lipcolor uses patented transfer-resistant technology that
		provides long wear. ColorStay Overtime Lipcolor is a patented lip
		technology introduced in 2002 that builds on the strengths of the
		ColorStay franchise by offering long-wearing benefits in a new product
		form, which enhances comfort and shine. Super Lustrous lipstick is the
		Company's flagship wax-based lipcolor. In 2003, the Company launched
		Moisturous Lipcolor, and LipGlide Sheer lipcolor.

The Company's nail color and nail care lines include enamels, cuticle
		preparations and enamel removers. The Company's flagship Revlon nail
		enamel uses a patented formula that provides consumers with improved wear,
		application, shine and gloss in a toluene-free, formaldehyde-free and
		phthalate-free formula. The Company's Super Top Speed nail enamel
		contains a patented speed drying polymer formula, which sets in 60 seconds. The
		Company also sells Cutex nail polish remover and nail care products in
		certain countries outside the U.S. In 2003, the Company launched ColorStay
		Always On nail enamel.

The Company sells face makeup, including foundation, powder, blush and
		concealers, under such Revlon brand names as Revlon Age Defying, which
		is targeted for women in the over 35 age bracket; ColorStay, which uses
		patented transfer-resistant technology that provides long wear and won't rub
		off benefits; New Complexion, for consumers in the 18-to-34 age bracket;
		and Skinlights skin brighteners that brighten skin with sheer washes of
		color. In 2003, the Company launched ColorStay Stay Natural foundation.

The Company's eye makeup products include mascaras, eyeliners and eye
		shadows. ColorStay mascara, Softstroke eyeliners and Revlon
		Wet/Dry eye shadows are targeted for women in the 18-to-49 age bracket. The
		Company's eye products also includeIlluminance, an eye shadow that
		gives a luminous finish, and High Dimension mascara and eyeliners. In
		2002, the Company launched ColorStay Overtime lash tint, a patented
		product that wears for up to three days. In 2003, the Company launched Lash
		Fantasy Primer & Mascara and Eyeglide Shimmer
		Shadow.

The Company's Almay brand consists of a line of hypo-allergenic,
		dermatologist-tested, fragrance-free cosmetics and skin care products.
		Almay products include lip makeup, eye and face makeup, and skin care
		products. The Almay brand flagship One Coatfranchise consists of
		lip makeup and eye makeup products including mascara. The Company also sells
		Skin Stays Clean liquid foundation makeup with its patented "clean pore
		complex." The Almay Amazing Lasting Collection features long-wearing
		mascaras and foundations. The AlmayKinetin Skincare Advanced Anti-Aging
		Series features a patented technology. In 2003, the Company launched Almay
		Lip Vitality lipstick with a patented technology, Nearly Naked
		foundation and Bright Eyesmascara.

The Company sells Revlon Beauty Tools, which include nail and eye
		grooming tools, such as clippers, scissors, files, tweezers and eye lash
		curlers. Revlon Beauty Tools are sold individually and in sets under the
		Revlon brand name and are the number one brand of beauty tools,
		excluding pedicure products in the U.S. mass-market distribution channel.

The Company's skin care products, including moisturizers, are sold under
		brand names including Eterna 27, Vitamin C Absolutes, Almay
		Kinetin, Almay Milk Plus and Ultima II. In addition,
		the Company sells skin care products in international markets under
		internationally recognized brand names and under various regional brands,
		including the Company's premium-priced Jeanne Gatineaubrand, as well as
		Ultima II.

Personal Care
		Products.    The Company sells a broad line of
		personal care consumer products, which complements its core cosmetics lines and
		enables the Company to meet the consumer's broader beauty care needs. In the
		mass-market distribution channel, the Company sells haircare, antiperspirant
		and other personal care products, including the Flex and
		Aquamarine haircare lines in many countries and the Bozzano and
		Juvena brands in Brazil; as well as Colorsilk and Frost &
		Glow hair coloring lines throughout a portion of the world; and the
		Mitchum and Hi& Dri antiperspirant brands in many
		countries. The Company also markets hypo-allergenic personal care products,
		including antiperspirants, under the Almay brand. The Company's High
		Dimension hair color is a revolutionary 10-minute home permanent hair
		color.

7

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Fragrances.    The
		Company sells a selection of moderately priced and premium-priced fragrances,
		including perfumes, eau de toilettes, colognes and body sprays. The Company's
		portfolio includes fragrances such asCharlieand Ciara.

Marketing

The Company markets extensive consumer product lines at a range of retail
		prices primarily through the mass-market distribution channel and outside the
		U.S. also markets select premium lines through demonstrator-assisted channels.

The Company uses print and television advertising and point-of-sale
		merchandising, including displays and samples. The Company's marketing
		emphasizes a uniform global image and product for its portfolio of core brands,
		includingRevlon, ColorStay, Revlon Age Defying, Almay, Charlie, and
		Mitchum. In 2002 the Company consolidated all of its advertising for the
		Revlon and Almay brands into a single advertising agency intended
		to increase the effectiveness of its worldwide advertising, as well as result
		in more efficient media placement. The Company coordinates advertising
		campaigns with in-store promotional and other marketing activities. The Company
		develops jointly with retailers carefully tailored advertising,
		point-of-purchase and other focused marketing programs. The Company uses
		network and spot television advertising, national cable advertising and print
		advertising in major general interest, women's fashion and women's service
		magazines, as well as coupons, magazine inserts and point-of-sale testers. The
		Company also uses cooperative advertising programs with some retailers,
		supported by Company-paid or Company-subsidized demonstrators, and coordinated
		in-store promotions and displays.

The Company distributes unique marketing materials such as the "Revlon
		Reports," which highlights seasonal and other fashion and color trends,
		describes the Company's products that address those trends and can include
		coupons, rebate offers and other promotional material to encourage consumers to
		try the Company's products. Other marketing materials designed to introduce the
		Company's newest products to consumers and encourage trial and purchase include
		point-of-sale testers on the Company's wall displays that provide information
		about, and permit consumers to test, the Company's products, thereby achieving
		the benefits of an in-store demonstrator without the corresponding cost;
		magazine inserts containing samples of the Company's newest products;
		trial-size products; and "shade samplers," which are collections of trial-size
		products in different shades. Additionally, the Company maintains separate
		websites, www.revlon.com and www.almay.com devoted to the
		Revlon and Almay brands, respectively. Each of these websites
		feature current product and promotional information for the Revlon and
		Almay brands, respectively, and are updated regularly to stay current
		with the Company's new product launches and other advertising and promotional
		campaigns.

New Product Development and Research and Development

The Company believes that it is an industry leader in the development of
		innovative and technologically-advanced consumer products. The Company's
		marketing and research and development groups identify consumer needs and
		shifts in consumer preferences in order to develop new products, tailor line
		extensions and promotions and redesign or reformulate existing products to
		satisfy such needs or preferences. The Company's research and development group
		comprises departments specialized in the technologies critical to the Company's
		various product categories, as well as an advanced technology department that
		promotes inter-departmental, cross-functional research on a wide range of
		technologies to develop new and innovative products. In connection with the
		implementation of the stabilization and growth phase of the Company's plan, the
		Company has developed and is implementing a new cross-functional product
		development process intended to optimize the Company's ability to bring to
		market its new product offerings and to ensure that the Company has products in
		key trend categories.

The Company operates an extensive cosmetics research and development
		facility in Edison, New Jersey. The scientists at the Edison facility are
		responsible for all of the Company's new product research worldwide, performing
		research for new products, ideas, concepts and packaging. The research and
		development group at the Edison facility also performs extensive safety and
		quality tests on the Company's products, including toxicology, microbiology and
		package testing. Additionally, quality control testing is performed at each
		manufacturing facility.

8

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As of December 31, 2003, the Company employed approximately 160 people in
		its research and development activities, including specialists in pharmacology,
		toxicology, chemistry, microbiology, engineering, biology, dermatology and
		quality control. In 2003, 2002 and 2001, the Company spent approximately $25.4
		million, $23.3 million and $24.4 million, respectively, on research and
		development activities.

Manufacturing and Related Operations and Raw Materials

During 2003, cosmetics and/or personal care products were produced at the
		Company's facilities in Oxford, North Carolina, Irvington, New Jersey,
		Venezuela, France, South Africa, China and Mexico and at third-party owned
		facilities around the world. The Company continually reviews its manufacturing
		needs against its manufacturing capacity to identify opportunities to reduce
		costs and operate more efficiently. The Company purchases raw materials and
		components throughout the world. The Company continuously pursues reductions in
		cost of goods through the global sourcing of raw materials and components from
		qualified vendors, utilizing its large purchasing capacity to maximize cost
		savings. The global sourcing of raw materials and components from accredited
		vendors also ensures the quality of the raw materials and components. The
		Company believes that alternate sources of raw materials and components exist
		and does not anticipate any significant shortages of, or difficulty in
		obtaining, such materials.

Distribution

The Company's products are sold in more than 100 countries across six
		continents. The Company's worldwide sales force had approximately 320 people as
		of December 31, 2003, including a dedicated sales force for cosmetics, skin
		care, fragrance and personal care products in the mass-market distribution
		channel in the U.S. In addition, the Company and utilizes sales representatives
		and independent distributors to serve specialized markets and related
		distribution channels.

United States and
		Canada.     Net sales in the U.S. and Canada
		accounted for approximately 69% of the Company's 2003 net sales, a majority of
		which were made in the mass-market distribution channel. The Company also sells
		a broad range of consumer products to U.S. Government military exchanges and
		commissaries. The Company licenses its trademarks to select manufacturers for
		products that the Company believes have the potential to extend the Company's
		brand names and image. As of December 31, 2003, 12 licenses were in effect
		relating to 16 product categories to be marketed principally in the mass-market
		distribution channel. Pursuant to such licenses, the Company retains strict
		control over product design and development, product quality, advertising and
		use of its trademarks. These licensing arrangements offer opportunities for the
		Company to generate revenues and cash flow through royalties.

As part of its strategy to increase consumption of the Company's products
		at retail, the Company has enhanced and focused coverage by retail
		merchandisers who stock and maintain the Company's point-of-sale wall displays
		intended to ensure that high-selling SKUs are in stock and to ensure the
		optimal presentation of the Company's products in retail outlets. Additionally,
		the Company has upgraded the technology available to its sales force to provide
		real-time information regarding inventory levels and other relevant
		information.

International.    Net
		sales outside the U.S. and Canada accounted for approximately 31% of the
		Company's 2003 net sales. The ten largest countries in terms of these sales,
		which include South Africa, United Kingdom, Australia, Mexico, Hong Kong,
		France, Brazil, Japan, Italy and China, accounted for approximately 24% of the
		Company's net sales in 2003. The Company distributes its products through drug
		stores/chemists, hypermarkets/mass volume retailers and variety stores. The
		Company also distributes outside the U.S. through department stores and
		specialty stores such as perfumeries. At December 31, 2003, the Company
		actively sold its products through wholly-owned subsidiaries established in 16
		countries outside of the U.S. and through a large number of distributors and
		licensees elsewhere around the world.

Customers

The Company's principal customers include large mass volume retailers and
		chain drug stores, including such well-known retailers as Wal-Mart, Target,
		Kmart, Walgreens, Rite Aid, CVS, Eckerd,

9

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Albertsons Drugs and Longs in the U.S., Boots in the United Kingdom,
		Watsons in the Far East and Wal-Mart internationally. Wal-Mart and its
		affiliates worldwide accounted for approximately 20.6% of the Company's 2003
		consolidated net sales. The Company expects that Wal-Mart and a small number of
		other customers will, in the aggregate, continue to account for a large portion
		of the Company's net sales. Although the loss of Wal-Mart or one or more of the
		Company's other customers that may account for a significant portion of the
		Company's sales, or any significant decrease in sales to these customers or any
		significant decrease in retail display space in any of these customers' stores,
		could have a material adverse effect on the Company's business, financial
		condition or results of operations, the Company has no reason to believe that
		any such loss of customers or decrease in sales will occur. In January 2002,
		Kmart Corporation filed a petition for reorganization under Chapter 11 of the
		U.S. Bankruptcy Code and in May 2003 emerged from bankruptcy. Throughout 2002
		and continuing into 2003 Kmart continued to close underperforming stores. Kmart
		accounted for less than 5% of the Company's net sales in 2003. Although the
		Company plans to continue doing business with Kmart for the foreseeable future
		and, based upon the information currently available, believes that Kmart's
		prior bankruptcy proceedings and store closings will not have any material
		adverse effect on the Company's business, financial condition or results of
		operations, there can be no assurances that further deterioration, if any, in
		Kmart's financial condition will not have such an effect on the Company.

Competition

The consumer products business is highly competitive. The Company
		competes on the basis of numerous factors. Brand recognition, product quality,
		performance and price, product availability at the retail stores and the extent
		to which consumers are educated on product benefits have a marked influence on
		consumers' choices among competing products and brands. Advertising, promotion,
		merchandising and packaging, and the timing of new product introductions and
		line extensions, also have a significant impact on buying decisions, and the
		structure and quality of the Company's sales force, as well as consumer
		consumption of the Company's products, affect in-store position, retail display
		space and inventory levels in retail outlets. The Company experienced declines
		in its market share in the U.S. mass-market in color cosmetics from the end of
		the first half of 1998 through the first half of 2002, including a decline in
		its color cosmetics market share from 32.0% in the second quarter of 1998 to
		22.3% in the second quarter of 2002. However, for the second half of 2002 and
		for the full years of 2002 and 2003, the market share for the Company's Revlon
		branded color cosmetics in the U.S. mass-market increased over the prior year.
		There can be no assurance that declines in market share will not occur in the
		future or that the Company's recent share increases will continue. In addition,
		the Company competes in selected product categories against a number of
		multinational manufacturers, some of which are larger and have substantially
		greater resources than the Company, and which may therefore have the ability to
		spend more aggressively on advertising and marketing and have more flexibility
		than the Company to respond to changing business and economic conditions. In
		addition to products sold in the mass-market and demonstrator-assisted
		channels, the Company's products also compete with similar products sold
		door-to-door or through mail-order or telemarketing by representatives of
		direct sales companies. The Company's principal competitors include
		L'Oréal S.A., The Procter & Gamble Company, Unilever N.V. and The
		Estée Lauder Companies Inc.

Patents, Trademarks and Proprietary Technology

The Company's major trademarks are registered in the U.S. and in well
		over 100 other countries, and the Company considers trademark protection to be
		very important to its business. Significant trademarks include Revlon,
		ColorStay, Revlon Age Defying, Skinlights, High Dimension, Frost & Glow,
		Illuminance, Cutex (outside the U.S.), Mitchum, Eterna 27, Almay, AlmayKinetin, Ultima II, Flex, Charlie, Jean Naté, Moon Drops, Super
		LustrousandColorsilk.

The Company utilizes certain proprietary, patent pending or patented
		technologies in the formulation or manufacture of a number of the Company's
		products, including ColorStay cosmetics, classic Revlon nail
		enamel, Skinlights skin brightener, High Dimension hair color,
		Super Top Speed nail enamel, Revlon Age Defying foundation and
		cosmetics, New Complexion makeup, Almay Kinetin skin
		care,Time-Off makeup, Amazing Lasting cosmetics,
		and Almay One Coat cosmetics. The Company also

10

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protects certain of its packaging and component concepts through design
		patents. The Company considers its proprietary technology and patent protection
		to be important to its business.

Government Regulation

The Company is subject to regulation by the Federal Trade Commission and
		the Food and Drug Administration (the "FDA") in the United States, as well as
		various other federal, state, local and foreign regulatory authorities. The
		Oxford, North Carolina manufacturing facility is registered with the FDA as a
		drug manufacturing establishment, permitting the manufacture of cosmetics that
		contain over-the-counter drug ingredients, such as sunscreens and
		antiperspirants. Compliance with federal, state, local and foreign laws and
		regulations pertaining to discharge of materials into the environment, or
		otherwise relating to the protection of the environment, has not had, and is
		not anticipated to have, a material effect upon the Company's capital
		expenditures, earnings or competitive position. State and local regulations in
		the U.S. that are designed to protect consumers or the environment have an
		increasing influence on the Company's product claims, contents and packaging.

Industry Segments, Foreign and Domestic Operations

The Company operates in a single segment. Certain geographic, financial
		and other information of the Company is set forth in Note 18 of the Notes to
		Consolidated Financial Statements of the Company.

Employees

As of December 31, 2003, the Company employed approximately 6,100 people.
		As of December 31, 2003, approximately 130 of such employees in the U.S. were
		covered by collective bargaining agreements. The Company believes that its
		employee relations are satisfactory. Although the Company has experienced minor
		work stoppages of limited duration in the past in the ordinary course of
		business, such work stoppages have not had a material effect on the Company's
		results of operations or financial condition.

Item 2.    Properties

The following table sets forth as of December 31, 2003 the Company's
		major manufacturing, research and warehouse/distribution facilities, all of
		which are owned except where otherwise noted.

Location
			 
			 Use
			 
			 Approximate Floor Space Sq.
				Ft.Oxford, North Carolina
			 
			 Manufacturing, warehousing,
				distribution and office
			 
			 
			 1,012,000Edison, New Jersey
			 
			 Research and office (leased)
			 
			 
			 99,000Irvington, New Jersey
			 
			 Manufacturing, warehousing and
				office
			 
			 
			 96,000Mexico City, Mexico
			 
			 Manufacturing, distribution and
				office
			 
			 
			 150,000Caracas, Venezuela
			 
			 Manufacturing, distribution and
				office
			 
			 
			 145,000Kempton Park, South Africa
			 
			 Warehousing, distribution and office
				(leased)
			 
			 
			 127,000Canberra, Australia
			 
			 Warehousing, distribution and office
				(leased)
			 
			 
			 125,000Isando, South Africa
			 
			 Manufacturing, warehousing, distribution
				and office
			 
			 
			 94,000


In addition to the facilities described above, the Company owns and
		leases additional facilities in various areas throughout the world, including
		the lease for the Company's executive offices in New York, New York
		(approximately 176,749 square feet, of which approximately 4,100 square feet
		was sublet to the Company's affiliates as of December 31, 2003). Management
		considers the Company's facilities to be well-maintained and satisfactory for
		the Company's operations, and believes that the Company's facilities and third
		party contractual supplier arrangements provide sufficient capacity for its
		current and expected production requirements.

11

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Item 3.    Legal Proceedings

The Company is involved in various routine legal proceedings incident to
		the ordinary course of its business. The Company believes that the outcome of
		all pending legal proceedings in the aggregate is unlikely to have a material
		adverse effect on the business or consolidated financial condition of the
		Company.

On April 17, 2000, the plaintiffs in the six purported class actions
		filed in October and November 1999 by each of Thomas Comport, Boaz Spitz, Felix
		Ezeir and Amy Hoffman, Ted Parris, Jerry Krim and Dan Gavish individually and
		allegedly on behalf of others similarly situated to them against Revlon, Inc.,
		certain of its present and former officers and directors and the parent of
		Revlon, Inc., REV Holdings Inc. (a Delaware corporation and the predecessor of
		REV Holdings LLC, a Delaware limited liability company ("REV Holdings")),
		alleging among other things, violations of Rule 10b-5 under the Securities
		Exchange Act of 1934, as amended (the "Exchange Act"), filed an amended
		complaint, which consolidated all of the actions under the caption "In Re
		Revlon, Inc. Securities Litigation" and limited the alleged class to security
		purchasers during the period from October 29, 1997 through October 1, 1998. On
		June 30, 2003, the court approved the settlement agreement that was executed in
		January 2003, which provides that the defendants will obtain complete releases
		from the participating members of the alleged class, and the period to appeal
		this decision has expired. The Company had recorded this settlement, including
		a related settlement of the defendants' insurance claim for this matter and the
		Second Gavish Action described below (the "Insurance Settlement"), in the
		fourth quarter of 2002.

A purported class action lawsuit was filed on September 27, 2000, in the
		United States District Court for the Southern District of New York on behalf of
		Dan Gavish, Tricia Fontan and Walter Fontan individually and allegedly on
		behalf of all others similarly situated who purchased the securities of Revlon,
		Inc. and REV Holdings Inc. between October 2, 1998 and September 30, 1999 (the
		"Second Gavish Action"). In November 2001, plaintiffs amended their complaint.
		The amended complaint alleges, among other things, that Revlon, Inc., certain
		of its present and former officers and directors and REV Holdings Inc.
		violated, among other things, Rule 10b-5 under the Exchange Act. In December
		2001, the defendants moved to dismiss the amended complaint. The Company
		believes the allegations in the amended complaint are without merit and, if its
		motion to dismiss is not granted, intends to vigorously defend against them. In
		light of the Insurance Settlement, the Company does not expect to incur any
		further expense in this matter.

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

No matter was submitted to a vote of security holders during the fourth
		quarter of the fiscal year covered by this report.

PART II

Item 5.    Market for Registrant's Common Equity and
		Related Stockholder Matters

MacAndrews & Forbes, which is indirectly wholly owned by Ronald O.
		Perelman, through REV Holdings and MacAndrews Holdings, beneficially owns (i)
		26,240,347 shares of the Class A Common Stock of Revlon, Inc., with a par value
		of $0.01 per share ("Class A Common Stock") (11,650,000 of which are owned by
		REV Holdings and 14,590,347 are owned by MacAndrews Holdings), (ii) all of the
		outstanding 31,250,000 shares of Class B Common Stock of Revlon, Inc., with a
		par value of $0.01 per share ("Class B Common Stock", and together with the
		Class A Common Stock, the "Common Stock") and (iii) all of the outstanding
		4,333 shares of Series B Convertible Preferred Stock, with a par value of $0.01
		per share ("Series B Preferred Stock"), of Revlon, Inc. (each of which is
		entitled to 100 votes and each of which is convertible into 100 shares of Class
		A Common Stock). Based on the shares referenced in clauses (i), (ii) and (iii)
		above, Mr. Perelman through Mafco Holdings (through REV Holdings and MacAndrews
		Holdings) at December 31, 2003 owned approximately 83% of Revlon, Inc.'s
		outstanding shares of Common Stock and had approximately 97% of the combined
		voting power of the outstanding shares of the Company's Common Stock entitled
		to vote at its 2004 Annual Meeting of Stockholders. The remaining 11,968,104
		shares of Revlon, Inc.'s Class A Common Stock outstanding at December 31, 2003

12

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were owned by the public and are listed and traded on the NYSE. As of
		December 31, 2003, there were 816 holders of record of Revlon, Inc.'s Class A
		Common Stock. No dividends were declared or paid during 2003 or 2002. The terms
		of the Credit Agreement, the 2003 Mafco Loans (as hereinafter defined), the
		2004 Mafco $125 million term loan, the 8 5/8% Senior Subordinated Notes, the 8
		1/8% Senior Notes, the 9% Senior Notes and the 12% Senior Secured Notes (as
		each such series of notes is hereinafter defined) currently restrict the
		ability of Products Corporation to pay dividends or make distributions to
		Revlon, Inc., except in limited circumstances. See the Consolidated Financial
		Statements of the Company and the Notes thereto. (See "Recent Developments"
		for important information concerning the Debt Reduction Transactions).

The table below shows the Company's high and low quarterly stock prices
		of the Company's Class A Common Stock on the NYSE for the years ended December
		31, 2003 and 2002.

2003 Quarterly Stock Prices
				(1)1st
			 
			 2nd
			 
			 3rd
			 
			 4thQuarter
			 
			 Quarter
			 
			 Quarter
			 
			 QuarterHigh
			 
			 $
			 3.54
			 
			 
			 $
			 3.67
			 
			 
			 $
			 3.70
			 
			 
			 $
			 2.96Low
			 
			 
			 2.40
			 
			 
			 
			 2.62
			 
			 
			 
			 2.66
			 
			 
			 
			 2.20


2002 Quarterly Stock Prices
				(1)1st
			 
			 2nd
			 
			 3rd
			 
			 4thQuarter
			 
			 Quarter
			 
			 Quarter
			 
			 QuarterHigh
			 
			 $
			 6.60
			 
			 
			 $
			 6.15
			 
			 
			 $
			 5.16
			 
			 
			 $
			 4.55Low
			 
			 
			 3.82
			 
			 
			 
			 4.35
			 
			 
			 
			 2.99
			 
			 
			 
			 2.10


|
|
|
|

|(1) | Represents
			 the closing price per share of the Company's Class A Common Stock on the NYSE,
			 the exchange on which such shares are listed. The Company's stock trading
			 symbol is "REV".
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 6.    Selected Financial Data

The Consolidated Statements of Operations Data for each of the years in
		the five-year period ended December 31, 2003 and the Balance Sheet Data as of
		December 31, 2003, 2002, 2001, 2000 and 1999 are derived from the Consolidated
		Financial Statements of the Company, which have been audited by KPMG LLP,
		independent certified public accountants. The Selected Consolidated Financial
		Data should be read in conjunction with the Consolidated Financial Statements
		of the Company and the Notes to the Consolidated Financial Statements and
		"Management's Discussion and Analysis of Financial Condition and Results of
		Operations."

Year Ended December 31,2003
			 
			 2002
			 
			 2001
			 
			 2000
			 
			 1999(dollars in millions, except per
				share amounts)Statements of Operations Data (a)
				(b) (k):Net sales
			 
			 $
			 1,299.3
			 
			 
			 $
			 1,119.4
			 
			 
			 $
			 1,277.6
			 
			 
			 $
			 1,409.4
			 
			 
			 $
			 1,629.8Operating income (loss)
			 
			 
			 21.3
			 (c) (i)
			 
			 
			 (114.9
			 )(d)(j)
			 
			 
			 16.1
			 (e)
			 
			 
			 15.9
			 (f)
			 
			 
			 (212.0
			 ) (g)Loss from continuing operations
			 
			 
			 (153.8
			 )
			 
			 
			 (286.5
			 )
			 
			 
			 (153.7
			 )(h)
			 
			 
			 (129.7
			 )
			 
			 
			 (370.9
			 )Basic and diluted loss from continuing
				operations per common share
			 
			 $
			 (2.47
			 )
			 
			 $
			 (5.36
			 )
			 
			 $
			 (2.87
			 )
			 
			 $
			 (2.43
			 )
			 
			 $
			 (6.95
			 )Weighted average number of common
				shares outstanding (in millions): (l)Basic and diluted
			 
			 
			 62.3
			 
			 
			 
			 53.5
			 
			 
			 
			 53.5
			 
			 
			 
			 53.4
			 
			 
			 
			 53.4


13

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December 31,2003
			 
			 2002
			 
			 2001
			 
			 2000
			 
			 1999(in millions)Balance Sheet Data (a)
				(b):Total assets
			 
			 $
			 892.2
			 
			 
			 $
			 933.7
			 
			 
			 $
			 997.6
			 
			 
			 $
			 1,101.8
			 
			 
			 $
			 1,558.9Long-term debt, including current
				portion
			 
			 
			 1,869.5
			 
			 
			 
			 1,750.1
			 
			 
			 
			 1,643.6
			 
			 
			 
			 1,563.1
			 
			 
			 
			 1,772.1Total stockholders' deficiency
			 
			 
			 (1,725.6
			 )
			 
			 
			 (1,638.5
			 )
			 
			 
			 (1,282.7
			 )
			 
			 
			 (1,106.7
			 )
			 
			 
			 (1,015.0
			 )


|
|
|
|

|(a) | On
			 July 16, 2001, the Company completed the disposition of the Colorama brand in
			 Brazil. Accordingly, the selected financial data includes the results of
			 operations of the Colorama brand through the date of disposition.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | On
			 March 30, 2000 and May 8, 2000, the Company completed the dispositions of its
			 worldwide professional products line and the Plusbelle brand in Argentina,
			 respectively. Accordingly, the selected financial data include the results of
			 operations of the professional products line and the Plusbelle brand through
			 the dates of their respective dispositions.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Includes
			 restructuring costs of $6.0 million, consisting of $5.9 million associated with
			 severance and other personnel costs principally related to International
			 operations and $0.1 million related to the continuation of the 2000
			 restructuring program. (See Note 2 to the Consolidated Financial
			 Statements).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Includes
			 restructuring costs and other, net and additional consolidation costs
			 associated with the shutdown of the Company's Phoenix and Canada facilities of
			 $13.6 million and $1.6 million, respectively, and executive separation costs of
			 $9.4 million. (See Note 2 to the Consolidated Financial Statements).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Includes
			 restructuring costs and other, net, and additional consolidation costs
			 associated with the shutdown of the Phoenix and Canada facilities of $38.1
			 million and $43.6 million, respectively. (See Note 2 to the Consolidated
			 Financial Statements).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Includes
			 restructuring costs and other, net, and additional consolidation costs
			 associated with the shutdown of the Phoenix facility of $54.1 million and $4.9
			 million, respectively. (See Note 2 to the Consolidated Financial
			 Statements).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) | Includes
			 restructuring costs and other, net of $40.2 million and executive separation
			 costs of $22.0 million. (See Note 2 to the Consolidated Financial
			 Statements).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(h) | Includes
			 a loss of $3.6 million from early extinguishments of debt.
|--- | -----------------------------------------------------------------------

|(i) | Includes
			 expenses of approximately $31 million recorded in 2003 related to the
			 acceleration of the continued implementation of the stabilization and growth
			 phase of the Company's plan.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(j) | Includes
			 expenses of approximately $104 million (of which approximately $100 million was
			 recorded in the fourth quarter of 2002) related to the acceleration of the
			 implementation of the stabilization and growth phase of the Company's
			 plan.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(k) | In
			 July 2001, the FASB issued Statement No. 142, "Goodwill and Other Intangible
			 Assets". Statement No. 142 requires that goodwill and intangible assets with
			 indefinite useful lives no longer be amortized, but instead be tested for
			 impairment at least annually in accordance with the provisions of Statement No.
			 142. Statement No. 142 requires that intangible assets with finite useful lives
			 be amortized over their respective estimated useful lives to their estimated
			 residual values, and reviewed for impairment in accordance with SFAS No. 144,
			 "Accounting for the Impairment or Disposal of Long-Lived Assets". The Company
			 adopted the provisions of Statement No. 142 effective January 1, 2002. In
			 connection with the adoption of Statement No. 142, the Company performed a
			 transitional goodwill impairment test as required by such rule and determined
			 that no goodwill impairment existed at January 1, 2002. Amortization of
			 goodwill ceased on January 1, 2002, upon adoption of Statement No. 142.
			 Amortization expense for goodwill was $7.7 million in 2001, $9.0 million in
			 2000 and $12.8 million in 1999.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(l) | Represents
			 the weighted average number of common shares outstanding for the period. Upon
			 consummation of the Rights Offering (as hereinafter defined), the fair value,
			 based on NYSE closing price of the Company's Class A Common Stock was more than
			 the subscription price. Accordingly, basic and diluted loss per common share
			 have been restated for all periods prior to the Rights Offering to reflect the
			 stock dividend of 1,262,328 shares of the Company's Class A Common Stock (See
			 Note 1 to the Consolidated Financial Statements).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 7.    Management's Discussion and Analysis of
		Financial Condition and Results of Operations

(dollars in millions)

Overview

The Company is providing this overview in accordance with the SEC's
		December 2003 interpretive guidance regarding Management's Discussion and
		Analysis of Financial Condition and Results of Operations.

The Company operates in a single segment and manufactures, markets and
		sells an extensive array of cosmetics and skin care, fragrances and personal
		care products. In addition, the Company has a licensing group.

14

---

The Company has accelerated the implementation of its three-part plan,
		which, following detailed evaluations and research, includes the following key
		actions and investments, among others: (i) increasing advertising and media
		spending and effectiveness; (ii) increasing the marketing effectiveness of the
		Company's wall displays, by among other things, reconfiguring wall displays at
		its existing retail customers, streamlining its product assortment and
		reconfiguring product placement on its wall displays and rolling out the new
		wall displays; (iii) enhancing the effectiveness of its merchandiser coverage
		to improve in-store stock levels and work with its retail customers to improve
		replenishment of the Company's products on the wall displays and to minimize
		out-of-stocks at its retail customers; (iv) selectively adjusting prices on
		certain SKUs; (v) further strengthening the Company's new product development
		process; and (vi) implementing a comprehensive program to develop and train the
		Company's employees.

In 2002, the Company began the implementation of the stabilization and
		growth phase of its plan and in connection with that plan recorded charges of
		approximately $100 in the fourth quarter of 2002. In 2003, net sales increased
		by approximately $179.9 or 16.1% primarily driven by (1) lower net charges for
		returns, allowances and discounts in the 2003 period since 2002 included
		significant amounts of returns due to the growth plan; and revised estimates of
		returns based on favorable experience in 2003 versus 2002 returns estimates;
		and (2) foreign currency translations benefits. The 2003 period was benefited
		by more favorable returns experience from regular business.

Operating income for the full year of 2003 was $21.3, versus an operating
		loss of $114.9 in 2002. The improvement in the 2003 period primarily reflected
		$73 less in growth plan charges in the current year versus 2002, including
		significantly lower net charges for returns, discounts and allowances, and the
		benefits of favorable foreign currency translation, higher volume, lower
		restructuring and consolidation costs, and reduced display amortization.
		Partially offsetting these positive factors were higher brand support and
		increased general and administrative expenses.

Market share in the U.S. mass market for color cosmetics for Almay
		and Revlon combined increased by 0.3% for the full year 2003 compared
		with 2002. These sales and market share gains were achieved in the context of a
		weaker than expected U.S. mass market color cosmetics category which, as
		measured by AC Nielsen, declined by 2.2%.

The Company believes that it has strengthened its organizational
		capability and it intends to continue to do so in 2004. The Company also
		believes that it has strengthened its relationships with its key retailers in
		the U.S. which has led to space gains and increased distribution for 2004 for
		certain of the Company's products.

The Company is refining its growth plan and focusing on actions which are
		intended to achieve both top line growth and margin improvements to (i) further
		improve the new product development and implementation process; (ii) continue
		to increase the effectiveness and reduce the cost of the Company's display
		walls; (iii) drive efficiencies across the Company's overall supply chain,
		including reducing manufacturing costs by streamlining components and sourcing
		strategically; and (iv) optimize the effectiveness of the Company's marketing
		and promotions.

In December 2003, the Company announced that it intended to explore
		opportunities to reduce debt and increase equity and this will be a major focus
		during 2004. (See "Recent Developments" for important information concerning
		the Debt Reduction Transactions).

During 2003, the Company revised its terms of sale to customers to
		provide for a discount for early payment of invoices and has managed its
		working capital and payables intended to improve its liquidity. The Company
		received an additional commitment from MacAndrews & Forbes to provide funds
		to support its business plan for 2004 in the form of the 2004 Mafco $125
		million term loan and secured the 2004 Bank Amendment as discussed in Recent
		Developments.

Discussion of Critical Accounting Policies:

In the ordinary course of its business, the Company has made a number of
		estimates and assumptions relating to the reporting of results of operations
		and financial condition in the preparation of its financial statements in
		conformity with accounting principles generally accepted in the U.S. Actual
		results could

15

---

differ significantly from those estimates and assumptions. The Company
		believes that the following discussion addresses the Company's most critical
		accounting policies, which are those that are most important to the portrayal
		of the Company's financial condition and results and require management's most
		difficult, subjective and complex judgments, often as a result of the need to
		make estimates about the effect of matters that are inherently uncertain.

Sales Returns:

The Company allows customers to return their unsold products when they
		meet certain Company-established criteria as outlined in the Company's trade
		terms. The Company regularly reviews and revises, when deemed necessary, its
		estimates of sales returns based primarily upon actual returns, planned product
		discontinuances, and promotional sales, which would permit customers to return
		items based upon the Company's trade terms. The Company records estimated sales
		returns as a reduction to sales and cost of sales, and an increase in accrued
		liabilities and inventories. Returned products which are recorded as
		inventories are valued based upon the amount that the Company expects to
		realize upon their subsequent disposition. The physical condition and
		marketability of the returned products are the major factors considered by the
		Company in estimating realizable value. Cost of sales includes the cost of
		refurbishment of returned products. Actual returns, as well as realized values
		on returned products, may differ significantly, either favorably or
		unfavorably, from the Company's estimates if factors such as product
		discontinuances, customer inventory levels or competitive conditions differ
		from the Company's estimates and expectations and, in the case of actual
		returns, if economic conditions differ significantly from the Company's
		estimates and expectations.

Trade Support Costs:

In order to support the retail trade, the Company has various
		performance-based arrangements with retailers to reimburse them for all or a
		portion of their promotional activities related to the Company's products. The
		Company regularly reviews and revises, when deemed necessary, estimates of
		costs to the Company for these promotions based on estimates of what has been
		incurred by the retailers. Actual costs incurred by the Company may differ
		significantly if factors such as the level and success of the retailers'
		programs, as well as retailer participation levels, differ from the Company's
		estimates and expectations.

Inventories:

Inventories are stated at the lower of cost or market value. Cost is
		principally determined by the first-in, first-out method. The Company records
		adjustments to the value of inventory based upon its forecasted plans to sell
		its inventories, as well as planned discontinuances. The physical condition
		(e.g., age and quality) of the inventories is also considered in establishing
		its valuation. These adjustments are estimates, which could vary significantly,
		either favorably or unfavorably, from the amounts that the Company may
		ultimately realize upon the disposition of inventories if future economic
		conditions, customer inventory levels, product discontinuances, return levels
		or competitive conditions differ from the Company's estimates and expectations.

Property, Plant and Equipment and Other Assets:

Property, plant and equipment is recorded at cost and is depreciated on a
		straight-line basis over the estimated useful lives of such assets. Changes in
		circumstances such as technological advances, changes to the Company's business
		model, changes in the planned use of fixtures or software or closing of
		facilities or changes in the Company's capital strategy can result in the
		actual useful lives differing from the Company's estimates.

Included in other assets are permanent wall displays, which are recorded
		at cost and amortized on a straight-line basis over the estimated useful lives
		of such assets. Intangibles other than goodwill are recorded at cost and
		amortized on a straight-line basis over the estimated useful lives of such
		assets.

Long-lived assets, including fixed assets, permanent wall displays and
		intangibles other than goodwill, are reviewed by the Company for impairment
		whenever events or changes in circumstances indicate that the carrying amount
		of any such asset may not be recoverable. If the undiscounted cash flows
		(excluding interest) from the use and eventual disposition of the asset is less
		than the carrying value, the Company

16

---

recognizes an impairment loss, measured as the amount by which the
		carrying value exceeds the fair value of the asset. The estimate of
		undiscounted cash flow is based upon, among other things, certain assumptions
		about expected future operating performance. The Company's estimates of
		undiscounted cash flow may differ from actual cash flow due to, among other
		things, technological changes, economic conditions, changes to its business
		model or changes in its operating performance. In those cases where the Company
		determines that the useful life of other long-lived assets should be shortened,
		the Company would depreciate the net book value in excess of the salvage value
		(after testing for impairment as described above), over the revised remaining
		useful life of such asset thereby increasing amortization expense.
		Additionally, goodwill is reviewed for impairment at least annually. The
		Company recognizes an impairment loss to the extent that carrying value exceeds
		the fair value of the asset.

Pension Benefits:

The Company sponsors pension and other retirement plans in various forms
		covering substantially all employees who meet eligibility requirements. Several
		statistical and other factors which attempt to estimate future events are used
		in calculating the expense and liability related to the plans. These factors
		include assumptions about the discount rate, expected return on plan assets and
		rate of future compensation increases as determined by the Company, within
		certain guidelines. In addition, the Company's actuarial consultants also use
		subjective factors such as withdrawal and mortality rates to estimate these
		factors. The actuarial assumptions used by the Company may differ materially
		from actual results due to changing market and economic conditions, higher or
		lower withdrawal rates or longer or shorter life spans of participants, among
		other things. Differences from these assumptions may result in a significant
		impact to the amount of pension expense/liability recorded by the Company.

Year ended December 31, 2003 compared with year ended December 31, 2002

Results of Operations

In the tables, numbers in parenthesis (  ), denote unfavorable
		variances.

Net sales:

Year Ended December 31,2003
			 
			 2002
			 
			 ChangeUnited States and Canada
			 
			 $
			 890.6
			 
			 
			 $
			 760.1
			 
			 
			 $
			 130.5International
			 
			 
			 408.7
			 
			 
			 
			 359.3
			 
			 
			 
			 49.4
			 (1)$
			 1,299.3
			 
			 
			 $
			 1,119.4
			 
			 
			 $
			 179.9
			 (2)


|
|
|
|

|(1) | Excluding
			 the impact of currency fluctuations, International net sales increased
			 4.6%.
|--- | ----------------------------------------------------------------------------------------------

|(2) | Excluding
			 the impact of currency fluctuations, consolidated net sales increased
			 12.6%.
|--- | ----------------------------------------------------------------------------------------------

United States and Canada.

The increase in net sales in the U.S. and Canada in 2003 was primarily
		driven by (1) lower net charges for sales returns, allowances and discounts of
		$137.6 in the 2003 period since 2002 included significant amounts of returns
		due to the growth plan; and to revised estimates of returns based on favorable
		experience in 2003 versus 2002 returns estimates; and (2) foreign currency
		translations benefits, partially offset by lower licensing revenues of $8.6 in
		2003. Market share in the U.S. mass market for color cosmetics for Almay
		and Revlon combined increased by 0.3% for the full year 2003 compared
		with 2002. These sales and market share gains were achieved in the context of a
		weaker than expected U.S. mass market color cosmetics category which, as
		measured by AC Nielsen, declined by 2.2%.

International.

Sales in the Company's international operations are divided by the
		Company into three geographic regions. In Europe, which is comprised of Europe
		and the Middle East, net sales increased by $16.5, or

17

---

15.3%, to $124.3 for 2003, as compared with 2002. The increase in the
		European region is primarily due to the impact of favorable currency
		fluctuations (which factor the Company estimates contributed to an approximate
		12.2% increase in net sales for the region) and increased sales volume and
		lower sales returns in the U.K. and France (which factor the Company estimates
		contributed to an approximate 6.7% increase in net sales for the region). Such
		factors were partially offset by lower sales volume in certain distributor
		markets in Russia and Germany, where the Company's distributors experienced
		financial problems (which factor the Company estimates contributed to an
		approximate 3.5% reduction in net sales for the region).

In Latin America, which is comprised of Mexico, Central America and South
		America, net sales decreased by $1.9, or 2.0%, to $92.2 for 2003, as compared
		with 2002. The decrease in the Latin American region is primarily due to
		decreased sales volume in Brazil and Mexico, where sales were impacted by local
		adverse economic conditions, a decline in the mass retail category and a
		reduction of customer inventory levels (which factors the Company estimates
		contributed to an approximate 10.0% reduction in net sales for the region) and
		the impact of adverse currency fluctuations (which factor the Company estimates
		contributed to an approximate 9.4% reduction in net sales for the region),
		which was partially offset by increased sales volume in Venezuela, Argentina
		and certain distributor markets (which factor the Company estimates contributed
		to an approximate 17.0% increase in net sales for the region).

In the Far East and Africa, net sales increased by $34.8, or 22.1%, to
		$192.2 for 2003, as compared with 2002. The increase in the Far East and Africa
		region is primarily due to the impact of favorable currency fluctuations (which
		factor the Company estimates contributed to an approximate 18.0% increase in
		net sales for the region) and increased sales volume in South Africa, Japan and
		China, where the Company's products experienced strong demand as a result of
		favorable general economic conditions, and the effect of strong brand marketing
		activities (which factors the Company estimates contributed to an approximate
		4.0% increase in net sales for the region), which the Company believes were
		partially offset by the economic impact of the SARS outbreak in China.

Net sales in the Company's international operations may be adversely
		affected by, among other things, weak economic conditions, political
		uncertainties, military actions, adverse currency fluctuations, and competitive
		activities. During 2002, the Company experienced production difficulties with
		its principal third party manufacturer for Europe and certain other
		international markets, which operates the Maesteg facility. To rectify this
		situation, on October 31, 2002 Products Corporation and such manufacturer
		terminated the long-term supply agreement and entered into a new, more flexible
		agreement. This new agreement has significantly reduced volume commitments and,
		among other things, Products Corporation loaned such supplier approximately
		$2.0. To address the past production difficulties, under the new arrangement,
		the supplier can earn performance-based payments of approximately $6.3 over a
		4-year period contingent upon the supplier achieving specific production
		service level objectives. During 2002, the Company paid approximately $1.6, and
		in 2003 accrued approximately an additional $1.8. Under the new arrangement,
		Products Corporation also sources certain products from its Oxford facility and
		other suppliers. Under the new supply arrangement, the Company believes that
		the production difficulties at the Maesteg facility were resolved during 2003.

Gross profit:

Year Ended December 31,2003
			 
			 2002
			 
			 ChangeGross profit
			 
			 $
			 798.2
			 
			 
			 $
			 615.7
			 
			 
			 $
			 182.5


The $182.5 increase in gross profit for 2003, as compared to the
		comparable 2002 period, is primarily due to lower net charges for sales
		returns, allowances and discounts of $144.5 in the 2003 period (which includes
		the impact of the stabilization and growth phase of the Company's plan, which
		began in December 2002) and higher sales volume of $43.8 (which includes the
		favorable impact of currency fluctuations). Such increases in 2003 were
		partially offset by unfavorable product mix in 2003 and a decrease in licensing
		and other revenue of $8.4 in 2003. Gross margins in 2003 improved to 61.4%
		versus 55.0% in 2002 due to the previously discussed lower net charges for
		sales returns, allowances and discounts.

18

---

SG&A expenses:

Year Ended December 31,2003
			 
			 2002
			 
			 ChangeSG&A expenses
			 
			 $
			 770.9
			 
			 
			 $
			 717.0
			 
			 
			 $
			 (53.9
			 )


The increase in SG&A expenses for 2003, as compared to 2002, is due
		primarily to higher brand support of $38.7 principally related to the
		stabilization and growth phase of the Company's plan, higher personnel-related
		expenses and professional fees of $19.2 (including expenses related to the
		stabilization and growth phase of the Company's plan) and rent expense of $2.7,
		partially offset by lower depreciation and amortization of $8.9 in the 2003
		period due to accelerated amortization of wall displays in 2002 as the Company
		transitioned to its new wall displays as part of the stabilization and growth
		phase of its plan.

Restructuring costs:

Year Ended December 31,2003
			 
			 2002
			 
			 ChangeRestructuring costs
			 
			 $
			 6.0
			 
			 
			 $
			 13.6
			 
			 
			 $
			 7.6


During 2003, the Company recorded a separate charge of $5.9, for employee
		severance and other personnel benefits in certain International operations.

During the third quarter of 2000, the Company initiated a new
		restructuring program in line with the original restructuring plan developed in
		late 1998, designed to improve profitability by reducing personnel and
		consolidating manufacturing facilities. The 2000 restructuring program focused
		on the Company's plans to close its manufacturing operations in Phoenix,
		Arizona and Mississauga, Canada and to consolidate its cosmetics production
		into its plant in Oxford, North Carolina. The 2000 restructuring program also
		includes the remaining obligation for excess leased real estate in the
		Company's headquarters, consolidation costs associated with the Company closing
		its facility in New Zealand, and the elimination of several domestic and
		international executive and operational positions, each of which were effected
		to reduce and streamline corporate overhead costs. During 2003 and 2002, the
		Company continued to implement the 2000 restructuring program, and recorded
		charges of $0.1 and $13.6, respectively, principally for additional employee
		severance and other personnel benefits, primarily resulting from reductions in
		the Company's worldwide sales force, relocation and other costs related to the
		consolidation of the Company's worldwide operations.

The Company anticipates annualized savings of approximately $12 to $14
		relating to the restructuring charges recorded during 2003.

Other expenses (income):

Year Ended December 31,2003
			 
			 2002
			 
			 ChangeInterest expense
			 
			 $
			 174.5
			 
			 
			 $
			 159.0
			 
			 
			 $
			 (15.5
			 )


The increase in interest expense for 2003, as compared to 2002, is
		primarily due to higher overall borrowings during 2003, including amounts
		borrowed under the Credit Agreement and the 2003 Mafco Loans and higher
		interest rates under the Credit Agreement as a result of the amendment to the
		Credit Agreement in February 2003.

Provision for income taxes:

Year Ended December 31,2003
			 
			 2002
			 
			 ChangeProvision for income taxes
			 
			 $
			 0.5
			 
			 
			 $
			 4.8
			 
			 
			 $
			 4.3


The reduction in the provision for income taxes in 2003 was primarily
		attributable to the resolution of various tax audits which reduced tax expense
		by approximately $7.0, partially offset by higher taxable income in certain
		markets outside the United States.

19

---

Year ended December 31, 2002 compared with year ended December 31, 2001

Net sales:

Year Ended December 31,2002
			 
			 2001
			 
			 ChangeUnited States and Canada
			 
			 $
			 760.1
			 
			 
			 $
			 870.3
			 
			 
			 $
			 (110.2
			 )International
			 
			 
			 359.3
			 
			 
			 
			 407.3
			 
			 
			 
			 (48.0
			 )(1)$
			 1,119.4
			 
			 
			 $
			 1,277.6
			 
			 
			 $
			 (158.2
			 )(2)


|
|
|
|

|(1) | Excluding
			 the impact of currency fluctuations, International net sales decreased
			 5.2%.
|--- | ----------------------------------------------------------------------------------------------

|(2) | Excluding
			 the impact of currency fluctuations, consolidated net sales decreased
			 10.4%.
|--- | ----------------------------------------------------------------------------------------------

United States and
		Canada.    The decrease in 2002 in net sales of
		$110.2 was comprised of $100.6 of increased sales returns and allowances
		related to the Company's plan to selectively reduce SKUs and reduced
		distribution of the Ultima II brand, sales allowances for selective price
		adjustments on certain SKUs related to the stabilization and growth phase of
		the Company's plan, and higher sales returns and allowances not directly
		related to the stabilization and growth phase of the Company's plan. In
		addition, brand support increased by $37.0. These factors were partially offset
		by an increase in sales volume of $21.6 and an increase in licensing revenues
		of $5.8, primarily stemming from the prepayment in 2002 by a licensee of
		certain minimum royalties.

International.    Net
		sales in 2001 include $16.4 of net sales related to the Colorama brand, which
		was sold in July 2001.

In Europe, net sales decreased by $11.3, or 9.5%, to $107.8 for 2002, as
		compared with 2001. Such decrease in the European region was primarily due to
		the conversion of the Company's Belgium, Netherlands and Luxemburg operations
		("Benelux") and Israeli businesses to distributors (which factor the Company
		estimates contributed to an approximate 8.5% reduction in net sales for the
		region), production disruption at the Company's third party manufacturer in
		Maesteg, Wales (which factor the Company estimates contributed to an
		approximate 5.6% reduction in net sales for the region) and increased
		competitive activity in Italy (which factor the Company estimates contributed
		to an approximate 2.3% reduction in net sales for the region). Such factors
		were partially offset by increased sales volume in the U.K. (which factor the
		Company estimates contributed to an approximate 6.7% increase in net sales for
		the region) and impact from favorable currency fluctuations (which factor the
		Company estimates contributed to an approximate 2.7% increase in net sales for
		the region).

In Latin America, net sales decreased by $46.9, or 33.3%, to $94.1 for
		2002, as compared with 2001. The decrease in the Latin American region was
		primarily due to the impact of adverse currency fluctuations (which factor the
		Company estimates contributed to an approximate 19.0% reduction in net sales
		for the region), the sale of the Colorama brand (which factor the Company
		estimates contributed to an approximate 10.6% reduction in net sales for the
		region), the effect of political and economic difficulties in Venezuela (which
		factor the Company estimates contributed to an approximate 6.4% reduction in
		net sales for the region), and increased competitive activity in Mexico (which
		factor the Company estimates contributed to an approximate 5.4% reduction in
		net sales for the region). Such factors were partially offset by sales tax
		increases and increased sales volume in Brazil (which factor the Company
		estimates contributed to an approximate 6.3% increase in net sales for the
		region) and increased sales volume in distributor markets in Latin America
		(which factor the Company estimates contributed to an approximate 2.6% increase
		in net sales for the region).

In the Far East and Africa, net sales increased by $10.2, or 6.9%, to
		$157.4 for 2002, as compared with 2001. The increase in the Far East region was
		primarily due to increased sales volume in South Africa, China, Hong Kong and
		distributor markets in the Far East (which factor the Company estimates
		contributed to an approximate 9.6% increase in net sales for the region). Such
		factors were partially offset by the impact of adverse currency fluctuations
		(which factor the Company estimates contributed to an

20

---

approximate 2.8% reduction in net sales for the region) and increased
		competitive activity in Australia and New Zealand (which factor the Company
		estimates contributed to an approximate 0.9% reduction in net sales for the
		region).

Net sales in the Company's international operations may be adversely
		affected by weak economic conditions, political uncertainties, adverse currency
		fluctuations, and competitive activities. During 2002, the Company experienced
		significant adverse currency fluctuations in Argentina, Brazil, Venezuela and
		South Africa. During 2002, as part of the new agreement with its principal
		third party manufacturer for Europe and certain other international markets
		which operates the Maesteg facility, the Company paid approximately $1.6 as a
		result of such supplier meeting the required production service level
		objectives.

Gross profit:

Year Ended December 31,2002
			 
			 2001
			 
			 ChangeGross profit
			 
			 $
			 615.7
			 
			 
			 $
			 733.4
			 
			 
			 $
			 (117.7
			 )


As a percentage of net sales, gross profit margins were 55.0% for 2002,
		compared with 57.4% for 2001. The decrease in gross profit margin in 2002
		compared to the comparable 2001 period was due to the implementation of various
		aspects of the stabilization and growth phase of the Company's plan, referred
		to above in the discussion of the Company's net sales and higher sales returns
		and allowances not directly related to such plan, which combined equal $127.1,
		and higher brand support of $30.8 in 2002. These factors were partially offset
		by lower additional consolidation costs of $36.7 associated with the 2001
		shutdown of the Company's Phoenix and Canada facilities, an increase in
		licensing revenue of $5.8 in 2002 due to the prepayment of certain minimum
		royalties, and $1.7 in respect of an insurance claim for certain losses in
		Latin America.

SG&A expenses:

Year Ended December 31,2002
			 
			 2001
			 
			 ChangeSG&A expenses
			 
			 $
			 717.0
			 
			 
			 $
			 679.2
			 
			 
			 $
			 (37.8
			 )


The increase in SG&A expenses for 2002, as compared to 2001, was due
		primarily to higher personnel-related expenses (including executive separation
		costs) and higher professional fees (including expenses related to the
		stabilization and growth phase of the Company's plan and costs related to
		litigation) of $42.0, higher wall display amortization of $8.9 due to the
		accelerated amortization associated with the roll out of the Company's new wall
		displays which the Company began in 2002 and accelerated amortization charges
		of $4.0 and a write-off of $2.2, both of which relate to certain information
		systems as a result of the Company's decision to, among other things, upgrade
		its information systems. These factors were partially offset by the elimination
		of goodwill amortization of $7.7, lower distribution costs of $7.3, the
		elimination of SG&A expenses of $9.1 related to the Colorama brand and $5.3
		of additional consolidation costs in 2001 associated with the shutdown of the
		Company's Phoenix and Canada facilities, and $0.7 in respect of an insurance
		claim for certain losses in Latin America.

Restructuring costs:

Year Ended December 31,2002
			 
			 2001
			 
			 ChangeRestructuring costs
			 
			 $
			 13.6
			 
			 
			 $
			 38.1
			 
			 
			 $
			 24.5


During the third quarter of 2000, the Company initiated a new
		restructuring program in line with the original restructuring plan developed in
		late 1998, designed to improve profitability by reducing personnel and
		consolidating manufacturing facilities. The 2000 restructuring program focused
		on the Company's plans to close its manufacturing operations in Phoenix,
		Arizona and Mississauga, Canada and to consolidate its cosmetics production
		into its plant in Oxford, North Carolina. The 2000 restructuring

21

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program also includes the remaining obligation for excess leased real
		estate in the Company's headquarters, consolidation costs associated with the
		Company closing its facility in New Zealand, and the elimination of several
		domestic and international executive and operational positions, each of which
		were effected to reduce and streamline corporate overhead costs. During 2001,
		the Company continued to implement the 2000 restructuring program and recorded
		a charge of $38.1, principally for additional employee severance and other
		personnel benefits and relocation and other costs related to the consolidation
		of the Company's worldwide operations.

During 2002, the Company continued to implement the 2000 restructuring
		program, as well as other restructuring actions, and recorded charges of $13.6,
		principally for additional employee severance and other personnel benefits,
		primarily resulting from reductions in the Company's worldwide sales force and
		relocation and other costs related to the consolidation of the Company's
		worldwide operations.

Other expenses (income):

Year Ended December 31,2002
			 
			 2001
			 
			 ChangeInterest expense
			 
			 $
			 159.0
			 
			 
			 $
			 140.5
			 
			 
			 $
			 (18.5
			 )


The increase in interest expense for 2002, as compared to 2001, is
		primarily due to the repayment of a portion of the Credit Agreement with
		certain net proceeds of Products Corporation's 12% Senior Secured Notes due
		2005 (the "12% Senior Secured Notes") (which were issued in late November 2001
		and which have a higher interest rate than the Credit Agreement) and higher
		overall outstanding borrowings.

Loss on sale of brand and facilities, net:

Year Ended December 31,2002
			 
			 2001
			 
			 ChangeLoss on sale of brand and facilities,
				net
			 
			 $
			 1.0
			 
			 
			 $
			 14.4
			 
			 
			 $
			 13.4


In February 2002, Products Corporation completed the disposition of its
		Benelux business. As part of this sale, Products Corporation entered into a
		long-term distribution agreement with the purchaser pursuant to which the
		purchaser distributes the Company's products in Benelux. The purchase price
		consisted principally of the assumption of certain liabilities and a deferred
		purchase price contingent upon future results of up to approximately $4.7,
		which could be received over approximately a seven-year period. In connection
		with the disposition, the Company recognized a pre-tax and after-tax net loss
		of $1.0 in the first quarter of 2002.

In July 2001, Products Corporation completed the disposition of the
		Colorama brand in Brazil. In connection with the disposition the Company
		recognized a pre-tax and after-tax loss of $6.7, $6.3 of which was recorded in
		the second quarter of 2001. Additionally, the Company recognized a pre-tax and
		after-tax net loss on the disposition of land in Minami Aoyama near Tokyo,
		Japan (the "Aoyama Property") and related rights for the construction of a
		building on such land of $0.8 during the second quarter of 2001.

In July 2001, Products Corporation completed the disposition of its
		subsidiary that owned and operated its manufacturing facility in Maesteg, Wales
		(UK), including all production equipment. As part of this sale, Products
		Corporation entered into a long-term supply agreement with the purchaser
		pursuant to which the purchaser manufactured and supplied to Products
		Corporation cosmetics and personal care products for sale throughout Europe. In
		connection with such disposition, the Company recognized a pre-tax and
		after-tax net loss of $8.6 in 2001. The supply agreement was subsequently
		terminated and certain aspects of the purchase agreement were revised. (See
		Note 3 to the Consolidated Financial Statements).

In December 2001, Products Corporation sold a facility in Puerto Rico for
		approximately $4. In connection with such disposition, the Company recorded a
		pre-tax and after-tax net gain on the sale of $3.1 in the fourth quarter of
		2001.

Loss on early extinguishment of debt

The loss on early extinguishment of debt of $3.6 in 2001 resulted
		primarily from the write-off of financing costs in connection with Products
		Corporation entering into the 2001 Credit Agreement.

22

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Provision for income taxes:

Year Ended December 31,2002
			 
			 2001
			 
			 ChangeProvision for income taxes
			 
			 $
			 4.8
			 
			 
			 $
			 4.1
			 
			 
			 $
			 (0.7
			 )


The increase in the provision for income taxes for 2002, as compared to
		2001, was attributable to higher taxable income in certain markets outside the
		U.S., which was partially offset by the recognition of tax benefits of
		approximately $0.9 relating to the carryback of alternative minimum tax losses
		resulting from tax legislation enacted in the first quarter of 2002.

Financial Condition, Liquidity and Capital Resources

Net cash used for operating activities was $166.4, $112.3 and $86.5 for
		2003, 2002 and 2001, respectively. The increase in net cash used for operating
		activities for 2003, compared to 2002, resulted primarily from a decrease in
		accrued liabilities mainly associated with the implementation of various
		aspects of the stabilization and growth phase of its plan and higher spending
		on displays due to the roll out of the Company's reconfigured permanent wall
		displays, partially offset by lower net loss and lower accounts receivable due
		to earlier payment terms with many of the Company's large U.S. customers. The
		Company received $5.3 and $11.5 in 2003 and 2002, respectively, related to
		prepaid minimum royalties under a long-term licensing agreement. The increase
		in net cash used for operating activities for 2002 compared to 2001 resulted
		primarily from a higher net loss, partially offset by lower inventories and an
		increase in accrued expenses and other, mainly associated with the Company's
		implementation of various aspects of the stabilization and growth phase of its
		plan. In addition, purchases of permanent wall displays increased in 2002 due
		to the roll out of the Company's newly-reconfigured wall displays.

Net cash (used for) provided by investing activities was $(23.3), $(14.2)
		and $87.2 for 2003, 2002 and 2001, respectively. Net cash used for investing
		activities for 2003 consisted of capital expenditures, partially offset by the
		proceeds from the sale of the Company's warehouse in Mississsauga, Ontario. Net
		cash used for investing activities for 2002 consisted primarily of capital
		expenditures. Net cash provided by investing activities for 2001 consisted of
		net proceeds from the sale of the Company's Colorama brand in Brazil, the
		Company's subsidiary in Maesteg, Wales (UK), the Aoyama Property in Japan, the
		Phoenix facility and a facility in Puerto Rico, partially offset by capital
		expenditures.

Net cash provided by financing activities was $151.1, $110.3 and $46.3
		for 2003, 2002 and 2001, respectively. Net cash provided by financing
		activities for 2003 included cash drawn under the Credit Agreement and the 2003
		Mafco Loans and net proceeds from the Rights Offering, partially offset by the
		repayment of borrowings under the Credit Agreement and the Mafco $65 million
		line of credit and payment of financing costs. Net cash provided by financing
		activities for 2002 included cash drawn under the Credit Agreement, partially
		offset by the repayment of borrowings under the Credit Agreement and payment of
		debt issuance costs. Net cash provided by financing activities for 2001
		included cash drawn under the 2001 and 1997 Credit Agreements and proceeds from
		the issuance of the 12% Senior Secured Notes, partially offset by the repayment
		of borrowings under the 1997 Credit Agreement (as hereinafter defined) with the
		net proceeds from the disposition of the Colorama brand in Brazil, and
		subsequently with proceeds from the issuance of the 12% Senior Secured Notes
		and proceeds from the 2001 Credit Agreement and payment of debt issuance costs
		in connection with the issuance of the 12% Senior Secured Notes and the 2001
		Credit Agreement.

On November 30, 2001, Products Corporation entered into a credit
		agreement (the "2001 Credit Agreement") with a syndicate of lenders, whose
		individual members change from time to time, which agreement amended and
		restated the credit agreement entered into by Products Corporation in May 1997
		(as amended, the "1997 Credit Agreement"; the 2001 Credit Agreement and the
		1997 Credit Agreement are sometimes referred to as the "Credit Agreement"), and
		which matures on May 30, 2005. As of December 31, 2003, the 2001 Credit
		Agreement provided up to $247.5, which is comprised of a $115.4 term loan
		facility (the "Term Loan Facility") and a $132.1 multi-currency revolving
		credit facility (the "Multi-Currency Facility"). As of February 9 2004,
		Products Corporation had utilized $244.6 under the 2001 Credit Agreement and
		had approximately $182 of available liquidity from available sources.

23

---

In connection with the 2003 M&F Investments described below, and as a
		result of Products Corporation's operating results for the fourth quarter of
		2002 and the effect of the acceleration of the Company's implementation of the
		stabilization and growth phase of its plan, Products Corporation entered into
		an amendment in February 2003 of its Credit Agreement with its bank lenders and
		secured waivers of compliance with certain covenants under the Credit Agreement
		(the "2003 Bank Amendment"). In particular, EBITDA (as defined in the Credit
		Agreement) was $35.2 for the four consecutive fiscal quarters ended December
		31, 2002, which was less than the minimum of $210 required under the EBITDA
		covenant of the Credit Agreement for that period and the Company's leverage
		ratio was 5.09:1.00, which was in excess of the maximum ratio of 1.4:1.00
		permitted under the leverage ratio covenant of the Credit Agreement for that
		period. Accordingly, the Company sought and secured waivers of compliance with
		these covenants for the four quarters ended December 31, 2002 and, in light of
		the Company's expectation that the continued implementation of the
		stabilization and growth phase of the Company's plan would affect the ability
		of Products Corporation to comply with these covenants during 2003, as part of
		the 2003 Bank Amendment, the Company also secured an amendment to eliminate the
		EBITDA and leverage ratio covenants for the first three quarters of 2003 and a
		waiver of compliance with such covenants for the four quarters ending December
		31, 2003 expiring on January 31, 2004.

The 2003 Bank Amendment to the Credit Agreement also included the
		substitution of a covenant requiring the Company to maintain a minimum of $20
		of liquidity from specified sources at all times through January 31, 2004 and
		certain other amendments to allow for the 2003 M&F Investments and the
		implementation of the stabilization and growth phase of the Company's plan,
		including specific exceptions from the limitations under the indebtedness
		covenant to permit the 2003 Mafco Loans and to exclude the proceeds from the
		2003 M&F Investments from the mandatory prepayment provisions of the Credit
		Agreement, and to increase the maximum limit on capital expenditures (as
		defined in the Credit Agreement) from $100 to $115 for 2003. The 2003 Bank
		Amendment also increased the applicable margin on loans under the Credit
		Agreement by 0.5%, the incremental cost of which to the Company, assuming the
		Credit Agreement is fully drawn, was $1.1 from February 5, 2003 through the end
		of 2003.

EBITDA (as defined in the Credit Agreement) was $144.4 for the four
		consecutive fiscal quarters ended December 31, 2003, which was less than the
		minimum of $230 required under the EBITDA covenant of the Credit Agreement for
		that period and the Company's leverage ratio was 1.66:1.00, which was in excess
		of the maximum ratio of 1.1:1.00 permitted under the leverage ratio covenant of
		the Credit Agreement for that period. Accordingly, the Company sought and on
		January 28, 2004 secured the 2004 Bank Amendment which includes waivers of
		compliance with these covenants for the four quarters ended December 31, 2003
		and, in light of the Company's expectation that the continued implementation of
		its plan would affect the ability of Products Corporation to comply with these
		covenants during 2004, the Company also secured an amendment to eliminate the
		EBITDA and leverage ratio covenants for the first three quarters of 2004 and a
		waiver of compliance with such covenants for the four quarters ending December
		31, 2004 expiring on January 31, 2005.

The 2004 Bank Amendment to the Credit Agreement included certain other
		amendments to allow for the continued implementation of, and refinement to, the
		Company's plan, including, among other things: (i) providing exceptions from
		the limitations under the indebtedness covenant to permit the 2004 Mafco $125
		million term loan, (ii) permitting Products Corporation to borrow up to an
		additional $50 in working capital loans from MacAndrews Holdings or its
		affiliates, if necessary, (iii) extending the maturity of the Mafco $65 million
		line of credit until June 30, 2005 and providing that as a condition to
		Products Corporation borrowing under such line from and after the effective
		date of the 2004 Bank Amendment that at least $100 shall have been borrowed
		under the 2004 Mafco $125 million term loan, (iv) continuing the $20 minimum
		liquidity covenant, (v) increasing the applicable margin on loans under the
		Credit Agreement by 0.25%, the incremental cost of which to the Company,
		assuming the Credit Agreement is fully drawn, would be approximately $0.5 from
		February 1, 2004 through the end of 2004; and (vi) permitting Revlon, Inc. to
		guarantee certain classes of Products Corporation's public indebtedness, if
		necessary, to permit the Proposed Refinancing. (See "Recent Developments"
		for important information concerning the Company's Financial Condition,
		Liquidity and Capital Resources).

In February 2003 the Company entered into an investment agreement with
		MacAndrews Holdings (the "Investment Agreement") pursuant to which the Company
		undertook and, on June 20, 2003,

24

---

completed, a $50 equity rights offering (the "Rights Offering") in which
		its stockholders purchased additional shares of the Company's Class A Common
		Stock. Pursuant to the Rights Offering, the Company distributed to each
		stockholder of record of its Class A Common Stock and Class B Common Stock as
		of the close of business on May 12, 2003, the record date set by the Board of
		Directors, at no charge, one transferable subscription right for each 2.9403
		shares of Common Stock owned. Each subscription right enabled the holder to
		purchase one share of Class A Common Stock at a subscription price equal to
		$2.84, representing 80% of the $3.55 closing price per share of the Company's
		Class A Common Stock on the NYSE on May 12, 2003, the record date of the Rights
		Offering.

On June 20, 2003, the Company completed the Rights Offering and issued an
		additional 17,605,650 shares of its Class A Common Stock, including 3,015,303
		shares subscribed for by the public and 14,590,347 shares issued to MacAndrews
		Holdings in a private placement (representing the number of shares of the
		Company's Class A Common Stock that MacAndrews Holdings would otherwise have
		been entitled to purchase pursuant to its basic subscription privilege, which
		was approximately 83% of the shares of the Company's Class A Common Stock
		offered in the Rights Offering).

In addition, in connection with the Investment Agreement, MacAndrews
		Holdings also made available a $100 million term loan to Products Corporation
		(the "Mafco $100 million term loan"). The Mafco $100 million term loan has a
		final maturity date of December 1, 2005 and interest on such loan of 12.0% is
		not payable in cash, but accrues and is added to the principal amount each
		quarter and will be paid in full at final maturity. (See "Recent
		Developments" for important information concerning the Mafco $100 million term
		loan).

Additionally, MacAndrews Holdings also provided Products Corporation with
		an additional $40 line of credit during 2003, which amount was originally to
		increase to $65 on January 1, 2004 (the "Mafco $65 million line of credit")
		(the Mafco $100 million term loan and the Mafco $65 million line of credit,
		each as amended, are referred to as the "2003 Mafco Loans" and the Rights
		Offering and the 2003 Mafco Loans are referred to as the "2003 M&F
		Investments") and which was originally to be available to Products Corporation
		through December 31, 2004, provided that the Mafco $100 million term loan is
		fully drawn and the Company had consummated the Rights Offering. The Mafco $65
		million line of credit bears interest payable in cash at a rate of the lesser
		of (i) 12.0% and (ii) 0.25% less than the rate payable from time to time on
		Eurodollar loans under Products Corporation's Credit Agreement (which rate was
		8.00% as of December 31, 2003). However, in connection with the recent 2004
		Bank Amendment of Products Corporation's Credit Agreement, Products Corporation
		and MacAndrews Holdings agreed to extend the maturity of the Mafco $65 million
		line of credit to June 30, 2005 and to subject the availability of funds under
		such line of credit to the condition that an aggregate principal amount of $100
		be drawn under the 2004 Mafco $125 million term loan. (See "Recent
		Developments" for important information concerning the Mafco $65 million line
		of credit).

In December 2003, Revlon, Inc. announced that its Board of Directors
		approved two loans from MacAndrews Holdings, the 2004 M&F Loan and the $25
		million M&F Loan, if needed, to help fund its continued implementation and
		refinement of the Company's plan. (See Recent Developments"). Revlon,
		Inc. also announced in December 2003 that it had begun exploring the Debt
		Reduction Transactions.(See "Recent Developments"). The 2004 M&F
		Loan and $25 million M&F Loan were consolidated into the 2004 Mafco $125
		million term loan. The 2004 Mafco $125 million term loan is a senior unsecured
		multiple-draw term loan at an interest rate of 12% per annum, and which is on
		substantially the same terms as the Mafco $100 million term loan provided by
		MacAndrews & Forbes earlier in 2003, including that interest on such loans
		is not payable in cash, but will accrue and be added to the principal amount
		each quarter and be paid in full at final maturity on December 1, 2005,
		provided that $25 of such loan may be repaid at the option of the Company prior
		to December 1, 2005. (See "Recent Developments" for important information
		concerning the 2004 Mafco $125 million term loan).

The Company's principal sources of funds are expected to be operating
		revenues, cash on hand, funds available for borrowing under the Credit
		Agreement, the Mafco $65 million line of credit, the 2004 Mafco $125 million
		term loan and other permitted lines of credit. (See "Recent
		Developments"). The Credit Agreement, the Mafco $65 million line of credit,
		the 2004 Mafco $125 million term loan, Products Corporation's 12% Senior
		Secured Notes, Products Corporation's 8 5/8% Senior Subordinated Notes due

25

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2008 (the "8 5/8% Senior Subordinated Notes"), Products Corporation's 8
		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 certain
		provisions that by their terms limit Products Corporation's and/or its
		subsidiaries' ability to, among other things, incur additional debt.

The Company's principal uses 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
		permanent wall displays, capital expenditure requirements, payments in
		connection with the Company's restructuring programs referred to herein and
		debt service payments and costs. Cash contributions to the Company's pension
		plans were $21 in 2003 and the Company expects them to be approximately $40 in
		2004.

The Company has undertaken a number of programs to efficiently manage its
		cash and working capital including, among other things, programs to carefully
		manage and reduce inventory levels, centralized purchasing to secure discounts
		and efficiencies in procurement, and providing additional discounts to U.S.
		customers for more timely payment of receivables and careful management of
		accounts payable.

The Company previously estimated that charges related to the
		implementation of its plan for 2002, 2003 and 2004 would not exceed $160. The
		Company recorded charges of approximately $104 in 2002 and approximately $31 in
		2003 related to the implementation of the stabilization and growth phase of its
		plan. The Company expects that cash payments related to the foregoing charges,
		that it has previously recorded with respect to its plan, will be approximately
		$100 during 2003 and 2004 of which the Company paid approximately $80 in 2003.

The Company developed a new design for its wall displays (which the
		Company is continuing to refine as part of the implementation of its plan) and
		began installing them at certain customers' retail stores during 2002, which it
		continued during 2003. The Company is also reconfiguring existing wall displays
		at its retail customers. Accordingly, the Company has accelerated the
		amortization of its existing wall displays. The Company estimates that
		purchases of wall displays for 2004 will be approximately $50 to $60.

The Company estimates that capital expenditures for 2004 will be
		approximately $20 to $30. The Company estimates that cash payments related to
		the restructuring programs referred to in Note 2 to the Consolidated Financial
		Statements and executive separation costs will be $17 to $22 in 2004.

The Company expects that operating revenues, cash on hand, and funds
		available for borrowing under the Credit Agreement, the Mafco $65 million line
		of credit, and the 2004 Mafco $125 million term loan and other permitted lines
		of credit (See "Recent Developments") will be sufficient to enable the
		Company to cover its operating expenses, including cash requirements in
		connection with the Company's operations, the continued implementation of, and
		refinement to, the Company's plan, cash requirements in connection with the
		Company's restructuring programs referred to above and the Company's debt
		service requirements for 2004. The U.S. mass-market color cosmetics category
		during 2003 was softer than expected. Despite this softness in the U.S.
		mass-market color cosmetics category, based upon the Company's belief that its
		continued implementation of its plan is proving effective, the Company intends
		to continue to support its plan, including for brand support. To help fund the
		costs and expenses of the continued implementation of the Company's plan, in
		July 2003, MacAndrews Holdings agreed to make available to Products Corporation
		in 2003 the full $65 under the Mafco $65 million line of credit, $25 of which
		was scheduled to become available on January 1, 2004. Additionally, MacAndrews
		& Forbes has provided Products Corporation with the 2004 Mafco $125 million
		term loan, which is on terms that are substantially the same as the Mafco $100
		million term loan. As of February 9, 2004, Products Corporation had drawn
		$244.6 under the 2001 Credit Agreement, all of the Mafco $100 million term
		loan, $26.0 of the Mafco $65 million line of credit and $12.4 of the 2004 Mafco
		$125 million term loan. (See "Recent Developments" for important information
		concerning the Mafco $100 million term loan, Mafco $65 million line of credit
		and the 2004 Mafco $125 million term loan). The Mafco $65 million line of
		credit and the 2004 Mafco $125 million term loan are intended to continue to
		help fund the continued implementation of, and refinement to, the Company's
		plan and to decrease the risk that would otherwise exist if the Company were to
		fail to meet its debt and ongoing obligations as they become due in 2004.
		However,

26

---

there can be no assurance that such funds will be sufficient to meet the
		Company's cash requirements on a consolidated basis. If the Company's
		anticipated level of revenue growth is not achieved because, for example, of
		decreased consumer spending in response to weak economic conditions or weakness
		in the cosmetics category, increased competition from the Company's competitors
		or the Company's marketing plans are not as successful as anticipated, or if
		the Company's expenses associated with the continued implementation of, and
		refinement to, the Company's plan exceed the anticipated level of expenses, the
		Company's current sources of funds may be insufficient to meet the Company's
		cash requirements. Additionally, in the event of a decrease in demand for
		Products Corporation's products or reduced sales or lack of increases in demand
		and sales as a result of the continued implementation of, and refinement to,
		the Company's plan, such development, if significant, could reduce Products
		Corporation's operating revenues and could adversely affect Products
		Corporation's ability to achieve certain financial covenants under the Credit
		Agreement and in such event the Company could be required to take measures,
		including reducing discretionary spending. If the Company is unable to satisfy
		such cash requirements from these sources, the Company could be required to
		adopt one or more alternatives, such as delaying the implementation of or
		revising aspects of its plan, reducing or delaying purchases of wall displays
		or advertising or promotional expenses, reducing or delaying capital spending,
		delaying, reducing or revising restructuring programs, restructuring
		indebtedness, selling assets or operations, seeking additional capital
		contributions or loans from MacAndrews & Forbes, the Company's other
		affiliates and/or third parties, selling additional equity or debt securities
		of Revlon, Inc. or reducing other discretionary spending. The Company has
		substantial debt maturing in 2005, which will require refinancing, consisting
		of $246.3 (assuming the maximum amount is borrowed) under the Credit Agreement
		and $363.0 of 12% Senior Secured Notes, as well as any amounts borrowed under
		the Mafco $65 million line of credit and the 2004 Mafco $125 million term loan.
		(See "Recent Developments" important information concerning recent
		amendments to the Credit Agreement).

Products Corporation's EBITDA, as defined in the Credit Agreement, was
		approximately $144.4 for the four quarters ended December 31, 2003. As a
		result, Products Corporation would not have been in compliance with the EBITDA
		and leverage ratio covenants, had they been in effect at that time. The Company
		expects that Products Corporation will need to seek a further amendment to the
		Credit Agreement or a waiver of the EBITDA and leverage ratio covenants under
		the Credit Agreement prior to the expiration of the existing waiver on January
		31, 2005 because the Company does not expect that its operating results,
		including after giving effect to various actions under the Company's plan, will
		allow Products Corporation to satisfy those covenants for the four consecutive
		fiscal quarters ending December 31, 2004. The minimum EBITDA required to be
		maintained by Products Corporation under the Credit Agreement was $230 for each
		of the four consecutive fiscal quarters ending on December 31, 2003 (which
		covenant was waived through January 31, 2004 and thereafter eliminated) and
		$250 for any four consecutive fiscal quarters ending December 31, 2004 and
		thereafter (which covenant was waived through January 31, 2005). The leverage
		ratio covenant under the Credit Agreement will permit a maximum ratio of
		1.10:1.00 for any four consecutive fiscal quarters ending on or after December
		31, 2003 (which limit was eliminated for the four quarters ending March 31,
		2004, June 30, 2004 and September 30, 2004 and waived through January 31, 2005
		for the four fiscal quarters ending December 31, 2004). In addition, after
		giving effect to the 2004 Bank Amendment, the Credit Agreement also contains a
		$20 minimum liquidity covenant. While the Company expects that Products
		Corporation's bank lenders will consent to such amendment or waiver, there can
		be no assurance that they will or that they will do so on terms that are
		favorable to the Company. If the Company is unable to obtain such amendment or
		waiver, it could be required to refinance the Credit Agreement or repay it with
		proceeds from the sale of assets or operations, or additional capital
		contributions and/or loans from MacAndrews & Forbes, the Company's other
		affiliates and/or third parties or the sale of additional equity or debt
		securities of Revlon, Inc. In the event that Products Corporation were unable
		to obtain such a waiver or amendment and Products Corporation were not able to
		refinance or repay the Credit Agreement, Products Corporation's inability to
		meet the financial covenants for the four consecutive fiscal quarters ending
		December 31, 2004 would constitute an event of default under Products
		Corporation's Credit Agreement, which would permit the bank lenders to
		accelerate the Credit Agreement, which in turn would constitute an event of
		default under the indentures governing Products Corporation's debt if the
		amount accelerated exceeds $25.0 and such default remains uncured within 10
		days of notice from the trustee under the applicable indenture. Further,

27

---

the lenders under Products Corporation's Credit Agreement could proceed
		against the collateral securing that indebtedness. If these lenders were to
		foreclose upon this collateral, which includes the capital stock of Products
		Corporation, the value of Revlon, Inc.'s Common Stock would be substantially
		diminished or eliminated.

There can be no assurance that the Company would be able to take any of
		the actions referred to in the preceding two paragraphs because of a variety of
		commercial or market factors or constraints in the Company's debt instruments,
		including, for example, Products Corporation's inability to reach agreement
		with its bank lenders on refinancing terms that are acceptable to the Company
		before the waiver of its financial covenants expires on January 31, 2005,
		market conditions being unfavorable for an equity or debt offering, or that the
		transactions may not be permitted under the terms of the Company's various debt
		instruments then in effect, because of restrictions on the incurrence of debt,
		incurrence of liens, asset dispositions and related party transactions. In
		addition, such actions, if taken, may not enable the Company to satisfy its
		cash requirements if the actions do not generate a sufficient amount of
		additional capital.

Revlon, Inc., as a holding company, will be dependent on the earnings and
		cash flow of, and dividends and distributions from, Products Corporation to pay
		its expenses and to pay any cash dividend or distribution on Revlon, Inc.'s
		Class A Common Stock that may be authorized by the Board of Directors of
		Revlon, Inc. The terms of the Credit Agreement, the 2003 Mafco Loans, the 2004
		Mafco $125 million term loan, the 12% Senior Secured Notes, the 8 5/8% Senior
		Subordinated Notes, the 8 1/8% Senior Notes and the 9% Senior Notes generally
		restrict Products Corporation from paying dividends or making distributions,
		except that Products Corporation is permitted to pay dividends and make
		distributions to Revlon, Inc., among other things, to enable Revlon, Inc. to
		pay expenses incidental to being a public holding company, including, among
		other things, professional fees such as legal and accounting fees, regulatory
		fees such as Commission filing fees and other miscellaneous expenses related to
		being a public holding company and, subject to certain limitations, to pay
		dividends or make distributions in certain circumstances to finance the
		purchase by Revlon, Inc. of its Class A Common Stock in connection with the
		delivery of such Class A Common Stock to grantees under the Revlon, Inc.
		Amended and Restated 1996 Stock Plan (the "Amended Stock Plan").

Pursuant to a tax sharing agreement, Revlon, Inc. may be required to make
		tax sharing payments to Mafco Holdings as if Revlon, Inc. were filing separate
		income tax returns, except that no payments are required by Revlon, Inc. if and
		to the extent that Products Corporation is prohibited under the Credit
		Agreement from making tax sharing payments to Revlon, Inc. The Credit Agreement
		prohibits Products Corporation from making any tax sharing payments other than
		in respect of state and local income taxes. Revlon, Inc. currently anticipates
		that, as a result of net operating tax losses and prohibitions under the Credit
		Agreement, no cash federal tax payments or cash payments in lieu of federal
		taxes pursuant to the tax sharing agreement will be required for 2004.

As a result of dealing with suppliers and vendors in a number of foreign
		countries, Products Corporation enters into foreign currency forward exchange
		contracts and option contracts from time to time to hedge certain cash flows
		denominated in foreign currencies. There were foreign currency forward exchange
		contracts with a notional amount of $8.3 outstanding at December 31, 2003. The
		fair value of foreign currency forward exchange contracts outstanding at
		December 31, 2003 was $(0.8).

28

---

Disclosures about Contractual Obligations and Commercial Commitments

The following table aggregates all contractual commitments and commercial
		obligations that affect the Company's financial condition and liquidity
		position as of December 31, 2003:

Payments Due by Period(dollars
				in millions)Contractual Obligations
			 
			 Total
			 
			 Less than 1 year
			 
			 1-3 years
			 
			 4-5 years
			 
			 After 5 yearsLong-term Debt
			 
			 $1,869.5
			 
			 Nil
			 
			 $1,219.6
			 
			 $649.9
			 
			 NilCapital Lease Obligations
			 
			 6.0
			 
			 $2.0
			 
			 4.0
			 
			 Nil
			 
			 NilOperating Leases
			 
			 129.8
			 
			 15.4
			 
			 38.8
			 
			 21.1
			 
			 $54.5Unconditional Purchase
				Obligations
			 
			 (a)37.4
			 
			 37.4
			 
			 Nil
			 
			 Nil
			 
			 NilOther Long-term Obligations
			 
			 (b)104.9
			 
			 53.4
			 
			 51.5
			 
			 Nil
			 
			 NilTotal Contractual Cash
				Obligations
			 
			 $2,147.6
			 
			 $108.2
			 
			 $1,313.9
			 
			 $671.0
			 
			 $54.5


|(a) | Consists
			 of purchase commitments for finished goods, raw materials, components and
			 services pursuant to enforceable and legally binding obligations which include
			 all significant terms, including fixed or minimum quantities to be purchased;
			 fixed, minimum or variable price provisions; and the approximate timing of the
			 transaction.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Consists
			 primarily of obligations related to advertising, insurance, employment
			 contracts and other personnel service contracts. Such amounts exclude severance
			 and other contractual commitments related to restructuring, which are discussed
			 under "Restructuring Costs".
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Off-Balance Sheet Transactions

The Company does not maintain any off-balance sheet transactions,
		arrangements, obligations or other relationships with unconsolidated entities
		or others that are reasonably likely to have a material current or future
		effect on the Company's financial condition, changes in financial condition,
		revenues or expenses, results of operations, liquidity, capital expenditures or
		capital resources.

Effect of New Accounting Standards

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

Inflation

In general, the Company's costs are affected by inflation and the effects
		of inflation may be experienced by the Company in future periods. Management
		believes, however, that such effects have not been material to the Company
		during the past three years in the United States and in foreign
		non-hyperinflationary countries. The Company operates in certain countries
		around the world, such as Argentina, Brazil, Venezuela and Mexico that have in
		the past experienced hyperinflation. In hyperinflationary foreign countries,
		the Company attempts to mitigate the effects of inflation by increasing prices
		in line with inflation, where possible, and efficiently managing its working
		capital levels.

Subsequent Events

See "Recent Developments."

29

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Item 7A.    Quantitative and Qualitative Disclosures
		About Market Risk

Interest Rate Sensitivity

The Company has exposure to changing interest rates, primarily in the
		U.S. The Company's policy is to manage interest rate risk through the use of a
		combination of fixed and floating rate debt. The Company from time to time
		makes use of derivative financial instruments to adjust its fixed and floating
		rate ratio. There were no such derivative financial instruments outstanding at
		December 31, 2003. The table below provides information about the Company's
		indebtedness that is sensitive to changes in interest rates. The table presents
		cash flows with respect to principal on indebtedness and related weighted
		average interest rates by expected maturity dates. Weighted average variable
		rates are based on implied forward rates in the yield curve at December 31,
		2003. The information is presented in U.S. dollar equivalents, which is the
		Company's reporting currency.

Exchange Rate Sensitivity

The Company manufactures and sells its products in a number of countries
		throughout the world and, as a result, is exposed to movements in foreign
		currency exchange rates. In addition, a portion of the Company's borrowings are
		denominated in foreign currencies, which are also subject to market risk
		associated with exchange rate movement. The Company from time to time hedges
		major foreign currency cash exposures generally through foreign exchange
		forward and option contracts. The contracts are entered into with major
		financial institutions to minimize counterparty risk. These contracts generally
		have a duration of less than twelve months and are primarily against the U.S.
		dollar. In addition, the Company enters into foreign currency swaps to hedge
		intercompany financing transactions. The Company does not hold or issue
		financial instruments for trading purposes.

30

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The
following table presents the information required by Item 7A of Form
10-K as of December 31,
2003:

Expected
maturity date for the year ended December
31,



Fair ValueDec. 31,
20032004

2005

2006

2007

2008

Thereafter

Total(dollars
in
millions)DebtShort-term
variable rate (various
currencies)

$
28.0






















$
28.0


$
28.0Average
interest
rate (a)


3.9
%Long-term
fixed rate - third party
($US)





$
356.3


$
499.8






$
649.9







1,506.0



1,009.6Average
interest
rate






12.0
%


8.6
%






8.6
%Long-term
variable rate - third party
($US)






214.4
*


















214.4



214.4Average
interest
rate (a)






6.5
%Long-term
variable rate - third party (various
currencies)






2.9
*


















2.9



2.9Average
interest
rate (a)






8.7
%Long-term
fixed rate - affiliates
($US)






122.1
**


















122.1



100.3Average
interest
rate






11.5
%Total
debt
(b)

$
28.0


$
695.7


$
499.8


$
—


$
649.9


$
—


$
1,873.4


$
1,355.2


AverageContractualRate$/FC











OriginalUS
DollarNotional Amount

ContractValueDec.
31,2003

Fair ValueDec.
31,2003Forward
ContractsBuy Euros/Sell
USD


1.0589






















$
1.2


$
1.4


$
0.2Buy
British Pounds/Sell
USD


1.7700























1.8



1.8



—Sell
British Pounds/Buy
USD


1.5375























0.5



0.4



(0.1
)Sell
Australian Dollars/Buy
USD


0.5760























1.6



1.1



(0.5
)Sell
Canadian Dollars/Buy
USD


0.6617























1.9



1.6



(0.3
)Sell
South African Rand/Buy
USD


0.1121























0.5



0.4



(0.1
)Buy
Australian Dollars/Sell New Zealand
Dollars


1.0946























0.5



0.5



—Buy
British Pounds/Sell
Euros


0.6835























0.3



0.3



—Total
forward
contracts

























$
8.3


$
7.5


$
(0.8
)


|
|
|
|

|(a) | Weighted
average variable rates are based upon implied forward rates from the
yield curves at December 31,
2003.
|--- | ----------------------------------------------------------------------------------------------------------------

|(b) | Excludes affiliate debt of
$24.1, for which fair value is not readily
determinable.
|--- | -----------------------------------------------------------------------------------

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

|** | Primarily represents borrowings
under MacAndrews & Forbes $100 million term loan, which matures in
December 2005, of which fair value was determined based on the market
rates of Products Corporation's 8 1/8% and
9% Notes, which have similar credit attributes.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 8.  Financial Statements and Supplementary Data

Reference is made to the Index on page F-1 of the Consolidated
Financial Statements of the Company and the Notes thereto contained
herein.

31

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Item 9.  Changes in and
Disagreements with Accountants on Accounting and Financial
Disclosure

Not applicable.

Item 9A. Controls and
Procedures

(a) Disclosure Controls and Procedures. The
Company's management, with the participation of the
Company's Chief Executive Officer and Chief Financial Officer,
has evaluated the effectiveness of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of the end of the fiscal period covered by
this Annual Report on Form 10-K. Based upon such evaluation, the Chief
Executive Officer and Chief Financial Officer have concluded that, as
of the end of such period, the Company's disclosure controls and
procedures are effective in recording, processing, summarizing and
reporting information required to be disclosed by the Company in the
reports it files or submits under the Exchange Act within the time
periods specified in the Commission's rules and forms.

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

PART III INFORMATION

Item 10.
Directors and Executive Officers of the Registrant

The
following table sets forth certain information concerning the Directors
and executive officers of the Company as of December 31, 2003. Each
Director holds office until his successor is duly elected and qualified
or until his resignation or removal, if
earlier.

Name

PositionRonald
O. Perelman

Chairman of the Board and
DirectorJack L. Stahl

President, Chief
Executive Officer and DirectorThomas E.
McGuire

Executive Vice President and Chief Financial
OfficerPaul E. Shapiro

Executive Vice
President and Chief Administrative OfficerDouglas
H. Greeff

Executive Vice President – Strategic
FinanceAlan S.
Bernikow

DirectorDonald G.
Drapkin

DirectorProfessor Meyer
Feldberg

DirectorHoward
Gittis

DirectorEdward J.
Landau

DirectorLinda Gosden
Robinson

DirectorTerry
Semel

DirectorMartha
Stewart

Director


The name, age (as of
December 31, 2003), principal occupation for the last five years, and
selected biographical information for each of the Directors and
executive officers of the Company are set forth below.

Mr.
Perelman (60) has been Chairman of the Board of Directors of the
Company and Products Corporation since June 1998 and a Director of the
Company and of Products Corporation since their respective formations
in 1992. Mr. Perelman has been Chairman of the Board of Managers,
Manager and Chief Executive Officer of REV Holdings, which files
reports pursuant to the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), since December 2002. He
was Chief Executive Officer of REV Holdings Inc. since 1997 and
Chairman of its Board of Directors from 1993 through December 2002. Mr.
Perelman has been Chairman of the Board and Chief Executive Officer of
MacAndrews &

32

---

Forbes and various of its affiliates since
1980. Mr. Perelman is also Chairman of the Executive Committee of the
Board of Directors of M&F Worldwide Corp. ("M&F
Worldwide") and Chairman of the Board of Directors of
Panavision Inc. ("Panavision"). Mr. Perelman
is also a Director of the following companies which file reports
pursuant to the Exchange Act: Scientific Games Corporation
("Scientific Games"), M&F Worldwide and
Panavision.

Mr. Stahl (50) has been President and Chief
Executive Officer of the Company and Products Corporation since
February 2002 and a Director of the Company and Products Corporation
since March 2002. Mr. Stahl served as President and Chief Operating
Officer of The Coca-Cola Company
("Coca-Cola") from February 2000 to March
2001. Prior to that, Mr. Stahl held various senior executive positions
at Coca-Cola where he began his career in 1979. Mr. Stahl is also a
Director of the Cosmetic, Toiletry, and Fragrance Association and the
United Negro College Fund.

Mr. McGuire (49) has been Executive
Vice President and Chief Financial Officer of the Company and Products
Corporation since August 2003. Mr. McGuire was the Founder and Chief
Executive Officer of Human Capital Formation, LLC from August 2001
until August 2003. Mr. McGuire was the Chief Operating Officer of Zyman
Marketing Group from July 2000 until May 2001. From March 1982 until
June 2000, Mr. McGuire held various professional staff and senior
financial executive positions at Coca-Cola.

Mr. Shapiro (62) was
Executive Vice President and Chief Administrative Officer of the
Company from August 2001 and of Products Corporation from September
2001, in each case until he retired from the Company on December 31,
2003. From June 1998 until July 2001, he was Executive Vice President
and Chief Administrative Officer of Sunbeam Corporation
("Sunbeam") and The Coleman Company, Inc.
("Coleman"). Mr. Shapiro served as a Director
of Coleman from June 1998 until July 2001. Mr. Shapiro previously held
the position of Executive Vice President of Coleman from July 1997
until its acquisition by Sunbeam in March 1998. Mr. Shapiro is a member
of the Board of Directors and serves on the Audit Committee of Toll
Brothers, Inc., which files reports pursuant to the Exchange Act.

Mr. Greeff (47) has been Executive Vice President – Strategic
Finance of the Company and Products Corporation since August 2003. He
had been Executive Vice President and Chief Financial Officer of the
Company and Products Corporation from May 2000 until August 2003. From
September 1998 to May 2000, Mr. Greeff was Managing Director, Fixed
Income Global Loans, and Co-head of Leverage Finance at Salomon Smith
Barney Inc. From January 1994 until August 1998, he was Managing
Director, Global Loans and Head of Leverage and Acquisition Finance at
Citibank N.A.

Mr. Bernikow (63) has been a Director of the
Company and Products Corporation since September 2003. Prior to his
retirement in May 2003, Mr. Bernikow served as the Deputy Chief
Executive Officer of Deloitte & Touche LLP
("D&T") since 1998. Prior to that, Mr.
Bernikow held various senior executive positions at D&T and its
predecessor, Touche Ross, which he joined in 1966. Mr. Bernikow also
serves as a Director and as a member of the Audit Committee of Casual
Male Retail Group, Inc., which files reports pursuant to the Exchange
Act.

Mr. Drapkin (55) has been a Director of the Company and of
Products Corporation since their respective formations in 1992. He has
been Vice Chairman of the Board of MacAndrews & Forbes and various
of its affiliates since 1987. Mr. Drapkin was a partner in the law firm
of Skadden, Arps, Slate, Meagher & Flom for more than five years
prior to 1987. Mr. Drapkin is also a Director of the following
companies which file reports pursuant to the Exchange Act: Anthracite
Capital, Inc., The Molson Companies Limited, Playboy Enterprises, Inc.
and SIGA Technologies, Inc.

Professor Feldberg (61) has been a
Director of the Company since February 1997. Professor Feldberg has
been the Dean of Columbia Business School, New York City, for more than
the past five years. Professor Feldberg is also a Director of the
following companies which file reports pursuant to the Exchange Act:
Federated Department Stores, Inc., PRIMEDIA Inc., Sappi Limited and
Select Medical Corporation. In addition, Professor Feldberg is also a
director or trustee of 31 investment companies (consisting of 51
portfolios) for which UBS Global Asset Management, Inc., UBS Paine
Webber Inc. or one of its affiliates serves as investment advisor,
sub-advisor or manager (the "UBS Investment
Companies"). In addition to being a member of the
Company's Audit Committee, Professor Feldberg is

33

---

also an audit committee member of each of the
UBS Investment Companies and, until November 2003, was an audit
committee member of PRIMEDIA Inc.

Mr. Gittis (69) has been a
Director of the Company and of Products Corporation since their
respective formations in 1992 and Vice Chairman of Products Corporation
since June 2002. Mr. Gittis has been Vice Chairman of the Board of
Managers and Manager of REV Holdings, which files reports pursuant to
the Exchange Act, since December 2002. He was a Director of REV
Holdings Inc. from its formation in 1993 through December 2002 and Vice
Chairman of its Board of Directors from March 1997 through December
2002. He has been Vice Chairman of the Board of MacAndrews & Forbes
and various of its affiliates since 1985. Mr. Gittis is also a Director
of the following companies which file reports pursuant to the Exchange
Act: Jones Apparel Group, Inc., Loral Space & Communications Ltd.,
Panavision, Scientific Games and M&F Worldwide.

Mr. Landau
(73) has been a Director of the Company since June 1996. Prior to his
retirement in February 2003, Mr. Landau was Of Counsel at the law firm
of Wolf, Block, Schorr and Solis-Cohen LLP ("Wolf,
Block") since February 1998, and was a Senior Partner of
Lowenthal, Landau, Fischer & Bring, P.C., a predecessor to such
firm, for more than five years prior to that date. He has been a
Director of Products Corporation since June 1992.

Ms. Robinson
(50) has been a Director of the Company since June 1996. Ms. Robinson
has been Chairman of Robinson Lerer & Montgomery, LLC, a New York
City strategic communications consulting firm, since May 1996. Ms.
Robinson was Chief Executive Officer of Robinson Lerer & Montgomery
from May 1996 until January 2002. In March 2000, Robinson Lerer &
Montgomery was acquired by Young & Rubicam Inc.
("Y&R") and Ms. Robinson has served as
Vice Chairman of Y&R since March 2000. In October 2000, Y&R was
acquired by the WPP Group plc ("WPP"). For
more than five years prior to May 1996, she was Chairman of the Board
and Chief Executive Officer of Robinson Lerer Sawyer Miller Group or
its predecessors. Ms. Robinson is also a member of the NYU Hospitals
Center Board of Trustees.

Mr. Semel (60) has been a Director of
the Company since June 1996. Mr. Semel has been Chairman and Chief
Executive Officer of Yahoo! Inc. ("Yahoo!")
since May 2001. Mr. Semel has been Chairman and Chief Executive Officer
of Windsor Media, Inc., Los Angeles, a diversified media company, since
October 1999. He was Chairman of the Board and Co-Chief Executive
Officer of the Warner Bros. Division of Time Warner Entertainment LP
("Warner Brothers"), Los Angeles, from March
1994 until October 1999 and of Warner Music Group, Los Angeles, from
November 1995 until October 1999. For more than ten years prior to that
he was President of Warner Brothers or its predecessor, Warner Bros.
Inc. Mr. Semel is also a Director of the following companies which file
reports pursuant to the Exchange Act: Yahoo! and Polo Ralph Lauren
Corporation.

Ms. Stewart (62) has been a Director of the Company
since June 1996. Ms. Stewart is the Founder and Chief Creative Officer
of Martha Stewart Living Omnimedia, Inc., New York City (formerly
Martha Stewart Living Omnimedia, LLC, New York City)
("MSLO"). Ms. Stewart was Chairman of the
Board and Chief Executive Officer of MSLO from 1996 until June 2003.
She is an author of many lifestyle books, the creator of the magazine
"Martha Stewart Living," creator and host of
a syndicated daily television series, creator of a syndicated newspaper
column and a catalog company, and has been a lifestyle consultant and
lecturer for more than twenty years. Ms. Stewart is currently a
defendant in a criminal proceeding in New York federal court relating
to a sale by her of non-MSLO stock and her alleged conduct during the
subsequent investigations. Ms. Stewart is also a Director of MSLO,
which files reports pursuant to the Exchange Act.

Compensation
of Directors

Directors who currently are not receiving
compensation as officers or employees of the Company or any of its
affiliates ("Non-Employee Directors") are
paid an annual retainer fee of $35,000, payable in quarterly
installments, and a fee of $1,000 for each meeting of the Board of
Directors or any committee thereof that they attend. Other than in
respect of 2003, Non-Employee Directors receive annual option grants to
purchase 7,500 shares of the Company's Class A Common Stock,
which options generally consist of non-qualified options having a term
of 10 years, vest 25% on each anniversary of the grant date and
vest

34

---

100% on the fourth anniversary of the
grant date, and have an exercise price equal to the per share closing
price on the NYSE of the Company's Class A Common Stock on the
grant date. On October 29, 2003, in connection with his joining the
Board of Directors, the Compensation Committee granted options to Mr.
Bernikow to purchase 7,500 shares of the Company's Class A Common
Stock, which options consist of non-qualified options having a term of
10 years, vest 25% on each anniversary of the grant date and
will become 100% vested on the fourth anniversary of the grant
date, and have an exercise price equal to $2.87, the per share closing
price on the NYSE of the Company's Class A Common Stock on the
grant date.

Effective January 1, 2003, in recognition of their
increased responsibilities, members of the Audit Committee are paid an
annual Audit Committee retainer fee of $10,000, in addition to any
annual retainer fee for Board membership, and a per meeting fee of
$1,500 for each meeting of the Audit Committee that they attend.

On December 17, 2002, the Company's Board of Directors
appointed a special committee of independent directors (the
"Special Committee") to evaluate an
investment proposal made in early 2003 by MacAndrews & Forbes,
which culminated in the $50 Rights Offering and the 2003 Mafco Loans.
The Board designated Messrs. Feldberg and Landau and Ms. Robinson as
the members of the Special Committee, which was authorized to evaluate
such proposed financing transactions between the Company and MacAndrews
& Forbes. The Special Committee retained independent legal counsel
and an investment advisor to assist in its evaluation. The Special
Committee held 10 meetings between December 17, 2002 and January 31,
2003. On January 31, 2003, the Compensation Committee approved a
one-time retainer fee of $25,000 per member of the Special Committee,
as well as a per meeting fee of $2,000 for each meeting of the Special
Committee that they attended.

Audit Committee Financial
Expert

The Company's Board of Directors has determined
that the Company's Audit Committee, consisting of Linda Gosden
Robinson, Alan S. Bernikow, Meyer Feldberg and Edward J. Landau, has at
least one "audit committee financial expert".
The Board determined that Alan S. Bernikow, based upon his experience,
training and education, qualifies as an audit committee financial
expert in that he has (a) an understanding of generally accepted
accounting principles ("GAAP") and financial
statements; (b) the ability to assess the general application of GAAP
in connection with accounting for estimates, accruals and reserves; (c)
experience preparing, auditing, analyzing or evaluating financial
statements that present a breadth and level of complexity of accounting
issues that are generally comparable to the breadth and complexity of
issues that can reasonably be expected to be raised by the
Company's financial statements as well as experience actively
supervising one or more persons engaged in such activities; (d) an
understanding of internal controls and procedures for financial
reporting; and (e) an understanding of audit committee functions. For
certain biographical data concerning Mr. Bernikow, see Item 10,
"Directors and Executive Officers of the
Registrant". The Board further determined that Mr.
Bernikow is independent of management pursuant to applicable SEC rules
and NYSE listing standards regarding the independence of board and
audit committee members, including the independence principles set
forth in the Revlon, Inc. Board Guidelines for Assessing Director
Independence, which are posted on the Company's website at
www.revloninc.com.

Senior Financial Officer Code of Ethics

The Company has a written Code of Business Conduct (the
"Code of Business Conduct") that includes a
code of ethics (the "Senior Financial Officer Code of
Ethics") that applies to the Company's Chief
Executive Officer and senior financial officers (including the
Company's Chief Financial Officer, Controller and persons
performing similar functions) (collectively, the "Senior
Financial Officers"). In addition to the Code of Business
Conduct and the Senior Financial Officer Code of Ethics being available
on the Company's website, www.revloninc.com, the Company will
provide a copy of the Senior Financial Officer Code of Ethics, without
charge, upon written request to Robert K. Kretzman, Executive Vice
President and Chief Legal Officer, Revlon, Inc., 237 Park Avenue, New
York NY, 10017. If the Company changes the Senior Financial Officer
Code of Ethics in any material respect or waives any provision of the
Senior Financial Officer Code of Ethics for any of its Senior Financial
Officers, the Company expects to

35

---

provide the public with notice of any such
change or waiver by publishing an appropriate description of such event
on its corporate website, www.revloninc.com, or by other appropriate
means as required or permitted under applicable rules of the
Commission. The Company does not currently expect to make any such
waivers.

Item 11. Executive Compensation

The following
table sets forth information for the years indicated concerning the
compensation awarded to, earned by or paid to the persons who served as
Chief Executive Officer of the Company during 2003 and the four most
highly paid executive officers (see footnote (a) below), other than the
Chief Executive Officer, who served as executive officers of the
Company during 2003 (collectively, the "Named Executive
Officers"), for services rendered in all capacities to the
Company and its subsidiaries during such periods.

Summary
Compensation
Table

Annual
Compensation
(a)

Long-TermCompensationAwardsName
And Principal
Position

Year

Salary($)

Bonus($)

OtherAnnualCompensation($)

RestrictedStockAwards($)
(b)

SecuritiesUnderlying Options

All
Other Compensation($)Jack L.
Stahl


2003


1,300,000

—

103,244

—

100,000

173,277President
and


2002


1,125,000

1,300,000

82,999

2,240,000

400,000

3,966,746Chief
Executive Officer (c)Thomas E.
McGuire


2003


182,692

—

18,678

112,000

100,000

25,224Executive Vice President and Chief
Financial Officer (d)Paul E. Shapiro


2003


500,000

—

70,426

—

—

5,423Executive Vice
    President and Chief     Administrative     Officer
(e)


20022001


500,000207,692

225,000500,000

72,0925,671

—112,000

200,000100,000

——Douglas
H.
Greeff


2003


884,833

190,720

13,820

—

—

14,056Executive Vice President
and Chief Financial Officer
(f)


20022001


811,365731,375

600,960511,200

16,67016,513

134,400112,000

75,00050,000

8,9748,786


|
|
|
|

|(a) | The
amounts shown in Annual Compensation for 2003, 2002 and 2001 reflect
salary, bonus and other annual compensation (including perquisites and
other personal benefits valued in excess of $50,000) and amounts
reimbursed for payment of taxes awarded to, earned by or paid to the
persons listed for services rendered to the Company and its
subsidiaries. For the periods reported, the Company had an Executive
Bonus Plan in which executives participated (including Messrs. Stahl,
McGuire, Shapiro and Greeff) (see "Employment Agreements
and Termination of Employment Arrangements"). The
Executive Bonus Plan provided for payment of cash compensation upon the
achievement of predetermined business and personal performance
objectives during the calendar year which are established by the
Compensation Committee. The Company did not have any
"executive officers" during 2003 other than
Messrs. Stahl, McGuire, Shapiro and Greeff. Accordingly, for 2003 the
Company is reporting the compensation of Messrs. Stahl, McGuire,
Shapiro and Greeff.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | See footnotes (c), (d),
(e) and (f) below for information concerning the number, value and
vesting schedules on restricted stock awards to the Named Executive
Officers under the Amended Stock Plan. The options granted to Named
Executive Officers during 2003 pursuant to the Amended Stock Plan are
discussed below under "Option Grants in the Last Fiscal
Year."
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Mr. Stahl became
President and Chief Executive Officer of the Company during February
2002. The amount shown for Mr. Stahl under Other Annual Compensation
for 2003 includes $103,244 in respect of gross ups for taxes on imputed
income arising out of (i) personal use of a Company-provided
automobile, (ii) premiums paid or reimbursed by the Company in respect
of life insurance and (iii) reimbursements for mortgage principal and
interest payments pursuant to Mr. Stahl's employment agreement.
The amount shown under All Other Compensation for 2003 reflects (i)
$16,309 in respect of life insurance premiums, (ii) $135,968 of
additional compensation in respect of interest and principal payments
on a mortgage loan which Products Corporation made to Mr. Stahl on May
20, 2002 to purchase a principal residence in the New York metropolitan
area
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

36

---

| | pursuant to his employment agreement (See
"Employment Agreements and Termination of Employment
Arrangements"), (iii) $6,000 in respect of matching
contributions under the Revlon Employees' Savings, Investment and
Profit Sharing Plan (the "401(k) Plan") and
(iv) $15,000 in respect of matching contributions under the Revlon
Excess Savings Plan for Key Employees. Mr. Stahl received a guaranteed
bonus of $1,300,000 in respect of 2002 pursuant to the terms of his
employment agreement. The amount shown for Mr. Stahl under Other Annual
Compensation for 2002 includes $82,999 in respect of gross ups for
taxes on imputed income arising out of (i) personal use of a
Company-provided automobile, (ii) premiums paid or reimbursed by the
Company in respect of life insurance, (iii) reimbursements for mortgage
principal and interest payments pursuant to Mr. Stahl's
employment agreement and (iv) relocation expenses paid or reimbursed by
the Company in 2002. The amount shown under All Other Compensation for
2002 reflects (i) $7,350 in Company-paid relocation expenses, (ii)
$13,081 in respect of life insurance premiums, (iii) $79,315 of
additional compensation in respect of interest and principal payments
on a mortgage loan which Products Corporation made to Mr. Stahl on May
20, 2002 to purchase a principal residence in the New York metropolitan
area pursuant to his employment agreement (See "Employment
Agreements and Termination of Employment Arrangements"),
(iv) $6,000 in respect of matching contributions under the 401(k) Plan,
(v) $15,000 in respect of matching contributions under the Revlon
Excess Savings Plan for Key Employees, and (vi) $3,846,000 for imputed
income in connection with receipt of an Award of restricted stock
reflected in the Summary Compensation Table as to which he made an
election pursuant to Section 83(b) of the Internal Revenue Code. On
February 17, 2002 (the "Stahl Grant Date"),
Mr. Stahl was awarded a grant of 470,000 shares of restricted stock
under the Amended Stock Plan and 530,000 shares of restricted stock
under the Revlon, Inc. 2002 Supplemental Stock Plan (the
"Supplemental Stock Plan"). The value of the
restricted stock Awards to Mr. Stahl reflected in the table are based
on $2.24, the per share closing price of the Company's Class A
Common Stock on the NYSE on December 31, 2003. Provided Mr. Stahl
remains continuously employed by the Company, his 2002 restricted stock
Award will vest as to one-third of the restricted shares on the day
after which such 20-day average of the closing price of the
Company's Class A Common Stock on the NYSE equals or exceeds
$20.00 per share, an additional one-third of such restricted shares
will vest on the day after which such 20-day average closing price
equals or exceeds $25.00 per share and the balance will vest on the day
after which such 20-day average closing price equals or exceeds $30.00
per share, provided (i) subject to clause (ii) below, no portion of Mr.
Stahl's restricted stock Award will vest until the second
anniversary of the Stahl Grant Date, unless such 20-day average closing
price has equaled or exceeded $25.00 per share, (ii) all of the shares
of restricted stock awarded to Mr. Stahl will vest immediately in the
event of a "change in control" as defined in
Mr. Stahl's restricted stock agreement and (iii) on June 18,
2004, restrictions shall lapse as to 250,000 shares of such restricted
stock, on the fourth anniversary of the Stahl Grant Date restrictions
shall lapse as to an additional 250,000 shares of such restricted stock
and on the fifth anniversary of the Stahl Grant Date, restrictions
shall lapse as to 500,000 shares of such restricted stock as to which
restrictions had not previously lapsed. In the event that, prior to the
fifth anniversary of the Stahl Grant Date, and subject to clause (ii)
of the prior sentence, Mr. Stahl's employment with the Company
terminates (a) as a result of Mr. Stahl's
"disability," (b) is terminated by Mr. Stahl
with "good reason" or (c) is terminated by
the Company other than for "cause" (as each
such term is defined or described in Mr. Stahl's employment
agreement), restrictions shall lapse with respect to an additional
number of shares of restricted stock, if any, such that the aggregate
number of shares of restricted stock as to which restrictions shall
have lapsed will equal the greater of (i) 250,000 and (ii) the product
of (X) 1,000,000 and (Y) a fraction, the numerator of which is the
number of full calendar months during which Mr. Stahl was employed
after the Stahl Grant Date (disregarding service prior to March 1,
2002) and the denominator of which is 60. In addition, if Mr.
Stahl's employment is terminated by Mr. Stahl for
"good reason" or is terminated by the Company
other than for "cause" or
"disability" (as each such term is defined or
described in Mr. Stahl's employment agreement) during the 120-day
period immediately preceding the date of a "change in
control" (as defined in Mr. Stahl's restricted stock
agreement), then the shares of restricted stock previously forfeited
upon such termination of employment will be reinstated and the
restrictions relating thereto will lapse and such shares will be deemed
fully vested as of the date of the change in control. In the event that
cash or any in-kind distributions are made in respect of the
Company's Common Stock prior to the lapse of the restrictions
relating to any of Mr. Stahl's restricted stock as to which the
restrictions have not lapsed, such dividends will be held by the
Company and paid to Mr. Stahl when, and if, the restrictions on such
restricted stock lapse.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Mr. McGuire became
Executive Vice President and Chief Financial Officer of the Company
during August 2003. The amount shown for Mr. McGuire under Other Annual
Compensation for 2003 includes $18,678 in respect of gross ups for
taxes on imputed income arising out of relocation expenses paid or
reimbursed by the Company in 2003. The amount shown under All Other
Compensation for 2003 reflects (i) $24,732 in Company-paid relocation
expenses and (ii) $492 in respect of life insurance premiums. On August
18, 2003 (the "McGuire Grant Date"), Mr.
McGuire was awarded 50,000 shares of restricted stock under the Amended
Stock Plan. The value of the 2003 restricted stock Award to Mr. McGuire
reflected in the table is based on $2.24, the per share closing price
of the Company's Class A Common Stock on the NYSE on December 31,
2003. Provided Mr. McGuire remains continuously employed by the
Company, his restricted stock Award will vest as to one-third of the
restricted shares on the day after which the 20-day average of the
closing price of the Company's Class A Common Stock on the NYSE
equals or exceeds $20.00 per share, an additional one-third of such
restricted shares will vest on the day after which such 20-day average
closing price equals or exceeds $25.00 per share and the balance will
vest on the day after which such 20-day average closing price equals or
exceeds $30.00 per share, provided (i) subject to clause (ii) below, no
portion of Mr. McGuire's restricted stock Award will vest until
the second anniversary of the McGuire Grant Date, (ii) all of the
shares of restricted stock awarded to Mr. McGuire in 2003 will vest
immediately in the event of a "change in
control" (as defined in Mr. McGuire's restricted
stock agreement), and (iii) all of the shares of restricted stock
granted to Mr. McGuire in 2003 which have not previously vested will
fully vest on the third anniversary of the McGuire Grant Date. No
dividends will be paid on Mr. McGuire's unvested restricted stock
granted in 2003.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Until his retirement on
December 31, 2003, Mr. Shapiro served as Executive Vice President and
Chief Administrative Officer of the Company during 2001, 2002 and 2003.
The $70,426 shown for Mr. Shapiro under Other Annual Compensation for
2003 includes (i) $16,418 in respect of gross ups for taxes on imputed
income arising out of personal use of a Company-provided automobile,
(ii) $21,510 in respect of health and country club membership
reimbursements and (iii) $22,209 relating to personal use of a Company
car. The amount shown under All Other Compensation for 2003 reflects
$5,423 in respect of matching contributions under the 401(k) Plan. Mr.
Shapiro received a discretionary bonus of $225,000 in respect of 2002
pursuant to the Revlon Executive Bonus Plan. The $72,092 shown for Mr.
Shapiro under Other Annual Compensation for 2002 includes (i) $17,014
in respect of gross ups for taxes on imputed income arising out of
personal use of a Company-provided automobile,
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

37

---

| | (ii) $18,908 in respect of health and country
club membership reimbursements and (iii) $20,450 relating to personal
use of a Company car. Mr. Shapiro received a bonus of $500,000 in
respect of 2001 pursuant to the terms of his employment agreement. The
amount shown for Mr. Shapiro under Other Annual Compensation for 2001
includes $5,671 in respect of gross ups for taxes on imputed income
arising out of personal use of a Company-provided automobile. On June
18, 2001 (the "2001 Grant Date"), Mr. Shapiro
was awarded a grant of (subject to his election as an executive officer
of the Company) 50,000 shares of restricted stock under the Amended
Stock Plan. The value of the 2001 restricted stock Award to Mr. Shapiro
reflected in the table is based on $2.24, the per share closing price
of the Company's Class A Common Stock on the NYSE on December 31,
2003. Mr. Shapiro's restricted stock Award will vest as to
one-third of the restricted shares on the day after which the 20-day
average of the closing price of the Company's Class A Common
Stock on the NYSE equals or exceeds $20.00 per share, an additional
one-third of such restricted shares will vest on the day after which
such 20-day average closing price equals or exceeds $25.00 per share
and the balance will vest on the day after which such 20-day average
closing price equals or exceeds $30.00 per share, provided (i) subject
to clause (ii) below, no portion of Mr. Shapiro's 2001 restricted
stock Award will vest until the second anniversary of the 2001 Grant
Date, (ii) all of the shares of restricted stock awarded to Mr. Shapiro
in 2001 will vest immediately in the event of a "change in
control" (as defined in Mr. Shapiro's restricted
stock agreement), and (iii) all of the shares of restricted stock
granted to Mr. Shapiro in 2001 which have not previously vested will
fully vest on the third anniversary of the 2001 Grant Date. No
dividends will be paid on Mr. Shapiro's unvested restricted stock
granted in 2001.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Mr. Greeff served as
Executive Vice President and Chief Financial Officer of the Company
during all of 2001 and 2002 and until August 2003 when he became
Executive Vice President - Strategic Finance of the Company. In 2003,
Mr. Greeff received a bonus of $190,720 pursuant to the terms of his
employment agreement as a special bonus in respect of repayment of a
loan made to Mr. Greeff by the Company in 2000 (see
"Employment Agreements and Termination of Employment
Arrangements"). The amount shown for Mr. Greeff under
Other Annual Compensation for 2003 includes $13,820 in respect of gross
ups for taxes on imputed income arising out of personal use of a
Company-provided automobile. The amount shown under All Other
Compensation for 2003 reflects (i) $3,056 in respect of life insurance
premiums, (ii) $6,000 in respect of matching contributions under the
401(k) Plan and (iii) $5,000 in respect of reimbursement of expenses in
connection with an amendment of Mr. Greeff's employment
agreement. In 2002, Mr. Greeff received a bonus of $600,960, of which
$200,960 was paid pursuant to the terms of his employment agreement as
a special bonus in respect of repayment of a loan made to Mr. Greeff by
the Company in 2000 (see "Employment Agreements and
Termination of Employment Arrangements") and the balance
of $400,000 was a discretionary bonus paid in respect of 2002 pursuant
to the Revlon Executive Bonus Plan. The amount shown for Mr. Greeff
under Other Annual Compensation for 2002 includes $16,670 in respect of
gross ups for taxes on imputed income arising out of personal use of a
Company-provided automobile. The amount shown under All Other
Compensation for 2002 reflects (i) $2,974 in respect of life insurance
premiums and (ii) $6,000 in respect of matching contributions under the
401(k) Plan. On September 17, 2002 (the "2002 Grant
Date"), Mr. Greeff was awarded a grant of 60,000 shares of
restricted stock under the Amended Stock Plan. The value of the 2002
restricted stock Award to Mr. Greeff reflected in the table is based on
$2.24, the per share closing price of the Company's Class A
Common Stock on the NYSE on December 31, 2003. Provided Mr. Greeff
remains continuously employed by the Company, his 2002 restricted stock
Award will vest as to one-third of the restricted shares on the day
after which the 20-day average of the closing price of the
Company's Class A Common Stock on the NYSE equals or exceeds
$20.00 per share, an additional one-third of such restricted shares
will vest on the day after which such 20-day average closing price
equals or exceeds $25.00 per share and the balance will vest on the day
after which such 20-day average closing price equals or exceeds $30.00
per share, provided (i) subject to clause (ii) below, no portion of Mr.
Greeff's 2002 restricted stock Award will vest until the second
anniversary of the 2002 Grant Date, (ii) all of the shares of
restricted stock awarded to Mr. Greeff in 2002 will vest immediately in
the event of a "change in control" (as
defined in Mr. Greeff's restricted stock agreement) and (iii) all
of the shares of restricted stock granted to Mr. Greeff in 2002 which
have not previously vested will fully vest on the third anniversary of
the 2002 Grant Date. No dividends will be paid on Mr. Greeff's
unvested restricted stock granted in 2002. Mr. Greeff received a bonus
of $511,200 in respect of 2001, of which $211,200 was paid pursuant to
the terms of his employment agreement as a special bonus in respect of
repayment of a loan made to Mr. Greeff by the Company in 2000 (see
"Employment Agreements and Termination of Employment
Arrangements") and the balance of $300,000 was paid in
respect of 2001 pursuant to the Revlon Executive Bonus Plan as a
short-term cash bonus in recognition of the Company's successful
refinancing of its credit agreement in 2001 with the 2001 Credit
Agreement and issuing Products Corporation's 12% Senior
Secured Notes. $150,000 of Mr. Greeff's bonus in respect of 2001
was paid in 2002 and the remaining $150,000 was paid in 2003. The
amount shown for Mr. Greeff under Other Annual Compensation for 2001
includes $16,513 in respect of gross ups for taxes on imputed income
arising out of personal use of a Company-provided automobile. The
amounts shown under All Other Compensation for 2001 reflect (i) $4,436
in respect of life insurance premiums and (ii) $4,350 in respect of
matching contributions under the 401(k) Plan. On the 2001 Grant Date,
Mr. Greeff was awarded a grant of 50,000 shares of restricted stock
under the Amended Stock Plan. The value of the 2001 restricted stock
Award to Mr. Greeff reflected in the table is based on $2.24, the per
share closing price of the Company's Class A Common Stock on the
NYSE on December 31, 2003. Provided Mr. Greeff remains continuously
employed by the Company, his 2001 restricted stock Award will vest as
to one-third of the restricted shares on the day after which the 20-day
average of the closing price of the Company's Class A Common
Stock on the NYSE equals or exceeds $20.00 per share, an additional
one-third of such restricted shares will vest on the day after which
such 20-day average closing price equals or exceeds $25.00 per share
and the balance will vest on the day after which such 20-day average
closing price equals or exceeds $30.00 per share, provided (i) subject
to clause (ii) below, no portion of Mr. Greeff's 2001 restricted
stock Award will vest until the second anniversary of the 2001 Grant
Date, (ii) all of the shares of restricted stock awarded to Mr. Greeff
in 2001 will vest immediately in the event of a "change in
control" (as defined in Mr. Greeff's restricted
stock agreement) and (iii) all of the shares of restricted stock
awarded to Mr. Greeff in 2001 which have not previously vested will
fully vest on the third anniversary of the 2001 Grant Date. No
dividends will be paid on Mr. Greeff's unvested restricted stock
granted in 2001.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

38

---

OPTION GRANTS IN THE LAST FISCAL
YEAR

During 2003, the following grants of stock options were
made pursuant to the Amended Stock Plan to the Named Executive
Officers:

Individual
Grants

Grant Date Value
(a)Name

Number
Of Securities Underlying Options
Granted(#)

Percent Of Total Options Granted
To Employees In Fiscal Year

Exercise Or Base
Price ($/Sh)

Expiration Date

Grant
Date Present Value ($)Jack L.
Stahl


100,000



9.2
%


3.09



5/19/13



206,383Thomas
E.
McGuire


100,000



9.2
%


3.01



8/18/13



200,940Paul
E.
Shapiro


—



—



—



—



—Douglas
H.
Greeff


—



—



—



—



—


The
options granted to Mr. Stahl in 2003 under the Amended Stock Plan were
awarded on May 19, 2003, consist of non-qualified options having a term
of 10 years, will vest 25% on each anniversary of the grant
date, will vest immediately in the event of a "change of
control" (as defined in Mr. Stahl's stock option
agreement), will become 100% vested on the fourth anniversary of
the grant date and have an exercise price equal to $3.09, the per share
closing price on the NYSE of the Company's Class A Common Stock
on such grant date, as indicated in the table above. The options
granted to Mr. McGuire in 2003 under the Amended Stock Plan were
awarded on the McGuire Grant Date pursuant to his employment agreement,
consist of non-qualified options having a term of 10 years, will vest
25% on each anniversary of the grant date, will vest immediately
in the event of a "change of control" (as
defined in Mr. McGuire's stock option agreement), will become
100% vested on the fourth anniversary of the grant date and have
an exercise price equal to $3.01, the per share closing price on the
NYSE of the Company's Class A Common Stock on such grant date, as
indicated in the table above.

|
|
|
|

|(a) | Grant Date
Present Values were calculated using the Black-Scholes option pricing
model. The model as applied used May 19, 2003 with respect to options
granted to Mr. Stahl on such date and the McGuire Grant Date with
respect to options granted to Mr. McGuire on such date. Stock option
models require a prediction about the future movement of stock price.
The following assumptions were made for purposes of calculating Grant
Date Present Values: (i) a risk-free rate of return of 3.53%
with respect to options granted to Mr. Stahl on May 19, 2003 and
3.99% with respect to options granted to Mr. McGuire on the
McGuire Grant Date, which were the rates as of the applicable grant
dates for the U.S. Treasury Zero Coupon Bond issues with a remaining
term similar to the expected term of the options; (ii) stock price
volatility of 70% based upon the volatility of the stock price
of the Company's Class A Common Stock; (iii) a constant dividend
rate of zero percent; and (iv) that the options normally would be
exercised on the final day of their fourth year after vesting. No
adjustments to the theoretical value were made to reflect the waiting
period, if any, prior to vesting of the stock options or the
transferability (or restrictions related thereto) of the stock options.
The real value of the options in the table depends upon the actual
performance of the Company's Class A Common Stock during the
applicable period and upon when they are exercised.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

39

---

AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

The following
chart shows the number of stock options exercised during 2003 and the
2003 year-end value of the stock options held by the Named Executive
Officers:

Name

SharesAcquired
OnExerciseDuring 2003

ValueRealizedDuring
2003

Number Of SecuritiesUnderlying
UnexercisedOptions At
FiscalYear-EndExercisable/UnexercisableAt December 31,
2003 (#)

Value Of In-The-Money Options At Fiscal
Year-EndExercisable/UnexercisableAt December 31, 2003
(a) ($)Jack L.
Stahl


—



—


—/500,000


—Thomas
E.
McGuire


—



—


—/100,000


—Paul
E.
Shapiro


—



—


108,334/191,666


—Douglas
H.
Greeff


—



—


120,834/104,166


—


|
|
|
|

|(a) | Amounts
shown represent the difference between the exercise price of the
options (exercisable or unexercisable, as the case may be) and the
market value of the underlying shares of the Company's Class A
Common Stock at year end, calculated using $2.24, the December 31, 2003
per share closing price on the NYSE of the Company's Class A
Common Stock. The actual value, if any, an executive may realize upon
exercise of a stock option depends upon the amount by which the market
price of shares of the Company's Class A Common Stock exceeds the
exercise price per share when the stock options are exercised.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Employment Agreements and Termination of Employment
Arrangements

Each of Messrs. Stahl, McGuire and Greeff has a
current executive employment agreement with Products Corporation.

Mr. Stahl's employment agreement provides that he will serve
as President and Chief Executive Officer at a base salary of not less
than $1,300,000 per annum, and that he receive a bonus of not less than
$1,300,000 in respect of 2002 (which bonus was paid in February 2003)
and grants of 1,000,000 shares of restricted stock and 400,000 options
during 2002 (which grants were made on the Stahl Grant Date). At any
time after February 28, 2002, Products Corporation may terminate Mr.
Stahl's employment by 36 months' prior written notice of
non-renewal.

Mr. Stahl's employment agreement provides for
participation in the Revlon Executive Bonus Plan and other executive
benefit plans on a basis equivalent to other senior executives of the
Company generally. Mr. Stahl's employment agreement provides for
Company-paid supplemental disability insurance and supplemental term
life insurance coverage with a death benefit of $10,000,000 during
employment. The employment agreement for Mr. Stahl also provides for
protection of Company confidential information and includes a
non-compete obligation.

Mr. Stahl's employment agreement
provides that in the event of termination of the term by Mr. Stahl for
breach by the Company of a material provision of such agreement for
"good reason" (as defined in Mr.
Stahl's employment agreement), or by the Company (otherwise than
for "cause" or
"disability" as each such term is defined or
described in Mr. Stahl's employment agreement), Mr. Stahl would
be entitled, at his election, to severance pursuant to Products
Corporation's Executive Severance Policy (see
"Executive Severance Policy") (other than the
six-month limit on lump sum payments provided for in such policy, which
six-month limit provision would not apply to Mr. Stahl); or continued
payments of base salary, continued participation in the Company's
life insurance plan (which life insurance coverage is subject to a
limit of two years) and medical plans subject to the terms of such
plans, and continued Company-paid supplemental term life insurance, in
each case through the date occurring 36 months after the effective date
of his termination, or in the case of medical plan participation only,
until such earlier date on which Mr. Stahl were to become covered by
like plans of another company. In addition, Mr. Stahl's
employment agreement provides that if he remains employed by Products
Corporation or its affiliates until age 60, then upon any subsequent
retirement he will be entitled to a supplemental pension benefit in a
sufficient amount so that his annual pension benefit from all qualified
and non-qualified pension plans of Products Corporation and its
affiliates, as well as any such plans of Mr. Stahl's past
employers or their affiliates (expressed as a straight life annuity),
equals $500,000. If Mr. Stahl's employment were to

40

---

terminate on or after February 28, 2004 and
prior to February 28, 2005, then he would receive 16.66% of the
supplemental pension benefit otherwise payable pursuant to his
employment agreement and thereafter an additional 8.33% would
accrue as of each February 28th on which Mr. Stahl is still employed
(but in no event more than would have been payable to Mr. Stahl under
the foregoing provision had he retired at age 60). Mr. Stahl would not
receive any supplemental pension benefit and any amounts then being
paid for supplemental pension benefits would immediately cease if he
were to terminate his employment prior to March 1, 2005 other than for
"good reason" (as defined in Mr.
Stahl's employment agreement), or if he were to breach such
agreement or be terminated by the Company for
"cause" (as defined in Mr. Stahl's
employment agreement). Mr. Stahl's employment agreement provides
for continuation of group life insurance and executive medical
insurance coverage in the event of permanent disability.

Mr.
Stahl's employment agreement provides that he is entitled to a
loan from Products Corporation to satisfy state, local and federal
income taxes (including any withholding taxes) incurred by him as a
result of his making an election under Section 83(b) of the Internal
Revenue Code in connection with the 1,000,000 shares of restricted
stock which were granted to him by the Company on the Stahl Grant Date.
Mr. Stahl received such loan from Products Corporation in the amount of
$1,800,000 in March 2002, prior to the passage of the Sarbanes-Oxley
Act of 2002. Interest on such loan is payable at the applicable federal
rate required to avoid imputation of income tax liability. The full
principal amount of such loan and all accrued interest is due and
payable on the fifth anniversary of the Stahl Grant Date, provided that
if Mr. Stahl terminates his employment for "good
reason" or the Company terminates him other than for
"disability" or
"cause" (as each such term is defined or
described in Mr. Stahl's employment agreement), the outstanding
balance of such loan and all accrued interest would be forgiven. Such
loan is secured by a pledge of the 1,000,000 shares of restricted stock
which were granted to Mr. Stahl on the Stahl Grant Date and such loan
and pledge are evidenced by a Promissory Note and a Pledge Agreement,
each dated March 13, 2002. Mr. Stahl's employment agreement also
provides that he is entitled to a mortgage loan to cover the purchase
of a principal residence in the New York metropolitan area and/or a
Manhattan apartment, in the principal amount of $2,000,000, which loan
was advanced by Products Corporation to Mr. Stahl on May 20, 2002,
prior to the passage of the Sarbanes-Oxley Act of 2002. The principal
of the mortgage loan is repayable on a monthly basis during the period
from June 1, 2002 through and including May 1, 2032, with interest at
the applicable federal rate, or 90 days after Mr. Stahl's
employment with the Company terminates, whichever occurs earlier.
Pursuant to his employment agreement, Mr. Stahl is entitled to receive
additional compensation payable on a monthly basis equal to the amount
repaid by him in respect of interest and principal on the mortgage
loan, plus a gross up for any taxes resulting from such additional
compensation. If during the term of his employment agreement Mr. Stahl
terminates his employment for "good reason,"
or the Company terminates his employment other than for
"disability" or
"cause" (as each such term is defined or
described in Mr. Stahl's employment agreement), the mortgage loan
from the Company would be forgiven in its entirety.

Mr.
McGuire's employment agreement with Products Corporation provides
that he will serve as Executive Vice President and Chief Financial
Officer at a base salary of not less than $500,000 per annum and that
he receive a (i) retention incentive of $600,000 within one year of his
employment start date (to be paid by no later than August 17, 2004) and
(ii) grant of (A) 50,000 shares of restricted stock in 2003 (which
grant was made on the McGuire Grant Date), (B) 100,000 options in 2003
(which grant was made on the McGuire Grant Date), (C) 25,000 options in
2004 and (D) 25,000 options in 2005. The term of Mr. McGuire's
employment agreement ends on August 17, 2006. During any period that
his employment continues after August 17, 2006, Mr. McGuire would be
deemed an employee at will and would be eligible for severance under
Products Corporation's Executive Severance Policy (see
"Executive Severance Policy"), provided that
the Severance Period for Mr. McGuire shall not be less than 24
months.

Mr. McGuire's employment agreement provides for
participation in the Revlon Executive Bonus Plan and other executive
benefit plans on a basis equivalent to other senior executives of the
Company generally. The employment agreement for Mr. McGuire also
provides for protection of Company confidential information and
includes a non-compete obligation.

Mr. McGuire's
employment agreement provides that in the event of termination of the
term by Mr. McGuire for breach by the Company of a material provision
of such agreement or failure of the

41

---

Compensation Committee to adopt and
implement the recommendations of management with respect to stock
option or restricted stock grants, or by the Company (otherwise than
for "cause" as defined in Mr. McGuire's
employment agreement or disability), Mr. McGuire would be entitled, at
his election, to severance pursuant to the Executive Severance Policy
(see "Executive Severance Policy") (provided
that the Severance Period for Mr. McGuire shall not be less than 24
months) or continued payments of base salary through August 17, 2006
and continued participation in the Company's life insurance plan,
which life insurance coverage is subject to a limit of two years and
medical plans, subject to the terms of such plans through August 17,
2006 or until Mr. McGuire were covered by like plans of another
company.

Mr. Greeff's employment agreement with Products
Corporation, as amended (as so amended, his "employment
agreement"), provides that he will serve as Executive Vice
President - Strategic Finance at a base salary of not less than
$650,000 per annum and that he receive a grant of (i) 50,000 shares of
restricted stock in 2001 (which grant was made on the 2001 Grant Date),
(ii) 50,000 options in 2001 (which grant was made on March 26, 2001)
and (iii) 50,000 options in 2002 (which grant was made on February 15,
2002). The term of Mr. Greeff's employment agreement ends on
December 31, 2006. During any period that his employment continues
after December 31, 2006, Mr. Greeff would be deemed an employee at will
and would be eligible for severance under Products Corporation's
Executive Severance Policy (see "Executive Severance
Policy"), provided that the Severance Period for Mr.
Greeff shall not be less than 24 months.

Mr. Greeff's
employment agreement provides for participation in the Revlon Executive
Bonus Plan and other executive benefit plans on a basis equivalent to
other senior executives of the Company generally and for Company-paid
supplemental disability insurance. The employment agreement for Mr.
Greeff also provides for protection of Company confidential information
and includes a non-compete obligation.

Mr. Greeff's
employment agreement provides that in the event of termination of the
term by Mr. Greeff for breach by the Company of a material provision of
such agreement or failure of the Compensation Committee to adopt and
implement the recommendations of management with respect to stock
option grants, or by the Company prior to December 31, 2006 (otherwise
than for "cause" as defined in Mr.
Greeff's employment agreement or disability), Mr. Greeff would be
entitled, at his election, to 24 months severance pay pursuant to the
Executive Severance Policy (see "Executive Severance
Policy") (other than the six-month limit on lump sum
payments provided for in the Executive Severance Policy, which
six-month limit provision would not apply to Mr. Greeff) or continued
payments of base salary through December 31, 2006 and continued
participation in the Company's life insurance plan (which life
insurance coverage is subject to a limit of two years) and medical
plans, subject to the terms of such plans through December 31, 2006 or
until Mr. Greeff were covered by like plans of another company, and
continued Company-paid supplemental disability insurance. In addition,
Mr. Greeff's agreement provides that if he remains employed by
Products Corporation or its affiliates until age 62, then upon any
subsequent retirement he will be entitled to a supplemental pension
benefit in a sufficient amount so that his annual pension benefit from
all qualified and non-qualified pension plans of Products Corporation
and its affiliates, as well as any such plans of Mr. Greeff's
past employers or their affiliates (expressed as a straight life
annuity), equals $400,000. If Mr. Greeff's employment were to
terminate on or after December 31, 2003 and prior to December 31, 2004,
then he would receive 36.36% of the supplemental pension benefit
otherwise payable pursuant to his employment agreement and thereafter
an additional 9.09% would accrue as of each December 31st on
which Mr. Greeff is still employed (but in no event more than would
have been payable to Mr. Greeff under the foregoing provision had he
retired at age 62). Mr. Greeff would not receive any supplemental
pension benefit and would be required to reimburse the Company for any
supplemental pension benefits received if he were to breach such
agreement or be terminated by the Company for
"cause" (as defined in Mr. Greeff's
employment agreement). Mr. Greeff's employment agreement provides
for continuation of group life insurance and executive medical
insurance coverage in the event of permanent disability.

Mr.
Greeff's employment agreement provides that he is entitled to a
loan from Products Corporation in the amount of $800,000 (which loan he
received in 2000, prior to the passage of the Sarbanes-Oxley Act of
2002), with the principal to be payable in five equal installments of
$160,000, plus interest at the applicable federal rate, on each of May
9, 2001, May 9, 2002, May 9, 2003 (which installments were repaid)

42

---

and the two successive anniversaries
thereafter, provided that the total principal amount of such loan and
any accrued but unpaid interest at the applicable federal rate (the
"Loan Payment") shall be due and payable upon
the earlier of the January 15th immediately following the termination
of Mr. Greeff's employment for any reason or May 9, 2005. In
addition, Mr. Greeff's employment agreement provides that he
shall be entitled to a special bonus, payable on each May 9th (which
was paid on May 9, 2001, May 9, 2002 and May 9, 2003) and ending with
May 9, 2005 equal to the sum of the Loan Payment with respect to such
year, provided that he is employed on each such May 9th, and provided
further that in the event that Mr. Greeff terminates his employment for
"good reason" or is terminated for a reason
other than "cause" (as such terms are defined
in Mr. Greeff's employment agreement), he shall be entitled to a
special bonus in the amount of $800,000 minus the sum of any special
bonuses paid through the date of such termination plus accrued but
unpaid interest at the applicable federal rate. Notwithstanding the
above, if Mr. Greeff terminates his employment other than for
"good reason" or the Company terminates his
employment for "cause" (as such terms are
defined in Mr. Greeff's employment agreement), or if he breaches
certain post-employment covenants, any bonus described above shall be
forfeited or repaid by Mr. Greeff, as the case may be. Mr.
Greeff's employment agreement also provides that he is eligible
to receive a bonus payment of not less than $1,000,000, subject to
approval by the Compensation Committee, upon the completion of
objectives relating to the Company's long-term financings,
provided that Mr. Greeff remains employed at such time. Such bonus
would also be payable on the completion of such financings in the event
that Mr. Greeff's employment was terminated by Mr. Greeff on
account of "good reason" (as defined in Mr.
Greeff's employment agreement) or by the Company for a reason
other than "cause" (as defined in Mr.
Greeff's employment agreement).

Mr. Shapiro retired from
his employment with Products Corporation effective December 31, 2003
and in connection therewith he entered into an agreement with Products
Corporation dated as of December 12, 2003 (the "Shapiro
Agreement"), which provides that he is to receive an
allowance payable at the rate of his base salary and maximum bonus per
annum payable over the period from January 1, 2004 to June 30, 2005,
during which period Products Corporation will continue to provide
Company-paid supplemental disability insurance. Pursuant to the Shapiro
Agreement, commencing on his 65th birthday on April 25, 2006, the
Company will pay Mr. Shapiro a supplemental pension benefit in a
sufficient amount so that his annual pension benefit from all qualified
and non-qualified pension plans of Products Corporation and its
affiliates, as well as any such plans of Mr. Shapiro's past
employers or their affiliates (expressed as a straight life annuity),
equals $400,000. Pursuant to the Shapiro Agreement, the Company
recommended to the Compensation Committee that stock options awarded to
Mr. Shapiro shall remain exercisable until the expiration date of such
grants, which recommendation was approved by the Compensation Committee
in January 2004.

Executive Severance Policy

Products
Corporation's Executive Severance Policy provides that upon
termination of employment of eligible executive employees, including
Messrs. Stahl, McGuire, and Greeff, other than voluntary resignation or
termination by Products Corporation for good reason, in consideration
for the executive's execution of a release and confidentiality
agreement and the Company's standard employee non-competition
agreement, the eligible executive may be entitled to receive, in lieu
of severance under any employment agreement then in effect or under
Products Corporation's basic severance plan, a number of months
of severance pay in bi-weekly installments based upon such
executive's grade level and years of service, reduced by the
amount of any compensation from subsequent employment, unemployment
compensation or statutory termination payments received by such
executive during the severance period, and, in certain circumstances,
by the actuarial value of enhanced pension benefits received by the
executive, as well as continued participation in medical and certain
other benefit plans for the severance period (or in lieu thereof, upon
commencement of subsequent employment, a lump sum payment equal to the
then present value of 50% of the amount of base salary then
remaining payable through the balance of the severance period,
generally capped at six months pay). Pursuant to the Executive
Severance Policy, upon meeting the conditions set forth in such policy,
as of December 31, 2003, Messrs. Stahl, McGuire, and Greeff could be
entitled to severance pay up to 19, 18 and 21 months' of base
salary, respectively, at the base salary rate in effect on the date of
employment termination, plus continued participation in the medical and
dental plans for the same respective periods on the same terms as
active employees.

43

---

Defined Benefit Plans

In
accordance with the terms of the Revlon Employees' Retirement
Plan (the "Retirement Plan"), the following
table shows the estimated annual retirement benefits payable (as of
December 31, 2003) under the non-cash balance program of the Retirement
Plan (the "Non-Cash Balance Program") at
normal retirement age (65) to a person retiring with the indicated
average compensation and years of credited service, on a straight life
annuity basis, after Social Security offset, including amounts
attributable to the Revlon Pension Equalization Plan, as amended (the
"Pension Equalization Plan"), as described
below.

Highest
ConsecutiveFive-Year Average CompensationDuring Final
Ten Years ($)

Estimated Annual Straight Life Annuity
Benefits At RetirementWith Indicated Years Of Credited Service ($)
(a)15

20

25

30

35600,000


150,777



201,036



251,295



301,554



301,554700,000


176,777



235,703



294,628



353,554



353,554800,000


202,777



270,369



337,962



405,554



405,554900,000


228,777



305,036



381,295



457,554



457,5541,000,000


254,777



339,703



424,628



500,000



500,0001,100,000


280,777



374,369



467,962



500,000



500,0001,200,000


306,777



409,036



500,000



500,000



500,0001,300,000


332,777



443,703



500,000



500,000



500,0001,400,000


358,777



478,369



500,000



500,000



500,0001,500,000


384,777



500,000



500,000



500,000



500,0002,000,000


500,000



500,000



500,000



500,000



500,0002,500,000


500,000



500,000



500,000



500,000



500,000


|
|
|
|

|(a) | The
normal form of benefit for the Retirement Plan and the Pension
Equalization Plan is a straight life annuity.
|--- | ----------------------------------------------------------------------------------------------------------------

The
Retirement Plan is intended to be a tax qualified defined benefit plan.
Non-Cash Balance Program benefits are a function of service and final
average compensation. The Non-Cash Balance Program is designed to
provide an employee having 30 years of credited service with an annuity
generally equal to 52% of final average compensation, less
50% of estimated individual Social Security benefits. Final
average compensation is defined as average annual base salary and bonus
(but not any part of bonuses in excess of 50% of base salary)
during the five consecutive calendar years in which base salary and
bonus (but not any part of bonuses in excess of 50% of base
salary) were highest out of the last 10 years prior to retirement or
earlier termination. Except as otherwise indicated, credited service
includes all periods of employment with the Company or a subsidiary
prior to retirement or earlier termination. Messrs. Stahl, McGuire and
Greeff do not participate in the Non-Cash Balance Program.

Effective January 1, 2001, Products Corporation amended the
Retirement Plan to provide for a cash balance program under the
Retirement Plan (the "Cash Balance Program").
Under the Cash Balance Program, eligible employees will receive
quarterly credits to an individual cash balance bookkeeping account
equal to 5% of their compensation for the previous quarter.
Interest credits, which commenced June 30, 2001, are allocated
quarterly (based on the yield of the 30-year Treasury bond for November
of the preceding calendar year). Employees who as of January 1, 2001
were at least age 45, had 10 or more years of service with the Company
and whose age and years of service totaled at least 60 were
"grandfathered" and continue to participate
in the Non-Cash Balance Program under the same retirement formula
described in the preceding paragraph. All other eligible employees had
their benefits earned (if any) under the Non-Cash Balance Program
"frozen" on December 31, 2000 and began to
participate in the Cash Balance Program on January 1, 2001. The
"frozen" benefits will be payable at normal
retirement age and will be reduced if the employee elects early
retirement. Any employee who, as of January 1, 2001 was at least age 40
but not part of the "grandfathered" group
will, in addition to the "basic" 5%
quarterly pay credits, receive quarterly
"transition" pay credits of 3% of
compensation each year for up to 10 years or until he/she leaves
employment with the Company, whichever is earlier. Messrs. Stahl,
McGuire and Greeff participate in the Cash Balance Program. Mr. Greeff
is eligible to receive basic

44

---

and transition pay credits. As they were not
employed by the Company on January 1, 2001 (the date on which a
"transition" employee was determined),
Messrs. Stahl and McGuire are eligible to receive only basic pay
credits. The estimated annual benefits payable under the Cash Balance
Program as a single life annuity (assuming Messrs. Stahl, McGuire and
Greeff remain employed by the Company until age 65 at their current
level of compensation) is $199,300 for Mr. Stahl, $73,900 for Mr.
McGuire and $266,400 for Mr. Greeff. Messrs. Stahl's and
Greeff's total retirement benefits will be determined in
accordance with their respective employment agreements, each of which
provides for a guaranteed retirement benefit provided that certain
conditions are met.

The Employee Retirement Income Security Act
of 1974, as amended, places certain maximum limitations upon the annual
benefit payable under all qualified plans of an employer to any one
individual. In addition, the Omnibus Budget Reconciliation Act of 1993
limits the annual amount of compensation that can be considered in
determining the level of benefits under qualified plans. The Pension
Equalization Plan, as amended, is a non-qualified benefit arrangement
designed to provide for the payment by the Company of the difference,
if any, between the amount of such maximum limitations and the annual
benefit that would be payable under the Retirement Plan (including the
Non-Cash Balance Program and the Cash Balance Program) but for such
limitations, up to a combined maximum annual straight life annuity
benefit at age 65 under the Retirement Plan and the Pension
Equalization Plan of $500,000. Benefits provided under the Pension
Equalization Plan are conditioned on the participant's compliance
with his or her non-competition agreement and on the participant not
competing with Products Corporation for one year after termination of
employment.

The number of full years of service under the
Retirement Plan and the Pension Equalization Plan as of January 1, 2004
for Mr. Stahl was one year, for Mr. Shapiro was two years and for Mr.
Greeff was three years. Mr. McGuire did not have any years of credited
service as of January 1, 2004.

Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder
Matters

The following table sets forth as of December 31, 2003
the number of shares of the Company's Common Stock beneficially
owned, and the percent so owned, by (i) each person known to the
Company to be the beneficial owner of more than 5% of the
outstanding shares of the Company's Common Stock, (ii) each
director of the Company, (iii) the Chief Executive Officer during 2003
and each of the other Named Executive Officers during 2003 and (iv) all
directors and Named Executive Officers of the Company as a group. The
number of shares owned are those beneficially owned, as determined
under the rules of the SEC, and such information is not necessarily
indicative of beneficial ownership for any other purpose. Under such
rules, beneficial ownership includes any shares of Common Stock as to
which a person has sole or shared voting power or investment power and
any shares of Common Stock which the person has the right to acquire
within 60 days through the exercise of any option, warrant or right,
through conversion of any security or pursuant to the automatic
termination of a power of attorney or revocation of a trust,
discretionary account or similar arrangement.

45

---

Name
and Addressof Beneficial Owner

Amount and Nature
ofBeneficial Ownership

Percentage
ofClassRonald O.
Perelman

58,969,514

83.13%35
E. 62nd St.New York, NY 10021

(Class A, Class B and
Series B Preferred)(1)

(Class A, Class B andSeries B
Preferred)Alan S.
Bernikow

—

*Donald G.
Drapkin

—

*Meyer
Feldberg

11,250 (Class
A)(2)

*Howard
Gittis

—

*Douglas H.
Greeff

270,694 (Class A)(3)

*Edward
J. Landau

11,384 (Class
A)(4)

*Thomas E.
McGuire

—

*Linda Gosden
Robinson

11,250 (Class A)(5)

*Terry
Semel

16,250 (Class A)(6)

*Paul E.
Shapiro

140,496 (Class A) (7)

*Jack
L. Stahl

214,416 (Class A)
(8)

*Martha Stewart

11,250 (Class
A)(9)

*All Directors and Executive Officers
as a Group (13
Persons)

27,973,171 (Class
A)(10)

70.72%31,250,000
(Class B)

100.0%4,333
(Series B
Preferred)

100.0%


|
|
|
|

|* | Less
than one percent.
|- | ----------------------

|(1) | Mr. Perelman, through
Mafco Holdings, beneficially owns (i) 26,240,347 shares of the
Company's Class A Common Stock (11,650,000 of which are owned by
REV Holdings and 14,590,347 of which are owned by MacAndrews Holdings),
which represent approximately 69% of the outstanding shares of
the Company's Class A Common Stock, (ii) all of the outstanding
31,250,000 shares of the Company's Class B Common Stock, which
together with the shares referenced in subclause (i) above represent
approximately 83% of the outstanding shares of the
Company's Common Stock, and (iii) all of the outstanding 4,333
shares of the Company's Series B Preferred Stock, which are
convertible into 433,333 shares of the Company's Class A Common
Stock. Based on the shares referenced in clauses (i), (ii) and (iii)
above, Mr. Perelman through Mafco Holdings (through REV Holdings and
MacAndrews Holdings) at December 31, 2003 had approximately 97%
of the combined voting power of the outstanding shares of the
Company's capital stock entitled to vote at the 2004 Annual
Meeting. As of December 31, 2003, 4,186,104 shares of the
Company's Class A Common Stock owned by REV Holdings were pledged
by REV Holdings (the "Pledged Shares") to
secure $80.5 million principal amount of REV Holdings' 12%
Senior Secured Notes due 2004 (the "REV 2004
Notes"). As of February 1, 2004 and following the
completion of an offering by REV Holdings to exchange the REV 2004
Notes for REV Holdings' 13% Senior Secured Notes due 2007
(the "REV 2007 Notes"), there were 1,928,992
Pledged Shares pledged by REV Holdings to secure the $18.55
million principal amount of the REV 2007 Notes. From time to time,
additional shares of the Company's Class A Common Stock or shares
of intermediate holding companies between the Company and Mafco
Holdings may be pledged to secure obligations of Mafco Holdings or its
affiliates. A default under REV Holdings' obligations which are
secured by the Pledged Shares could cause a foreclosure with respect to
such shares of the Company's Class A Common Stock pledged by REV
Holdings. Mr. Perelman also holds an option to acquire 300,000 shares
of the Company's Class A Common Stock, which option vested on
February 12, 1999, an option to acquire 300,000 shares of the
Company's Class A Common Stock, which option vested on April 4,
2002, 56,250 shares of the Company's Class A Common Stock which
Mr. Perelman may acquire under options which vested on June 18, 2002,
an option to acquire 300,000 shares of the Company's Class A
Common Stock, which option vested on April 27, 2003, 56,250 shares of
the Company's Class A Common Stock which Mr. Perelman may acquire
under options which vested on June 18, 2003 and 33,334 shares of the
Company's Class A Common Stock which Mr. Perelman may acquire
under options which vested on September 17, 2003. Such vested options
to acquire 1,045,834 shares of the Company's Class A Common
Stock, together with the Class A Common Stock, Class B Common Stock and
Series B Preferred Stock beneficially owned by Mr. Perelman, represent
approximately 83% of the outstanding shares of the
Company's Common Stock.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes
11,250 shares which Mr. Feldberg may acquire under options which vested
in installments of 1,875 shares on each of May 22, 2001, May 22, 2002,
July 13, 2002, May 22, 2003, July 13, 2003 and December 17,
2003.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes 137,360 shares held
directly by Mr. Greeff, 25,000 shares which Mr. Greeff may acquire
under options which vested on May 22, 2001, 12,500 shares which Mr.
Greeff may acquire under options which vested on March 26, 2002, 25,000
shares which Mr. Greeff may acquire under options which vested on May
22, 2002, 12,500 shares which Mr. Greeff may acquire under options
which vested on February 15, 2003, 12,500 shares which Mr. Greeff may
acquire under options which vested on March 26, 2003, 25,000 shares
which Mr. Greeff may acquire under options which vested on May 22,
2003, 8,334 shares which Mr. Greeff may acquire under options which
vested on September 17, 2003 and 12,500 shares which Mr. Greeff may
acquire under options which vested on February 15, 2004.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

46

---

|(4) | Includes 134 shares held
directly by Mr. Landau and 11,250 shares which Mr. Landau may acquire
under options which vested in installments of 1,875 shares on each of
May 22, 2001, May 22, 2002, July 13, 2002, May 22, 2003, July 13, 2003
and December 17, 2003.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes 11,250
shares which Ms. Robinson may acquire under options which vested in
installments of 1,875 shares on each of May 22, 2001, May 22, 2002,
July 13, 2002, May 22, 2003, July 13, 2003 and December 17,
2003.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Includes 2,000 shares owned by Mr.
Semel's children as to which beneficial ownership is disclaimed,
3,000 shares owned jointly with Mr. Semel's wife and 11,250
shares which Mr. Semel may acquire under options which vested in
installments of 1,875 shares on each of May 22, 2001, May 22, 2002,
July 13, 2002, May 22, 2003, July 13, 2003 and December 17,
2003.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Includes 32,162 shares held directly
by Mr. Shapiro and 25,000 shares which Mr. Shapiro may acquire under
options which vested on June 18, 2002, 25,000 shares which Mr. Shapiro
may acquire under options which vested on June 18, 2003, 25,000 shares
which Mr. Shapiro may acquire under options which vested on August 8,
2003 and 33,334 options which Mr. Shapiro may acquire under options
which vested on September 17, 2003.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Includes 201,015 shares held directly by Mr. Stahl
and 13,401 shares held by his wife, as to which beneficial ownership is
disclaimed.
|--- | --------------------------------------------------------------------------------------------------------------------------------------

|(9) | Includes 11,250 shares which
Ms. Stewart may acquire under options which vested in installments of
1,875 shares on each of May 22, 2001, May 22, 2002, July 13, 2002, May
22, 2003, July 13, 2003 and December 17, 2003.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Includes only shares beneficially held by persons who were
directors and executive officers of the Company as of December 31,
2003, including Mr. Shapiro who retired effective as of such
date.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

47

---

EQUITY COMPENSATION PLAN
INFORMATION

The following table sets forth as of December 31,
2003, with respect to all compensation plans of the Company previously
approved and not previously approved by its stockholders (i) the number
of securities to be issued upon the exercise of outstanding options,
warrants and rights, (ii) the weighted-average exercise price of such
outstanding options, warrants and rights and (iii) the number of
securities remaining available for future issuance under such equity
compensation plans, excluding securities reflected in item (i). A
description of the Supplemental Stock Plan follows the table.

Equity Compensation Plan
Information

Plan
Category

(a)Number of securities
to be issued upon exercise of outstanding options,
warrants and rights

(b)Weighted-average
exercise price of outstanding options, warrants and
rights

(c)Number of securities remaining available
for future issuance under equity compensation plans
(excluding securities reflected in column
(a))Previously Approved by
Stockholders:Amended Stock
Plan


9,147,573
(1)

$
10.66
(3)


1,191,811Not
Previously Approved by Stockholders:(4)Supplemental Stock
Plan


530,000
(2)


N/A
(3)


—


|
|
|
|

|(1) | Includes
1,440,000 shares of restricted stock and 7,707,573 options issued under
the Amended Stock
Plan.
|--- | --------------------------------------------------------------------------------------------------------

|(2) | Includes 530,000 shares
of restricted stock issued under the Supplemental Stock Plan, the
entire amount of securities issuable under such
plan.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Weighted-average exercise
price excludes restricted
stock.
|--- | ----------------------------------------------------------

|(4) | The Supplemental Stock
Plan was not required to be approved by the Company's
stockholders.
|--- | ------------------------------------------------------------------------------------------

On February 17, 2002, the Company adopted the
Supplemental Stock Plan, the purpose of which is to provide Mr. Stahl,
the sole eligible participant, with inducement awards to entice him to
join the Company and to enhance the Company's long-term
performance and profitability. The Supplemental Stock Plan covers
530,000 shares of the Company's Class A Common Stock. Awards may
be made under the Supplemental Stock Plan in the form of stock options,
stock appreciation rights and restricted or unrestricted stock. On
February 17, 2002, the Compensation Committee granted Mr. Stahl an
Award of 530,000 restricted shares of Class A Common Stock, the full
amount of the shares of Class A Common Stock issuable under the
Supplemental Stock Plan. The terms of the Supplemental Stock Plan and
the foregoing grant of restricted shares to Mr. Stahl are substantially
the same as the Amended Stock Plan and the grant of restricted shares
to Mr. Stahl under such plan. Pursuant to the terms of the Supplemental
Stock Plan, such grant was made conditioned upon Mr. Stahl's
execution of the Company's standard employee confidentiality and
non-competition agreement. See "Employment Agreements and
Termination of Employment Agreements."

Item
13.    Certain Relationships and Related Transactions

As of
December 31, 2003, MacAndrews & Forbes beneficially owns shares of
the Company's Common Stock and Series B Preferred Stock having
approximately 97% of the combined voting power of the
outstanding shares of Common Stock and Series B Preferred Stock. As a
result, MacAndrews & Forbes is able to elect the entire Board of
Directors of the Company and control the vote on all matters submitted
to a vote of the Company's stockholders. MacAndrews & Forbes
is wholly owned by Ronald O. Perelman, Chairman of the Board of
Directors of the Company. (See "Recent
Developments" for important information).

Transfer Agreements

In June 1992, Revlon, Inc. and Products
Corporation entered into an asset transfer agreement with Revlon
Holdings Inc. (a Delaware corporation which in 2002 converted into a
Delaware limited liability

48

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company known as Revlon Holdings LLC
("Holdings") and which is an affiliate and an
indirect wholly-owned subsidiary of Mafco Holdings) and certain of its
wholly-owned subsidiaries (the "Asset Transfer
Agreement"), and Revlon, Inc. and Products Corporation
entered into a real property asset transfer agreement with Holdings
(the "Real Property Transfer Agreement" and,
together with the Asset Transfer Agreement, the "Transfer
Agreements"), and pursuant to such agreements, on June 24,
1992 Holdings transferred assets to Products Corporation and Products
Corporation assumed all of the liabilities of Holdings, other than
certain specifically excluded assets and liabilities (the liabilities
excluded are referred to as the "Excluded
Liabilities"). Certain consumer products lines sold in
demonstrator-assisted distribution channels considered not integral to
Revlon, Inc.'s business and which historically had not been
profitable (the "Retained Brands") and
certain other assets and liabilities were retained by Holdings.
Holdings agreed to indemnify Revlon, Inc. and Products Corporation
against losses arising from the Excluded Liabilities, and Revlon, Inc.
and Products Corporation agreed to indemnify Holdings against losses
arising from the liabilities assumed by Products Corporation. The
amount reimbursed by Holdings to Products Corporation for the Excluded
Liabilities for 2003 was $0.3 million.

Reimbursement
Agreements

Revlon, Inc., Products Corporation and MacAndrews
Holdings have entered into reimbursement agreements (the
"Reimbursement Agreements") pursuant to which
(i) MacAndrews Holdings is obligated to provide (directly or through
affiliates) certain professional and administrative services, including
employees, to Revlon, Inc. and its subsidiaries, including Products
Corporation, and purchase services from third party providers, such as
insurance, legal and accounting services and air transportation
services, on behalf of Revlon, Inc. and its subsidiaries, including
Products Corporation, to the extent requested by Products Corporation,
and (ii) Products Corporation is obligated to provide certain
professional and administrative services, including employees, to
MacAndrews Holdings (and its affiliates) and purchase services from
third party providers, such as insurance and legal and accounting
services, on behalf of MacAndrews Holdings (and its affiliates) to the
extent requested by MacAndrews Holdings, provided that in each case the
performance of such services does not cause an unreasonable burden to
MacAndrews Holdings or Products Corporation, as the case may be.
Products Corporation reimburses MacAndrews Holdings for the allocable
costs of the services purchased for or provided to Products Corporation
and its subsidiaries and for reasonable out-of-pocket expenses incurred
in connection with the provision of such services. MacAndrews Holdings
(or such affiliates) reimburses Products Corporation for the allocable
costs of the services purchased for or provided to MacAndrews Holdings
(or such affiliates) and for the reasonable out-of-pocket expenses
incurred in connection with the purchase or provision of such services.
Each of Revlon, Inc. and Products Corporation, on the one hand, and
MacAndrews Holdings, on the other, has agreed to indemnify the other
party for losses arising out of the provision of services by it under
the Reimbursement Agreements other than losses resulting from its
willful misconduct or gross negligence. The Reimbursement Agreements
may be terminated by either party on 90 days' notice. Products
Corporation does not intend to request services under the Reimbursement
Agreements unless their costs would be at least as favorable to
Products Corporation as could be obtained from unaffiliated third
parties. The Company participates in MacAndrews & Forbes'
directors and officers liability insurance program, which covers the
Company as well as MacAndrews & Forbes and its other affiliates.
The limits of coverage are available on an aggregate basis for losses
to any or all of the participating companies and their respective
directors and officers. The Company reimburses MacAndrews & Forbes
for its allocable portion of the premiums for such coverage, which the
Company believes, is more favorable than the premiums the Company would
pay were it to secure stand-alone coverage. The amount paid by the
Company to MacAndrews & Forbes for premiums is included in the
amounts paid under the Reimbursement Agreement. The net amount payable
to MacAndrews Holdings by Products Corporation for the services
provided under the Reimbursement Agreements for 2003 was $2.7
million.

Tax Sharing Agreement

Revlon, Inc. and
Products Corporation, for federal income tax purposes, are included in
the affiliated group of which Mafco Holdings is the common parent, and
Revlon, Inc.'s and Products Corporation's federal taxable
income and loss are included in such group's consolidated tax
return filed by Mafco

49

---

Holdings. Revlon, Inc. and Products
Corporation also may be included in certain state and local tax returns
of Mafco Holdings or its subsidiaries. In June 1992, Holdings, Revlon,
Inc., Products Corporation and certain of its subsidiaries, and Mafco
Holdings entered into a tax sharing agreement (as subsequently amended
and restated, the "Tax Sharing Agreement"),
pursuant to which Mafco Holdings has agreed to indemnify Revlon, Inc.
and Products Corporation against federal, state or local income tax
liabilities of the consolidated or combined group of which Mafco
Holdings (or a subsidiary of Mafco Holdings other than Revlon, Inc. and
Products Corporation or its subsidiaries) is the common parent for
taxable periods beginning on or after January 1, 1992 during which
Revlon, Inc. and Products Corporation or a subsidiary of Products
Corporation is a member of such group. Pursuant to the Tax Sharing
Agreement, for all taxable periods beginning on or after January 1,
1992, Products Corporation will pay to Revlon, Inc., which in turn will
pay to Holdings, amounts equal to the taxes that Products Corporation
would otherwise have to pay if it were to file separate federal, state
or local income tax returns (including any amounts determined to be due
as a result of a redetermination arising from an audit or otherwise of
the consolidated or combined tax liability relating to any such period
which is attributable to Products Corporation), except that Products
Corporation will not be entitled to carry back any losses to taxable
periods ending prior to January 1, 1992. No payments are required by
Products Corporation or Revlon, Inc. if and to the extent Products
Corporation is prohibited under the terms of its Credit Agreement from
making tax sharing payments to Revlon, Inc. The Credit Agreement
prohibits Products Corporation from making such tax sharing payments
other than in respect of state and local income taxes. Since the
payments to be made under the Tax Sharing Agreement will be determined
by the amount of taxes that Revlon, Inc. would otherwise have to pay if
it were to file separate federal, state or local income tax returns,
the Tax Sharing Agreement will benefit Mafco Holdings to the extent
Mafco Holdings can offset the taxable income generated by Revlon, Inc.
against losses and tax credits generated by Mafco Holdings and its
other subsidiaries. The Tax Sharing Agreement was amended, effective as
of January 1, 2001, to eliminate a contingent payment to Revlon, Inc.
under certain circumstances in return for a $10 million note with
interest at 12% and interest and principal payable by Mafco
Holdings on December 31, 2005. As a result of net operating tax losses
and prohibitions under the Credit Agreement, there were no federal tax
payments or payments in lieu of taxes pursuant to the Tax Sharing
Agreement for 2003.

Registration Rights Agreement

Prior
to the consummation of Revlon, Inc.'s initial public equity
offering, Revlon, Inc. and Revlon Worldwide Corporation (subsequently
merged into REV Holdings), the then direct parent of Revlon, Inc.,
entered into a registration rights agreement (the
"Registration Rights Agreement") and in
February 2003, Revlon, Inc. and MacAndrews Holdings entered into a
joinder agreement to the Registration Rights Agreement pursuant to
which REV Holdings and certain transferees of Revlon, Inc.'s
Common Stock held by REV Holdings (the
"Holders") have the right to require Revlon,
Inc. to register all or part of Revlon, Inc.'s Class A Common
Stock owned by such Holders, including shares of Class A Common Stock
purchased in connection with the Rights Offering and shares of Class A
Common Stock issuable upon conversion of Revlon, Inc.'s Class B
Common Stock and Series B Preferred Stock owned by such Holders under
the Securities Act of 1933, as amended (a "Demand
Registration"); provided that Revlon, Inc. may postpone
giving effect to a Demand Registration up to a period of 30 days if
Revlon, Inc. believes such registration might have a material adverse
effect on any plan or proposal by Revlon, Inc. with respect to any
financing, acquisition, recapitalization, reorganization or other
material transaction, or if Revlon, Inc. is in possession of material
non-public information that, if publicly disclosed, could result in a
material disruption of a major corporate development or transaction
then pending or in progress or in other material adverse consequences
to Revlon, Inc. In addition, the Holders have the right to participate
in registrations by Revlon, Inc. of its Class A Common Stock (a
"Piggyback Registration"). The Holders will
pay all out-of-pocket expenses incurred in connection with any Demand
Registration. Revlon, Inc. will pay any expenses incurred in connection
with a Piggyback Registration, except for underwriting discounts,
commissions and expenses attributable to the shares of Revlon,
Inc.'s Class A Common Stock sold by such Holders.

50

---

Investment Agreement, 2003 Mafco Loans,
the 2004 Mafco $125 Million Term Loan and Debt Reduction
Transactions

See the description of the Investment Agreement
and the various loan agreements with MacAndrews Holdings, as well as a
description of the Debt Reduction Transactions, under
"Recent Developments" and
"Financial Condition, Liquidity and Capital
Resources".

Other

Pursuant to a lease
dated April 2, 1993 (the "Edison Lease"),
Holdings leased to Products Corporation the Edison research and
development facility for a term of up to 10 years with an annual rent
of $1.4 million and certain shared operating expenses payable by
Products Corporation which, together with the annual rent, were not to
exceed $2.0 million per year. In August 1998, Holdings sold the Edison
facility to an unrelated third party, which assumed substantially all
liability for environmental claims and compliance costs relating to the
Edison facility, and in connection with the sale Products Corporation
terminated the Edison Lease and entered into a new lease with the new
owner. Holdings agreed to indemnify Products Corporation through
September 1, 2013 to the extent rent under the new lease exceeds rent
that would have been payable under the terminated Edison Lease had it
not been terminated. The net amount reimbursed by Holdings to Products
Corporation with respect to the Edison facility for 2003 was $1.1
million.

During 2003, Products Corporation leased certain
facilities to MacAndrews & Forbes or its affiliates pursuant to
occupancy agreements and leases, including space at Products
Corporation's New York headquarters. The rent paid by MacAndrews
& Forbes or its affiliates to Products Corporation for 2003 was
$0.3 million.

The Credit Agreement and Products
Corporation's 12% Senior Secured Notes are supported by,
among other things, guarantees from Revlon, Inc., and, subject to
certain limited exceptions, all of the domestic subsidiaries of
Products Corporation. The obligations under such guarantees are secured
by, among other things, the capital stock of Products Corporation and,
subject to certain limited exceptions, the capital stock of all of
Products Corporation's domestic subsidiaries and 66% of
the capital stock of Products Corporation's and its domestic
subsidiaries' first-tier foreign subsidiaries. (See
"Recent Developments")

In March 2002,
prior to the passage of the Sarbanes-Oxley Act of 2002, Products
Corporation made an advance of $1.8 million to Mr. Stahl pursuant to
his employment agreement, which was entered into in February 2002, for
tax assistance related to a grant of restricted stock provided to Mr.
Stahl pursuant to such agreement, which loan bears interest at the
applicable federal rate. In May 2002, prior to the passage of the
Sarbanes-Oxley Act of 2002, Products Corporation made an advance of
$2.0 million to Mr. Stahl pursuant to his employment agreement in
connection with the purchase of his principal residence in the New York
City metropolitan area, which loan bears interest at the applicable
federal rate. Mr. Stahl repaid $135,968 of such loan during 2003.
Pursuant to his employment agreement, Mr. Stahl receives from Products
Corporation additional compensation payable on a monthly basis equal to
the amount actually paid by him in respect of interest and principal on
such $2.0 million advance, which for 2003 was $135,968. The Company
also pays Mr. Stahl a gross up for any taxes payable by Mr. Stahl as a
result of such additional compensation, which tax gross up amount was
$75,518 in 2003.

During 2000, prior to the passage of the
Sarbanes-Oxley Act of 2002, Products Corporation made an advance of
$0.8 million to Mr. Greeff, pursuant to his employment agreement, which
loan bears interest at the applicable federal rate. Mr. Greeff repaid
$0.2 million during 2003. Pursuant to his employment agreement, Mr.
Greeff is entitled to receive bonuses from Products Corporation,
payable on each May 9th commencing on May 9, 2001 and ending on May 9,
2005, in each case equal to the sum of the principal and interest on
the advance repaid in respect of such year by Mr. Greeff, provided that
he is employed by Products Corporation on each such May 9th, which
bonus installment was paid to Mr. Greeff in May 2003.

During
2003, Products Corporation made payments of $0.3 million to Ms. Ellen
Barkin (spouse of Mr. Perelman) under a written agreement pursuant to
which she provides voiceover services for certain of the
Company's advertisements, which payments were competitive with
industry rates for similarly situated talent.

51

---

The law firm of which Mr. Landau was Of
Counsel to and from which he retired in February 2003, Wolf, Block, did
not provide any legal services to the Company during 2003. It is
anticipated that such firm could provide such services in 2004.

During 2003, Products Corporation placed advertisements in magazines
and other media operated by MSLO, which is controlled by Ms. Stewart,
who also serves as MSLO's Founder and Chief Creative Officer.
Products Corporation paid MSLO $1.9 million for such services in 2003,
which fees were less than 1% of the Company's estimate of
MSLO's consolidated gross revenues for 2003 and less than
1% of the Company's consolidated gross revenues for 2003.
Products Corporation's decision to place advertisements for its
products in MSLO's magazines and other media was based upon their
popular appeal to women and the rates paid were competitive with
industry rates for similarly situated magazines and media.

During 2003, Products Corporation obtained advertising, media buying
and direct marketing services from various subsidiaries of WPP. Ms.
Robinson is employed by one of WPP's subsidiaries, however, Ms.
Robinson is neither an executive officer of, nor does she hold any
material equity interest in, WPP. Products Corporation paid WPP $0.8
million for such services in 2003, which fees were less than 1%
of the Company's estimate of WPP's consolidated gross
revenues for 2003 and less than 1% of the Company's
consolidated gross revenues for 2003. Products Corporation's
decision to engage WPP was based upon its professional expertise in
understanding the advertising needs of the consumer packaged goods
industry, as well as its global presence in many of the international
markets in which the Company operates, and the rates paid were
competitive with industry rates for similarly situated advertising
agencies.

During 2003, Products Corporation employed Mr.
Perelman's daughter in a marketing position, with compensation
paid for 2003 of less than $80,000.

During 2003, Products
Corporation employed Mr. Drapkin's daughter in a marketing
position, with compensation paid for 2003 of less than $80,000.

During 2003, Products Corporation paid $0.1 million to a
nationally-recognized security services company in which MacAndrews
& Forbes has a controlling interest for security officer services.
Products Corporation's decision to engage such firm was based
upon its expertise in the field of security services, and the rates
paid were competitive with industry rates for similarly situated
security agencies.

52

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AUDIT FEES

KPMG LLP
("KPMG") has audited the consolidated
financial statements of the Company and its predecessors for more than
the past five years.

The Audit Committee has adopted an Audit
Committee Pre-Approval Policy for pre-approving all permissible audit
and non-audit services performed by KPMG after the final rules became
effective on May 6, 2003.

The aggregate fees billed for
professional services by KPMG in 2002 and 2003 for these various
services
were:

Types
of Fees

2003

2002Audit
Fees

$
3.0


$
2.8Audit-Related
Fees


0.1



0.1Tax
Fees


0.3



0.4All Other
Fees


—



—Total
Fees

$
3.4


$
3.3


In
the above table, in accordance with new SEC definitions and rules,
"audit fees" are fees the Company paid KPMG
for professional services rendered for the audit of the Company's
annual financial statements and review of financial statements included
in the Company's Quarterly Reports on Form 10-Q, and for services
that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements;
"audit-related fees" are fees billed by KPMG
for assurance and related services that are traditionally performed by
the auditor, including employee benefit plan audits, the Rights
Offering and attest services not required by statute or regulation;
"tax fees" are fees for tax compliance, tax
advice and tax planning; and "all other fees"
are fees billed by KPMG to the Company for any services not included in
the first three categories.

During 2003, the Audit Committee
specifically pre-approved the services performed by KPMG in connection
with (i) the Company's 2003 audit and (ii) the Company's
Rights Offering. All of the other services performed by KPMG for the
Company during 2003 from and after May 6, 2003 (the effective date of
the applicable rules) were pre-approved in accordance with the Audit
Committee's Pre-Approval Policy and the Audit Committee was
provided with quarterly updates as to the nature of such services and
fees paid for such services.

Website Availability of Reports
and Other Corporate Governance Information

In January 2004, the
Company adopted a comprehensive corporate governance program, including
Corporate Governance Guidelines for the Board, Board Guidelines for
Assessing Director Independence and new charters for the
Company's Audit and Compensation Committees. The Company
maintains a corporate investor relations website, www.revloninc.com,
where stockholders and other interested persons may review, among other
things, the Company's corporate governance materials and certain
SEC filings (such as the Company's annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, proxy
statements, annual reports, Section 16 reports reflecting certain
changes in the stock ownership of our directors and Section 16
executive officers, and certain other documents filed with the
Commission), each of which are generally available on such site on the
same business day as the filing date with the Commission. In addition,
under the section of the website entitled, "Corporate
Governance," the Company posts the latest versions of its
Corporate Governance Guidelines, Board Guidelines for Assessing
Director Independence, charters for the Company's Audit Committee
and Compensation Committee, as well as the Company's Code of
Business Conduct, which includes the Company's Code of Ethics for
Senior Financial Officers, each of which the Company will provide in
print, without charge, upon written request to Robert K. Kretzman,
Executive Vice President and Chief Legal Officer, Revlon, Inc., 237
Park Avenue, New York NY, 10017. (See "Recent
Developments" for important
information).

Forward-Looking Statements

This Annual
Report on Form 10-K for the year ended December 31, 2003, as well as
other public documents and statements of the Company, contain
forward-looking statements that involve risks and

53

---

uncertainties. The Company's actual
results may differ materially from those discussed in such
forward-looking statements. Such statements include, without
limitation, the Company's expectations and estimates (whether
qualitative or quantitative) as
to:

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i) | the Company's plans to
update its retail presence and improve the marketing effectiveness of
its retail wall displays by installing newly-reconfigured wall displays
and reconfiguring existing wall displays at its retail customers (and
its estimates of the costs of such wall displays, the effects of such
plans on the accelerated amortization of existing wall displays and the
estimated amount of such
amortization);

|     |                                                                                                                     
|---- | --------------------------------------------------------------------------------------------------------------------
|(ii) | the Company's
plans to increase its advertising and media spending and improve the
effectiveness of its
advertising;

|      |                                                                                                          
|----- | ---------------------------------------------------------------------------------------------------------
|(iii) | the Company's
plans to introduce new products and further strengthen its new product
development process;

|     |                                                                                                                                                                          
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(iv) | the
Company's plans to streamline its product assortment and
reconfigure product placement on its wall displays and selectively
adjust prices on certain of its
products;

|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(v) | the Company's plans
to implement comprehensive programs to develop and train its
employees;

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

|      |                                                                                                                                                                                     
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(vii) | the effect on sales
of political and/or economic conditions, political uncertainties,
military actions, adverse currency fluctuations, competitive activities
and category weakness;

|       |                                                                                                                                                                                                                                                                                                                                                                                                   
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(viii) | the
Company's plans to accelerate the implementation of its plan and
the charges and the cash costs resulting from implementing and refining
such plan and the timing of such costs, as well as the Company's
expectations as to improved revenues and achieving profitability over
the long term as a result of such phase of its plan and the
Company's plans to continue to fund brand support;

|     |                                                                                                                                      
|---- | -------------------------------------------------------------------------------------------------------------------------------------
|(ix) | the Company's plans regarding
the accelerated growth phase of its plan, with the objective of
improving its operating profit margins;

|    |                                                                                               
|--- | ----------------------------------------------------------------------------------------------
|(x) | the Company's plans to further
improve the new product development and implementation process;

|     |                                                                                                        
|---- | -------------------------------------------------------------------------------------------------------
|(xi) | the Company's plans to
continue to increase the effectiveness and reduce the cost of its
display walls;

|      |                                                                                                                                                                       
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(xii) | the
Company's plans to drive efficiencies across its overall supply
chain, including reducing manufactory costs by streamlining components
and sourcing strategically;

|       |                                                                                                             
|------ | ------------------------------------------------------------------------------------------------------------
|(xiii) | the Company's plans to
optimize the effectiveness of its marketing and promotions and
merchandiser coverage;

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

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

54

---

|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(xvi) | the
Company's uses of funds, including amounts required for the
payment of operating expenses, including expenses in connection with
the continued implementation of, and refinement to, the Company's
plan, such as the purchase and reconfiguration of wall displays and
increases in advertising and media, capital expenditure requirements,
including charges and costs in connection with the ERP System, payments
in connection with the Company's restructuring programs and debt
service payments, and its estimates of operating expenses, working
capital expenses, wall display costs, capital expenditures,
restructuring costs and debt service payments (including payments
required under Products Corporation's debt instruments);

|       |                                                                    
|------ | -------------------------------------------------------------------
|(xvii) | matters concerning the
Company's market-risk sensitive instruments;

|        |                                                                        
|------- | -----------------------------------------------------------------------
|(xviii) | the effects of the
Company's adoption of certain accounting principles;

|      |                                                                                                                                                                                                                                                                                   
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(xix) | Products Corporation obtaining a
further waiver or amendment of various provisions of its Credit
Agreement, including the EBITDA and leverage ratio covenants, or
refinancing or repaying such debt before January 31, 2005 in the event
such waiver or amendment is not obtained;

|     |                                                                                                                                                                                                                                                                                                     
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(xx) | the Company's plan to
refinance Products Corporation's debt maturing in 2005, including
the Company's plans to consummate the Debt Reduction
Transactions, and the amounts and timing of such transactions and the
estimated impact of such transactions on the Company's financial
performance; and

|      |                                                                                                                                                                                                                                                                                                                                                                            
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(xxi) | the
Company's plan to efficiently manage its cash and working capital
including, among other things, by carefully managing and reducing
inventory levels, centralizing purchasing to secure discounts and
efficiencies in procurement, and providing additional discounts to U.S.
customers for more timely payment of receivables and carefully managing
accounts payable.

Statements that are not historical facts,
including statements about the Company's beliefs and
expectations, are forward-looking statements. Forward-looking
statements can be identified by, among other things, the use of
forward-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, or
other variations of those terms or comparable language, or by
discussions of strategy or intentions. Forward-looking statements speak
only as of the date they are made, and except for the Company's
ongoing obligations under the U.S. federal securities laws, the Company
undertakes no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or
otherwise. Investors are advised, however, to consult any additional
disclosures the Company makes in its Quarterly Reports on Form 10-Q
filed in 2004 and Current Reports on Form 8-K filed with the Commission
in 2004 (which, among other places, can be found on the
Commission's website at http://www.sec.gov, as well as on the
Company's website at www.revloninc.com). The information
available from time to time on such websites shall not be deemed
incorporated by reference into this Annual Report on Form 10-K. A
number of important factors could cause actual results to differ
materially from those contained in any forward-looking statement. In
addition to factors that may be described in the Company's
filings with the Commission, including this filing, the following
factors, among others, could cause the Company's actual results
to differ materially from those expressed in any forward-looking
statements made by the Company:

|    |                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------
|(i) | difficulties or delays or
unanticipated costs associated with improving the marketing
effectiveness of the Company's wall displays;

|     |                                                                                                                                                                                                    
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ii) | difficulties or delays in, or
unanticipated costs associated with, developing and/or presenting the
Company's increased advertising programs and/or improving the
effectiveness of its advertising;

|      |                                                                                                                                                                                                                                                                
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(iii) | difficulties or delays in, or
unanticipated costs associated with, developing and introducing new
products or failure of the Company's customers to accept new
product offerings and/or in further strengthening the Company's
new product development process;

55

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|     |                                                                                                                                                                                                                                                          
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(iv) | difficulties
or delays in, or unanticipated costs associated with, implementing the
Company's plans to streamline its product assortment and
reconfigure product placement on its wall displays and selectively
adjust prices on certain of its products;

|    |                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|(v) | difficulties or delays in, or
unanticipated costs associated with, implementing comprehensive
programs to train the Company's employees;

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(vi) | unanticipated circumstances or
results affecting the Company's financial performance, including
decreased consumer spending in response to weak economic conditions or
weakness in the category, changes in consumer preferences, such as
reduced consumer demand for the Company's color cosmetics and
other current products, and actions by the Company's competitors,
including business combinations, technological breakthroughs, new
products offerings, promotional spending and marketing and promotional
successes, including increases in market share;

|      |                                                                                                                                                                                                             
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(vii) | the effects of and changes in
political and/or economic conditions, including inflation, monetary
conditions and military actions, and in trade, monetary, fiscal and tax
policies in international markets;

|       |                                                                                                                                                                                                                                                                               
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(viii) | unanticipated costs or
difficulties or delays in completing projects associated with the
continued implementation of, and refinement to, the Company's
plan or lower than expected revenues or inability to achieve
profitability over the long term as a result of such plan;

|     |                                                                                                                                                                                                  
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ix) | difficulties, delays or
unanticipated costs in implementing the Company's plans regarding
the accelerated growth phase of its plan, with the objective of
improving its operating profit margins;

|    |                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|(x) | difficulties, delays or unanticipated
costs in implementing the Company's plans to further improve the
new product development and implementation process;

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

|      |                                                                                                                                                                                                                                   
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(xii) | difficulties,
delays or unanticipated costs in implementing the Company's plans
to drive efficiencies across its overall supply chain, including
reducing manufactory costs by streamlining components and sourcing
strategically;

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

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

|     |                                                                                                                                                                                                                                                                                                                                                                            
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(xv) | lower than expected operating
revenues, the inability to secure capital contributions or loans from
MacAndrews & Forbes, the Company's other affiliates and/or
third parties, or the unavailability of funds under Products
Corporation's Credit Agreement, the Mafco $65 million line of
credit, the 2004 Mafco $125 million term loan or other permitted lines
of credit;

|      |                                                                                                                                                                          
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(xvi) | higher than expected
operating expenses, sales returns, working capital expenses, wall
display costs, capital expenditures, restructuring costs or debt
service payments;

|       |                                                                                                                     
|------ | --------------------------------------------------------------------------------------------------------------------
|(xvii) | interest
rate or foreign exchange rate changes affecting the Company and its
market sensitive financial instruments;

|        |                                                                                     
|------- | ------------------------------------------------------------------------------------
|(xviii) | unanticipated effects of the
Company's adoption of certain new accounting standards;

|      |                                                                                                                                                                                                                                                                          
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(xix) | difficulties, delays or inability
to obtain a further waiver or amendment of the EBITDA and leverage
ratio covenants under the Credit Agreement or refinancing or repaying
such debt on or before January 31, 2005 in the event such waiver or
amendment is not obtained;

56

---

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(xx) | difficulties,
delays or the inability of the Company to refinance Products
Corporation's debt maturing in 2005, including the inability to
issue equity or debt securities, including Revlon, Inc. Class A Common
Stock, for cash or in exchange for indebtedness of Products Corporation
difficulties, delays or the inability of the Company to consummate the
Debt Reduction Transactions and to secure any required Board,
stockholder, lender or regulatory approvals; and

|      |                                                                                                         
|----- | --------------------------------------------------------------------------------------------------------
|(xxi) | difficulties, delays or the
inability of the Company to efficiently manage its cash and working
capital.

Factors other than those listed above could also cause
the Company's results to differ materially from expected results.
This discussion is provided as permitted by the Private Securities
Litigation Reform Act of 1995.

57

---

PART IV

Item
15.    Exhibits, Financial Statement Schedules and Reports on Form
8-K

(a)

List
of documents filed as part of this Report:(1)Consolidated Financial
Statements and Independent Auditors' Report included herein:
See Index on page F-1.(2)Financial Statement
Schedule: See Index on page F-1. All other schedules are
omitted as they are inapplicable or the required information is
furnished in the Consolidated Financial Statements of the Company or
the Notes thereto.(3)List of Exhibits:2.

Plan of Acquisition Etc.2.1

Investment Agreement, dated as of February 5, 2003
among Revlon, Inc., Products Corporation and MacAndrews Holdings
(incorporated by reference to Exhibit 2.1 to the Current Report on Form
8-K of Products Corporation filed with the Commission on February 5,
2003 (the "Products Corporation February 2003 Form
8-K")).3.

Certificate of
Incorporation and By-laws.3.1

Amended
and Restated Certificate of Incorporation of Revlon, Inc. dated March
4, 1996 (incorporated by reference to Exhibit 3.4 to the Quarterly
Report on Form 10-Q of Revlon, Inc. for the quarterly period ended
March 31, 1996).3.2

Amended and Restated
By-laws of Revlon, Inc., dated as of June 30, 2001 (incorporated by
reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q of
Revlon, Inc. for the quarterly period ended June 30, 2001 (the
"Revlon 2001 Second Quarter Form
10-Q")).3.3

Certificate of
Designations, Powers, Preferences and Rights of Series B Convertible
Preferred Stock of Revlon, Inc. (incorporated by reference to Exhibit
3.2 to the Registration Statement on Form S-8 of Revlon, Inc. filed
with the Commission on October 11, 2001, File No.
333-71378).3.4

Certificate of the
Designations, Powers, Preferences and Rights of Series C Preferred
Stock dated May 8, 2003 (incorporated by reference to Exhibit 3.4 to
the Quarterly Report on Form 10-Q of Revlon, Inc. for the quarterly
period ended March 31, 2003).*3.5

Certificate of Elimination of Series C Preferred
Stock of Revlon, Inc. dated February 13, 2004.4.

Instruments defining the right of security
holders, including indentures.4.1

Indenture, dated as of November 26, 2001, among
Products Corporation, the Guarantors party thereto, including Revlon,
Inc., as parent guarantor, and Wilmington Trust Company, as trustee,
relating to the 12% Senior Secured Notes due 2005 (incorporated
by reference to Exhibit 4.2 to the Current Report on Form 8-K of
Products Corporation filed with the Commission on November 30, 2001
(the "Products Corporation November 2001 Form
8-K")).


58

---

4.2

Revlon Pledge Agreement,
dated as of November 30, 2001, between Revlon, Inc., as pledgor, in
favor of Wilmington Trust Company, as note collateral agent (the
"Note Collateral Agent") (incorporated by
reference to Exhibit 4.2 to the Annual Report on Form 10-K of Products
Corporation for the year ended December 31, 2001 (the
"Products Corporation 2001 Form
10-K")).4.3

Company Pledge
Agreement (Domestic), dated as of November 30, 2001, between Products
Corporation, as pledgor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.3 to the
Products Corporation 2001 Form 10-K).4.4

Subsidiary Pledge Agreement (Domestic), dated as
of November 30, 2001, between RIROS Corporation, as pledgor, in favor
of Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.4 to the Products Corporation 2001 Form
10-K).4.5

Subsidiary Pledge Agreement
(Domestic), dated as of November 30, 2001, between Revlon International
Corporation, as pledgor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.5 to the
Products Corporation 2001 Form 10-K).4.6

Subsidiary Pledge Agreement (Domestic), dated as
of November 30, 2001, between PPI Two Corporation, as pledgor, in favor
of Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.6 to the Products Corporation 2001 Form
10-K).4.7

Company Pledge Agreement
(International), dated as of November 30, 2001, between Products
Corporation, as pledgor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.7 to the
Products Corporation 2001 Form 10-K).4.8

Subsidiary Pledge Agreement (International), dated
as of November 30, 2001, between RIROS Corporation, as pledgor, in
favor of Wilmington Trust Company, as Note Collateral Agent
(incorporated by reference to Exhibit 4.8 to the Products Corporation
2001 Form 10-K).4.9

Subsidiary Pledge
Agreement (International), dated as of November 30, 2001, between
Revlon International Corporation, as pledgor, in favor of Wilmington
Trust Company, as Note Collateral Agent (incorporated by reference to
Exhibit 4.9 to the Products Corporation 2001 Form 10-K).4.10

Subsidiary Pledge Agreement (International),
dated as of November 30, 2001, between PPI Two Corporation, as pledgor,
in favor of Wilmington Trust Company, as Note Collateral Agent
(incorporated by reference to Exhibit 4.10 to the Products Corporation
2001 Form 10-K).4.11

Company Security
Agreement, dated as of November 30, 2001, between Products Corporation,
as grantor, in favor of Wilmington Trust Company, as Note Collateral
Agent (incorporated by reference to Exhibit 4.11 to the Products
Corporation 2001 Form 10-K).


59

---

4.12

Subsidiary Security
Agreement, dated as of November 30, 2001, among Almay, Inc., Carrington
Parfums Ltd., Charles of the Ritz Group Ltd., Charles Revson Inc.,
Cosmetics & More, Inc., North America Revsale Inc., Pacific Finance
& Development Corp., PPI Two Corporation, Prestige Fragrances,
Ltd., Revlon Consumer Corp., Revlon Government Sales, Inc., Revlon
International Corporation, Revlon Products Corp., Revlon Real Estate
Corporation, RIROS Corporation, RIROS Group Inc. and RIT Inc., each as
grantor, in favor of Wilmington Trust Company, as Note Collateral Agent
(incorporated by reference to Exhibit 4.12 to the Products Corporation
2001 Form 10-K).4.13

Company Copyright
Security Agreement, dated as of November 30, 2001, between Products
Corporation, as grantor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.13 to the
Products Corporation 2001 Form  10-K).4.14

Company Patent Security Agreement, dated as of
November 30, 2001, between Products Corporation, as grantor, in favor
of Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.14 to the Products Corporation 2001 Form
10-K).4.15

Company Trademark Security
Agreement, dated as of November 30, 2001, between Products Corporation,
as grantor, in favor of Wilmington Trust Company, as Note Collateral
Agent (incorporated by reference to Exhibit 4.15 to the Products
Corporation 2001 Form  10-K).4.16

Subsidiary Trademark Security Agreement, dated as
of November 30, 2001, between Charles Revson Inc., as grantor, in favor
of Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.16 to the Products Corporation 2001 Form
10-K).4.17

Subsidiary Trademark Security
Agreement, dated as of November 30, 2001, between Charles of the Ritz
Group, Ltd., as grantor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.17 to the
Products Corporation 2001 Form 10-K).4.18

Deed of Trust, Assignment of Rents and Leases and Security
Agreement, dated as of November 30, 2001, between Products Corporation
and First American Title Insurance Company for the use and benefit of
Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.18 to the Products Corporation 2001 Form
10-K).4.19

Amended and Restated Collateral
Agency Agreement, dated as of May 30, 1997, and further amended and
restated as of November 30, 2001, between Products Corporation,
JPMorgan Chase Bank, as bank agent and as administrative agent, and
Wilmington Trust Company, as trustee and as Note Collateral Agent
(incorporated by reference to Exhibit 4.19 to the Products Corporation
2001 Form 10-K).4.20

Indenture, dated as
of February 1, 1998, between Revlon Escrow Corp. ("Revlon
Escrow") and U.S. Bank Trust National Association
(formerly known as First Trust National Association), as trustee,
relating to the 8 1/8% Senior Notes due 2006
(the  "8 1/8% Senior Notes
Indenture") (incorporated by reference to Exhibit 4.1 to
the Registration Statement on Form S-1 of Products Corporation filed
with the Commission on March 12, 1998, File No.  333-47875 (the
"Products Corporation March 1998  Form
S-1")).


60

---

4.21

Indenture, dated as of
February 1, 1998, between Revlon Escrow and U.S. Bank Trust National
Association (formerly known as First Trust National Association), as
trustee, relating to the 8 5/8% Senior
Subordinated Notes Due 2008 (the
"8 5/8% Senior Subordinated Notes
Indenture") (incorporated by reference to Exhibit 4.3 to
the Products Corporation March 1998 Form S-1).4.22

First Supplemental Indenture, dated April 1,
1998, among Products Corporation, Revlon Escrow, and U.S. Bank Trust
National Association (formerly known as First Trust National
Association), as trustee, amending the 8 1/8%
Senior Notes Indenture (incorporated by reference to Exhibit 4.2 to the
Products Corporation March 1998 Form S-1).4.23

First Supplemental Indenture, dated March 4,
1998, among Products Corporation, Revlon Escrow, and U.S. Bank Trust
National Association (formerly known as First Trust National
Association), as trustee, amending the 8 5/8%
Senior Subordinated Notes Indenture (incorporated by reference to
Exhibit 4.4 to the Products Corporation March 1998 Form
S-1).4.24

Indenture, dated as of November
6, 1998, between Products Corporation and U.S. Bank Trust National
Association (formerly known as First Trust National Association), as
trustee, relating to Products Corporation's 9% Senior
Notes due 2006 (incorporated by reference to Exhibit 4.13 to the
Quarterly Report on Form 10-Q of Revlon, Inc. for the quarterly period
ended September 30, 1998).4.25

Second
Amended and Restated Credit Agreement, dated as of November 30, 2001,
among Products Corporation, the subsidiaries of Products Corporation
parties thereto, the lenders parties thereto, the Co-Agents parties
thereto, Citibank, N.A., as documentation agent, J.P. Morgan Securities
Inc., as sole arranger and bookrunner, and JPMorgan Chase Bank, as
administrative agent (the "Second Amended and Restated
Credit Agreement") (incorporated by reference to Exhibit
4.1 to the Products Corporation November 2001 Form 8-K).4.26

First Amendment dated May 31, 2002 to the Second
Amended and Restated Credit Agreement (incorporated by reference to
Exhibit 10.18 to the Quarterly Report on Form 10-Q of Revlon, Inc. for
the quarterly period ended June 30, 2002).4.27

Second Amendment and First Waiver Agreement dated
as of February 5, 2003 to the Second Amended and Restated Credit
Agreement (incorporated by reference to Exhibit 10.19 to the Products
Corporation February 2003 Form 8-K).4.28

Third Amendment and Second Waiver Agreement dated as of January 28,
2004 to the Second Amended and Restated Credit Agreement (incorporated
by reference to Exhibit 4.28 of the Current Report on Form 8-K of
Products Corporation filed with the Commission on January 29, 2004 (the
"Products Corporation January 2004 Form
8-K")).4.29

Second
Supplemental Indenture, dated as of February 11, 2004, among Products
Corporation, U.S. Bank Trust National Association (formerly known as
First Trust National Association), as Trustee, and Revlon, Inc., as
guarantor, amending the Indenture, dated as of February 1, 1998, as
supplemented by the First Supplemental Indenture, dated as of April 1,
1998, between Products Corporation and such trustee relating to
Products Corporation's 8 1/8% Senior Notes
due 2006 (incorporated by reference to Exhibit 4.29 of the Current
Report on Form 8-K of Revlon, Inc. filed with the Commission on
February 12, 2004 (the "Revlon, Inc. February 2004 Form
8-K")).


61

---

4.30

First Supplemental
Indenture, dated as of February 11, 2004, among Products Corporation,
U.S. Bank Trust National Association (formerly known as First Trust
National Association), as trustee, and Revlon, Inc., as guarantor,
amending the Indenture, dated as of November 6, 1998, between Products
Corporation and such trustee, relating to Products Corporation's
9% Senior Notes due 2006 (incorporated by reference to Exhibit
4.30 of the Revlon, Inc. February 2004 Form 8-K).4.31

Second Supplemental Indenture, dated as of
February 11, 2004, among Products Corporation, U.S. Bank Trust National
Association (formerly known as First Trust National Association), as
trustee, and Revlon, as guarantor, amending the Indenture, dated as of
February 1, 1998, as supplemented by the First Supplemental Indenture,
dated as of March 4, 1998, between Products Corporation and such
trustee, relating to Products Corporation's
8 5/8% Senior Subordinated Notes due 2008
(incorporated by reference to Exhibit 4.31 of the Revlon, Inc. February
2004 Form 8-K).*4.32

Fourth Amendment
dated February 18, 2004 to the Second Amended and Restated Credit
Agreement.10.

Material
Contracts.10.1

Asset Transfer
Agreement, dated as of June 24, 1992, among Revlon Holdings LLC
(formerly known as Revlon Holdings Inc.), National Health Care Group,
Inc., Charles of the Ritz Group Ltd., Products Corporation and Revlon,
Inc. (incorporated by reference to Exhibit 10.1 to Amendment No. 1 to
the Revlon, Inc. Registration Statement on Form S-1 filed with the
Commission on June 29, 1992, File No. 33-47100).10.2

Tax Sharing Agreement, entered into as of June
24, 1992, among Mafco Holdings, Revlon, Inc., Products Corporation and
certain subsidiaries of Products Corporation as amended and restated as
of January 1, 2001 (incorporated by reference to Exhibit 10.2 to the
Products Corporation 2001 Form 10-K).10.3

Employment Agreement, dated as of February 17,
2002, between Products Corporation and Jack L. Stahl (incorporated by
reference to Exhibit 10.17 to the Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2002 of Revlon, Inc.).10.4

Revlon, Inc. 2002 Supplemental Stock Plan
(incorporated by reference to Exhibit 4.1 to the Registration Statement
on Form S-8 of Revlon, Inc. filed with the Commission on June 24, 2002,
File No. 333-91040).10.5

Employment
Agreement, dated as of August 18, 2003, between Products Corporation
and Thomas E. McGuire (incorporated by reference to Exhibit 10.5 to the
Quarterly Report on Form 10-Q of Revlon, Inc. for the quarterly period
ended September 30, 2003 (the "Revlon, Inc. 2003 Third
Quarter Form 10-Q")).10.6

Employment Agreement, amended and restated as of
May 9, 2000, between Products Corporation and Douglas H. Greeff (the
"Greeff Employment Agreement") (incorporated
by reference to Exhibit 10.22 to the Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2000 of Revlon, Inc.).10.7

Amendment dated June 18, 2001 to the Greeff
Employment Agreement (incorporated by reference to Exhibit 10.6 to the
Products Corporation 2001 Form 10-K).10.8

Amendment, dated as of August 18, 2003, to the
amended and restated Greeff Employment Agreement (incorporated by
reference to Exhibit 10.8 to the Revlon, Inc. 2003 Third Quarter Form
10-Q).10.9

Employment Agreement, effective
as of August 1, 2001, between Products Corporation and Paul E. Shapiro
(incorporated by reference to Exhibit 10.7 to the Products Corporation
2001 Form 10-K).


62

---

10.10

Revlon Executive Bonus
Plan (Amended and Restated as of September 1, 2002) (incorporated by
reference to Exhibit 10.8 to the Annual Report on Form 10-K of Revlon,
Inc. for the year ended December 31, 2002 (the "Revlon,
Inc. 2002 Form 10-K").10.11

Amended and Restated Revlon Pension Equalization
Plan, amended and restated as of December 14, 1998 (incorporated by
reference to Exhibit 10.15 to the Annual Report on Form 10-K for year
ended December 31, 1998 of Revlon, Inc.).10.12

Executive Supplemental Medical Expense Plan
Summary dated July 2000 (incorporated by reference to Exhibit 10.10 to
the Revlon, Inc. 2002 Form 10-K).10.13

Benefit Plans Assumption Agreement, dated as of
July 1, 1992, by and among Holdings, Revlon, Inc. and Products
Corporation (incorporated by reference to Exhibit 10.25 to the Annual
Report on Form 10-K for the year ended December 31, 1992 of Products
Corporation).10.14

Revlon Amended and
Restated Executive Deferred Compensation Plan dated as of August 6,
1999 (incorporated by reference to Exhibit 10.27 to the Quarterly
Report on Form 10-Q of Revlon, Inc. for the quarterly period ended
September 30, 1999).10.15

Revlon Executive
Severance Policy as amended July 1, 2002 (incorporated by reference to
Exhibit 10.13 to the Revlon, Inc. 2002 Form 10-K).10.16

Revlon, Inc. Fourth Amended and Restated 1996
Stock Plan (incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-8 of Revlon, Inc. filed with the
Commission on June 24, 2002, File No. 333-91038).10.17

Purchase Agreement, dated as of February 18,
2000, by and among Revlon, Inc., Products Corporation, REMEA 2 B.V.,
Revlon Europe, Middle East and Africa, Ltd., Revlon International
Corporation, Europeenne de Produits de Beaute S.A., Deutsche Revlon
GmbH & Co. K.G., Revlon Canada, Inc., Revlon de Argentina,
S.A.I.C., Revlon South Africa (Proprietary) Limited, Revlon (Suisse)
S.A., Revlon Overseas Corporation C.A., CEIL Comercial, Exportadora,
Industrial Ltda., Revlon Manufacturing Ltd., Revlon Belgium N.V.,
Revlon (Chile) S.A., Revlon (Hong Kong) Limited, Revlon, S.A., Revlon
Nederland B.V., Revlon New Zealand Limited, European Beauty Products
S.p.A. and Beauty Care Professional Products Luxembourg, S.a.r.l.
(incorporated by reference to Exhibit 10.19 to the Annual Report on
Form 10-K for the year ended December 31, 1999 of Revlon,
Inc.).10.18

Purchase and Sale Agreement
dated as of July 31, 2001 by and between Holdings and Revlon, Inc.
relating to the Charles of the Ritz business (incorporated by reference
to Exhibit 10.6 to the Products Corporation 2001 Form 10-K).10.19

Senior Unsecured Multiple-Draw Term Loan dated
as of February 5, 2003, between MacAndrews Holdings and Products
Corporation (incorporated by reference to Exhibit 10.17 to the Products
Corporation February 2003 Form 8-K).10.20

Senior Unsecured Supplemental Line of Credit
Agreement, dated as of February 5, 2003, between MacAndrews Holdings
and Products Corporation (the "Senior Unsecured
Supplemental Line of Credit Agreement") (incorporated by
reference to Exhibit 10.18 of the Products Corporation February 2003
Form 8-K).10.21

Amendment No. 1, dated as
of July 30, 2003, to the Senior Unsecured Supplemental Line of Credit
Agreement (incorporated by reference to Exhibit 10.19 to the Quarterly
Report on Form 10-Q of Revlon, Inc. for the quarterly period ended June
30, 2003).


63

---

10.22

$125 Million Senior
Unsecured Multiple-Draw Term Loan Agreement, dated as of January 28,
2004, between Products Corporation and MacAndrews Holdings
(incorporated by reference to Exhibit 10.22 to the Products Corporation
January 2004 Form 8-K).10.23

Support
Agreement, dated as of February 11, 2004, between Revlon, Inc. and
MacAndrews & Forbes Holdings Inc. (incorporated by reference to
Exhibit 10.23 of the Revlon, Inc. February 2004 Form 8-K).10.24

Support Agreement, dated as of February 11,
2004, between Revlon, Inc. and Fidelity Management & Research Co.
(incorporated by reference to Exhibit 10.24 of the Revlon, Inc.
February 2004 Form 8-K).*10.25

Amendment
No.  2, dated as of January 28, 2004, to the Senior Unsecured
Supplemental Line of Credit
Agreement.*10.26

Revlon, Inc. Audit
Committee Pre-Approval Policy.21.

Subsidiaries.*21.1

Subsidiaries of Revlon, Inc.23.

Consents of Experts and
Counsel.*23.1

Consent of KPMG
LLP.24.

Powers of
Attorney.*24.1

Power of Attorney
executed by Ronald O. Perelman.*24.2

Power
of Attorney executed by Howard Gittis.*24.3

Power of Attorney executed by Donald G.
Drapkin.*24.4

Power of Attorney executed
by Alan S. Bernikow.*24.5

Power of
Attorney executed by Meyer Feldberg*24.6

Power of Attorney executed by Edward J.
Landau.*24.7

Power of Attorney executed by
Linda Gosden Robinson.*24.8

Power of
Attorney executed by Terry Semel.*24.9

Power of Attorney executed by Martha
Stewart.31.1

Certification of Jack Stahl,
Chief Executive Officer, dated February  19, 2004 as adopted
pursuant to Section 302 of The Sarbanes-Oxley Act of
2002.31.2

Certification of Thomas E.
McGuire, Chief Financial Officer, dated February  19, 2004 as
adopted pursuant to Section 302 of The Sarbanes-Oxley Act of
2002.*32.1

Certification of Jack L. Stahl,
Chief Executive Officer, dated February 19, 2004, as adopted pursuant
to Section 906 of The Sarbanes-Oxley Act of 2002.*32.2

Certification of Thomas E. McGuire, Chief
Financial Officer, dated February 19, 2004, as adopted pursuant to
Section 906 of The Sarbanes-Oxley Act of
2002.


|
|
|
|

|* | Filed
herewith.
|- | ---------------

|(b) | Reports on Form
8-K.
|--- | --------------------

On October 30, 2003, the Company filed with the
Commission a current report on Form 8-K furnishing as Item 12 of Form
8-K, "Results of Operations and Financial
Condition" a copy of the Company's press release
announcing its earnings for the fiscal quarter ended September 30,
2003.

64

---

On January 29, 2004, the Company filed
with the Commission a current report on Form 8-K filing as Item 5 of
Form 8-K a press release announcing the January 2004 amendment of
Products Corporation's Credit Agreement which included copies of
Products Corporation's Third Amendment and Second Waiver
Agreement dated as of January 28, 2004 to its Credit Agreement and its
$125 Million Senior Unsecured Multiple-Draw Term Loan Agreement dated
as of January 28, 2004 with MacAndrews Holdings.

On February 12,
2004, the Company filed with the Commission a current report on Form
8-K furnishing as Item 12 of Form 8-K, "Results of
Operations and Financial Condition" a copy of the
Company's press release announcing its earnings for the fiscal
quarter and fiscal year ended December 31, 2003.

On February 12,
2004, the Company filed with the Commission a current report on Form
8-K furnishing as Item 5 of Form 8-K, "Other Events and
Regulation FD Disclosure" a copy of the Company's
press release announcing its Debt Reduction Transactions and which
included copies of certain related documents.

On February 18,
2004, the Company filed with the Commission a current report on Form
8-K furnishing as Item 9 of Form 8-K, "Regulation F D
Disclosure" certain information that was previously
non-public information.

On February 19, 2004, the Company filed
with the Commission a current report on Form 8-K furnishing as Item 9
of Form 8-K, "Regulation FD Disclosure"
certain material, non-public information provided to the public at an
Investors Conference held by the Company on February  18, 2004,
advance notice of which was publicly announced via a press release on
February  12, 2004.

65

---

REVLON,
INC. AND SUBSIDIARIESINDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND
SCHEDULE

PageIndependent
Auditors'
Report


F-2Audited
Financial
Statements:Consolidated Balance
Sheets as of December 31, 2003 and
2002


F-3Consolidated Statements of
Operations for each of the years in the three-year period ended
December 31, 2003


F-4Consolidated
Statements of Stockholders' Deficiency and Comprehensive Loss for
each of the years in the three-year period ended December 31,
2003


F-5Consolidated Statements of
Cash Flows for each of the years in the three-yearperiod ended
December 31, 2003


F-6Notes to
Consolidated Financial
Statements


F-7Financial
Statement Schedule:Schedule
II—Valuation and Qualifying
Accounts


F-54


F-1

---

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders Revlon,
Inc.:

We have audited the accompanying consolidated
balance sheets of Revlon, Inc. and subsidiaries as of December 31, 2003
and 2002, and the related consolidated statements of operations,
stockholders' deficiency and comprehensive loss and cash flows
for each of the years in the three-year period ended December 31, 2003.
In connection with our audits of the consolidated financial statements,
we have also audited the financial statement schedule as listed on the
index on page F-1. These consolidated financial statements and
financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion
on these consolidated financial statements and financial statement
schedule based on our audits.

We conducted our audits in
accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects,
the financial position of Revlon, Inc. and subsidiaries as of December
31, 2003 and 2002 and the results of their operations and their cash
flows for each of the years in the three-year period ended December 31,
2003, in conformity with accounting principles generally accepted in
the United States of America. Also in our opinion, the related
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.

As discussed in Note 1 to the consolidated financial
statements, the Company adopted FASB Statement No. 142,
"Goodwill and Other Intangible Assets," as of
January 1, 2002.

KPMG LLP

New
York, New York February 12,
2004

F-2

---

REVLON,
INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE
SHEETS

(dollars in millions, except per share
data)

December
31,2003

2002ASSETSCurrent
assets:Cash and cash
equivalents

$
56.5


$
85.8Trade
receivables, less allowances of $19.4 and $24.0,
respectively


182.5



212.3Inventories


142.7



128.1Prepaid expenses and
other


33.9



41.6Total current assets


415.6



467.8Property, plant and
equipment, net


132.1



133.4Other
assets


158.4



146.6Goodwill,
net


186.1



185.9Total assets

$
892.2


$
933.7LIABILITIES
AND STOCKHOLDERS'
DEFICIENCYCurrent
liabilities:Short-term
borrowings — third parties

$
28.0


$
25.0Accounts payable


97.4



92.9Accrued expenses and
other


321.9



379.2Total current liabilities


447.3



497.1Long-term debt —
third parties


1,723.3



1,726.0Long-term debt — affiliates


146.2



24.1Other long-term
liabilities


301.0



325.0Stockholders'
deficiency:Preferred stock, par
value $.01 per share; 20,000,000 shares authorized, 546 shares of
Series A Preferred Stock issued and outstanding


54.6



54.6Preferred stock, par value $.01 per share;
20,000,000 shares authorized, 4,333 shares of Series B Convertible
Preferred Stock issued and outstanding


—



—Class B Common Stock, par value $.01 per
share; 200,000,000 shares authorized, 31,250,000 issued and
outstanding


0.3



0.3Class A Common
Stock, par value $.01 per share; 350,000,000 shares authorized,
38,208,451 and 20,516,135 issued and outstanding,
respectively


0.4



0.2Capital
deficiency


(139.0
)


(192.6
)Accumulated deficit since June 24,
1992


(1,515.7
)


(1,361.9
)Deferred
compensation


(4.2
)


(6.4
)Accumulated other comprehensive
loss


(122.0
)


(132.7
)Total stockholders'
deficiency


(1,725.6
)


(1,638.5
)Total liabilities and stockholders'
deficiency

$
892.2


$
933.7


See Accompanying Notes to Consolidated
Financial Statements.

F-3

---

REVLON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in millions, except per share
data)

Year
Ended December
31,2003

2002

2001Net
sales

$
1,299.3


$
1,119.4


$
1,277.6Cost of sales


501.1



503.7



544.2Gross
profit


798.2



615.7



733.4Selling, general and administrative
expenses


770.9



717.0



679.2Restructuring costs and other,
net


6.0



13.6



38.1Operating income
(loss)


21.3



(114.9
)


16.1Other
expenses (income):Interest
expense


174.5



159.0



140.5Interest
income


(4.3
)


(3.5
)


(3.9
)Amortization of debt issuance costs


8.9



7.7



6.2Foreign currency (gains)
losses, net


(5.0
)


1.4



2.2Loss on sale of brand and facilities, net


—



1.0



14.4Loss on early extinguishment
of debt


—



—



3.6Miscellaneous, net


0.5



1.2



2.7Other expenses,
net


174.6



166.8



165.7Loss before income
taxes


(153.3
)


(281.7
)


(149.6
)Provision for income
taxes


0.5



4.8



4.1Net
loss

$
(153.8
)

$
(286.5
)

$
(153.7
)Basic and diluted loss per
common share:Net loss per common share

$
(2.47
)

$
(5.36
)

$
(2.87
)Weighted average number of
common shares outstanding:Basic and
diluted


62,327,726



53,461,796



53,461,677


See
Accompanying Notes to Consolidated Financial
Statements.

F-4

---

REVLON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
AND COMPREHENSIVE LOSS

(dollars in millions)

PreferredStock

CommonStock

CapitalDeficiency

AccumulatedDeficit

DeferredCompensation

AccumulatedOtherComprehensiveLoss
(a)

TotalStockholders'DeficiencyBalance, January 1, 2001

$
54.6


$
0.5


$
(210.3
)

$
(921.7
)

$
—


$
(29.8
)

$
(1,106.7
)Net distribution from
affiliate










(1.0
)(b)














(1.0
)Capital contribution from indirect
parent










10.0















10.0Issuance of
restricted stock










8.7







(8.7
)






—Amortization
of deferred
compensation


















0.6







0.6Comprehensive
loss:Net
loss














(153.7
)










(153.7
)Adjustment for minimum pension
liability






















(42.5
)


(42.5
)Revaluation of foreign currency forward exchange
    contracts






















0.1



0.1Currency translation
adjustment






















11.1
(c)


11.1Total comprehensive
loss


























(185.0
)Balance,
December 31, 2001


54.6



0.5



(192.6
)


(1,075.4
)


(8.1
)


(61.1
)


(1,282.1
)Amortization of deferred
compensation


















1.7







1.7Comprehensive
loss:Net
loss














(286.5
)










(286.5
)Adjustment for minimum pension
liability






















(67.5
)


(67.5
)Revaluation of foreign currency forward exchange
    contracts






















(0.1
)


(0.1
)Currency
translation
adjustment






















(4.0
)


(4.0
)Total comprehensive
loss


























(358.1
)Balance, December 31,
2002


54.6



0.5



(192.6
)


(1,361.9
)


(6.4
)


(132.7
)


(1,638.5
)Net proceeds from Rights Offering (See Note
9)






0.2



46.7















46.9Reduction of
liabilities assumed from indirect
parent










6.9
(d)














6.9Amortization of
deferred
compensation


















2.2







2.2Comprehensive
loss:Net
loss














(153.8
)










(153.8
)Adjustment for minimum pension
liability






















1.5



1.5Revaluation of foreign currency forward exchange
    contracts






















(1.4
)


(1.4
)Currency
translation
adjustment






















10.6



10.6Total
comprehensive
loss


























(143.1
)Balance,
December 31, 2003

$
54.6


$
0.7


$
(139.0
)

$
(1,515.7
)

$
(4.2
)

$
(122.0
)

$
(1,725.6
)


|
|
|
|

|(a) | Accumulated
other comprehensive loss includes net unrealized losses on revaluations
of foreign currency forward exchange contracts of $0.8, nil and nil as
of December 31, 2003, 2002 and 2001, respectively, net realized losses
(gains) of $0.6, nil and $(0.1) on foreign currency forward exchange
contracts as of December 31, 2003, cumulative net translation losses of
$8.5, $19.1 and $15.1 as of December 31, 2003, 2002 and 2001,
respectively, and adjustments for the minimum pension liability of
$112.1, $113.6 and $46.1 as of December 31, 2003, 2002 and 2001,
respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Represents net
distributions in capital from the Charles of the Ritz business (See
Note 15).
|--- | --------------------------------------------------------------------------------------------

|(c) | The change in the
currency translation adjustment as of December 31, 2001 includes a
reclassification adjustment of $7.1 for realized losses on foreign
currency adjustments associated primarily with the sale of the Colorama
brand in Brazil.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | During the
second quarter of 2003, the Company resolved various tax audits, which
resulted in a tax benefit of $13.9, of which $6.9 was recorded directly
to capital deficiency since it relates to liabilities assumed by Revlon
Consumer Products Corporation in connection with the transfer
agreements related to Revlon Consumer Products Corporation's
formation in 1992 (See Note 15).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See Accompanying
Notes to Consolidated Financial
Statements.

F-5

---

REVLON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in
millions)

Year
Ended December
31,2003

2002

2001CASH
FLOWS FROM OPERATING ACTIVITIES:Net
loss

$
(153.8
)

$
(286.5
)

$
(153.7
)Adjustments
to reconcile net loss to net cash (used for) provided by operating
activities:Depreciation
and
amortization


109.8



116.3



114.7Amortization
of debt
discount


3.1



2.6



0.4Loss on
early extinguishment of
debt


—



—



3.6Gain
on sale of marketable
securities


—



—



(2.2
)Loss
(gain) on sale of brand and certain assets,
net


—



1.0



14.4Change
in assets and liabilities, net of acquisitions and
dispositions:Decrease
(increase) in trade
receivables


40.2



(9.4
)


5.9(Increase)
decrease in
inventories


(5.7
)


30.3



10.2Decrease
(increase) in prepaid expenses and other current
assets


2.9



3.7



(2.3
)Increase
in accounts
payable


0.5



6.3



4.4(Decrease)
increase in accrued expenses and other current
liabilities


(80.0
)


98.4



(42.5
)Purchase
of permanent
displays


(72.9
)


(66.2
)


(44.0
)Other,
net


(10.5
)


(8.8
)


4.6Net
cash used for operating
activities


(166.4
)


(112.3
)


(86.5
)CASH
FLOWS FROM INVESTING
ACTIVITIES:Capital
expenditures


(28.6
)


(16.0
)


(15.1
)Sale
of marketable
securities


—



1.8



—Proceeds
from the sale of brand and certain
assets


5.3



—



102.3Net
cash (used for) provided by investing
activities


(23.3
)


(14.2
)


87.2CASH
FLOWS FROM FINANCING
ACTIVITIES:Net
(decrease) increase in short-term borrowings — third
parties


(1.6
)


8.0



(11.3
)Proceeds
from the issuance of long-term debt — third
parties


233.1



175.6



698.5Repayment
of long-term debt — third
parties


(239.3
)


(73.0
)


(614.0
)Proceeds
from the issuance of long-term debt —
affiliates


178.1



—



—Repayment
of long-term debt —
affiliates


(62.6
)


—



—Net
proceeds from the Rights
Offering


46.9



—



—Issuance
of Series C preferred
stock


50.0



—



—Redemption
of Series C preferred
stock


(50.0
)


—



—Payment
of financing
costs


(3.5
)


(0.3
)


(25.9
)Net
distribution from
affiliate


—



—



(1.0
)Net
cash provided by financing
activities


151.1



110.3



46.3Effect
of exchange rate changes on cash and cash
equivalents


9.3



(1.3
)


-Net
(decrease) increase in cash and cash
equivalents


(29.3
)


(17.5
)


47.0Cash
and cash equivalents at beginning of
period


85.8



103.3



56.3Cash
and cash equivalents at end of
period

$
56.5


$
85.8


$
103.3Supplemental
schedule of cash flow
information:Cash
paid during the period
for:Interest

$
160.8


$
155.2


$
134.6Income
taxes, net of
refunds


6.7



3.6



3.4Supplemental
schedule of noncash financing
activities:Noncash
capital contribution from indirect parent pursuant to the amended tax
sharing
agreement

$
—


$
—


$
10.0


See
Accompanying Notes to Consolidated Financial
Statements.

F-6

---

REVLON,
INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (dollars in millions, except per share data)

1.    Significant Accounting Policies

Principles of
Consolidation and Basis of Presentation:

Revlon, Inc. (and
together with its subsidiaries, the
"Company") conducts its business exclusively
through its direct subsidiary, Revlon Consumer Products Corporation and
its subsidiaries ("Products Corporation").
The Company manufactures and sells an extensive array of cosmetics and
skin care, fragrances and personal care products. On July 16, 2001 the
Company sold the Colorama brand in Brazil. (See Note 3). The
Company's principal customers include large mass volume retailers
and chain drug stores, as well as certain department stores and other
specialty stores, such as perfumeries. The Company also sells consumer
products to U.S. military exchanges and commissaries and has a
licensing group.

Unless the context otherwise requires, all
references to the Company mean Revlon, Inc. and its subsidiaries.
Revlon, Inc., as a public holding company, has no business operations
of its own and its only material asset has been all of the outstanding
capital stock of Products Corporation. As such, its net (loss) income
has historically consisted predominantly of the net (loss) income of
Products Corporation and in 2003, 2002 and 2001 included approximately
$1.2, $5.9 and $2.6, respectively, in expenses incidental to being a
public holding company.

The Consolidated Financial Statements
include the accounts of the Company after elimination of all material
intercompany balances and transactions. Further, the Company has made a
number of estimates and assumptions relating to the reporting of assets
and liabilities, the disclosure of liabilities and the reporting of
revenues and expenses to prepare these financial statements in
conformity with generally accepted accounting principles. Actual
results could differ from those estimates.

The Company is a
directly and indirectly majority-owned subsidiary of MacAndrews &
Forbes Holdings Inc. ("MacAndrews Holdings"),
a corporation wholly owned indirectly through Mafco Holdings Inc.
("Mafco Holdings" and, together with its
affiliates, "MacAndrews & Forbes") by
Ronald O. Perelman.

Certain amounts in the prior year financial
statements have been reclassified to conform to the current
year's presentation.

During 2003 and 2002 the Company
recorded expenses of approximately $31 and approximately $104 (of which
approximately $100 was recorded in the fourth quarter of 2002),
respectively, related to various aspects of the stabilization and
growth phase of the Company's plan, primarily stemming from
higher sales returns and inventory writedowns from a selective
reduction of SKUs, reduced distribution of the Ultima II brand, higher
allowances stemming from selective price adjustments on certain
products, higher professional expenses associated with the development
of, research in relation to, the stabilization and growth phase of the
Company's plan, and writedowns associated with reconfiguring
existing wall displays at the Company's retail customers.

Recently Adopted Accounting Pronouncements:

In April 2002,
the Financial Accounting Standards Board
("FASB") issued Statement No. 145,
"Rescission of FASB Statements Nos. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical
Corrections". Statement No. 145, among other things,
rescinds Statement No. 4, "Reporting Gains and Losses from
Extinguishment of Debt", and an amendment of that
Statement, Statement No. 64, "Extinguishments of Debt Made
to Satisfy Sinking-Fund Requirements". Statement No. 4
required that gains and losses from extinguishment of debt be
classified as extraordinary items, if material. Under Statement No.
145, extinguishment of debt should usually not be considered
extraordinary under the criteria in Accounting Principles Board
("APB") Opinion No. 30,
"Reporting the Results of Operations – Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and
Transactions" ("APB No. 30").
The Company adopted the provisions

F-7

---

of Statement No. 145 effective December 31,
2002. The Company reclassified the extraordinary item for early
extinguishment of debt of $3.6 incurred in the fourth quarter of 2001
to other expenses on the Company's consolidated statements of
operations as it is no longer considered to meet the extraordinary item
classification criteria in APB No. 30.

In August 2001, the FASB
issued Statement No. 143, "Accounting for Asset Retirement
Obligations". Statement No. 143 requires recording the
fair market value of an asset retirement obligation as a liability in
the period in which a legal obligation associated with the retirement
of a tangible long-lived asset is incurred. This statement also
requires recording the contra asset to the initial obligation as an
increase to the carrying amount of the related long-lived asset and
depreciation of that cost over the life of the asset. The liability is
then increased at the end of each period to reflect the passage of time
and changes in the initial fair value measurement. The Company adopted
the provisions of Statement No. 143 effective January 1, 2003 and it
did not have a material effect on the Company's financial
statements or disclosures.

In July 2002, the FASB issued
Statement No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities". This statement nullifies
Emerging Issues Task Force (the "EITF") Issue
No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)." Statement No.
146 requires that a liability for the fair value of costs associated
with an exit or disposal activity be recognized when the liability is
incurred. The provisions of Statement No. 146 are effective for exit or
disposal activities initiated after December 31, 2002 and thus became
effective for the Company on January 1, 2003. The Company applied the
provisions of Statement No. 146 to any exit activities which occurred
in 2003. The adoption of Statement No. 146 did not have a material
effect on the financial position, results of operations or cash flows
of the Company.

In November 2002, the FASB issued Interpretation
No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." Interpretation No. 45 requires
the guarantor to recognize a liability for the contingent and
non-contingent component of a guarantee; which means (a) the guarantor
has undertaken an obligation to stand ready to perform in the event
that specified triggering events or conditions occur and (b) the
guarantor has undertaken a contingent obligation to make future
payments if such triggering events or conditions occur. The initial
measurement of this liability is the fair value of the guarantee at
inception. The Company is required to recognize the liability even if
it is not probable that payments will be required under the guarantee
or if the guarantee was issued with a premium payment or as part of a
transaction with multiple elements. Interpretation No. 45 also requires
additional disclosures related to guarantees that have certain
specified characteristics. The Company was required to adopt, and has
adopted the disclosure provisions of Interpretation No. 45 in its
financial statements as of and for the year ended December 31, 2002.
Additionally, the recognition and measurement provisions of
Interpretation No. 45 are effective for all guarantees entered into or
modified after December 31, 2002. The adoption of this Interpretation
did not have a material effect on the Company's financial
statements or disclosures.

In December 2002, the FASB issued
Statement of Financial Accounting Standards
("SFAS") No. 148, "Accounting
for Stock-Based Compensation, Transition and Disclosure".
SFAS No. 148 provides alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based
employee compensation. Should the Company elect to transition to fair
value recognition of stock-based employee compensation, not all of the
alternatives outlined in SFAS No. 148 will be available after December
31, 2002. The Company has included the disclosure requirements of SFAS
No. 148 in its consolidated financial statements effective December 31,
2002 and has continued to apply the guidance prescribed in APB Opinion
No. 25, "Accounting for Stock Issued to
Employees".

In December 2003, the FASB issued
Statement No. 132 (R), "Employer's Disclosures about
Pensions and Other Postretirement Benefits". Statement No.
132 requires new annual disclosures about the types of plan assets,
investment strategy, measurement date, plan obligations, and cash flows
as well as the components of the net periodic benefit cost recognized
in interim periods. The new annual disclosure requirements apply to
fiscal years ending after December 15, 2003, except for the disclosure
of expected future benefit payments, which must be disclosed for fiscal
years ending after June 15, 2004. Interim

F-8

---

period disclosures are generally effective for
interim periods beginning after December 15, 2003. The Company has
included the disclosures required by SFAS No. 132 in its consolidated
financial statements for the year ended December 31, 2003.

SFAS
No. 150, "Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity", was
issued by the FASB in May 2003. SFAS No. 150 provides guidance on how
to classify and measure certain financial instruments with
characteristics of both liabilities and equity. This statement is
effective for financial instruments entered into or modified after May
31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003.None of the
Company's financial instruments were impacted by this
statement.

SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities
Summary", was issued by the FASB in April 2003. This
statement amends and clarifies the accounting and reporting for
derivative instruments, including embedded derivatives, and for hedging
activities under SFAS No. 133. Statement No. 149 amends Statement No.
133 to reflect the decisions made as part of the Derivatives
Implementation Group ("DIG") and in other
FASB projects or deliberations. Statement No. 149 is effective for
contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. The Company has applied
the pertinent DIG interpretations as they were issued and does not
expect that SFAS No. 149 will have any material impact on the
Company's financial statements or disclosures.

The FASB
issued Interpretation No. 46, "Consolidation of Variable
Interest Entities", an interpretation of APB No. 51, in
January 2003. This interpretation addresses the consolidation by
business enterprises of variable interest entities as defined in the
interpretation. The interpretation applied immediately to variable
interest entities created after January 31, 2003, and to variable
interests in variable interest entities obtained after January 31,
2003. Significant changes to this interpretation were proposed by FASB
in October 2003, including delaying the effective date to the beginning
of the first reporting period ending after December 15, 2003. The
Company does not currently own an interest in any variable interest
entities; and the Company adopted this statement and it did not have a
material effect on its financial statements or disclosures.

Cash and Cash Equivalents:

Cash equivalents (primarily
investments in time deposits, which have original maturities of three
months or less) are carried at cost, which approximates fair value.
Approximately $27.9 and $22.9 was restricted and supported short-term
borrowings at December 31, 2003 and 2002, respectively. (See
Note  8).

Inventories:

Inventories are stated at
the lower of cost or market value. Cost is principally determined by
the first-in, first-out method.

Property, Plant and Equipment
and Other Assets:

Property, plant and equipment is recorded at
cost and is depreciated on a straight-line basis over the estimated
useful lives of such assets as follows: land improvements, 20 to 40
years; buildings and improvements, 5 to 45 years; machinery and
equipment, 3 to 17 years; and office furniture and fixtures and
capitalized software, 2 to 12 years. Leasehold improvements are
amortized over their estimated useful lives or the terms of the leases,
whichever is shorter. Repairs and maintenance are charged to operations
as incurred, and expenditures for additions and improvements are
capitalized.

Long-lived assets, including fixed assets and
intangibles other than goodwill, are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. If events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable,
the Company estimates the undiscounted future cash flows (excluding
interest) resulting from the use of the asset and its ultimate
disposition. If the sum of the undiscounted cash flows (excluding
interest) is less than the carrying value, the Company recognizes an
impairment loss, measured as the amount by which the carrying value
exceeds the fair value of the asset.

F-9

---

Included in other assets are net permanent
wall displays amounting to approximately $98.6 and $85.2 as of December
31, 2003 and 2002, respectively, which are amortized over 3 to 5 years.
Beginning in the first quarter of 2002, the Company decided to roll out
new permanent wall displays, replacing existing permanent wall displays
at an accelerated rate. As a result, the useful lives of those
permanent wall displays to be replaced were shortened to their new
estimated useful lives, resulting in accelerated amortization of
approximately $11 during 2002. The cost of the new wall displays will
be amortized over a 3-year life. The Company has included in other
assets net costs related to the issuance of its debt instruments
amounting to approximately $23.0 and $26.7 as of December 31, 2003 and
2002, respectively, which are amortized over the terms of the related
debt instruments. In addition, the Company has included in other assets
trademarks, net, of $7.5 and $7.4 as of December 31, 2003 and 2002,
respectively, and patents, net, of $3.9 and $4.7 as of December 31,
2003 and 2002, respectively. Patents and trademarks are recorded at
cost and amortized ratably over approximately 10 to 17 years.
Amortization expense for patents and trademarks for 2003, 2002 and 2001
was $1.8, $2.0 and $1.5, respectively. The Company's intangible
assets other than goodwill continue to be subject to amortization,
which is anticipated to be approximately $1.9 annually through December
31, 2008.

Intangible Assets Related to Businesses
Acquired:

Intangible assets related to businesses acquired
principally represent goodwill. In July 2001, the FASB issued Statement
No. 141, "Business Combinations", and
Statement No. 142, "Goodwill and Other Intangible
Assets". Statement 141 requires that the purchase method
of accounting be used for all business combinations initiated after
June 30, 2001, as well as all purchase method business combinations
completed after June 30, 2001. Statement 141 also specifies criteria
that must be met in order for intangible assets acquired in a purchase
method business combination to be recognized and reported apart from
goodwill. Statement 142 requires that goodwill and intangible assets
with indefinite useful lives no longer be amortized, but instead tested
for impairment at least annually in accordance with the provisions of
Statement 142. Statement 142 requires that intangible assets with
finite useful lives be amortized over their respective estimated useful
lives to their estimated residual values, and reviewed for impairment
in accordance with Statement 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". The Company
adopted the provisions of Statement 141 in July 2001 and Statement 142
effective January 1, 2002. In connection with the adoption of Statement
142, the Company performed a transitional goodwill impairment test as
required and determined that no goodwill impairment existed at January
1, 2002. The Company has also evaluated the lives of all of its
intangible assets. As a result of this evaluation, the Company has
determined that none of its intangible assets, other than goodwill,
have indefinite lives and that the existing useful lives are
appropriate. The amounts outstanding for goodwill, net, $186.1 and
$185.9 at December 31, 2003 and December 31, 2002, respectively.
Accumulated amortization aggregated $117.3 and $117.1 at December 31,
2003 and 2002, respectively. Goodwill represents excess purchase price
over the fair value of assets acquired. Amortization of goodwill ceased
on January 1, 2002 upon adoption of Statement 142. Excluding
amortization expense related to goodwill of $7.7 recognized during
2001, net loss and basic and diluted loss per common share would have
been $146.0 and $2.73, respectively. Prior to January 1, 2002, the
Company amortized goodwill on a straight-line basis over 40 years.

Revenue Recognition:

Sales are recognized when revenue is
realized or realizable and has been earned. The Company's policy
is to recognize revenue when risk of loss and title to the product
transfers to the customer, which generally is on the date of shipment.
Net sales is comprised of gross revenues less expected returns, trade
discounts and customer allowances, which include costs associated with
off-invoice mark-downs and other price reductions, as well as coupons.
These incentive costs are recognized at the later of the date on which
the Company recognizes the related revenue or the date on which the
Company offers the incentive. The Company allows customers to return
their unsold products when they meet certain Company-established
criteria as outlined in the Company's trade terms. The Company
regularly reviews and revises, when deemed necessary, its estimates of
sales returns based primarily upon actual returns, planned product
discontinuances, and promotional sales, which would permit customers to
return items based upon the

F-10

---

Company's trade terms. The Company
records sales returns as a reduction to sales and cost of sales, and an
increase to accrued liabilities and to inventories. Returned products
which are recorded as inventories are valued based upon the amount that
the Company expects to realize upon their subsequent disposition. The
physical condition and marketability of the returned products are the
major factors considered by the Company in estimating realizable value.
Actual returns, as well as realized values on returned products, may
differ significantly, either favorably or unfavorably, from the
Company's estimates if factors such as product discontinuances,
customer inventory levels or competitive conditions differ from the
Company's estimates and expectations and, in the case of actual
returns, if economic conditions differ significantly from the
Company's estimates and expectations. Revenues derived from
licensing arrangements are recognized in the period in which they
become due and payable but not before the license term commences.

Cost of sales includes all of the costs to manufacture the
Company's products. For products manufactured in the
Company's own facilities, such costs include raw materials and
supplies, direct labor and factory overhead. For products manufactured
for the Company by third-party contractors, such costs represent the
amounts invoiced by the contractors. Cost of sales also includes the
cost of refurbishing products returned by customers that will be
offered for resale and the cost of inventory write-downs associated
with adjustments of held inventories to net realizable value. These
costs are reflected in the statement of operations when the product is
sold and net sales revenues are recognized or, in the case of inventory
write-downs, when circumstances indicate that the carrying value of
inventories is in excess of its recoverable value. Additionally, cost
of sales reflects the costs associated with free products. These
incentive costs are recognized on the later of the date that the
Company recognizes the related revenue or the date on which the Company
offers the incentive.

SG&A expenses include expenses to
advertise the Company's products, such as television advertising
production costs and air-time costs, print advertising costs,
promotional displays and consumer promotions. SG&A also includes
the amortization of permanent wall displays and intangible assets,
distribution costs (such as freight and handling), non-manufacturing
overhead, principally personnel and related expenses, insurance and
professional fees.

Accounts Receivable:

Accounts
receivable represent payments due to the Company for previously
recognized net sales, reduced by an allowance for doubtful accounts for
balances, which are estimated to be uncollectible at December 31, 2003
and 2002. Accounts receivable balances are recorded against the
allowance for doubtful accounts when they are deemed uncollectible.
Recoveries of accounts receivable previously recorded against the
allowance are recorded in the Consolidated Statements of Operations
when received.

Income Taxes:

Income taxes are
calculated using the asset and liability method in accordance with the
provisions of SFAS No. 109, "Accounting for Income
Taxes."

Revlon, Inc., for federal income tax
purposes, is included in the affiliated group of which Mafco Holdings
is the common parent, and Revlon, Inc.'s federal taxable income
and loss is included in such group's consolidated tax return
filed by Mafco Holdings. Revlon, Inc. also may be included in certain
state and local tax returns of Mafco Holdings or its subsidiaries. For
all periods presented, federal, state and local income taxes are
provided as if the Company filed its own income tax returns. On June
24, 1992, Revlon Holdings Inc. (a Delaware corporation which in 2002
converted into a Delaware limited liability company known as Revlon
Holdings LLC ("Holdings") and which is an
affiliate and an indirect wholly-owned subsidiary of Mafco Holdings),
the Company and certain of its subsidiaries and Mafco Holdings entered
into a tax sharing agreement, which is described in Notes 12 and
15.

Pension and Other Post-retirement and Post-employment
Benefits:

The Company sponsors pension and other retirement
plans in various forms covering substantially all employees who meet
the respective plan's eligibility requirements. For plans in the
U.S., the minimum

F-11

---

amount required pursuant to the Employee
Retirement Income Security Act, as amended, is contributed annually.
Various subsidiaries outside the U.S. have retirement plans under which
funds are deposited with trustees or reserves are provided.

The
Company accounts for benefits such as severance, disability and health
insurance provided to former employees prior to their retirement when
it is probable that a liability has been incurred and the amount of
such liability can be reasonably estimated.

Research and
Development:

Research and development expenditures are expensed
as incurred. The amounts charged against earnings in 2003, 2002 and
2001 were $25.4, $23.3 and $24.4, respectively.

Foreign
Currency Translation:

Assets and liabilities of foreign
operations are generally translated into U.S. dollars at the rates of
exchange in effect at the balance sheet date. Income and expense items
are generally translated at the weighted average exchange rates
prevailing during each period presented. Gains and losses resulting
from foreign currency transactions are included in the results of
operations. Gains and losses resulting from translation of financial
statements of foreign subsidiaries and branches operating in
non-hyperinflationary economies are recorded as a component of
accumulated other comprehensive loss until either sale or upon complete
or substantially complete liquidation by the Company of its investment
in a foreign entity. Foreign subsidiaries and branches operating in
hyperinflationary economies translate non-monetary assets and
liabilities at historical rates and include translation adjustments in
the results of operations.

Sale of Subsidiary Stock:

The Company recognizes gains and losses on sales of subsidiary stock
in its Consolidated Statements of Operations.

Basic and Diluted
(Loss) Income per Common Share and Classes of Stock:

The basic
(loss) income per common share has been computed based upon the
weighted average number of shares of common stock outstanding during
each of the periods presented. Diluted (loss) income per common share
has been computed based upon the weighted average number of shares of
common stock outstanding. The Company's outstanding stock options
and restricted stock represent the only potential dilutive common stock
outstanding. The number of shares used in the calculation of basic and
diluted loss per common share does not include any incremental shares
that would have been outstanding assuming the exercise of stock options
or the issuance of restricted stock because the effect of those
incremental shares would have been antidilutive. For each period
presented, the amount of loss used in the calculation of diluted loss
per common share was the same as the amount of loss used in the
calculation of basic loss per common share. As a result of the
consummation of the Rights Offering on June 20, 2003 (as hereinafter
defined), the Company issued a total of 17,605,650 shares of its Class
A common stock, with a par value of $0.01 per share
("Class A Common Stock"), increasing the
number of outstanding shares of the Company's Class A Common
Stock to 38,121,785 and the total number of shares of common stock
outstanding, including the Company's existing 31,250,000 shares
of Class B common stock, with a par value of $0.01 per share
("Class B Common Stock," together with the
Class A Common Stock, the "Common Stock"), to
69,371,785, with MacAndrews & Forbes continuing to own
approximately 83% of the Company's total Common Stock
outstanding. Upon consummation of the Rights Offering, the fair value,
based on the New York Stock Exchange ("NYSE")
closing price of the Company's Class A Common Stock was more than
the subscription price. Accordingly, basic and diluted loss per common
share for all periods prior to the Rights Offering have been restated
to reflect the stock dividend of 1,262,328 shares of the
Company's Class A Common Stock. The shares issued in the Rights
Offering are included in the weighted average number of shares
outstanding since the date of the transaction.

The Revlon, Inc.
Common Stock vote as a single class on all matters, except as otherwise
required by law, with each share of Class A Common Stock entitling its
holder to one vote and each share of the

F-12

---

Class B Common Stock entitling its holder to
ten votes. All of the shares of Class B Common Stock are owned by REV
Holdings LLC, a Delaware limited liability company and an indirect
wholly-owned subsidiary of Mafco Holdings, which was formerly a
Delaware corporation known as REV Holdings Inc. ("REV
Holdings"). Mafco Holdings beneficially owns shares of
Common Stock having approximately 97% of the combined voting
power of the outstanding shares of Common Stock. The holders of the
Company's two classes of Common Stock are entitled to share
equally in the earnings of the Company from dividends, when and if
declared by the Board. Each outstanding share of Class B Common Stock
is convertible into one share of Class A Common Stock.

(See
"Subsequent Events".)

In February
2003 the Company entered into an investment agreement with MacAndrews
Holdings (the "Investment Agreement")
pursuant to which the Company undertook and, on June 20, 2003,
completed, a $50 equity rights offering (the "Rights
Offering") in which its stockholders purchased additional
shares of the Company's Class A Common Stock. Pursuant to the
Rights Offering, the Company distributed to each stockholder of record
of its Common Stock, as of the close of business on May 12, 2003, the
record date set by the Board of Directors, at no charge, one
transferable subscription right for each 2.9403 shares of Common Stock
owned. Each subscription right enabled the holder to purchase one share
of Class A Common Stock at a subscription price equal to $2.84,
representing 80% of the $3.55 closing price per share of the
Company's Class A Common Stock on the NYSE on May 12, 2003, the
record date of the Rights Offering.

On June 20, 2003, the
Company completed the Rights Offering and issued an additional
17,605,650 shares of its Class A Common Stock, including 3,015,303
shares subscribed for by the public and 14,590,347 shares issued to
MacAndrews Holdings in a private placement (representing the number of
shares of the Company's Class A Common Stock that MacAndrews
Holdings would otherwise have been entitled to purchase pursuant to its
basic subscription privilege, which was approximately 83% of the
shares of the Company's Class A Common Stock offered in the
Rights Offering).

The Company designated 1,000 shares of
Preferred Stock as the Series A Preferred Stock, of which 546 shares
are outstanding and held by REV Holdings. The holder of the Series A
Preferred Stock is not entitled to receive any dividends. The Series A
Preferred Stock is entitled to a liquidation preference of $100,000 per
share before any distribution is made to the holders of Common Stock.
The holder of the Series A Preferred Stock does not have any voting
rights, except as required by law. The Series A Preferred Stock may be
redeemed at any time by the Company, at its option, for $100,000 per
share. However, the terms of Products Corporation's various debt
agreements currently restrict Revlon, Inc.'s ability to effect
such redemption by generally restricting the amount of dividends or
distributions Products Corporation can pay to Revlon, Inc.

The
Company designated 4,333 shares of Preferred Stock as the Series B
Convertible Preferred Stock (the "Series B Preferred
Stock"), all of which are outstanding and held by REV
Holdings. The Series B Preferred Stock is entitled to receive dividends
if the Company declares or pays any dividends on the Company's
Class A Common Stock in an amount per share of Series B Preferred Stock
as if the shares of Series B Preferred Stock had been converted into
the Company's Class A Common Stock entitled to such dividend
(provided that in February 2003 REV Holdings waived its rights to
receive any subscription rights in the Rights Offering). The Series B
Preferred Stock is entitled to a liquidation preference of $720.0554
per share plus the amount of declared but unpaid dividends as of the
date of any liquidation, dissolution or winding up of the Company
before any distributions are made to the holders of Common Stock. Each
of the outstanding 4,333 shares of Series B Preferred Stock of Revlon,
Inc. is entitled to 100 votes and is convertible into 100 shares of
Class A Common Stock. At its option, the Company may redeem the Series
B Preferred Stock at any time for $720.0554 per share. However, the
terms of Products Corporation's various debt agreements currently
restrict Revlon, Inc.'s ability to effect such redemption by
generally restricting the amount of dividends or distributions Products
Corporation can pay to Revlon, Inc.

Stock-Based
Compensation:

SFAS No. 123, "Accounting for
Stock-Based Compensation," encourages, but does not
require, companies to record compensation cost for stock-based employee
compensation plans at fair value. The

F-13

---

Company has chosen to account for stock-based
compensation plans using the intrinsic value method prescribed in APB
Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. Accordingly,
compensation cost for stock options issued to employees is measured as
the excess, if any, of the quoted market price of the Company's
stock at the date of the grant over the amount an employee must pay to
acquire the stock. The following table illustrates the effect on net
loss and net loss per basic and diluted common share as if the Company
had applied the fair value method to its stock-based compensation,
which is more fully described in Note 14 as required under the
disclosure provisions of Statement No. 123:

Year
Ended December
31,2003

2002

2001Net loss as
reported

$
(153.8
)

$
(286.5
)

$
(153.7
)Add: Stock-based employee compensation included in reported
net loss


2.2



1.7



0.6Deduct: Total stock-based employee compensation expense
determined under fair value based method for all
awards


(7.7
)


(6.9
)


(10.2
)Pro forma net
loss

$
(159.3
)

$
(291.7
)

$
(163.3
)Basic and diluted loss per common
share:As
reported

$
(2.47
)

$
(5.36
)

$
(2.87
)Pro
forma

$
(2.56
)

$
(5.46
)

$
(3.05
)


The
effects of applying SFAS No. 123 in this pro forma disclosure are not
necessarily indicative of future amounts.

Derivative Financial
Instruments:

On January 1, 2001, the Company adopted SFAS No.
133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS No. 149. The standard
requires the recognition of all derivative instruments on the balance
sheet as either assets or liabilities measured at fair value. Changes
in fair value are recognized immediately in earnings unless the
derivatives qualify as hedges of future cash flows. For derivatives
qualifying as hedges of future cash flows, the effective portion of
changes in fair value is recorded as a component of Other Comprehensive
Income and recognized in earnings when the hedged transaction is
recognized in earnings. Any ineffective portion (representing the
extent that the change in fair value of the hedges does not completely
offset the change in the anticipated net payments being hedged) is
recognized in earnings as it occurs. If a derivative instrument
designated as a hedge is terminated, the unrecognized fair value of the
hedge previously recorded in accumulated other comprehensive income
(loss) is recognized in earnings when the hedged transaction is
recognized in earnings. If the transaction being hedged is terminated,
the unrecognized fair value of the Company's related hedge
instrument is recognized in earnings at that time. There was no
cumulative effect on the Company's financial statements or
disclosures recognized for adopting this accounting change.

The
Company formally designates and documents each financial instrument as
a hedge of a specific underlying exposure, as well as the risk
management objectives and strategies for entering into the hedge
transaction upon inception. The Company also formally assesses upon
inception and quarterly thereafter whether the financial instruments
used in hedging transactions are effective in offsetting changes in the
fair value or cash flows of the hedged items.

The Company uses
derivative financial instruments, primarily foreign currency forward
exchange contracts, to reduce the effects of fluctuations in foreign
currency exchange rates. These contracts, which have been designated as
cash flow hedges, were entered into primarily to hedge anticipated
inventory purchases and certain intercompany payments denominated in
foreign currencies, which have maturities of less than one year. Any
unrecognized income (loss) related to these contracts are recorded in
the Statement of Operations primarily in cost of goods sold when the
underlying transactions hedged are realized (e.g., when inventory is
sold or intercompany transactions are settled). The Company enters into

F-14

---

these contracts with a counterparty that is a
major financial institution, and accordingly the Company believes that
the risk of counterparty nonperformance is remote. The notional amount
of the foreign currency forward exchange contracts outstanding at
December 31, 2003 and 2002 was $8.3 and $10.8, respectively. The fair
value of the foreign currency forward exchange contracts outstanding at
December 31, 2003 and 2002 was $(0.8) and nil, respectively.

The
amount of the hedges' ineffectiveness for the year ended December
31, 2003 recorded in the Consolidated Statements of Operations was not
significant.

Advertising and Promotion:

Costs
associated with advertising and promotion are expensed when incurred.
Television advertising production costs are expensed the first time the
advertising takes place. Advertising and promotion expenses were
$314.4, $281.2 and $272.9 for 2003, 2002 and 2001, respectively.

The Company has various arrangements with customers pursuant to its
trade terms to reimburse them for a portion of their advertising or
promotional costs, which provide advertising and promotional benefits
to the Company. Additionally, from time to time the Company may pay
fees to customers in order to expand or maintain shelf space for its
products. The costs that the Company incurs for
"cooperative" advertising programs, end cap
replacement, shelf replacement costs and slotting fees are expensed as
incurred and are netted against revenues on the Company's
Consolidated Statements of Operations.

Distribution Costs:

Costs, such as freight and handling costs, associated with
distribution are expensed within SG&A when incurred. Distribution
costs were $60.4, $56.5 and $65.9 for 2003, 2002 and 2001,
respectively.

2.    Restructuring Costs and Other, Net

During 2003, the Company recorded a separate charge of $5.9, for
employee severance and other personnel benefits for 421 employees in
certain International operations as to which 331 employees have been
terminated as of December 31, 2003.

During 2003, 2002 and 2001,
the Company recorded a charge of $0.1, $13.6 and $38.1 related to the
2000 restructuring program, principally for additional employee
severance and other personnel benefits and relocation and other costs
related to the consolidation of the Company's worldwide
operations. Included in the $38.1 charge for 2001 was an adjustment in
the fourth quarter to previous estimates of approximately $6.6.

During the third quarter of 2000, the Company initiated a new
restructuring program in line with the original restructuring plan
developed in late 1998, designed to improve profitability by reducing
personnel and consolidating manufacturing facilities. The 2000
restructuring program focused on the Company's plans to close its
manufacturing operations in Phoenix, Arizona and Mississauga, Canada
and to consolidate its cosmetics production into its plant in Oxford,
North Carolina. The 2000 restructuring program also includes the
remaining obligation for excess leased real estate in the
Company's headquarters, consolidation costs associated with the
Company closing its facility in New Zealand, and the elimination of
several domestic and international executive and operational positions,
each of which were effected to reduce and streamline corporate overhead
costs. In connection with the 2000 restructuring program, termination
benefits for 2,457 employees were included in the Company's
restructuring charges, and all such employees that were to be
terminated had been terminated as of December 31, 2003.

F-15

---

Details of the activity described above
during 2003, 2002 and 2001 are as follows:

BalanceBeginningof
Year

Expenses, Net

Utilized,
Net

BalanceEndof
YearCash

Noncash2003Employee
severance and other personnel
benefits:2000
plan

$
7.0


$
—


$
(5.2
)

$
—


$
1.82003
plan


—



5.9



(0.9
)


—



5.07.0



5.9



(6.1
)


—



6.8Relocation


—



0.1



(0.1
)


—



—Leases
and equipment
write-offs


3.9



—



(1.7
)


—



2.2Other
obligations


0.9



—



—



(0.9
)


—$
11.8


$
6.0


$
(7.9
)

$
(0.9
)

$
9.02002Employee
severance and other personnel
benefits

$
15.1


$
10.1


$
(18.2
)

$
—


$
7.0Relocation


—



0.6



(0.6
)


—



—Leases
and equipment
write-offs


7.4



1.7



(4.9
)


(0.3
)


3.9Other
obligations


0.3



1.2



(0.6
)


—



0.9$
22.8


$
13.6


$
(24.3
)

$
(0.3
)

$
11.82001Employee
severance and other personnel
benefits

$
28.6


$
27.5


$
(41.0
)

$
—


$
15.1Relocation


—



3.8



(3.8
)


—



—Leases
and equipment
write-offs


5.9



5.6



(4.0
)


(0.1
)


7.4Other
obligations


1.5



1.2



(2.4
)


—



0.3$
36.0


$
38.1


$
(51.2
)

$
(0.1
)

$
22.8


As
of December 31, 2003, 2002 and 2001, the unpaid balance of the
restructuring costs for reserves are included in accrued expenses and
other and other long-term liabilities in the Company's
Consolidated Balance Sheets. The remaining balance at December 31, 2003
for employee severance and other personnel benefits is $6.8, of which
$5.7 is expected to be paid by the end of 2004 and the remaining lease
and equipment obligations of $2.2 are expected to be paid by the end of
2008.

3. Dispositions

Described below are the principal
sales of certain brands and facilities entered into by Products
Corporations during 2003, 2002 and 2001:

In April 2001, Products
Corporation sold land in Minami Aoyama near Tokyo, Japan and related
rights for the construction of a building on such land (the
"Aoyama Property") for approximately $28. In
connection with such disposition, the Company recognized a pre-tax and
after-tax net loss of $0.8 during the second quarter of 2001.

In
May 2001, Products Corporation sold its Phoenix, Arizona facility for
approximately $7 and leased it back through the end of 2001. After
recognition of increased depreciation in the first quarter of 2001, the
Company recorded a pre-tax and after-tax net loss on the sale of $3.7
in the second quarter of 2001, which is included in SG&A
expenses.

In July 2001, Products Corporation completed the
disposition of its Colorama brand of cosmetics and hair care products,
as well as Products Corporation's manufacturing facility located
in São Paulo, Brazil, for approximately $57. Products
Corporation used $22 of the net proceeds, after transaction costs and

F-16

---

retained liabilities, to permanently reduce
commitments under the 1997 Credit Agreement. In connection with such
disposition, the Company recognized a pre-tax and after-tax net loss of
$6.7.

In July 2001, Products Corporation completed the
disposition of its subsidiary that owned and operated its manufacturing
facility in Maesteg, Wales (UK), including all production equipment. As
part of this sale, Products Corporation entered into a long-term supply
agreement with the purchaser pursuant to which the purchaser
manufactured and supplied to Products Corporation cosmetics and
personal care products for sale throughout Europe. In connection with
such disposition, the Company recognized a pre-tax and after-tax net
loss of $8.6.

In December 2001, Products Corporation sold a
facility in Puerto Rico for approximately $4. In connection with such
disposition, the Company recorded a pre-tax and after-tax net gain on
the sale of $3.1 in the fourth quarter of 2001.

In February
2002, Products Corporation completed the disposition of its Benelux
business. As part of this sale, Products Corporation entered into a
long-term distribution agreement with the purchaser pursuant to which
the purchaser distributes the Company's products in Benelux. The
purchase price consisted principally of the assumption of certain
liabilities and a deferred purchase price contingent upon future
results of up to approximately $4.7, which could be received over
approximately a seven-year period. In connection with the disposition,
the Company recognized a pre-tax and after-tax net loss of $1.0 in the
first quarter of 2002.

In October 2002, Products Corporation and
its principal third party manufacturer for Europe and certain other
international markets terminated the long-term supply agreement they
had entered into in connection with Products Corporation's
disposition of its Maesteg facility in July 2001, and they entered into
a new, more flexible agreement. This new agreement has significantly
reduced volume commitments, and, among other things, Products
Corporation agreed to loan such supplier approximately $2.0 and the
supplier can earn performance-based payments of approximately $6.3 over
a 4-year period, contingent upon the supplier achieving specific
production service level objectives. During 2003 and 2002, the Company
accrued $1.8 and $1.6, respectively, for such payments. As part of
terminating the long-term supply agreement the supplier released
Products Corporation from its minimum purchase commitments under the
old supply agreement, which were approximately $145.5 over the 8-year
term of such agreement. In exchange, Products Corporation waived
approximately $10.0 of deferred purchase price which otherwise would
have been payable by the supplier to Products Corporation in connection
with the July 2001 sale of the Maesteg facility (a portion of which was
contingent on future events). Such deferred purchase price, absent such
waiver, would have been payable by the supplier to Products Corporation
over a 6-year period.

In December 2003, the Company sold a
facility located in Canada for approximately $5.2 and leased it back
through the end of 2006. In connection with such disposition, the
Company will recognize a pre-tax and after-tax net gain of
approximately $1.7 ratably over the remaining 3-year lease term.

4.    Inventories

December
31,2003

2002Raw
materials and
supplies

$
48.3


$
36.7Work-in-process


11.6



11.1Finished
goods


82.8



80.3$
142.7


$
128.1


In
the fourth quarter of 2002, the Company recorded a charge of $17.7 to
write-down inventories related to the implementation of the
stabilization and growth phase of its plan and reduced distribution of
its Ultima II brand.

F-17

---

5.    Prepaid Expenses and Other

December
31,2003

2002Prepaid
expenses

$
22.9


$
21.1Asset held for
sale


—



3.4Other


11.0



17.1$
33.9


$
41.6


The
asset held for sale at December 31, 2002 represents a building in
Canada, which the Company decided to sell in 2001 as a result of the
closing of its manufacturing facility in Canada. Such building was sold
in December 2003 for approximately $5.2. (See Note 3)

6.    Property, Plant and Equipment, Net

December
31,2003

2002Land and improvements

$
2.2


$
2.2Buildings and improvements


82.8



80.5Machinery and equipment and capitalized
leases


135.1



124.1Office
furniture and fixtures and capitalized software


109.5



99.9Leasehold improvements


12.5



18.1Construction-in-progress


10.5



13.6352.6



338.4Accumulated
depreciation


(220.5
)


(205.0
)$
132.1


$
133.4


Depreciation
expense for the years ended December 31, 2003, 2002 and 2001 was $33.7,
$34.5 and $36.8, respectively. The Company has evaluated its management
information systems and determined, among other things, to upgrade its
systems. As a result of this decision, certain existing information
systems are being amortized on an accelerated basis. The additional
amortization recorded in 2003 and 2002 was $4.6 and $4.0,
respectively.

7.    Accrued Expenses and
Other

December
31,2003

2002Sales
returns and
allowances

$
103.4


$
174.1Advertising
and promotional
costs


52.3



59.2Compensation and
related
benefits


65.7



54.5Interest


40.7



39.5Taxes,
other than federal income
taxes


9.3



7.8Restructuring
costs


6.4



8.3Other


44.1



35.8$
321.9


$
379.2


8.
Short-term Borrowings

Products Corporation had outstanding
short-term bank borrowings (excluding borrowings under the Credit
Agreement (as hereinafter defined)) aggregating $28.0 and $25.0 at
December 31, 2003 and 2002, respectively. Interest rates on amounts
borrowed under such short-term lines at December 31, 2003 and 2002
ranged from 3.0% to 7.3% and from 2.5% to
6.5%, respectively, excluding Latin American countries

F-18

---

in which the Company had outstanding
borrowings of approximately $0.2 and $1.7 at December 31, 2003 and
2002, respectively. Compensating balances at December 31, 2003 and 2002
were approximately $27.9 and $22.9, respectively. Interest rates on
compensating balances at December 31, 2003 and 2002 ranged from
0.6% to 5.6% and 1.5% to 5.6%,
respectively.

9.    Long-term Debt

December
31,2003

2002Credit
facilities
(a)

$
217.3


$
223.18 1/8%
Senior Notes due 2006
(b)


249.8



249.79% Senior
Notes due 2006
(c)


250.0



250.08 5/8%
Senior Subordinated Notes due 2008
(d)


649.9



649.912% Senior
Secured Notes due 2005
(e)


356.3



353.312% Senior
Unsecured Multiple-Draw Term Loan due 2005
(f)


106.6



—8%
MacAndrews & Forbes Line of Credit due 2005
(f)


15.5



—Advances from
affiliates
(f)


24.1



24.11,869.5



1,750.1Less
current
portion


—



—$
1,869.5


$
1,750.1


(a)
On November 30, 2001, Products Corporation entered into the Second
Amended and Restated Credit Agreement (the "2001 Credit
Agreement") with a syndicate of lenders, whose individual
members change from time to time, which agreement amended and restated
the credit agreement entered into by Products Corporation in May 1997
(the "1997 Credit Agreement"; the 2001 Credit
Agreement and the 1997 Credit Agreement are sometimes referred to as
the "Credit Agreement"). On November 26,
2001, prior to closing on the 2001 Credit Agreement, Products
Corporation issued and sold in a private placement $363 in aggregate
principal amount of 12% Senior Secured Notes due 2005 (the
"Original 12% Notes"), receiving gross
proceeds of $350.5 (see footnote (e) below) (the issuance of the
Original 12% Notes and the 2001 Credit Agreement are referred to
herein as the "2001 Debt Reduction
Transactions"). Products Corporation used the proceeds
from the Original 12% Notes and borrowings under the 2001 Credit
Agreement to repay outstanding indebtedness under Products
Corporation's 1997 Credit Agreement and to pay fees and expenses
incurred in connection with the 2001 Debt Reduction Transactions, and
the balance was available for general corporate purposes. On June 21,
2002, the Original 12% Notes were exchanged for new 12%
Senior Secured Notes due 2005 which have substantially identical terms
as the Original 12% Notes (the "12% Senior
Secured Notes"), except that the 12% Senior Secured
Notes are registered with the Securities and Exchange Commission (the
"Commission") under the Securities Act of
1933 (as amended, the "Securities Act") and
the transfer restrictions and registration rights applicable to the
Original 12% Notes do not apply to the 12% Senior Secured
Notes. (See Notes 9 and 19 for discussion of recent amendments to the
Credit Agreement).

(See "Subsequent
Events" for important information).

The 2001
Credit Agreement, as of December 31, 2003, provides up to $247.5 and
consists of a $115.4 term loan facility (the "Term Loan
Facility") and a $132.1 multi-currency revolving credit
facility (the "Multi-Currency Facility") (the
Term Loan Facility and the Multi-Currency Facility being referred to as
the "Credit Facilities"). The Multi-Currency
Facility is available (i) to Products Corporation in revolving credit
loans denominated in U.S. dollars, (ii) to Products Corporation in
standby and commercial letters of credit denominated in U.S. dollars up
to $50.0, $22.3 of which was issued but undrawn at December 31, 2003
and (iii) to Products Corporation and certain of its international
subsidiaries designated from time to time in revolving credit loans and
bankers' acceptances denominated in U.S. dollars and other
currencies (the "Local Loans"). At December
31, 2003 and 2002, the Company had $115.4 and $116.6, respectively,
outstanding under the Term Loan Facility, and $124.2 ($22.3 of which
was issued but undrawn letters of credit) and $131.8 ($25.3 of which
was issued but undrawn letters of credit), respectively, outstanding
under the Multi-Currency Facility.

F-19

---

The Credit Facilities (other than loans
in foreign currencies) bear interest as of December 31, 2003 at a rate
equal to, at Products Corporation's option, either (A) the
Alternate Base Rate plus 4.25%; or (B) the Eurodollar Rate plus
5.25% (provided that as a result of the amendment to the Credit
Agreement in January 2004 (the "2004 Bank
Amendment") such rate is currently either (A) the
Alternate Base Rate plus 4.50%; or (B) the Eurodollar Rate plus
5.50%). Loans in foreign currencies bear interest in certain
limited circumstances or if mutually acceptable to Products Corporation
and the relevant foreign lenders at the Local Rate and otherwise at the
Eurocurrency Rate, in each case plus 5.25% (provided that as a
result of the 2004 Bank Amendment to the Credit Agreement such rate is
currently 5.50%). Products Corporation pays to those lenders
having multi-currency commitments a commitment fee of 0.75% of
the average daily unused portion of the Multi-Currency Facility, which
fee is payable quarterly in arrears. Under the Multi-Currency Facility,
Products Corporation pays (i) to foreign lenders a fronting fee of
0.25% per annum on the aggregate principal amount of specified
Local Loans (which fee is retained by the foreign lenders out of the
portion of the Applicable Margin payable to such foreign lender), (ii)
to foreign lenders an administrative fee of 0.25% per annum on
the aggregate principal amount of specified Local Loans, (iii) to the
multi-currency lenders a letter of credit commission equal to (a) the
Applicable Margin for Eurodollar Rate loans (adjusted for the term that
the letter of credit is outstanding) times (b) the aggregate undrawn
face amount of letters of credit and (c) to the issuing lender a letter
of credit fronting fee of 0.25% per annum of the aggregate
undrawn face amount of letters of credit (which fee is a portion of the
Applicable Margin). Products Corporation also paid certain facility and
other fees to the lenders and agents upon closing of the 2001 Credit
Agreement. Prior to the termination date of the Credit Facilities, on
each November 30 (commencing November 30, 2002) Products Corporation
shall repay $1.25 in aggregate principal amount of the Term Loan
Facility. Products Corporation made its applicable installment payment
in November 2002 and November 2003, respectively. In addition, prior to
its termination, the commitments under the Credit Facilities will be
reduced by: (i) the net proceeds in excess of $10.0 each year received
during such year from sales of assets by Products Corporation or any of
its subsidiaries (and in excess of an additional $15.0 in the aggregate
during the term with respect to certain specified dispositions),
subject to certain limited exceptions, (ii) certain proceeds from the
sales of collateral security granted to the lenders, and (iii) the net
proceeds from the issuance by Products Corporation or any of its
subsidiaries of certain additional debt. The 2001 Credit Agreement will
terminate on May 30, 2005. The weighted average interest rates on the
Term Loan Facility and the Multi-Currency Facility were 8.25%
and 8.26% at December 31, 2003, respectively, 7.75% and
7.81% at December 31, 2002, respectively, and 7.75% and
8.49% at December 31, 2001, respectively.

The Credit
Facilities are supported by, among other things, guarantees from
Revlon, Inc. and, subject to certain limited exceptions, the domestic
subsidiaries of Products Corporation. The obligations of Products
Corporation under the Credit Facilities and the obligations under the
aforementioned guarantees are secured, on a first-priority basis (and
therefore entitled to payment out of the proceeds on any sale of the
following collateral before the 12% Senior Secured Notes, which
are secured on a second-priority basis), subject to certain limited
exceptions, primarily by (i) a mortgage on Products Corporation's
facility in Oxford, North Carolina; (ii) the capital stock of Products
Corporation and its domestic subsidiaries and 66% of the capital
stock of Products Corporation's and its domestic
subsidiaries' first-tier foreign subsidiaries; (iii) domestic
intellectual property and certain other domestic intangibles of
Products Corporation and its domestic subsidiaries; (iv) domestic
inventory, accounts receivable, equipment and certain investment
property of Products Corporation and its domestic subsidiaries; and (v)
the assets of certain foreign subsidiary borrowers under the
Multi-Currency Facility (to support their borrowings only). The Credit
Agreement provides that the liens on the stock and property referred to
above may be shared from time to time, subject to certain limitations,
on a first-priority basis, with specified types of other obligations
incurred or guaranteed by Products Corporation, such as interest rate
hedging obligations and working capital lines, and on a second-priority
basis with Products Corporation's obligations under the
12% Senior Secured Notes.

The Credit Agreement contains
various material restrictive covenants prohibiting Products Corporation
from (i) incurring additional indebtedness or guarantees, with certain
exceptions, (ii) making dividend, tax sharing and other payments or
loans to Revlon, Inc. or other affiliates, with certain exceptions,
including among others, permitting Products Corporation to pay
dividends and make

F-20

---

distributions to Revlon, Inc., among other
things, to enable Revlon, Inc. to pay expenses incidental to being a
public holding company, including, among other things, professional
fees such as legal and accounting fees, regulatory fees such as
Commission filing fees and other miscellaneous expenses related to
being a public holding company, and, subject to certain limitations, to
pay dividends or make distributions in certain circumstances to finance
the purchase by Revlon, Inc. of its Class A Common Stock in connection
with the delivery of such common stock to grantees under the Revlon,
Inc. Amended and Restated 1996 Stock Plan (as may be amended and
restated from time to time, the "Amended Stock
Plan"), (iii) creating liens or other encumbrances on
Products Corporation's or its domestic subsidiaries' assets
or revenues, granting negative pledges or selling or transferring any
of Products Corporation's or its domestic subsidiaries'
assets except in the ordinary course of business, all subject to
certain limited exceptions, including among others, permitting Products
Corporation to create liens to secure Products Corporations'
obligations under the 12% Senior Secured Notes, (iv) with
certain exceptions, engaging in merger or acquisition transactions, (v)
prepaying indebtedness and modifying the terms of certain indebtedness
and specified material contractual obligations, subject to certain
limited exceptions, (vi) making investments, subject to certain limited
exceptions, and (vii) entering into transactions with affiliates of
Products Corporation other than upon terms no less favorable to
Products Corporation or its subsidiaries than it would obtain in an
arms'-length transaction. In addition to the foregoing, the
Credit Agreement contains financial covenants requiring Products
Corporation to maintain specified cumulative EBITDA levels and limiting
the leverage ratio of Products Corporation, which financial covenants,
among the other amendments referred to in this Note 9 and Note 19, the
bank lenders under the Credit Agreement waived for the four quarters
ended December 31, 2002 in an amendment to the Credit Agreement in
February 2003 (the "2003 Bank Amendment") and
December 31, 2003 (and thereafter eliminated) and waived until January
31, 2005 for the four quarters ended December 31, 2004 in connection
with the 2004 Bank Amendment. In addition, the 2003 Bank Amendment
increased the maximum limit on capital expenditures (as defined in the
Credit Agreement) to $115 for 2003 and includes a minimum liquidity
covenant requiring Products Corporation to maintain a minimum of $20 in
liquidity from all available sources at all times, which liquidity
covenant was extended through the maturity of the Credit Agreement in
connection with the 2004 Bank Amendment.

In connection with the
2003 M&F Investments described below, and as a result of Products
Corporation's operating results for the fourth quarter of 2002
and the effect of the acceleration of the Company's
implementation of the stabilization and growth phase of its plan,
Products Corporation entered into the 2003 Bank Amendment with its bank
lenders and secured waivers of compliance with certain covenants under
the Credit Agreement. In particular, EBITDA (as defined in the Credit
Agreement) was $35.2 for the four consecutive fiscal quarters ended
December 31, 2002, which was less than the minimum of $210 required
under the EBITDA covenant of the Credit Agreement for that period and
the Company's leverage ratio was 5.09:1.00, which was in excess
of the maximum ratio of 1.4:1.00 permitted under the leverage ratio
covenant of the Credit Agreement for that period. Accordingly, the
Company sought and secured waivers of compliance with these covenants
for the four quarters ended December 31, 2002 and, in light of the
Company's expectation that the continued implementation of the
stabilization and growth phase of the Company's plan would affect
the ability of Products Corporation to comply with these covenants
during 2003, as part of the 2003 Bank Amendment, the Company also
secured an amendment to eliminate the EBITDA and leverage ratio
covenants for the first three quarters of 2003 and a waiver of
compliance with such covenants for the four quarters ending December
31, 2003 expiring on January 31, 2004.

The 2003 Bank Amendment
to the Credit Agreement also included the substitution of a covenant
requiring the Company to maintain a minimum of $20 of liquidity from
specified sources at all times through January 31, 2004 and certain
other amendments to allow for the 2003 M&F Investments and the
implementation of the stabilization and growth phase of the
Company's plan, including specific exceptions from the
limitations under the indebtedness covenant to permit the 2003 Mafco
Loans and to exclude the proceeds from the 2003 M&F Investments
from the mandatory prepayment provisions of the Credit Agreement, and
to increase the maximum limit on capital expenditures (as defined in
the Credit Agreement) from $100 to $115 for 2003. The 2003 Bank
Amendment also increased the applicable margin

F-21

---

on loans under the Credit Agreement by
0.5%, the incremental cost of which to the Company, assuming the
Credit Agreement is fully drawn, was $1.1 from February 5, 2003 through
the end of 2003.

EBITDA (as defined in the Credit Agreement) was
$144.4 for the four consecutive fiscal quarters ended December 31,
2003, which was less than the minimum of $230 required under the EBITDA
covenant of the Credit Agreement for that period and the
Company's leverage ratio was 1.66:1.00, which was in excess of
the maximum ratio of 1.1:1.00 permitted under the leverage ratio
covenant of the Credit Agreement for that period. Accordingly, the
Company sought and on January 28, 2004 secured the 2004 Bank Amendment
which includes waivers of compliance with these covenants for the four
quarters ended December 31, 2003 and, in light of the Company's
expectation that the continued implementation of the Company's
plan would affect the ability of Products Corporation to comply with
these covenants during 2004, the Company also secured as part of the
2004 Bank Amendment an amendment to eliminate the EBITDA and leverage
ratio covenants for the first three quarters of 2004 and a waiver of
compliance with such covenants for the four quarters ending December
31, 2004 expiring on January 31, 2005. The 2004 Bank Amendment to the
Credit Agreement included certain other amendments to allow for the
continued implementation of, and refinement to, the Company's
plan, including, among other things: (i) providing exceptions from the
limitations under the indebtedness covenant to permit the 2004 Mafco
$125 million term loan (as hereinafter defined), (ii) permitting
Products Corporation to borrow up to an additional $50 in working
capital loans from MacAndrews Holdings or its affiliates, if necessary,
(iii) extending the maturity of the Mafco $65 million line of credit
(as hereinafter defined) until June 30, 2005 and providing that as a
condition to Products Corporation borrowing under such line from and
after the effective date of the 2004 Bank Amendment that at least $100
shall have been borrowed under the 2004 Mafco $125 million term loan
(as hereinafter defined), (iv) continuing the $20 million minimum
liquidity covenant, (v) increasing the applicable margin on loans under
the Credit Agreement by 0.25%, the incremental cost of which to
the Company, assuming the Credit Agreement is fully drawn, would be
approximately $0.5 from February 1, 2004 through the end of 2004, and
(vi) permitting Revlon, Inc. to guarantee certain classes of Products
Corporation's public indebtedness, if necessary, to permit the
Debt Reduction Transactions (as hereinafter defined).(See
"Subsequent Events" for important
information).

The events of default under the Credit
Agreement include a Change of Control (as defined in the Credit
Agreement) of Products Corporation and other customary events of
default for such types of agreements. Among such customary events of
default under the Credit Agreement is a cross-default provision which
provides that it is an event of default under the Credit Agreement if
Products Corporation or any of its subsidiaries (as defined under the
Credit Agreement) (i) defaults in the payment of certain indebtedness
when due (whether at maturity or by acceleration) in excess of $5.0 in
aggregate principal amount or (ii) defaults in the observance or
performance of any other agreement or condition relating to such debt,
provided that the amount of debt involved is in excess of $5.0 in
aggregate principal amount, or any other event occurs, the effect of
such default or other event would cause or permit the holders of such
debt to accelerate payment.

Upon entering into the 2001 Credit
Agreement, the Company recorded a charge of $3.6 ($0.07 basic and
diluted loss per common share) for associated costs.

(b) The
8 1/8% Senior Notes due 2006 (the
"8 1/8% Senior Notes")
are senior unsecured obligations of Products Corporation and rank pari
passu in right of payment with all existing and future Senior Debt (as
defined in the indenture relating to the 8 1/8%
Senior Notes (the "8 1/8% Senior
Notes Indenture")) of Products Corporation, including the
12% Senior Secured Notes, 9% Senior Notes and the
indebtedness under the Credit Agreement, the 2003 Mafco Loans, and the
2004 Mafco $125 million term loan (each as hereinafter defined), and
are senior to the 8 5/8% Senior Subordinated
Notes and to all future subordinated indebtedness of Products
Corporation. The 8 1/8% Senior Notes are
effectively subordinated to the outstanding indebtedness and other
liabilities of Products Corporation's subsidiaries. Interest is
payable on February 1 and August 1.

The
8 1/8% Senior Notes may be redeemed at the
option of Products Corporation in whole or from time to time in part at
any time on or after February 1, 2002 at the redemption prices set
forth in the 8 1/8% Senior Notes Indenture, plus
accrued and unpaid interest, if any, to the date of redemption.

F-22

---

Upon a Change of Control (as defined in
the 8 1/8% Senior Notes Indenture), Products
Corporation will have the option to redeem the
8 1/8% Senior Notes in whole at a redemption
price equal to the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of redemption, plus the
Applicable Premium (as defined in the 8 1/8%
Senior Notes Indenture) and, subject to certain conditions, each holder
of the 8 1/8% Senior Notes will have the right
to require Products Corporation to repurchase all or a portion of such
holder's 8 1/8% Senior Notes at a price
equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the date of repurchase.

The
8 1/8% Senior Notes Indenture contains covenants
that, among other things, limit (i) the issuance of additional debt and
redeemable stock by Products Corporation, (ii) the incurrence of liens,
(iii) the issuance of debt and preferred stock by Products
Corporation's subsidiaries, (iv) the payment of dividends on
capital stock of Products Corporation and its subsidiaries and the
redemption of capital stock of Products Corporation and certain
subordinated obligations, (v) the sale of assets and subsidiary stock,
(vi) transactions with affiliates and (vii) consolidations, mergers and
transfers of all or substantially all Products Corporation's
assets. The 8 1/8% Senior Notes Indenture also
prohibits certain restrictions on distributions from subsidiaries. All
of these limitations and prohibitions, however, are subject to a number
of important qualifications.

(c) The 9% Senior Notes due
2006 (the "9% Senior Notes") are
senior unsecured obligations of Products Corporation and rank pari
passu in right of payment with all existing and future Senior Debt (as
defined in the indenture relating to the 9% Senior Notes (the
"9% Senior Notes Indenture")) of
Products Corporation, including the 12% Senior Secured Notes,
8 1/8% Senior Notes and the indebtedness under
the Credit Agreement, the 2003 Mafco Loans and the 2004 Mafco $125
million term loan, and are senior to the 8 5/8%
Senior Subordinated Notes and to all future subordinated indebtedness
of Products Corporation. The 9% Senior Notes are effectively
subordinated to outstanding indebtedness and other liabilities of
Products Corporation's subsidiaries. Interest is payable on May 1
and November 1.

The 9% Senior Notes may be redeemed at
the option of Products Corporation in whole or from time to time in
part at any time on or after November 1, 2002 at the redemption prices
set forth in the 9% Senior Notes Indenture plus accrued and
unpaid interest, if any, to the date of redemption.

Upon a
Change of Control (as defined in the 9% Senior Notes Indenture),
Products Corporation will have the option to redeem the 9%
Senior Notes in whole at a redemption price equal to the principal
amount thereof, plus accrued and unpaid interest, if any, thereon to
the date of redemption, plus the Applicable Premium (as defined in the
9% Senior Notes Indenture) and, subject to certain conditions,
each holder of the 9% Senior Notes will have the right to
require Products Corporation to repurchase all or a portion of such
holder's 9% Senior Notes at a price equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if
any, thereon to the date of repurchase.

The 9% Senior
Notes Indenture contains covenants that, among other things, limit (i)
the issuance of additional debt and redeemable stock by Products
Corporation, (ii) the incurrence of liens, (iii) the issuance of debt
and preferred stock by Products Corporation's subsidiaries, (iv)
the payment of dividends on capital stock of Products Corporation and
its subsidiaries and the redemption of capital stock of Products
Corporation and certain subordinated obligations, (v) the sale of
assets and subsidiary stock, (vi) transactions with affiliates and
(vii) consolidations, mergers and transfers of all or substantially all
Products Corporation's assets. The 9% Senior Notes
Indenture also prohibits certain restrictions on distributions from
subsidiaries. All of these limitations and prohibitions, however, are
subject to a number of important qualifications.

(d) The
8 5/8% Senior Subordinated Notes due 2008 (the
"8 5/8% Senior Subordinated
Notes") are general unsecured obligations of Products
Corporation and are (i) subordinate in right of payment to all existing
and future Senior Debt (as defined in the indenture relating to the
8 5/8% Senior Subordinated Notes (the
"8 5/8% Senior Subordinated Notes
Indenture")) of Products Corporation, including the
12% Senior Secured Notes, 9% Senior Notes, the
8 1/8% Senior Notes and the indebtedness under
the Credit Agreement, the 2003 Mafco Loans, and the 2004 Mafco $125
million term loan, (ii) pari passu in right of payment with all future
senior subordinated debt, if any, of Products Corporation and (iii)
senior in right of payment to all future subordinated debt, if any, of
Products Corporation. The 8 5/8% Senior

F-23

---

Subordinated Notes are effectively
subordinated to the outstanding indebtedness and other liabilities of
Products Corporation's subsidiaries. Interest is payable on
February 1 and August 1.

The 8 5/8%
Senior Subordinated Notes may be redeemed at the option of Products
Corporation in whole or from time to time in part at any time on or
after February 1, 2003 at the redemption prices set forth in the
8 5/8% Senior Subordinated Notes Indenture, plus
accrued and unpaid interest, if any, to the date of redemption.

Upon a Change of Control (as defined in the
8 5/8% Senior Subordinated Notes Indenture),
Products Corporation will have the option to redeem the
8 5/8% Senior Subordinated Notes in whole at a
redemption price equal to the principal amount thereof, plus accrued
and unpaid interest, if any, thereon to the date of redemption, plus
the Applicable Premium (as defined in the 8 5/8%
Senior Subordinated Notes Indenture) and, subject to certain
conditions, each holder of the 8 5/8% Senior
Subordinated Notes will have the right to require Products Corporation
to repurchase all or a portion of such holder's
8 5/8% Senior Subordinated Notes at a price
equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the date of repurchase.

The
8 5/8% Senior Subordinated Notes Indenture
contains covenants that, among other things, limit (i) the issuance of
additional debt and redeemable stock by Products Corporation, (ii) the
incurrence of liens, (iii) the issuance of debt and preferred stock by
Products Corporation's subsidiaries, (iv) the payment of
dividends on capital stock of Products Corporation and its subsidiaries
and the redemption of capital stock of Products Corporation, (v) the
sale of assets and subsidiary stock, (vi) transactions with affiliates,
(vii) consolidations, mergers and transfers of all or substantially all
of Products Corporation's assets and (viii) the issuance of
additional subordinated debt that is senior in right of payment to the
8 5/8% Senior Subordinated Notes. The
8 5/8% Senior Subordinated Notes Indenture also
prohibits certain restrictions on distributions from subsidiaries. All
of these limitations and prohibitions, however, are subject to a number
of important qualifications.

(e) On November 26, 2001, prior to
closing on the 2001 Credit Agreement, Products Corporation issued and
sold $363.0 in aggregate principal amount of Original 12% Notes
in a private placement receiving gross proceeds of $350.5. The
effective interest rate on the 12% Senior Secured Notes is
13.125%. Products Corporation used the proceeds from the
Original 12% Notes and borrowings under the 2001 Credit
Agreement to repay outstanding indebtedness under Products
Corporation's 1997 Credit Agreement and to pay fees and expenses
incurred in connection with the 2001 Debt Reduction Transactions, and
the balance was available for general corporate purposes. On June 21,
2002, the Original 12% Notes were exchanged for the new
12% Senior Secured Notes which have substantially identical
terms as the Original 12% Notes, except that the 12%
Senior Secured Notes are registered with the Commission under the
Securities Act and the transfer restrictions and registration rights
applicable to the Original 12% Notes do not apply to the
12% Senior Secured Notes.

The 12% Senior Secured
Notes were issued pursuant to an Indenture, dated as of November 26,
2001 (the "12% Notes Indenture"),
among Products Corporation, the guarantors party thereto, including
Revlon, Inc. as parent guarantor, and Wilmington Trust Company, as
trustee. The 12% Senior Secured Notes are supported by
guarantees from Revlon, Inc. and, subject to certain limited
exceptions, Products Corporation's domestic subsidiaries. The
obligations of Products Corporation under the 12% Senior Secured
Notes and the obligations under the aforementioned guarantees are
secured, on a second-priority basis, subject to certain limited
exceptions, primarily by (i) a mortgage on Products Corporation's
facility in Oxford, North Carolina; (ii) the capital stock of Products
Corporation and its domestic subsidiaries and 66% of the capital
stock of Products Corporation's and its domestic
subsidiaries' first-tier foreign subsidiaries; (iii) domestic
intellectual property and certain other domestic intangibles of
Products Corporation and its domestic subsidiaries; and (iv) domestic
inventory, accounts receivable, equipment and certain investment
property of Products Corporation and its domestic subsidiaries. Such
liens are subject to certain limitations, which among other things,
limit the ability of holders of second-priority liens from exercising
any remedies against the collateral while the Credit Agreement or any
other first-priority lien remains in effect.

The 12%
Senior Secured Notes are senior secured obligations of Products
Corporation and rank pari passu in right of payment with all existing
and future Senior Debt (as defined in the 12% Senior Secured

F-24

---

Notes Indenture) including the
8 1/8% Senior Notes, the 9% Senior Notes
and the indebtedness under the Credit Agreement, the 2003 Mafco Loans,
and the 2004 Mafco $125 million term loan, and are senior to the
8 5/8% Senior Subordinated Notes and all future
subordinated indebtedness of Products Corporation. The 12%
Senior Secured Notes are effectively subordinated to the outstanding
indebtedness and other liabilities of Products Corporation's
subsidiaries. The 12% Senior Secured Notes mature on December 1,
2005. Interest is payable on June 1 and December 1, beginning June 1,
2002.

The 12% Senior Secured Notes may be redeemed at the
option of Products Corporation in whole or in part at any time at a
redemption price equal to the principal amount thereof, plus accrued
and unpaid interest, if any to the date of redemption, plus the
Applicable Premium (as defined in the 12% Senior Secured Notes
Indenture).

Upon a Change of Control (as defined in the
12% Senior Secured Notes Indenture), subject to certain
conditions, each holder of the 12% Senior Secured Notes will
have the right to require Products Corporation to repurchase all or a
portion of such holder's 12% Senior Secured Notes at a
price equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, thereon to the date of
repurchase.

The 12% Senior Secured Notes Indenture
contains covenants that, among other things, limit (i) the issuance of
additional debt and redeemable stock by Products Corporation, (ii) the
incurrence of liens, (iii) the issuance of debt and preferred stock by
Products Corporation's subsidiaries, (iv) the payment of
dividends on capital stock of Products Corporation and its subsidiaries
and the redemption of capital stock of Products Corporation and certain
subordinated obligations, (v) the sale of assets and subsidiary stock,
(vi) transactions with affiliates and (vii) consolidations, mergers and
transfers of all or substantially all Products Corporation's
assets. The 12% Senior Secured Notes Indenture also prohibits
certain restrictions on distributions from subsidiaries. All of these
limitations and prohibitions, however, are subject to a number of
important qualifications.

The 12% Senior Secured Notes
Indenture, 8 1/8% Senior Notes Indenture, the
8 5/8% Senior Subordinated Notes Indenture and
the 9% Senior Notes Indenture contain customary events of
default for debt instruments of such type.

The
8 1/8% Senior Notes Indenture, the 9%
Senior Notes Indenture, the 8 5/8% Senior
Subordinated Notes Indenture and the 12% Senior Secured Notes
Indenture each include a cross acceleration provision which provides
that it shall be an event of default under each such indenture if any
debt (as defined in each such indenture) of Products Corporation or any
of its significant subsidiaries (as defined in each such indenture),
and in the case of the 12% Senior Secured Notes Indenture,
Revlon, Inc., is not paid within any applicable grace period after
final maturity or is accelerated by the holders of such debt because of
a default and the total principal amount of the portion of such debt
that is unpaid or accelerated exceeds $25.0 and such default continues
for 10 days after notice from the trustee under each such indenture. If
any such event of default occurs, the trustee under each such indenture
or the holders of at least 25% in principal amount of the
outstanding notes under each such indenture may declare all such notes
to be due and payable immediately, provided that the holders of a
majority in aggregate principal amount of the outstanding notes under
each such indenture may, by notice to the trustee, waive any such
default or event of default and its consequences under each such
indenture.

(f) During 2003, MacAndrews Holdings made available a
$100 million term loan to Products Corporation (the "Mafco
$100 million term loan"). The Mafco $100 million term loan
has a final maturity date of December 1, 2005 and interest on such loan
of 12.0% is not payable in cash, but accrues and is added to the
principal amount each quarter and will be paid in full at final
maturity. At December 31, 2003, the Company had $106.6 outstanding
under the Mafco $100 million term loan (including accrued interest of
$6.6).(See "Subsequent Events" for
important information concerning the Mafco $100 million term
loan).

Additionally, MacAndrews Holdings also provided
Products Corporation with an additional $40 line of credit during 2003,
which amount was originally to increase to $65 on January 1, 2004 (the
"Mafco $65 million line of credit") (the
Mafco $100 million term loan and the Mafco $65 million line of credit,
each as amended, are referred to as the "2003 Mafco
Loans" and the Rights Offering and the 2003 Mafco

F-25

---

Loans are referred to as the
"2003 M&F Investments") and which was
originally to be available to Products Corporation through December 31,
2004, provided that the Mafco $100 million term loan is fully drawn and
the Company had consummated the Rights Offering. The Mafco $65 million
line of credit bears interest payable in cash at a rate of the lesser
of (i) 12.0% and (ii) 0.25% less than the rate payable
from time to time on Eurodollar loans under Products
Corporation's Credit Agreement (which rate was 8.00% as of
December 31, 2003 and would be 8.25% after the 2004 Bank
Amendment). However, in connection with the recent 2004 Bank Amendment
of Products Corporation's Credit Agreement, Products Corporation
and MacAndrews Holdings agreed to extend the maturity of the Mafco $65
million line of credit to June 30, 2005 and to subject the availability
of funds under such line of credit to the condition that an aggregate
principal amount of $100 be drawn under the 2004 Mafco $125 million
term loan. At December 31, 2003, the Company had $15.5 outstanding
under the Mafco $65 million line of credit.

In December 2003,
Revlon, Inc. announced that its Board of Directors approved two loans
from MacAndrews Holdings to provide up to $100 million (the
"2004 M&F Loan") and an additional $25
million (the "$25 million M&F Loan"), if
needed, to help fund its continued implementation and refinement of the
Company's plan. Revlon, Inc. also announced in December 2003 that
it had begun exploring the Debt Reduction Transactions.(See
"Subsequent Events" for important information
concerning the Debt Reduction Transactions. The 2004 M&F Loan
and $25 million M&F Loan were consolidated into one term loan
agreement (hereinafter referred to as the "2004 Mafco $125
million term loan"). The 2004 Mafco $125 million term loan
is a senior unsecured term loan at an interest rate of 12% per
annum and which is on substantially the same terms as the Mafco $100
million term loan (as hereinafter defined) provided by MacAndrews &
Forbes earlier in 2003, including that interest on such loans is not
payable in cash, but will accrue and be added to the principal amount
each quarter and be paid in full at final maturity on December 1, 2005,
provided that the final $25 of such loan may be repaid at the option of
the Company prior to December 1, 2005. (See "Subsequent
Events" for important information concerning the 2004
Mafco $125 million term loan).

During 1992, Holdings made an
advance of $25.0 to Products Corporation, evidenced by subordinated
noninterest-bearing demand notes. The notes were subsequently adjusted
by offsets and additional amounts loaned by Holdings to Products
Corporation. At December 31, 2003, the balance of $24.1 is evidenced by
noninterest-bearing promissory notes payable to Holdings that are
subordinated to Products Corporation's obligations under the
Credit Agreement.

The aggregate amounts of long-term debt
maturities (at December 31, 2003), in the years 2004 through 2008 are
nil, $719.8, $499.8, nil and $649.9, respectively.

The Company
expects that operating revenues, cash on hand, and funds available for
borrowing under the Credit Agreement, the Mafco $65 million line of
credit, and the 2004 Mafco $125 million term loan and other permitted
lines of credit will be sufficient to enable the Company to cover its
operating expenses, including cash requirements in connection with the
Company's operations, the continued implementation of, and
refinement to, the Company's plan, cash requirements in
connection with the Company's restructuring programs referred to
above and the Company's debt service requirements for 2004. The
U.S. mass-market color cosmetics category during 2003 was softer than
expected. Despite this softness in the U.S. mass-market color cosmetics
category, based upon the Company's belief that its continued
implementation of its plan is proving effective, the Company intends to
continue to support its plan, including for brand support. To help fund
the costs and expenses of the continued implementation of the
Company's plan, in July 2003, MacAndrews Holdings agreed to make
available to Products Corporation in 2003 the full $65 under the Mafco
$65 million line of credit, $25 of which was scheduled to become
available on January 1, 2004. Additionally, MacAndrews & Forbes has
provided Products Corporation with the 2004 Mafco $125 million term
loan, which is on terms that are substantially the same as the Mafco
$100 million term loan. The Mafco $65 million line of credit and the
2004 Mafco $125 million term loan are intended to continue to help fund
the continued implementation of, and refinement to, the Company's
plan and to decrease the risk that would otherwise exist if the Company
were to fail to meet its debt and ongoing obligations as they become
due in 2004. However, there can be no assurance that such funds will be
sufficient to meet the Company's cash requirements on a
consolidated basis. If the Company's anticipated level of revenue
growth is not achieved because, for example, of decreased

F-26

---

consumer spending in response to weak
economic conditions or weakness in the cosmetics category, increased
competition from the Company's competitors or the Company's
marketing plans are not as successful as anticipated, or if the
Company's expenses associated with the continued implementation
of, and refinement to, the Company's plan exceed the anticipated
level of expenses, the Company's current sources of funds may be
insufficient to meet the Company's cash requirements.
Additionally, in the event of a decrease in demand for Products
Corporation's products or reduced sales or lack of increases in
demand and sales as a result of the continued implementation of, and
refinement to, the Company's plan, such development, if
significant, could reduce Products Corporation's operating
revenues and could adversely affect Products Corporation's
ability to achieve certain financial covenants under the Credit
Agreement and in such event the Company could be required to take
measures, including reducing discretionary spending. If the Company is
unable to satisfy such cash requirements from these sources, the
Company could be required to adopt one or more alternatives, such as
delaying the implementation of or revising aspects of its plan,
reducing or delaying purchases of wall displays or advertising or
promotional expenses, reducing or delaying capital spending, delaying,
reducing or revising restructuring programs, restructuring
indebtedness, selling assets or operations, seeking additional capital
contributions or loans from MacAndrews & Forbes, the
Company's other affiliates and/or third parties, selling
additional equity or debt securities of Revlon, Inc. or reducing other
discretionary spending. The Company has substantial debt maturing in
2005, which will require refinancing, consisting of $246.3 (assuming
the maximum amount is borrowed) under the Credit Agreement and $363.0
of 12% Senior Secured Notes, as well as any amounts borrowed
under the Mafco $65 million line of credit and the 2004 Mafco $125
million term loan. (See "Subsequent
Events" for important information).

Products
Corporation was not in compliance with the EBITDA and leverage ratio
covenants at December 31, 2003. The Company expects that Products
Corporation will need to seek a further amendment to the Credit
Agreement or a waiver of the EBITDA and leverage ratio covenants under
the Credit Agreement prior to the expiration of the existing waiver on
January 31, 2005 because the Company does not expect that its operating
results, including after giving effect to various actions under the
Company's plan, will allow Products Corporation to satisfy those
covenants for the four consecutive fiscal quarters ending December 31,
2004. The minimum EBITDA required to be maintained by Products
Corporation under the Credit Agreement was $230 for each of the four
consecutive fiscal quarters ending on December 31, 2003 (which covenant
was waived through January 31, 2004 and thereafter eliminated) and $250
for any four consecutive fiscal quarters ending December 31, 2004 and
thereafter (which covenant was waived through January 31, 2005). The
leverage ratio covenant under the Credit Agreement will permit a
maximum ratio of 1.10:1.00 for any four consecutive fiscal quarters
ending on or after December 31, 2003 (which limit was eliminated for
the four quarters ending March 31, 2004, June 30, 2004 and September
30, 2004 and waived through January 31, 2005 for the four fiscal
quarters ending December 31, 2004). In addition, after giving effect to
the 2004 Bank Amendment, the Credit Agreement also contains a $20
minimum liquidity covenant. While the Company expects that Products
Corporation's bank lenders will consent to such amendment or
waiver, there can be no assurance that they will or that they will do
so on terms that are favorable to the Company. If the Company is unable
to obtain such amendment or waiver, it could be required to refinance
the Credit Agreement or repay it with proceeds from the sale of assets
or operations, or additional capital contributions and/or loans from
MacAndrews & Forbes, the Company's other affiliates and/or
third parties or the sale of additional equity or debt securities of
Revlon, Inc. In the event that Products Corporation were unable to
obtain such a waiver or amendment and Products Corporation were not
able to refinance or repay the Credit Agreement, Products
Corporation's inability to meet the financial covenants for the
four consecutive fiscal quarters ending December 31, 2004 would
constitute an event of default under Products Corporation's
Credit Agreement, which would permit the bank lenders to accelerate the
Credit Agreement, which in turn would constitute an event of default
under the indentures governing Products Corporation's debt if the
amount accelerated exceeds $25.0 and such default remains uncured
within 10 days of notice from the trustee under the applicable
indenture. Further, the lenders under Products Corporation's
Credit Agreement could proceed against the collateral securing that
indebtedness. If these lenders were to foreclose upon this collateral,
which includes the capital stock of Products Corporation, the value of
Revlon, Inc.'s Common Stock would be substantially diminished or
eliminated.

F-27

---

There can be no assurance that the
Company would be able to take any of the actions referred to in the
preceding two paragraphs because of a variety of commercial or market
factors or constraints in the Company's debt instruments,
including, for example, Products Corporation's inability to reach
agreement with its bank lenders on refinancing terms that are
acceptable to the Company before the waiver of its financial covenants
expires on January 31, 2005, market conditions being unfavorable for an
equity or debt offering, or that the transactions may not be permitted
under the terms of the Company's various debt instruments then in
effect, because of restrictions on the incurrence of debt, incurrence
of liens, asset dispositions and related party transactions. In
addition, such actions, if taken, may not enable the Company to satisfy
its cash requirements if the actions do not generate a sufficient
amount of additional capital.

Revlon, Inc., as a holding
company, will be dependent on the earnings and cash flow of, and
dividends and distributions from, Products Corporation to pay its
expenses and to pay any cash dividend or distribution on Revlon,
Inc.'s Class A Common Stock that may be authorized by the Board
of Directors of Revlon, Inc. The terms of the Credit Agreement, the
2003 Mafco Loans, the 2004 Mafco $125 million term loan, the 12%
Senior Secured Notes, the 8 5/8% Senior
Subordinated Notes, the 8 1/8% Senior Notes and
the 9% Senior Notes generally restrict Products Corporation from
paying dividends or making distributions, except that Products
Corporation is permitted to pay dividends and make distributions to
Revlon, Inc., among other things, to enable Revlon, Inc. to pay
expenses incidental to being a public holding company, including, among
other things, professional fees such as legal and accounting fees,
regulatory fees such as Commission filing fees and other miscellaneous
expenses related to being a public holding company and, subject to
certain limitations, to pay dividends or make distributions in certain
circumstances to finance the purchase by Revlon, Inc. of its Class A
Common Stock in connection with the delivery of such Class A Common
Stock to grantees under the Revlon, Inc. Amended and Restated 1996
Stock Plan (the "Amended Stock Plan").

10. Guarantor Condensed Consolidating Financial Data

Products Corporation's 12% Senior Secured Notes are
jointly and severally, fully and unconditionally guaranteed by the
domestic subsidiaries of Products Corporation that guarantee Products
Corporation's 2001 Credit Agreement (the "Guarantor
Subsidiaries") (subsidiaries of Products Corporation that
do not guarantee the 12% Senior Secured Notes are referred to as
the "Non-Guarantor Subsidiaries"). The
Supplemental Guarantor Condensed Consolidating Financial Data presented
below presents the balance sheets, statements of operations and
statements of cash flow data (i) for Products Corporation and the
Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a
consolidated basis (which is derived from Products Corporation's
historical reported financial information); (ii) for Products
Corporation as the "Parent Company," alone
(accounting for its Guarantor Subsidiaries and the Non-Guarantor
Subsidiaries on an equity basis under which the investments are
recorded by each entity owning a portion of another entity at cost,
adjusted for the applicable share of the subsidiary's cumulative
results of operations, capital contributions and distributions, and
other equity changes); (iii) for the Guarantor Subsidiaries alone; and
(iv) for the Non-Guarantor Subsidiaries alone. Additionally, Products
Corporation's 12% Senior Secured Notes are fully and
unconditionally guaranteed by Revlon, Inc. The audited consolidating
condensed balance sheets, the audited consolidating condensed
statements of operations and the audited consolidating condensed
statements of cash flow for Revlon, Inc. have not been included in the
accompanying Supplemental Guarantor Condensed Consolidating Financial
Data as such information is not materially different from those of
Products Corporation.

F-28

---

Condensed
Consolidating Balance Sheets As of December 31, 2003 (dollars
in millions)

ASSETS

Consolidated

Eliminations

Parent
Company

Guarantor
Subsidiaries

Non-Guarantor
SubsidiariesCurrent
assets

$
428.3


$
—


$
211.1


$
31.1


$
186.1Intercompany
receivables


—



(1,964.1
)


1,225.4



532.9



205.8Investment
in
subsidiaries


—



270.7



(249.4
)


(86.3
)


65.0Property,
plant and equipment,
net


132.1



—



113.3



3.8



15.0Other
assets


144.2



—



116.4



8.1



19.7Goodwill,
net


186.1



—



156.6



2.1



27.4Total
assets

$
890.7


$
(1,693.4
)

$
1,573.4


$
491.7


$
519.0LIABILITIES
AND STOCKHOLDER'S
DEFICIENCYCurrent
liabilities

$
447.4


$
—


$
301.6


$
28.9


$
116.9Intercompany
payables


—



(1,964.1
)


859.5



748.1



356.5Long-term
debt


1,869.5



—



1,866.5



1.7



1.3Other
long-term
liabilities


301.0



—



273.0



20.6



7.4Total
liabilities


2,617.9



(1,964.1
)


3,300.6



799.3



482.1Stockholder's
(deficiency)
equity


(1,727.2
)


270.7



(1,727.2
)


(307.6
)


36.9Total
liabilities and stockholder's (deficiency)
equity

$
890.7


$
(1,693.4
)

$
1,573.4


$
491.7


$
519.0


Condensed
Consolidating Statement of Operations For the Year Ended December
31, 2003 (dollars in
millions)

Consolidated

Eliminations

Parent
Company

Guarantor Subsidiaries

Non-
Guarantor SubsidiariesNet
sales

$
1,299.3


$
(117.7
)

$
818.4


$
178.3


$
420.3Cost
of
sales


501.1



(117.7
)


288.6



142.7



187.5Gross
profit


798.2



—



529.8



35.6



232.8Selling,
general and administrative
expenses


769.7



—



530.7



39.2



199.8Restructuring
costs and other,
net


6.0



—



0.9



3.5



1.6Operating
income
(loss)


22.5



—



(1.8
)


(7.1
)


31.4Other
expenses
(income):Interest
expense,
net


171.8



—



171.3



0.4



0.1Miscellaneous,
net


4.4



—



(22.2
)


(14.6
)


41.2Equity
in earnings of
subsidiaries


—



(26.2
)


9.7



23.0



(6.5
)Other
expenses,
net


176.2



(26.2
)


158.8



8.8



34.8Loss
before income
taxes


(153.7
)


26.2



(160.6
)


(15.9
)


(3.4
)Provision
(benefit) for income
taxes


0.3



—



(6.6
)


2.5



4.4Net
loss

$
(154.0
)

$
26.2


$
(154.0
)

$
(18.4
)

$
(7.8
)


F-29

---

Condensed Consolidating Statement of Cash
FlowFor the Year Ended December 31, 2003 (dollars in
millions)

Consolidated

Eliminations

Parent
Company

Guarantor
Subsidiaries

Non-Guarantor
SubsidiariesCASH FLOWS FROM OPERATING
ACTIVITIES:Net
cash (used for) provided by operating
activities

$
(166.4
)

$
—


$
(166.9
)

$
5.5


$
(5.0
)CASH
FLOWS FROM INVESTING
ACTIVITIES:Capital
expenditures


(28.6
)


—



(23.8
)


(2.5
)


(2.3
)Proceeds
from the sale of brand and certain
assets


5.3



—



—



—



5.3Net
cash (used for) provided by investing
activities


(23.3
)


—



(23.8
)


(2.5
)


3.0CASH
FLOWS FROM FINANCING
ACTIVITIES:Net
decrease in short-term borrowings – third
parties


(1.6
)


—



—



(0.8
)


(0.8
)Proceeds
from the issuance of long-term debt – third
parties


233.1



—



223.8



7.9



1.4Repayment
of long-term debt – third
parties


(239.3
)


—



(225.3
)


(13.0
)


(1.0
)Proceeds
from the issuance of long-term debt –
affiliates


178.1



—



178.1



—



—Repayment
of long-term debt –
affiliates


(62.6
)


—



(62.6
)


—



—Capital
contribution from direct
parent


46.9



—



46.9



—



—Payment
of financing
costs


(3.5
)


—



(3.5
)


—



—Net
cash provided by (used for) financing
activities


151.1



—



157.4



(5.9
)


(0.4
)Effect
of exchange rate changes on cash and cash
equivalents


9.3



—



0.3



0.1



8.9Net
decrease in cash and cash
equivalents


(29.3
)


—



(33.0
)


(2.8
)


6.5Cash
and cash equivalents at beginning of
period


85.8



—



28.1



7.8



49.9Cash
and cash equivalents at end of
period

$
56.5


$
—


$
(4.9
)

$
5.0


$
56.4


Condensed
Consolidating Balance Sheets As of December 31, 2002 (dollars
in
millions)

ASSETS

Consolidated

Eliminations

Parent
Company

Guarantor
Subsidiaries

Non-Guarantor
SubsidiariesCurrent
assets

$
478.7


$
—


$
256.5


$
35.8


$
186.4Intercompany
receivables


—



(1,526.4
)


850.7



471.5



204.2Investment
in
subsidiaries


—



277.6



(228.1
)


(107.8
)


58.3Property,
plant and equipment,
net


133.4



—



118.1



2.9



12.4Other
assets


134.0



—



107.8



4.5



21.7Goodwill,
net


185.9



—



156.6



2.1



27.2Total
assets

$
932.0


$
(1,248.8
)

$
1,261.6


$
409.0


$
510.2LIABILITIES
AND STOCKHOLDER'S
DEFICIENCYCurrent
liabilities

$
496.8


$
—


$
355.5


$
30.9


$
110.4Intercompany
payables


—



(1,526.4
)


501.0



645.9



379.5Long-term
debt


1,750.1



—



1,742.9



6.5



0.7Other
long-term
liabilities


325.0



—



302.1



15.5



7.4Total
liabilities


2,571.9



(1,526.4
)


2,901.5



698.8



498.0Stockholder's
(deficiency)
equity


(1,639.9
)


277.6



(1,639.9
)


(289.8
)


12.2Total
liabilities and stockholder's (deficiency)
equity

$
932.0


$
(1,248.8
)

$
1,261.6


$
409.0


$
510.2


F-30

---

Condensed Consolidating Statement of
Operations For the Year Ended December 31, 2002 (dollars in
millions)

Consolidated

Eliminations

Parent
Company

Guarantor
Subsidiaries

Non-Guarantor
SubsidiariesNet
sales

$
1,119.4


$
(134.4
)

$
697.4


$
187.9


$
368.5Cost
of
sales


503.7



(134.4
)


297.3



156.7



184.1Gross
profit


615.7



—



400.1



31.2



184.4Selling,
general and administrative
expenses


711.1



—



483.3



37.3



190.5Restructuring
costs and other,
net


13.6



—



8.0



0.3



5.3Operating
loss


(109.0
)


—



(91.2
)


(6.4
)


(11.4
)Other
expenses
(income):Interest
expense,
net


156.9



—



155.7



0.5



0.7Loss
on sale of brand and facilities,
net


1.0



—



—



—



1.0Miscellaneous,
net


10.3



—



(23.5
)


(5.4
)


39.2Equity
in earnings of
subsidiaries


—



(139.4
)


61.7



78.7



(1.0
)Other
expenses,
net


168.2



(139.4
)


193.9



73.8



39.9Loss
before income
taxes


(277.2
)


139.4



(285.1
)


(80.2
)


(51.3
)Provision
(benefit) for income
taxes


4.6



—



(3.3
)


3.3



4.6Net
loss

$
(281.8
)

$
139.4


$
(281.8
)

$
(83.5
)

$
(55.9
)


Condensed
Consolidating Statement of Cash FlowFor the Year Ended December
31, 2002(dollars in millions)

Consolidated

Eliminations

Parent
Company

Guarantor
Subsidiaries

Non-Guarantor SubsidiariesCASH FLOWS FROM OPERATING
ACTIVITIES:Net cash (used
for) provided by operating
activities

$
(112.3
)

$
—


$
(113.3
)

$
(11.0
)

$
12.0CASH
FLOWS FROM INVESTING
ACTIVITIES:Capital
expenditures


(16.0
)


—



(13.6
)


—



(2.4
)Proceeds
from the sale of brand and certain
assets


1.8



—



1.8



—



—Net
cash used for investing
activities


(14.2
)


—



(11.8
)


—



(2.4
)CASH
FLOWS FROM FINANCING ACTIVITIES:Net
increase in short-term borrowings – third
parties


8.0



—



0.1



2.8



5.1Proceeds
from the issuance of long-term debt – third
parties


175.6



—



155.2



14.2



6.2Repayment
of long-term debt – third
parties


(73.0
)


—



(57.2
)


(8.4
)


(7.4
)Payment
of financing
costs


(0.3
)


—



(0.3
)


—



—Net
cash provided by financing
activities


110.3



—



97.8



8.6



3.9Effect
of exchange rate changes on cash and cash
equivalents


(1.3
)


—



0.3



0.1



(1.7
)Net
(decrease) increase in cash and cash
equivalents


(17.5
)


—



(27.0
)


(2.3
)


11.8Cash
and cash equivalents at beginning of
period


103.3



—



55.1



10.1



38.1Cash
and cash equivalents at end of
period

$
85.8


$
—


$
28.1


$
7.8


$
49.9


F-31

---

Condensed Consolidating Statement of
Operations For the Year Ended December 31, 2001 (dollars in
millions)

Non-Parent

Guarantor

GuarantorConsolidated

Eliminations

Company

Subsidiaries

SubsidiariesNet
sales

$
1,277.6


$
(132.9
)

$
800.6


$
155.6


$
454.3Cost
of
sales


544.2



(132.9
)


323.8



121.5



231.8Gross
profit


733.4



—



476.8



34.1



222.5Selling,
general and administrative
expenses


676.6



—



432.6



36.0



208.0Restructuring
costs and other,
net


38.1



—



25.4



1.4



11.3Operating
income
(loss)


18.7



—



18.8



(3.3
)


3.2Other
expenses (income):Interest
expense,
net


137.8



—



132.4



1.6



3.8Loss
(gain) on sale of, brand and facilities,
net


14.4



—



—



(0.4
)


14.8Miscellaneous,
net


11.1



—



(17.0
)


(12.7
)


40.8Loss
on early extinguishment of
debt


3.6



—



3.6



—



—Equity
in earnings of
subsidiaries


—



(102.4
)


51.9



49.0



1.5Other
expenses,
net


166.9



(102.4
)


170.9



37.5



60.9Loss
before income
taxes


(148.2
)


102.4



(152.1
)


(40.8
)


(57.7
)Provision
for income
taxes


4.0



—



0.1



2.6



1.3Net
loss

$
(152.2
)

$
102.4


$
(152.2
)

$
(43.4
)

$
(59.0
)


Condensed
Consolidating Statement of Cash FlowFor the Year Ended December
31, 2001 (dollars in millions)

Non-Parent

Guarantor

GuarantorConsolidated

Eliminations

Company

Subsidiaries

SubsidiariesCASH
FLOWS FROM OPERATING ACTIVITIES:Net cash (used for)
provided by operating
activities

$
(86.5
)

$
(1.0
)

$
(42.0
)

$
11.5


$
(55.0
)CASH
FLOWS FROM INVESTING ACTIVITIES:Capital
expenditures


(15.1
)


—



(13.0
)


(1.7
)


(0.4
)Proceeds
from the sale of brand and certain
assets


102.3



—



6.7



56.8



38.8Net
cash provided by (used for) investing
activities


87.2



—



(6.3
)


55.1



38.4CASH
FLOWS FROM FINANCING ACTIVITIES:Net (decrease)
increase in short-term borrowings – third
parties


(11.3
)


—



—



1.6



(12.9
)Proceeds
from the issuance of long-term debt – third
parties


698.5



—



657.5



22.9



18.1Repayment
of long-term debt – third
parties


(614.0
)


—



(520.3
)


(31.3
)


(62.4
)Intercompany
dividends and net change in intercompany
obligations


—



1.0



(17.6
)


(52.6
)


69.2Net
distribution from
affiliate


(1.0
)


—



(1.0
)


—



—Payment
of financing
costs


(25.9
)


—



(25.9
)


—



—Net
cash provided by (used for) financing
activities


46.3



1.0



92.7



(59.4
)


12.0Effect
of exchange rate changes on cash and cash
equivalents


—



—



—



—



—Net
increase (decrease) in cash and cash
equivalents


47.0



—



44.4



7.2



(4.6
)Cash
and cash equivalents at beginning of
period


56.3



—



10.7



2.9



42.7Cash
and cash equivalents at end of
period

$
103.3


$
—


$
55.1


$
10.1


$
38.1


F-32

---

11.    Financial Instruments

The fair value of the Company's long-term debt is based on the
quoted market prices for the same issues or on the current rates
offered to the Company for debt of the same remaining maturities. The
estimated fair value of long-term debt (excluding amounts due to
affiliates of $24.1) at December 31, 2003 and 2002, respectively, was
approximately $518.2 and $513.9 less than the carrying values of
$1,845.4 and $1,726.0, respectively.

Products Corporation also
maintains standby and trade letters of credit with certain banks for
various corporate purposes under which Products Corporation is
obligated, of which approximately $22.3 and $25.3 (including amounts
available under credit agreements in effect at that time) were
maintained at December 31, 2003 and 2002, respectively. Included in
these amounts is $10.5, as of both dates, in standby letters of credit,
which support Products Corporation's self-insurance programs. The
estimated liability under such programs is accrued by Products
Corporation.

The carrying amounts of cash and cash equivalents,
marketable securities, trade receivables, notes receivable, accounts
payable and short-term borrowings approximate their fair values.

12.    Income Taxes

In June 1992, Holdings, Revlon, Inc.
and certain of its subsidiaries, and Mafco Holdings entered into a tax
sharing agreement (as subsequently amended, the "Tax
Sharing Agreement"), pursuant to which Mafco Holdings has
agreed to indemnify Revlon, Inc. against federal, state or local income
tax liabilities of the consolidated or combined group of which Mafco
Holdings (or a subsidiary of Mafco Holdings other than Revlon, Inc. or
its subsidiaries) is the common parent for taxable periods beginning on
or after January 1, 1992 during which Revlon, Inc. or a subsidiary of
Revlon, Inc. is a member of such group. Pursuant to the Tax Sharing
Agreement, for all taxable periods beginning on or after January 1,
1992, Revlon, Inc. will pay to Holdings, amounts equal to the taxes
that Revlon, Inc. would otherwise have to pay if it were to file
separate federal, state or local income tax returns (including any
amounts determined to be due as a result of a redetermination arising
from an audit or otherwise of the consolidated or combined tax
liability relating to any such period which is attributable to Revlon,
Inc.), except that Revlon, Inc. will not be entitled to carry back any
losses to taxable periods ending prior to January 1, 1992. No payments
are required by Revlon, Inc. if and to the extent Products Corporation
is prohibited under the Credit Agreement from making tax sharing
payments to Revlon, Inc. The Credit Agreement prohibits Products
Corporation from making such tax sharing payments other than in respect
of state and local income taxes. Since the payments to be made under
the Tax Sharing Agreement will be determined by the amount of taxes
that Revlon, Inc. would otherwise have to pay if it were to file
separate federal, state or local income tax returns, the Tax Sharing
Agreement will benefit Mafco Holdings to the extent Mafco Holdings can
offset the taxable income generated by Revlon, Inc. against losses and
tax credits generated by Mafco Holdings and its other subsidiaries. The
Tax Sharing Agreement was amended, effective as of January 1, 2001, to
eliminate a contingent payment to Revlon, Inc. under certain
circumstances in return for a $10 note with interest at 12% and
interest and principal payable by Mafco Holdings on December 31, 2005.
As a result of net operating tax losses and prohibitions under the
Credit Agreement there were no federal tax payments or payments in lieu
of taxes pursuant to the Tax Sharing Agreement for 2003, 2002 or 2001.
The Company had a liability of $0.9 to Holdings in respect of
alternative minimum taxes for 1997 under the Tax Sharing Agreement.
However, as a result of tax legislation enacted in the first quarter of
2002, the Company was able to recognize tax benefits of $0.9 in 2002,
which completely offset this liability.

Pursuant to the asset
transfer agreement referred to in Note 15, Products Corporation assumed
all tax liabilities of Holdings other than (i) certain income tax
liabilities arising prior to January 1, 1992 to the extent such
liabilities exceeded reserves on Holdings' books as of January 1,
1992 or were not of the nature reserved for and (ii) other tax
liabilities to the extent such liabilities are related to the business
and assets retained by Holdings. During the second quarter of 2003, the
Company resolved various tax audits, which resulted in a tax benefit of
$13.9, of which $6.9 was recorded directly to capital deficiency since
it relates to liabilities assumed by Products Corporation in connection
with the transfer agreements related to Products Corporation's
formation in 1992 (See Note 15).

F-33

---

The Company's loss before income
taxes and the applicable provision (benefit) for income taxes are as
follows:

Year
Ended December
31,2003

2002

2001Loss before income
taxes:Domestic

$
(136.5
)

$
(213.0
)

$
(83.2
)Foreign


(16.8
)


(68.7
)


(66.4
)$
(153.3
)

$
(281.7
)

$
(149.6
)Provision
(benefit) for income
taxes:Federal

$
(4.4
)

$
(0.9
)

$
—State
and
local


0.4



0.4



0.4Foreign


4.5



5.3



3.7$
0.5


$
4.8


$
4.1Current

$
8.3


$
8.0


$
7.8Deferred


1.9



(1.2
)


(0.1
)Benefits
of operating loss
carryforwards


(1.9
)


(2.0
)


(3.6
)Taxes
previously accrued and
reversed


(7.8
)


—



—$
0.5


$
4.8


$
4.1


The
effective tax rate on loss before income taxes is reconciled to the
applicable statutory federal income tax rate as
follows:

Year
Ended December
31,2003

2002

2001Statutory federal income tax rate


(35.0)
%


(35.0)
%


(35.0
)%State and local
taxes, net of federal income tax
benefit


0.2



0.1



0.2Foreign
and U.S. tax effects attributable to operations outside the
U.S


2.1



(4.1
)


0.5Nondeductible
amortization
expense


—



—



1.4Change
in valuation
allowance


38.1



44.1



29.2Sale
of
businesses


—



(3.1
)


9.7Reversal
of income taxes previously
accrued


(5.1
)


—



—Other


—



(0.3
)


(3.2
)Effective
rate


0.3
%


1.7
%


2.8
%


F-34

---

The tax effects of temporary differences
that give rise to significant portions of the deferred tax assets and
deferred tax liabilities at December 31, 2003 and 2002 are presented
below:

December
31,2003

2002Deferred
tax assets:Accounts receivable,
principally due to doubtful
accounts

$
2.2


$
5.0Inventories


14.9



18.9Net
operating loss carryforwards –
domestic


322.3



266.1Net operating
loss carryforwards –
foreign


135.5



122.6Accruals and
related reserves


2.9



5.9Employee
benefits


70.1



67.3State and local
taxes


12.6



12.2Advertising, sales
discounts and returns and coupon
redemptions


35.7



53.5Capital loss
carryover


7.3



7.8Deferred interest
expense


28.5



9.7Other


30.5



34.2Total
gross deferred tax
assets


662.5



603.2Less
valuation
allowance


(628.0
)


(569.2
)Net
deferred tax
assets


34.5



34.0Deferred
tax liabilities:Plant, equipment and other
assets


(27.0
)


(25.8
)Other


(2.4
)


(3.2
)Total
gross deferred tax
liabilities


(29.4
)


(29.0
)Net
deferred tax
assets

$
5.1


$
5.0


In
assessing the recoverability of its deferred tax assets, management
considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment. Based upon the
level of historical taxable income for certain international markets
and projections for future taxable income over the periods in which the
deferred tax assets are deductible, management believes it is more
likely than not that the Company will realize the benefits of certain
deductible differences existing at December 31, 2003.

The
valuation allowance increased by $58.8 during 2003 and increased by
$117.4 during 2002.

During 2003, 2002 and 2001, certain of the
Company's foreign subsidiaries used operating loss carryforwards
to credit the current provision for income taxes by $1.9, $2.0, and
$3.6, respectively. Certain other foreign operations generated losses
during 2003, 2002 and 2001 for which the potential tax benefit was
reduced by a valuation allowance. At December 31, 2003, the Company had
tax loss carryforwards of approximately $1,349.6 of which $920.9 are
domestic and $428.7 are foreign, and which expire in future years as
follows: 2004-$29.1; 2005-$59.2; 2006-$52.6 2007-$46.0; 2008 and
beyond-$982.7; and unlimited-$180.0. The Company could receive the
benefit of such tax loss carryforwards only to the extent it has
taxable income during the carryforward periods in the applicable tax
jurisdictions. In addition, based upon certain factors, including the
amount and nature of gains or losses recognized by Mafco Holdings and
its other subsidiaries included in Mafco Holdings' consolidated
federal income tax return, the amount of net operating loss
carryforwards attributable to Mafco Holdings and such other
subsidiaries and the amounts of alternative minimum tax liability of
Mafco Holdings and such other subsidiaries, pursuant to the provisions
of the Internal Revenue Service's Consolidated Income Tax
Regulations, all or a portion of the domestic operating loss
carryforwards may not be available to the Company should the Company
cease being a member of Mafco Holdings' consolidated federal
income tax return at any time in the future. In the event Products
Corporation effects a reduction of debt through the issuance of
additional equity

F-35

---

securities of Revlon, Inc. in the Debt
Reduction Transactions and such issuance results in Revlon, Inc. no
longer being part of the affiliated group for U.S. tax purposes of
which Mafco Holdings is the common parent, Revlon, Inc. will be
required to file separate tax returns for U.S. federal tax purposes. It
is impossible to estimate accurately the amount of consolidated net
operating losses of the group ("CNOLs") that
will be allocated to the Company if the Company and its U.S.
subsidiaries cease to be members of the Mafco Holdings consolidated
group as of the end of the day on which the Exchange Offers close
because various factors could increase or decrease or eliminate these
amounts before that time. These factors include, but are not limited
to, the actual date that the Exchange Offers close and the amount and
nature of the income, gains or losses that the Company and its U.S.
subsidiaries recognize in the period from January  1, 2004,
through the day on which the Exchange Offers close. Furthermore, the
amount and nature of the income, gains or losses that the other members
of the Mafco Holdings consolidated group recognize in the 2004 taxable
year will also determine the amount of CNOLs that will be allocated to
the Company because any CNOLs are first used to offset the taxable
income of the Mafco Holdings group for the entire consolidated return
year ending December  31, 2004. Only the amount of any CNOLs that
the Mafco Holdings consolidated group does not absorb will be available
to be allocated to the Company and its U.S. subsidiaries for its
taxable years beginning on the day after the Exchange Offers close.
This may significantly reduce, or even eliminate, the amount of CNOLs
available to the Company and its U.S. subsidiaries. Subject to the
foregoing, it is estimated that Revlon, Inc. would have approximately
$330 in U.S. federal net operating losses and nil in alternative
minimum tax losses available to it if such deconsolidation were to
occur at March 31, 2004.

Appropriate U.S. and foreign income
taxes have been accrued on foreign earnings that have been or are
expected to be remitted in the near future. Unremitted earnings of
foreign subsidiaries which have been, or are currently intended to be,
permanently reinvested in the future growth of the business are nil at
December 31, 2003, excluding those amounts which, if remitted in the
near future, would not result in significant additional taxes under tax
statutes currently in effect.

13.    Post-retirement
Benefits

Pension:

A substantial portion of the
Company's employees in the U.S. are covered by defined benefit
pension plans. The Company uses September 30 as its measurement date
for plan obligations and assets.

Other Post-retirement
Benefits:

The Company also has sponsored an unfunded retiree
benefit plan, which provides death benefits payable to beneficiaries of
a limited number of employees and former employees. Participation in
this plan is limited to participants enrolled as of December 31, 1993.
The Company also administers a medical insurance plan on behalf of
Holdings, the cost of which has been apportioned to Holdings. The
Company uses September 30 as its measurement date for plan obligations
and assets.

The Medicare Act became law in December 2003 and
introduced both a Medicare prescription-drug benefit and a federal
subsidy to sponsors of retiree health-care plans that provide a benefit
at least "actuarially equivalent" to the
Medicare benefit. The Company's other postretirement benefit
plans do provide for such prescription-drug benefits. The Company has
made a one-time election to defer accounting for the economic effects
of the Medicare Act, as permitted by FASB Staff Position 106-1. The
FASB plans to issue authoritative guidance on the accounting for the
subsidies in 2004. The issued guidance could require the Company to
change previously reported
information.

F-36

---

Information
regarding the Company's significant pension and other
post-retirement plans at the dates indicated is as
follows:

Pension
Plans

Other Post-retirement
BenefitsSeptember
30,2003

2002

2003

2002Change
in Benefit
Obligation:Benefit
obligation – September 30 of prior
year

$
(468.5
)

$
(427.9
)

$
(15.1
)

$
(11.2
)Service
cost


(11.8
)


(8.6
)


(0.3
)


(2.1
)Interest
cost


(29.2
)


(28.9
)


(1.0
)


(0.8
)Actuarial
loss


(28.9
)


(23.2
)


(0.7
)


(0.7
)Benefits
paid


25.3



23.8



1.0



0.7Foreign
exchange


(4.9
)


(3.5
)


(1.0
)


(1.0
)Plan
participant
contributions


(0.2
)


(0.2
)


—



—Benefit
obligation – September 30 of current
year


(518.2
)


(468.5
)


(17.1
)


(15.1
)Change
in Plan Assets:Fair value of plan assets –
September 30 of prior
year


253.1



282.8



—



—Actual
return (loss) on plan
assets


47.0



(20.8
)


—



—Employer
contributions


20.8



12.7



1.0



0.7Plan
participant
contributions


0.2



0.2



—



—Benefits
paid


(25.3
)


(23.8
)


(1.0
)


(0.7
)Foreign
exchange


2.8



2.1



—



—Fair
value of plan assets – September 30 of current
year


298.6



253.2



—



—Funded
status of
plans


(219.6
)


(215.3
)


(17.1
)


(15.1
)Amounts
contributed to plans during fourth
quarter


1.7



1.5



0.2



0.2Unrecognized
net
loss


133.2



137.0



1.5



0.8Unrecognized
prior service
cost


(4.7
)


(5.5
)


—



—Unrecognized
net transition
asset


(0.1
)


(0.2
)


—



—Accrued
benefit
cost

$
(89.5
)

$
(82.5
)

$
(15.4
)

$
(14.1
)


December
31,
20032003

2002

2003

2002Amounts
recognized in the Consolidated Balance Sheets consist
of:Prepaid
expenses

$
5.6


$
4.8


$
—


$
—Accrued
expenses


(41.1
)


(16.6
)


—



—Other
long-term
liabilities


(166.8
)


(185.1
)


(15.4
)


(14.1
)Intangible
asset


0.4



0.5



—



—Accumulated
other comprehensive
loss


112.1



113.6



—



—Other
long-term
assets


0.3



0.3



—



—$
(89.5
)

$
(82.5
)

$
(15.4
)

$
(14.1
)


With
respect to the above accrued benefit costs, the Company has recorded a
receivable from affiliates of $1.4 and $1.3 at December 31, 2003 and
2002, respectively, relating to Holdings' participation in the
Company's pension plans and $1.1 and $1.2 at December 31, 2003
and 2002, respectively, for other post-retirement benefits costs
attributable to Holdings.

F-37

---

The following weighted-average assumptions
were used in accounting for both the benefit obligations and net
periodic benefit cost of the pension
plans:

U.S.
Plans

International
Plans2003

2002

2001

2003

2002

2001Discount
rate


6.0
%


6.5
%


7.0
%


5.4
%


5.6
%


5.8
%Expected
return on plan
assets


8.75



9.0



9.5



7.1



7.5



8.5Rate
of future compensation
increases


4.0



4.3



5.0



3.6



3.5



3.7


The
Company considers a number of factors to determine its expected rate of
return on plan assets assumption, including historical performance of
plan assets, asset allocation and other third-party studies and
surveys. The Company reviewed the historical performance of plan assets
over a ten-year period (from 1993 to 2003), the results of which
exceeded the 8.75% rate of return assumption that the Company
ultimately selected for domestic plans. The Company also considered the
plan portfolios' asset allocations over a variety of time periods
and compared them with third-party studies and surveys of annualized
returns of similarly balanced portfolio strategies. The historical
return of this universe of similar portfolios also exceeded the return
assumption that the Company ultimately selected. Finally, the Company
reviewed performance of the capital markets in recent years and, upon
advice from various third parties, such as the pension plans'
advisers, investment managers and actuaries, selected the 8.75%
return assumption used for domestic plans.

The following table
presents domestic and foreign pension plan assets information at
September 30, 2003, 2002, and 2001 (the measurement date of pension
plan
assets):

U.S.
Plans

International
Plans2003

2002

2001

2003

2002

2001Fair
value of plan
assets

$
272.1


$
232.2


$
259.4


$
26.5


$
21.0


$
23.4


The
Plans' Investment Committee has adopted an investment policy for
domestic pension plan assets designed to meet or exceed the expected
rate of return on plan assets assumption. To achieve this, the pension
plans retain professional investment managers that invest plan assets
in the following asset classes: equity and fixed income securities,
real estate, and cash and other investments, which may include hedge
funds and private equity. The Company has the following target ranges
for these asset classes, which are readjusted quarterly when an asset
class weighting is outside its target range (recognizing that these are
flexible target ranges that may vary from time to time) with the goal
of achieving the required return at a reasonable risk level as
follows:

Target
RangesAsset
Category:Equity
securities

45%
– 55%Fixed income
securities

35% –
45%Real estate

0% –
7%Cash and other
investments

0% –
16%


F-38

---

The domestic pension plans
weighted-average asset allocations at September 30, 2003 and 2002 by
asset categories were as follows:

Plan
Assetsat September
30,2003

2002Asset
Category:Equity
securities


57.0
%


51.0
%Fixed
income securities


34.0



38.0Real
estate


5.0



6.0Cash and other
investments


4.0



5.0100.0
%


100.0
%


Within
the equity securities asset class, the investment policy provides for
investments in a broad range of publicly-traded securities ranging from
small to large capitalization stocks and domestic and international
stocks. Within the fixed income securities asset class, the investment
policy provides for investments in a broad range of publicly-traded
debt securities ranging from US Treasury issues, corporate debt
securities, mortgages and asset-backed issues, as well as international
debt securities. In the cash and other investments asset class,
investments may be in cash and cash equivalents and other investments,
which may include hedge funds and private equity not covered in the
classes listed above, provided that such investments receive approval
of the investment committee prior to their selection.

The
Plans' investment committee allows its investment managers to use
derivatives to reduce risk exposures or to replicate exposures of a
particular asset class, but does not allow the use of derivatives for
speculative purposes.

Other company-sponsored post-retirement
benefits consist of health and life insurance. These plans are not
pre-funded.

The components of net periodic benefit cost for the
plans are as
follows:

Pension
Plans

Other Post-retirement
BenefitsYear Ended
December
31,2003

2002

2001

2003

2002

2001Service
cost

$
11.8


$
8.6


$
10.4


$
0.3


$
2.1


$
0.4Interest
cost


29.2



28.9



28.3



1.0



0.8



0.8Expected
return on plan
assets


(21.3
)


(24.7
)


(30.8
)


—



—



—Amortization
of prior service
cost


(0.8
)


(1.2
)


(1.0
)


—



—



—Amortization
of net transition
asset.


(0.1
)


(0.1
)


(0.2
)


—



—



—Amortization
of actuarial loss
(gain)


9.5



2.9



0.9



(0.1
)


(0.1
)


(0.1
)Settlement
loss


—



—



0.8



—



—



—Curtailment
loss


—



—



1.5



—



—



—28.3



14.4



9.9



1.2



2.8



1.1Portion
allocated to
Holdings


(0.3
)


(0.3
)


(0.3
)


—



—



—$
28.0


$
14.1


$
9.6


$
1.2


$
2.8


$
1.1


Where
the accumulated benefit obligation exceeded the related fair value of
plan assets, the projected benefit obligation, accumulated benefit
obligation, and fair value of plan assets for the Company's
pension plans are as follows:

F-39

---

December
31,2003

2002

2001Projected
benefit
obligation

$
518.2


$
468.5


$
424.6Accumulated
benefit
obligation


502.4



451.0



407.9Fair
value of plan
assets


298.6



253.2



280.0


Contributions:

The Company expects to contribute approximately $40 in cash to its
pension plans and $1 to its other post-retirement benefit plans in
2004.

14.    Stock Compensation Plan

Since March 5,
1996, Revlon, Inc. has had the Amended Stock Plan, which is a
stock-based compensation plan and is described below. Revlon, Inc.
applies APB Opinion No. 25 and its related interpretations in
accounting for the Amended Stock Plan. Under APB Opinion No. 25,
because the exercise price of Revlon, Inc.'s employee stock
options under the Amended Stock Plan equals the market price of the
underlying stock on the date of grant, no compensation cost has been
recognized. The fair value of each option grant is estimated on the
date of the grant using the Black-Scholes option-pricing model assuming
no dividend yield, expected volatility of approximately 70% in
2003, 71% in 2002 and 68% in 2001; weighted average
risk-free interest rate of 3.72% in 2003, 3.86% in 2002,
and 5.07% in 2001; and a seven-year expected average life for
the Amended Stock Plan's options issued in 2003, 2002 and
2001.

Under the Amended Stock Plan, awards may be granted to
employees and directors of Revlon, Inc., and its subsidiaries for up to
an aggregate of 10.5 million shares of Class A Common Stock, of which
up to 3,000,000 shares may be issued as restricted stock. Non-qualified
options granted under the Amended Stock Plan have a term of 10 years
during which the holder can purchase shares of Class A Common Stock at
an exercise price, which must be not less than the market price on the
date of the grant. Option grants vest over service periods that range
from one to five years, subject to limited exceptions and except as
disclosed below. Options granted in February 1999 with an original
four-year vesting term were modified in May 1999 to allow the options
to become fully vested on the first anniversary date of the grant.
Options granted in May 2000 under the Amended Stock Plan vest
25% on each anniversary of the grant date and will become
100% vested on the fourth anniversary of the grant date;
provided that an additional 25% of such options would vest on
each subsequent anniversary date of the grant if the Company achieved
certain performance objectives relating to the Company's
operating income for the fiscal year preceding such anniversary date,
which objectives were not achieved in 2003, 2002 or 2001. The option
grant of 400,000 shares in February 2002 to Mr. Jack L. Stahl, the
Company's President and Chief Executive Officer, vests in full on
the fifth anniversary of such grant, provided that one-half of such
options vest on the day after which the 20-day average closing price of
Class A Common Stock on the NYSE equals or exceeds $30.00 per share and
the balance will vest on the day after which such 20-day average
closing price equals or exceeds $40.00 per share. Additionally, various
option grants made by the Company to its employees vest upon a
"change in control" as defined in the
respective stock option agreements. During each of 2002 and 2001, the
Company granted to Mr. Perelman, the Company's Chairman of the
Board and Chairman of the Executive Committee of the Board, options to
purchase 100,000 and 225,000, shares of Revlon, Inc. Class A Common
Stock, respectively, which grants will vest 33% on each
anniversary date of the grant and will become 100% vested on the
third anniversary date of the grant date as to the 2002 grant, and will
vest 25% on each anniversary date of the grant and will become
100% vested on the fourth anniversary date of the grant date as
to the 2001 grant. At December 31, 2003, 2002 and 2001 there were
3,792,196, 2,847,972 and 3,296,133 options exercisable under the
Amended Stock Plan, respectively.

A summary of the status of the
Amended Stock Plan as of December 31, 2003, 2002 and 2001 and changes
during the years then ended is presented below:

F-40

---

Shares(000)

Weighted
AverageExercise PriceOutstanding at January 1,
2001


6,603.5


$
21.59Granted


1,087.6



5.69Exercised


(0.2
)


7.06Forfeited


(788.8
)


19.16Outstanding
at December 31,
2001


6,902.1



19.37Granted


3,306.8



3.94Exercised


—



—Forfeited


(2,322.8
)


19.54Outstanding
at December 31,
2002


7,886.1



12.83Granted


1,091.6



3.00Exercised


—



—Forfeited


(1,270.1
)


17.43Outstanding
at December 31,
2003


7,707.6



10.66


The
weighted average grant date fair value of options granted during 2003,
2002 and 2001 approximated $2.03, $2.65 and $3.82, respectively.

The following table summarizes information about the Amended Stock
Plan's options outstanding, at December 31, 2003:

Outstanding

ExercisableRangeofExercise
Prices

Numberof
Options(000's)

Weighted
AverageYearsRemaining

WeightedAverageExercise
Price

Numberof
Options(000's)

WeightedAverageExercise
Price$2.78
to
$  3.78


2,945.7



9.01


$
3.49



651.7


$
3.733.82
to
  6.88


1,693.8



7.89



4.90



582.8



5.347.06
to
  15.00


1,674.7



5.98



9.91



1,164.3



10.7018.50
to
  50.75


1,393.4



4.11



33.75



1,393.4



33.752.78
to
  50.75


7,707.6











3,792.2


The
Amended Stock Plan also provides that restricted stock may be awarded
to employees and directors of Revlon, Inc. and its subsidiaries. On
September 17, 2002 and June 18, 2001 (the "Grant
Dates"), the Compensation Committee awarded 50,000 shares
and 120,000 shares, respectively, of restricted stock to Mr. Perelman
as a director of the Company. The restricted stock awards are subject
to execution of a Restricted Stock Agreement by each grantee. Provided
the grantee remains continuously employed by the Company (or, in the
case of Mr. Perelman, he continuously provides services as a director
to the Company), the restricted stock awards, subject to limited
exceptions, will vest as to one-third of the restricted shares on the
day after which the 20-day average of the closing price of Revlon,
Inc.'s Class A Common Stock on the NYSE equals or exceeds $20.00
per share, an additional one-third of such restricted shares will vest
on the day after which the 20-day average of the closing price of
Revlon, Inc.'s Class A Common Stock on the NYSE equals or exceeds
$25.00 per share and the balance will vest on the day after which the
20-day average of the closing price of the Company's Class A
Common Stock on the NYSE equals or exceeds $30.00 per share, provided
that (i) subject to clause (ii) below, no portion of the restricted
stock awards will vest until the second anniversary following the Grant
Dates (except that the restrictions will lapse on the February 2002
grant of 470,000 restricted shares to Mr. Stahl under the Amended Stock
Plan prior to the second anniversary if the 20-day average closing
price of Class A Common Stock on the NYSE has equaled or exceeded
$25.00 per share), (ii) all of the shares of restricted stock will vest
immediately in the event of a "change in
control" of Revlon, Inc., and (iii) all of the shares of
restricted stock which have not previously vested will fully vest on
the third anniversary of the Grant Dates. The restrictions lapse on the
February 2002 grant of restricted stock to Mr. Stahl as to 25%
of such

F-41

---

grant on June 18, 2004, an additional
25% on February 17, 2006 and in full on February 17, 2007. No
dividends will be paid on unvested restricted stock, provided however,
that in connection with the 2002 grant of restricted stock to Mr.
Stahl, in the event any cash or in-kind distributions are made in
respect of Common Stock prior to the lapse of the restrictions relating
to any of Mr. Stahl's restricted stock as to which the
restrictions have not lapsed, such dividends will be held by the
Company and paid to Mr. Stahl when and if such restrictions lapse. At
December 31, 2003 and 2002, there were 1,440,000 and 1,475,000 shares,
respectively, of restricted stock outstanding and unvested under the
Amended Stock Plan. The Company recorded compensation expense of $2.2,
$1.7 and $0.6 during 2003, 2002 and 2001, respectively, and deferred
compensation of $4.2 and $6.4 at December 31, 2003 and 2002,
respectively, for the restricted stock awards.

On February 17,
2002, Revlon, Inc. adopted the Revlon, Inc. 2002 Supplemental Stock
Plan (the "Supplemental Stock Plan"), the
purpose of which is to provide Mr. Stahl, the sole eligible
participant, with inducement awards to entice him to join the Company
to enhance the Company's long-term performance and profitability.
The Supplemental Stock Plan covers 530,000 shares of the Class A Common
Stock. Awards may be made under the Supplemental Stock Plan in the form
of stock options, stock appreciation rights and restricted or
unrestricted stock. On February 17, 2002, the Compensation Committee
granted Mr. Stahl an Award of 530,000 restricted shares of Class A
Common Stock, the full amount of the shares of Revlon, Inc.'s
Class A Common Stock issuable under the Supplemental Stock Plan. The
terms of the Supplemental Stock Plan and the foregoing grant of
restricted shares to Mr. Stahl are substantially the same as the
Amended Stock Plan and the February 2002 grant of restricted shares to
Mr. Stahl under such plan. Pursuant to the terms of the Supplemental
Stock Plan, such grant was made conditioned upon Mr. Stahl's
execution of the Company's standard Employee Agreement as to
Confidentiality and Non-Competition.

15.    Related Party
Transactions

As of December 31, 2003, MacAndrews & Forbes
beneficially owns shares of the Company's Common Stock and Series
B Preferred Stock having approximately 97% of the combined
voting power of the outstanding shares of Common Stock and Series B
Preferred Stock. As a result, MacAndrews & Forbes is able to elect
the entire Board of Directors of the Company and control the vote on
all matters submitted to a vote of the Company's stockholders.
MacAndrews & Forbes is wholly owned by Ronald O. Perelman, Chairman
of the Board of Directors of the Company. (See "Recent
Developments" for important information).

Transfer Agreements

In June 1992, Revlon, Inc. and Products
Corporation entered into an asset transfer agreement with Holdings and
certain of its wholly-owned subsidiaries (the "Asset
Transfer Agreement"), and Revlon, Inc. and Products
Corporation entered into a real property asset transfer agreement with
Holdings (the "Real Property Transfer
Agreement" and, together with the Asset Transfer
Agreement, the "Transfer Agreements"), and
pursuant to such agreements, on June 24, 1992 Holdings transferred
assets to Products Corporation and Products Corporation assumed all of
the liabilities of Holdings, other than certain specifically excluded
assets and liabilities (the liabilities excluded are referred to as the
"Excluded Liabilities"). Certain consumer
products lines sold in demonstrator-assisted distribution channels
considered not integral to Revlon, Inc.'s business and which
historically had not been profitable (the "Retained
Brands") and certain other assets and liabilities were
retained by Holdings. Holdings agreed to indemnify Revlon, Inc. and
Products Corporation against losses arising from the Excluded
Liabilities, and Revlon, Inc. and Products Corporation agreed to
indemnify Holdings against losses arising from the liabilities assumed
by Products Corporation. The amounts reimbursed by Holdings to Products
Corporation for the Excluded Liabilities for 2003, 2002 and 2001 were
$0.3, $0.5 and $0.2, respectively.

Certain assets and
liabilities relating to divested businesses were transferred to
Products Corporation on the transfer date and any remaining balances as
of December 31 of the applicable year have been reflected in the
Company's Consolidated Balance Sheets as of such dates. At
December 31, 2003 and 2002, the amounts reflected in the
Company's Consolidated Balance Sheets aggregated a net liability
of $14.6 and $21.4, respectively, all of which are included in other
long-term liabilities.

F-42

---

Reimbursement Agreements

Revlon,
Inc., Products Corporation and MacAndrews Holdings have entered into
reimbursement agreements (the "Reimbursement
Agreements") pursuant to which (i) MacAndrews Holdings is
obligated to provide (directly or through affiliates) certain
professional and administrative services, including employees, to
Revlon, Inc. and its subsidiaries, including Products Corporation, and
purchase services from third party providers, such as insurance, legal
and accounting services and air transportation services, on behalf of
Revlon, Inc. and its subsidiaries, including Products Corporation, to
the extent requested by Products Corporation, and (ii) Products
Corporation is obligated to provide certain professional and
administrative services, including employees, to MacAndrews Holdings
(and its affiliates) and purchase services from third party providers,
such as insurance and legal and accounting services, on behalf of
MacAndrews Holdings (and its affiliates) to the extent requested by
MacAndrews Holdings, provided that in each case the performance of such
services does not cause an unreasonable burden to MacAndrews Holdings
or Products Corporation, as the case may be. Products Corporation
reimburses MacAndrews Holdings for the allocable costs of the services
purchased for or provided to Products Corporation and its subsidiaries
and for reasonable out-of-pocket expenses incurred in connection with
the provision of such services. MacAndrews Holdings (or such
affiliates) reimburses Products Corporation for the allocable costs of
the services purchased for or provided to MacAndrews Holdings (or such
affiliates) and for the reasonable out-of-pocket expenses incurred in
connection with the purchase or provision of such services. Each of
Revlon, Inc. and Products Corporation, on the one hand, and MacAndrews
Holdings, on the other, has agreed to indemnify the other party for
losses arising out of the provision of services by it under the
Reimbursement Agreements other than losses resulting from its willful
misconduct or gross negligence. The Reimbursement Agreements may be
terminated by either party on 90 days' notice. Products
Corporation does not intend to request services under the Reimbursement
Agreements unless their costs would be at least as favorable to
Products Corporation as could be obtained from unaffiliated third
parties. The Company participates in MacAndrews & Forbes'
directors and officers liability insurance program, which covers the
Company as well as MacAndrews & Forbes and its other affiliates.
The limits of coverage are available on an aggregate basis for losses
to any or all of the participating companies and their respective
directors and officers. The Company reimburses MacAndrews & Forbes
for its allocable portion of the premiums for such coverage, which the
Company believes, is more favorable than the premiums the Company would
pay were it to secure stand-alone coverage. The amount paid by the
Company to MacAndrews & Forbes for premiums is included in the
amounts paid under the Reimbursement Agreement. The net amounts
reimbursable by (payable to) MacAndrews Holdings to (by) Products
Corporation for the services provided under the Reimbursement
Agreements for 2003, 2002 and 2001, were $(2.7), $0.8 and $(0.2),
respectively.

Tax Sharing Agreement

Holdings, Revlon,
Inc., Products Corporation and certain of its subsidiaries and Mafco
Holdings are parties to the Tax Sharing Agreement, which is described
in Note 12. Since payments to be made under the Tax Sharing Agreement
will be determined by the amount of taxes that Revlon, Inc. would
otherwise have to pay if it were to file separate federal, state or
local income tax returns, the Tax Sharing Agreement will benefit Mafco
Holdings to the extent Mafco Holdings can offset the taxable income
generated by Revlon, Inc. against losses and tax credits generated by
Mafco Holdings and its other subsidiaries. There were no cash payments
in respect of federal taxes made by Revlon, Inc. pursuant to the Tax
Sharing Agreement for 2003, 2002 and 2001.

Registration Rights
Agreement

Prior to the consummation of Revlon, Inc.'s
initial public equity offering, Revlon, Inc. and Revlon Worldwide
Corporation (subsequently merged into REV Holdings), the then direct
parent of Revlon, Inc., entered into a registration rights agreement
(the "Registration Rights Agreement") and in
February 2003, Revlon, Inc. and MacAndrews Holdings entered into a
joinder agreement to the Registration Rights Agreement pursuant to
which REV Holdings and certain transferees of Revlon, Inc.'s
Common Stock held by REV Holdings (the
"Holders") have the right to require Revlon,
Inc. to register all or part of Revlon, Inc.'s Class A Common
Stock owned by such Holders, including shares of Class A Common

F-43

---

Stock purchased in connection with the Rights
Offering and shares of Class A Common Stock issuable upon conversion of
Revlon, Inc.'s Class B Common Stock and Series B Preferred Stock
owned by such Holders under the Securities Act of 1933, as amended (a
"Demand Registration"); provided that Revlon,
Inc. may postpone giving effect to a Demand Registration up to a period
of 30 days if Revlon, Inc. believes such registration might have a
material adverse effect on any plan or proposal by Revlon, Inc. with
respect to any financing, acquisition, recapitalization, reorganization
or other material transaction, or if Revlon, Inc. is in possession of
material non-public information that, if publicly disclosed, could
result in a material disruption of a major corporate development or
transaction then pending or in progress or in other material adverse
consequences to Revlon, Inc. In addition, the Holders have the right to
participate in registrations by Revlon, Inc. of its Class A Common
Stock (a "Piggyback Registration"). The
Holders will pay all out-of-pocket expenses incurred in connection with
any Demand Registration. Revlon, Inc. will pay any expenses incurred in
connection with a Piggyback Registration, except for underwriting
discounts, commissions and expenses attributable to the shares of
Revlon, Inc.'s Class A Common Stock sold by such Holders.

Investment Agreement, 2003 Mafco Loans, the 2004 Mafco $125 Million
Term Loan and Debt Reduction Transactions

See Notes 1 and 9, as
well as "Subsequent Events".

Other

Pursuant to a lease dated April 2, 1993 (the
"Edison Lease"), Holdings leased to Products
Corporation the Edison research and development facility for a term of
up to 10 years with an annual rent of $1.4 and certain shared operating
expenses payable by Products Corporation, which, together with the
annual rent, were not to exceed $2.0 per year. In August 1998, Holdings
sold the Edison facility to an unrelated third party, which assumed
substantially all liability for environmental claims and compliance
costs relating to the Edison facility, and in connection with the sale
Products Corporation terminated the Edison Lease and entered into a new
lease with the new owner. Holdings agreed to indemnify Products
Corporation through September 1, 2013 to the extent rent under the new
lease exceeds rent that would have been payable under the terminated
Edison Lease had it not been terminated. The net amounts reimbursed by
Holdings to Products Corporation with respect to the Edison facility
for 2003, 2002 and 2001 were $1.1, $0.2 and $0.2, respectively.

Effective September 2001, Revlon, Inc. acquired from Holdings all
the assets and liabilities of the Charles of the Ritz business (which
Revlon, Inc. contributed to Products Corporation in the form of a
capital contribution), in consideration for 400,000 newly issued shares
of Revlon, Inc.'s Class A Common Stock and 4,333 shares of newly
issued voting (with 433,333 votes in the aggregate) Series B Preferred
Stock which are convertible into 433,333 shares in the aggregate of
Revlon, Inc.'s Class A Common Stock, which conversion rights were
approved by the stockholders of Revlon, Inc. at its 2002 Annual Meeting
of Stockholders. As Holdings and Products Corporation are under common
control, the transaction has been accounted for at historical cost in a
manner similar to that of a pooling of interests and, accordingly, all
prior period financial statements presented have been restated as if
the acquisition took place at the beginning of such periods. An
investment banking firm rendered its written opinion that the terms of
the transaction were fair from a financial standpoint to Revlon, Inc.
The effect of the acquisition was to increase both operating income and
net income by $2.3 for 2001. The net equity of the Charles of the Ritz
business is included in total stockholders' deficiency at
December 31, 2003.

During 2003, 2002 and 2001 Products
Corporation leased certain facilities to MacAndrews & Forbes or its
affiliates pursuant to occupancy agreements and leases, including space
at Products Corporation's New York headquarters and through
January 31, 2001 at Products Corporation's offices in London. The
rent paid by MacAndrews & Forbes or its affiliates to Products
Corporation for 2003, 2002 and 2001 was $0.3, $0.3 and $0.5,
respectively.

The Credit Agreement and Products
Corporation's 12% Senior Secured Notes are supported by,
among other things, guarantees from Revlon, Inc., and, subject to
certain limited exceptions, all of the domestic subsidiaries of
Products Corporation. The obligations under such guarantees are secured
by,

F-44

---

among other things, the capital stock of
Products Corporation and, subject to certain limited exceptions, the
capital stock of all of Products Corporation's domestic
subsidiaries and 66% of the capital stock of Products
Corporation's and its domestic subsidiaries' first-tier
foreign subsidiaries.

In March 2002, prior to the passage of the
Sarbanes-Oxley Act of 2002, Products Corporation made an advance of
$1.8 to Mr. Jack L. Stahl, the Company's President and CEO,
pursuant to his employment agreement which was entered into in February
2002, for tax assistance related to a grant of restricted stock
provided to Mr. Stahl pursuant to such agreement, which loan bears
interest at the applicable federal rate. In May 2002, prior to the
passage of the Sarbanes-Oxley Act of 2002, Products Corporation made an
advance of $2.0 to Mr. Stahl pursuant to his employment agreement in
connection with the purchase of his principal residence in the New York
City metropolitan area, which loan bears interest at the applicable
federal rate. Mr. Stahl repaid $0.1 and $0.1 of such loan during 2003
and 2002, respectively. Pursuant to his employment agreement, Mr. Stahl
receives from Products Corporation additional compensation payable on a
monthly basis equal to the amount actually paid by him in respect of
interest and principal on such $2.0 advance, which for 2003 and 2002
was $0.1 and $0.1, respectively. The Company also pays Mr. Stahl a
gross up for any taxes payable by Mr. Stahl as a result of such
additional compensation, which tax gross up amount was $0.1 and $0.1 in
2003 and 2002, respectively.

During 2000, prior to the passage
of the Sarbanes-Oxley Act of 2002, Products Corporation made an advance
of $0.8 to Mr. Douglas Greeff, Executive Vice President Strategic
Finance, pursuant to his employment agreement, which loan bears
interest at the applicable federal rate. Mr. Greeff repaid $0.2, $0.2
and $0.2 during 2003, 2002 and 2001, respectively. Pursuant to his
employment agreement, Mr. Greeff is entitled to receive bonuses from
Products Corporation, payable on each May 9th commencing on May 9, 2001
and ending on May 9, 2005, in each case equal to the sum of the
principal and interest on the advance repaid in respect of such year by
Mr. Greeff, provided that he is employed by Products Corporation on
each such May 9th, which bonus installments were paid to Mr. Greeff in
each of May 2001, 2002 and 2003.

In February 2002, Products
Corporation entered into a separation agreement with Mr. Jeffrey M.
Nugent, the Company's former President and CEO, pursuant to which
the parties agreed to an offset of obligations whereby Products
Corporation canceled Mr. Nugent's obligation to repay principal
and interest on a loan in the amount of $0.5 that was made in
installments of $0.4 in 1999 and $0.1 in 2000 pursuant to Mr.
Nugent's employment agreement, in exchange for the cancellation
of Products Corporation's obligation to pay Mr. Nugent a special
bonus on January 15, 2003 pursuant to his employment agreement.

Mr. Nugent's spouse provided consulting services in 2001 for
product and concept development, for which Products Corporation paid
her $0.1 in 2001.

During 2003, 2002 and 2001, Products
Corporation made payments of nil, nil and $0.1, respectively, to a
fitness center, in which an interest is owned by members of the
immediate family of Mr. Donald Drapkin, who is a member of Revlon,
Inc.'s Board of Directors, for discounted health club dues for an
executive health program of Products Corporation.

During 2003,
2002 and 2001, Products Corporation made payments of $0.3, $0.3 and
$0.3, respectively, to Ms. Ellen Barkin (spouse of Mr. Perelman) under
a written agreement pursuant to which she provides voiceover services
for certain of the Company's advertisements.

The law firm
of which Mr. Edward Landau was Of Counsel to and from which he retired
in February 2003, Wolf, Block, Schorr and Solis-Cohen LLP, did not
provide any legal services to Products Corporation during 2003, but did
provide such services in 2002 and 2001. It is anticipated that such
firm could continue to provide such services in 2004.

An
investment bank of which Mr. Vernon Jordan (a former Director of
Revlon, Inc. who did not stand for re-election with respect to the
Company's Annual Meeting of Stockholders in 2003) became a
Managing Director in January 2000, Lazard Freres & Co. LLC,
provided investment banking services to Revlon, Inc. and its
subsidiaries during 2001.

During 2003, 2002 and 2001 Products
Corporation placed advertisements in magazines and other media operated
by Martha Stewart Living Omnimedia, Inc.
("MSLO"), which is controlled by Ms.

F-45

---

Stewart, who also serves as MSLO's
Founder and Chief Creative Officer. Products Corporation paid MSLO
$1.9, $2.5 and $2.1 for such services in 2003, 2002 and 2001,
respectively, which fees were less than 1% of the
Company's estimate of MSLO's consolidated gross revenues,
and less than 1% of the Company's consolidated gross
revenues, for 2003, 2002 and 2001, respectively. Products
Corporation's decision to place advertisements for its products
in MSLO's magazines and other media was based upon their popular
appeal to women and the rates paid were competitive with industry rates
for similarly situated magazines and media.

During 2003 and
2002, Products Corporation obtained advertising, media buying and
direct marketing services, and during 2001 obtained public relations,
advertising and media buying services, from various subsidiaries of WPP
Group plc ("WPP"). Ms. Robinson is employed
by one of WPP's subsidiaries, however, Ms. Robinson is neither an
executive officer of, nor does she hold any material equity interest
in, WPP. Products Corporation paid WPP $0.8, $1.1 and $2.0 for such
services in 2003, 2002 and 2001, respectively, which fees were less
than 1% of the Company's estimate of WPP's
consolidated gross revenues, and less than 1% of the
Company's consolidated gross revenues, for 2003, 2002 and 2001,
respectively. Products Corporation's decision to engage WPP was
based upon its professional expertise in understanding the advertising
and public relations needs of the consumer packaged goods industry, as
well as its global presence in many of the international markets in
which Products Corporation operates and the rates paid were competitive
with industry rates for similarly situated advertising agencies.

During 2003, 2002 and 2001, Products Corporation employed Mr.
Perelman's daughter in a marketing position, with compensation
paid in each of 2003, 2002 and 2001 of less than $0.1.

During
2003, 2002 and 2001, Products Corporation employed Mr. Drapkin's
daughter in a marketing position, with compensation paid in each of
2003, 2002 and 2001 of less than $0.1.

During 2003, Products
Corporation paid $0.1 to a nationally-recognized security services
company in which MacAndrews & Forbes has a controlling interest for
security officer services. Products Corporation's decision to
engage such firm was based upon its expertise in the field of security
services, and the rates paid were competitive with industry rates for
similarly situated security agencies.

16.    Commitments and
Contingencies

The Company currently leases manufacturing,
executive, including research and development, and sales facilities and
various types of equipment under operating and capital lease
agreements. Rental expense was $27.2, $27.5 and $29.0 for the years
ended December 31, 2003, 2002 and 2001, respectively. Minimum rental
commitments under all noncancelable leases, including those pertaining
to idled facilities, with remaining lease terms in excess of one year
from December 31, 2003 aggregated $135.8; such commitments for each of
the five years subsequent to December 31, 2003 are $17.4, $15.7, $13.9,
$13.1 and $10.9, respectively. Such amounts exclude the minimum rentals
to be received by the Company in the future under noncancelable
subleases of $0.4.

The Company has minimum purchase commitments
with suppliers of finished goods, raw materials and components. The
minimum purchase commitments under these agreements aggregated $37.4;
such commitments for each of the five years subsequent to December 31,
2003 are $37.4, nil, nil, nil and nil, respectively. The amount the
Company purchased under minimum purchase commitments during 2003, 2002
and 2001 was $65.3, $63.7 and $32.0, respectively.

The Company
and its subsidiaries are defendants in litigation and proceedings
involving various matters. In the opinion of the Company's
management, based upon advice of its counsel handling such litigation
and proceedings, adverse outcomes, if any, will not result in a
material effect on the Company's consolidated financial condition
or results of operations.

On April 17, 2000, the plaintiffs in
the six purported class actions filed in October and November 1999 by
each of Thomas Comport, Boaz Spitz, Felix Ezeir and Amy Hoffman, Ted
Parris, Jerry Krim and Dan Gavish individually and allegedly on behalf
of others similarly situated to them against Revlon, Inc., certain of
its present and former officers and directors and the parent of Revlon,
Inc., REV Holdings Inc. (a Delaware corporation and the predecessor of
REV Holdings), alleging among other things, violations of Rule 10b-5
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), filed an

F-46

---

amended complaint, which consolidated all of
the actions under the caption "In Re Revlon, Inc.
Securities Litigation" and limited the alleged class to
security purchasers during the period from October 29, 1997 through
October 1, 1998. On June 30, 2003, the court approved the settlement
agreement that was executed in January 2003, which provides that the
defendants will obtain complete releases from the participating members
of the alleged class, and the period to appeal this decision has
expired. The Company had recorded this settlement, including a related
settlement of the defendants' insurance claim for this matter and
the Second Gavish Action described below (the "Insurance
Settlement"), in the fourth quarter of 2002.

A
purported class action lawsuit was filed on September 27, 2000, in the
United States District Court for the Southern District of New York on
behalf of Dan Gavish, Tricia Fontan and Walter Fontan individually and
allegedly on behalf of all others similarly situated who purchased the
securities of Revlon, Inc. and REV Holdings Inc. between October 2,
1998 and September 30, 1999 (the "Second Gavish
Action"). In November 2001, plaintiffs amended their
complaint. The amended complaint alleges, among other things, that
Revlon, Inc., certain of its present and former officers and directors
and REV Holdings Inc. violated, among other things, Rule 10b-5 under
the Exchange Act. In December 2001, the defendants moved to dismiss the
amended complaint. The Company believes the allegations in the amended
complaint are without merit and, if its motion to dismiss is not
granted, intends to vigorously defend against them. In light of the
Insurance Settlement, the Company does not expect to incur any further
expense in this matter.

F-47

---

17.    Quarterly Results of Operations
(Unaudited)

The following is a summary of the unaudited
quarterly results of
operations:

Year
Ended December 31,
20031st

2nd

3rd

4thQuarter

Quarter

Quarter

QuarterNet
sales

$
292.0


$
322.3


$
316.5


$
368.5Gross
profit


180.5



197.1



189.4



231.2Net
loss (a)
(d)


(48.7
)


(37.8
)


(54.7
)


(12.6
)Basic
loss per common share:Net loss per common
share

$
(0.91
)

$
(0.68
)

$
(0.78
)

$
(0.18
)Diluted
loss per common share:Net loss per common
share

$
(0.91
)

$
(0.68
)

$
(0.78
)

$
(0.18
)


Year
Ended December 31,
20021st

2nd

3rd

4thQuarter

Quarter

Quarter

Quarter
(c)Net
sales

$
275.4


$
308.2


$
323.2


$
212.6Gross
profit


166.4



188.4



201.6



59.3Net
loss
(b)


(46.1
)


(38.9
)


(22.1
)


(179.4
)Basic
loss per common share:Net loss per common
share

$
(0.86
)

$
(0.73
)

$
(0.41
)

$
(3.36
)Diluted
loss per common share:Net loss per common
share

$
(0.86
)

$
(0.73
)

$
(0.41
)

$
(3.36
)


|
|
|
|

|(a) | Includes
restructuring costs of $0.5, nil, $0.4 and $5.1 in the first, second,
third and fourth quarters, respectively. (See Note 2).
|--- | -------------------------------------------------------------------------------------------------------------------------------------

|(b) | Includes restructuring costs of $4.0, $3.2, $2.1 and
$4.3 in the first, second, third and fourth quarters, respectively.
(See Note 2).
|--- | --------------------------------------------------------------------------------------------------------------------------------------

|(c) | During 2002 the Company
recorded expenses of approximately $104 (of which approximately $100
was recorded in the fourth quarter of 2002) related to the
implementation of the stabilization and growth phase of the
Company's plan.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | During 2003 the
Company recorded expenses of approximately $31 related to the
implementation of the stabilization and growth phase of the
Company's plan.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

F-48

---

18.    Geographic, Financial and Other
Information

The Company manages its business on the basis of
one reportable operating segment. See Note 1 for a brief description of
the Company's business. As of December 31, 2003, the Company had
operations established in 16 countries outside of the U.S. and its
products are sold throughout the world. The Company is exposed to the
risk of changes in social, political and economic conditions inherent
in foreign operations and the Company's results of operations and
the value of its foreign assets are affected by fluctuations in foreign
currency exchange rates. Net sales by geographic area are presented by
attributing revenues from external customers on the basis of where the
products are sold. During 2003, 2002 and 2001, Wal-Mart and its
affiliates worldwide accounted for approximately 20.6%,
22.5% and 19.7%, respectively, of the Company's
consolidated net sales. The Company expects that Wal-Mart and a small
number of other customers will, in the aggregate, continue to account
for a large portion of the Company's net sales. Although the loss
of Wal-Mart or one or more of the Company's other customers that
may account for a significant portion of the Company's sales, or
any significant decrease in sales to these customers or any significant
decrease in retail display space in any of these customers'
stores, could have a material adverse effect on the Company's
business, financial condition or results of operations, the Company has
no reason to believe that any such loss of customer or decrease in
sales will occur. In January 2002, Kmart Corporation filed a petition
for reorganization under Chapter 11 of the U.S. Bankruptcy Code and in
May 2003 emerged from bankruptcy. Throughout 2002 and continuing into
2003 Kmart continued to close underperforming stores. Kmart accounted
for less than 5% of the Company's net sales in 2003.
Although the Company plans to continue doing business with Kmart for
the foreseeable future and, based upon the information currently
available, believes that Kmart's prior bankruptcy proceedings and
store closings will not have any material adverse effect on the
Company's business, financial condition or results of operations,
there can be no assurances that further deterioration, if any, in
Kmart's financial condition will not have such an effect on the
Company.

Year
Ended December
31,2003

2002

2001Geographic
Areas:Net
sales:United
States

$
837.0


$
716.1


$
825.1Canada


53.6



44.0



45.2United
States and
Canada


890.6



760.1



870.3International


408.7



359.3



407.3$
1,299.3


$
1,119.4


$
1,277.6


December
31,2003

2002Long-lived
assets:United
States

$
392.9


$
387.8Canada


3.9



3.5United
States and
Canada


396.8



391.3International


79.8



74.6$
476.6


$
465.9


F-49

---

Year
Ended December
31,2003

2002

2001Classes
of Similar
Products:Net
sales:Cosmetics, skin care and
fragrances

$
872.4


$
723.9


$
831.0Personal
care


426.9



395.5



446.6$
1,299.3


$
1,119.4


$
1,277.6


19.    Subsequent
Events

On February 12, 2004, the Company announced that its
Board of Directors had approved agreements with Fidelity Management
& Research Co. ("Fidelity") and
MacAndrews & Forbes which will dramatically strengthen the
Company's balance sheet (the "Debt Reduction
Transactions"). As a result of the agreements reached, the
Company expects that Products Corporation's debt will be reduced
by approximately $930 and the Company anticipates that at least $780 of
Products Corporation's debt will be eliminated during the first
quarter of 2004 through a debt-for-equity exchange.

In
connection with the Debt Reduction Transactions, MacAndrews &
Forbes has agreed to exchange an aggregate of approximately $475 of
Products Corporation's indebtedness for shares of Revlon,
Inc.'s Class A Common Stock. Fidelity has also agreed to exchange
an aggregate of $155 of Products Corporation's indebtedness for
shares of Revlon, Inc.'s Class A Common Stock. The Company
intends to commence exchange offers to holders of any and all of
Products Corporation's outstanding 8 1/8%
Senior Notes due 2006, 9% Senior Notes due 2006 and
8 5/8% Senior Subordinated Notes due 2008, each
of which has been fully and unconditionally guaranteed by Revlon, Inc.,
on the same terms as agreed with Fidelity and MacAndrews &
Forbes.

Fidelity and MacAndrews & Forbes have agreed to
tender for exchange in the exchange offers an aggregate of
approximately $440 of outstanding 8 1/8% Senior
Notes, 9% Senior Notes and 8 5/8% Senior
Subordinated Notes for shares of Revlon, Inc. Class A Common Stock, at
a ratio of 400 shares of Revlon, Inc. Class A Common Stock for each
$1,000 principal amount of 8 1/8% Senior Notes
or 9% Senior Notes tendered for exchange or 300 shares of
Revlon, Inc. Class A Common Stock for each $1,000 principal amount of
8 5/8% Senior Subordinated Notes tendered for
exchange. Fidelity may elect to receive cash or additional shares of
Revlon, Inc. Class A Common Stock in respect of accrued interest
payable on the notes tendered by it.

MacAndrews & Forbes and
its affiliates (other than Revlon, Inc. and its subsidiaries) as of
February 12, 2004 held nil, $1 and $285, respectively, and Fidelity and
its affiliates and consolidated funds as of February 12, 2004 held $76,
$47 and $32, respectively, in principal amount of the
8 1/8% Senior Notes, 9% Senior Notes and
8 5/8% Senior Subordinated Notes.

In the
exchange offers for the outstanding 8 1/8%
Senior Notes, 9% Senior Notes and 8 5/8%
Senior Subordinated Notes, holders other than MacAndrews & Forbes
and Fidelity will be offered the opportunity to exchange their notes
for (i) shares of Revlon, Inc. Class A Common Stock at the same ratios
applicable to Fidelity and MacAndrews & Forbes in the support
agreements, or (ii) cash up to a maximum of $150 aggregate principal
amount of tendered notes, subject to proration. Notes tendered for cash
would receive $830 per $1,000 face amount for the
8 1/8% Senior Notes, $800 per $1,000 face amount
for the 9% Senior Notes and $620 per $1,000 face amount for the
8 5/8% Senior Subordinated Notes. Accrued
interest will also be paid on tendered notes in cash or additional
shares of Revlon, Inc. Class A Common Stock, at the holder's
option. The maximum principal amount of notes that may be exchanged for
cash is $150 reduced by the aggregate principal amount of any notes
tendered and exchanged in the exchange offers for shares of Revlon,
Inc. Class A Common Stock in excess of the amounts Fidelity and
MacAndrews & Forbes currently hold and have agreed to tender for
exchange. The exchange offers are expected to commence on or before
March 1, 2004.

To the extent that $150 aggregate principal
amount of notes, other than the notes to be tendered by Fidelity and
MacAndrews & Forbes, are not tendered in the exchange offers,
MacAndrews & Forbes has agreed to subscribe for additional shares
of Revlon, Inc. Class A Common Stock at a purchase price of

F-50

---

$2.50 per share to make up for any such
shortfall, with the proceeds of such investment to be used to repay
Products Corporation's indebtedness. MacAndrews & Forbes has
also agreed to subscribe for additional shares of Revlon, Inc. Class A
Common Stock in an aggregate subscription amount equal to the amount of
cash required to be paid by Revlon, Inc. in exchange for notes which
are tendered for cash, excluding cash payable with respect to accrued
interest. If, as a result of these transactions, MacAndrews &
Forbes makes an investment in Revlon, Inc. Class A Common Stock for
cash, the other stockholders of record of Revlon, Inc. as of a date
prior to the termination of the exchange offer will be provided the
opportunity to subscribe for Revlon, Inc. Class A Common Stock at the
same $2.50 subscription price.

In addition to the exchange
offers which the Company expects will reduce indebtedness by an
aggregate of approximately $780, the Company plans to conduct further
rights and equity offerings in such amounts as to ensure that the total
debt reduction will be at least $830 by the end of 2004 and at least
$930 by March 2006. The terms of the rights offering to be consummated
prior to December 31, 2004 and any other equity offerings to be
undertaken in connection with the Debt Reduction Transactions,
including the subscription prices will be determined by the
Company's Board of Directors at the appropriate times.

Included in the obligations to be exchanged for Revlon, Inc. Class A
Common Stock are any and all outstanding amounts owing to MacAndrews
& Forbes, as of the closing date of the exchange offers, under the
Mafco $100 million term loan (which the Company currently expects will
be $110 at March 31, 2004), the 2004 Mafco $125 million term loan
(which the Company currently expects will be $55 at March 31, 2004),
the Mafco $65 million line of credit (which the Company currently
expects will be nil at March 31, 2004) (each as hereinafter defined)
and approximately $24 of certain subordinated promissory notes payable
to MacAndrews & Forbes. Each $1,000 principal amount of
indebtedness outstanding under the Mafco $100 million term loan, Mafco
$65 million line of credit and 2004 Mafco $125 million term loan will
be exchanged for 400 shares of Revlon, Inc. Class A Common Stock and
each $1,000 principal amount of indebtedness outstanding under the
subordinated promissory notes will be exchanged for 300 shares of
Revlon, Inc. Class A Common Stock. The remainder of the 2004 Mafco $125
million term loan and the Mafco $65 million line of credit which is not
exchanged in the exchange offers shall remain available to Products
Corporation in accordance with their respective terms. As part of the
Debt Reduction Transactions, under the stockholders agreement Revlon,
Inc. agreed with Fidelity to cause Products Corporation to limit
outstanding aggregate borrowings under the Mafco $65  million
line of credit and the Mafco 2004 $125  million term loan to an
amount not greater than $125  million less the indebtedness under
such loans that is exchanged in the exchange offers, at any time after
closing the Debt Reduction Transactions. MacAndrews & Forbes, which
beneficially owns 100% of the outstanding shares of Revlon,
Inc.'s Series A preferred stock, having an aggregate liquidation
preference of $54.6, and 100% of Revlon, Inc.'s
outstanding Series B convertible preferred stock, has also agreed to
exchange its shares of Revlon, Inc.'s Series A preferred stock
for 160 shares of Revlon, Inc. Class A Common Stock for each $1,000 of
liquidation preference and to convert its shares of Revlon, Inc. Series
B convertible preferred stock into an aggregate of 433,333 shares of
Revlon, Inc. Class A Common Stock.

As part of the Debt Reduction
Transactions, Revlon, Inc., MacAndrews & Forbes and Fidelity will
also enter into a stockholders agreement pursuant to which, among other
things, (i) Revlon, Inc. will agree to continue to maintain a majority
of independent directors on its Board of Directors (as it currently
does) (as defined by New York Stock Exchange
("NYSE") listing standards); (ii) Fidelity
will be entitled to nominate to Revlon, Inc.'s Board of Directors
(A) two directors for so long as Fidelity holds at least 10% of
Revlon, Inc.'s outstanding voting stock or (B) one director for
so long as Fidelity holds at least 5% but less than 10%
of Revlon, Inc.'s outstanding voting stock, one of which will be
entitled to sit on all standing committees of Revlon, Inc.'s
Board of Directors (subject to satisfaction of applicable listing
standards and other applicable laws, rules and regulations); and (iii)
Revlon, Inc. would establish and maintain a Nominating and Corporate
Governance Committee of the Board of Directors.

MacAndrews &
Forbes has agreed to act by written consent to approve the Debt
Reduction Transactions to the extent that such approval is required,
including the approval of the issuance of the necessary additional
shares of Revlon, Inc. Class A Common Stock as consideration in the
exchange offers and the transactions contemplated by the support
agreements with Fidelity and MacAndrews & Forbes. The Board of
Directors has fixed February 17, 2004 as the record date for the
determination of stockholders entitled to notice of the action by
written consent. The decision to enter into the transactions

F-51

---

described above follows the announcement in
December 2003 that the Board of Directors had authorized management to
begin exploring various alternatives to strengthen the Company's
balance sheet and increase equity. The Company currently expects to
file an Information Statement with the Securities and Exchange
Commissions and mail exchange offer materials to note holders by March
1, 2004. The Company indicated that certain aspects of the refinancing
may be subject to Board of Director, stockholder, lender, and
regulatory approvals.

As a result of the Debt Reduction
Transactions, in February 2004 the Company sought and secured
amendments of its Credit Agreement to permit various aspects of such
transactions, including permitting (i) the prepayment of the Mafco
$100  million term loan and the Mafco $125  million term
loan as a result of the indebtedness thereunder outstanding at the
consummation of the exchange offers being fully converted to equity in
connection with the exchange offers; (ii) the reduction of the
commitment of the Mafco $65  million line of credit to its
undrawn amount at the consummation of the exchange offers; (iii)
the exclusion from Revlon, Inc.'s obligation to make capital
contributions to Products Corporation using the proceeds from Revlon,
Inc.'s equity offerings raised by Revlon, Inc. in connection with
the Debt Reduction Transactions; (iv) any proceeds remaining after such
transactions to be contributed to Products Corporation and used by
Products Corporation to prepay or repurchase any of its outstanding
indebtedness, provided that Products Corporation takes action to make
such prepayment or repurchase within 30 days after receipt of such
contribution and grants a first-priority security interest in the
amount contributed pending its application to such prepayment or
repurchase; (v) permitting Revlon, Inc. to enter into certain
investment or subscription agreements in connection with the Debt
Reduction Transactions, including the support agreements and any other
investment or subscription agreements; and (vi) the aggregate term loan
commitments under the Credit Agreement to be increased by $64.4.

In December 2003, Revlon, Inc. announced that its Board of Directors
approved the 2004 M&F Loan and the $25 million M&F Loan from
MacAndrews Holdings. The 2004 Mafco $125 million term loan became
available to the Company effective in January 2004, if needed, to
enable the Company to continue to implement and refine its plan. The
2004 M&F Loan and $25 million M&F Loan were consolidated into
the 2004 Mafco $125 million term loan. The 2004 Mafco $125 million term
loan is a senior unsecured multiple-draw term loan at an interest rate
of 12% per annum. The 2004 Mafco $125 million term loan is on
substantially the same terms as the Mafco $100 million term loan
provided by MacAndrews & Forbes earlier in 2003, including that
interest on such loans is not payable in cash, but will accrue and be
added to the principal amount each quarter and be paid in full at final
maturity on December 1, 2005, provided that $25 of such loan may be
repaid at the option of the Company prior to December 31,
2005.

EBITDA (as defined in the Credit Agreement) was $144.4 for
the four consecutive fiscal quarters ended December 31, 2003, which was
less than the minimum of $230 required under the EBITDA covenant of the
Credit Agreement for that period and the Company's leverage ratio
was 1.66:1.00, which was in excess of the maximum ratio of 1.1:1.00
permitted under the leverage ratio covenant of the Credit Agreement for
that period. Accordingly, the Company sought and on January 28, 2004
secured the 2004 Bank Amendment including waivers of compliance with
these covenants for the four quarters ended December 31, 2003 and, in
light of the Company's expectation that the continued
implementation of, and refinement to, the Company's plan would
affect the ability of Products Corporation to comply with these
covenants during 2004, the Company also secured as part of the 2004
Bank Amendment an amendment to eliminate the EBITDA and leverage ratio
covenants for the first three quarters of 2004 and a waiver of
compliance with such covenants for the four quarters ending December
31, 2004 expiring on January  31, 2005. The 2004 Bank Amendment
to the Credit Agreement also included certain other amendments to allow
for the continued implementation of, and refinement to, the
Company's plan, including, among other things: (i) providing
exceptions from the limitations under the indebtedness covenant to
permit the 2004 Mafco $125 million term loan, (ii) permitting Products
Corporation to borrow up to an additional $50 in working capital loans
from MacAndrews Holdings or its affiliates, if necessary, (iii)
extending the maturity of the Mafco $65 million line of credit until
June 30, 2005 and providing that as a condition to Products Corporation
borrowing under such line from and after the effective date of the
amendment that at least $100 shall have been borrowed under the 2004
Mafco $125 million term loan, (iv)  continuing the $20 minimum
liquidity covenant, (v) increasing the applicable margin on loans under
the Credit Agreement by 0.25%, the incremental cost of which to
the Company, assuming the Credit

F-52

---

Agreement is fully drawn, would be
approximately $0.5 from February 1, 2004 through the end of 2004, and
(vi) permitting Revlon, Inc. to guarantee certain classes of Products
Corporation's public indebtedness to consummate the Debt
Reduction Transactions.

F-53

---

Schedule
II

REVLON, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING
ACCOUNTS Years Ended December 31, 2003, 2002 and 2001
(dollars in
millions)

Balance
at Beginningof Year

Charged to Cost
andExpenses

OtherDeductions

Balance at
Endof YearYear ended December
31, 2003:Applied against
asset
accounts:Allowance
for doubtful
accounts

$
15.8


$
3.2


$
(11.3)
(1)

$
7.7Allowance
for volume and early payment
discounts

$
8.2


$
40.4


$
(36.9)
(2)

$
11.7Year
ended December 31,
2002:Applied against
asset accounts:Allowance for doubtful
accounts

$
8.3


$
9.5


$
(2.0)
(1)

$
15.8Allowance
for volume and early payment
discounts

$
7.1


$
31.7


$
(30.6)
(2)

$
8.2Year
ended December 31,
2001:Applied against
asset accounts:Allowance for doubtful
accounts

$
7.6


$
3.5


$
(2.8)
(1)

$
8.3Allowance
for volume and early payment
discounts

$
8.5


$
30.0


$
(31.4)
(2)

$
7.1


|
|
|
|

| | Notes:
| | ------

|(1) | Doubtful accounts written off, less recoveries,
reclassifications and foreign currency translation
adjustments.
|--- | ---------------------------------------------------------------------------------------------------------------

|(2) | Discounts taken,
reclassifications and foreign currency translation
adjustments.
|--- | --------------------------------------------------------------------------------

F-54

---

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Revlon, Inc. (Registrant)

By:
/s/ Jack L. Stahl

By: /s/ Thomas E.
McGuire

By: /s/ John F. Matsen,
Jr.Jack
L. Stahl            President, Chief
Executive            Officer and
Director

Thomas E.
McGuire            Executive
Vice            President and            Chief
Financial Officer

John F. Matsen,
Jr.            Senior Vice
President            and Corporate
Controller


Dated: February 19,
2004

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed by the following
persons on behalf of the Registrant on February 19, 2004 and in the
capacities
indicated.

Signature

Title*___________________________________(Ronald
O.
Perelman)

Chairman
of the Board and
Director*___________________________________(Howard
Gittis)

Director*___________________________________(Donald
G. Drapkin)

Director/s/ Jack
L.
Stahl___________________________________
(Jack L. Stahl)

President, Chief Executive Officer and
Director*___________________________________(Alan
S.
Bernikow)

Director*___________________________________(Meyer
Feldberg)

Director*___________________________________(Edward
J.
Landau)

Director*___________________________________(Linda
Gosden Robinson)

Director


---

Signature

Title*___________________________________(Terry
Semel)

Director*___________________________________(Martha
Stewart)

Director


*   Robert
K. Kretzman, by signing his name hereto, does hereby sign this report
on behalf of the directors of the registrant after whose typed names
asterisks appear, pursuant to powers of attorney duly executed by such
directors and filed with the Securities and Exchange Commission.

By: /s/ Robert K. Kretzman



Robert K. Kretzman
Attorney-in-fact

---

CERTIFICATIONS

I, Jack L. Stahl, certify that:

|   |                                                                                                   
|-- | --------------------------------------------------------------------------------------------------
|1. | I have reviewed this annual report on
Form 10-K (the "Report") of Revlon, Inc. (the
"Registrant");

|   |                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Based
on my knowledge, this Report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this Report;

|   |                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | Based on my
knowledge, the financial statements, and other financial information
included in this Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this Report;

|   |                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | The Registrant's other
certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
Registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this Report is being prepared;

(b)
[Intentionally omitted per SEC's transition rules in SEC
Release Nos. 33-8238 and 34-47986];

(c) Evaluated
the effectiveness of the Registrant's disclosure controls and
procedures and presented in this Report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the
Registrant's internal control over financial reporting that
occurred during the Registrant's most recent fiscal quarter (the
Registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over
financial reporting; and

|   |                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | The
Registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the Registrant's auditors and the audit committee
of the Registrant's board of directors (or persons performing the
equivalent functions):

(a) All significant deficiencies
and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely
affect the Registrant's ability to record, process, summarize and
report financial information; and

(b) Any fraud, whether
or not material, that involves management or other employees who have a
significant role in the Registrant's internal control over
financial reporting.

Date: February 19, 2004

/s/ Jack L. Stahl
Jack L. Stahl President
and Chief Executive Officer

---

CERTIFICATIONS

I, Thomas E. McGuire, certify that:

|   |                                                                                                   
|-- | --------------------------------------------------------------------------------------------------
|1. | I have reviewed this annual report on
Form 10-K (the "Report") of Revlon, Inc. (the
"Registrant");

|   |                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Based on my knowledge, this Report
does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this Report;

|   |                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | Based on my knowledge, the financial
statements, and other financial information included in this Report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the Registrant as of, and for,
the periods presented in this Report;

|   |                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | The Registrant's other
certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
Registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this Report is being prepared;

(b)
[Intentionally omitted per SEC's transition rules in SEC
Release Nos. 33-8238 and 34-47986];

(c) Evaluated
the effectiveness of the Registrant's disclosure controls and
procedures and presented in this Report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the
Registrant's internal control over financial reporting that
occurred during the Registrant's most recent fiscal quarter (the
Registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over
financial reporting; and

|   |                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | The
Registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the Registrant's auditors and the audit committee
of the Registrant's board of directors (or persons performing the
equivalent functions):

(a) All significant deficiencies
and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely
affect the Registrant's ability to record, process, summarize and
report financial information; and

(b) Any fraud, whether
or not material, that involves management or other employees who have a
significant role in the Registrant's internal control over
financial reporting.

Date: February 19, 2004

/s/ Thomas E. McGuire
 Thomas E. McGuire
Executive Vice President and Chief Financial
Officer

---

EXHIBIT
INDEX

2.

Plan
of Acquisition Etc.2.1

Investment
Agreement, dated as of February 5, 2003 among Revlon, Inc., Products
Corporation and MacAndrews Holdings (incorporated by reference to
Exhibit 2.1 to the Current Report on Form 8-K of Products Corporation
filed with the Commission on February 5, 2003 (the
"Products Corporation February 2003 Form
8-K")).3.

Certificate of
Incorporation and By-laws.3.1

Amended
and Restated Certificate of Incorporation of Revlon, Inc. dated March
4, 1996 (incorporated by reference to Exhibit 3.4 to the Quarterly
Report on Form 10-Q of Revlon, Inc. for the quarterly period ended
March 31, 1996).3.2

Amended and Restated
By-laws of Revlon, Inc., dated as of June 30, 2001 (incorporated by
reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q of
Revlon, Inc. for the quarterly period ended June 30, 2001 (the
"Revlon 2001 Second Quarter Form
10-Q")).3.3

Certificate of
Designations, Powers, Preferences and Rights of Series B Convertible
Preferred Stock of Revlon, Inc. (incorporated by reference to Exhibit
3.2 to the Registration Statement on Form S-8 of Revlon, Inc. filed
with the Commission on October 11, 2001, File No.
333-71378).3.4

Certificate of the
Designations, Powers, Preferences and Rights of Series C Preferred
Stock dated May 8, 2003 (incorporated by reference to Exhibit 3.4 to
the Quarterly Report on Form 10-Q of Revlon, Inc. for the quarterly
period ended March 31, 2003).*3.5

Certificate of Elimination of Series C Preferred
Stock of Revlon, Inc. dated February 13, 2004.4.

Instruments defining the right of security
holders, including indentures.4.1

Indenture, dated as of November 26, 2001, among
Products Corporation, the Guarantors party thereto, including Revlon,
Inc., as parent guarantor, and Wilmington Trust Company, as trustee,
relating to the 12% Senior Secured Notes due 2005 (incorporated
by reference to Exhibit 4.2 to the Current Report on Form 8-K of
Products Corporation filed with the Commission on November 30, 2001
(the "Products Corporation November 2001 Form
8-K")).4.2

Revlon Pledge
Agreement, dated as of November 30, 2001, between Revlon, Inc., as
pledgor, in favor of Wilmington Trust Company, as note collateral agent
(the "Note Collateral Agent") (incorporated
by reference to Exhibit 4.2 to the Annual Report on Form 10-K of
Products Corporation for the year ended December 31, 2001 (the
"Products Corporation 2001 Form
10-K")).4.3

Company Pledge
Agreement (Domestic), dated as of November 30, 2001, between Products
Corporation, as pledgor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.3 to the
Products Corporation 2001 Form 10-K).4.4

Subsidiary Pledge Agreement (Domestic), dated as
of November 30, 2001, between RIROS Corporation, as pledgor, in favor
of Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.4 to the Products Corporation 2001 Form
10-K).


---

4.5

Subsidiary Pledge
Agreement (Domestic), dated as of November 30, 2001, between Revlon
International Corporation, as pledgor, in favor of Wilmington Trust
Company, as Note Collateral Agent (incorporated by reference to Exhibit
4.5 to the Products Corporation 2001 Form 10-K).4.6

Subsidiary Pledge Agreement (Domestic), dated as
of November 30, 2001, between PPI Two Corporation, as pledgor, in favor
of Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.6 to the Products Corporation 2001 Form
10-K).4.7

Company Pledge Agreement
(International), dated as of November 30, 2001, between Products
Corporation, as pledgor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.7 to the
Products Corporation 2001 Form 10-K).4.8

Subsidiary Pledge Agreement (International), dated
as of November 30, 2001, between RIROS Corporation, as pledgor, in
favor of Wilmington Trust Company, as Note Collateral Agent
(incorporated by reference to Exhibit 4.8 to the Products Corporation
2001 Form 10-K).4.9

Subsidiary Pledge
Agreement (International), dated as of November 30, 2001, between
Revlon International Corporation, as pledgor, in favor of Wilmington
Trust Company, as Note Collateral Agent (incorporated by reference to
Exhibit 4.9 to the Products Corporation 2001 Form 10-K).4.10

Subsidiary Pledge Agreement (International),
dated as of November 30, 2001, between PPI Two Corporation, as pledgor,
in favor of Wilmington Trust Company, as Note Collateral Agent
(incorporated by reference to Exhibit 4.10 to the Products Corporation
2001 Form 10-K).4.11

Company Security
Agreement, dated as of November 30, 2001, between Products Corporation,
as grantor, in favor of Wilmington Trust Company, as Note Collateral
Agent (incorporated by reference to Exhibit 4.11 to the Products
Corporation 2001 Form 10-K).4.12

Subsidiary Security Agreement, dated as of
November 30, 2001, among Almay, Inc., Carrington Parfums Ltd., Charles
of the Ritz Group Ltd., Charles Revson Inc., Cosmetics & More,
Inc., North America Revsale Inc., Pacific Finance & Development
Corp., PPI Two Corporation, Prestige Fragrances, Ltd., Revlon Consumer
Corp., Revlon Government Sales, Inc., Revlon International Corporation,
Revlon Products Corp., Revlon Real Estate Corporation, RIROS
Corporation, RIROS Group Inc. and RIT Inc., each as grantor, in favor
of Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.12 to the Products Corporation 2001 Form
10-K).4.13

Company Copyright Security
Agreement, dated as of November 30, 2001, between Products Corporation,
as grantor, in favor of Wilmington Trust Company, as Note Collateral
Agent (incorporated by reference to Exhibit 4.13 to the Products
Corporation 2001 Form  10-K).4.14

Company Patent Security Agreement, dated as of
November 30, 2001, between Products Corporation, as grantor, in favor
of Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.14 to the Products Corporation 2001 Form
10-K).


---

4.15

Company Trademark
Security Agreement, dated as of November 30, 2001, between Products
Corporation, as grantor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.15 to the
Products Corporation 2001 Form  10-K).4.16

Subsidiary Trademark Security Agreement, dated as
of November 30, 2001, between Charles Revson Inc., as grantor, in favor
of Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.16 to the Products Corporation 2001 Form
10-K).4.17

Subsidiary Trademark Security
Agreement, dated as of November 30, 2001, between Charles of the Ritz
Group, Ltd., as grantor, in favor of Wilmington Trust Company, as Note
Collateral Agent (incorporated by reference to Exhibit 4.17 to the
Products Corporation 2001 Form 10-K).4.18

Deed of Trust, Assignment of Rents and Leases and Security
Agreement, dated as of November 30, 2001, between Products Corporation
and First American Title Insurance Company for the use and benefit of
Wilmington Trust Company, as Note Collateral Agent (incorporated by
reference to Exhibit 4.18 to the Products Corporation 2001 Form
10-K).4.19

Amended and Restated Collateral
Agency Agreement, dated as of May 30, 1997, and further amended and
restated as of November 30, 2001, between Products Corporation,
JPMorgan Chase Bank, as bank agent and as administrative agent, and
Wilmington Trust Company, as trustee and as Note Collateral Agent
(incorporated by reference to Exhibit 4.19 to the Products Corporation
2001 Form 10-K).4.20

Indenture, dated as
of February 1, 1998, between Revlon Escrow Corp. ("Revlon
Escrow") and U.S. Bank Trust National Association
(formerly known as First Trust National Association), as trustee,
relating to the 8 1/8% Senior Notes due 2006
(the  "8 1/8% Senior Notes
Indenture") (incorporated by reference to Exhibit 4.1 to
the Registration Statement on Form S-1 of Products Corporation filed
with the Commission on March 12, 1998, File No.  333-47875 (the
"Products Corporation March 1998  Form
S-1")).4.21

Indenture, dated
as of February 1, 1998, between Revlon Escrow and U.S. Bank Trust
National Association (formerly known as First Trust National
Association), as trustee, relating to the 8 5/8%
Senior Subordinated Notes Due 2008 (the
"8 5/8% Senior Subordinated Notes
Indenture") (incorporated by reference to Exhibit 4.3 to
the Products Corporation March 1998 Form S-1).4.22

First Supplemental Indenture, dated April 1,
1998, among Products Corporation, Revlon Escrow, and U.S. Bank Trust
National Association (formerly known as First Trust National
Association), as trustee, amending the 8 1/8%
Senior Notes Indenture (incorporated by reference to Exhibit 4.2 to the
Products Corporation March 1998 Form S-1).4.23

First Supplemental Indenture, dated March 4,
1998, among Products Corporation, Revlon Escrow, and U.S. Bank Trust
National Association (formerly known as First Trust National
Association), as trustee, amending the 8 5/8%
Senior Subordinated Notes Indenture (incorporated by reference to
Exhibit 4.4 to the Products Corporation March 1998 Form
S-1).


---

4.24

Indenture, dated as of
November 6, 1998, between Products Corporation and U.S. Bank Trust
National Association (formerly known as First Trust National
Association), as trustee, relating to Products Corporation's
9% Senior Notes due 2006 (incorporated by reference to Exhibit
4.13 to the Quarterly Report on Form 10-Q of Revlon, Inc. for the
quarterly period ended September 30, 1998).4.25

Second Amended and Restated Credit Agreement,
dated as of November 30, 2001, among Products Corporation, the
subsidiaries of Products Corporation parties thereto, the lenders
parties thereto, the Co-Agents parties thereto, Citibank, N.A., as
documentation agent, J.P. Morgan Securities Inc., as sole arranger and
bookrunner, and JPMorgan Chase Bank, as administrative agent (the
"Second Amended and Restated Credit
Agreement") (incorporated by reference to Exhibit 4.1 to
the Products Corporation November 2001 Form 8-K).4.26

First Amendment dated May 31, 2002 to the Second
Amended and Restated Credit Agreement (incorporated by reference to
Exhibit 10.18 to the Quarterly Report on Form 10-Q of Revlon, Inc. for
the quarterly period ended June 30, 2002).4.27

Second Amendment and First Waiver Agreement dated
as of February 5, 2003 to the Second Amended and Restated Credit
Agreement (incorporated by reference to Exhibit 10.19 to the Products
Corporation February 2003 Form 8-K).4.28

Third Amendment and Second Waiver Agreement dated as of January 28,
2004 to the Second Amended and Restated Credit Agreement (incorporated
by reference to Exhibit 4.28 of the Current Report on Form 8-K of
Products Corporation filed with the Commission on January 29, 2004 (the
"Products Corporation January 2004 Form
8-K")).4.29

Second
Supplemental Indenture, dated as of February 11, 2004, among Products
Corporation, U.S. Bank Trust National Association (formerly known as
First Trust National Association), as Trustee, and Revlon, Inc., as
guarantor, amending the Indenture, dated as of February 1, 1998, as
supplemented by the First Supplemental Indenture, dated as of April 1,
1998, between Products Corporation and such trustee relating to
Products Corporation's 8 1/8% Senior Notes
due 2006 (incorporated by reference to Exhibit 4.29 of the Current
Report on Form 8-K of Revlon, Inc. filed with the Commission on
February 12, 2004 (the "Revlon, Inc. February 2004 Form
8-K")).4.30

First
Supplemental Indenture, dated as of February 11, 2004, among Products
Corporation, U.S. Bank Trust National Association (formerly known as
First Trust National Association), as trustee, and Revlon, Inc., as
guarantor, amending the Indenture, dated as of November 6, 1998,
between Products Corporation and such trustee, relating to Products
Corporation's 9% Senior Notes due 2006 (incorporated by
reference to Exhibit 4.30 of the Revlon, Inc. February 2004 Form
8-K).4.31

Second Supplemental Indenture,
dated as of February 11, 2004, among Products Corporation, U.S. Bank
Trust National Association (formerly known as First Trust National
Association), as trustee, and Revlon, as guarantor, amending the
Indenture, dated as of February 1, 1998, as supplemented by the First
Supplemental Indenture, dated as of March 4, 1998, between Products
Corporation and such trustee, relating to Products Corporation's
8 5/8% Senior Subordinated Notes due 2008
(incorporated by reference to Exhibit 4.31 of the Revlon, Inc. February
2004 Form 8-K).*4.32

Fourth Amendment
dated February 18, 2004 to the Second Amended and Restated Credit
Agreement.


---

10.

Material
Contracts.10.1

Asset Transfer
Agreement, dated as of June 24, 1992, among Revlon Holdings LLC
(formerly known as Revlon Holdings Inc.), National Health Care Group,
Inc., Charles of the Ritz Group Ltd., Products Corporation and Revlon,
Inc. (incorporated by reference to Exhibit 10.1 to Amendment No. 1 to
the Revlon, Inc. Registration Statement on Form S-1 filed with the
Commission on June 29, 1992, File No. 33-47100).10.2

Tax Sharing Agreement, entered into as of June
24, 1992, among Mafco Holdings, Revlon, Inc., Products Corporation and
certain subsidiaries of Products Corporation as amended and restated as
of January 1, 2001 (incorporated by reference to Exhibit 10.2 to the
Products Corporation 2001 Form 10-K).10.3

Employment Agreement, dated as of February 17,
2002, between Products Corporation and Jack L. Stahl (incorporated by
reference to Exhibit 10.17 to the Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2002 of Revlon, Inc.).10.4

Revlon, Inc. 2002 Supplemental Stock Plan
(incorporated by reference to Exhibit 4.1 to the Registration Statement
on Form S-8 of Revlon, Inc. filed with the Commission on June 24, 2002,
File No. 333-91040).10.5

Employment
Agreement, dated as of August 18, 2003, between Products Corporation
and Thomas E. McGuire (incorporated by reference to Exhibit 10.5 to the
Quarterly Report on Form 10-Q of Revlon, Inc. for the quarterly period
ended September 30, 2003 (the "Revlon, Inc. 2003 Third
Quarter Form 10-Q")).10.6

Employment Agreement, amended and restated as of
May 9, 2000, between Products Corporation and Douglas H. Greeff (the
"Greeff Employment Agreement") (incorporated
by reference to Exhibit 10.22 to the Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2000 of Revlon, Inc.).10.7

Amendment dated June 18, 2001 to the Greeff
Employment Agreement (incorporated by reference to Exhibit 10.6 to the
Products Corporation 2001 Form 10-K).10.8

Amendment, dated as of August 18, 2003, to the
amended and restated Greeff Employment Agreement (incorporated by
reference to Exhibit 10.8 to the Revlon, Inc. 2003 Third Quarter Form
10-Q).10.9

Employment Agreement, effective
as of August 1, 2001, between Products Corporation and Paul E. Shapiro
(incorporated by reference to Exhibit 10.7 to the Products Corporation
2001 Form 10-K).10.10

Revlon Executive
Bonus Plan (Amended and Restated as of September 1, 2002) (incorporated
by reference to Exhibit 10.8 to the Annual Report on Form 10-K of
Revlon, Inc. for the year ended December 31, 2002 (the
"Revlon, Inc. 2002 Form 10-K").10.11

Amended and Restated Revlon Pension Equalization
Plan, amended and restated as of December 14, 1998 (incorporated by
reference to Exhibit 10.15 to the Annual Report on Form 10-K for year
ended December 31, 1998 of Revlon, Inc.).10.12

Executive Supplemental Medical Expense Plan
Summary dated July 2000 (incorporated by reference to Exhibit 10.10 to
the Revlon, Inc. 2002 Form 10-K).10.13

Benefit Plans Assumption Agreement, dated as of
July 1, 1992, by and among Holdings, Revlon, Inc. and Products
Corporation (incorporated by reference to Exhibit 10.25 to the Annual
Report on Form 10-K for the year ended December 31, 1992 of Products
Corporation).


---

10.14

Revlon Amended and
Restated Executive Deferred Compensation Plan dated as of August 6,
1999 (incorporated by reference to Exhibit 10.27 to the Quarterly
Report on Form 10-Q of Revlon, Inc. for the quarterly period ended
September 30, 1999).10.15

Revlon Executive
Severance Policy as amended July 1, 2002 (incorporated by reference to
Exhibit 10.13 to the Revlon, Inc. 2002 Form 10-K).10.16

Revlon, Inc. Fourth Amended and Restated 1996
Stock Plan (incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-8 of Revlon, Inc. filed with the
Commission on June 24, 2002, File No. 333-91038).10.17

Purchase Agreement, dated as of February 18,
2000, by and among Revlon, Inc., Products Corporation, REMEA 2 B.V.,
Revlon Europe, Middle East and Africa, Ltd., Revlon International
Corporation, Europeenne de Produits de Beaute S.A., Deutsche Revlon
GmbH & Co. K.G., Revlon Canada, Inc., Revlon de Argentina,
S.A.I.C., Revlon South Africa (Proprietary) Limited, Revlon (Suisse)
S.A., Revlon Overseas Corporation C.A., CEIL Comercial, Exportadora,
Industrial Ltda., Revlon Manufacturing Ltd., Revlon Belgium N.V.,
Revlon (Chile) S.A., Revlon (Hong Kong) Limited, Revlon, S.A., Revlon
Nederland B.V., Revlon New Zealand Limited, European Beauty Products
S.p.A. and Beauty Care Professional Products Luxembourg, S.a.r.l.
(incorporated by reference to Exhibit 10.19 to the Annual Report on
Form 10-K for the year ended December 31, 1999 of Revlon,
Inc.).10.18

Purchase and Sale Agreement
dated as of July 31, 2001 by and between Holdings and Revlon, Inc.
relating to the Charles of the Ritz business (incorporated by reference
to Exhibit 10.6 to the Products Corporation 2001 Form 10-K).10.19

Senior Unsecured Multiple-Draw Term Loan dated
as of February 5, 2003, between MacAndrews Holdings and Products
Corporation (incorporated by reference to Exhibit 10.17 to the Products
Corporation February 2003 Form 8-K).10.20

Senior Unsecured Supplemental Line of Credit
Agreement, dated as of February 5, 2003, between MacAndrews Holdings
and Products Corporation (the "Senior Unsecured
Supplemental Line of Credit Agreement") (incorporated by
reference to Exhibit 10.18 of the Products Corporation February 2003
Form 8-K).10.21

Amendment No. 1, dated as
of July 30, 2003, to the Senior Unsecured Supplemental Line of Credit
Agreement (incorporated by reference to Exhibit 10.19 to the Quarterly
Report on Form 10-Q of Revlon, Inc. for the quarterly period ended June
30, 2003).10.22

$125 Million Senior
Unsecured Multiple-Draw Term Loan Agreement, dated as of January 28,
2004, between Products Corporation and MacAndrews Holdings
(incorporated by reference to Exhibit 10.22 to the Products Corporation
January 2004 Form 8-K).10.23

Support
Agreement, dated as of February 11, 2004, between Revlon, Inc. and
MacAndrews & Forbes Holdings Inc. (incorporated by reference to
Exhibit 10.23 of the Revlon, Inc. February 2004 Form 8-K).10.24

Support Agreement, dated as of February 11,
2004, between Revlon, Inc. and Fidelity Management & Research Co.
(incorporated by reference to Exhibit 10.24 of the Revlon, Inc.
February 2004 Form 8-K).*10.25

Amendment
No.  2, dated as of January 28, 2004, to the Senior Unsecured
Supplemental Line of Credit Agreement.


---

10.26

Amendment dated as of
February  19, 2004, to the Support Agreement, dated as of
February  11, 2004, between Revlon, Inc. and Mafco Holdings Inc.
(incorporated by reference to Exhibit 10.25 of the Current Report on
Form 8-K of Revlon, Inc. filed with the Commission on February
19, 2004 (the "Revlon, Inc. Second February  2004
Form 8-K").10.27

Amendment
dated as of February  19, 2004, to the Support Agreement, dated
as of February  11, 2004, between Revlon, Inc. and Fidelity
Management & Research Co. (incorporated by reference to Exhibit
10.26 of the Revlon, Inc. Second February Form 8-K).*10.28

Revlon, Inc. Audit Committee Pre-Approval
Policy.21.

Subsidiaries.*21.1

Subsidiaries of Revlon, Inc.23.

Consents of Experts and
Counsel.*23.1

Consent of KPMG
LLP.24.

Powers of
Attorney.*24.1

Power of Attorney
executed by Ronald O. Perelman.*24.2

Power
of Attorney executed by Howard Gittis.*24.3

Power of Attorney executed by Donald G.
Drapkin.*24.4

Power of Attorney executed
by Alan S. Bernikow.*24.5

Power of
Attorney executed by Meyer Feldberg*24.6

Power of Attorney executed by Edward J.
Landau.*24.7

Power of Attorney executed by
Linda Gosden Robinson.*24.8

Power of
Attorney executed by Terry Semel.*24.9

Power of Attorney executed by Martha
Stewart.99.

Additional
Exhibits.*99.1

Certification of Jack
L. Stahl, Chief Executive Officer, dated February 19, 2004 pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The
Sarbanes-Oxley Act of 2002.*99.2

Certification of Thomas E. McGuire, Chief
Financial Officer, dated February 19, 2004 pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley
Act of
2002.


|
|
|
|

|* | Filed
herewith.
|- | ---------------

|(b) | Reports on Form
8-K.
|--- | --------------------

On October 30, 2003, the Company filed with the
Commission a current report on Form 8-K furnishing as Item 12 of Form
8-K, "Results of Operations and Financial
Condition" a copy of the Company's press release
announcing its earnings for the fiscal quarter ended September 30,
2003.

On January 29, 2004, the Company filed with the Commission
a current report on Form 8-K filing as Item 5 of Form 8-K a press
release announcing the January 2004 amendment of Products
Corporation's Credit Agreement which included copies of Products
Corporation's Third Amendment and Second

---

Waiver Agreement dated as of January 28, 2004
to its Credit Agreement and its $125 Million Senior Unsecured
Multiple-Draw Term Loan Agreement dated as of January 28, 2004 with
MacAndrews Holdings.

On February 12, 2004, the Company filed
with the Commission a current report on Form 8-K furnishing as Item 12
of Form 8-K, "Results of Operations and Financial
Condition" a copy of the Company's press release
announcing its earnings for the fiscal quarter and fiscal year ended
December 31, 2003.

On February 12, 2004, the Company filed with
the Commission a current report on Form 8-K furnishing as Item 5 of
Form 8-K, "Other Events and Regulation FD
Disclosure" a copy of the Company's press release
announcing its Debt Reduction Transactions and which included copies of
certain related documents.

On February 18, 2004, the Company
filed with the Commission a current report on Form 8-K furnishing as
Item 9 of Form 8-K, "Regulation FD
Disclosure" certain material, non-public information
provided to the public at an Investors Conference held by the Company
on February  18, 2004, advance notice of which was publicly
announced via a press release on February  12, 2004.

On
February  19, 2004, the Company filed with the Commission a
current report on Form 8-K furnishing as Item 5 of Form 8-K,
"Other Events and Regulation FD Disclosure"
copies of the Amendment dated as of February  18, 2004, to the
Support Agreement, dated as of February  11, 2004, between
Revlon, Inc. and Mafco Holdings Inc. and the Amendment dated as of
February  18, 2004, to the Support Agreement, dated as of
February 11, 2004, between Revlon, Inc. and Fidelity Management &
Research Co.

---