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SECURITIESAND EXCHANGE COMMISSION

Washington, D.C.20549

FORM 10-K

FOR ANNUAL AND TRANSITIONREPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

(Mark One)

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

For thefiscal year ended December 31, 2003

**OR**

    **TRANSITION REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For thetransition period from                                    to                                    

Commission file number 33-59650

REVLON CONSUMER PRODUCTS CORPORATION

(Exact name of registrant as specified in itscharter)

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| DELAWARE                                                    |  | 13-3662953                         |
| (Stateor other jurisdiction ofincorporation ororganization) |  | (I.R.S. EmployerIdentificationNo.) |
|                                                        |  |
| 237 ParkAvenue, New York, New York                          |  | 10017                              |
| (Address ofprincipal executive offices)                     |  | (ZipCode)                          |
|                                                             |

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

Securities registeredpursuant to Section 12(b) or 12(g) of theAct:

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| Titleof each class |  | Name of each exchange on whichregistered |
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Indicate by check mark whetherthe registrant: (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.    Yes        No    

Indicate by check mark if disclosure ofdelinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best ofregistrant's knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-K orany amendment to this Form 10-K.    

Indicateby check mark whether the registrant is an accelerated filer (asdefined in Rule 12b-2 of the Securities Exchange Act of1934).    Yes         No    

Theaggregate market value of the voting stock held by non-affiliates ofthe registrant is not applicable as there is no public market therefor.All shares of common stock are held by one affiliate. The number ofoutstanding shares of the registrant's common stock, as ofDecember 31, 2003, was 1,000.

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Part I

Item1.     Description of Business

Background

Revlon Consumer Products Corporation ("ProductsCorporation" and together with its subsidiaries, the"Company"), is a direct wholly ownedsubsidiary of Revlon, Inc., which manufactures, markets and sells anextensive array of cosmetics and skin care, fragrances and personalcare products. **Revlon** is one of the world's leadingmass-market cosmetics brands. **Revlon** believes that its globalbrand name recognition, product quality and marketing experience haveenabled it to create one of the strongest consumer brand franchises inthe world. The Company's products are sold worldwide and marketedunder such well-known brand names as **Revlon, ColorStay, Revlon AgeDefying**and**Skinlights**, as well as **Almay** incosmetics; **Almay** Kinetin, **Vitamin C Absolutes, Eterna 27,Ultima II** and **Jeanne Gatineau** in skin care; **Charlie**in fragrances; and **High Dimension, Flex, Mitchum, Colorsilk, JeanNaté**and **Bozzano** in personal care products.

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

All U.S. market share and market position dataherein for the Company's brands are based upon retail dollarsales, which are derived from ACNielsen data. ACNielsen measures retailsales volume of products sold in the U.S. mass-market distributionchannel. Such data represent ACNielsen's estimates based upondata gathered by ACNielsen from market samples and are thereforesubject 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.

TheCompany's Plan

The Company's plan consists of threemain components: (1) the cost rationalization phase; (2) thestabilization and growth phase; and (3) the continued growth momentumand accelerated growth phase.

Phase 1 — CostRationalization

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

Phase 2 —Stabilization and Growth

In February 2002, the Companyannounced the appointment of Jack L. Stahl, former president and chiefoperating officer of The Coca-Cola Company, as the Company's newPresident and Chief Executive Officer.

Following the appointmentof Mr. Stahl, the Company undertook an extensive review and evaluationof the Company's business to establish specific integratedobjectives and actions to advance the next stage in the Company'splan. As a result of this review, the Company established threeprincipal objectives:

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| •  | creating anddeveloping the most consumer-preferredbrands; |

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

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| •  | becoming a top company wherepeople choose to work. |

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The Company also conducted detailedevaluations and research of the strengths of the Revlon brand and theAlmay brand; the Company's advertising and promotional efforts;the Company's relationships with the Company's retailersand consumers; its retail in-store presence; and the strength andskills of the Company's organization. As a result, the Companydeveloped the following key actions and investments to support thestabilization and growth phase of itsplan:

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| •  | Increase advertising andmedia spending and effectiveness.    The Company increased itsmedia spending and advertising support in 2003 and latter half of 2002.The Company is also seeking to improve the effectiveness of itsmarketing, including its advertising, by, among other things, ensuringconsistent messaging and imagery in its advertising, in the graphicsincluded in the Company's wall displays and in other marketingmaterials. |

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| •  | Increase the marketingeffectiveness of the Company's wall displays.    Beginningin the first quarter of 2003, the Company has begun and intends tocontinue to make significant improvements to its retail wall displaysby streamlining its product assortment and reconfiguring productplacement, which the Company believes will optimize cross-selling amongthe Company's various product categories on the wall displays andmake the displays easier to merchandise and stock. The Company alsointends to continue to roll out its new wall displays, which theCompany began in 2002. In addition, beginning in the first quarter of2003, the Company has begun and intends to continue to focus onenhancing the effectiveness of its merchandiser coverage to improvein-store stock levels and work with its retail customers to improvereplenishment of the Company's products on the wall displays andto minimize out-of-stocks at its retailcustomers. |

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| •  | Adopt revised pricingstrategies.    The Company has been selectively adjusting priceson certain stock keeping units, or SKUs, to better align theCompany's pricing with product benefits and competitivebenchmarks. |

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

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

InDecember 2002, Revlon, Inc. announced that it would accelerate aspectsof the implementation of the stabilization and growth phase of itsplan. The Company recorded charges of approximately $100 million in thefourth quarter of 2002 and approximately $31 million during 2003. Thesecharges primarily related to various aspects of the stabilization andgrowth phase of the Company's plan, primarily stemming from salesreturns and inventory writedowns from a selective reduction of SKUs,reduced distribution of the Ultima II brand, higher allowances stemmingfrom selective price adjustments on certain products, professionalexpenses associated with the development of, and research in relationto, and execution of the stabilization and growth phase of theCompany's plan, and writedowns associated with reconfiguringexisting wall displays at the Company's retail customers. Thesecharges exclude brand support expenses and training and developmentcosts.

Phase 3 — Continued Growth Momentum andAccelerated Growth

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

The Companycurrently anticipates that the continued growth momentum andaccelerated growth stage of its plan will include various actions thatrepresent refinements of and additions to the actions taken during thestabilization and growth phase of its plan, with the objective ofimproving the Company's operating margins. The Company currentlyanticipates that these initiatives will include, among other

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things, actions to: (i) further improve thenew product development and implementation process; (ii) continue toincrease the effectiveness and reduce the cost of the Company'sdisplay walls; (iii) drive efficiencies across the Company'soverall supply chain, including reducing manufacturing costs bystreamlining components and sourcing strategically; and (iv) optimizethe effectiveness of the Company's marketing and promotions. Thisstage will also include strengthening the Company's balancesheet. **(See "RecentDevelopments")**.

Finally, the Company expectsthat it will continue the training and development of its organizationto continue to improve the organization's capability to executeits strategies, while providing enhanced job satisfaction for itsemployees.

Recent Developments

On February 12, 2004,Revlon, Inc. announced that its Board of Directors had approvedagreements with Fidelity Management & Research Co.("Fidelity") and Mafco Holdings Inc.("Mafco Holdings" and, together with itsaffiliates, "MacAndrews & Forbes"), whichis wholly owned by Ronald O. Perelman, Revlon's principalstockholder, intended to dramatically strengthen the Company'sbalance sheet (the "Debt ReductionTransactions"). As a result of the agreements reached, theCompany expects that its debt will be reduced by approximately $930million and the Company anticipates that approximately $780 million ofits debt will be eliminated during the first quarter of 2004 through adebt-for-equity exchange.

In connection with the Debt ReductionTransactions, MacAndrews & Forbes has agreed to exchange anaggregate of approximately $475 million of the Company'sindebtedness for shares of Revlon, Inc.'s Class A Common Stock.Fidelity has also agreed to exchange an aggregate of $155 million ofthe Company's indebtedness for shares of Revlon, Inc.'sClass A Common Stock. On February 20, 2004, Revlon, Inc. commencedexchange offers to holders of any and all of the Company'soutstanding 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), eachof 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 totender for exchange in the exchange offers an aggregate ofapproximately $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 CommonStock, at a ratio of 400 shares of Revlon, Inc. Class A Common Stockfor each $1,000 principal amount of 8 1/8%Senior Notes or 9% Senior Notes tendered for exchange or 300shares of Revlon, Inc. Class A Common Stock for each $1,000 principalamount of 8 5/8% Senior Subordinated Notestendered for exchange. Fidelity may elect to receive cash or additionalshares of Revlon, Inc. Class A Common Stock in respect of accruedinterest payable on the notes tendered by it.

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

In the exchange offers for the outstanding8 1/8% Senior Notes, 9% Senior Notes and8 5/8% Senior Subordinated Notes, holders otherthan MacAndrews & Forbes and Fidelity are being offered theopportunity to exchange their notes for (i) shares of Revlon, Inc.Class A Common Stock at the same ratios applicable to Fidelity andMacAndrews & Forbes in the support agreements, or (ii) cash up to amaximum 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% SeniorSubordinated Notes. Accrued interest will also be paid on tenderednotes in cash or additional shares of Revlon, Inc. Class A CommonStock, at the holder's option. The maximum principal amount ofnotes that may be exchanged for cash is $150 million reduced by theaggregate principal amount of any notes tendered and exchanged in theexchange offers for shares of Revlon, Inc. Class A Common Stock inexcess of the amounts Fidelity and MacAndrews & Forbes currentlyhold and have agreed to tender for exchange. The exchange offerscommenced on February 20, 2004.

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To the extent that $150 million aggregateprincipal amount of notes, other than the notes to be tendered byFidelity and MacAndrews & Forbes, are not tendered in the exchangeoffers, MacAndrews & Forbes has agreed to subscribe for additionalshares 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 ofsuch investment to be used to repay the Company's indebtedness.MacAndrews & Forbes has also agreed to subscribe for additionalshares of Revlon, Inc. Class A Common Stock in an aggregatesubscription amount equal to the amount of cash required to be paid byRevlon, Inc. in exchange for notes which are tendered for cash,excluding cash payable with respect to accrued interest. If, as aresult of these transactions, MacAndrews & Forbes makes aninvestment in Revlon, Inc. Class A Common Stock for cash, the otherstockholders of record of Revlon, Inc. as of a date prior to thetermination of the exchange offer will be provided the opportunity tosubscribe for Revlon, Inc. Class A Common Stock at the same $2.50subscription price.

In addition to the exchange offers which theCompany expects will reduce indebtedness by an aggregate ofapproximately $780 million, Revlon, Inc. plans to conduct furtherrights and equity offerings in such amounts as to ensure that the totaldebt reduction will be approximately $830 million by the end of 2004and approximately $930 million by the end of March 2006. The terms ofthe rights offering to be consummated prior to December 31, 2004 andany other equity offerings to be undertaken in connection with the DebtReduction Transactions, including the subscription prices, will bedetermined by Revlon, Inc.'s Board of Directors at theappropriate times.

Included in the obligations to be exchangedfor Revlon, Inc. Class A Common Stock are any and all outstandingamounts owing to MacAndrews & Forbes, as of the closing date of theexchange offers, under the Mafco $100 million term loan (which theCompany currently expects will be approximately $110 million at March31, 2004), the 2004 Mafco $125 million term loan (which the Companycurrently expects will be approximately $55 million at March 31, 2004),the Mafco $65 million line of credit (which the Company currentlyexpects will be approximately nil at March 31, 2004) (each ashereinafter defined) and approximately $24 million of certainsubordinated 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 indebtednessoutstanding under the subordinated promissory notes will be exchangedfor 300 shares of Revlon, Inc. Class A Common Stock. The remainder ofthe 2004 Mafco $125 million term loan and the Mafco $65 million line ofcredit which is not exchanged in the exchange offers shall remainavailable to the Company in accordance with their respective terms. Aspart of the Debt Reduction Transactions, under the stockholdersagreement Revlon, Inc. agreed with Fidelity to cause the Company tolimit outstanding aggregate borrowings under the Mafco $65 million lineof credit and the Mafco 2004 $125 million term loan to an amount notgreater than $125 million less the indebtedness under such loans thatis exchanged in the exchange offers, at any time after closing the DebtReduction Transactions. MacAndrews & Forbes, which beneficiallyowns 100% of the outstanding shares of Revlon, Inc.'sSeries A preferred stock, having an aggregate liquidation preference of$54.6 million, and 100% of Revlon, Inc.'s outstandingSeries B convertible preferred stock, has also agreed to exchange itsshares of Revlon, Inc.'s Series A preferred stock for 160 sharesof Revlon, Inc. Class A Common Stock for each $1,000 of liquidationpreference and to convert its shares of Revlon, Inc. Series Bconvertible preferred stock into an aggregate of 433,333 shares ofRevlon, Inc. Class A Common Stock.

As part of the Debt ReductionTransactions, Revlon, Inc. and Fidelity have entered into astockholders agreement pursuant to which, among other things, (i)Revlon, Inc. agreed to continue to maintain a majority of independentdirectors (as defined by New York Stock Exchange("NYSE") listing standards) on its Board ofDirectors as it currently does; and (ii) Revlon, Inc. would establishwithin 30 days of the consummation of the exchange offers and maintaina Nominating and Corporate Governance Committee of the Board ofDirectors.

MacAndrews & Forbes has agreed to act by writtenconsent to approve the Debt Reduction Transactions to the extent thatsuch approval is required, including the approval of the issuance ofthe necessary additional shares of Revlon, Inc. Class A Common Stock asconsideration in the exchange offers and the transactions contemplatedby the support agreements with Fidelity and MacAndrews & Forbes.The Board of Directors has fixed February 17, 2004 as the record datefor the determination of 

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stockholders entitled to notice of the actionby written consent. The decision to enter into the transactionsdescribed above follows the announcement in December 2003 that Revlon,Inc.'s Board of Directors had authorized management to beginexploring various alternatives to strengthen the Company'sbalance sheet and increase equity. Revlon, Inc. filed an InformationStatement with the Securities and Exchange Commission and mailedexchange offer materials to note holders on February 20, 2004. As acondition to the exchange of its exchange notes in the exchange offers,Fidelity is entitled to nominate two directors to be appointed toRevlon, Inc.'s Board of Directors, one of whom shall be appointedto each of the committees of Revlon, Inc.'s Board of Directors,subject to satisfying applicable NYSE listing standards. Revlon, Inc.indicated that certain aspects of the Debt Reduction Transactions maybe subject to Board of Director, stockholder, lender, and regulatoryapprovals.

As a result of the Debt Reduction Transactions, inFebruary 2004 the Company sought and secured amendments of its CreditAgreement to permit various aspects of such transactions, includingpermitting (i) the prepayment of the Mafco $100 million term loan andthe Mafco $125 million term loan as a result of the indebtednessthereunder outstanding at the consummation of the exchange offers beingfully converted to equity in connection with the exchange offers; (ii)the reduction of the commitment of the Mafco $65 million line of creditto its undrawn amount at the consummation of the exchange offers; (iii)the exclusion from Revlon, Inc.'s obligation to make capitalcontributions to the Company using the proceeds from Revlon,Inc.'s equity offerings raised by Revlon, Inc. in connection withthe Debt Reduction Transactions; (iv) any proceeds remaining after suchtransactions to be contributed to the Company and used to prepay orrepurchase any of its outstanding indebtedness, provided that theCompany takes action to make such prepayment or repurchase within 30days after receipt of such contribution and grants a first-prioritysecurity interest in the amount contributed pending its application tosuch prepayment or repurchase; (v) permitting Revlon, Inc. to enterinto certain investment or subscription agreements in connection withthe Debt Reduction Transactions, including the support agreements andany other investment or subscription agreements; and (vi) the aggregateterm loan commitments under the Credit Agreement to be increased by$64.4 million.

In December 2003, Revlon, Inc. announced that itsBoard of Directors approved two loans from MacAndrews & ForbesHoldings Inc. ("MacAndrews Holdings") one toprovide up to $100 million (the "2004 M&FLoan"), if needed, to enable the Company to continue toimplement and refine its plan, and the other to provide an additional$25 million (the "$25 million M&F Loan")to be used for general corporate purposes. 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 millionterm loan"). The 2004 Mafco $125 million term loan is asenior unsecured multiple-draw term loan at an interest rate of12% per annum and which is on substantially the same terms asthe Mafco $100 million term loan (as hereinafter defined) provided byMacAndrews & Forbes earlier in 2003, including that interest onsuch loans is not payable in cash, but will accrue and be added to theprincipal amount each quarter and be paid in full at final maturity onDecember 1, 2005, provided that the final $25 million of such loan maybe repaid at the option of the Company prior to December 1, 2005.

EBITDA (as defined in the Credit Agreement) was $144.4 million forthe four consecutive fiscal quarters ended December 31, 2003, which wasless than the minimum of $230 million required under the EBITDAcovenant of the Credit Agreement for that period and theCompany's leverage ratio was 1.66:1.00, which was in excess ofthe maximum ratio of 1.10:1.00 permitted under the leverage ratiocovenant of the Credit Agreement for that period. Accordingly, theCompany sought and on January 28, 2004 secured waivers of compliancewith these covenants for the four quarters ended December 31, 2003 and,in light of the Company's expectation that its plan would affectits ability to comply with these covenants during 2004, the Companyalso secured an amendment to eliminate the EBITDA and leverage ratiocovenants for the first three quarters of 2004 and a waiver ofcompliance with such covenants for the four quarters ending December31, 2004 expiring on January 31, 2005 (the "2004 BankAmendment"). The 2004 Bank Amendment to the CreditAgreement included certain other amendments to allow for the continuedimplementation of its plan, including, among other things: (i)providing exceptions from the limitations under the indebtednesscovenant to permit the 2004 Mafco $125 million term loan, (ii)permitting the Company to borrow up to an additional $50 million inworking capital loans from MacAndrews Holdings or its affiliates, ifnecessary, (iii) extending the maturity of the Mafco $65 million

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line of credit until June 30, 2005 andproviding that as a condition to the Company borrowing under such linefrom and after the effective date of the 2004 Bank Amendment that atleast $100 million shall have been borrowed under the 2004 Mafco $125million term loan, (iv) continuing the $20 million minimum liquiditycovenant, (v) increasing the applicable margin on loans under theCredit Agreement by 0.25%, the incremental cost of which to theCompany, assuming the Credit Agreement is fully drawn, would beapproximately $0.5 million from February 1, 2004 through the end of2004, and (vi) permitting Revlon, Inc. to guarantee certain classes ofthe Company's public indebtedness to consummate the DebtReduction Transactions.

Products

The Companymanufactures and markets a variety of products worldwide. The followingtable sets forth the Company's principal brands and certainselectedproducts.

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| BRAND       |  | COSMETICS                                                                                                                             |  | SKINCARE                     |  | FRAGRANCES   |  | PERSONALCAREPRODUCTS                                                                                                 |
| Revlon      |  | RevlonColorStayStayNaturalAlways OnRevlon Age DefyingSuper LustrousNewComplexion SkinlightsHighDimensionIlluminanceLipglideMoisturous |  | Eterna27Vitamin C Absolutes  |  | CharlieCiara |  | HighDimension ColorsilkFrost &GlowFlexOutrageous Aquamarine MitchumHi &DriJean NatéRevlon BeautyTools |
| Almay       |  | Almay Time-OffAmazingLastingOne CoatSkin Stays CleanAlmay LipVitalityClear ComplexionSkin Smoothing PureTints                         |  | Almay Kinetin Almay MilkPlus |  |         |  | Almay                                                                                                                |
| OtherBrands |  | Ultima II Jeanne GatineauCutex                                                                                                        |  | UltimaIIJeanneGatineau       |  |         |  | BozzanoJuvena                                                                                                        |
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Cosmeticsand Skin Care.    The Company sells a broad range of cosmeticsand skin care products designed to fulfill specifically identifiedconsumer needs, principally priced in the upper range of themass-market distribution channel, including lip makeup, nail color andnail care products, eye and face makeup and skin care products such aslotions, cleansers, creams, toners and moisturizers. Many of theCompany's products incorporate patented, patent-pending orproprietary technology.

The Company markets several differentlines of **Revlon** lip makeup (which address different segments ofthe lip makeup category). The Company's **ColorStay** lipcoloruses patented transfer-resistant technology that provides long wear.**ColorStay Overtime Lipcolor** is a patented lip technologyintroduced 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 theCompany's flagship wax-based lipcolor. In 2003, the Companylaunched **Moisturous Lipcolor**, and **LipGlide Sheer**lipcolor.

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

TheCompany sells face makeup, including foundation, powder, blush andconcealers, 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 technologythat provides long wear and won't rub off benefits; **NewComplexion**, for consumers in the 18-to-34 age bracket; and**Skinlights** skin brighteners that brighten skin with sheer washesof color. In 2003, the Company launched **ColorStay Stay Natural**foundation.

The Company's eye makeup products includemascaras, eyeliners and eye shadows. **ColorStay** mascara,**Softstroke** eyeliners and **Revlon Wet/Dry** eye shadows aretargeted for women in the 18-to-49 age bracket. The Company's eyeproducts also include**Illuminance**, an eye shadow that gives aluminous finish, and **High Dimension** mascara and eyeliners. In2002, the Company launched **ColorStay Overtime** lash tint, apatented product that wears for up to three days. In 2003, the Companylaunched **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** productsinclude lip makeup, eye and face makeup, and skin care products. The**Almay** brand flagship **One Coat**franchise consists of lipmakeup and eye makeup products including mascara. The Company alsosells **Skin Stays Clean** liquid foundation makeup with itspatented "clean pore complex." The **AlmayAmazing Lasting** Collection features long-wearing mascaras andfoundations. The **Almay**Kinetin Skincare Advanced Anti-AgingSeries features a patented technology. In 2003, the Company launched**Almay Lip Vitality** lipstick with a patented technology,**Nearly Naked** foundation and **Bright Eyes** mascara.

The Company sells **Revlon** Beauty Tools, which include nail andeye grooming tools, such as clippers, scissors, files, tweezers and eyelash curlers. **Revlon** Beauty Tools are sold individually and insets under the **Revlon** brand name and are the number one brand ofbeauty tools, excluding pedicure products in the U.S. mass-marketdistribution channel.

The Company's skin care products,including moisturizers, are sold under brand names including **Eterna27**, **Vitamin C Absolutes, Almay** Kinetin**,** **Almay MilkPlus** and **Ultima II**. In addition, the Company sells skin careproducts in international markets under internationally recognizedbrand names and under various regional brands, including theCompany's premium-priced **Jeanne Gatineau**brand, as well asUltima II.

Personal Care Products.    The Company sellsa broad line of personal care consumer products, which complements itscore cosmetics lines and enables the Company to meet theconsumer's broader beauty care needs. In the mass-marketdistribution channel, the Company sells haircare, antiperspirant andother 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 linesthroughout a portion of the world; and the **Mitchum** and **Hi****& Dri** antiperspirant brands in many countries. The Companyalso markets hypo-allergenic personal care products, includingantiperspirants, under the **Almay** brand. The Company's**High Dimension** hair color is a revolutionary 10-minute homepermanent hair color.

Fragrances.    The Company sellsa selection of moderately priced and premium-priced fragrances,including perfumes, eau de toilettes, colognes and body sprays. TheCompany's portfolio includes fragrances such as**Charlie**and **Ciara**.

Marketing

The Company marketsextensive consumer product lines at a range of retail prices primarilythrough the mass-market distribution channel and outside the U.S. alsomarkets select premium lines through demonstrator-assistedchannels.

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The Company uses print and televisionadvertising and point-of-sale merchandising, including displays andsamples. The Company's marketing emphasizes a uniform globalimage and product for its portfolio of core brands, including**Revlon, ColorStay, Revlon Age Defying, Almay, Charlie**, and**Mitchum**. In 2002 the Company consolidated all of its advertisingfor the **Revlon** and **Almay** brands into a single advertisingagency intended to increase the effectiveness of its worldwideadvertising, as well as result in more efficient media placement. TheCompany coordinates advertising campaigns with in-store promotional andother marketing activities. The Company develops jointly with retailerscarefully tailored advertising, point-of-purchase and other focusedmarketing programs. The Company uses network and spot televisionadvertising, national cable advertising and print advertising in majorgeneral interest, women's fashion and women's servicemagazines, as well as coupons, magazine inserts and point-of-saletesters. The Company also uses cooperative advertising programs withsome retailers, supported by Company-paid or Company-subsidizeddemonstrators, and coordinated in-store promotions and displays.

The Company distributes unique marketing materials such as the"Revlon Reports," which highlights seasonaland other fashion and color trends, describes the Company'sproducts that address those trends and can include coupons, rebateoffers and other promotional material to encourage consumers to try theCompany's products. Other marketing materials designed tointroduce the Company's newest products to consumers andencourage trial and purchase include point-of-sale testers on theCompany's wall displays that provide information about, andpermit consumers to test, the Company's products, therebyachieving the benefits of an in-store demonstrator without thecorresponding cost; magazine inserts containing samples of theCompany's newest products; trial-size products; and"shade samplers," which are collections oftrial-size products in different shades. Additionally, the Companymaintains separate websites, www.revlon.com andwww.almay.com devoted to the **Revlon** and **Almay**brands, respectively. Each of these websites feature current productand promotional information for the **Revlon** and **Almay**brands, respectively, and are updated regularly to stay current withthe Company's new product launches and other advertising andpromotional campaigns.

New Product Development and Research andDevelopment

The Company believes that it is an industry leaderin the development of innovative and technologically-advanced consumerproducts. The Company's marketing and research and developmentgroups identify consumer needs and shifts in consumer preferences inorder to develop new products, tailor line extensions and promotionsand redesign or reformulate existing products to satisfy such needs orpreferences. The Company's research and development groupcomprises departments specialized in the technologies critical to theCompany's various product categories, as well as an advancedtechnology department that promotes inter-departmental,cross-functional research on a wide range of technologies to developnew and innovative products. In connection with the implementation ofthe stabilization and growth phase of the Company's plan, theCompany has developed and is implementing a new cross-functionalproduct development process intended to optimize the Company'sability to bring to market its new product offerings and to ensure thatthe Company has products in key trend categories.

The Companyoperates an extensive cosmetics research and development facility inEdison, New Jersey. The scientists at the Edison facility areresponsible for all of the Company's new product researchworldwide, performing research for new products, ideas, concepts andpackaging. The research and development group at the Edison facilityalso performs extensive safety and quality tests on the Company'sproducts, including toxicology, microbiology and package testing.Additionally, quality control testing is performed at eachmanufacturing facility.

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

Manufacturing and Related Operationsand Raw Materials

During 2003, cosmetics and/or personal careproducts were produced at the Company's facilities in Oxford,North Carolina, Irvington, New Jersey, Venezuela, France, South Africa,China and Mexico and 

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at third-party owned facilities around theworld. The Company continually reviews its manufacturing needs againstits manufacturing capacity to identify opportunities to reduce costsand operate more efficiently. The Company purchases raw materials andcomponents throughout the world. The Company continuously pursuesreductions in cost of goods through the global sourcing of rawmaterials and components from qualified vendors, utilizing its largepurchasing capacity to maximize cost savings. The global sourcing ofraw materials and components from accredited vendors also ensures thequality of the raw materials and components. The Company believes thatalternate sources of raw materials and components exist and does notanticipate any significant shortages of, or difficulty in obtaining,such materials.

Distribution

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

United States andCanada.     Net sales in the U.S. and Canada accounted forapproximately 69% of the Company's 2003 net sales, amajority 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 licensesits trademarks to select manufacturers for products that the Companybelieves have the potential to extend the Company's brand namesand image. As of December 31, 2003, 12 licenses were in effect relatingto 16 product categories to be marketed principally in the mass-marketdistribution channel. Pursuant to such licenses, the Company retainsstrict control over product design and development, product quality,advertising and use of its trademarks. These licensing arrangementsoffer opportunities for the Company to generate revenues and cash flowthrough royalties.

As part of its strategy to increaseconsumption of the Company's products at retail, the Company hasenhanced and focused coverage by retail merchandisers who stock andmaintain the Company's point-of-sale wall displays intended toensure that high-selling SKUs are in stock and to ensure the optimalpresentation of the Company's products in retail outlets.Additionally, the Company has upgraded the technology available to itssales force to provide real-time information regarding inventory levelsand other relevant information.

International.     Net sales outside the U.S. andCanada accounted for approximately 31% of the Company's2003 net sales. The ten largest countries in terms of these sales,which include South Africa, United Kingdom, Australia, Mexico, HongKong, France, Brazil, Japan, Italy and China, accounted forapproximately 24% of the Company's net sales in 2003. TheCompany distributes its products through drug stores/chemists,hypermarkets/mass volume retailers and variety stores. The Company alsodistributes outside the U.S. through department stores and specialtystores such as perfumeries. At December 31, 2003, the Company activelysold its products through wholly-owned subsidiaries established in 16countries outside of the U.S. and through a large number ofdistributors and licensees elsewhere around the world.

Customers

The Company's principal customers includelarge mass volume retailers and chain drug stores, including suchwell-known retailers as Wal-Mart, Target, Kmart, Walgreens, Rite Aid,CVS, Eckerd, Albertsons Drugs and Longs in the U.S., Boots in theUnited Kingdom, Watsons in the Far East and Wal-Mart internationally.Wal-Mart and its affiliates worldwide accounted for approximately20.6% of the Company's 2003 consolidated net sales. TheCompany expects that Wal-Mart and a small number of other customerswill, in the aggregate, continue to account for a large portion of theCompany's net sales. Although the loss of Wal-Mart or one or moreof the Company's other customers that may account for asignificant portion of the Company's sales, or any significantdecrease in sales to these customers or any significant decrease inretail display space in any of these customers' stores, couldhave a material adverse effect on the Company's business,financial condition or results of operations, the Company has no reason

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to believe that any such loss of customersor decrease in sales will occur. In January 2002, Kmart Corporationfiled a petition for reorganization under Chapter 11 of the U.S.Bankruptcy Code and in May 2003 emerged from bankruptcy. Throughout2002 and continuing into 2003 Kmart continued to close underperformingstores. Kmart accounted for less than 3% of the Company'snet sales in 2003. Although the Company plans to continue doingbusiness with Kmart for the foreseeable future and, based upon theinformation currently available, believes that Kmart's priorbankruptcy proceedings and store closings will not have any materialadverse effect on the Company's business, financial condition orresults of operations, there can be no assurances that furtherdeterioration, if any, in Kmart's financial condition will nothave such an effect on the Company.

Competition

Theconsumer products business is highly competitive. The Company competeson the basis of numerous factors. Brand recognition, product quality,performance and price, product availability at the retail stores andthe extent to which consumers are educated on product benefits have amarked influence on consumers' choices among competing productsand brands. Advertising, promotion, merchandising and packaging, andthe timing of new product introductions and line extensions, also havea significant impact on buying decisions, and the structure and qualityof the Company's sales force, as well as consumer consumption ofthe Company's products, affect in-store position, retail displayspace and inventory levels in retail outlets. The Company experienceddeclines in its market share in the U.S. mass-market in color cosmeticsfrom the end of the first half of 1998 through the first half of 2002,including a decline in its color cosmetics market share from32.0% in the second quarter of 1998 to 22.3% in thesecond quarter of 2002. However, for the second half of 2002 and forthe full years of 2002 and 2003, the market share for theCompany's Revlon branded color cosmetics in the U.S. mass-marketincreased over the prior year. There can be no assurance that declinesin market share will not occur in the future or that theCompany's recent share increases will continue. In addition, theCompany competes in selected product categories against a number ofmultinational manufacturers, some of which are larger and havesubstantially greater resources than the Company, and which maytherefore have the ability to spend more aggressively on advertisingand marketing and have more flexibility than the Company to respond tochanging business and economic conditions. In addition to products soldin the mass-market and demonstrator-assisted channels, theCompany's products also compete with similar products solddoor-to-door or through mail-order or telemarketing by representativesof direct sales companies. The Company's principal competitorsinclude L'Oréal S.A., The Procter & Gamble Company,Unilever N.V. and The Estée Lauder Companies Inc.

Patents, Trademarks and Proprietary Technology

TheCompany's major trademarks are registered in the U.S. and in wellover 100 other countries, and the Company considers trademarkprotection to be very important to its business. Significant trademarksinclude **Revlon, ColorStay, Revlon Age Defying, Skinlights, HighDimension, Frost & Glow, Illuminance, Cutex** (outside the U.S.),**Mitchum, Eterna 27, Almay, Almay**Kinetin**, Ultima II, Flex,Charlie, Jean Naté, Moon Drops, Super Lustrous**and**Colorsilk**.

The Company utilizes certain proprietary, patentpending or patented technologies in the formulation or manufacture of anumber of the Company's products, including **ColorStay**cosmetics, classic **Revlon** nail enamel, **Skinlights** skinbrightener, **High Dimension** hair color, **Super Top Speed**nail enamel, **Revlon Age Defying** foundation and cosmetics, **NewComplexion** makeup, **Almay** Kinetin skin care**,****Time-Off** makeup, **Amazing Lasting** cosmetics**,** and**Almay One Coat** cosmetics. The Company also protects certain ofits packaging and component concepts through design patents. TheCompany considers its proprietary technology and patent protection tobe important to its business.

Government Regulation

TheCompany is subject to regulation by the Federal Trade Commission andthe Food and Drug Administration (the "FDA")in the United States, as well as various other federal, state, localand foreign regulatory authorities. The Oxford, North Carolinamanufacturing facility is registered with the FDA as 

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a drug manufacturing establishment,permitting the manufacture of cosmetics that contain over-the-counterdrug ingredients, such as sunscreens and antiperspirants. Compliancewith federal, state, local and foreign laws and regulations pertainingto discharge of materials into the environment, or otherwise relatingto the protection of the environment, has not had, and is notanticipated to have, a material effect upon the Company's capitalexpenditures, earnings or competitive position. State and localregulations in the U.S. that are designed to protect consumers or theenvironment have an increasing influence on the Company's productclaims, contents and packaging.

Industry Segments, Foreign andDomestic Operations

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

Employees

As of December 31, 2003, theCompany employed approximately 6,100 people. As of December 31, 2003,approximately 130 of such employees in the U.S. were covered bycollective bargaining agreements. The Company believes that itsemployee relations are satisfactory. Although the Company hasexperienced minor work stoppages of limited duration in the past in theordinary course of business, such work stoppages have not had amaterial effect on the Company's results of operations orfinancial condition.

Item 2.     Properties

Thefollowing table sets forth as of December 31, 2003 the Company'smajor manufacturing, research and warehouse/distribution facilities,all of which are owned except where otherwisenoted.

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

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

Item3.     Legal Proceedings

The Company is involved invarious routine legal proceedings incident to the ordinary course ofits business. The Company believes that the outcome of all pendinglegal proceedings in the aggregate is unlikely to have a materialadverse effect on the business or consolidated financial condition ofthe Company.

Item 4.    Submission of Matters to a Vote ofSecurity Holders

No matter was submitted to a vote of securityholders during the fourth quarter of the fiscal year covered by thisreport.

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PARTII

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

Revlon, Inc.beneficially owns all of the outstanding shares of common stock, parvalue $1.00 per share, of Products Corporation. MacAndrews &Forbes, which is indirectly wholly owned by Ronald O. Perelman, throughREV Holdings LLC (a Delaware limited liability company which wasformerly a Delaware corporation known as REV Holdings Inc.("REV Holdings")), beneficially owns (i)26,240,347 shares of the Class A Common Stock of Revlon, Inc., with apar value of $0.01 per share ("Class A CommonStock") (11,650,000 of which are owned by REV Holdings and14,590,347 are owned by MacAndrews Holdings), (ii) all of theoutstanding 31,250,000 shares of Class B Common Stock of Revlon, Inc.,with a par value of $0.01 per share ("Class B CommonStock", and together with the Class A Common Stock, the"Common Stock") and (iii) all of theoutstanding 4,333 shares of Series B Convertible Preferred Stock, witha par value of $0.01 per share ("Series B PreferredStock"), of Revlon, Inc. (each of which is entitled to 100votes and each of which is convertible into 100 shares of Class ACommon Stock). Based on the shares referenced in clauses (i), (ii) and(iii) above, Mr. Perelman through Mafco Holdings (through REV Holdingsand MacAndrews Holdings) at December 31, 2003 owned approximately83% of Revlon, Inc.'s outstanding shares of Common Stockand had approximately 97% of the combined voting power of theoutstanding shares of Revlon, Inc.'s Common Stock entitled tovote at its 2004 Annual Meeting of Stockholders. The remaining11,968,104 shares of Revlon, Inc.'s Class A Common Stockoutstanding at December 31, 2003 were owned by the public and arelisted and traded on the NYSE. No dividends were declared or paidduring 2003 or 2002. The terms of the Credit Agreement, the 2003 MafcoLoans (as hereinafter defined), the 2004 Mafco $125 million term loan,the 8 5/8% Senior Subordinated Notes, the8 1/8% Senior Notes, the 9% Senior Notesand the 12% Senior Secured Notes (as each such series of notesis hereinafter defined) currently restrict the ability of ProductsCorporation to pay dividends or make distributions to Revlon, Inc.,except in limited circumstances. See the Consolidated FinancialStatements of the Company and the Notes thereto. (**See"Recent Developments" for importantinformation concerning the Debt ReductionTransactions**).

Item 6.    Selected Financial Data

The Consolidated Statements of Operations Data for each of the yearsin the five-year period ended December 31, 2003 and the Balance SheetData as of December 31, 2003, 2002, 2001, 2000 and 1999 are derivedfrom the Consolidated Financial Statements of the Company, which havebeen audited by KPMG LLP, independent certified public accountants. TheSelected Consolidated Financial Data should be read in conjunction withthe Consolidated Financial Statements of the Company and the Notes tothe Consolidated Financial Statements and"Management's Discussion and Analysis of FinancialCondition and Results ofOperations."

|                                            |  |                       |         |                    |  |        |         |               |  |        |         |            |  |        |         |                 |  |        |         |            |  |  |
|--------------------------------------------|--|-----------------------|---------|--------------------|--|--------|---------|---------------|--|--------|---------|------------|--|--------|---------|-----------------|--|--------|---------|------------|--|--|
|                                       |  | YearEnded December31, |
|                                       |  | 2003                  |         | 2002               |  | 2001   |         | 2000          |  | 1999   |
|                                       |  | (dollarsin millions)  |
| **Statements of OperationsData(a)(b)(k):** |  |                  |    |               |  |   |    |          |  |   |    |       |  |   |    |            |  |
| Netsales                                   |  | $                     | 1,299.3 |               |  | $      | 1,119.4 |          |  | $      | 1,277.6 |       |  | $      | 1,409.4 |            |  | $      | 1,629.8 |       |
| Operating income (loss)                    |  |                  | 22.5    |  (c)(i)  |  |   | (109.0  | )(d)(j)  |  |   | 18.7    | (e)   |  |   | 17.6    |  (f)  |  |   | (210.8  | )(g)  |
| Loss fromcontinuingoperations              |  |                  | (154.0  | )             |  |   | (281.8  | )        |  |   | (152.2  | )(h)  |  |   | (128.0  | )          |  |   | (369.7  | )     |
|                                            |

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|                                          |  |                      |          |         |  |        |          |         |  |        |          |         |  |        |          |         |  |        |          |         |  |  |
|------------------------------------------|--|----------------------|----------|---------|--|--------|----------|---------|--|--------|----------|---------|--|--------|----------|---------|--|--------|----------|---------|--|--|
|                                     |  |
|                                     |  | December31,          |
|                                     |  | 2003                 |          | 2002    |  | 2001   |          | 2000    |  | 1999   |
|                                     |  | (dollarsin millions) |
| **Balance Sheet Data(a)(b):**            |  |
| Totalassets                              |  | $                    | 890.7    |    |  | $      | 932.0    |    |  | $      | 991.4    |    |  | $      | 1,104.2  |    |  | $      | 1,560.6  |    |
| Long-term debt,including current portion |  |                 | 1,869.5  |    |  |   | 1,750.1  |    |  |   | 1,643.6  |    |  |   | 1,563.1  |    |  |   | 1,772.1  |    |
| Totalstockholder'sdeficiency             |  |                 | (1,727.2 | )  |  |   | (1,639.9 | )  |  |   | (1,288.2 | )  |  |   | (1,104.3 | )  |  |   | (1,013.2 | )  |
|                                          |

|  |
|--|
|  |  |
|  |

| (a) | OnJuly 16, 2001, the Company completed the disposition of the Coloramabrand in Brazil. Accordingly, the selected financial data includes theresults of operations of the Colorama brand through the date ofdisposition. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| (c) | Includes restructuring costsof $6.0 million, consisting of $5.9 million associated with severanceand other personnel costs principally related to Internationaloperations and $0.1 million related to the continuation of the 2000restructuring program. (See Note 2 to the Consolidated FinancialStatements). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

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

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

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

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

| (k) | In July 2001, theFASB issued Statement No. 142, "Goodwill and OtherIntangible Assets". Statement No. 142 requires thatgoodwill and intangible assets with indefinite useful lives no longerbe amortized, but instead be tested for impairment at least annually inaccordance with the provisions of Statement No. 142. Statement No. 142requires that intangible assets with finite useful lives be amortizedover their respective estimated useful lives to their estimatedresidual values, and reviewed for impairment in accordance with SFASNo. 144, "Accounting for the Impairment or Disposal ofLong-Lived Assets". The Company adopted the provisions ofStatement No. 142 effective January 1, 2002. In connection with theadoption of Statement No. 142, the Company performed a transitionalgoodwill impairment test as required by such rule and determined thatno goodwill impairment existed at January 1, 2002. Amortization ofgoodwill ceased on January 1, 2002, upon adoption of Statement No. 142.Amortization expense for goodwill was $7.7 million in 2001, $9.0million in 2000 and $12.8 million in 1999. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item7.     Management's Discussion and Analysis of FinancialCondition and Results of Operations

(dollars inmillions)

Overview

The Company is providing thisoverview in accordance with the SEC's December 2003 interpretiveguidance regarding Management's Discussion and Analysis ofFinancial Condition and Results of Operations.

The Companyoperates in a single segment and manufactures, markets and sells anextensive array of cosmetics and skin care, fragrances and personalcare products. In addition, the Company has a licensinggroup.

The Company has accelerated the implementation of itsthree-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 

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Company's wall displays, by among otherthings, reconfiguring wall displays at its existing retail customers,streamlining its product assortment and reconfiguring product placementon its wall displays and rolling out the new wall displays; (iii)enhancing the effectiveness of its merchandiser coverage to improvein-store stock levels and work with its retail customers to improvereplenishment of the Company's products on the wall displays andto minimize out-of-stocks at its retail customers; (iv) selectivelyadjusting prices on certain SKUs; (v) further strengthening theCompany's new product development process; and (vi) implementinga comprehensive program to develop and train the Company'semployees.

In 2002, the Company began the implementation of thestabilization and growth phase of its plan and in connection with thatplan recorded charges of approximately $100 in the fourth quarter of2002. In 2003, net sales increased by approximately $179.9 or16.1% primarily driven by (1) lower net charges for returns,allowances and discounts in the 2003 period since 2002 includedsignificant amounts of returns due to the growth plan; and revisedestimates of returns based on favorable experience in 2003 versus 2002returns estimates; and (2) foreign currency translations benefits. The2003 period was benefited by more favorable returns experience fromregular business.

Operating income for the full year of 2003 was$22.5, versus an operating loss of $109.0 in 2002. The improvement inthe 2003 period primarily reflected $73 less in growth plan charges inthe current year versus 2002, including significantly lower net chargesfor returns, discounts and allowances, and the benefits of favorableforeign currency translation, higher volume, lower restructuring andconsolidation costs, and reduced display amortization. Partiallyoffsetting these positive factors were higher brand support andincreased general and administrative expenses.

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

The Company believes that it has strengthened its organizationalcapability and it intends to continue to do so in 2004. The Companyalso believes that it has strengthened its relationships with its keyretailers in the U.S. which has led to space gains and increaseddistribution for 2004 for certain of the Company's products.

The Company is refining its growth plan and focusing on actionswhich are intended to achieve both top line growth and marginimprovements to (i) further improve the new product development andimplementation process; (ii) continue to increase the effectiveness andreduce the cost of the Company's display walls; (iii) driveefficiencies across the Company's overall supply chain, includingreducing manufacturing costs by streamlining components and sourcingstrategically; and (iv) optimize the effectiveness of theCompany's marketing and promotions.

In December 2003, theCompany announced that it intended to explore opportunities to reducedebt and increase equity and this will be a major focus during 2004.(**See "Recent Developments" for importantinformation concerning the Debt Reduction Transactions**).

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

Discussion ofCritical Accounting Policies:

In the ordinary course of itsbusiness, the Company has made a number of estimates and assumptionsrelating to the reporting of results of operations and financialcondition in the preparation of its financial statements in conformitywith accounting principles generally accepted in the U.S. Actualresults could differ significantly from those estimates andassumptions. The Company believes that the following discussionaddresses the Company's most critical accounting policies, whichare those that are most important to the portrayal of theCompany's financial condition and results and requiremanagement's 

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most difficult, subjective and complexjudgments, often as a result of the need to make estimates about theeffect of matters that are inherently uncertain.

SalesReturns:

The Company allows customers to return their unsoldproducts when they meet certain Company-established criteria asoutlined in the Company's trade terms. The Company regularlyreviews and revises, when deemed necessary, its estimates of salesreturns based primarily upon actual returns, planned productdiscontinuances, and promotional sales, which would permit customers toreturn items based upon the Company's trade terms. The Companyrecords estimated sales returns as a reduction to sales and cost ofsales, and an increase in accrued liabilities and inventories. Returnedproducts which are recorded as inventories are valued based upon theamount that the Company expects to realize upon their subsequentdisposition. The physical condition and marketability of the returnedproducts are the major factors considered by the Company in estimatingrealizable value. Cost of sales includes the cost of refurbishment ofreturned products. Actual returns, as well as realized values onreturned products, may differ significantly, either favorably orunfavorably, from the Company's estimates if factors such asproduct discontinuances, customer inventory levels or competitiveconditions differ from the Company's estimates and expectationsand, in the case of actual returns, if economic conditions differsignificantly from the Company's estimates andexpectations.

Trade Support Costs:

In order to supportthe retail trade, the Company has various performance-basedarrangements with retailers to reimburse them for all or a portion oftheir 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 onestimates of what has been incurred by the retailers. Actual costsincurred by the Company may differ significantly if factors such as thelevel and success of the retailers' programs, as well as retailerparticipation levels, differ from the Company's estimates andexpectations.

Inventories:

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

Property,Plant and Equipment and Other Assets:

Property, plant andequipment is recorded at cost and is depreciated on a straight-linebasis over the estimated useful lives of such assets. Changes incircumstances such as technological advances, changes to theCompany's business model, changes in the planned use of fixturesor software or closing of facilities or changes in the Company'scapital strategy can result in the actual useful lives differing fromthe Company's estimates.

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

Long-lived assets, including fixed assets, permanent wall displaysand intangibles other than goodwill, are reviewed by the Company forimpairment whenever events or changes in circumstances indicate thatthe carrying amount of any such asset may not be recoverable. If theundiscounted cash flows (excluding interest) from the use and eventualdisposition of the asset is less than the carrying value, the Companyrecognizes an impairment loss, measured as the amount by which thecarrying value exceeds the fair value of the asset. The estimate ofundiscounted cash flow is based upon, among other things, certainassumptions about expected future operating performance. TheCompany's estimates of undiscounted 

15

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cash flow may differ from actual cash flowdue 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 ofother long-lived assets should be shortened, the Company woulddepreciate the net book value in excess of the salvage value (aftertesting for impairment as described above), over the revised remaininguseful 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 carryingvalue exceeds the fair value of the asset.

PensionBenefits:

The Company sponsors pension and other retirementplans in various forms covering substantially all employees who meeteligibility requirements. Several statistical and other factors whichattempt to estimate future events are used in calculating the expenseand liability related to the plans. These factors include assumptionsabout the discount rate, expected return on plan assets and rate offuture compensation increases as determined by the Company, withincertain guidelines. In addition, the Company's actuarialconsultants also use subjective factors such as withdrawal andmortality rates to estimate these factors. The actuarial assumptionsused by the Company may differ materially from actual results due tochanging market and economic conditions, higher or lower withdrawalrates or longer or shorter life spans of participants, among otherthings. Differences from these assumptions may result in a significantimpact to the amount of pension expense/liability recorded by theCompany.

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

Results of Operations

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

Netsales:

|                         |  |                       |         |        |  |        |         |        |  |        |       |           |  |  |
|-------------------------|--|-----------------------|---------|--------|--|--------|---------|--------|--|--------|-------|-----------|--|--|
|                    |  | YearEnded December31, |         |   |
|                    |  | 2003                  |         | 2002   |  | Change |
| UnitedStates and Canada |  | $                     | 890.6   |   |  | $      | 760.1   |   |  | $      | 130.5 |      |
| International      |  |                  | 408.7   |   |  |   | 359.3   |   |  |   | 49.4  | (1)  |
|                    |  | $                     | 1,299.3 |   |  | $      | 1,119.4 |   |  | $      | 179.9 | (2)  |
|                         |

|  |
|--|
|  |  |
|  |

| (1) | Excludingthe impact of currency fluctuations, International net sales increased4.6%. |
|-----|--------------------------------------------------------------------------------------|

| (2) | Excluding the impact ofcurrency fluctuations, consolidated net sales increased12.6%. |
|-----|--------------------------------------------------------------------------------------|

United States and Canada.

Theincrease in net sales in the U.S. and Canada in 2003 was primarilydriven by (1) lower net charges for sales returns, allowances anddiscounts of $137.6 in the 2003 period since 2002 included significantamounts of returns due to the growth plan; and to revised estimates ofreturns based on favorable experience in 2003 versus 2002 returnsestimates; and (2) foreign currency translations benefits, partiallyoffset by lower licensing revenues of $8.6 in 2003. Market share in theU.S. mass market for color cosmetics for **Almay** and **Revlon**combined increased by 0.3% for the full year 2003 compared with2002. These sales and market share gains were achieved in the contextof a weaker than expected U.S. mass market color cosmetics categorywhich, as measured by AC Nielsen, declined by2.2%.

International.

Sales in the Company'sinternational operations are divided by the Company into threegeographic regions. In Europe, which is comprised of Europe and theMiddle East, net sales increased by $16.5, or 15.3%, to $124.3for 2003, as compared with 2002. The increase in the European region isprimarily due to the impact of favorable currency fluctuations (whichfactor the Company estimates contributed to an approximate 12.2%increase in net sales for the region) and increased sales volume andlower sales returns in the U.K. and France (which factor the Companyestimates contributed to an approximate 6.7% increase

16

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in net sales for the region). Such factorswere partially offset by lower sales volume in certain distributormarkets in Russia and Germany, where the Company's distributorsexperienced financial problems (which factor the Company estimatescontributed to an approximate 3.5% reduction in net sales forthe region). 

In Latin America, which is comprised of Mexico,Central America and South America, net sales decreased by $1.9, or2.0%, to $92.2 for 2003, as compared with 2002. The decrease inthe Latin American region is primarily due to decreased sales volume inBrazil and Mexico, where sales were impacted by local adverse economicconditions, a decline in the mass retail category and a reduction ofcustomer inventory levels (which factors the Company estimatescontributed to an approximate 10.0% reduction in net sales forthe region) and the impact of adverse currency fluctuations (whichfactor the Company estimates contributed to an approximate 9.4%reduction in net sales for the region), which was partially offset byincreased sales volume in Venezuela, Argentina and certain distributormarkets (which factor the Company estimates contributed to anapproximate 17.0% increase in net sales for the region).

In the Far East and Africa, net sales increased by $34.8, or22.1%, to $192.2 for 2003, as compared with 2002. The increasein the Far East and Africa region is primarily due to the impact offavorable currency fluctuations (which factor the Company estimatescontributed to an approximate 18.0% increase in net sales forthe region) and increased sales volume in South Africa, Japan andChina, where the Company's products experienced strong demand asa result of favorable general economic conditions and the effect ofstrong brand marketing activities (which factors the Company estimatescontributed to an approximate 4.0% increase in net sales for theregion), which the Company believes were partially offset by theeconomic impact of the SARS outbreak in China.

Net sales in theCompany's international operations may be adversely affected by,among other things, weak economic conditions, political uncertainties,military actions, adverse currency fluctuations, and competitiveactivities. During 2002, the Company experienced productiondifficulties with its principal third party manufacturer for Europe andcertain other international markets, which operates the Maestegfacility. To rectify this situation, on October 31, 2002 ProductsCorporation and such manufacturer terminated the long-term supplyagreement and entered into a new, more flexible agreement. This newagreement has significantly reduced volume commitments and, among otherthings, 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 $6.3over a 4-year period contingent upon the supplier achieving specificproduction service level objectives. During 2002, the Company paidapproximately $1.6, and in 2003 accrued approximately an additional$1.8. Under the new arrangement, Products Corporation also sourcescertain products from its Oxford facility and other suppliers. Underthe new supply arrangement, the Company believes that the productiondifficulties at the Maesteg facility were resolved during2003.

Grossprofit:

|             |  |                       |       |        |  |        |       |        |  |   |       |        |  |  |
|-------------|--|-----------------------|-------|--------|--|--------|-------|--------|--|---|-------|--------|--|--|
|        |  | YearEnded December31, |       |   |
|        |  | 2003                  |       | 2002   |  | Change |
| Grossprofit |  | $                     | 798.2 |   |  | $      | 615.7 |   |  | $ | 182.5 |   |
|             |

The $182.5 increase ingross profit for 2003, as compared to the comparable 2002 period, isprimarily due to lower sales returns, allowances and discounts of$144.5 in the 2003 period (which includes the impact of thestabilization and growth phase of the Company's plan, which beganin December 2002) and higher sales volume of $43.8 (which includes thefavorable impact of currency fluctuations). Such increases in 2003 werepartially offset by unfavorable product mix in 2003 and a decrease inlicensing and other revenue of $8.4 in 2003. Gross margins in 2003improved to 61.4% versus 55.0% in 2002 due to thepreviously discussed lower sales returns, allowances and discounts.

17

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SG&Aexpenses:

|                  |  |                       |       |        |  |        |       |        |  |   |       |         |  |  |
|------------------|--|-----------------------|-------|--------|--|--------|-------|--------|--|---|-------|---------|--|--|
|             |  | YearEnded December31, |       |   |
|             |  | 2003                  |       | 2002   |  | Change |
| SG&Aexpenses |  | $                     | 769.7 |   |  | $      | 711.1 |   |  | $ | (58.6 | )  |
|                  |

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

Restructuringcosts:

|                    |  |                       |     |        |  |        |      |        |  |   |     |        |  |  |
|--------------------|--|-----------------------|-----|--------|--|--------|------|--------|--|---|-----|--------|--|--|
|               |  | YearEnded December31, |     |   |
|               |  | 2003                  |     | 2002   |  | Change |
| Restructuringcosts |  | $                     | 6.0 |   |  | $      | 13.6 |   |  | $ | 7.6 |   |
|                    |

During 2003, the Companyrecorded a separate charge of $5.9, for employee severance and otherpersonnel benefits in certain International operations.

Duringthe third quarter of 2000, the Company initiated a new restructuringprogram in line with the original restructuring plan developed in late1998, designed to improve profitability by reducing personnel andconsolidating manufacturing facilities. The 2000 restructuring programfocused on the Company's plans to close its manufacturingoperations in Phoenix, Arizona and Mississauga, Canada and toconsolidate its cosmetics production into its plant in Oxford, NorthCarolina. The 2000 restructuring program also includes the remainingobligation for excess leased real estate in the Company'sheadquarters, consolidation costs associated with the Company closingits facility in New Zealand, and the elimination of several domesticand international executive and operational positions, each of whichwere effected to reduce and streamline corporate overhead costs. During2003 and 2002, the Company continued to implement the 2000restructuring program, and recorded charges of $0.1 and $13.6,respectively, principally for additional employee severance and otherpersonnel benefits, primarily resulting from reductions in theCompany's worldwide sales force, relocation and other costsrelated to the consolidation of the Company's worldwideoperations.

The Company anticipates annualized savings ofapproximately $12 to $14 relating to the restructuring charges recordedduring 2003.

Other expenses(income):

|                 |  |                       |       |        |  |        |       |        |  |   |       |         |  |  |
|-----------------|--|-----------------------|-------|--------|--|--------|-------|--------|--|---|-------|---------|--|--|
|            |  | YearEnded December31, |       |   |
|            |  | 2003                  |       | 2002   |  | Change |
| Interestexpense |  | $                     | 174.5 |   |  | $      | 159.0 |   |  | $ | (15.5 | )  |
|                 |

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

Provision for incometaxes:

|                           |  |                       |     |        |  |        |     |        |  |   |     |        |  |  |
|---------------------------|--|-----------------------|-----|--------|--|--------|-----|--------|--|---|-----|--------|--|--|
|                      |  | YearEnded December31, |     |   |
|                      |  | 2003                  |     | 2002   |  | Change |
| Provisionfor income taxes |  | $                     | 0.3 |   |  | $      | 4.6 |   |  | $ | 4.3 |   |
|                           |

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

18

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Year ended December 31, 2002 comparedwith year ended December 31, 2001

Netsales:

|                         |  |                       |         |        |  |        |         |        |  |        |        |            |  |  |
|-------------------------|--|-----------------------|---------|--------|--|--------|---------|--------|--|--------|--------|------------|--|--|
|                    |  | YearEnded December31, |         |   |
|                    |  | 2002                  |         | 2001   |  | Change |
| UnitedStates 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) | Excludingthe impact of currency fluctuations, International net sales decreased5.2%. |
|-----|--------------------------------------------------------------------------------------|

| (2) | Excluding the impact ofcurrency fluctuations, consolidated net sales decreased10.4%. |
|-----|--------------------------------------------------------------------------------------|

United States andCanada.    The decrease in 2002 in net sales of $110.2 wascomprised of $100.6 of increased sales returns and allowances relatedto the Company's plan to selectively reduce SKUs and reduceddistribution of the Ultima II brand, sales allowances for selectiveprice adjustments on certain SKUs related to the stabilization andgrowth phase of the Company's plan, and higher sales returns andallowances not directly related to the stabilization and growth phaseof the Company's plan. In addition, brand support increased by$37.0. These factors were partially offset by an increase in salesvolume of $21.6 and an increase in licensing revenues of $5.8,primarily stemming from the prepayment in 2002 by a licensee of certainminimum royalties.

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

In Europe, net sales decreased by $11.3, or9.5%, to $107.8 for 2002, as compared with 2001. Such decreasein the European region was primarily due to the conversion of theCompany's Belgium, Netherlands and Luxemburg operations("Benelux") and Israeli businesses todistributors (which factor the Company estimates contributed to anapproximate 8.5% reduction in net sales for the region),production disruption at the Company's third party manufacturerin Maesteg, Wales (which factor the Company estimates contributed to anapproximate 5.6% reduction in net sales for the region) andincreased competitive activity in Italy (which factor the Companyestimates contributed to an approximate 2.3% reduction in netsales for the region). Such factors were partially offset by increasedsales volume in the U.K. (which factor the Company estimatescontributed to an approximate 6.7% increase in net sales for theregion) and impact from favorable currency fluctuations (which factorthe Company estimates contributed to an approximate 2.7%increase in net sales for the region).

In Latin America, netsales decreased by $46.9, or 33.3%, to $94.1 for 2002, ascompared with 2001. The decrease in the Latin American region wasprimarily due to the impact of adverse currency fluctuations (whichfactor 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 approximate10.6% reduction in net sales for the region), the effect ofpolitical and economic difficulties in Venezuela (which factor theCompany estimates contributed to an approximate 6.4% reductionin net sales for the region), and increased competitive activity inMexico (which factor the Company estimates contributed to anapproximate 5.4% reduction in net sales for the region). Suchfactors were partially offset by sales tax increases and increasedsales volume in Brazil (which factor the Company estimates contributedto an approximate 6.3% increase in net sales for the region) andincreased sales volume in distributor markets in Latin America (whichfactor the Company estimates contributed to an approximate 2.6%increase in net sales for the region).

In the Far East andAfrica, net sales increased by $10.2, or 6.9%, to $157.4 for2002, as compared with 2001. The increase in the Far East region wasprimarily due to increased sales volume in South Africa, China, HongKong and distributor markets in the Far East (which factor the Companyestimates contributed to an approximate 9.6% increase in netsales for the region). Such factors were partially offset by the impactof adverse currency fluctuations (which factor the Company estimatescontributed to an approximate 2.8% reduction in net sales forthe region) and increased competitive activity in Australia and NewZealand (which factor the Company estimates contributed to anapproximate 0.9% reduction in net sales for theregion).

19

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Net sales in the Company'sinternational operations may be adversely affected by weak economicconditions, political uncertainties, adverse currency fluctuations, andcompetitive activities. During 2002, the Company experiencedsignificant adverse currency fluctuations in Argentina, Brazil,Venezuela and South Africa. During 2002, as part of the new agreementwith its principal third party manufacturer for Europe and certainother international markets which operates the Maesteg facility, theCompany paid approximately $1.6 as a result of such supplier meetingthe required production service level objectives.

Grossprofit:

|             |  |                       |       |        |  |        |       |        |  |   |        |         |  |  |
|-------------|--|-----------------------|-------|--------|--|--------|-------|--------|--|---|--------|---------|--|--|
|        |  | YearEnded December31, |       |   |
|        |  | 2002                  |       | 2001   |  | Change |
| Grossprofit |  | $                     | 615.7 |   |  | $      | 733.4 |   |  | $ | (117.7 | )  |
|             |

As a percentage of netsales, gross profit margins were 55.0% for 2002, compared with57.4% for 2001. The decrease in gross profit margin in 2002compared to the comparable 2001 period was due to the implementation ofvarious aspects of the stabilization and growth phase of theCompany's plan, referred to above in the discussion of theCompany's net sales and higher sales returns and allowances notdirectly related to such plan, which combined equal $127.1, and higherbrand support of $30.8 in 2002. These factors were partially offset bylower additional consolidation costs of $36.7 associated with the 2001shutdown of the Company's Phoenix and Canada facilities, anincrease in licensing revenue of $5.8 in 2002 due to the prepayment ofcertain minimum royalties, and $1.7 in respect of an insurance claimfor certain losses in Latin America.

SG&Aexpenses:

|                  |  |                       |       |        |  |        |       |        |  |   |       |         |  |  |
|------------------|--|-----------------------|-------|--------|--|--------|-------|--------|--|---|-------|---------|--|--|
|             |  | YearEnded December31, |       |   |
|             |  | 2002                  |       | 2001   |  | Change |
| SG&Aexpenses |  | $                     | 711.1 |   |  | $      | 676.6 |   |  | $ | (34.5 | )  |
|                  |

The increase inSG&A expenses for 2002, as compared to 2001, was due primarily tohigher personnel-related expenses (including executive separationcosts) and higher professional fees (including expenses related to thestabilization and growth phase of the Company's plan and costsrelated to litigation) of $42.0, higher wall display amortization of$8.9 due to the accelerated amortization associated with the roll outof the Company's new wall displays which the Company began in2002 and accelerated amortization charges of $4.0 and a write-off of$2.2, both of which relate to certain information systems as a resultof the Company's decision to, among other things, upgrade itsinformation systems. These factors were partially offset by theelimination of goodwill amortization of $7.7, lower distribution costsof $7.3, the elimination of SG&A expenses of $9.1 related to theColorama brand and $5.3 of additional consolidation costs in 2001associated with the shutdown of the Company's Phoenix and Canadafacilities, and $0.7 in respect of an insurance claim for certainlosses in Latin America.

Restructuringcosts:

|                    |  |                       |      |        |  |        |      |        |  |   |      |        |  |  |
|--------------------|--|-----------------------|------|--------|--|--------|------|--------|--|---|------|--------|--|--|
|               |  | YearEnded December31, |      |   |
|               |  | 2002                  |      | 2001   |  | Change |
| Restructuringcosts |  | $                     | 13.6 |   |  | $      | 38.1 |   |  | $ | 24.5 |   |
|                    |

During the third quarterof 2000, the Company initiated a new restructuring program in line withthe original restructuring plan developed in late 1998, designed toimprove profitability by reducing personnel and consolidatingmanufacturing facilities. The 2000 restructuring program focused on theCompany's plans to close its manufacturing operations in Phoenix,Arizona and Mississauga, Canada and to consolidate its cosmeticsproduction into its plant in Oxford, North Carolina. The 2000restructuring program also includes the remaining obligation for excessleased real estate in the Company's headquarters, consolidationcosts associated with the Company closing its facility in New Zealand,and the elimination of several domestic and international executive andoperational positions, each of which were effected to reduce andstreamline corporate overhead costs. During 2001, the Company continuedto 

20

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implement the 2000 restructuring program andrecorded a charge of $38.1, principally for additional employeeseverance and other personnel benefits and relocation and other costsrelated to the consolidation of the Company's worldwideoperations.

During 2002, the Company continued to implement the2000 restructuring program, as well as other restructuring actions, andrecorded charges of $13.6, principally for additional employeeseverance and other personnel benefits, primarily resulting fromreductions in the Company's worldwide sales force and relocationand other costs related to the consolidation of the Company'sworldwide operations.

Other expenses(income):

|                       |  |                       |       |        |  |        |       |        |  |   |       |         |  |  |
|-----------------------|--|-----------------------|-------|--------|--|--------|-------|--------|--|---|-------|---------|--|--|
|                  |  | YearEnded December31, |       |   |
|                  |  | 2002                  |       | 2001   |  | Change |
| Interestexpense  |  | $                     | 159.0 |   |  | $      | 140.5 |   |  | $ | (18.5 | )  |
|                       |

The increase in interest expense for2002, as compared to 2001, is primarily due to the repayment of aportion of the Credit Agreement with certain net proceeds of ProductsCorporation's 12% Senior Secured Notes due 2005 (the"12% Senior Secured Notes") (whichwere issued in late November 2001 and which have a higher interest ratethan the Credit Agreement) and higher overall outstanding borrowings.

Loss on sale of brand and facilities,net:

|                                          |  |                       |     |        |  |        |      |        |  |   |      |        |  |  |
|------------------------------------------|--|-----------------------|-----|--------|--|--------|------|--------|--|---|------|--------|--|--|
|                                     |  | YearEnded December31, |     |   |
|                                     |  | 2002                  |     | 2001   |  | Change |
| Losson sale of brand and facilities, net |  | $                     | 1.0 |   |  | $      | 14.4 |   |  | $ | 13.4 |   |
|                                          |

In February 2002, ProductsCorporation completed the disposition of its Benelux business. As partof this sale, Products Corporation entered into a long-termdistribution agreement with the purchaser pursuant to which thepurchaser distributes the Company's products in Benelux. Thepurchase price consisted principally of the assumption of certainliabilities and a deferred purchase price contingent upon futureresults of up to approximately $4.7, which could be received overapproximately a seven-year period. In connection with the disposition,the Company recognized a pre-tax and after-tax net loss of $1.0 in thefirst quarter of 2002.

In July 2001, Products Corporationcompleted the disposition of the Colorama brand in Brazil. Inconnection with the disposition the Company recognized a pre-tax andafter-tax loss of $6.7, $6.3 of which was recorded in the secondquarter of 2001. Additionally, the Company recognized a pre-tax andafter-tax net loss on the disposition of land in Minami Aoyama nearTokyo, Japan (the "Aoyama Property") andrelated rights for the construction of a building on such land of $0.8during the second quarter of 2001.

In July 2001, ProductsCorporation completed the disposition of its subsidiary that owned andoperated its manufacturing facility in Maesteg, Wales (UK), includingall production equipment. As part of this sale, Products Corporationentered into a long-term supply agreement with the purchaser pursuantto which the purchaser manufactured and supplied to ProductsCorporation cosmetics and personal care products for sale throughoutEurope. In connection with such disposition, the Company recognized apre-tax and after-tax net loss of $8.6 in 2001. The supply agreementwas subsequently terminated and certain aspects of the purchaseagreement were revised. (See Note 3 to the Consolidated FinancialStatements).

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

Losson early extinguishment of debt

The loss on earlyextinguishment of debt of $3.6 in 2001 resulted primarily from thewrite-off of financing costs in connection with Products Corporationentering into the 2001 Credit Agreement.

21

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Provision for incometaxes:

|                           |  |                       |     |        |  |        |     |        |  |   |      |         |  |  |
|---------------------------|--|-----------------------|-----|--------|--|--------|-----|--------|--|---|------|---------|--|--|
|                      |  | YearEnded December31, |     |   |
|                      |  | 2002                  |     | 2001   |  | Change |
| Provisionfor income taxes |  | $                     | 4.6 |   |  | $      | 4.0 |   |  | $ | (0.6 | )  |
|                           |

The increase in theprovision for income taxes for 2002, as compared to 2001, wasattributable to higher taxable income in certain markets outside theU.S., which was partially offset by the recognition of tax benefits ofapproximately $0.9 relating to the carryback of alternative minimum taxlosses resulting from tax legislation enacted in the first quarter of2002.

Financial Condition, Liquidity and Capital Resources

Net cash used for operating activities was $166.4, $112.3 and $86.5for 2003, 2002 and 2001, respectively. The increase in net cash usedfor operating activities for 2003, compared to 2002, resulted primarilyfrom a decrease in accrued liabilities mainly associated with theimplementation of various aspects of the stabilization and growth phaseof its plan and higher spending on displays due to the roll out of theCompany's reconfigured permanent wall displays, partially offsetby lower net loss and lower accounts receivable due to earlier paymentterms with many of the Company's large U.S. customers. TheCompany received $5.3 and $11.5 in 2003 and 2002, respectively, relatedto prepaid minimum royalties under a long-term licensing agreement. Theincrease in net cash used for operating activities for 2002 compared to2001 resulted primarily from a higher net loss, partially offset bylower inventories and an increase in accrued expenses and other, mainlyassociated with the Company's implementation of various aspectsof the stabilization and growth phase of its plan. In addition,purchases of permanent wall displays increased in 2002 due to the rollout of the Company's newly-reconfigured wall displays.

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

Net cash provided byfinancing activities was $151.1, $110.3 and $46.3 for 2003, 2002 and2001, respectively. Net cash provided by financing activities for 2003included cash drawn under the Credit Agreement and the 2003 Mafco Loansand net proceeds from the Rights Offering, partially offset by therepayment of borrowings under the Credit Agreement and the Mafco $65million line of credit and payment of financing costs. Net cashprovided by financing activities for 2002 included cash drawn under theCredit Agreement, partially offset by the repayment of borrowings underthe Credit Agreement and payment of debt issuance costs. Net cashprovided by financing activities for 2001 included cash drawn under the2001 and 1997 Credit Agreements and proceeds from the issuance of the12% Senior Secured Notes, partially offset by the repayment ofborrowings under the 1997 Credit Agreement (as hereinafter defined)with the net proceeds from the disposition of the Colorama brand inBrazil, and subsequently with proceeds from the issuance of the12% Senior Secured Notes and proceeds from the 2001 CreditAgreement and payment of debt issuance costs in connection with theissuance of the 12% Senior Secured Notes and the 2001 CreditAgreement.

On November 30, 2001, the Company entered into acredit agreement (the "2001 CreditAgreement") with a syndicate of lenders, whose individualmembers change from time to time, which agreement amended and restatedthe credit agreement entered into by Products Corporation in May 1997(as amended, the "1997 Credit Agreement"; the2001 Credit Agreement and the 1997 Credit Agreement are sometimesreferred to as the "Credit Agreement"), andwhich matures on May 30, 2005. As of December 31, 2003, the 2001 CreditAgreement provided up to $247.5, which is comprised of a $115.4 termloan facility (the "Term Loan Facility") anda $132.1 multi-currency revolving credit facility (the"Multi-Currency Facility"). As of February 92004, Products Corporation had utilized $244.6 under the 2001 CreditAgreement and had approximately $182 of available liquidity fromavailable sources.

22

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In connection with the 2003 M&FInvestments described below, and as a result of the Company'soperating results for the fourth quarter of 2002 and the effect of theacceleration of the Company's implementation of the stabilizationand growth phase of its plan, the Company entered into an amendment inFebruary 2003 of its Credit Agreement with its bank lenders and securedwaivers 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 fourconsecutive fiscal quarters ended December 31, 2002, which was lessthan the minimum of $210 required under the EBITDA covenant of theCredit Agreement for that period and the Company's leverage ratiowas 5.09:1.00, which was in excess of the maximum ratio of 1.4:1.00permitted under the leverage ratio covenant of the Credit Agreement forthat period. Accordingly, the Company sought and secured waivers ofcompliance with these covenants for the four quarters ended December31, 2002 and, in light of the Company's expectation that thecontinued implementation of the stabilization and growth phase of theCompany's plan would affect its ability to comply with thesecovenants during 2003, as part of the 2003 Bank Amendment, the Companyalso secured an amendment to eliminate the EBITDA and leverage ratiocovenants for the first three quarters of 2003 and a waiver ofcompliance with such covenants for the four quarters ending December31, 2003 expiring on January 31, 2004.

The 2003 Bank Amendmentto the Credit Agreement also included the substitution of a covenantrequiring the Company to maintain a minimum of $20 of liquidity fromspecified sources at all times through January 31, 2004 and certainother amendments to allow for the 2003 M&F Investments and theimplementation of the stabilization and growth phase of theCompany's plan, including specific exceptions from thelimitations under the indebtedness covenant to permit the 2003 MafcoLoans and to exclude the proceeds from the 2003 M&F Investmentsfrom the mandatory prepayment provisions of the Credit Agreement, andto increase the maximum limit on capital expenditures (as defined inthe Credit Agreement) from $100 to $115 for 2003. The 2003 BankAmendment also increased the applicable margin on loans under theCredit Agreement by 0.5%, the incremental cost of which to theCompany, assuming the Credit Agreement is fully drawn, was $1.1 fromFebruary 5, 2003 through the end of 2003.

EBITDA (as defined inthe Credit Agreement) was $144.4 for the four consecutive fiscalquarters ended December 31, 2003, which was less than the minimum of$230 required under the EBITDA covenant of the Credit Agreement forthat period and the Company's leverage ratio was 1.66:1.00, whichwas in excess of the maximum ratio of 1.1:1.00 permitted under theleverage ratio covenant of the Credit Agreement for that period.Accordingly, the Company sought and on January 28, 2004 secured the2004 Bank Amendment which includes waivers of compliance with thesecovenants for the four quarters ended December 31, 2003 and, in lightof the Company's expectation that the continued implementation ofits plan would affect its ability to comply with these covenants during2004, the Company also secured an amendment to eliminate the EBITDA andleverage ratio covenants for the first three quarters of 2004 and awaiver of compliance with such covenants for the four quarters endingDecember 31, 2004 expiring on January 31, 2005.

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

In February2003 Revlon, Inc. entered into an investment agreement with MacAndrewsHoldings (the "Investment Agreement")pursuant to which Revlon, Inc. undertook and, on June 20, 2003,

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

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

In addition, in connection with the Investment Agreement, MacAndrewsHoldings also made available a $100 million term loan to the Company(the "Mafco $100 million term loan"). TheMafco $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 willbe paid in full at final maturity. **(See "RecentDevelopments" for important information concerning theMafco $100 million term loan)**.

Additionally, MacAndrewsHoldings also provided the Company with an additional $40 line ofcredit during 2003, which amount was originally to increase to $65 onJanuary 1, 2004 (the "Mafco $65 million line ofcredit") (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 Offeringand the 2003 Mafco Loans are referred to as the "2003M&F Investments") and which was originally to beavailable to the Company through December 31, 2004, provided that theMafco $100 million term loan is fully drawn and Revlon, Inc. hadconsummated the Rights Offering. The Mafco $65 million line of creditbears interest payable in cash at a rate of the lesser of (i)12.0% and (ii) 0.25% less than the rate payable from timeto time on Eurodollar loans under the Company's Credit Agreement(which rate was 8.00% as of December 31, 2003). However, inconnection with the recent 2004 Bank Amendment of the Company'sCredit Agreement, the Company and MacAndrews Holdings agreed to extendthe maturity of the Mafco $65 million line of credit to June 30, 2005and to subject the availability of funds under such line of credit tothe condition that an aggregate principal amount of $100 be drawn underthe 2004 Mafco $125 million term loan. **(See "RecentDevelopments" for important information concerning theMafco $65 million line of credit)**.

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

The Company's principal sources of funds areexpected to be operating revenues, cash on hand, funds available forborrowing under the Credit Agreement, the Mafco $65 million line ofcredit, the 2004 Mafco $125 million term loan and other permitted linesof credit. **(See "RecentDevelopments")**. The Credit Agreement, the Mafco $65million line of credit, the 2004 Mafco $125 million term loan, ProductsCorporation's 12% Senior Secured Notes, ProductsCorporation's 8 5/8% Senior SubordinatedNotes due 

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2008 (the"8 5/8% Senior SubordinatedNotes"), Products Corporation's8 1/8% Senior Notes due 2006 (the"8 1/8% Senior Notes")and Products Corporation's 9% Senior Notes due 2006 (the"9% Senior Notes") contain certainprovisions that by their terms limit Products Corporation'sand/or its subsidiaries' ability to, among other things, incuradditional debt.

The Company's principal uses of funds areexpected to be the payment of operating expenses, including expenses inconnection with the continued implementation of, and refinement to, theCompany's plan, purchases of permanent wall displays, capitalexpenditure requirements, payments in connection with theCompany's restructuring programs referred to herein and debtservice payments and costs. Cash contributions to the Company'spension plans were $21 in 2003 and the Company expects them to beapproximately $40 in 2004.

The Company has undertaken a numberof programs to efficiently manage its cash and working capitalincluding, among other things, programs to carefully manage and reduceinventory levels, centralized purchasing to secure discounts andefficiencies in procurement, and providing additional discounts to U.S.customers for more timely payment of receivables and careful managementof accounts payable.

The Company previously estimated thatcharges related to the implementation of its plan for 2002, 2003 and2004 would not exceed $160. The Company recorded charges ofapproximately $104 in 2002 and approximately $31 in 2003 related to theimplementation of the stabilization and growth phase of its plan. TheCompany expects that cash payments related to the foregoing charges,that it has previously recorded with respect to its plan, will beapproximately $100 during 2003 and 2004 of which the Company paidapproximately $80 in 2003.

The Company developed a new designfor its wall displays (which the Company is continuing to refine aspart of the implementation of its plan) and began installing them atcertain customers' retail stores during 2002, which it continuedduring 2003. The Company is also reconfiguring existing wall displaysat its retail customers. Accordingly, the Company has accelerated theamortization of its existing wall displays. The Company estimates thatpurchases of wall displays for 2004 will be approximately $50 to$60.

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

The Company expects that operatingrevenues, cash on hand, and funds available for borrowing under theCredit Agreement, the Mafco $65 million line of credit, and the 2004Mafco $125 million term loan and other permitted lines of credit**(See "Recent Developments")** will besufficient to enable the Company to cover its operating expenses,including cash requirements in connection with the Company'soperations, the continued implementation of, and refinement to, theCompany's plan, cash requirements in connection with theCompany's restructuring programs referred to above and theCompany's debt service requirements for 2004. The U.S.mass-market color cosmetics category during 2003 was softer thanexpected. Despite this softness in the U.S. mass-market color cosmeticscategory, based upon the Company's belief that its continuedimplementation of its plan is proving effective, the Company intends tocontinue to support its plan, including for brand support. To help fundthe costs and expenses of the continued implementation of theCompany's plan, in July 2003, MacAndrews Holdings agreed to makeavailable to the Company in 2003 the full $65 under the Mafco $65million line of credit, $25 of which was scheduled to become availableon January 1, 2004. Additionally, MacAndrews & Forbes has providedthe Company with the 2004 Mafco $125 million term loan, which is onterms that are substantially the same as the Mafco $100 million termloan. As of February 9, 2004, the Company had drawn $244.6 under the2001 Credit Agreement, all of the Mafco $100 million term loan, $26.0of the Mafco $65 million line of credit and $12.4 of the 2004 Mafco$125 million term loan. **(See "RecentDevelopments" for important information concerning theMafco $100 million term loan, Mafco $65 million line of credit and the2004 Mafco $125 million term loan)**. The Mafco $65 million line ofcredit and the 2004 Mafco $125 million term loan are intended tocontinue to help fund the continued implementation of, and refinementto, the Company's plan and to decrease the risk that wouldotherwise exist if the Company were to fail to meet its debt andongoing obligations as they become due in 2004. However, there can beno assurance that 

25

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such funds will be sufficient to meet theCompany's cash requirements on a consolidated basis. If theCompany's anticipated level of revenue growth is not achievedbecause, for example, of decreased consumer spending in response toweak economic conditions or weakness in the cosmetics category,increased competition from the Company's competitors or theCompany's marketing plans are not as successful as anticipated,or if the Company's expenses associated with the continuedimplementation of, and refinement to, the Company's plan exceedthe anticipated level of expenses, the Company's current sourcesof funds may be insufficient to meet the Company's cashrequirements. Additionally, in the event of a decrease in demand forthe Company's products or reduced sales or lack of increases indemand and sales as a result of the continued implementation of, andrefinement to, the Company's plan, such development, ifsignificant, could reduce the Company's operating revenues andcould adversely affect its ability to achieve certain financialcovenants under the Credit Agreement and in such event the Companycould be required to take measures, including reducing discretionaryspending. If the Company is unable to satisfy such cash requirementsfrom these sources, the Company could be required to adopt one or morealternatives, such as delaying the implementation of or revisingaspects of its plan, reducing or delaying purchases of wall displays oradvertising or promotional expenses, reducing or delaying capitalspending, delaying, reducing or revising restructuring programs,restructuring indebtedness, selling assets or operations, seekingadditional capital contributions or loans from MacAndrews & Forbes,Revlon, Inc. or other affiliates and/or third parties, or reducingother discretionary spending. The Company has substantial debt maturingin 2005, which will require refinancing, consisting of $246.3 (assumingthe maximum amount is borrowed) under the Credit Agreement and $363.0of 12% Senior Secured Notes, as well as any amounts borrowedunder the Mafco $65 million line of credit and the 2004 Mafco $125million term loan. **(See "RecentDevelopments" important information concerning recentamendments to the Credit Agreement)**.

The Company'sEBITDA, as defined in the Credit Agreement, was approximately $144.4for the four quarters ended December 31, 2003. As a result, the Companywould not have been in compliance with the EBITDA and leverage ratiocovenants, had they been in effect at that time. The Company expectsthat it will need to seek a further amendment to the Credit Agreementor a waiver of the EBITDA and leverage ratio covenants under the CreditAgreement 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 theCompany's plan, will allow it to satisfy those covenants for thefour consecutive fiscal quarters ending December 31, 2004. The minimumEBITDA required to be maintained by the Company under the CreditAgreement was $230 for each of the four consecutive fiscal quartersending on December 31, 2003 (which covenant was waived through January31, 2004 and thereafter eliminated) and $250 for any four consecutivefiscal quarters ending December 31, 2004 and thereafter (which covenantwas waived through January 31, 2005). The leverage ratio covenant underthe Credit Agreement will permit a maximum ratio of 1.10:1.00 for anyfour 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 January31, 2005 for the four fiscal quarters ending December 31, 2004). Inaddition, after giving effect to the 2004 Bank Amendment, the CreditAgreement also contains a $20 minimum liquidity covenant. While theCompany expects that its bank lenders will consent to such amendment orwaiver, there can be no assurance that they will or that they will doso on terms that are favorable to the Company. If the Company is unableto obtain such amendment or waiver, it could be required to refinancethe Credit Agreement or repay it with proceeds from the sale of assetsor operations, or additional capital contributions and/or loans fromMacAndrews & Forbes, Revlon, Inc. or other affiliates and/or thirdparties. In the event that the Company were unable to obtain such awaiver or amendment and it was not able to refinance or repay theCredit Agreement, its inability to meet the financial covenants for thefour consecutive fiscal quarters ending December 31, 2004 wouldconstitute an event of default under the Company's CreditAgreement, which would permit the bank lenders to accelerate the CreditAgreement, which in turn would constitute an event of default under theindentures governing the Company's debt if the amount acceleratedexceeds $25.0 and such default remains uncured within 10 days of noticefrom the trustee under the applicable indenture. Further, the lendersunder the Company's Credit Agreement could proceed against thecollateral securing that indebtedness. If these lenders were toforeclose upon this collateral, which includes the capital stock of theCompany, the value of Revlon, Inc.'s Common Stock would besubstantially diminished or eliminated.

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There can be no assurance that theCompany would be able to take any of the actions referred to in thepreceding two paragraphs because of a variety of commercial or marketfactors or constraints in the Company's debt instruments,including, for example, the Company's inability to reachagreement with its bank lenders on refinancing terms that areacceptable to the Company before the waiver of its financial covenantsexpires on January 31, 2005, market conditions being unfavorable for anequity or debt offering, or that the transactions may not be permittedunder the terms of the Company's various debt instruments then ineffect, because of restrictions on the incurrence of debt, incurrenceof liens, asset dispositions and related party transactions. Inaddition, such actions, if taken, may not enable the Company to satisfyits cash requirements if the actions do not generate a sufficientamount of additional capital.

The terms of the Credit Agreement,the 2003 Mafco Loans, the 2004 Mafco $125 million term loan, the12% Senior Secured Notes, the 8 5/8%Senior Subordinated Notes, the 8 1/8% SeniorNotes and the 9% Senior Notes generally restrict ProductsCorporation from paying dividends or making distributions, except thatProducts Corporation is permitted to pay dividends and makedistributions to Revlon, Inc., among other things, to enable Revlon,Inc. to pay expenses incidental to being a public holding company,including, among other things, professional fees such as legal andaccounting fees, regulatory fees such as Commission filing fees andother miscellaneous expenses related to being a public holding companyand, subject to certain limitations, to pay dividends or makedistributions in certain circumstances to finance the purchase byRevlon, Inc. of its Class A Common Stock in connection with thedelivery of such Class A Common Stock to grantees under the Revlon,Inc. Amended and Restated 1996 Stock Plan (the "AmendedStock Plan").

Pursuant to a tax sharing agreement,Products Corporation may be required to make tax sharing payments toRevlon, Inc. (which in turn may be required to make tax sharingpayments to Mafco Holdings) as if Products Corporation were filingseparate income tax returns, except that no payments are required byProducts Corporation (or Revlon, Inc.) if and to the extent thatProducts Corporation is prohibited under the Credit Agreement frommaking tax sharing payments to Revlon, Inc. The Credit Agreementprohibits Products Corporation from making any tax sharing paymentsother than in respect of state and local income taxes. ProductsCorporation currently anticipates that, as a result of net operatingtax losses and prohibitions under the Credit Agreement, no cash federaltax payments or cash payments in lieu of federal taxes pursuant to thetax sharing agreement will be required for 2004.

As a result ofdealing with suppliers and vendors in a number of foreign countries,the Company enters into foreign currency forward exchange contracts andoption contracts from time to time to hedge certain cash flowsdenominated in foreign currencies. There were foreign currency forwardexchange contracts with a notional amount of $8.3 outstanding atDecember 31, 2003. The fair value of foreign currency forward exchangecontracts outstanding at December 31, 2003 was $(0.8).

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Disclosures about ContractualObligations and Commercial Commitments

The following tableaggregates all contractual commitments and commercial obligations thataffect the Company's financial condition and liquidity positionas of December 31,2003:

|                                   |  |                                           |  |                  |  |          |  |           |  |              |  |  |  |  |  |  |  |  |  |  |  |  |
|-----------------------------------|--|-------------------------------------------|--|------------------|--|----------|--|-----------|--|--------------|--|--|--|--|--|--|--|--|--|--|--|--|
|                              |  | PaymentsDue by Period(dollars inmillions) |
| ContractualObligations            |  | Total                                     |  | Less than 1 year |  | 1-3years |  | 4-5 years |  | After 5years |
| Long-termDebt                     |  | $1,869.5                                  |  | Nil              |  | $1,219.6 |  | $649.9    |  | Nil          |
| CapitalLeaseObligations           |  | 6.0                                       |  | $2.0             |  | 4.0      |  | Nil       |  | Nil          |
| OperatingLeases                   |  | 129.8                                     |  | 15.4             |  | 38.8     |  | 21.1      |  | $54.5        |
| UnconditionalPurchase Obligations |  | (a)37.4                                   |  | 37.4             |  | Nil      |  | Nil       |  | Nil          |
| OtherLong-term Obligations        |  | (b)104.9                                  |  | 53.4             |  | 51.5     |  | Nil       |  | Nil          |
| TotalContractual CashObligations  |  | $2,147.6                                  |  | $108.2           |  | $1,313.9 |  | $671.0    |  | $54.5        |
|                                   |

| (a) | Consistsof purchase commitments for finished goods, raw materials, componentsand services pursuant to enforceable and legally binding obligationswhich include all significant terms, including fixed or minimumquantities to be purchased; fixed, minimum or variable priceprovisions; and the approximate timing of thetransaction. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Consists primarily ofobligations related to advertising, insurance, employment contracts andother personnel service contracts. Such amounts exclude severance andother contractual commitments related to restructuring, which arediscussed under "RestructuringCosts". |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Off-Balance Sheet Transactions

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

Effect of New Accounting Standards

In April 2003, the FASBannounced it will require all companies to expense the fair value ofemployee equity-based awards. The FASB announced that it plans to issuean exposure draft in the first quarter of 2004 that could becomeeffective in 2005. Until a new statement is issued, the provisions ofAPB Opinion No. 25 and SFAS No. 123 will remain in effect. The Companywill evaluate the impact of any new statement regarding employeeequity-based awards when a new statement is issued.

Inflation

In general, the Company's costs areaffected by inflation and the effects of inflation may be experiencedby the Company in future periods. Management believes, however, thatsuch effects have not been material to the Company during the pastthree years in the United States and in foreign non-hyperinflationarycountries. The Company operates in certain countries around the world,such as Argentina, Brazil, Venezuela and Mexico that have in the pastexperienced hyperinflation. In hyperinflationary foreign countries, theCompany attempts to mitigate the effects of inflation by increasingprices in line with inflation, where possible, and efficiently managingits working capital levels.

Subsequent Events

See"Recent Developments."

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Item 7A.    Quantitative andQualitative Disclosures About Market Risk

Interest RateSensitivity

The Company has exposure to changing interestrates, primarily in the U.S. The Company's policy is to manageinterest rate risk through the use of a combination of fixed andfloating rate debt. The Company from time to time makes use ofderivative financial instruments to adjust its fixed and floating rateratio. There were no such derivative financial instruments outstandingat December 31, 2003. The table below provides information about theCompany's indebtedness that is sensitive to changes in interestrates. The table presents cash flows with respect to principal onindebtedness and related weighted average interest rates by expectedmaturity dates. Weighted average variable rates are based on impliedforward rates in the yield curve at December 31, 2003. The informationis presented in U.S. dollar equivalents, which is the Company'sreporting currency.

Exchange Rate Sensitivity

TheCompany manufactures and sells its products in a number of countriesthroughout the world and, as a result, is exposed to movements inforeign currency exchange rates. In addition, a portion of theCompany's borrowings are denominated in foreign currencies, whichare also subject to market risk associated with exchange rate movement.The Company from time to time hedges major foreign currency cashexposures generally through foreign exchange forward and optioncontracts. The contracts are entered into with major financialinstitutions to minimize counterparty risk. These contracts generallyhave a duration of less than twelve months and are primarily againstthe U.S. dollar. In addition, the Company enters into foreign currencyswaps to hedge intercompany financing transactions. The Company doesnot hold or issue financial instruments for tradingpurposes.

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The following tablepresents the information required by Item 7A of Form 10-K as ofDecember   31, 2003 **(See "RecentDevelopments")**:

|                                                                |  |                                                      |        |         |  |                       |        |          |  |        |        |                                |  |                          |                     |                      |  |        |        |         |  |        |                             |        |  |        |         |        |  |        |         |         |  |  |
|----------------------------------------------------------------|--|------------------------------------------------------|--------|---------|--|-----------------------|--------|----------|--|--------|--------|--------------------------------|--|--------------------------|---------------------|----------------------|--|--------|--------|---------|--|--------|-----------------------------|--------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                                           |  | Expectedmaturity date for the year ended December31, |        |    |  | Fair ValueDec.31,2003 |
|                                                           |  | 2004                                                 |        | 2005    |  | 2006                  |        | 2007     |  | 2008   |        | Thereafter                     |  | Total                    |                     |
|                                                           |  | (dollars inmillions)                                 |
| **Debt**                                                       |  |                                                 |   |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   |                        |   |  |   |    |   |  |   |    |    |
| Short-termvariable rate (variouscurrencies)                    |  | $                                                    | 28.0   |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   |                        |   |  | $      | 28.0    |   |  | $      | 28.0    |    |
| Averageinterest rate(a)                                        |  |                                                 | 3.9    | %  |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   |                        |   |  |   |    |   |  |   |    |    |
| Long-termfixed rate — third party($US)                   |  |                                                 |   |    |  |                  | 356.3  |     |  | $      | 499.8  |                           |  |                     |                |                 |  | $      | 649.9  |    |  |   |                        |   |  |   | 1,506.0 |   |  |   | 1,009.6 |    |
| Averageinterestrate                                            |  |                                                 |   |    |  |                  | 12.0   | %   |  |   | 8.6    | %                         |  |                     |                |                 |  |   | 8.6    | %  |  |   |                        |   |  |   |    |   |  |   |    |    |
| Long-termvariable rate — third party($US)                |  |                                                 |   |    |  |                  | 214.4  | *   |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   |                        |   |  |   | 214.4   |   |  |   | 214.4   |    |
| Averageinterest rate(a)                                        |  |                                                 |   |    |  |                  | 6.5    | %   |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   |                        |   |  |   |    |   |  |   |    |    |
| Long-termvariable rate — third party (variouscurrencies) |  |                                                 |   |    |  |                  | 2.9    | *   |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   |                        |   |  |   | 2.9     |   |  |   | 2.9     |    |
| Averageinterest rate(a)                                        |  |                                                 |   |    |  |                  | 8.7    | %   |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   |                        |   |  |   |    |   |  |   |    |    |
| Long-termfixed rate — affiliates($US)                    |  |                                                 |   |    |  |                  | 122.1  | **  |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   |                        |   |  |   | 122.1   |   |  |   | 100.3   |    |
| Averageinterestrate                                            |  |                                                 |   |    |  |                  | 11.5   | %   |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   |                        |   |  |   |    |   |  |   |    |    |
| Totaldebt(b)                                                   |  | $                                                    | 28.0   |    |  | $                     | 695.7  |     |  | $      | 499.8  |                           |  | $                        |   — |                 |  | $      | 649.9  |    |  | $      |   —         |   |  | $      | 1,873.4 |   |  | $      | 1,355.2 |    |
|                                                           |  | AverageContractualRate$/FC                           |        |    |  |                  |        |     |  |   |        | OriginalUSDollarNotionalAmount |  | ContractValueDec.31,2003 |                     | FairValueDec.31,2003 |
| **ForwardContracts**                                           |  |
| Buy Euros/SellUSD                                              |  |                                                 | 1.0589 |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  | $      | 1.2                         |   |  | $      | 1.4     |   |  | $      | 0.2     |    |
| BuyBritish Pounds/SellUSD                                      |  |                                                 | 1.7700 |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   | 1.8                         |   |  |   | 1.8     |   |  |   | — |    |
| SellBritish Pounds/BuyUSD                                      |  |                                                 | 1.5375 |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   | 0.5                         |   |  |   | 0.4     |   |  |   | (0.1    | )  |
| SellAustralian Dollars/BuyUSD                                  |  |                                                 | 0.5760 |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   | 1.6                         |   |  |   | 1.1     |   |  |   | (0.5    | )  |
| SellCanadian Dollars/BuyUSD                                    |  |                                                 | 0.6617 |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   | 1.9                         |   |  |   | 1.6     |   |  |   | (0.3    | )  |
| SellSouth African Rand/BuyUSD                                  |  |                                                 | 0.1121 |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   | 0.5                         |   |  |   | 0.4     |   |  |   | (0.1    | )  |
| BuyAustralian Dollars/Sell New ZealandDollars                  |  |                                                 | 1.0946 |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   | 0.5                         |   |  |   | 0.5     |   |  |   | — |    |
| BuyBritish Pounds/SellEuros                                    |  |                                                 | 0.6835 |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  |   | 0.3                         |   |  |   | 0.3     |   |  |   | — |    |
| Totalforwardcontracts                                          |  |                                                 |   |    |  |                  |   |     |  |   |   |                           |  |                     |                |                 |  |   |   |    |  | $      |     8.3 |   |  | $      | 7.5     |   |  | $      | (0.8    | )  |
|                                                                |

|  |
|--|
|  |  |
|  |

| (a) | Weightedaverage variable rates are based upon implied forward rates from theyield curves at December 31, 2003. |
|-----|----------------------------------------------------------------------------------------------------------------|

| (b) | Excludesaffiliate debt of $24.1, for which fair value is not readilydeterminable. |
|-----|-----------------------------------------------------------------------------------|

| * | Represents ProductsCorporation's Credit Agreement which matures in May2005. |
|---|-----------------------------------------------------------------------------|

| ** | Primarily represents borrowings underMacAndrews & Forbes $100 million term loan, which matures inDecember 2005, of which fair value was determined based on the marketrates of Products Corporation's 8 1/8% and9% Notes, which have similar credit attributes. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item8.    Financial Statements and Supplementary Data

Reference ismade to the Index on page F-1 of the Consolidated Financial Statementsof the Company and the Notes thereto contained herein.

Item9.     Changes in and Disagreements with Accountants onAccounting and Financial Disclosure

Not applicable.

Item 9A.    Controls and Procedures

(a) DisclosureControls and Procedures.    The Company's management, withthe participation of the Company's Chief Executive Officer andChief Financial Officer, has evaluated the effectiveness of theCompany's disclosure controls and procedures (as defined in Rules13a-15(e) and 15d-15(e) under the 

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Exchange Act) as of the end of the fiscalperiod covered by this Annual Report on Form 10-K. Based upon suchevaluation, the Chief Executive Officer and Chief Financial Officerhave concluded that, as of the end of such period, the Company'sdisclosure controls and procedures are effective in recording,processing, summarizing and reporting information required to bedisclosed by the Company in the reports it files or submits under theExchange Act within the time periods specified in theCommission's rules and forms.

(b) Internal Control OverFinancial Reporting.    There have not been any changes in theCompany's internal control over financial reporting (as such termis defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)during the fourth fiscal quarter of the fiscal period covered by thisAnnual Report on Form 10-K that have materially affected, or arereasonably likely to materially affect, the Company's internalcontrol over financial reporting.

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PART III INFORMATION

Item 10.    Directors and Executive Officers of theRegistrant

The following table sets forth certain informationconcerning the Directors and executive officers of the Company as ofDecember 31, 2003. Each Director holds office until his successor isduly elected and qualified or until his resignation or removal, ifearlier.

|                   |  |                                                          |  |  |  |  |
|-------------------|--|----------------------------------------------------------|--|--|--|--|
| Name              |  | Position                                                 |
| RonaldO.Perelman  |  | Chairmanof the Board and Director                        |
| Jack L.Stahl      |  | President, Chief Executive Officer andDirector           |
| Thomas E. McGuire |  | Executive VicePresident and Chief Financial Officer      |
| Paul E.Shapiro    |  | Executive Vice President and Chief AdministrativeOfficer |
| Douglas H. Greeff |  | Executive VicePresident – Strategic Finance        |
| Alan S.Bernikow   |  | Director                                                 |
| Donald G.Drapkin  |  | Director                                                 |
| Howard Gittis     |  | ViceChairman of the Board of Directors andDirector       |
| Edward J.Landau   |  | Director                                                 |
|                   |

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

Mr.Perelman (60) has been Chairman of the Board of Directors of ProductsCorporation and of Revlon, Inc. since June 1998 and a Director ofProducts Corporation and of Revlon, Inc. since their respectiveformations in 1992. Mr. Perelman has been Chairman of the Board ofManagers, Manager and Chief Executive Officer of REV Holdings, whichfiles reports pursuant to the Securities and Exchange Act of 1934, asamended (the "Exchange Act"), since December2002. He was Chief Executive Officer of REV Holdings Inc. since 1997and Chairman of its Board of Directors from 1993 through December 2002.Mr. Perelman has been Chairman of the Board and Chief Executive Officerof MacAndrews & Forbes and various of its affiliates since 1980.Mr. Perelman is also Chairman of the Executive Committee of the Boardof Directors of M&F Worldwide Corp. ("M&FWorldwide") and Chairman of the Board of Directors ofPanavision Inc. ("Panavision"). Mr. Perelmanis also a Director of the following companies which file reportspursuant to the Exchange Act: Scientific Games Corporation("Scientific Games"), M&F Worldwide andPanavision.

Mr. Stahl (50) has been President and ChiefExecutive Officer of Products Corporation and of Revlon, Inc. sinceFebruary 2002 and a Director of Products Corporation and of Revlon,Inc. since March 2002. Mr. Stahl served as President and ChiefOperating Officer of The Coca-Cola Company("Coca-Cola") from February 2000 to March2001. Prior to that, Mr. Stahl held various senior executive positionsat Coca-Cola where he began his career in 1979. Mr. Stahl is also aDirector of the Cosmetic, Toiletry, and Fragrance Association and theUnited Negro College Fund.

Mr. McGuire (49) has been ExecutiveVice President and Chief Financial Officer of Products Corporation andof Revlon, Inc. since August 2003. Mr. McGuire was the Founder andChief Executive Officer of Human Capital Formation, LLC from August2001 until August 2003. Mr. McGuire was the Chief Operating Officer ofZyman Marketing Group from July 2000 until May 2001. From March 1982until June 2000, Mr. McGuire held various professional staff and seniorfinancial executive positions at Coca-Cola.

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

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

Mr. Bernikow(63) has been a Director of Products Corporation and of Revlon, Inc.since September 2003. Prior to his retirement in May 2003, Mr. Bernikowserved as the Deputy Chief Executive Officer of Deloitte & ToucheLLP ("D&T") since 1998. Prior to that,Mr. Bernikow held various senior executive positions at D&T and itspredecessor, Touche Ross, which he joined in 1966. Mr. Bernikow alsoserves as a Director and as a member of the Audit Committee of CasualMale Retail Group, Inc., which files reports pursuant to the ExchangeAct.

Mr. Drapkin (55) has been a Director of ProductsCorporation and of Revlon, Inc. since their respective formations in1992. He has been Vice Chairman of the Board of MacAndrews & Forbesand various of its affiliates since 1987. Mr. Drapkin was a partner inthe law firm of Skadden, Arps, Slate, Meagher & Flom for more thanfive years prior to 1987. Mr. Drapkin is also a Director of thefollowing companies which file reports pursuant to the Exchange Act:Anthracite Capital, Inc., The Molson Companies Limited, PlayboyEnterprises, Inc. and SIGA Technologies, Inc.

Mr. Gittis (69)has been a Director of Products Corporation and of Revlon, Inc. sincetheir respective formations in 1992 and Vice Chairman of ProductsCorporation since June 2002. Mr. Gittis has been Vice Chairman of theBoard of Managers and Manager of REV Holdings, which files reportspursuant to the Exchange Act, since December 2002. He was a Director ofREV Holdings Inc. from its formation in 1993 through December 2002 andVice Chairman of its Board of Directors from March 1997 throughDecember 2002. He has been Vice Chairman of the Board of MacAndrews& Forbes and various of its affiliates since 1985. Mr. Gittis isalso a Director of the following companies which file reports pursuantto the Exchange Act: Jones Apparel Group, Inc., Loral Space &Communications Ltd., Panavision, Scientific Games and M&FWorldwide.

Mr. Landau (73) has been a Director of ProductsCorporation since June 1992 and a Director of Revlon, Inc. since June1996. Prior to his retirement in February 2003, Mr. Landau was OfCounsel at the law firm of Wolf, Block, Schorr and Solis-Cohen LLP("Wolf, Block") since February 1998, and wasa Senior Partner of Lowenthal, Landau, Fischer & Bring, P.C., apredecessor to such firm, for more than five years prior to thatdate.

Compensation of Directors

Directors who currentlyare not receiving compensation as officers or employees of the Companyor any of its affiliates are paid an annual retainer fee of $25,000,payable in quarterly installments, and a fee of $1,000 for each meetingof the Board of Directors or any committee thereof that theyattend.

Audit Committee Financial Expert

RevlonInc.'s Board of Directors has determined that Revlon,Inc.'s Audit Committee, consisting of Linda Gosden Robinson, AlanS. Bernikow, Meyer Feldberg and Edward J. Landau, has at least one"audit committee financial expert". RevlonInc.'s Board determined that Alan S. Bernikow, who is also amember of the Company's Board of Directors, based upon hisexperience, training and education, qualifies as an audit committeefinancial expert in that he has (a) an understanding of generallyaccepted accounting principles ("GAAP") andfinancial statements; (b) the ability to assess the general applicationof GAAP in connection with accounting for estimates, accruals andreserves; (c) experience preparing, auditing, analyzing or evaluatingfinancial statements that present a breadth and level of complexity ofaccounting issues that are generally comparable to the breadth andcomplexity of issues that can reasonably be expected to be raised byRevlon, Inc.'s financial statements as well as experienceactively supervising one or more persons engaged in such activities;(d) an understanding of internal controls and procedures for financialreporting; and (e) an understanding of audit committee functions. Forcertain 

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biographical data concerning Mr. Bernikow,see Item 10, "Directors and Executive Officers of theRegistrant". Revlon, Inc.'s Board further determinedthat Mr. Bernikow is independent of management pursuant to applicableSEC rules and NYSE listing standards regarding the independence ofboard and audit committee members, including the independenceprinciples set forth in the Revlon, Inc. Board Guidelines for AssessingDirector Independence, which are posted on Revlon, Inc.'s websiteat www.revloninc.com.

Senior Financial Officer Code ofEthics

The Company has a written Code of Business Conduct (the"Code of Business Conduct") that includes acode of ethics (the "Senior Financial Officer Code ofEthics") that applies to the Company's ChiefExecutive Officer and senior financial officers (including theCompany's Chief Financial Officer, Controller and personsperforming similar functions) (collectively, the "SeniorFinancial Officers"). The Company will provide a copy ofthe Senior Financial Officer Code of Ethics, without charge, uponwritten request to Robert K. Kretzman, Executive Vice President andChief Legal Officer, Revlon, Inc., 237 Park Avenue, New York NY, 10017.If the Company changes the Senior Financial Officer Code of Ethics inany material respect or waives any provision of the Senior FinancialOfficer Code of Ethics for any of its Senior Financial Officers, theCompany expects to provide the public with notice of any suchchange or waiver by publishing an appropriate description of suchevent on Revlon, Inc.'s website, www.revloninc.com or byother appropriate means as required or permitted under applicable rulesof the Commission. The Company does not currently expect to make anysuch waivers.

Item 11.    Executive Compensation

Thefollowing table sets forth information for the years indicatedconcerning the compensation awarded to, earned by or paid to thepersons who served as Chief Executive Officer of the Company during2003 and the four most highly paid executive officers (see footnote (a)below), other than the Chief Executive Officer, who served as executiveofficers of the Company during 2003 (collectively, the"Named Executive Officers"), for servicesrendered in all capacities to the Company and its subsidiaries duringsuch periods.

Summary CompensationTable

|                                                                            |  |              |  |                        |  |                             |  |                            |  |                             |  |                              |  |                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|----------------------------------------------------------------------------|--|--------------|--|------------------------|--|-----------------------------|--|----------------------------|--|-----------------------------|--|------------------------------|--|-------------------------|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|
|                                                                       |  |         |  | AnnualCompensation (a) |  | Long-TermCompensationAwards |
| Name AndPrincipalPosition                                                  |  | Year         |  | Salary($)              |  | Bonus($)                    |  | OtherAnnualCompensation($) |  | RestrictedStockAwards($)(b) |  | SecuritiesUnderlying Options |  | AllOtherCompensation($) |
| JackL. StahlPresident and Chief ExecutiveOfficer(c)                        |  | 20032002     |  | 1,300,0001,125,000     |  | —1,300,000            |  | 103,24482,999              |  | —2,240,000            |  | 100,000400,000               |  | 173,2773,966,746        |
| ThomasE. McGuire Executive Vice President andChief Financial Officer(d)    |  | 2003         |  | 182,692                |  | —                     |  | 18,678                     |  | 112,000                     |  | 100,000                      |  | 25,224                  |
| PaulE. Shapiro Executive Vice President andChief Administrative Officer(e) |  | 200320022001 |  | 500,000500,000207,692  |  | —225,000500,000       |  | 70,42672,0925,671          |  | ——112,000       |  | —200,000100,000        |  | 5,423——     |
| DouglasH. Greeff Executive Vice President and ChiefFinancial Officer(f)    |  | 200320022001 |  | 884,833811,365731,375  |  | 190,720600,960511,200       |  | 13,82016,67016,513         |  | —134,400112,000       |  | —75,00050,000          |  | 14,0568,9748,786        |
|                                                                            |

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|  |
|--|
|  |  |
|  |

| (a) | The amounts shown in Annual Compensation for 2003, 2002 and 2001reflect salary, bonus and other annual compensation (includingperquisites and other personal benefits valued in excess of $50,000)and amounts reimbursed for payment of taxes awarded to, earned by orpaid to the persons listed for services rendered to the Company and itssubsidiaries. For the periods reported, Products Corporation had anExecutive Bonus Plan in which executives participated (includingMessrs. Stahl, McGuire, Shapiro and Greeff) (see"Employment Agreements and Termination of EmploymentArrangements"). The Executive Bonus Plan provided forpayment of cash compensation upon the achievement of predeterminedbusiness and personal performance objectives during the calendar yearwhich are established by Revlon, Inc.'s Compensation and StockPlan Committee (the "CompensationCommittee"). The Company did not have any"executive officers" during 2003 other thanMessrs. Stahl, McGuire, Shapiro and Greeff. Accordingly, for 2003 theCompany is reporting the compensation of Messrs. Stahl, McGuire,Shapiro and Greeff. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Seefootnotes (c), (d), (e) and (f) below for information concerning thenumber, value and vesting schedules on restricted stock awards to theNamed Executive Officers under the Amended Stock Plan. The optionsgranted to Named Executive Officers during 2003 pursuant to the AmendedStock Plan are discussed below under "Option Grants in theLast Fiscal Year." |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Mr. Stahl became President andChief Executive Officer of the Company during February 2002. The amountshown for Mr. Stahl under Other Annual Compensation for 2003 includes$103,244 in respect of gross ups for taxes on imputed income arisingout of (i) personal use of a Company-provided automobile, (ii) premiumspaid or reimbursed by the Company in respect of life insurance and(iii) reimbursements for mortgage principal and interest paymentspursuant to Mr. Stahl's employment agreement. The amount shownunder All Other Compensation for 2003 reflects (i) $16,309 in respectof life insurance premiums, (ii) $135,968 of additional compensation inrespect of interest and principal payments on a mortgage loan whichProducts Corporation made to Mr. Stahl on May 20, 2002 to purchase aprincipal residence in the New York metropolitan area pursuant to hisemployment agreement (See "Employment Agreements andTermination of Employment Arrangements"), (iii) $6,000 inrespect of matching contributions under the Revlon Employees'Savings, Investment and Profit Sharing Plan (the "401(k)Plan") and (iv) $15,000 in respect of matchingcontributions under the Revlon Excess Savings Plan for Key Employees.Mr. Stahl received a guaranteed bonus of $1,300,000 in respect of 2002pursuant to the terms of his employment agreement. The amount shown forMr. Stahl under Other Annual Compensation for 2002 includes $82,999 inrespect of gross ups for taxes on imputed income arising out of (i)personal use of a Company-provided automobile, (ii) premiums paid orreimbursed by the Company in respect of life insurance, (iii)reimbursements for mortgage principal and interest payments pursuant toMr. Stahl's employment agreement and (iv) relocation expensespaid or reimbursed by the Company in 2002. The amount shown under AllOther Compensation for 2002 reflects (i) $7,350 in Company-paidrelocation expenses, (ii) $13,081 in respect of life insurancepremiums, (iii) $79,315 of additional compensation in respect ofinterest and principal payments on a mortgage loan which ProductsCorporation made to Mr. Stahl on May 20, 2002 to purchase a principalresidence in the New York metropolitan area pursuant to his employmentagreement (See "Employment Agreements and Termination ofEmployment Arrangements"), (iv) $6,000 in respect ofmatching contributions under the 401(k) Plan, (v) $15,000 in respect ofmatching contributions under the Revlon Excess Savings Plan for KeyEmployees, and (vi) $3,846,000 for imputed income in connection withreceipt of an Award of restricted stock reflected in the SummaryCompensation Table as to which he made an election pursuant to Section83(b) of the Internal Revenue Code. On February 17, 2002 (the"Stahl Grant Date"), Mr. Stahl was awarded agrant of 470,000 shares of restricted stock under the Amended StockPlan and 530,000 shares of restricted stock under the Revlon, Inc. 2002Supplemental Stock Plan (the "Supplemental StockPlan"). The value of the restricted stock Awards to Mr.Stahl reflected in the table are based on $2.24, the per share closingprice of Revlon, Inc.'s Class A Common Stock on the NYSE onDecember 31, 2003. Provided Mr. Stahl remains continuously employed bythe Company, his 2002 restricted stock Award will vest as to one-thirdof the restricted shares on the day after which such 20-day average ofthe closing price of Revlon, Inc.'s Class A Common Stock on theNYSE equals or exceeds $20.00 per share, an additional one-third ofsuch restricted shares will vest on the day after which such 20-dayaverage closing price equals or exceeds $25.00 per share and thebalance will vest on the day after which such 20-day average closingprice equals or exceeds $30.00 per share, provided (i) subject toclause (ii) below, no portion of Mr. Stahl's restricted stockAward will vest until the second anniversary of the Stahl Grant Date,unless such 20-day average closing price has equaled or exceeded $25.00per share, (ii) all of the shares of restricted stock awarded to Mr.Stahl will vest immediately in the event of a "change incontrol" as defined in Mr. Stahl's restricted stockagreement and (iii) on June 18, 2004, restrictions shall lapse as to250,000 shares of such restricted stock, on the fourth anniversary ofthe Stahl Grant Date restrictions shall lapse as to an additional250,000 shares of such restricted stock and on the fifth anniversary ofthe Stahl Grant Date, restrictions shall lapse as to 500,000 shares ofsuch restricted stock as to which restrictions had not previouslylapsed. In the event that, prior to the fifth anniversary of the StahlGrant Date, and subject to clause (ii) of the prior sentence, Mr.Stahl's employment with the Company terminates (a) as a result ofMr. Stahl's "disability," (b) isterminated by Mr. Stahl with "good reason" or(c) is terminated by the Company other than for"cause" (as each such term is defined ordescribed in Mr. Stahl's employment agreement), restrictionsshall lapse with respect to an additional number of shares ofrestricted stock, if any, such that the aggregate number of shares ofrestricted stock as to which restrictions shall have lapsed will equalthe 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 calendarmonths during which Mr. Stahl was employed after the Stahl Grant Date(disregarding service prior to March 1, 2002) and the denominator ofwhich is 60. In addition, if Mr. Stahl's employment is terminatedby Mr. Stahl for "good reason" or isterminated by the Company other than for"cause" or"disability" (as each such term is defined ordescribed in Mr. Stahl's employment agreement) during the 120-dayperiod immediately preceding the date of a "change incontrol" (as defined in Mr. Stahl's restricted stockagreement), then the shares of restricted stock previously forfeitedupon such termination of employment will be reinstated and therestrictions relating thereto will lapse and such shares will be deemedfully vested as of the date of the change in control. In the event thatcash or any in-kind distributions are made in respect of theCompany's Common Stock prior to the lapse of the restrictionsrelating to any of Mr. Stahl's restricted stock as to which therestrictions have not lapsed, such dividends will be held by theCompany and paid to Mr. Stahl when, and if, the restrictions on suchrestricted stock lapse. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (d) | Mr. McGuirebecame Executive Vice President and Chief Financial Officer of theCompany during August 2003. The amount shown for Mr. McGuire underOther Annual Compensation for 2003 includes $18,678 in respect of grossups for taxes on imputed income arising out of relocation expenses paidor reimbursed by the Company in 2003. The amount shown under All OtherCompensation for 2003 reflects (i) $24,732 in Company-paid relocationexpenses and (ii) $492 in respect of life insurance premiums. On August18, 2003 (the "McGuire Grant Date"), Mr.McGuire was awarded 50,000 shares of restricted stock under the AmendedStock Plan. The value of the 2003 restricted stock Award to Mr. McGuirereflected in the table is based on $2.24, the per share closing priceof Revlon, Inc.'s Class A Common Stock on the NYSE on December31, 2003. Provided Mr. McGuire remains continuously employed by theCompany, his restricted stock Award will vest as to one-third of therestricted shares on the day after which the 20-day average of theclosing price of Revlon, Inc.'s Class A Common Stock on the NYSEequals or exceeds $20.00 per share, an additional one-third of suchrestricted shares will vest on the day after which such 20-day averageclosing price equals or exceeds $25.00 per share and the balance willvest on the day after which such 20-day average closing price equals orexceeds $30.00 per share, provided (i) subject to clause (ii) below, noportion of Mr. McGuire's restricted stock Award will vest untilthe second anniversary of the McGuire Grant Date, (ii) all of theshares of restricted stock awarded to Mr. McGuire in 2003 will vestimmediately in the event of a "change incontrol" (as defined in Mr. McGuire's restrictedstock agreement), and (iii) all of the shares of restricted stockgranted to Mr. McGuire in 2003 which have not previously vested willfully vest on the third anniversary of the McGuire Grant Date. Nodividends will be paid on Mr. McGuire's unvested restricted stockgranted in 2003. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | Until hisretirement on December 31, 2003, Mr. Shapiro served as Executive VicePresident and Chief Administrative Officer of the Company during 2001,2002 and 2003. The $70,426 shown for Mr. Shapiro under Other AnnualCompensation for 2003 includes (i) $16,418 in respect of gross ups fortaxes on imputed income arising out of personal use of aCompany-provided automobile, (ii) $21,510 in respect of health andcountry club membership reimbursements and (iii) $22,209 relating topersonal use of a Company car. The amount shown under All OtherCompensation for 2003 reflects $5,423 in respect of matchingcontributions under the 401(k) Plan. Mr. Shapiro received adiscretionary bonus of $225,000 in respect of 2002 pursuant to theRevlon Executive Bonus Plan. The $72,092 shown for Mr. Shapiro underOther Annual Compensation for 2002 includes (i) $17,014 in respect ofgross ups for taxes on imputed income arising out of personal use of aCompany-provided automobile, (ii) $18,908 in respect of health andcountry club membership reimbursements and (iii) $20,450 relating topersonal use of a Company car. Mr. Shapiro received a bonus of $500,000in respect of 2001 pursuant to the terms of his employment agreement.The amount shown for Mr. Shapiro under Other Annual Compensation for2001 includes $5,671 in respect of gross ups for taxes on imputedincome arising out of personal use of a Company-provided automobile. OnJune 18, 2001 (the "2001 Grant Date"), Mr.Shapiro was awarded a grant of (subject to his election as an executiveofficer of the Company) 50,000 shares of restricted stock under theAmended 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 closingprice of Revlon, Inc.'s Class A Common Stock on the NYSE onDecember 31, 2003. Mr. Shapiro's restricted stock Award will vestas to one-third of the restricted shares on the day after which the20-day average of the closing price of Revlon, Inc.'s Class ACommon Stock on the NYSE equals or exceeds $20.00 per share, anadditional one-third of such restricted shares will vest on the dayafter which such 20-day average closing price equals or exceeds $25.00per share and the balance will vest on the day after which such 20-dayaverage closing price equals or exceeds $30.00 per share, provided (i)subject to clause (ii) below, no portion of Mr. Shapiro's 2001restricted stock Award will vest until the second anniversary of the2001 Grant Date, (ii) all of the shares of restricted stock awarded toMr. 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 theshares of restricted stock granted to Mr. Shapiro in 2001 which havenot previously vested will fully vest on the third anniversary of the2001 Grant Date. No dividends will be paid on Mr. Shapiro'sunvested restricted stock granted in 2001. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | Mr. Greeff served as Executive VicePresident and Chief Financial Officer of the Company during all of 2001and 2002 and until August 2003 when he became Executive Vice President- Strategic Finance of the Company. In 2003, Mr. Greeff received abonus of $190,720 pursuant to the terms of his employment agreement asa special bonus in respect of repayment of a loan made to Mr. Greeff bythe Company in 2000 (see "Employment Agreements andTermination of Employment Arrangements"). The amount shownfor Mr. Greeff under Other Annual Compensation for 2003 includes$13,820 in respect of gross ups for taxes on imputed income arising outof personal use of a Company-provided automobile. The amount shownunder All Other Compensation for 2003 reflects (i) $3,056 in respect oflife insurance premiums, (ii) $6,000 in respect of matchingcontributions under the 401(k) Plan and (iii) $5,000 in respect ofreimbursement of expenses in connection with an amendment of Mr.Greeff's employment agreement. In 2002, Mr. Greeff received abonus of $600,960, of which $200,960 was paid pursuant to the terms ofhis employment agreement as a special bonus in respect of repayment ofa loan made to Mr. Greeff by the Company in 2000 (see"Employment Agreements and Termination of EmploymentArrangements") and the balance of $400,000 was adiscretionary bonus paid in respect of 2002 pursuant to the RevlonExecutive Bonus Plan. The amount shown for Mr. Greeff under OtherAnnual Compensation for 2002 includes $16,670 in respect of gross upsfor taxes on imputed income arising out of personal use of aCompany-provided automobile. The amount shown under All OtherCompensation for 2002 reflects (i) $2,974 in respect of life insurancepremiums and (ii) $6,000 in respect of matching contributions under the401(k) Plan. On September 17, 2002 (the "2002 GrantDate"), Mr. Greeff was awarded a grant of 60,000 shares ofrestricted stock under the Amended Stock Plan. The value of the 2002restricted stock Award to Mr. Greeff reflected in the table is based on$2.24, the per share closing price of Revlon, Inc.'s Class ACommon Stock on the NYSE on December 31, 2003. Provided Mr. Greeffremains continuously employed by the Company, his 2002 restricted stockAward will vest as to one-third of the restricted shares on the dayafter which the 20-day average of the closing price of Revlon,Inc.'s Class A Common Stock on the NYSE equals or exceeds $20.00per share, an additional one-third of such restricted shares will veston the day after which such 20-day average closing price equals orexceeds $25.00 per share and the balance will vest on the day afterwhich such 20-day average closing price equals or exceeds $30.00 pershare, provided (i) subject to clause (ii) below, no portion of Mr.Greeff's 2002 restricted stock Award will vest until the secondanniversary of the 2002 Grant Date, (ii) all of the shares ofrestricted stock awarded to Mr. Greeff in 2002 will vest immediately inthe event of a "change in control" (asdefined in Mr. Greeff's restricted stock agreement) and (iii) allof the shares of restricted stock granted to Mr. Greeff in 2002 whichhave not previously vested |
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|  | will fully vest on the third anniversary ofthe 2002 Grant Date. No dividends will be paid on Mr. Greeff'sunvested restricted stock granted in 2002. Mr. Greeff received a bonusof $511,200 in respect of 2001, of which $211,200 was paid pursuant tothe terms of his employment agreement as a special bonus in respect ofrepayment of a loan made to Mr. Greeff by the Company in 2000 (see"Employment Agreements and Termination of EmploymentArrangements") and the balance of $300,000 was paid inrespect of 2001 pursuant to the Revlon Executive Bonus Plan as ashort-term cash bonus in recognition of the Company's successfulrefinancing of its credit agreement in 2001 with the 2001 CreditAgreement and issuing Products Corporation's 12% SeniorSecured Notes. $150,000 of Mr. Greeff's bonus in respect of 2001was paid in 2002 and the remaining $150,000 was paid in 2003. Theamount shown for Mr. Greeff under Other Annual Compensation for 2001includes $16,513 in respect of gross ups for taxes on imputed incomearising out of personal use of a Company-provided automobile. Theamounts shown under All Other Compensation for 2001 reflect (i) $4,436in respect of life insurance premiums and (ii) $4,350 in respect ofmatching contributions under the 401(k) Plan. On the 2001 Grant Date,Mr. Greeff was awarded a grant of 50,000 shares of restricted stockunder the Amended Stock Plan. The value of the 2001 restricted stockAward to Mr. Greeff reflected in the table is based on $2.24, the pershare closing price of Revlon, Inc.'s Class A Common Stock on theNYSE on December 31, 2003. Provided Mr. Greeff remains continuouslyemployed by the Company, his 2001 restricted stock Award will vest asto one-third of the restricted shares on the day after which the 20-dayaverage of the closing price of Revlon, Inc.'s Class A CommonStock on the NYSE equals or exceeds $20.00 per share, an additionalone-third of such restricted shares will vest on the day after whichsuch 20-day average closing price equals or exceeds $25.00 per shareand the balance will vest on the day after which such 20-day averageclosing price equals or exceeds $30.00 per share, provided (i) subjectto clause (ii) below, no portion of Mr. Greeff's 2001 restrictedstock Award will vest until the second anniversary of the 2001 GrantDate, (ii) all of the shares of restricted stock awarded to Mr. Greeffin 2001 will vest immediately in the event of a "change incontrol" (as defined in Mr. Greeff's restrictedstock agreement) and (iii) all of the shares of restricted stockawarded to Mr. Greeff in 2001 which have not previously vested willfully vest on the third anniversary of the 2001 Grant Date. Nodividends will be paid on Mr. Greeff's unvested restricted stockgranted in 2001. |
|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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OPTION GRANTS IN THE LAST FISCALYEAR

During 2003, the following grants of stock options weremade pursuant to the Amended Stock Plan to the Named ExecutiveOfficers:

|                 |  |                                                  |         |                                                             |  |                              |         |                 |  |                             |         |        |  |        |         |        |  |        |         |        |  |  |
|-----------------|--|--------------------------------------------------|---------|-------------------------------------------------------------|--|------------------------------|---------|-----------------|--|-----------------------------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|            |  | IndividualGrants                                 |         | Grant Date Value(a)                                         |
| Name            |  | NumberOf Securities Underlying OptionsGranted(#) |         | Percent Of Total Options GrantedTo Employees In Fiscal Year |  | Exercise Or BasePrice ($/Sh) |         | Expiration Date |  | GrantDate Present Value ($) |
| Jack L.Stahl    |  |                                             | 100,000 |                                                        |  |                         | 9.2     | %          |  |                        | 3.09    |   |  |   | 5/19/13 |   |  |   | 206,383 |   |
| ThomasE.McGuire |  |                                             | 100,000 |                                                        |  |                         | 9.2     | %          |  |                        | 3.01    |   |  |   | 8/18/13 |   |  |   | 200,940 |   |
| PaulE.Shapiro   |  |                                             | — |                                                        |  |                         | — |            |  |                        | — |   |  |   | — |   |  |   | — |   |
| DouglasH.Greeff |  |                                             | — |                                                        |  |                         | — |            |  |                        | — |   |  |   | — |   |  |   | — |   |
|                 |

Theoptions granted to Mr. Stahl in 2003 under the Amended Stock Plan wereawarded on May 19, 2003, consist of non-qualified options having a termof 10 years, will vest 25% on each anniversary of the grantdate, will vest immediately in the event of a "change ofcontrol" (as defined in Mr. Stahl's stock optionagreement), will become 100% vested on the fourth anniversary ofthe grant date and have an exercise price equal to $3.09, the per shareclosing price on the NYSE of Revlon, Inc.'s Class A Common Stockon such grant date, as indicated in the table above. The optionsgranted to Mr. McGuire in 2003 under the Amended Stock Plan wereawarded on the McGuire Grant Date pursuant to his employment agreement,consist of non-qualified options having a term of 10 years, will vest25% on each anniversary of the grant date, will vest immediatelyin the event of a "change of control" (asdefined in Mr. McGuire's stock option agreement), will become100% vested on the fourth anniversary of the grant date and havean exercise price equal to $3.01, the per share closing price on theNYSE of Revlon, Inc.'s Class A Common Stock on such grant date,as indicated in the table above.

|  |
|--|
|  |  |
|  |

| (a) | Grant Date Present Values were calculated using theBlack-Scholes option pricing model. The model as applied used May 19,2003 with respect to options granted to Mr. Stahl on such date and theMcGuire Grant Date with respect to options granted to Mr. McGuire onsuch date. Stock option models require a prediction about the futuremovement of stock price. The following assumptions were made forpurposes of calculating Grant Date Present Values: (i) a risk-free rateof return of 3.53% with respect to options granted to Mr. Stahlon 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 theapplicable grant dates for the U.S. Treasury Zero Coupon Bond issueswith a remaining term similar to the expected term of the options; (ii)stock price volatility of 70% based upon the volatility of thestock price of Revlon, Inc.'s Class A Common Stock; (iii) aconstant dividend rate of zero percent; and (iv) that the optionsnormally would be exercised on the final day of their fourth year aftervesting. No adjustments to the theoretical value were made to reflectthe waiting period, if any, prior to vesting of the stock options orthe transferability (or restrictions related thereto) of the stockoptions. The real value of the options in the table depends upon theactual performance of Revlon, Inc.'s Class A Common Stock duringthe applicable period and upon when they areexercised. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

The followingchart shows the number of stock options exercised during 2003 and the2003 year-end value of the stock options held by the Named ExecutiveOfficers:

|                 |  |                                     |         |                         |  |                                                                                                                   |         |                                                                                                     |  |                 |  |        |         |        |  |  |  |  |
|-----------------|--|-------------------------------------|---------|-------------------------|--|-------------------------------------------------------------------------------------------------------------------|---------|-----------------------------------------------------------------------------------------------------|--|-----------------|--|--------|---------|--------|--|--|--|--|
| Name            |  | SharesAcquiredOnExerciseDuring 2003 |         | ValueRealizedDuring2003 |  | Number Of SecuritiesUnderlyingUnexercisedOptions AtFiscalYear-EndExercisable/UnexercisableAt December 31,2003 (#) |         | Value Of In-The-Money Options At FiscalYear-EndExercisable/UnexercisableAt December 31, 2003(a) ($) |
| Jack L.Stahl    |  |                                | — |                    |  |                                                                                                              | — |                                                                                                |  | —/500,000 |  |   | — |   |
| ThomasE.McGuire |  |                                | — |                    |  |                                                                                                              | — |                                                                                                |  | —/100,000 |  |   | — |   |
| PaulE.Shapiro   |  |                                | — |                    |  |                                                                                                              | — |                                                                                                |  | 108,334/191,666 |  |   | — |   |
| DouglasH.Greeff |  |                                | — |                    |  |                                                                                                              | — |                                                                                                |  | 120,834/104,166 |  |   | — |   |
|                 |

|  |
|--|
|  |  |
|  |

| (a) | Amounts shown represent the difference between the exerciseprice of the options (exercisable or unexercisable, as the case may be)and the market value of the underlying shares of Revlon, Inc.'sClass A Common Stock at year end, calculated using $2.24, the December31, 2003 per share closing price on the NYSE of Revlon, Inc.'sClass A Common Stock. The actual value, if any, an executive mayrealize upon exercise of a stock option depends upon the amount bywhich the market price of shares of Revlon, Inc.'s Class A CommonStock exceeds the exercise price per share when the stock options areexercised. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Employment Agreements and Termination ofEmployment Arrangements

Each of Messrs. Stahl, McGuire andGreeff has a current executive employment agreement with ProductsCorporation.

Mr. Stahl's employment agreement providesthat he will serve as President and Chief Executive Officer at a basesalary of not less than $1,300,000 per annum, and that he receive abonus of not less than $1,300,000 in respect of 2002 (which bonus waspaid in February 2003) and grants of 1,000,000 shares of restrictedstock and 400,000 options during 2002 (which grants were made on theStahl Grant Date). At any time after February 28, 2002, ProductsCorporation may terminate Mr. Stahl's employment by 36months' prior written notice of non-renewal.

Mr.Stahl's employment agreement provides for participation in theRevlon Executive Bonus Plan and other executive benefit plans on abasis equivalent to other senior executives of the Company generally.Mr. Stahl's employment agreement provides for Company-paidsupplemental disability insurance and supplemental term life insurancecoverage with a death benefit of $10,000,000 during employment. Theemployment agreement for Mr. Stahl also provides for protection ofCompany confidential information and includes a non-competeobligation.

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

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terminate on or after February 28, 2004 andprior to February 28, 2005, then he would receive 16.66% of thesupplemental pension benefit otherwise payable pursuant to hisemployment agreement and thereafter an additional 8.33% wouldaccrue 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 underthe foregoing provision had he retired at age 60). Mr. Stahl would notreceive any supplemental pension benefit and any amounts then beingpaid for supplemental pension benefits would immediately cease if hewere 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 suchagreement or be terminated by the Company for"cause" (as defined in Mr. Stahl'semployment agreement). Mr. Stahl's employment agreement providesfor continuation of group life insurance and executive medicalinsurance coverage in the event of permanent disability.

Mr.Stahl's employment agreement provides that he is entitled to aloan from Products Corporation to satisfy state, local and federalincome taxes (including any withholding taxes) incurred by him as aresult of his making an election under Section 83(b) of the InternalRevenue Code in connection with the 1,000,000 shares of restrictedstock 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-OxleyAct of 2002. Interest on such loan is payable at the applicable federalrate required to avoid imputation of income tax liability. The fullprincipal amount of such loan and all accrued interest is due andpayable on the fifth anniversary of the Stahl Grant Date, provided thatif Mr. Stahl terminates his employment for "goodreason" or the Company terminates him other than for"disability" or"cause" (as each such term is defined ordescribed in Mr. Stahl's employment agreement), the outstandingbalance of such loan and all accrued interest would be forgiven. Suchloan is secured by a pledge of the 1,000,000 shares of restricted stockwhich were granted to Mr. Stahl on the Stahl Grant Date and such loanand pledge are evidenced by a Promissory Note and a Pledge Agreement,each dated March 13, 2002. Mr. Stahl's employment agreement alsoprovides that he is entitled to a mortgage loan to cover the purchaseof a principal residence in the New York metropolitan area and/or aManhattan apartment, in the principal amount of $2,000,000, which loanwas advanced by Products Corporation to Mr. Stahl on May 20, 2002,prior to the passage of the Sarbanes-Oxley Act of 2002. The principalof the mortgage loan is repayable on a monthly basis during the periodfrom June 1, 2002 through and including May 1, 2032, with interest atthe applicable federal rate, or 90 days after Mr. Stahl'semployment with the Company terminates, whichever occurs earlier.Pursuant to his employment agreement, Mr. Stahl is entitled to receiveadditional compensation payable on a monthly basis equal to the amountrepaid by him in respect of interest and principal on the mortgageloan, plus a gross up for any taxes resulting from such additionalcompensation. If during the term of his employment agreement Mr. Stahlterminates his employment for "good reason,"or the Company terminates his employment other than for"disability" or"cause" (as each such term is defined ordescribed in Mr. Stahl's employment agreement), the mortgage loanfrom the Company would be forgiven in its entirety.

Mr.McGuire's employment agreement with Products Corporation providesthat he will serve as Executive Vice President and Chief FinancialOfficer at a base salary of not less than $500,000 per annum and thathe receive a (i) retention incentive of $600,000 within one year of hisemployment 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 (whichgrant 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 in2004 and (D) 25,000 options in 2005. The term of Mr. McGuire'semployment agreement ends on August 17, 2006. During any period thathis employment continues after August 17, 2006, Mr. McGuire would bedeemed an employee at will and would be eligible for severance underProducts Corporation's Executive Severance Policy (see"Executive Severance Policy"), provided thatthe Severance Period for Mr. McGuire shall not be less than 24months.

Mr. McGuire's employment agreement provides forparticipation in the Revlon Executive Bonus Plan and other executivebenefit plans on a basis equivalent to other senior executives of theCompany generally. The employment agreement for Mr. McGuire alsoprovides for protection of Company confidential information andincludes a non-compete obligation.

Mr. McGuire'semployment agreement provides that in the event of termination of theterm by Mr. McGuire for breach by the Company of a material provisionof such agreement or failure of the 

40

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

Mr. Greeff's employment agreement with ProductsCorporation, as amended (as so amended, his "employmentagreement"), provides that he will serve as Executive VicePresident - 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 ofrestricted 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 onDecember 31, 2006. During any period that his employment continuesafter December 31, 2006, Mr. Greeff would be deemed an employee at willand would be eligible for severance under Products Corporation'sExecutive Severance Policy (see "Executive SeverancePolicy"), provided that the Severance Period for Mr.Greeff shall not be less than 24 months.

Mr. Greeff'semployment agreement provides for participation in the Revlon ExecutiveBonus Plan and other executive benefit plans on a basis equivalent toother senior executives of the Company generally and for Company-paidsupplemental disability insurance. The employment agreement for Mr.Greeff also provides for protection of Company confidential informationand includes a non-compete obligation.

Mr. Greeff'semployment agreement provides that in the event of termination of theterm by Mr. Greeff for breach by the Company of a material provision ofsuch agreement or failure of the Compensation Committee to adopt andimplement the recommendations of management with respect to stockoption grants, or by the Company prior to December 31, 2006 (otherwisethan for "cause" as defined in Mr.Greeff's employment agreement or disability), Mr. Greeff would beentitled, at his election, to 24 months severance pay pursuant to theExecutive Severance Policy (see "Executive SeverancePolicy") (other than the six-month limit on lump sumpayments provided for in the Executive Severance Policy, whichsix-month limit provision would not apply to Mr. Greeff) or continuedpayments of base salary through December 31, 2006 and continuedparticipation in the Company's life insurance plan (which lifeinsurance coverage is subject to a limit of two years) and medicalplans, subject to the terms of such plans through December 31, 2006 oruntil Mr. Greeff were covered by like plans of another company, andcontinued Company-paid supplemental disability insurance. In addition,Mr. Greeff's agreement provides that if he remains employed byProducts Corporation or its affiliates until age 62, then upon anysubsequent retirement he will be entitled to a supplemental pensionbenefit in a sufficient amount so that his annual pension benefit fromall qualified and non-qualified pension plans of Products Corporationand its affiliates, as well as any such plans of Mr. Greeff'spast employers or their affiliates (expressed as a straight lifeannuity), equals $400,000. If Mr. Greeff's employment were toterminate on or after December 31, 2003 and prior to December 31, 2004,then he would receive 36.36% of the supplemental pension benefitotherwise payable pursuant to his employment agreement and thereafteran additional 9.09% would accrue as of each December 31st onwhich Mr. Greeff is still employed (but in no event more than wouldhave been payable to Mr. Greeff under the foregoing provision had heretired at age 62). Mr. Greeff would not receive any supplementalpension benefit and would be required to reimburse the Company for anysupplemental pension benefits received if he were to breach suchagreement or be terminated by the Company for"cause" (as defined in Mr. Greeff'semployment agreement). Mr. Greeff's employment agreement providesfor continuation of group life insurance and executive medicalinsurance coverage in the event of permanent disability.

Mr.Greeff's employment agreement provides that he is entitled to aloan from Products Corporation in the amount of $800,000 (which loan hereceived in 2000, prior to the passage of the Sarbanes-Oxley Act of2002), with the principal to be payable in five equal installments of$160,000, plus interest at the applicable federal rate, on each of May9, 2001, May 9, 2002, May 9, 2003 (which installments were repaid)

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and the two successive anniversariesthereafter, provided that the total principal amount of such loan andany accrued but unpaid interest at the applicable federal rate (the"Loan Payment") shall be due and payable uponthe earlier of the January 15th immediately following the terminationof Mr. Greeff's employment for any reason or May 9, 2005. Inaddition, Mr. Greeff's employment agreement provides that heshall be entitled to a special bonus, payable on each May 9th (whichwas paid on May 9, 2001, May 9, 2002 and May 9, 2003) and ending withMay 9, 2005 equal to the sum of the Loan Payment with respect to suchyear, provided that he is employed on each such May 9th, and providedfurther that in the event that Mr. Greeff terminates his employment for"good reason" or is terminated for a reasonother than "cause" (as such terms are definedin Mr. Greeff's employment agreement), he shall be entitled to aspecial bonus in the amount of $800,000 minus the sum of any specialbonuses paid through the date of such termination plus accrued butunpaid interest at the applicable federal rate. Notwithstanding theabove, if Mr. Greeff terminates his employment other than for"good reason" or the Company terminates hisemployment for "cause" (as such terms aredefined in Mr. Greeff's employment agreement), or if he breachescertain post-employment covenants, any bonus described above shall beforfeited or repaid by Mr. Greeff, as the case may be. Mr.Greeff's employment agreement also provides that he is eligibleto receive a bonus payment of not less than $1,000,000, subject toapproval by the Compensation Committee, upon the completion ofobjectives relating to the Company's long-term financings,provided that Mr. Greeff remains employed at such time. Such bonuswould also be payable on the completion of such financings in the eventthat Mr. Greeff's employment was terminated by Mr. Greeff onaccount of "good reason" (as defined in Mr.Greeff's employment agreement) or by the Company for a reasonother than "cause" (as defined in Mr.Greeff's employment agreement).

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

Executive Severance Policy

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

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Defined Benefit Plans

Inaccordance with the terms of the Revlon Employees' RetirementPlan (the "Retirement Plan"), the followingtable shows the estimated annual retirement benefits payable (as ofDecember 31, 2003) under the non-cash balance program of the RetirementPlan (the "Non-Cash Balance Program") atnormal retirement age (65) to a person retiring with the indicatedaverage compensation and years of credited service, on a straight lifeannuity basis, after Social Security offset, including amountsattributable to the Revlon Pension Equalization Plan, as amended (the"Pension Equalization Plan"), as describedbelow.

|                                                                           |  |                                                                                                                                    |         |        |  |        |         |        |  |        |         |        |  |        |         |        |  |        |         |        |  |  |
|---------------------------------------------------------------------------|--|------------------------------------------------------------------------------------------------------------------------------------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
| HighestConsecutiveFive-Year Average CompensationDuring FinalTen Years ($) |  |     Estimated Annual Straight LifeAnnuity Benefits At RetirementWith Indicated Years Of CreditedService ($)(a) |
| 15                                                                        |  | 20                                                                                                                                 |         | 25     |  | 30     |         | 35     |  |
| 600,000                                                                   |  |                                                                                                                               | 150,777 |   |  |   | 201,036 |   |  |   | 251,295 |   |  |   | 301,554 |   |  |   | 301,554 |   |
| 700,000                                                                   |  |                                                                                                                               | 176,777 |   |  |   | 235,703 |   |  |   | 294,628 |   |  |   | 353,554 |   |  |   | 353,554 |   |
| 800,000                                                                   |  |                                                                                                                               | 202,777 |   |  |   | 270,369 |   |  |   | 337,962 |   |  |   | 405,554 |   |  |   | 405,554 |   |
| 900,000                                                                   |  |                                                                                                                               | 228,777 |   |  |   | 305,036 |   |  |   | 381,295 |   |  |   | 457,554 |   |  |   | 457,554 |   |
| 1,000,000                                                                 |  |                                                                                                                               | 254,777 |   |  |   | 339,703 |   |  |   | 424,628 |   |  |   | 500,000 |   |  |   | 500,000 |   |
| 1,100,000                                                                 |  |                                                                                                                               | 280,777 |   |  |   | 374,369 |   |  |   | 467,962 |   |  |   | 500,000 |   |  |   | 500,000 |   |
| 1,200,000                                                                 |  |                                                                                                                               | 306,777 |   |  |   | 409,036 |   |  |   | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |
| 1,300,000                                                                 |  |                                                                                                                               | 332,777 |   |  |   | 443,703 |   |  |   | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |
| 1,400,000                                                                 |  |                                                                                                                               | 358,777 |   |  |   | 478,369 |   |  |   | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |
| 1,500,000                                                                 |  |                                                                                                                               | 384,777 |   |  |   | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |
| 2,000,000                                                                 |  |                                                                                                                               | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |
| 2,500,000                                                                 |  |                                                                                                                               | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |  |   | 500,000 |   |
|                                                                           |

|  |
|--|
|  |  |
|  |

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

TheRetirement Plan is intended to be a tax qualified defined benefit plan.Non-Cash Balance Program benefits are a function of service and finalaverage compensation. The Non-Cash Balance Program is designed toprovide an employee having 30 years of credited service with an annuitygenerally equal to 52% of final average compensation, less50% of estimated individual Social Security benefits. Finalaverage 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 andbonus (but not any part of bonuses in excess of 50% of basesalary) were highest out of the last 10 years prior to retirement orearlier termination. Except as otherwise indicated, credited serviceincludes all periods of employment with the Company or a subsidiaryprior to retirement or earlier termination. Messrs. Stahl, McGuire andGreeff do not participate in the Non-Cash Balance Program.

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

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and transition pay credits. As they were notemployed 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 paycredits. The estimated annual benefits payable under the Cash BalanceProgram as a single life annuity (assuming Messrs. Stahl, McGuire andGreeff remain employed by the Company until age 65 at their currentlevel of compensation) is $199,300 for Mr. Stahl, $73,900 for Mr.McGuire and $266,400 for Mr. Greeff. Messrs. Stahl's andGreeff's total retirement benefits will be determined inaccordance with their respective employment agreements, each of whichprovides for a guaranteed retirement benefit provided that certainconditions are met.

The Employee Retirement Income Security Actof 1974, as amended, places certain maximum limitations upon the annualbenefit payable under all qualified plans of an employer to any oneindividual. In addition, the Omnibus Budget Reconciliation Act of 1993limits the annual amount of compensation that can be considered indetermining the level of benefits under qualified plans. The PensionEqualization Plan, as amended, is a non-qualified benefit arrangementdesigned to provide for the payment by the Company of the difference,if any, between the amount of such maximum limitations and the annualbenefit that would be payable under the Retirement Plan (including theNon-Cash Balance Program and the Cash Balance Program) but for suchlimitations, up to a combined maximum annual straight life annuitybenefit at age 65 under the Retirement Plan and the PensionEqualization Plan of $500,000. Benefits provided under the PensionEqualization Plan are conditioned on the participant's compliancewith his or her non-competition agreement and on the participant notcompeting with Products Corporation for one year after termination ofemployment.

The number of full years of service under theRetirement Plan and the Pension Equalization Plan as of January 1, 2004for 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 creditedservice as of January 1, 2004.

Item 12.    Security Ownershipof Certain Beneficial Owners and Management

Revlon, Inc.beneficially owns all the outstanding shares of common stock ofProducts Corporation. MacAndrews & Forbes, which is indirectlywholly owned by Ronald O. Perelman, through REV Holdings and MacAndrewsHoldings, beneficially owns (i) 26,240,347 shares of the Class A CommonStock (11,650,000 of which are owned by REV Holdings and 14,590,347 areowned by MacAndrews Holdings), (ii) all of the outstanding 31,250,000shares of Class B Common Stock and (iii) all of the outstanding 4,333shares of Series B Preferred Stock, of Revlon, Inc. (which together areentitled to 433,333 votes and which are convertible into 433,333 sharesof Class A Common Stock). Based on the shares referenced in clauses(i), (ii) and (iii) above, Mr. Perelman through Mafco Holdings (throughREV Holdings and MacAndrews Holdings) at December 31, 2003 ownedapproximately 83% of Revlon, Inc.'s outstanding shares ofCommon Stock and had approximately 97% of the combined votingpower of the outstanding shares of Revlon, Inc.'s Common Stockentitled to vote at its 2004 Annual Meeting of Stockholders. No otherdirector, executive officer or other person beneficially owns anyshares of Products Corporation's common stock. As of December 31,2003, 1,928,992 shares of Revlon, Inc.'s Class A Common Stockowned by REV Holdings were pledged by REV Holdings (the"Pledged Shares") to secure $18.55 millionprincipal amount of REV Holdings' 13% Senior Secured Notesdue 2007. From time to time, additional shares of the Company'sClass A Common Stock or shares of intermediate holding companiesbetween the Company and Mafco Holdings may be pledged to secureobligations of Mafco Holdings or its affiliates. A default under REVHoldings' obligations which are secured by the Pledged Sharescould cause a foreclosure with respect to such shares of Revlon,Inc.'s Class A Common Stock pledged by REV Holdings. (**See"Recent Developments"**).

Item13.    Certain Relationships and Related Transactions

Revlon,Inc. beneficially owns all the outstanding shares of common stock ofProducts Corporation. As of December 31, 2003, MacAndrews & Forbesindirectly beneficially owns shares of Revlon, Inc.'s CommonStock having approximately 97% of the combined voting power ofthe outstanding shares of Revlon, Inc.'s Common Stock and all ofthe Series B Preferred Stock. As a result, MacAndrews & Forbes isable to control the election of the entire Board of Directors ofProducts Corporation and control the 

44

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vote on all matters submitted to a vote ofthe Products Corporation's stockholder, including extraordinarytransactions such as mergers or sales of all or substantially all ofProducts Corporation's assets. MacAndrews & Forbes is whollyowned by Ronald O. Perelman who is Chairman of the Board of Directorsof Products Corporation. (**See "RecentDevelopments" for important information**).

Transfer Agreements

In June 1992, Revlon, Inc. and ProductsCorporation entered into an asset transfer agreement with RevlonHoldings Inc. (a Delaware corporation which in 2002 converted into aDelaware limited liability company known as Revlon Holdings LLC("Holdings") and which is an affiliate and anindirect wholly-owned subsidiary of Mafco Holdings) and certain of itswholly-owned subsidiaries (the "Asset TransferAgreement"), and Revlon, Inc. and Products Corporationentered into a real property asset transfer agreement with Holdings(the "Real Property Transfer Agreement" and,together with the Asset Transfer Agreement, the "TransferAgreements"), and pursuant to such agreements, on June 24,1992 Holdings transferred assets to Products Corporation and ProductsCorporation assumed all of the liabilities of Holdings, other thancertain specifically excluded assets and liabilities (the liabilitiesexcluded are referred to as the "ExcludedLiabilities"). Certain consumer products lines sold indemonstrator-assisted distribution channels considered not integral toRevlon, Inc.'s business and which historically had not beenprofitable (the "Retained Brands") andcertain other assets and liabilities were retained by Holdings.Holdings agreed to indemnify Revlon, Inc. and Products Corporationagainst losses arising from the Excluded Liabilities, and Revlon, Inc.and Products Corporation agreed to indemnify Holdings against lossesarising from the liabilities assumed by Products Corporation. Theamount reimbursed by Holdings to Products Corporation for the ExcludedLiabilities for 2003 was $0.3 million.

ReimbursementAgreements

Revlon, Inc., Products Corporation and MacAndrewsHoldings have entered into reimbursement agreements (the"Reimbursement Agreements") pursuant to which(i) MacAndrews Holdings is obligated to provide (directly or throughaffiliates) certain professional and administrative services, includingemployees, to Revlon, Inc. and its subsidiaries, including ProductsCorporation, and purchase services from third party providers, such asinsurance, legal and accounting services and air transportationservices, on behalf of Revlon, Inc. and its subsidiaries, includingProducts Corporation, to the extent requested by Products Corporation,and (ii) Products Corporation is obligated to provide certainprofessional and administrative services, including employees, toMacAndrews Holdings (and its affiliates) and purchase services fromthird party providers, such as insurance and legal and accountingservices, on behalf of MacAndrews Holdings (and its affiliates) to theextent requested by MacAndrews Holdings, provided that in each case theperformance of such services does not cause an unreasonable burden toMacAndrews Holdings or Products Corporation, as the case may be.Products Corporation reimburses MacAndrews Holdings for the allocablecosts of the services purchased for or provided to Products Corporationand its subsidiaries and for reasonable out-of-pocket expenses incurredin connection with the provision of such services. MacAndrews Holdings(or such affiliates) reimburses Products Corporation for the allocablecosts of the services purchased for or provided to MacAndrews Holdings(or such affiliates) and for the reasonable out-of-pocket expensesincurred in connection with the purchase or provision of such services.Each of Revlon, Inc. and Products Corporation, on the one hand, andMacAndrews Holdings, on the other, has agreed to indemnify the otherparty for losses arising out of the provision of services by it underthe Reimbursement Agreements other than losses resulting from itswillful misconduct or gross negligence. The Reimbursement Agreementsmay be terminated by either party on 90 days' notice. ProductsCorporation does not intend to request services under the ReimbursementAgreements unless their costs would be at least as favorable toProducts Corporation as could be obtained from unaffiliated thirdparties. Products Corporation participates in MacAndrews &Forbes' directors and officers liability insurance program, whichcovers Products Corporation, Revlon, Inc., as well as MacAndrews &Forbes and its other affiliates. The limits of coverage are availableon an aggregate basis for losses to any or all of the participatingcompanies and their respective directors and officers. ProductsCorporation reimburses MacAndrews & Forbes for its allocableportion of the premiums for such coverage, which Products Corporationbelieves, is more favorable than the premiums 

45

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Products Corporation would pay were it tosecure stand-alone coverage. The amount paid by Products Corporation toMacAndrews & Forbes for premiums is included in the amounts paidunder the Reimbursement Agreement. The net amount payable to MacAndrewsHoldings by Products Corporation for the services provided under theReimbursement Agreements for 2003 was $2.7 million.

Tax SharingAgreement

Revlon, Inc. and Products Corporation, for federalincome tax purposes, are included in the affiliated group of whichMafco Holdings is the common parent, and Revlon, Inc.'s andProducts Corporation's federal taxable income and loss areincluded in such group's consolidated tax return filed by MafcoHoldings. Revlon, Inc. and Products Corporation also may be included incertain state and local tax returns of Mafco Holdings or itssubsidiaries. In June 1992, Holdings, Revlon, Inc., ProductsCorporation and certain of its subsidiaries, and Mafco Holdings enteredinto a tax sharing agreement (as subsequently amended and restated, the"Tax Sharing Agreement"), pursuant to whichMafco Holdings has agreed to indemnify Revlon, Inc. and ProductsCorporation against federal, state or local income tax liabilities ofthe consolidated or combined group of which Mafco Holdings (or asubsidiary of Mafco Holdings other than Revlon, Inc. and ProductsCorporation or its subsidiaries) is the common parent for taxableperiods beginning on or after January 1, 1992 during which Revlon, Inc.and Products Corporation or a subsidiary of Products Corporation is amember of such group. Pursuant to the Tax Sharing Agreement, for alltaxable periods beginning on or after January 1, 1992, ProductsCorporation will pay to Revlon, Inc., which in turn will pay toHoldings, amounts equal to the taxes that Products Corporation wouldotherwise have to pay if it were to file separate federal, state orlocal income tax returns (including any amounts determined to be due asa result of a redetermination arising from an audit or otherwise of theconsolidated or combined tax liability relating to any such periodwhich is attributable to Products Corporation), except that ProductsCorporation will not be entitled to carry back any losses to taxableperiods ending prior to January 1, 1992. No payments are required byProducts Corporation or Revlon, Inc. if and to the extent ProductsCorporation is prohibited under the terms of its Credit Agreement frommaking tax sharing payments to Revlon, Inc. The Credit Agreementprohibits Products Corporation from making such tax sharing paymentsother than in respect of state and local income taxes. Since thepayments to be made under the Tax Sharing Agreement will be determinedby the amount of taxes that Products Corporation would otherwise haveto pay if it were to file separate federal, state or local income taxreturns, the Tax Sharing Agreement will benefit Mafco Holdings to theextent Mafco Holdings can offset the taxable income generated byProducts Corporation against losses and tax credits generated by MafcoHoldings and its other subsidiaries. The Tax Sharing Agreement wasamended, effective as of January 1, 2001, to eliminate a contingentpayment to Revlon, Inc. under certain circumstances in return for a $10million note with interest at 12% and interest and principalpayable by Mafco Holdings on December 31, 2005. As a result of netoperating tax losses and prohibitions under the Credit Agreement, therewere no federal tax payments or payments in lieu of taxes pursuant tothe Tax Sharing Agreement for 2003.

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

See the description of the Investment Agreementand the various loan agreements with MacAndrews Holdings, as well as adescription of the Debt Reduction Transactions, under"Recent Developments" and"Financial Condition, Liquidity and CapitalResources".

Other

Pursuant to a leasedated April 2, 1993 (the "Edison Lease"),Holdings leased to Products Corporation the Edison research anddevelopment facility for a term of up to 10 years with an annual rentof $1.4 million and certain shared operating expenses payable byProducts Corporation which, together with the annual rent, were not toexceed $2.0 million per year. In August 1998, Holdings sold the Edisonfacility to an unrelated third party, which assumed substantially allliability for environmental claims and compliance costs relating to theEdison facility, and in connection with the sale Products Corporationterminated the Edison Lease and entered into a new lease with the newowner. Holdings agreed to 

46

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indemnify Products Corporation throughSeptember 1, 2013 to the extent rent under the new lease exceeds rentthat would have been payable under the terminated Edison Lease had itnot been terminated. The net amount reimbursed by Holdings to ProductsCorporation with respect to the Edison facility for 2003 was $1.1million.

During 2003, Products Corporation leased certainfacilities to MacAndrews & Forbes or its affiliates pursuant tooccupancy agreements and leases, including space at ProductsCorporation'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 ProductsCorporation's 12% Senior Secured Notes are supported by,among other things, guarantees from Revlon, Inc., and, subject tocertain limited exceptions, all of the domestic subsidiaries ofProducts Corporation. The obligations under such guarantees are securedby, among other things, the capital stock of Products Corporation and,subject to certain limited exceptions, the capital stock of all ofProducts Corporation's domestic subsidiaries and 66% ofthe capital stock of Products Corporation's and its domesticsubsidiaries' first-tier foreign subsidiaries. (See"Recent Developments")

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

During 2000, prior to the passage of theSarbanes-Oxley Act of 2002, Products Corporation made an advance of$0.8 million to Mr. Greeff, pursuant to his employment agreement, whichloan 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 onthe advance repaid in respect of such year by Mr. Greeff, provided thathe is employed by Products Corporation on each such May 9th, whichbonus installment was paid to Mr. Greeff in May 2003.

During2003, Products Corporation made payments of $0.3 million to Ms. EllenBarkin (spouse of Mr. Perelman) under a written agreement pursuant towhich she provides voiceover services for certain of theCompany's advertisements, which payments were competitive withindustry rates for similarly situated talent.

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

During 2003, Products Corporationemployed Mr. Perelman's daughter in a marketing position, withcompensation paid for 2003 of less than $80,000.

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

During 2003, Products Corporation paid $0.1 million toa 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 basedupon its expertise in the field of security services, and the ratespaid were competitive with industry rates for similarly situatedsecurity agencies.

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Item 14.    Principal Accountant Feesand Services

AUDIT FEES

KPMG LLP("KPMG") has audited the consolidatedfinancial statements of Revlon, Inc. and the Company and itspredecessors for more than the past five years. The Board of Directorsof Revlon, Inc., which owns 100% of the Company's commonstock, maintains an Audit Committee in accordance with applicable SECrules and the NYSE's listing standards. In accordance with thecharter of Revlon, Inc.'s Audit Committee, which is available atwww.revloninc.com, Revlon, Inc.'s Audit Committee is directlyresponsible for the appointment, compensation, retention and oversightof the work of Revlon, Inc.'s and the Company's independentauditors for the purpose of preparing and issuing its audit report orperforming other audit, review or attest services for Revlon, Inc. andthe Company. The independent auditors report directly to Revlon,Inc.'s Audit Committee and Revlon, Inc.'s Audit Committeeis directly responsible for reviewing in advance, and granting anyappropriate pre-approvals of, (a) all auditing services to be providedby the independent auditor and (b) all non-audit services to beprovided by the independent auditor (as permitted by the Exchange Act),and in connection therewith to approve all fees and other terms ofengagement, as required by the applicable rules of the Exchange Act andsubject to the exemptions provided for in such rules. To carry out suchpre-approval responsibilities, Revlon, Inc.'s Audit Committeeadopted an Audit Committee Pre-Approval Policy for pre-approving allpermissible audit and non-audit services performed by KPMG after thefinal rules became effective on May 6, 2003 covering services performedby KPMG during 2003. In February 2004, Revlon, Inc.'s AuditCommittee approved an updated Pre-Approval Policy for services to beperformed by KPMG during 2004.

The aggregate fees billed forprofessional services by KPMG in 2002 and 2003 for these variousserviceswere:

|                                       |  |        |         |        |  |        |         |        |  |  |
|---------------------------------------|--|--------|---------|--------|--|--------|---------|--------|--|--|
| Typesof Fees                          |  | 2003   |         | 2002   |
| AuditFees                             |  | $      | 3.0     |   |  | $      | 2.8     |   |
| Audit-RelatedFees                     |  |   | 0.1     |   |  |   | 0.1     |   |
| TaxFees                               |  |   | 0.3     |   |  |   | 0.4     |   |
| All OtherFees                         |  |   | — |   |  |   | — |   |
|     **TotalFees** |  | $      | 3.4     |   |  | $      | 3.3     |   |
|                                       |

Inthe above table, in accordance with new SEC definitions and rules,"audit fees" are fees the Company paid KPMGfor professional services rendered for the audit of the Company'sannual financial statements and review of financial statements includedin the Company's Quarterly Reports on Form 10-Q, and for servicesthat are normally provided by the accountant in connection withstatutory and regulatory filings or engagements;"audit-related fees" are fees billed by KPMGfor assurance and related services that are traditionally performed bythe auditor, including employee benefit plan audits, Revlon,Inc.'s Rights Offering and attest services not required bystatute or regulation; "tax fees" are feesfor tax compliance, tax advice and tax planning; and "allother fees" are fees billed by KPMG to the Company for anyservices not included in the first three categories.

During2003, Revlon, Inc.'s Audit Committee specifically pre-approvedthe services performed by KPMG in connection with (i) Revlon,Inc.'s and the Company's 2003 audit and (ii) Revlon,Inc.'s Rights Offering. All of the other services performed byKPMG for Revlon, Inc. and the Company during 2003 from and after May 6,2003 (the effective date of the applicable rules) were pre-approved inaccordance with Revlon, Inc.'s Audit Committee'sPre-Approval Policy and Revlon, Inc.'s Audit Committee wasprovided with quarterly updates as to the nature of such services andfees paid for such services.

Website Availability of Reportsand Other Corporate Governance Information

In January 2004,Revlon, Inc., which owns 100% of the Company's commonstock, adopted a comprehensive corporate governance program, includingCorporate Governance Guidelines for Revlon, Inc.'s Board ofDirectors, Board Guidelines for Assessing Director Independence and newcharters for Revlon, Inc.'s Audit and Compensation Committees.Revlon, Inc. maintains a corporate investor relations 

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website, www.revloninc.com, where itsstockholders and other interested persons may review, among otherthings, Revlon, Inc.'s corporate governance materials and certainSEC filings (such as Revlon, Inc.'s annual reports on Form 10-K,quarterly reports on Form 10-Q, current reports on Form 8-K, proxystatements, annual reports, Section 16 reports reflecting certainchanges in the stock ownership of Revlon Inc.'s directors andSection 16 executive officers, and certain other documents filed withthe Commission), each of which are generally available on such site onthe same business day as the filing date with the Commission. Inaddition, under the section of the website entitled,"Corporate Governance," Revlon, Inc. poststhe latest versions of its Corporate Governance Guidelines, BoardGuidelines for Assessing Director Independence, charters for Revlon,Inc.'s Audit Committee and Compensation Committee, as well asRevlon, Inc.'s Code of Business Conduct, which includes its Codeof Ethics for Senior Financial Officers, each of which Revlon, Inc.will provide in print, without charge, upon written request to RobertK. Kretzman, Executive Vice President and Chief Legal Officer, Revlon,Inc., 237 Park Avenue, New  York NY, 10017. (**See"Recent Developments" for importantinformation**).

Forward-Looking Statements

ThisAnnual Report on Form 10-K for the year ended December 31, 2003, aswell as other public documents and statements of the Company, containforward-looking statements that involve risks and uncertainties. TheCompany's actual results may differ materially from thosediscussed in such forward-looking statements. Such statements include,without limitation, the Company's expectations and estimates(whether qualitative or quantitative) asto:

|           |                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (i)  | the Company's plans toupdate its retail presence and improve the marketing effectiveness ofits retail wall displays by installing newly-reconfigured wall displaysand reconfiguring existing wall displays at its retail customers (andits estimates of the costs of such wall displays, the effects of suchplans on the accelerated amortization of existing wall displays and theestimated amount of suchamortization); |

|            |                                                                                                                   |
|------------|-------------------------------------------------------------------------------------------------------------------|
| (ii)  | the Company'splans to increase its advertising and media spending and improve theeffectiveness of itsadvertising; |

|             |                                                                                                         |
|-------------|---------------------------------------------------------------------------------------------------------|
| (iii)  | the Company'splans to introduce new products and further strengthen its new productdevelopment process; |

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

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

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

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

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

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

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

|            |                                                                                                       |
|------------|-------------------------------------------------------------------------------------------------------|
| (xi)  | the Company's plans to continueto increase the effectiveness and reduce the cost of its displaywalls; |

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|             |                                                                                                                                                                     |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xii)  | theCompany's plans to drive efficiencies across its overall supplychain, including reducing manufactory costs by streamlining componentsand sourcing strategically; |

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

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

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

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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 andreconfiguration of wall displays and increases in advertising andmedia, capital expenditure requirements, payments in connection withthe Company's restructuring programs and debt service payments,and its estimates of operating expenses, working capital expenses, walldisplay costs, capital expenditures, restructuring costs and debtservice payments (including payments required under ProductsCorporation's debt instruments); |

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

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

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

|            |                                                                                                                                                                                                                                                                               |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xx)  | theCompany's plan to refinance its debt maturing in 2005, includingRevlon, Inc.'s plans to consummate the Debt ReductionTransactions, and the amounts and timing of such transactions and theestimated impact of such transactions on the Company's financialperformance; and |

|             |                                                                                                                                                                                                                                                                                                                                                                       |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xxi)  | theCompany's plan to efficiently manage its cash and working capitalincluding, among other things, by carefully managing and reducinginventory levels, centralizing purchasing to secure discounts andefficiencies in procurement, and providing additional discounts to U.S.customers for more timely payment of receivables and carefully managingaccounts payable. |

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

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addition to factors that may be described inthe Company's filings with the Commission, including this filing,the following factors, among others, could cause the Company'sactual results to differ materially from those expressed in anyforward-looking statements made by the Company:

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

|            |                                                                                                                                                                                                  |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  | difficulties or delays in, or unanticipated costsassociated with, developing and/or presenting the Company'sincreased advertising programs and/or improving the effectiveness ofits advertising; |

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

|            |                                                                                                                                                                                                                                                       |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (iv)  | difficulties or delays in, orunanticipated costs associated with, implementing the Company'splans to streamline its product assortment and reconfigure productplacement on its wall displays and selectively adjust prices on certainof its products; |

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

|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (vi)  | unanticipated circumstances orresults affecting the Company's financial performance, includingdecreased consumer spending in response to weak economic conditions orweakness in the category, changes in consumer preferences, such asreduced consumer demand for the Company's color cosmetics andother current products, and actions by the Company's competitors,including business combinations, technological breakthroughs, newproducts offerings, promotional spending and marketing and promotionalsuccesses, including increases in market share; |

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

|              |                                                                                                                                                                                                                                                                            |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (viii)  | unanticipated costs or difficultiesor delays in completing projects associated with the continuedimplementation of, and refinement to, the Company's plan or lowerthan expected revenues or inability to achieve profitability over thelong term as a result of such plan; |

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

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

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

|             |                                                                                                                                                                                                                                |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xii)  | difficulties, delays orunanticipated costs in implementing the Company's plans to driveefficiencies across its overall supply chain, including reducingmanufactory costs by streamlining components and sourcingstrategically; |

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

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

|            |                                                                                                                                                                                                                                                                                                                                                                             |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xv)  | lower than expected operatingrevenues, the inability to secure capital contributions or loans fromMacAndrews & Forbes, Revlon, Inc. or other affiliates and/or thirdparties, or the unavailability of funds under ProductsCorporation's Credit Agreement, the Mafco $65 million line ofcredit, the 2004 Mafco $125 million term loan or other permitted linesof credit; |

51

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|             |                                                                                                                                                                        |
|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xvi)  | higherthan expected operating expenses, sales returns, working capitalexpenses, wall display costs, capital expenditures, restructuring costsor debt service payments; |

|              |                                                                                                                    |
|--------------|--------------------------------------------------------------------------------------------------------------------|
| (xvii)  | interest rate or foreign exchangerate changes affecting the Company and its market sensitive financialinstruments; |

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

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

|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xx)  | difficulties, delays or the inabilityof the Company to refinance its debt maturing in 2005, including theinability of Revlon, Inc. to issue equity or debt securities, includingRevlon, Inc. Class A Common Stock, for cash or in exchange forindebtedness of the Company difficulties, delays or the inability ofRevlon, Inc. to consummate the Debt Reduction Transactions and tosecure any required Board, stockholder, lender or regulatory approvals;and |

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

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

52

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PART IV

Item15.    Exhibits, Financial Statement Schedules and Reports on Form8-K

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |  |
|--------|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| (a)    |  | Listof documents filed as part of this Report:                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |  | (1)  Consolidated FinancialStatements and Independent Auditors' Report included herein:See Index on page F-1.                                                                                                                                                                                                                                                                                                                        |
|   |  | (2)  Financial StatementSchedule: See Index on page F-1. All other schedules areomitted as they are inapplicable or the required information isfurnished in the Consolidated Financial Statements of the Company orthe Notes thereto.                                                                                                                                                                                                |
|   |  | (3)  List ofExhibits:                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2.     |  | Plan of AcquisitionEtc.                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 2.1    |  | Investment Agreement, dated asof February 5, 2003 among Revlon, Inc., Products Corporation andMacAndrews Holdings (incorporated by reference to Exhibit 2.1 to theCurrent Report on Form 8-K of Products Corporation filed with theCommission on February 5, 2003 (the "Products CorporationFebruary 2003 Form8-K")).                                                                                                                          |
| 3.     |  | Certificate ofIncorporation andBy-laws.                                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.1    |  | Certificate ofIncorporation of Products Corporation (incorporated by reference toExhibit 3.3 to the Products Corporation Form 10 filed with theCommission on August 7, 1992, File No.1-11334).                                                                                                                                                                                                                                                 |
| 3.2    |  | Certificate of Amendment ofCertificate of Incorporation of Products Corporation filed with theCommission on February 18, 1993 (incorporated by reference to Exhibit3.4 to the Products Corporation Annual Report on Form 10-K for the yearended December 31, 1992 (the "Products Corporation 1992Form 10-K")).                                                                                                                                 |
| 3.3    |  | Amended andRestated By-Laws of Products Corporation dated June 5, 2002(incorporated by reference to Exhibit 3.3 to the Products CorporationQuarterly Report on Form 10-Q for the quarterly period ended June 30,2002).                                                                                                                                                                                                                         |
| 4.     |  | Instruments defining the rightof security holders, includingindentures.                                                                                                                                                                                                                                                                                                                                                                        |
| 4.1    |  | Indenture, dated as ofNovember 26, 2001, among Products Corporation, the Guarantors partythereto, including Revlon, Inc., as parent guarantor, and WilmingtonTrust Company, as trustee, relating to the 12% Senior SecuredNotes due 2005 (incorporated by reference to Exhibit 4.2 to the CurrentReport on Form 8-K of Products Corporation filed with the Commission onNovember 30, 2001 (the "Products Corporation November 2001Form 8-K")). |
| 4.2    |  | Revlon PledgeAgreement, dated as of November 30, 2001, between Revlon, Inc., aspledgor, in favor of Wilmington Trust Company, as note collateral agent(the "Note Collateral Agent") (incorporatedby reference to Exhibit 4.2 to the Annual Report on Form 10-K ofProducts Corporation for the year ended December 31, 2001 (the"Products Corporation 2001 Form10-K")).                                                                         |
| 4.3    |  | Company PledgeAgreement (Domestic), dated as of November 30, 2001, between ProductsCorporation, as pledgor, in favor of Wilmington Trust Company, as NoteCollateral Agent (incorporated by reference to Exhibit 4.3 to theProducts Corporation 2001 Form 10-K).                                                                                                                                                                                |
|        |

53

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |  |
|------|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| 4.4  |  | Subsidiary PledgeAgreement (Domestic), dated as of November 30, 2001, between RIROSCorporation, as pledgor, in favor of Wilmington Trust Company, as NoteCollateral Agent (incorporated by reference to Exhibit 4.4 to theProducts Corporation 2001 Form10-K).                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 4.5  |  | Subsidiary Pledge Agreement(Domestic), dated as of November 30, 2001, between Revlon InternationalCorporation, as pledgor, in favor of Wilmington Trust Company, as NoteCollateral Agent (incorporated by reference to Exhibit 4.5 to theProducts Corporation 2001 Form10-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 CollateralAgent (incorporated by reference to Exhibit 4.6 to the ProductsCorporation 2001 Form 10-K).                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.7  |  | CompanyPledge Agreement (International), dated as of November 30, 2001,between Products Corporation, as pledgor, in favor of Wilmington TrustCompany, as Note Collateral Agent (incorporated by reference to Exhibit4.7 to the Products Corporation 2001 Form10-K).                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.8  |  | Subsidiary Pledge Agreement(International), dated as of November 30, 2001, between RIROSCorporation, as pledgor, in favor of Wilmington Trust Company, as NoteCollateral Agent (incorporated by reference to Exhibit 4.8 to theProducts Corporation 2001 Form10-K).                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.9  |  | Subsidiary Pledge Agreement(International), dated as of November 30, 2001, between RevlonInternational Corporation, as pledgor, in favor of Wilmington TrustCompany, as Note Collateral Agent (incorporated by reference to Exhibit4.9 to the Products Corporation 2001 Form10-K).                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.10 |  | Subsidiary Pledge Agreement(International), dated as of November 30, 2001, between PPI TwoCorporation, as pledgor, in favor of Wilmington Trust Company, as NoteCollateral Agent (incorporated by reference to Exhibit 4.10 to theProducts Corporation 2001 Form10-K).                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.11 |  | Company Security Agreement,dated as of November 30, 2001, between Products Corporation, asgrantor, in favor of Wilmington Trust Company, as Note Collateral Agent(incorporated by reference to Exhibit 4.11 to the Products Corporation2001 Form 10-K).                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.12 |  | Subsidiary SecurityAgreement, dated as of November 30, 2001, among Almay, Inc., CarringtonParfums 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., RevlonInternational Corporation, Revlon Products Corp., Revlon Real EstateCorporation, RIROS Corporation, RIROS Group Inc. and RIT Inc., each asgrantor, in favor of Wilmington Trust Company, as Note Collateral Agent(incorporated by reference to Exhibit 4.12 to the Products Corporation2001 Form 10-K). |
| 4.13 |  | Company CopyrightSecurity Agreement, dated as of November 30, 2001, between ProductsCorporation, as grantor, in favor of Wilmington Trust Company, as NoteCollateral Agent (incorporated by reference to Exhibit 4.13 to theProducts Corporation 2001 Form 10-K).                                                                                                                                                                                                                                                                                                                                                                                                              |
|      |

54

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |  |  |  |
|------|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| 4.14 |  | Company Patent SecurityAgreement, dated as of November 30, 2001, between Products Corporation,as grantor, in favor of Wilmington Trust Company, as Note CollateralAgent (incorporated by reference to Exhibit 4.14 to the ProductsCorporation 2001 Form 10-K).                                                                                                                                                                                                                                            |
| 4.15 |  | CompanyTrademark Security Agreement, dated as of November 30, 2001, betweenProducts Corporation, as grantor, in favor of Wilmington Trust Company,as Note Collateral Agent (incorporated by reference to Exhibit 4.15 tothe Products Corporation 2001 Form10-K).                                                                                                                                                                                                                                          |
| 4.16 |  | Subsidiary Trademark SecurityAgreement, dated as of November 30, 2001, between Charles Revson Inc.,as grantor, in favor of Wilmington Trust Company, as Note CollateralAgent (incorporated by reference to Exhibit 4.16 to the ProductsCorporation 2001 Form 10-K).                                                                                                                                                                                                                                       |
| 4.17 |  | SubsidiaryTrademark Security Agreement, dated as of November 30, 2001, betweenCharles of the Ritz Group, Ltd., as grantor, in favor of WilmingtonTrust Company, as Note Collateral Agent (incorporated by reference toExhibit 4.17 to the Products Corporation 2001 Form10-K).                                                                                                                                                                                                                            |
| 4.18 |  | Deed of Trust, Assignment ofRents and Leases and Security Agreement, dated as of November 30, 2001,between Products Corporation and First American Title Insurance Companyfor the use and benefit of Wilmington Trust Company, as Note CollateralAgent (incorporated by reference to Exhibit 4.18 to the ProductsCorporation 2001 Form 10-K).                                                                                                                                                             |
| 4.19 |  | Amendedand Restated Collateral Agency Agreement, dated as of May 30, 1997, andfurther amended and restated as of November 30, 2001, between ProductsCorporation, JPMorgan Chase Bank, as bank agent and as administrativeagent, and Wilmington Trust Company, as trustee and as Note CollateralAgent (incorporated by reference to Exhibit 4.19 to the ProductsCorporation 2001 Form 10-K).                                                                                                               |
| 4.20 |  | Indenture,dated as of February 1, 1998, between Revlon Escrow Corp.("Revlon Escrow") and U.S. Bank TrustNational Association (formerly known as First Trust NationalAssociation), as trustee, relating to the 8 1/8% Senior Notesdue 2006 (the "8 1/8% Senior NotesIndenture") (incorporated by reference to Exhibit 4.1 tothe Registration Statement on Form S-1 of Products Corporation filedwith the Commission on March 12, 1998, File No. 333-47875 (the"Products Corporation March 1998 FormS-1")). |
| 4.21 |  | Indenture, datedas of February 1, 1998, between Revlon Escrow and U.S. Bank TrustNational Association (formerly known as First Trust NationalAssociation), as trustee, relating to the 8 5/8% SeniorSubordinated Notes Due 2008 (the "8 5/8% SeniorSubordinated Notes Indenture") (incorporated by referenceto Exhibit 4.3 to the Products Corporation March 1998 FormS-1).                                                                                                                               |
| 4.22 |  | First Supplemental Indenture,dated April 1, 1998, among Products Corporation, Revlon Escrow, andU.S. Bank Trust National Association (formerly known as First TrustNational Association), as trustee, amending the 8 1/8% SeniorNotes Indenture (incorporated by reference to Exhibit 4.2 to theProducts Corporation March 1998 FormS-1).                                                                                                                                                                 |
| 4.23 |  | First Supplemental Indenture,dated March 4, 1998, among Products Corporation, Revlon Escrow, andU.S. Bank Trust National Association (formerly known as First TrustNational Association), as trustee, amending the 8 5/8% SeniorSubordinated Notes Indenture (incorporated by reference to Exhibit 4.4to the Products Corporation March 1998 FormS-1).                                                                                                                                                    |
|      |

55

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |  |  |
|------|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| 4.24 |  | Indenture, dated as ofNovember 6, 1998, between Products Corporation and U.S. Bank TrustNational Association (formerly known as First Trust NationalAssociation), as trustee, relating to Products Corporation's9% Senior Notes due 2006 (incorporated by reference to Exhibit4.13 to the Quarterly Report on Form 10-Q of Revlon, Inc. for thequarterly period ended September 30,1998).                                                                                                                                                                                                                                                                           |
| 4.25 |  | Second Amended and RestatedCredit Agreement, dated as of November 30, 2001, among ProductsCorporation, 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 solearranger and bookrunner, and JPMorgan Chase Bank, as administrativeagent (the "Second Amended and Restated CreditAgreement") (incorporated by reference to Exhibit 4.1 tothe Products Corporation November 2001 Form8-K).                                                                                                                                    |
| 4.26 |  | First Amendment dated May 31,2002 to the Second Amended and Restated Credit Agreement (incorporatedby reference to Exhibit 10.18 to the Quarterly Report on Form 10-Q ofRevlon, Inc. for the quarterly period ended June 30,2002).                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.27 |  | Second Amendment and FirstWaiver Agreement dated as of February 5, 2003 to the Second Amended andRestated Credit Agreement (incorporated by reference to Exhibit 10.19to the Products Corporation February 2003 Form8-K).                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.28 |  | Third Amendment and Second WaiverAgreement dated as of January 28, 2004 to the Second Amended andRestated Credit Agreement (incorporated by reference to Exhibit 4.28 ofthe Current Report on Form 8-K of Products Corporation filed with theCommission on January 29, 2004 (the "Products CorporationJanuary 2004 Form8-K")).                                                                                                                                                                                                                                                                                                                                      |
| 4.29 |  | SecondSupplemental Indenture, dated as of February 11, 2004, among ProductsCorporation, U.S. Bank Trust National Association (formerly known asFirst Trust National Association), as Trustee, and Revlon, Inc., asguarantor, amending the Indenture, dated as of February 1, 1998, assupplemented by the First Supplemental Indenture, dated as of April 1,1998, between Products Corporation and such trustee relating toProducts Corporation's 8 1/8% Senior Notes due 2006(incorporated by reference to Exhibit 4.29 of the Current Report onForm 8-K of Revlon, Inc. filed with the Commission on February 12, 2004(the "Revlon, Inc. February 2004 Form8-K")). |
| 4.30 |  | FirstSupplemental Indenture, dated as of February 11, 2004, among ProductsCorporation, U.S. Bank Trust National Association (formerly known asFirst Trust National Association), as trustee, and Revlon, Inc., asguarantor, amending the Indenture, dated as of November 6, 1998,between Products Corporation and such trustee, relating to ProductsCorporation's 9% Senior Notes due 2006 (incorporated byreference to Exhibit 4.30 of the Revlon, Inc. February 2004 Form8-K).                                                                                                                                                                                    |
| 4.31 |  | Second Supplemental Indenture,dated as of February 11, 2004, among Products Corporation, U.S. BankTrust National Association (formerly known as First Trust NationalAssociation), as trustee, and Revlon, as guarantor, amending theIndenture, dated as of February 1, 1998, as supplemented by the FirstSupplemental Indenture, dated as of March 4, 1998, between ProductsCorporation and such trustee, relating to Products Corporation's8 5/8% Senior Subordinated Notes due 2008 (incorporated byreference to Exhibit 4.31 of the Revlon, Inc. February 2004 Form8-K).                                                                                         |
| 4.32 |  | Fourth Amendment dated February18, 2004 to the Second Amended and Restated Credit Agreement(incorporated by reference to Exhibit 4.32 to the Annual Report on Form10-K of Revlon, Inc. for the year ended December 31, 2003 (the"Revlon, Inc. 2003 Form10-K")).                                                                                                                                                                                                                                                                                                                                                                                                     |
|      |

56

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|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |  |
|-------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| 10.   |  | MaterialContracts.                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.1  |  | Asset TransferAgreement, 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 tothe Revlon, Inc. Registration Statement on Form S-1 filed with theCommission 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 Corporationas amended and restated as of January 1, 2001 (incorporated byreference to Exhibit 10.2 to the Products Corporation 2001 Form10-K).                                                                                                            |
| 10.3  |  | Employment Agreement, dated asof February 17, 2002, between Products Corporation and Jack L. Stahl(incorporated by reference to Exhibit 10.17 to the Quarterly Report onForm 10-Q for the quarterly period ended March 31, 2002 of Revlon,Inc.).                                                                                                                                                               |
| 10.4  |  | Revlon, Inc. 2002 SupplementalStock Plan (incorporated by reference to Exhibit 4.1 to theRegistration Statement on Form S-8 of Revlon, Inc. filed with theCommission on June 24, 2002, File No.333-91040).                                                                                                                                                                                                     |
| 10.5  |  | Employment Agreement, datedas of August 18, 2003, between Products Corporation and Thomas E.McGuire (incorporated by reference to Exhibit 10.5 to the QuarterlyReport on Form 10-Q of Revlon, Inc. for the quarterly period endedSeptember 30, 2003 (the "Revlon, Inc. 2003 Third QuarterForm 10-Q")).                                                                                                         |
| 10.6  |  | EmploymentAgreement, amended and restated as of May 9, 2000, between ProductsCorporation and Douglas H. Greeff (the "Greeff EmploymentAgreement") (incorporated by reference to Exhibit 10.22 tothe Quarterly Report on Form 10-Q for the quarterly period ended June30, 2000 of Revlon, Inc.).                                                                                                                |
| 10.7  |  | Amendmentdated June 18, 2001 to the Greeff Employment Agreement (incorporated byreference to Exhibit 10.6 to the Products Corporation 2001 Form10-K).                                                                                                                                                                                                                                                          |
| 10.8  |  | Amendment, dated as of August18, 2003, to the amended and restated Greeff Employment Agreement(incorporated by reference to Exhibit 10.8 to the Revlon, Inc. 2003Third Quarter Form 10-Q).                                                                                                                                                                                                                     |
| 10.9  |  | EmploymentAgreement, effective as of August 1, 2001, between Products Corporationand Paul E. Shapiro (incorporated by reference to Exhibit 10.7 to theProducts Corporation 2001 Form10-K).                                                                                                                                                                                                                     |
| 10.10 |  | Revlon Executive Bonus Plan(Amended and Restated as of September 1, 2002) (incorporated byreference 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 Form10-K").                                                                                                                                                                   |
| 10.11 |  | Amended andRestated Revlon Pension Equalization Plan, amended and restated as ofDecember 14, 1998 (incorporated by reference to Exhibit 10.15 to theAnnual Report on Form 10-K for year ended December 31, 1998 of Revlon,Inc.).                                                                                                                                                                               |
| 10.12 |  | Executive Supplemental MedicalExpense Plan Summary dated July 2000 (incorporated by reference toExhibit 10.10 to the Revlon, Inc. 2002 Form10-K).                                                                                                                                                                                                                                                              |
| 10.13 |  | Benefit Plans AssumptionAgreement, dated as of July 1, 1992, by and among Holdings, Revlon,Inc. and Products Corporation (incorporated by reference to Exhibit10.25 to the Annual Report on Form 10-K for the year ended December 31,1992 of Products Corporation).                                                                                                                                            |
|       |

57

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|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |  |  |
|-----------------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| 10.14           |  | Revlon Amended andRestated Executive Deferred Compensation Plan dated as of August 6,1999 (incorporated by reference to Exhibit 10.27 to the QuarterlyReport on Form 10-Q of Revlon, Inc. for the quarterly period endedSeptember 30, 1999).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.15           |  | Revlon ExecutiveSeverance Policy as amended July 1, 2002 (incorporated by reference toExhibit 10.13 to the Revlon, Inc. 2002 Form10-K).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.16           |  | Revlon, Inc. Fourth Amended andRestated 1996 Stock Plan (incorporated by reference to Exhibit 4.1 tothe Registration Statement on Form S-8 of Revlon, Inc. filed with theCommission on June 24, 2002, File No.333-91038).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.17           |  | Purchase Agreement, datedas of February 18, 2000, by and among Revlon, Inc., ProductsCorporation, REMEA 2 B.V., Revlon Europe, Middle East and Africa, Ltd.,Revlon International Corporation, Europeenne de Produits de BeauteS.A., Deutsche Revlon GmbH & Co. K.G., Revlon Canada, Inc., Revlonde 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., RevlonBelgium N.V., Revlon (Chile) S.A., Revlon (Hong Kong) Limited, Revlon,S.A., Revlon Nederland B.V., Revlon New Zealand Limited, EuropeanBeauty Products S.p.A. and Beauty Care Professional ProductsLuxembourg, S.a.r.l. (incorporated by reference to Exhibit 10.19 to theAnnual Report on Form 10-K for the year ended December 31, 1999 ofRevlon, Inc.). |
| 10.18           |  | Purchase and SaleAgreement dated as of July 31, 2001 by and between Holdings and Revlon,Inc. relating to the Charles of the Ritz business (incorporated byreference to Exhibit 10.6 to the Products Corporation 2001 Form10-K).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.19           |  | Senior Unsecured Multiple-DrawTerm Loan dated as of February 5, 2003, between MacAndrews Holdings andProducts Corporation (incorporated by reference to Exhibit 10.17 to theProducts Corporation February 2003 Form8-K).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.20           |  | Senior Unsecured SupplementalLine of Credit Agreement, dated as of February 5, 2003, betweenMacAndrews Holdings and Products Corporation (the "SeniorUnsecured Supplemental Line of Credit Agreement")(incorporated by reference to Exhibit 10.18 of the Products CorporationFebruary 2003 Form 8-K).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21           |  | Amendment No.1, dated as of July 30, 2003, to the Senior Unsecured Supplemental Lineof Credit Agreement (incorporated by reference to Exhibit 10.19 to theQuarterly Report on Form 10-Q of Revlon, Inc. for the quarterly periodended June 30, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.22           |  | $125 MillionSenior Unsecured Multiple-Draw Term Loan Agreement, dated as of January28, 2004, between Products Corporation and MacAndrews Holdings(incorporated by reference to Exhibit 10.22 to the Products CorporationJanuary 2004 Form 8-K).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.23           |  | AmendmentNo.  2, dated as of January 28, 2004, to the Senior UnsecuredSupplemental Line of Credit Agreement (incorporated by reference toExhibit 10.25 of the Revlon, Inc. 2003 Form10-K).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *10.24          |  | Revlon, Inc. Audit CommitteePre-ApprovalPolicy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   21. |  | Subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| *21.1           |  | Subsidiariesof Revlon Consumer ProductsCorporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   24. |  | Powers ofAttorney.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| *24.1           |  | Power of Attorneyexecuted by Ronald O. Perelman.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| *24.2           |  | Powerof Attorney executed by Howard Gittis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                 |

58

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|       |  |                                                                                                                                                          |  |  |  |  |
|-------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| *24.3 |  | Power of Attorneyexecuted by Donald G. Drapkin.                                                                                                          |
| *24.4 |  | Powerof Attorney executed by Alan S.Bernikow.                                                                                                            |
| *24.5 |  | Power of Attorney executedby Edward J. Landau.                                                                                                           |
| *31.1 |  | Certification ofJack L. Stahl, Chief Executive Officer, dated February 24, 2004 asadopted pursuant to Section 302 of the Sarbanes-Oxley Act of2002.      |
| *31.2 |  | Certification of Thomas E.McGuire, Chief Financial Officer, dated February 24, 2004 as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of2002.  |
| *32.1 |  | Certification of Jack L. Stahl,Chief Executive Officer, dated February 24, 2004, as adopted pursuantto Section 906 of The Sarbanes-Oxley Act of2002.     |
| *32.2 |  | Certification of Thomas E.McGuire, Chief Financial Officer, dated February 24, 2004, as adoptedpursuant to Section 906 of The Sarbanes-Oxley Act of2002. |
|       |

|  |
|--|
|  |  |
|  |

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

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

OnJanuary 29, 2004, the Company filed with the Commission a currentreport on Form 8-K filing as Item 5 of Form 8-K a press releaseannouncing the January 2004 amendment of the Company's CreditAgreement which included copies of the Company's Third Amendmentand Second Waiver Agreement dated as of January 28, 2004 to its CreditAgreement and its $125 Million Senior Unsecured Multiple-Draw Term LoanAgreement dated as of January 28, 2004 with MacAndrewsHoldings.

59

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REVLONCONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES INDEX TOCONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

|                                                                                                                                                 |  |        |        |        |  |  |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--|--------|--------|--------|--|--|
|                                                                                                                                            |  | Page   |
| Independent Auditors' Report                                                                                                                    |  |   | F-2    |   |
|                                                                                                                                            |  |
| **Audited FinancialStatements:**                                                                                                                |  |   |   |   |
| ConsolidatedBalance Sheets as of December 31, 2003 and 2002                                                                                     |  |   | F-3    |   |
| Consolidated Statements of Operations for each of the years inthe three-year period ended December 31, 2003                                     |  |   | F-4    |   |
| Consolidated Statements of Stockholder's Deficiency andComprehensive Loss for each of the years in the three-year period endedDecember 31, 2003 |  |   | F-5    |   |
| ConsolidatedStatements of Cash Flows for each of the years in the three-year periodended December 31, 2003                                      |  |   | F-6    |   |
| Notes toConsolidated Financial Statements                                                                                                       |  |   | F-7    |   |
|                                                                                                                                            |  |
| **Financial StatementSchedule:**                                                                                                                |  |
| Schedule II—Valuation andQualifying Accounts                                                                                              |  |   | F-49   |   |
|                                                                                                                                                 |

F-1

----

INDEPENDENTAUDITORS' REPORT

The Board of Directors andStockholder Revlon Consumer Products Corporation:

We haveaudited the accompanying consolidated balance sheets of Revlon ConsumerProducts Corporation and subsidiaries as of December 31, 2003 and 2002,and the related consolidated statements of operations,stockholder's deficiency and comprehensive loss and cash flowsfor 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 theindex on page F-1. These consolidated financial statements andfinancial statement schedule are the responsibility of theCompany's management. Our responsibility is to express an opinionon these consolidated financial statements and financial statementschedule based on our audits.

We conducted our audits inaccordance with auditing standards generally accepted in the UnitedStates of America. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis forour opinion.

In our opinion, the consolidated financialstatements referred to above present fairly, in all material respects,the financial position of Revlon Consumer Products Corporation andsubsidiaries as of December 31, 2003 and 2002 and the results of theiroperations and their cash flows for each of the years in the three-yearperiod ended December 31, 2003, in conformity with accountingprinciples generally accepted in the United States of America. Also inour opinion, the related financial statement schedule, when consideredin relation to the basic consolidated financial statements taken as awhole, presents fairly, in all material respects, the information setforth therein.

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

KPMG LLP

NewYork, New York February 12,2004

F-2

----

REVLONCONSUMER PRODUCTS CORPORATION ANDSUBSIDIARIES

CONSOLIDATED BALANCESHEETS

(dollars in millions, except per sharedata)

|                                                                                                                                 |  |             |          |         |  |        |          |         |  |  |
|---------------------------------------------------------------------------------------------------------------------------------|--|-------------|----------|---------|--|--------|----------|---------|--|--|
|                                                                                                                            |  | December31, |
|                                                                                                                            |  | 2003        |          | 2002    |
| **ASSETS**                                                                                                                      |  |
| Currentassets:                                                                                                                  |  |        |     |    |  |   |     |    |
| Cashand cashequivalents                                                                                                         |  | $           | 56.5     |    |  | $      | 85.8     |    |
| Tradereceivables, less allowances of $19.4 and $24.0,respectively                                                               |  |        | 182.5    |    |  |   | 212.3    |    |
| Inventories                                                                                                                     |  |        | 142.7    |    |  |   | 128.1    |    |
| Prepaidexpenses andother                                                                                                        |  |        | 46.6     |    |  |   | 52.5     |    |
| Totalcurrentassets                                                                                                              |  |        | 428.3    |    |  |   | 478.7    |    |
| Property,plant and equipment,net                                                                                                |  |        | 132.1    |    |  |   | 133.4    |    |
| Otherassets                                                                                                                     |  |        | 144.2    |    |  |   | 134.0    |    |
| Goodwill,net                                                                                                                    |  |        | 186.1    |    |  |   | 185.9    |    |
| Totalassets                                                                                                                     |  | $           | 890.7    |    |  | $      | 932.0    |    |
|                                                                                                                            |  |        |     |    |  |   |     |    |
| **LIABILITIESAND STOCKHOLDER'SDEFICIENCY**                                                                                      |  |        |     |    |  |   |     |    |
|                                                                                                                            |  |        |     |    |  |   |     |    |
| Currentliabilities:                                                                                                             |  |        |     |    |  |   |     |    |
| Short-term borrowings— thirdparties                                                                                       |  | $           | 28.0     |    |  | $      | 25.0     |    |
| Accountspayable                                                                                                                 |  |        | 97.4     |    |  |   | 92.9     |    |
| Accrued expensesandother                                                                                                        |  |        | 322.0    |    |  |   | 378.9    |    |
| Totalcurrentliabilities                                                                                                         |  |        | 447.4    |    |  |   | 496.8    |    |
| Long-termdebt — thirdparties                                                                                              |  |        | 1,723.3  |    |  |   | 1,726.0  |    |
| Long-termdebt —affiliates                                                                                                 |  |        | 146.2    |    |  |   | 24.1     |    |
| Otherlong-termliabilities                                                                                                       |  |        | 301.0    |    |  |   | 325.0    |    |
|                                                                                                                            |  |        |     |    |  |   |     |    |
| Stockholder'sdeficiency:                                                                                                        |  |        |     |    |  |   |     |    |
| Preferred stock, parvalue $1.00 per share; 1,000 shares authorized, 546 shares of Series APreferred Stock issued andoutstanding |  |        | 54.6     |    |  |   | 54.6     |    |
| Common Stock,par value $1.00 per share; 1,000 shares authorized, issued andoutstanding                                          |  |        | —  |    |  |   | —  |    |
| Capitaldeficiency                                                                                                               |  |        | (152.3   | )  |  |   | (206.1   | )  |
| Accumulateddeficit since June 24,1992                                                                                           |  |        | (1,503.3 | )  |  |   | (1,349.3 | )  |
| Deferredcompensation                                                                                                            |  |        | (4.2     | )  |  |   | (6.4     | )  |
| Accumulatedother comprehensiveloss                                                                                              |  |        | (122.0   | )  |  |   | (132.7   | )  |
| Totalstockholder'sdeficiency                                                                                                    |  |        | (1,727.2 | )  |  |   | (1,639.9 | )  |
| Totalliabilities and stockholder'sdeficiency                                                                                    |  | $           | 890.7    |    |  | $      | 932.0    |    |
|                                                                                                                                 |

SeeAccompanying Notes to Consolidated FinancialStatements.

F-3

----

REVLON CONSUMER PRODUCTS CORPORATION ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OFOPERATIONS

(dollars in millions)

|                                            |  |                       |         |         |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------|--|-----------------------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                       |  | YearEnded December31, |
|                                       |  | 2003                  |         | 2002    |  | 2001   |
| Netsales                                   |  | $                     | 1,299.3 |    |  | $      | 1,119.4 |    |  | $      | 1,277.6 |    |
| Costofsales                                |  |                  | 501.1   |    |  |   | 503.7   |    |  |   | 544.2   |    |
| Grossprofit                                |  |                  | 798.2   |    |  |   | 615.7   |    |  |   | 733.4   |    |
| Selling,general and administrativeexpenses |  |                  | 769.7   |    |  |   | 711.1   |    |  |   | 676.6   |    |
| Restructuringcosts and other,net           |  |                  | 6.0     |    |  |   | 13.6    |    |  |   | 38.1    |    |
|                                       |  |                  |    |    |  |   |    |    |  |   |    |    |
| Operatingincome(loss)                      |  |                  | 22.5    |    |  |   | (109.0  | )  |  |   | 18.7    |    |
|                                       |  |                  |    |    |  |   |    |    |  |   |    |    |
| Otherexpenses(income):                     |  |                  |    |    |  |   |    |    |  |   |    |    |
| Interestexpense                            |  |                  | 174.5   |    |  |   | 159.0   |    |  |   | 140.5   |    |
| Interestincome                             |  |                  | (2.7    | )  |  |   | (2.1    | )  |  |   | (2.7    | )  |
| Amortizationof debt issuancecosts          |  |                  | 8.9     |    |  |   | 7.7     |    |  |   | 6.2     |    |
| Foreigncurrency (gains) losses,net         |  |                  | (5.0    | )  |  |   | 1.4     |    |  |   | 2.2     |    |
| Loss onsale of brand and facilities,net    |  |                  | — |    |  |   | 1.0     |    |  |   | 14.4    |    |
| Loss onearly extinguishment ofdebt         |  |                  | — |    |  |   | — |    |  |   | 3.6     |    |
| Miscellaneous,net                          |  |                  | 0.5     |    |  |   | 1.2     |    |  |   | 2.7     |    |
|     Otherexpenses,net  |  |                  | 176.2   |    |  |   | 168.2   |    |  |   | 166.9   |    |
|                                       |  |                  |    |    |  |   |    |    |  |   |    |    |
| Lossbefore incometaxes                     |  |                  | (153.7  | )  |  |   | (277.2  | )  |  |   | (148.2  | )  |
|                                       |  |                  |    |    |  |   |    |    |  |   |    |    |
| Provisionfor incometaxes                   |  |                  | 0.3     |    |  |   | 4.6     |    |  |   | 4.0     |    |
| Netloss                                    |  | $                     | (154.0  | )  |  | $      | (281.8  | )  |  | $      | (152.2  | )  |
|                                            |

SeeAccompanying Notes to Consolidated FinancialStatements.

F-4

----

REVLON CONSUMER PRODUCTS CORPORATION ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OFSTOCKHOLDER'S DEFICIENCY AND COMPREHENSIVELOSS

(dollars in millions)

|                                                          |  |                |        |                   |  |                    |        |                      |  |                                      |          |                              |  |        |         |         |  |        |        |           |  |        |          |         |  |  |
|----------------------------------------------------------|--|----------------|--------|-------------------|--|--------------------|--------|----------------------|--|--------------------------------------|----------|------------------------------|--|--------|---------|---------|--|--------|--------|-----------|--|--------|----------|---------|--|--|
|                                                     |  | PreferredStock |        | CapitalDeficiency |  | AccumulatedDeficit |        | DeferredCompensation |  | AccumulatedOtherComprehensiveLoss(a) |          | TotalStockholder'sDeficiency |
|                                                     |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   |     |    |
| Balance,January 1,2001                                   |  | $              | 54.6   |              |  | $                  | (213.8 | )               |  | $                                    | (915.3   | )                       |  | $      | — |    |  | $      | (29.8  | )    |  | $      | (1,104.3 | )  |
| Netdistribution fromaffiliate                            |  |           |   |              |  |               | (1.0   | )(b)            |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   | (1.0     | )  |
| Issuanceof restrictedstock                               |  |           |   |              |  |               | 8.7    |                 |  |                                 |     |                         |  |   | (8.7    | )  |  |   |   |      |  |   | —  |    |
| Amortizationof deferredcompensation                      |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   | 0.6     |    |  |   |   |      |  |   | 0.6      |    |
| Comprehensiveloss:                                       |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   |     |    |
| Netloss                                                  |  |           |   |              |  |               |   |                 |  |                                 | (152.2   | )                       |  |   |    |    |  |   |   |      |  |   | (152.2   | )  |
| Adjustmentfor minimum pensionliability                   |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   | (42.5  | )    |  |   | (42.5    | )  |
| Revaluationof foreign currency forward exchangecontracts |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   | 0.1    |      |  |   | 0.1      |    |
| Currencytranslationadjustment                            |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   | 11.1   | (c)  |  |   | 11.1     |    |
| Totalcomprehensiveloss                                   |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   | (183.5   | )  |
|                                                     |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   |     |    |
| Balance,December 31,2001                                 |  |           | 54.6   |              |  |               | (206.1 | )               |  |                                 | (1,067.5 | )                       |  |   | (8.1    | )  |  |   | (61.1  | )    |  |   | (1,288.2 | )  |
| Amortizationof deferredcompensation                      |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   | 1.7     |    |  |   |   |      |  |   | 1.7      |    |
| Comprehensiveloss:                                       |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   |     |    |
| Netloss                                                  |  |           |   |              |  |               |   |                 |  |                                 | (281.8   | )                       |  |   |    |    |  |   |   |      |  |   | (281.8   | )  |
| Adjustmentfor minimum pensionliability                   |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   | (67.5  | )    |  |   | (67.5    | )  |
| Revaluationof foreign currency forward exchangecontracts |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   | (0.1   | )    |  |   | (0.1     | )  |
| Currencytranslationadjustment                            |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   | (4.0   | )    |  |   | (4.0     | )  |
| Totalcomprehensiveloss                                   |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   | (353.4   | )  |
|                                                     |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   |     |    |
| Balance,December 31,2002                                 |  |           | 54.6   |              |  |               | (206.1 | )               |  |                                 | (1,349.3 | )                       |  |   | (6.4    | )  |  |   | (132.7 | )    |  |   | (1,639.9 | )  |
| Capitalcontribution from direct parent (See Note9)       |  |           |   |              |  |               | 46.9   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   | 46.9     |    |
| Reductionof liabilities assumed from indirectparent      |  |           |   |              |  |               | 6.9    |  (d)       |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   | 6.9      |    |
| Amortizationof deferredcompensation                      |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   | 2.2     |    |  |   |   |      |  |   | 2.2      |    |
| Comprehensiveloss:                                       |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   |     |    |
| Netloss                                                  |  |           |   |              |  |               |   |                 |  |                                 | (154.0   | )                       |  |   |    |    |  |   |   |      |  |   | (154.0   | )  |
| Adjustmentfor minimum pensionliability                   |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   | 1.5    |      |  |   | 1.5      |    |
| Revaluationof foreign currency forward exchangecontracts |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   | (1.4   | )    |  |   | (1.4     | )  |
| Currencytranslationadjustment                            |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   | 10.6   |      |  |   | 10.6     |    |
| Totalcomprehensiveloss                                   |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   | (143.3   | )  |
|                                                     |  |           |   |              |  |               |   |                 |  |                                 |     |                         |  |   |    |    |  |   |   |      |  |   |     |    |
| Balance,December 31,2003                                 |  | $              | 54.6   |              |  | $                  | (152.3 | )               |  | $                                    | (1,503.3 | )                       |  | $      | (4.2    | )  |  | $      | (122.0 | )    |  | $      | (1,727.2 | )  |
|                                                          |

|  |
|--|
|  |  |
|  |

| (a)    | Accumulatedother comprehensive loss includes net unrealized losses on revaluationsof foreign currency forward exchange contracts of $0.8, nil and nil asof December 31, 2003, 2002 and 2001, respectively, net realized losses(gains) of $0.6, nil and $(0.1) on foreign currency forward exchangecontracts 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 netdistributions in capital from the Charles of the Ritz business (SeeNote 15). |
|-----------------------|--------------------------------------------------------------------------------------------|

| (c)    | The change in thecurrency translation adjustment as of December 31, 2001 includes areclassification adjustment of $7.1 for realized losses on foreigncurrency adjustments associated primarily with the sale of the Coloramabrand in Brazil. |
|-----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)    | During thesecond quarter of 2003, the Company resolved various tax audits, whichresulted in a tax benefit of $13.9, of which $6.9 was recorded directlyto capital deficiency since it relates to liabilities assumed by RevlonConsumer Products Corporation in connection with the transferagreements related to Revlon Consumer Products Corporation'sformation in 1992 (See Note 15). |
|-----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

See AccompanyingNotes to Consolidated FinancialStatements.

F-5

----

REVLON, CONSUMER PRODUCTS CORPORATION ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASHFLOWS

(dollars in millions)

|                                                                                          |  |                       |         |         |  |        |         |         |  |        |         |         |  |  |
|------------------------------------------------------------------------------------------|--|-----------------------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                                                     |  | YearEnded December31, |
|                                                                                     |  | 2003                  |         | 2002    |  | 2001   |
| **CASHFLOWS FROM OPERATING ACTIVITIES:**                                                 |  |
| Netloss                                                                                  |  | $                     | (154.0  | )  |  | $      | (281.8  | )  |  | $      | (152.2  | )  |
| Adjustmentsto reconcile net loss to net cash (used for) provided by operatingactivities: |  |                  |    |    |  |   |    |    |  |   |    |    |
| Depreciationandamortization                                                              |  |                  | 109.8   |    |  |   | 116.3   |    |  |   | 114.7   |    |
| Amortizationof debtdiscount                                                              |  |                  | 3.1     |    |  |   | 2.6     |    |  |   | 0.4     |    |
| Loss onearly extinguishment ofdebt                                                       |  |                  | — |    |  |   | — |    |  |   | 3.6     |    |
| Gainon sale of marketablesecurities                                                      |  |                  | — |    |  |   | — |    |  |   | (2.2    | )  |
| Loss(gain) on sale of brand and certain assets,net                                       |  |                  | — |    |  |   | 1.0     |    |  |   | 14.4    |    |
| Changein assets and liabilities, net of acquisitions anddispositions:                    |  |                  |    |    |  |   |    |    |  |   |    |    |
| Decrease(increase) in tradereceivables                                                   |  |                  | 40.2    |    |  |   | (9.4    | )  |  |   | 5.9     |    |
| (Increase)decrease ininventories                                                         |  |                  | (5.7    | )  |  |   | 30.3    |    |  |   | 10.2    |    |
| Decrease(increase) in prepaid expenses and other currentassets                           |  |                  | 1.1     |    |  |   | (2.2    | )  |  |   | (4.9    | )  |
| Increasein accountspayable                                                               |  |                  | 0.5     |    |  |   | 6.3     |    |  |   | 4.4     |    |
| (Decrease)increase in accrued expenses and other currentliabilities                      |  |                  | (79.6   | )  |  |   | 98.2    |    |  |   | (42.6   | )  |
| Purchaseof permanentdisplays                                                             |  |                  | (72.9   | )  |  |   | (66.2   | )  |  |   | (44.0   | )  |
| Other,net                                                                                |  |                  | (8.9    | )  |  |   | (7.4    | )  |  |   | 5.8     |    |
| Netcash used for operatingactivities                                                     |  |                  | (166.4  | )  |  |   | (112.3  | )  |  |   | (86.5   | )  |
|                                                                                     |  |                  |    |    |  |   |    |    |  |   |    |    |
| **CASHFLOWS FROM INVESTINGACTIVITIES:**                                                  |  |                  |    |    |  |   |    |    |  |   |    |    |
| Capitalexpenditures                                                                      |  |                  | (28.6   | )  |  |   | (16.0   | )  |  |   | (15.1   | )  |
| Saleof marketablesecurities                                                              |  |                  | — |    |  |   | 1.8     |    |  |   | — |    |
| Proceedsfrom the sale of brand and certainassets                                         |  |                  | 5.3     |    |  |   | — |    |  |   | 102.3   |    |
| Netcash (used for) provided by investingactivities                                       |  |                  | (23.3   | )  |  |   | (14.2   | )  |  |   | 87.2    |    |
|                                                                                     |  |                  |    |    |  |   |    |    |  |   |    |    |
| **CASHFLOWS FROM FINANCINGACTIVITIES:**                                                  |  |                  |    |    |  |   |    |    |  |   |    |    |
| Net(decrease) increase in short-term borrowings — thirdparties                     |  |                  | (1.6    | )  |  |   | 8.0     |    |  |   | (11.3   | )  |
| Proceedsfrom the issuance of long-term debt — thirdparties                         |  |                  | 233.1   |    |  |   | 175.6   |    |  |   | 698.5   |    |
| Repaymentof long-term debt — thirdparties                                          |  |                  | (239.3  | )  |  |   | (73.0   | )  |  |   | (614.0  | )  |
| Proceedsfrom the issuance of long-term debt —affiliates                            |  |                  | 178.1   |    |  |   | — |    |  |   | — |    |
| Repaymentof long-term debt —affiliates                                             |  |                  | (62.6   | )  |  |   | — |    |  |   | — |    |
| Capitalcontribution from directparent                                                    |  |                  | 46.9    |    |  |   | — |    |  |   | — |    |
| Paymentof financingcosts                                                                 |  |                  | (3.5    | )  |  |   | (0.3    | )  |  |   | (25.9   | )  |
| Netdistribution fromaffiliate                                                            |  |                  | — |    |  |   | — |    |  |   | (1.0    | )  |
| Netcash provided by financingactivities                                                  |  |                  | 151.1   |    |  |   | 110.3   |    |  |   | 46.3    |    |
| Effectof exchange rate changes on cash and cashequivalents                               |  |                  | 9.3     |    |  |   | (1.3    | )  |  |   | — |    |
| Net(decrease) increase in cash and cashequivalents                                       |  |                  | (29.3   | )  |  |   | (17.5   | )  |  |   | 47.0    |    |
| Cashand cash equivalents at beginning ofperiod                                           |  |                  | 85.8    |    |  |   | 103.3   |    |  |   | 56.3    |    |
| Cashand cash equivalents at end ofperiod                                                 |  | $                     | 56.5    |    |  | $      | 85.8    |    |  | $      | 103.3   |    |
| Supplementalschedule of cash flowinformation:                                            |  |                  |    |    |  |   |    |    |  |   |    |    |
| Cashpaid during the periodfor:                                                           |  |                  |    |    |  |   |    |    |  |   |    |    |
| Interest                                                                                 |  | $                     | 160.8   |    |  | $      | 155.2   |    |  | $      | 134.6   |    |
| Incometaxes, net ofrefunds                                                               |  |                  | 6.7     |    |  |   | 3.6     |    |  |   | 3.4     |    |
|                                                                                          |

SeeAccompanying Notes to Consolidated FinancialStatements.

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REVLONCONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES NOTES TOCONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except pershare data)

1.    Significant Accounting Policies

Principles of Consolidation and Basis of Presentation:

Revlon Consumer Products Corporation ("ProductsCorporation" and together with its subsidiaries, the"Company"), which is a direct wholly ownedsubsidiary of Revlon, Inc., was formed in April 1992. The Companymanufactures and sells an extensive array of cosmetics and skin care,fragrances and personal care products. On July 16, 2001 the Companysold the Colorama brand in Brazil. (See Note 3). The Company'sprincipal customers include large mass volume retailers and chain drugstores, as well as certain department stores and other specialtystores, such as perfumeries. The Company also sells consumer productsto U.S. military exchanges and commissaries and has a licensinggroup.

The Consolidated Financial Statements include theaccounts of the Company after elimination of all material intercompanybalances and transactions. Further, the Company has made a number ofestimates and assumptions relating to the reporting of assets andliabilities, the disclosure of liabilities and the reporting ofrevenues and expenses to prepare these financial statements inconformity with generally accepted accounting principles. Actualresults could differ from those estimates.

Products Corporationis a direct wholly owned subsidiary of Revlon, Inc., which is adirectly 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 itsaffiliates, "MacAndrews & Forbes") byRonald O. Perelman.

Certain amounts in the prior year financialstatements have been reclassified to conform to the currentyear's presentation.

During 2003 and 2002 the Companyrecorded expenses of approximately $31 and approximately $104 (of whichapproximately $100 was recorded in the fourth quarter of 2002),respectively, related to various aspects of the stabilization andgrowth phase of the Company's plan, primarily stemming fromhigher sales returns and inventory writedowns from a selectivereduction of SKUs, reduced distribution of the Ultima II brand, higherallowances stemming from selective price adjustments on certainproducts, higher professional expenses associated with the developmentof, research in relation to, the stabilization and growth phase of theCompany's plan, and writedowns associated with reconfiguringexisting 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 TechnicalCorrections". Statement No. 145, among other things,rescinds Statement No. 4, "Reporting Gains and Losses fromExtinguishment of Debt", and an amendment of thatStatement, Statement No. 64, "Extinguishments of Debt Madeto Satisfy Sinking-Fund Requirements". Statement No. 4required that gains and losses from extinguishment of debt beclassified as extraordinary items, if material. Under Statement No.145, extinguishment of debt should usually not be consideredextraordinary under the criteria in Accounting Principles Board("APB") Opinion No. 30,"Reporting the Results of Operations — Reporting theEffects of Disposal of a Segment of a Business, and Extraordinary,Unusual and Infrequently Occurring Events andTransactions" ("APB No. 30").The Company adopted the provisions of Statement No. 145 effectiveDecember 31, 2002. The Company reclassified the extraordinary item forearly extinguishment of debt of $3.6 incurred in the fourth quarter of2001 to other expenses on the Company's consolidated statementsof operations as it is no longer considered to meet the extraordinaryitem classification criteria in APB No. 30.

In August 2001, theFASB issued Statement No. 143, "Accounting for AssetRetirement Obligations". Statement No. 143 requiresrecording the fair market value of an asset retirement obligation as a

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liability in the period in which a legalobligation associated with the retirement of a tangible long-livedasset is incurred. This statement also requires recording the contraasset to the initial obligation as an increase to the carrying amountof the related long-lived asset and depreciation of that cost over thelife of the asset. The liability is then increased at the end of eachperiod to reflect the passage of time and changes in the initial fairvalue measurement. The Company adopted the provisions of Statement No.143 effective January 1, 2003 and it did not have a material effect onthe Company's financial statements or disclosures.

In July2002, the FASB issued Statement No. 146, "Accounting forCosts Associated with Exit or Disposal Activities". Thisstatement nullifies Emerging Issues Task Force (the"EITF") Issue No. 94-3,"Liability Recognition for Certain Employee TerminationBenefits and Other Costs to Exit an Activity (including Certain CostsIncurred in a Restructuring)." Statement No. 146 requiresthat a liability for the fair value of costs associated with an exit ordisposal activity be recognized when the liability is incurred. Theprovisions of Statement No. 146 are effective for exit or disposalactivities initiated after December  31, 2002 and thus becameeffective for the Company on January 1, 2003. The Company applied theprovisions of Statement No. 146 to any exit activities which occurredin 2003. The adoption of Statement No. 146 did not have a materialeffect on the financial position, results of operations or cash flowsof the Company.

In November 2002, the FASB issued InterpretationNo. 45, "Guarantor's Accounting and DisclosureRequirements for Guarantees, Including Indirect Guarantees ofIndebtedness of Others." Interpretation No. 45 requiresthe guarantor to recognize a liability for the contingent andnon-contingent component of a guarantee; which means (a) the guarantorhas undertaken an obligation to stand ready to perform in the eventthat specified triggering events or conditions occur and (b) theguarantor has undertaken a contingent obligation to make futurepayments if such triggering events or conditions occur. The initialmeasurement of this liability is the fair value of the guarantee atinception. The Company is required to recognize the liability even ifit is not probable that payments will be required under the guaranteeor if the guarantee was issued with a premium payment or as part of atransaction with multiple elements. Interpretation No. 45 also requiresadditional disclosures related to guarantees that have certainspecified characteristics. The Company was required to adopt, and hasadopted the disclosure provisions of Interpretation No. 45 in itsfinancial statements as of and for the year ended December 31, 2002.Additionally, the recognition and measurement provisions ofInterpretation No. 45 are effective for all guarantees entered into ormodified after December 31, 2002. The adoption of this Interpretationdid not have a material effect on the Company's financialstatements or disclosures.

In December 2002, the FASB issuedStatement of Financial Accounting Standards("SFAS") No. 148, "Accountingfor Stock-Based Compensation, Transition and Disclosure".SFAS No. 148 provides alternative methods of transition for a voluntarychange to the fair value based method of accounting for stock-basedemployee compensation. Should the Company elect to transition to fairvalue recognition of stock-based employee compensation, not all of thealternatives outlined in SFAS No. 148 will be available after December31, 2002. The Company has included the disclosure requirements of SFASNo. 148 in its consolidated financial statements effective December 31,2002 and has continued to apply the guidance prescribed in APB OpinionNo. 25, "Accounting for Stock Issued toEmployees".

In December 2003, the FASB issuedStatement No. 132 (R), "Employer's Disclosures aboutPensions 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 flowsas well as the components of the net periodic benefit cost recognizedin interim periods. The new annual disclosure requirements apply tofiscal years ending after December 15, 2003, except for the disclosureof expected future benefit payments, which must be disclosed for fiscalyears ending after June 15, 2004. Interim period disclosures aregenerally effective for interim periods beginning after December 15,2003. The Company has included the disclosures required by SFAS No. 132in its consolidated financial statements for the year ended December31, 2003.

SFAS No. 150, "Accounting for CertainFinancial Instruments with Characteristics of both Liabilities andEquity", was issued by the FASB in May 2003. SFAS No. 150provides guidance on how to classify and measure certain financialinstruments with characteristics of both liabilities and equity. Thisstatement 

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is effective for financial instruments enteredinto or modified after May 31, 2003, and otherwise is effective at thebeginning of the first interim period beginning after June 15, 2003.None of the Company's financial instruments were impacted by thisstatement.

SFAS No. 149, "Amendment of Statement133 on Derivative Instruments and Hedging ActivitiesSummary", was issued by the FASB in April 2003. Thisstatement amends and clarifies the accounting and reporting forderivative instruments, including embedded derivatives, and for hedgingactivities under SFAS No. 133. Statement No. 149 amends Statement No.133 to reflect the decisions made as part of the DerivativesImplementation Group ("DIG") and in otherFASB projects or deliberations. Statement No. 149 is effective forcontracts entered into or modified after June 30, 2003, and for hedgingrelationships designated after June 30, 2003. The Company has appliedthe pertinent DIG interpretations as they were issued and does notexpect that SFAS No. 149 will have any material impact on theCompany's financial statements or disclosures.

The FASBissued Interpretation No. 46, "Consolidation of VariableInterest Entities", an interpretation of APB No. 51, inJanuary 2003. This interpretation addresses the consolidation bybusiness enterprises of variable interest entities as defined in theinterpretation. The interpretation applied immediately to variableinterest entities created after January 31, 2003, and to variableinterests in variable interest entities obtained after January 31,2003. Significant changes to this interpretation were proposed by FASBin October 2003, including delaying the effective date to the beginningof the first reporting period ending after December 15, 2003. TheCompany does not currently own an interest in any variable interestentities; and the Company adopted this statement and it did not have amaterial effect on its financial statements or disclosures.

Cash and Cash Equivalents:

Cash equivalents (primarilyinvestments in time deposits, which have original maturities of threemonths or less) are carried at cost, which approximates fair value.Approximately $27.9 and $22.9 was restricted and supported short-termborrowings at December 31, 2003 and 2002, respectively. (SeeNote  8).

Inventories:

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

Property, Plant and Equipmentand Other Assets:

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

Long-lived assets, including fixed assets andintangibles other than goodwill, are reviewed for impairment wheneverevents or changes in circumstances indicate that the carrying amount ofan asset may not be recoverable. If events or changes in circumstancesindicate that the carrying amount of an asset may not be recoverable,the Company estimates the undiscounted future cash flows (excludinginterest) resulting from the use of the asset and its ultimatedisposition. If the sum of the undiscounted cash flows (excludinginterest) is less than the carrying value, the Company recognizes animpairment loss, measured as the amount by which the carrying valueexceeds the fair value of the asset.

Included in other assetsare net permanent wall displays amounting to approximately $98.6 and$85.2 as of December 31, 2003 and 2002, respectively, which areamortized over 3 to 5 years. Beginning in the first quarter of 2002,the Company decided to roll out new permanent wall displays, replacingexisting permanent wall displays at an accelerated rate. As a result,the useful lives of those permanent wall displays to be replaced wereshortened to their new estimated useful lives, resulting in accelerated

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amortization of approximately $11 during2002. The cost of the new wall displays will be amortized over a 3-yearlife. The Company has included in other assets net costs related to theissuance of its debt instruments amounting to approximately $23.0 and$26.7 as of December 31, 2003 and 2002, respectively, which areamortized 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 overapproximately 10 to 17 years. Amortization expense for patents andtrademarks for 2003, 2002 and 2001 was $1.8, $2.0 and $1.5,respectively. The Company's intangible assets other than goodwillcontinue to be subject to amortization, which is anticipated to beapproximately $1.9 annually through December 31, 2008.

Intangible Assets Related to Businesses Acquired:

Intangible assets related to businesses acquired principallyrepresent 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 usedfor all business combinations initiated after June 30, 2001, as well asall purchase method business combinations completed after June 30,2001. Statement 141 also specifies criteria that must be met in orderfor intangible assets acquired in a purchase method businesscombination to be recognized and reported apart from goodwill.Statement 142 requires that goodwill and intangible assets withindefinite useful lives no longer be amortized, but instead tested forimpairment at least annually in accordance with the provisions ofStatement 142. Statement 142 requires that intangible assets withfinite useful lives be amortized over their respective estimated usefullives to their estimated residual values, and reviewed for impairmentin accordance with Statement 144, "Accounting for theImpairment or Disposal of Long-Lived Assets". The Companyadopted the provisions of Statement 141 in July 2001 and Statement 142effective January 1, 2002. In connection with the adoption of Statement142, the Company performed a transitional goodwill impairment test asrequired and determined that no goodwill impairment existed at January1, 2002. The Company has also evaluated the lives of all of itsintangible assets. As a result of this evaluation, the Company hasdetermined that none of its intangible assets, other than goodwill,have indefinite lives and that the existing useful lives areappropriate. 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 priceover the fair value of assets acquired. Amortization of goodwill ceasedon January 1, 2002 upon adoption of Statement 142. Excludingamortization expense related to goodwill of $7.7 recognized during2001, net loss would have been $144.5. Prior to January 1, 2002, theCompany amortized goodwill on a straight-line basis over 40 years.

Revenue Recognition:

Sales are recognized when revenue isrealized or realizable and has been earned. The Company's policyis to recognize revenue when risk of loss and title to the producttransfers to the customer, which generally is on the date of shipment.Net sales is comprised of gross revenues less expected returns, tradediscounts and customer allowances, which include costs associated withoff-invoice mark-downs and other price reductions, as well as coupons.These incentive costs are recognized at the later of the date on whichthe Company recognizes the related revenue or the date on which theCompany offers the incentive. The Company allows customers to returntheir unsold products when they meet certain Company-establishedcriteria as outlined in the Company's trade terms. The Companyregularly reviews and revises, when deemed necessary, its estimates ofsales returns based primarily upon actual returns, planned productdiscontinuances, and promotional sales, which would permit customers toreturn items based upon the Company's trade terms. The Companyrecords sales returns as a reduction to sales and cost of sales, and anincrease to accrued liabilities and to inventories. Returned productswhich are recorded as inventories are valued based upon the amount thatthe Company expects to realize upon their subsequent disposition. Thephysical condition and marketability of the returned products are themajor factors considered by the Company in estimating realizable value.Actual returns, as well as realized values on returned products, maydiffer significantly, either favorably or unfavorably, from theCompany's estimates if factors such as 

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product discontinuances, customer inventorylevels or competitive conditions differ from the Company'sestimates and expectations and, in the case of actual returns, ifeconomic conditions differ significantly from the Company'sestimates and expectations. Revenues derived from licensingarrangements are recognized in the period in which they become due andpayable but not before the license term commences.

Cost of salesincludes all of the costs to manufacture the Company's products.For products manufactured in the Company's own facilities, suchcosts include raw materials and supplies, direct labor and factoryoverhead. For products manufactured for the Company by third-partycontractors, such costs represent the amounts invoiced by thecontractors. Cost of sales also includes the cost of refurbishingproducts returned by customers that will be offered for resale and thecost of inventory write-downs associated with adjustments of heldinventories to net realizable value. These costs are reflected in thestatement of operations when the product is sold and net sales revenuesare recognized or, in the case of inventory write-downs, whencircumstances indicate that the carrying value of inventories is inexcess of its recoverable value. Additionally, cost of sales reflectsthe costs associated with free products. These incentive costs arerecognized on the later of the date that the Company recognizes therelated revenue or the date on which the Company offers theincentive.

SG&A expenses include expenses to advertise theCompany's products, such as television advertising productioncosts and air-time costs, print advertising costs, promotional displaysand consumer promotions. SG&A also includes the amortization ofpermanent wall displays and intangible assets, distribution costs (suchas freight and handling), non-manufacturing overhead, principallypersonnel and related expenses, insurance and professional fees.

Accounts Receivable:

Accounts receivable represent paymentsdue to the Company for previously recognized net sales, reduced by anallowance for doubtful accounts for balances, which are estimated to beuncollectible at December 31, 2003 and 2002. Accounts receivablebalances are recorded against the allowance for doubtful accounts whenthey are deemed uncollectible. Recoveries of accounts receivablepreviously recorded against the allowance are recorded in theConsolidated Statements of Operations when received.

IncomeTaxes:

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

Products Corporation, for federal income tax purposes, is includedin the affiliated group of which Mafco Holdings is the common parent,and Products Corporation's federal taxable income and loss isincluded in such group's consolidated tax return filed by MafcoHoldings. Products Corporation also may be included in certain stateand local tax returns of Mafco Holdings or its subsidiaries. For allperiods presented, federal, state and local income taxes are providedas if Products Corporation filed its own income tax returns. On June24, 1992, Revlon Holdings Inc. (a Delaware corporation which in 2002converted into a Delaware limited liability company known as RevlonHoldings LLC ("Holdings") and which is anaffiliate and an indirect wholly-owned subsidiary of Mafco Holdings),Revlon, Inc., Products Corporation and certain of its subsidiaries andMafco Holdings entered into a tax sharing agreement, which is describedin Notes 12 and 15.

Pension and Other Post-retirement andPost-employment Benefits:

The Company sponsors pension andother retirement plans in various forms covering substantially allemployees who meet the respective plan's eligibilityrequirements. For plans in the U.S., the minimum amount requiredpursuant to the Employee Retirement Income Security Act, as amended, iscontributed annually. Various subsidiaries outside the U.S. haveretirement plans under which funds are deposited with trustees orreserves are provided.

The Company accounts for benefits such asseverance, disability and health insurance provided to former employeesprior to their retirement when it is probable that a liability has beenincurred and the amount of such liability can be reasonablyestimated.

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Research and Development:

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

Foreign CurrencyTranslation:

Assets and liabilities of foreign operations aregenerally translated into U.S. dollars at the rates of exchange ineffect at the balance sheet date. Income and expense items aregenerally translated at the weighted average exchange rates prevailingduring each period presented. Gains and losses resulting from foreigncurrency transactions are included in the results of operations. Gainsand losses resulting from translation of financial statements offoreign subsidiaries and branches operating in non-hyperinflationaryeconomies are recorded as a component of accumulated othercomprehensive loss until either sale or upon complete or substantiallycomplete liquidation by the Company of its investment in a foreignentity. Foreign subsidiaries and branches operating inhyperinflationary economies translate non-monetary assets andliabilities at historical rates and include translation adjustments inthe results of operations.

Sale of Subsidiary Stock:

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

Classes ofStock:

Products Corporation designated 1,000 shares ofPreferred Stock as the Series A Preferred Stock, of which 546 sharesare outstanding and held by Revlon, Inc. The holder of the Series APreferred Stock is not entitled to receive any dividends. The Series APreferred Stock is entitled to a liquidation preference of $100,000 pershare before any distribution is made to the holder of ProductsCorporation's common stock. The holder of the Series A PreferredStock does not have any voting rights, except as required by law. TheSeries A Preferred Stock may be redeemed at any time by ProductsCorporation, at its option, for $100,000 per share. However, the termsof Products Corporation's various debt agreements currentlyrestrict Products Corporation's ability to effect suchredemption. **(See "SubsequentEvents").**

Stock-Based Compensation:

SFAS No. 123, "Accounting for Stock-BasedCompensation," encourages, but does not require, companiesto record compensation cost for stock-based employee compensation plansat fair value. The Company has chosen to account for stock-basedcompensation plans using the intrinsic value method prescribed in APBOpinion No. 25, "Accounting for Stock Issued toEmployees," and related interpretations. Accordingly,compensation cost for stock options issued to employees is measured asthe excess, if any, of the quoted market price of Revlon, Inc.'sstock at the date of the grant over the amount an employee must pay toacquire the stock. The following table illustrates the effect on netloss as if the Company had applied the fair value method to itsstock-based compensation, which is more fully described in Note 14 asrequired under the disclosure provisions of Statement No. 123:

|                                                                                                              |  |                       |        |         |  |        |        |         |  |        |        |         |  |  |
|--------------------------------------------------------------------------------------------------------------|--|-----------------------|--------|---------|--|--------|--------|---------|--|--------|--------|---------|--|--|
|                                                                                                         |  | YearEnded December31, |
|                                                                                                         |  | 2003                  |        | 2002    |  | 2001   |
| Netloss asreported                                                                                           |  | $                     | (154.0 | )  |  | $      | (281.8 | )  |  | $      | (152.2 | )  |
| Add:Stock-based employee compensation included in reported netloss                                           |  |                  | 2.2    |    |  |   | 1.7    |    |  |   | 0.6    |    |
| Deduct:Total stock-based employee compensation expense determined under fairvalue based method for allawards |  |                  | (7.7   | )  |  |   | (6.9   | )  |  |   | (10.2  | )  |
| Proforma netloss                                                                                             |  | $                     | (159.5 | )  |  | $      | (287.0 | )  |  | $      | (161.8 | )  |
|                                                                                                              |

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

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Derivative Financial Instruments:

On January 1, 2001, the Company adopted SFAS No. 133,"Accounting for Derivative Instruments and HedgingActivities," as amended by SFAS No. 149. The standardrequires the recognition of all derivative instruments on the balancesheet as either assets or liabilities measured at fair value. Changesin fair value are recognized immediately in earnings unless thederivatives qualify as hedges of future cash flows. For derivativesqualifying as hedges of future cash flows, the effective portion ofchanges in fair value is recorded as a component of Other ComprehensiveIncome and recognized in earnings when the hedged transaction isrecognized in earnings. Any ineffective portion (representing theextent that the change in fair value of the hedges does not completelyoffset the change in the anticipated net payments being hedged) isrecognized in earnings as it occurs. If a derivative instrumentdesignated as a hedge is terminated, the unrecognized fair value of thehedge previously recorded in accumulated other comprehensive income(loss) is recognized in earnings when the hedged transaction isrecognized in earnings. If the transaction being hedged is terminated,the unrecognized fair value of the Company's related hedgeinstrument is recognized in earnings at that time. There was nocumulative effect on the Company's financial statements ordisclosures recognized for adopting this accounting change.

TheCompany formally designates and documents each financial instrument asa hedge of a specific underlying exposure, as well as the riskmanagement objectives and strategies for entering into the hedgetransaction upon inception. The Company also formally assesses uponinception and quarterly thereafter whether the financial instrumentsused in hedging transactions are effective in offsetting changes in thefair value or cash flows of the hedged items.

The Company usesderivative financial instruments, primarily foreign currency forwardexchange contracts, to reduce the effects of fluctuations in foreigncurrency exchange rates. These contracts, which have been designated ascash flow hedges, were entered into primarily to hedge anticipatedinventory purchases and certain intercompany payments denominated inforeign currencies, which have maturities of less than one year. Anyunrecognized income (loss) related to these contracts are recorded inthe Statement of Operations primarily in cost of goods sold when theunderlying transactions hedged are realized (e.g., when inventory issold or intercompany transactions are settled). The Company enters intothese contracts with a counterparty that is a major financialinstitution, and accordingly the Company believes that the risk ofcounterparty nonperformance is remote. The notional amount of theforeign currency forward exchange contracts outstanding at December 31,2003 and 2002 was $8.3 and $10.8, respectively. The fair value of theforeign currency forward exchange contracts outstanding atDecember  31, 2003 and 2002 was $(0.8) and nil,respectively.

The amount of the hedges' ineffectivenessfor the year ended December 31, 2003 recorded in the ConsolidatedStatements of Operations was not significant.

Advertising andPromotion:

Costs associated with advertising and promotion areexpensed when incurred. Television advertising production costs areexpensed the first time the advertising takes place. Advertising andpromotion expenses were $314.4, $281.2 and $272.9 for 2003, 2002 and2001, respectively.

The Company has various arrangements withcustomers pursuant to its trade terms to reimburse them for a portionof their advertising or promotional costs, which provide advertisingand promotional benefits to the Company. Additionally, from time totime the Company may pay fees to customers in order to expand ormaintain shelf space for its products. The costs that the Companyincurs for "cooperative" advertisingprograms, end cap replacement, shelf replacement costs and slottingfees are expensed as incurred and are netted against revenues on theCompany's Consolidated Statements of Operations.

Distribution Costs:

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

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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 421employees in certain International operations, as to which 331employees have been terminated as of December 31, 2003.

During2003, 2002 and 2001, the Company recorded a charge of $0.1, $13.6 and$38.1 related to the 2000 restructuring program, principally foradditional employee severance and other personnel benefits andrelocation and other costs related to the consolidation of theCompany's worldwide operations. Included in the $38.1 charge for2001 was an adjustment in the fourth quarter to previous estimates ofapproximately $6.6.

During the third quarter of 2000, theCompany initiated a new restructuring program in line with the originalrestructuring plan developed in late 1998, designed to improveprofitability by reducing personnel and consolidating manufacturingfacilities. The 2000 restructuring program focused on theCompany's plans to close its manufacturing operations in Phoenix,Arizona and Mississauga, Canada and to consolidate its cosmeticsproduction into its plant in Oxford, North Carolina. The 2000restructuring program also includes the remaining obligation for excessleased real estate in the Company's headquarters, consolidationcosts associated with the Company closing its facility in New Zealand,and the elimination of several domestic and international executive andoperational positions, each of which were effected to reduce andstreamline corporate overhead costs. In connection with the 2000restructuring program, termination benefits for 2,457 employees wereincluded in the Company's restructuring charges, and all suchemployees that were to be terminated had been terminated as of December31, 2003.

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

|                                                |  |                        |         |               |  |              |         |                  |  |        |         |         |  |        |         |         |  |        |         |        |  |  |
|------------------------------------------------|--|------------------------|---------|---------------|--|--------------|---------|------------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|--------|--|--|
|                                           |  | BalanceBeginningofYear |         | Expenses, Net |  | Utilized,Net |         | BalanceEndofYear |
|                                           |  | Cash                   |         | Noncash       |  |
| **2003**                                       |  |                   |    |          |  |         |    |             |  |   |    |    |  |   |    |    |  |   |    |   |
| Employeeseverance and other personnelbenefits: |  |                   |    |          |  |         |    |             |  |   |    |    |  |   |    |    |  |   |    |   |
| 2000plan                                       |  | $                      | 7.0     |          |  | $            | — |             |  | $      | (5.2    | )  |  | $      | — |    |  | $      | 1.8     |   |
| 2003plan                                       |  |                   | — |          |  |         | 5.9     |             |  |   | (0.9    | )  |  |   | — |    |  |   | 5.0     |   |
|                                           |  |                   | 7.0     |          |  |         | 5.9     |             |  |   | (6.1    | )  |  |   | — |    |  |   | 6.8     |   |
| Relocation                                     |  |                   | — |          |  |         | 0.1     |             |  |   | (0.1    | )  |  |   | — |    |  |   | — |   |
| Leasesand equipmentwrite-offs                  |  |                   | 3.9     |          |  |         | — |             |  |   | (1.7    | )  |  |   | — |    |  |   | 2.2     |   |
| Otherobligations                               |  |                   | 0.9     |          |  |         | — |             |  |   | — |    |  |   | (0.9    | )  |  |   | — |   |
|                                           |  | $                      | 11.8    |          |  | $            | 6.0     |             |  | $      | (7.9    | )  |  | $      | (0.9    | )  |  | $      | 9.0     |   |
| **2002**                                       |  |                   |    |          |  |         |    |             |  |   |    |    |  |   |    |    |  |   |    |   |
| Employeeseverance and other personnelbenefits  |  | $                      | 15.1    |          |  | $            | 10.1    |             |  | $      | (18.2   | )  |  | $      | — |    |  | $      | 7.0     |   |
| Relocation                                     |  |                   | — |          |  |         | 0.6     |             |  |   | (0.6    | )  |  |   | — |    |  |   | — |   |
| Leasesand equipmentwrite-offs                  |  |                   | 7.4     |          |  |         | 1.7     |             |  |   | (4.9    | )  |  |   | (0.3    | )  |  |   | 3.9     |   |
| Otherobligations                               |  |                   | 0.3     |          |  |         | 1.2     |             |  |   | (0.6    | )  |  |   | — |    |  |   | 0.9     |   |
|                                           |  | $                      | 22.8    |          |  | $            | 13.6    |             |  | $      | (24.3   | )  |  | $      | (0.3    | )  |  | $      | 11.8    |   |
| **2001**                                       |  |                   |    |          |  |         |    |             |  |   |    |    |  |   |    |    |  |   |    |   |
| Employeeseverance and other personnelbenefits  |  | $                      | 28.6    |          |  | $            | 27.5    |             |  | $      | (41.0   | )  |  | $      | — |    |  | $      | 15.1    |   |
| Relocation                                     |  |                   | — |          |  |         | 3.8     |             |  |   | (3.8    | )  |  |   | — |    |  |   | — |   |
| Leasesand equipmentwrite-offs                  |  |                   | 5.9     |          |  |         | 5.6     |             |  |   | (4.0    | )  |  |   | (0.1    | )  |  |   | 7.4     |   |
| Otherobligations                               |  |                   | 1.5     |          |  |         | 1.2     |             |  |   | (2.4    | )  |  |   | — |    |  |   | 0.3     |   |
|                                           |  | $                      | 36.0    |          |  | $            | 38.1    |             |  | $      | (51.2   | )  |  | $      | (0.1    | )  |  | $      | 22.8    |   |
|                                                |

Asof December 31, 2003, 2002 and 2001, the unpaid balance of therestructuring costs for reserves are included in accrued expenses andother and other long-term liabilities in the Company'sConsolidated 

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Balance Sheets. The remaining balance atDecember 31, 2003 for employee severance and other personnel benefitsis $6.8, of which $5.7 is expected to be paid by the end of 2004 andthe remaining lease and equipment obligations of $2.2 are expected tobe paid by the end of 2008.

3.    Dispositions

Described below are the principal sales of certain brands andfacilities entered into by Products Corporations during 2003, 2002 and2001:

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

In May 2001, Products Corporation sold itsPhoenix, Arizona facility for approximately $7 and leased it backthrough the end of 2001. After recognition of increased depreciation inthe first quarter of 2001, the Company recorded a pre-tax and after-taxnet loss on the sale of $3.7 in the second quarter of 2001, which isincluded in SG&A expenses.

In July 2001, ProductsCorporation completed the disposition of its Colorama brand ofcosmetics and hair care products, as well as ProductsCorporation's manufacturing facility located in São Paulo,Brazil, for approximately $57. Products Corporation used $22 of the netproceeds, after transaction costs and retained liabilities, topermanently reduce commitments under the 1997 Credit Agreement. Inconnection with such disposition, the Company recognized a pre-tax andafter-tax net loss of $6.7.

In July 2001, Products Corporationcompleted the disposition of its subsidiary that owned and operated itsmanufacturing facility in Maesteg, Wales (UK), including all productionequipment. As part of this sale, Products Corporation entered into along-term supply agreement with the purchaser pursuant to which thepurchaser manufactured and supplied to Products Corporation cosmeticsand personal care products for sale throughout Europe. In connectionwith such disposition, the Company recognized a pre-tax and after-taxnet loss of $8.6.

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

In February2002, Products Corporation completed the disposition of its Beneluxbusiness. As part of this sale, Products Corporation entered into along-term distribution agreement with the purchaser pursuant to whichthe purchaser distributes the Company's products in Benelux. Thepurchase price consisted principally of the assumption of certainliabilities and a deferred purchase price contingent upon futureresults of up to approximately $4.7, which could be received overapproximately a seven-year period. In connection with the disposition,the Company recognized a pre-tax and after-tax net loss of $1.0 in thefirst quarter of 2002.

In October 2002, Products Corporation andits principal third party manufacturer for Europe and certain otherinternational markets terminated the long-term supply agreement theyhad entered into in connection with Products Corporation'sdisposition of its Maesteg facility in July 2001, and they entered intoa new, more flexible agreement. This new agreement has significantlyreduced volume commitments, and, among other things, ProductsCorporation agreed to loan such supplier approximately $2.0 and thesupplier can earn performance-based payments of approximately $6.3 overa 4-year period, contingent upon the supplier achieving specificproduction service level objectives. During 2003 and 2002, the Companyaccrued $1.8 and $1.6, respectively, for such payments. As part ofterminating the long-term supply agreement the supplier releasedProducts Corporation from its minimum purchase commitments under theold supply agreement, which were approximately $145.5 over the 8-yearterm of such agreement. In exchange, Products Corporation waivedapproximately $10.0 of deferred purchase price which otherwise wouldhave been payable by the supplier to Products Corporation in connectionwith the July 2001 sale of the Maesteg facility (a portion of which wascontingent on future events). Such deferred purchase price, absent suchwaiver, would have been payable by the supplier to Products Corporationover a 6-year period.

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

4.    Inventories

|                          |  |             |       |        |  |        |       |        |  |  |
|--------------------------|--|-------------|-------|--------|--|--------|-------|--------|--|--|
|                     |  | December31, |
|                     |  | 2003        |       | 2002   |
| Rawmaterials andsupplies |  | $           | 48.3  |   |  | $      | 36.7  |   |
| Work-in-process          |  |        | 11.6  |   |  |   | 11.1  |   |
| Finishedgoods            |  |        | 82.8  |   |  |   | 80.3  |   |
|                     |  | $           | 142.7 |   |  | $      | 128.1 |   |
|                          |

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

5.    Prepaid Expenses and Other

|                    |  |             |         |        |  |        |      |        |  |  |
|--------------------|--|-------------|---------|--------|--|--------|------|--------|--|--|
|               |  | December31, |
|               |  | 2003        |         | 2002   |
| Prepaidexpenses    |  | $           | 22.9    |   |  | $      | 21.1 |   |
| Asset held forsale |  |        | — |   |  |   | 3.4  |   |
| Other              |  |        | 23.7    |   |  |   | 28.0 |   |
|               |  | $           | 46.6    |   |  | $      | 52.5 |   |
|                    |

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

6.    Property, Plant and Equipment, Net

|                                                      |  |             |        |         |  |        |        |         |  |  |
|------------------------------------------------------|--|-------------|--------|---------|--|--------|--------|---------|--|--|
|                                                 |  | December31, |
|                                                 |  | 2003        |        | 2002    |
| Landand improvements                                 |  | $           | 2.2    |    |  | $      | 2.2    |    |
| Buildingsand improvements                            |  |        | 82.8   |    |  |   | 80.5   |    |
| Machineryand equipment and capitalizedleases         |  |        | 135.1  |    |  |   | 124.1  |    |
| Office furnitureand fixtures and capitalizedsoftware |  |        | 109.5  |    |  |   | 99.9   |    |
| Leaseholdimprovements                                |  |        | 12.5   |    |  |   | 18.1   |    |
| Construction-in-progress                             |  |        | 10.5   |    |  |   | 13.6   |    |
|                                                 |  |        | 352.6  |    |  |   | 338.4  |    |
| Accumulateddepreciation                              |  |        | (220.5 | )  |  |   | (205.0 | )  |
|                                                 |  | $           | 132.1  |    |  | $      | 133.4  |    |
|                                                      |

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

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7.    Accrued Expenses and Other

|                                      |  |             |       |        |  |        |       |        |  |  |
|--------------------------------------|--|-------------|-------|--------|--|--------|-------|--------|--|--|
|                                 |  | December31, |
|                                 |  | 2003        |       | 2002   |
| Salesreturns andallowances           |  | $           | 103.4 |   |  | $      | 174.1 |   |
| Advertisingand promotionalcosts      |  |        | 52.3  |   |  |   | 59.2  |   |
| Compensation andrelatedbenefits      |  |        | 65.7  |   |  |   | 54.5  |   |
| Interest                             |  |        | 40.7  |   |  |   | 39.5  |   |
| Taxes,other than federal incometaxes |  |        | 9.3   |   |  |   | 7.8   |   |
| Restructuringcosts                   |  |        | 6.4   |   |  |   | 8.3   |   |
| Other                                |  |        | 44.2  |   |  |   | 35.5  |   |
|                                 |  | $           | 322.0 |   |  | $      | 378.9 |   |
|                                      |

8.    Short-termBorrowings

Products Corporation had outstanding short-term bankborrowings (excluding borrowings under the Credit Agreement (ashereinafter defined)) aggregating $28.0 and $25.0 at December 31, 2003and 2002, respectively. Interest rates on amounts borrowed under suchshort-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 in which the Company had outstandingborrowings of approximately $0.2 and $1.7 at December 31, 2003 and2002, respectively. Compensating balances at December 31, 2003 and 2002were approximately $27.9 and $22.9, respectively. Interest rates oncompensating balances at December 31, 2003 and 2002 ranged from0.6% to 5.6% and 1.5% to 5.6%,respectively.

9.    Long-term Debt

|                                                         |  |             |         |        |  |        |         |        |  |  |
|---------------------------------------------------------|--|-------------|---------|--------|--|--------|---------|--------|--|--|
|                                                    |  | December31, |
|                                                    |  | 2003        |         | 2002   |
| Creditfacilities(a)                                     |  | $           | 217.3   |   |  | $      | 223.1   |   |
| 8 1/8%Senior Notes due 2006(b)                          |  |        | 249.8   |   |  |   | 249.7   |   |
| 9% SeniorNotes due 2006(c)                              |  |        | 250.0   |   |  |   | 250.0   |   |
| 8 5/8%Senior Subordinated Notes due 2008(d)             |  |        | 649.9   |   |  |   | 649.9   |   |
| 12% SeniorSecured Notes due 2005(e)                     |  |        | 356.3   |   |  |   | 353.3   |   |
| 12% SeniorUnsecured Multiple-Draw Term Loan due 2005(f) |  |        | 106.6   |   |  |   | — |   |
| 8%MacAndrews & Forbes Line of Credit due 2005(f)    |  |        | 15.5    |   |  |   | — |   |
| Advances fromaffiliates(f)                              |  |        | 24.1    |   |  |   | 24.1    |   |
|                                                    |  |        | 1,869.5 |   |  |   | 1,750.1 |   |
| Lesscurrentportion                                      |  |        | — |   |  |   | — |   |
|                                                    |  | $           | 1,869.5 |   |  | $      | 1,750.1 |   |
|                                                         |

(a)On November 30, 2001, Products Corporation entered into the SecondAmended and Restated Credit Agreement (the "2001 CreditAgreement") with a syndicate of lenders, whose individualmembers change from time to time, which agreement amended and restatedthe credit agreement entered into by Products Corporation in May 1997(the "1997 Credit Agreement"; the 2001 CreditAgreement and the 1997 Credit Agreement are sometimes referred to asthe "Credit Agreement"). On November 26,2001, prior to closing on the 2001 Credit Agreement, ProductsCorporation issued and sold in a private placement $363 in aggregateprincipal amount of 12% Senior Secured Notes due 2005 (the"Original 12% Notes"), receiving grossproceeds of $350.5 (see footnote (e) below) (the issuance of theOriginal 12% Notes and the 2001 Credit Agreement are referred toherein as the "2001 Debt ReductionTransactions"). Products Corporation used the proceedsfrom the Original 12% Notes and borrowings under the 2001 CreditAgreement to repay outstanding indebtedness under ProductsCorporation's 1997 Credit Agreement and to pay fees and expensesincurred in connection with the 2001 Debt Reduction Transactions, andthe balance was available for general corporate purposes. On June 21,2002, the 

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Original 12% Notes were exchanged fornew 12% Senior Secured Notes due 2005 which have substantiallyidentical terms as the Original 12% Notes (the"12% Senior Secured Notes"), exceptthat the 12% Senior Secured Notes are registered with theSecurities and Exchange Commission (the"Commission") under the Securities Act of1933 (as amended, the "Securities Act") andthe transfer restrictions and registration rights applicable to theOriginal 12% Notes do not apply to the 12% Senior SecuredNotes. (See Notes 9 and 19 for discussion of recent amendments to theCredit Agreement).

**(See "SubsequentEvents" for important information)**.

The 2001Credit Agreement, as of December 31, 2003, provides up to $247.5 andconsists of a $115.4 term loan facility (the "Term LoanFacility") and a $132.1 multi-currency revolving creditfacility (the "Multi-Currency Facility") (theTerm Loan Facility and the Multi-Currency Facility being referred to asthe "Credit Facilities"). The Multi-CurrencyFacility is available (i) to Products Corporation in revolving creditloans denominated in U.S. dollars, (ii) to Products Corporation instandby and commercial letters of credit denominated in U.S. dollars upto $50.0, $22.3 of which was issued but undrawn at December 31, 2003and (iii) to Products Corporation and certain of its internationalsubsidiaries designated from time to time in revolving credit loans andbankers' acceptances denominated in U.S. dollars and othercurrencies (the "Local Loans"). At December31, 2003 and 2002, the Company had $115.4 and $116.6, respectively,outstanding under the Term Loan Facility, and $124.2 ($22.3 of whichwas issued but undrawn letters of credit) and $131.8 ($25.3 of whichwas issued but undrawn letters of credit), respectively, outstandingunder the Multi-Currency Facility.

The Credit Facilities (otherthan loans in foreign currencies) bear interest as of December 31, 2003at a rate equal to, at Products Corporation's option, either (A)the Alternate Base Rate plus 4.25%; or (B) the Eurodollar Rateplus 5.25% (provided that as a result of the amendment to theCredit Agreement in January 2004 (the "2004 BankAmendment") such rate is currently either (A) theAlternate Base Rate plus 4.50%; or (B) the Eurodollar Rate plus5.50%). Loans in foreign currencies bear interest in certainlimited circumstances or if mutually acceptable to Products Corporationand the relevant foreign lenders at the Local Rate and otherwise at theEurocurrency Rate, in each case plus 5.25% (provided that as aresult of the 2004 Bank Amendment to the Credit Agreement such rate iscurrently 5.50%). Products Corporation pays to those lendershaving multi-currency commitments a commitment fee of 0.75% ofthe average daily unused portion of the Multi-Currency Facility, whichfee is payable quarterly in arrears. Under the Multi-Currency Facility,Products Corporation pays (i) to foreign lenders a fronting fee of0.25% per annum on the aggregate principal amount of specifiedLocal Loans (which fee is retained by the foreign lenders out of theportion of the Applicable Margin payable to such foreign lender), (ii)to foreign lenders an administrative fee of 0.25% per annum onthe aggregate principal amount of specified Local Loans, (iii) to themulti-currency lenders a letter of credit commission equal to (a) theApplicable Margin for Eurodollar Rate loans (adjusted for the term thatthe letter of credit is outstanding) times (b) the aggregate undrawnface amount of letters of credit and (c) to the issuing lender a letterof credit fronting fee of 0.25% per annum of the aggregateundrawn face amount of letters of credit (which fee is a portion of theApplicable Margin). Products Corporation also paid certain facility andother fees to the lenders and agents upon closing of the 2001 CreditAgreement. Prior to the termination date of the Credit Facilities, oneach November 30 (commencing November 30, 2002) Products Corporationshall repay $1.25 in aggregate principal amount of the Term LoanFacility. Products Corporation made its applicable installment paymentin November 2002 and November 2003, respectively. In addition, prior toits termination, the commitments under the Credit Facilities will bereduced by: (i) the net proceeds in excess of $10.0 each year receivedduring such year from sales of assets by Products Corporation or any ofits subsidiaries (and in excess of an additional $15.0 in the aggregateduring the term with respect to certain specified dispositions),subject to certain limited exceptions, (ii) certain proceeds from thesales of collateral security granted to the lenders, and (iii) the netproceeds from the issuance by Products Corporation or any of itssubsidiaries of certain additional debt. The 2001 Credit Agreement willterminate on May 30, 2005. The weighted average interest rates on theTerm Loan Facility and the Multi-Currency Facility were 8.25%and 8.26% at December 31, 2003, respectively, 7.75% and7.81% at December 31, 2002, respectively, and 7.75% and8.49% at December 31, 2001, respectively.

The CreditFacilities are supported by, among other things, guarantees fromRevlon, Inc. and, subject to certain limited exceptions, the domesticsubsidiaries of Products Corporation. The obligations of 

F-18

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Products Corporation under the CreditFacilities and the obligations under the aforementioned guarantees aresecured, on a first-priority basis (and therefore entitled to paymentout of the proceeds on any sale of the following collateral before the12% Senior Secured Notes, which are secured on a second-prioritybasis), subject to certain limited exceptions, primarily by (i) amortgage on Products Corporation's facility in Oxford, NorthCarolina; (ii) the capital stock of Products Corporation and itsdomestic subsidiaries and 66% of the capital stock of ProductsCorporation's and its domestic subsidiaries' first-tierforeign subsidiaries; (iii) domestic intellectual property and certainother domestic intangibles of Products Corporation and its domesticsubsidiaries; (iv) domestic inventory, accounts receivable, equipmentand certain investment property of Products Corporation and itsdomestic subsidiaries; and (v) the assets of certain foreign subsidiaryborrowers under the Multi-Currency Facility (to support theirborrowings only). The Credit Agreement provides that the liens on thestock and property referred to above may be shared from time to time,subject to certain limitations, on a first-priority basis, withspecified types of other obligations incurred or guaranteed by ProductsCorporation, such as interest rate hedging obligations and workingcapital lines, and on a second-priority basis with ProductsCorporation's obligations under the 12% Senior SecuredNotes.

The Credit Agreement contains various materialrestrictive covenants prohibiting Products Corporation from (i)incurring additional indebtedness or guarantees, with certainexceptions, (ii) making dividend, tax sharing and other payments orloans to Revlon, Inc. or other affiliates, with certain exceptions,including among others, permitting Products Corporation to paydividends and make distributions to Revlon, Inc., among other things,to enable Revlon, Inc. to pay expenses incidental to being a publicholding company, including, among other things, professional fees suchas legal and accounting fees, regulatory fees such as Commission filingfees and other miscellaneous expenses related to being a public holdingcompany, and, subject to certain limitations, to pay dividends or makedistributions in certain circumstances to finance the purchase byRevlon, Inc. of its Class A common stock, with a par value of $0.01 pershare ("Class A Common Stock"), in connectionwith the delivery of such common stock to grantees under the Revlon,Inc. Amended and Restated 1996 Stock Plan (as may be amended andrestated from time to time, the "Amended StockPlan"), (iii) creating liens or other encumbrances onProducts Corporation's or its domestic subsidiaries' assetsor revenues, granting negative pledges or selling or transferring anyof Products Corporation's or its domestic subsidiaries'assets except in the ordinary course of business, all subject tocertain limited exceptions, including among others, permitting ProductsCorporation to create liens to secure Products Corporations'obligations under the 12% Senior Secured Notes, (iv) withcertain exceptions, engaging in merger or acquisition transactions, (v)prepaying indebtedness and modifying the terms of certain indebtednessand specified material contractual obligations, subject to certainlimited exceptions, (vi) making investments, subject to certain limitedexceptions, and (vii) entering into transactions with affiliates ofProducts Corporation other than upon terms no less favorable toProducts Corporation or its subsidiaries than it would obtain in anarms'-length transaction. In addition to the foregoing, theCredit Agreement contains financial covenants requiring ProductsCorporation to maintain specified cumulative EBITDA levels and limitingthe leverage ratio of Products Corporation, which financial covenants,among the other amendments referred to in this Note 9 and Note 19, thebank lenders under the Credit Agreement waived for the four quartersended December 31, 2002 in an amendment to the Credit Agreement inFebruary 2003 (the "2003 Bank Amendment") andDecember 31, 2003 (and thereafter eliminated) and waived until January31, 2005 for the four quarters ended December 31, 2004 in connectionwith the 2004 Bank Amendment. In addition, the 2003 Bank Amendmentincreased the maximum limit on capital expenditures (as defined in theCredit Agreement) to $115 for 2003 and includes a minimum liquiditycovenant requiring Products Corporation to maintain a minimum of $20 inliquidity from all available sources at all times, which liquiditycovenant was extended through the maturity of the Credit Agreement inconnection with the 2004 Bank Amendment.

In connection with the2003 M&F Investments described below, and as a result of ProductsCorporation's operating results for the fourth quarter of 2002and the effect of the acceleration of the Company'simplementation of the stabilization and growth phase of its plan,Products Corporation entered into the 2003 Bank Amendment with its banklenders and secured waivers of compliance with certain covenants underthe Credit Agreement. In particular, EBITDA (as defined in the Credit

F-19

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Agreement) was $35.2 for the fourconsecutive fiscal quarters ended December 31, 2002, which was lessthan the minimum of $210 required under the EBITDA covenant of theCredit Agreement for that period and the Company's leverage ratiowas 5.09:1.00, which was in excess of the maximum ratio of 1.4:1.00permitted under the leverage ratio covenant of the Credit Agreement forthat period. Accordingly, the Company sought and secured waivers ofcompliance with these covenants for the four quarters ended December31, 2002 and, in light of the Company's expectation that thecontinued implementation of the stabilization and growth phase of theCompany's plan would affect the ability of Products Corporationto comply with these covenants during 2003, as part of the 2003 BankAmendment, the Company also secured an amendment to eliminate theEBITDA and leverage ratio covenants for the first three quarters of2003 and a waiver of compliance with such covenants for the fourquarters ending December 31, 2003 expiring on January 31, 2004.

The 2003 Bank Amendment to the Credit Agreement also included thesubstitution of a covenant requiring the Company to maintain a minimumof $20 of liquidity from specified sources at all times through January31, 2004 and certain other amendments to allow for the 2003 M&FInvestments and the implementation of the stabilization and growthphase of the Company's plan, including specific exceptions fromthe limitations under the indebtedness covenant to permit the 2003Mafco Loans and to exclude the proceeds from the 2003 M&FInvestments from the mandatory prepayment provisions of the CreditAgreement, and to increase the maximum limit on capital expenditures(as defined in the Credit Agreement) from $100 to $115 for 2003. The2003 Bank Amendment also increased the applicable margin on loans underthe Credit Agreement by 0.5%, the incremental cost of which tothe Company, assuming the Credit Agreement is fully drawn, was $1.1from February 5, 2003 through the end of 2003.

EBITDA (asdefined in the Credit Agreement) was $144.4 for the four consecutivefiscal quarters ended December 31, 2003, which was less than theminimum of $230 required under the EBITDA covenant of the CreditAgreement for that period and the Company's leverage ratio was1.66:1.00, which was in excess of the maximum ratio of 1.1:1.00permitted under the leverage ratio covenant of the Credit Agreement forthat period. Accordingly, the Company sought and on January 28, 2004secured the 2004 Bank Amendment which includes waivers of compliancewith these covenants for the four quarters ended December 31, 2003 and,in light of the Company's expectation that the continuedimplementation of the Company's plan would affect the ability ofProducts Corporation to comply with these covenants during 2004, theCompany also secured as part of the 2004 Bank Amendment an amendment toeliminate the EBITDA and leverage ratio covenants for the first threequarters of 2004 and a waiver of compliance with such covenants for thefour quarters ending December 31, 2004 expiring on January 31, 2005.The 2004 Bank Amendment to the Credit Agreement included certain otheramendments to allow for the continued implementation of, and refinementto, the Company's plan, including, among other things: (i)providing exceptions from the limitations under the indebtednesscovenant to permit the 2004 Mafco $125 million term loan (ashereinafter defined), (ii) permitting Products Corporation to borrow upto an additional $50 in working capital loans from MacAndrews Holdingsor its affiliates, if necessary, (iii) extending the maturity of theMafco $65 million line of credit (as hereinafter defined) until June30, 2005 and providing that as a condition to Products Corporationborrowing under such line from and after the effective date of the 2004Bank Amendment that at least $100 shall have been borrowed under the2004 Mafco $125 million term loan (as hereinafter defined), (iv)continuing the $20 million minimum liquidity covenant, (v) increasingthe applicable margin on loans under the Credit Agreement by0.25%, the incremental cost of which to the Company, assumingthe Credit Agreement is fully drawn, would be approximately $0.5 fromFebruary 1, 2004 through the end of 2004, and (vi) permitting Revlon,Inc. to guarantee certain classes of Products Corporation'spublic indebtedness, if necessary, to permit the Debt ReductionTransactions (as hereinafter defined).**(See "SubsequentEvents" for important information)**.

The eventsof default under the Credit Agreement include a Change of Control (asdefined in the Credit Agreement) of Products Corporation and othercustomary events of default for such types of agreements. Among suchcustomary events of default under the Credit Agreement is across-default provision which provides that it is an event of defaultunder the Credit Agreement if Products Corporation or any of itssubsidiaries (as defined under the Credit Agreement) (i) defaults inthe payment of certain indebtedness when due (whether at maturity or byacceleration) in excess of $5.0 in aggregate principal amount or (ii)defaults in the observance or performance of any other agreement orcondition 

F-20

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relating to such debt, provided that theamount of debt involved is in excess of $5.0 in aggregate principalamount, or any other event occurs, the effect of such default or otherevent would cause or permit the holders of such debt to acceleratepayment.

Upon entering into the 2001 Credit Agreement, theCompany recorded a charge of $3.6 for associated costs.

(b) The8 1/8% Senior Notes due 2006 (the"8 1/8% Senior Notes")are senior unsecured obligations of Products Corporation and rank paripassu in right of payment with all existing and future Senior Debt (asdefined in the indenture relating to the 8 1/8%Senior Notes (the "8 1/8% SeniorNotes Indenture")) of Products Corporation, including the12% Senior Secured Notes, 9% Senior Notes and theindebtedness under the Credit Agreement, the 2003 Mafco Loans, and the2004 Mafco $125 million term loan (each as hereinafter defined), andare senior to the 8 5/8% Senior SubordinatedNotes and to all future subordinated indebtedness of ProductsCorporation. The 8 1/8% Senior Notes areeffectively subordinated to the outstanding indebtedness and otherliabilities of Products Corporation's subsidiaries. Interest ispayable on February 1 and August 1.

The8 1/8% Senior Notes may be redeemed at theoption of Products Corporation in whole or from time to time in part atany time on or after February 1, 2002 at the redemption prices setforth in the 8  1/8% Senior NotesIndenture, plus accrued and unpaid interest, if any, to the date ofredemption.

Upon a Change of Control (as defined in the8 1/8% Senior Notes Indenture), ProductsCorporation will have the option to redeem the8 1/8% Senior Notes in whole at a redemptionprice equal to the principal amount thereof, plus accrued and unpaidinterest, if any, thereon to the date of redemption, plus theApplicable Premium (as defined in the 8 1/8%Senior Notes Indenture) and, subject to certain conditions, each holderof the 8 1/8% Senior Notes will have the rightto require Products Corporation to repurchase all or a portion of suchholder's 8 1/8% Senior Notes at a priceequal to 101% of the principal amount thereof, plus accrued andunpaid interest, if any, thereon to the date of repurchase.

The8 1/8% Senior Notes Indenture contains covenantsthat, among other things, limit (i) the issuance of additional debt andredeemable stock by Products Corporation, (ii) the incurrence of liens,(iii) the issuance of debt and preferred stock by ProductsCorporation's subsidiaries, (iv) the payment of dividends oncapital stock of Products Corporation and its subsidiaries and theredemption of capital stock of Products Corporation and certainsubordinated obligations, (v) the sale of assets and subsidiary stock,(vi) transactions with affiliates and (vii) consolidations, mergers andtransfers of all or substantially all Products Corporation'sassets. The 8 1/8% Senior Notes Indenture alsoprohibits certain restrictions on distributions from subsidiaries. Allof these limitations and prohibitions, however, are subject to a numberof important qualifications.

(c) The 9% Senior Notes due2006 (the "9% Senior Notes") aresenior unsecured obligations of Products Corporation and rank paripassu in right of payment with all existing and future Senior Debt (asdefined in the indenture relating to the 9% Senior Notes (the"9% Senior Notes Indenture")) ofProducts Corporation, including the 12% Senior Secured Notes,8 1/8% Senior Notes and the indebtedness underthe Credit Agreement, the 2003 Mafco Loans and the 2004 Mafco $125million term loan, and are senior to the 8 5/8%Senior Subordinated Notes and to all future subordinated indebtednessof Products Corporation. The 9% Senior Notes are effectivelysubordinated to outstanding indebtedness and other liabilities ofProducts Corporation's subsidiaries. Interest is payable on May 1and November 1.

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

Upon aChange 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 principalamount thereof, plus accrued and unpaid interest, if any, thereon tothe date of redemption, plus the Applicable Premium (as defined in the9% Senior Notes Indenture) and, subject to certain conditions,each holder of the 9% Senior Notes will have the right torequire Products Corporation to repurchase all or a portion of suchholder's 9% Senior Notes at a price equal to 101%of the principal amount thereof, plus accrued and unpaid interest, ifany, thereon to the date of repurchase.

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The 9% Senior Notes Indenturecontains covenants that, among other things, limit (i) the issuance ofadditional debt and redeemable stock by Products Corporation, (ii) theincurrence of liens, (iii) the issuance of debt and preferred stock byProducts Corporation's subsidiaries, (iv) the payment ofdividends on capital stock of Products Corporation and its subsidiariesand the redemption of capital stock of Products Corporation and certainsubordinated obligations, (v) the sale of assets and subsidiary stock,(vi) transactions with affiliates and (vii) consolidations, mergers andtransfers of all or substantially all Products Corporation'sassets. The 9% Senior Notes Indenture also prohibits certainrestrictions on distributions from subsidiaries. All of theselimitations and prohibitions, however, are subject to a number ofimportant qualifications.

(d) The 8 5/8%Senior Subordinated Notes due 2008 (the"8 5/8% Senior SubordinatedNotes") are general unsecured obligations of ProductsCorporation and are (i) subordinate in right of payment to all existingand future Senior Debt (as defined in the indenture relating to the8 5/8% Senior Subordinated Notes (the"8 5/8% Senior Subordinated NotesIndenture")) of Products Corporation, including the12% Senior Secured Notes, 9% Senior Notes, the8 1/8% Senior Notes and the indebtedness underthe Credit Agreement, the 2003 Mafco Loans, and the 2004 Mafco $125million term loan, (ii) pari passu in right of payment with all futuresenior subordinated debt, if any, of Products Corporation and (iii)senior in right of payment to all future subordinated debt, if any, ofProducts Corporation. The 8 5/8% SeniorSubordinated Notes are effectively subordinated to the outstandingindebtedness and other liabilities of Products Corporation'ssubsidiaries. Interest is payable on February 1 and August 1.

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

Upon a Change of Control (as definedin the 8 5/8% Senior Subordinated NotesIndenture), Products Corporation will have the option to redeem the8 5/8% Senior Subordinated Notes in whole at aredemption price equal to the principal amount thereof, plus accruedand unpaid interest, if any, thereon to the date of redemption, plusthe Applicable Premium (as defined in the 8 5/8%Senior Subordinated Notes Indenture) and, subject to certainconditions, each holder of the 8 5/8% SeniorSubordinated Notes will have the right to require Products Corporationto repurchase all or a portion of such holder's8 5/8% Senior Subordinated Notes at a priceequal to 101% of the principal amount thereof, plus accrued andunpaid interest, if any, thereon to the date of repurchase.

The8 5/8% Senior Subordinated Notes Indenturecontains covenants that, among other things, limit (i) the issuance ofadditional debt and redeemable stock by Products Corporation, (ii) theincurrence of liens, (iii) the issuance of debt and preferred stock byProducts Corporation's subsidiaries, (iv) the payment ofdividends on capital stock of Products Corporation and its subsidiariesand the redemption of capital stock of Products Corporation, (v) thesale of assets and subsidiary stock, (vi) transactions with affiliates,(vii) consolidations, mergers and transfers of all or substantially allof Products Corporation's assets and (viii) the issuance ofadditional subordinated debt that is senior in right of payment to the8 5/8% Senior Subordinated Notes. The8 5/8% Senior Subordinated Notes Indenture alsoprohibits certain restrictions on distributions from subsidiaries. Allof these limitations and prohibitions, however, are subject to a numberof important qualifications.

(e) On November 26, 2001, prior toclosing on the 2001 Credit Agreement, Products Corporation issued andsold $363.0 in aggregate principal amount of Original 12% Notesin a private placement receiving gross proceeds of $350.5. Theeffective interest rate on the 12% Senior Secured Notes is13.125%. Products Corporation used the proceeds from theOriginal 12% Notes and borrowings under the 2001 CreditAgreement to repay outstanding indebtedness under ProductsCorporation's 1997 Credit Agreement and to pay fees and expensesincurred in connection with the 2001 Debt Reduction Transactions, andthe balance was available for general corporate purposes. On June 21,2002, the Original 12% Notes were exchanged for the new12% Senior Secured Notes which have substantially identicalterms as the Original 12% Notes, except that the 12%Senior Secured Notes are registered with the Commission under theSecurities Act and the transfer restrictions and registration rightsapplicable to the Original 12% Notes do not apply to the12% Senior Secured Notes.

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The 12% Senior Secured Notes wereissued pursuant to an Indenture, dated as of November 26, 2001 (the"12% Notes Indenture"), among ProductsCorporation, the guarantors party thereto, including Revlon, Inc. asparent guarantor, and Wilmington Trust Company, as trustee. The12% Senior Secured Notes are supported by guarantees fromRevlon, Inc. and, subject to certain limited exceptions, ProductsCorporation's domestic subsidiaries. The obligations of ProductsCorporation under the 12% Senior Secured Notes and theobligations under the aforementioned guarantees are secured, on asecond-priority basis, subject to certain limited exceptions, primarilyby (i) a mortgage on Products Corporation's facility in Oxford,North Carolina; (ii) the capital stock of Products Corporation and itsdomestic subsidiaries and 66% of the capital stock of ProductsCorporation's and its domestic subsidiaries' first-tierforeign subsidiaries; (iii) domestic intellectual property and certainother domestic intangibles of Products Corporation and its domesticsubsidiaries; and (iv) domestic inventory, accounts receivable,equipment and certain investment property of Products Corporation andits domestic subsidiaries. Such liens are subject to certainlimitations, which among other things, limit the ability of holders ofsecond-priority liens from exercising any remedies against thecollateral while the Credit Agreement or any other first-priority lienremains in effect.

The 12% Senior Secured Notes aresenior secured obligations of Products Corporation and rank pari passuin right of payment with all existing and future Senior Debt (asdefined in the 12% Senior Secured Notes Indenture) including the8 1/8% Senior Notes, the 9% Senior Notesand the indebtedness under the Credit Agreement, the 2003 Mafco Loans,and the 2004 Mafco $125 million term loan, and are senior to the8 5/8% Senior Subordinated Notes and all futuresubordinated indebtedness of Products Corporation. The 12%Senior Secured Notes are effectively subordinated to the outstandingindebtedness and other liabilities of Products Corporation'ssubsidiaries. 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 theoption of Products Corporation in whole or in part at any time at aredemption price equal to the principal amount thereof, plus accruedand unpaid interest, if any to the date of redemption, plus theApplicable Premium (as defined in the 12% Senior Secured NotesIndenture).

Upon a Change of Control (as defined in the12% Senior Secured Notes Indenture), subject to certainconditions, each holder of the 12% Senior Secured Notes willhave the right to require Products Corporation to repurchase all or aportion of such holder's 12% Senior Secured Notes at aprice equal to 101% of the principal amount thereof, plusaccrued and unpaid interest, if any, thereon to the date ofrepurchase.

The 12% Senior Secured Notes Indenturecontains covenants that, among other things, limit (i) the issuance ofadditional debt and redeemable stock by Products Corporation, (ii) theincurrence of liens, (iii) the issuance of debt and preferred stock byProducts Corporation's subsidiaries, (iv) the payment ofdividends on capital stock of Products Corporation and its subsidiariesand the redemption of capital stock of Products Corporation and certainsubordinated obligations, (v) the sale of assets and subsidiary stock,(vi) transactions with affiliates and (vii) consolidations, mergers andtransfers of all or substantially all Products Corporation'sassets. The 12% Senior Secured Notes Indenture also prohibitscertain restrictions on distributions from subsidiaries. All of theselimitations and prohibitions, however, are subject to a number ofimportant qualifications.

The 12% Senior Secured NotesIndenture, 8 1/8% Senior Notes Indenture, the8 5/8% Senior Subordinated Notes Indenture andthe 9% Senior Notes Indenture contain customary events ofdefault for debt instruments of such type.

The8 1/8% Senior Notes Indenture, the 9%Senior Notes Indenture, the 8 5/8% SeniorSubordinated Notes Indenture and the 12% Senior Secured NotesIndenture each include a cross acceleration provision which providesthat it shall be an event of default under each such indenture if anydebt (as defined in each such indenture) of Products Corporation or anyof 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 afterfinal maturity or is accelerated by the holders of such debt because ofa default and the total principal amount of the portion of such debtthat is unpaid or accelerated exceeds $25.0 and such default continuesfor 10 days after notice from the trustee under each such indenture. If

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any such event of default occurs, thetrustee under each such indenture or the holders of at least 25%in principal amount of the outstanding notes under each such indenturemay declare all such notes to be due and payable immediately, providedthat the holders of a majority in aggregate principal amount of theoutstanding notes under each such indenture may, by notice to thetrustee, waive any such default or event of default and itsconsequences under each such indenture.

(f) During 2003,MacAndrews Holdings made available a $100 million term loan to ProductsCorporation (the "Mafco $100 million termloan"). The Mafco $100 million term loan has a finalmaturity date of December 1, 2005 and interest on such loan of12.0% is not payable in cash, but accrues and is added to theprincipal amount each quarter and will be paid in full at finalmaturity. At December 31, 2003, the Company had $106.6 outstandingunder the Mafco $100 million term loan (including accrued interest of$6.6).**(See "Subsequent Events" forimportant information concerning the Mafco $100 million termloan)**.

Additionally, MacAndrews Holdings also providedProducts Corporation with an additional $40 line of credit during 2003,which amount was originally to increase to $65 on January 1, 2004 (the"Mafco $65 million line of credit") (theMafco $100 million term loan and the Mafco $65 million line of credit,each as amended, are referred to as the "2003 MafcoLoans" and Revlon, Inc.'s Rights Offering and the2003 Mafco Loans are referred to as the "2003 M&FInvestments") and which was originally to be available toProducts Corporation through December 31, 2004, provided that the Mafco$100 million term loan is fully drawn and Revlon, Inc. had consummatedits Rights Offering. The Mafco $65 million line of credit bearsinterest 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 onEurodollar loans under Products Corporation's Credit Agreement(which rate was 8.00% as of December 31, 2003 and would be8.25% after the 2004 Bank Amendment). However, in connectionwith the recent 2004 Bank Amendment of Products Corporation'sCredit Agreement, Products Corporation and MacAndrews Holdings agreedto extend the maturity of the Mafco $65 million line of credit to June30, 2005 and to subject the availability of funds under such line ofcredit to the condition that an aggregate principal amount of $100 bedrawn under the 2004 Mafco $125 million term loan. At December 31,2003, the Company had $15.5 outstanding under the Mafco $65 millionline of credit.

In December 2003, Revlon, Inc. announced thatits Board of Directors approved two loans from MacAndrews Holdings toprovide up to $100 million (the "2004 M&FLoan") and an additional $25 million (the"$25 million M&F Loan"), if needed, tohelp fund its continued implementation and refinement of theCompany's plan. Revlon, Inc. also announced in December 2003 thatit had begun exploring the Debt Reduction Transactions.**(See"Subsequent Events" for important informationconcerning the Debt Reduction Transactions)**. The 2004 M&F Loanand $25 million M&F Loan were consolidated into one term loanagreement (hereinafter referred to as the "2004 Mafco $125million term loan"). The 2004 Mafco $125 million term loanis a senior unsecured term loan at an interest rate of 12% perannum and which is on substantially the same terms as the Mafco $100million term loan (as hereinafter defined) provided by MacAndrews &Forbes earlier in 2003, including that interest on such loans is notpayable in cash, but will accrue and be added to the principal amounteach 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 ofthe Company prior to December 1, 2005. **(See "SubsequentEvents" for important information concerning the 2004Mafco $125 million term loan)**.

During 1992, Holdings made anadvance of $25.0 to Products Corporation, evidenced by subordinatednoninterest-bearing demand notes. The notes were subsequently adjustedby offsets and additional amounts loaned by Holdings to ProductsCorporation. At December 31, 2003, the balance of $24.1 is evidenced bynoninterest-bearing promissory notes payable to Holdings that aresubordinated to Products Corporation's obligations under theCredit Agreement.

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

The Companyexpects that operating revenues, cash on hand, and funds available forborrowing under the Credit Agreement, the Mafco $65 million line ofcredit, and the 2004 Mafco $125 million term loan and other permittedlines of credit will be sufficient to enable the Company to cover itsoperating 

F-24

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expenses, including cash requirements inconnection with the Company's operations, the continuedimplementation of, and refinement to, the Company's plan, cashrequirements in connection with the Company's restructuringprograms referred to above and the Company's debt servicerequirements for 2004. The U.S. mass-market color cosmetics categoryduring 2003 was softer than expected. Despite this softness in the U.S.mass-market color cosmetics category, based upon the Company'sbelief that its continued implementation of its plan is provingeffective, the Company intends to continue to support its plan,including for brand support. To help fund the costs and expenses of thecontinued implementation of the Company's plan, in July 2003,MacAndrews Holdings agreed to make available to the Company in 2003 thefull $65 under the Mafco $65 million line of credit, $25 of which wasscheduled to become available on January 1, 2004. Additionally,MacAndrews & Forbes has provided the Company with the 2004 Mafco$125 million term loan, which is on terms that are substantially thesame as the Mafco $100 million term loan. The Mafco $65 million line ofcredit and the 2004 Mafco $125 million term loan are intended tocontinue to help fund the continued implementation of, and refinementto, the Company's plan and to decrease the risk that wouldotherwise exist if the Company were to fail to meet its debt andongoing obligations as they become due in 2004. However, there can beno assurance that such funds will be sufficient to meet theCompany's cash requirements on a consolidated basis. If theCompany's anticipated level of revenue growth is not achievedbecause, for example, of decreased consumer spending in response toweak economic conditions or weakness in the cosmetics category,increased competition from the Company's competitors or theCompany's marketing plans are not as successful as anticipated,or if the Company's expenses associated with the continuedimplementation of, and refinement to, the Company's plan exceedthe anticipated level of expenses, the Company's current sourcesof funds may be insufficient to meet the Company's cashrequirements. Additionally, in the event of a decrease in demand forthe Company's products or reduced sales or lack of increases indemand and sales as a result of the continued implementation of, andrefinement to, the Company's plan, such development, ifsignificant, could reduce the Company's operating revenues andcould adversely affect its ability to achieve certain financialcovenants under the Credit Agreement and in such event the Companycould be required to take measures, including reducing discretionaryspending. If the Company is unable to satisfy such cash requirementsfrom these sources, the Company could be required to adopt one or morealternatives, such as delaying the implementation of or revisingaspects of its plan, reducing or delaying purchases of wall displays oradvertising or promotional expenses, reducing or delaying capitalspending, delaying, reducing or revising restructuring programs,restructuring indebtedness, selling assets or operations, seekingadditional capital contributions or loans from MacAndrews & Forbes,Revlon, Inc. or other affiliates and/or third parties, or reducingother discretionary spending. The Company has substantial debt maturingin 2005, which will require refinancing, consisting of $246.3 (assumingthe maximum amount is borrowed) under the Credit Agreement and $363.0of 12% Senior Secured Notes, as well as any amounts borrowedunder the Mafco $65 million line of credit and the 2004 Mafco $125million term loan. **(See "SubsequentEvents" for important information)**.

The Companywas not in compliance with the EBITDA and leverage ratio covenants atDecember  31, 2003. The Company expects that it will need to seeka further amendment to the Credit Agreement or a waiver of the EBITDAand leverage ratio covenants under the Credit Agreement prior to theexpiration of the existing waiver on January 31, 2005 because theCompany does not expect that its operating results, including aftergiving effect to various actions under of the Company's plan,will allow it to satisfy those covenants for the four consecutivefiscal quarters ending December 31, 2004. The minimum EBITDA requiredto be maintained by the Company under the Credit Agreement was $230 foreach of the four consecutive fiscal quarters ending on December 31,2003 (which covenant was waived through January 31, 2004 and thereaftereliminated) and $250 for any four consecutive fiscal quarters endingDecember 31, 2004 and thereafter (which covenant was waived throughJanuary 31, 2005). The leverage ratio covenant under the CreditAgreement will permit a maximum ratio of 1.10:1.00 for any fourconsecutive fiscal quarters ending on or after December 31, 2003 (whichlimit was eliminated for the four quarters ending March 31, 2004, June30, 2004 and September 30, 2004 and waived through January 31, 2005 forthe four fiscal quarters ending December 31, 2004). In addition, aftergiving effect to the 2004 Bank Amendment, the Credit Agreement alsocontains a $20 minimum liquidity covenant. While the Company expectsthat its bank lenders will consent to such amendment or waiver, therecan be no assurance that they will or that they will do so on termsthat are favorable to the Company. If the 

F-25

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Company is unable to obtain such amendmentor waiver, it could be required to refinance the Credit Agreement orrepay it with proceeds from the sale of assets or operations, oradditional capital contributions and/or loans from MacAndrews &Forbes, Revlon, Inc. or other affiliates and/or third parties. In theevent that the Company were unable to obtain such a waiver or amendmentand it was not able to refinance or repay the Credit Agreement, itsinability to meet the financial covenants for the four consecutivefiscal quarters ending December 31, 2004 would constitute an event ofdefault under the Company's Credit Agreement, which would permitthe bank lenders to accelerate the Credit Agreement, which in turnwould constitute an event of default under the indentures governing theCompany's debt if the amount accelerated exceeds $25.0 and suchdefault remains uncured within 10 days of notice from the trustee underthe applicable indenture. Further, the lenders under theCompany's Credit Agreement could proceed against the collateralsecuring that indebtedness. If these lenders were to foreclose uponthis collateral, which includes the capital stock of the Company, thevalue of Revlon, Inc.'s Common Stock would be substantiallydiminished or eliminated.

There can be no assurance that theCompany would be able to take any of the actions referred to in thepreceding two paragraphs because of a variety of commercial or marketfactors or constraints in the Company's debt instruments,including, for example, the Company's inability to reachagreement with its bank lenders on refinancing terms that areacceptable to the Company before the waiver of its financial covenantsexpires on January 31, 2005, market conditions being unfavorable for anequity or debt offering, or that the transactions may not be permittedunder the terms of the Company's various debt instruments then ineffect, because of restrictions on the incurrence of debt, incurrenceof liens, asset dispositions and related party transactions. Inaddition, such actions, if taken, may not enable the Company to satisfyits cash requirements if the actions do not generate a sufficientamount of additional capital.

The terms of the Credit Agreement,the 2003 Mafco Loans, the 2004 Mafco $125 million term loan, the12% Senior Secured Notes, the 8 5/8%Senior Subordinated Notes, the 8 1/8% SeniorNotes and the 9% Senior Notes generally restrict ProductsCorporation from paying dividends or making distributions, except thatProducts Corporation is permitted to pay dividends and makedistributions to Revlon, Inc., among other things, to enable Revlon,Inc. to pay expenses incidental to being a public holding company,including, among other things, professional fees such as legal andaccounting fees, regulatory fees such as Commission filing fees andother miscellaneous expenses related to being a public holding companyand, subject to certain limitations, to pay dividends or makedistributions in certain circumstances to finance the purchase byRevlon, Inc. of its Class A Common Stock in connection with thedelivery of such Class A Common Stock to grantees under the AmendedStock Plan.

10.    Guarantor Condensed ConsolidatingFinancial Data

Products Corporation's 12% SeniorSecured Notes are jointly and severally, fully and unconditionallyguaranteed by the domestic subsidiaries of Products Corporation thatguarantee Products Corporation's 2001 Credit Agreement (the"Guarantor Subsidiaries") (subsidiaries ofProducts Corporation that do not guarantee the 12% SeniorSecured Notes are referred to as the "Non-GuarantorSubsidiaries"). The Supplemental Guarantor CondensedConsolidating Financial Data presented below presents the balancesheets, statements of operations and statements of cash flow data (i)for Products Corporation and the Guarantor Subsidiaries and theNon-Guarantor Subsidiaries on a consolidated basis (which is derivedfrom Products Corporation's historical reported financialinformation); (ii) for Products Corporation as the "ParentCompany," alone (accounting for its Guarantor Subsidiariesand the Non-Guarantor Subsidiaries on an equity basis under which theinvestments are recorded by each entity owning a portion of anotherentity at cost, adjusted for the applicable share of thesubsidiary's cumulative results of operations, capitalcontributions and distributions, and other equity changes); (iii) forthe Guarantor Subsidiaries alone; and (iv) for the Non-GuarantorSubsidiaries alone. Additionally, Products Corporation's12% Senior Secured Notes are fully and unconditionallyguaranteed by Revlon, Inc. The audited consolidating condensed balancesheets, the audited consolidating condensed statements of operationsand the audited consolidating condensed statements of cash flow forRevlon, Inc. have not been included in the accompanying SupplementalGuarantor Condensed Consolidating Financial Data as such information isnot materially different from those of ProductsCorporation.

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CondensedConsolidating Balance Sheets As of December 31, 2003 (dollarsin millions)

|                                                       |  |              |          |              |  |               |          |                       |  |                            |          |         |  |        |        |         |  |        |       |        |  |  |
|-------------------------------------------------------|--|--------------|----------|--------------|--|---------------|----------|-----------------------|--|----------------------------|----------|---------|--|--------|--------|---------|--|--------|-------|--------|--|--|
| ASSETS                                                |  | Consolidated |          | Eliminations |  | ParentCompany |          | GuarantorSubsidiaries |  | Non-Guarantor Subsidiaries |
| Current assets                                        |  | $            | 428.3    |         |  | $             | —  |                  |  | $                          | 211.1    |    |  | $      | 31.1   |    |  | $      | 186.1 |   |
| Intercompany receivables                              |  |         | —  |         |  |          | (1,964.1 | )                |  |                       | 1,225.4  |    |  |   | 532.9  |    |  |   | 205.8 |   |
| Investment in subsidiaries                            |  |         | —  |         |  |          | 270.7    |                  |  |                       | (249.4   | )  |  |   | (86.3  | )  |  |   | 65.0  |   |
| Property,plant and equipment, net                     |  |         | 132.1    |         |  |          | —  |                  |  |                       | 113.3    |    |  |   | 3.8    |    |  |   | 15.0  |   |
| Otherassets                                           |  |         | 144.2    |         |  |          | —  |                  |  |                       | 116.4    |    |  |   | 8.1    |    |  |   | 19.7  |   |
| Goodwill,net                                          |  |         | 186.1    |         |  |          | —  |                  |  |                       | 156.6    |    |  |   | 2.1    |    |  |   | 27.4  |   |
| Totalassets                                           |  | $            | 890.7    |         |  | $             | (1,693.4 | )                |  | $                          | 1,573.4  |    |  | $      | 491.7  |    |  | $      | 519.0 |   |
| **LIABILITIESAND STOCKHOLDER'S DEFICIENCY**           |  |
| Currentliabilities                                    |  | $            | 447.4    |         |  | $             | —  |                  |  | $                          | 301.6    |    |  | $      | 28.9   |    |  | $      | 116.9 |   |
| Intercompanypayables                                  |  |         | —  |         |  |          | (1,964.1 | )                |  |                       | 859.5    |    |  |   | 748.1  |    |  |   | 356.5 |   |
| Long-termdebt                                         |  |         | 1,869.5  |         |  |          | —  |                  |  |                       | 1,866.5  |    |  |   | 1.7    |    |  |   | 1.3   |   |
| Other long-termliabilities                            |  |         | 301.0    |         |  |          | —  |                  |  |                       | 273.0    |    |  |   | 20.6   |    |  |   | 7.4   |   |
| Totalliabilities                                      |  |         | 2,617.9  |         |  |          | (1,964.1 | )                |  |                       | 3,300.6  |    |  |   | 799.3  |    |  |   | 482.1 |   |
| Stockholder's(deficiency) equity                      |  |         | (1,727.2 | )       |  |          | 270.7    |                  |  |                       | (1,727.2 | )  |  |   | (307.6 | )  |  |   | 36.9  |   |
| Totalliabilities and stockholder's (deficiency)equity |  | $            | 890.7    |         |  | $             | (1,693.4 | )                |  | $                          | 1,573.4  |    |  | $      | 491.7  |    |  | $      | 519.0 |   |
|                                                       |

Condensed Consolidating Statement ofOperations For the Year Ended December 31, 2003 (dollars inmillions)

|                                             |  |              |         |              |  |               |         |                        |  |                            |        |         |  |        |       |         |  |        |       |         |  |  |
|---------------------------------------------|--|--------------|---------|--------------|--|---------------|---------|------------------------|--|----------------------------|--------|---------|--|--------|-------|---------|--|--------|-------|---------|--|--|
|                                        |  | Consolidated |         | Eliminations |  | ParentCompany |         | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
| Netsales                                    |  | $            | 1,299.3 |         |  | $             | (117.7  | )                 |  | $                          | 818.4  |    |  | $      | 178.3 |    |  | $      | 420.3 |    |
| Cost ofsales                                |  |         | 501.1   |         |  |          | (117.7  | )                 |  |                       | 288.6  |    |  |   | 142.7 |    |  |   | 187.5 |    |
| Gross profit                                |  |         | 798.2   |         |  |          | — |                   |  |                       | 529.8  |    |  |   | 35.6  |    |  |   | 232.8 |    |
| Selling,general and administrative expenses |  |         | 769.7   |         |  |          | — |                   |  |                       | 530.7  |    |  |   | 39.2  |    |  |   | 199.8 |    |
| Restructuring costs and other,net           |  |         | 6.0     |         |  |          | — |                   |  |                       | 0.9    |    |  |   | 3.5   |    |  |   | 1.6   |    |
| Operating income(loss)                      |  |         | 22.5    |         |  |          | — |                   |  |                       | (1.8   | )  |  |   | (7.1  | )  |  |   | 31.4  |    |
| Other expenses(income):                     |  |
| Interest expense,net                        |  |         | 171.8   |         |  |          | — |                   |  |                       | 171.3  |    |  |   | 0.4   |    |  |   | 0.1   |    |
| Miscellaneous, net                          |  |         | 4.4     |         |  |          | — |                   |  |                       | (22.2  | )  |  |   | (14.6 | )  |  |   | 41.2  |    |
| Equity in earnings ofsubsidiaries           |  |         | — |         |  |          | (26.2   | )                 |  |                       | 9.7    |    |  |   | 23.0  |    |  |   | (6.5  | )  |
| Other expenses,net                          |  |         | 176.2   |         |  |          | (26.2   | )                 |  |                       | 158.8  |    |  |   | 8.8   |    |  |   | 34.8  |    |
| Loss before incometaxes                     |  |         | (153.7  | )       |  |          | 26.2    |                   |  |                       | (160.6 | )  |  |   | (15.9 | )  |  |   | (3.4  | )  |
| Provision (benefit) for incometaxes         |  |         | 0.3     |         |  |          | — |                   |  |                       | (6.6   | )  |  |   | 2.5   |    |  |   | 4.4   |    |
| Netloss                                     |  | $            | (154.0  | )       |  | $             | 26.2    |                   |  | $                          | (154.0 | )  |  | $      | (18.4 | )  |  | $      | (7.8  | )  |
|                                             |

F-27

----

Condensed Consolidating Statement of CashFlow For the Year Ended December 31, 2003 (dollars inmillions)

|                                                                  |  |              |        |              |  |               |                                 |                        |  |                            |         |         |  |        |         |         |  |        |         |         |  |  |
|------------------------------------------------------------------|--|--------------|--------|--------------|--|---------------|---------------------------------|------------------------|--|----------------------------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                             |  | Consolidated |        | Eliminations |  | ParentCompany |                                 | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
| **CASH FLOWS FROM OPERATINGACTIVITIES:**                         |  |
| Net cash (used for) provided byoperatingactivities               |  | $            | (166.4 | )       |  | $             | —                         |                   |  | $                          | (166.9  | )  |  | $      | 5.5     |    |  | $      | (5.0    | )  |
| **CASH FLOWS FROM INVESTINGACTIVITIES:**                         |  |
| Capitalexpenditures                                              |  |         | (28.6  | )       |  |          | —                         |                   |  |                       | (23.8   | )  |  |   | (2.5    | )  |  |   | (2.3    | )  |
| Proceedsfrom the sale of brand and certainassets                 |  |         | 5.3    |         |  |          | —                         |                   |  |                       | — |    |  |   | — |    |  |   | 5.3     |    |
| Net cash(used for) provided by investingactivities               |  |         | (23.3  | )       |  |          | —                         |                   |  |                       | (23.8   | )  |  |   | (2.5    | )  |  |   | 3.0     |    |
| **CASH FLOWS FROM FINANCINGACTIVITIES:**                         |  |
| Net decrease in short-termborrowings – third parties       |  |         | (1.6   | )       |  |          | —                         |                   |  |                       | — |    |  |   | (0.8    | )  |  |   | (0.8    | )  |
| Proceedsfrom the issuance of long-term debt – thirdparties |  |         | 233.1  |         |  |          | —                         |                   |  |                       | 223.8   |    |  |   | 7.9     |    |  |   | 1.4     |    |
| Repayment of long-term debt – thirdparties                 |  |         | (239.3 | )       |  |          | —                         |                   |  |                       | (225.3  | )  |  |   | (13.0   | )  |  |   | (1.0    | )  |
| Proceedsfrom the issuance of long-term debt –affiliates    |  |         | 178.1  |         |  |          | —                         |                   |  |                       | 178.1   |    |  |   | — |    |  |   | — |    |
| Repayment of long-termdebt – affiliates                    |  |         | (62.6  | )       |  |          | —                         |                   |  |                       | (62.6   | )  |  |   | — |    |  |   | — |    |
| Capitalcontribution from direct parent                           |  |         | 46.9   |         |  |          | —                         |                   |  |                       | 46.9    |    |  |   | — |    |  |   | — |    |
| Paymentof financingcosts                                         |  |         | (3.5   | )       |  |          | —                         |                   |  |                       | (3.5    | )  |  |   | — |    |  |   | — |    |
| Net cashprovided by (used for) financingactivities               |  |         | 151.1  |         |  |          | —                         |                   |  |                       | 157.4   |    |  |   | (5.9    | )  |  |   | (0.4    | )  |
| Effect ofexchange rate changes on cash and cashequivalents       |  |         | 9.3    |         |  |          | —                         |                   |  |                       | 0.3     |    |  |   | 0.1     |    |  |   | 8.9     |    |
| Net decrease in cash andcashequivalents                          |  |         | (29.3  | )       |  |          | —                         |                   |  |                       | (33.0   | )  |  |   | (2.8    | )  |  |   | 6.5     |    |
| Cashand cash equivalents at beginning ofperiod                   |  |         | 85.8   |         |  |          | —                         |                   |  |                       | 28.1    |    |  |   | 7.8     |    |  |   | 49.9    |    |
| Cashand cash equivalents at end ofperiod                         |  | $            | 56.5   |         |  | $             |     — |                   |  | $                          | (4.9    | )  |  | $      | 5.0     |    |  | $      | 56.4    |    |
|                                                                  |

CondensedConsolidating Balance Sheets As of December 31, 2002 (dollarsinmillions)

|                                                       |  |              |          |              |  |               |                                 |                        |  |                            |          |         |  |        |        |         |  |        |                               |        |  |  |
|-------------------------------------------------------|--|--------------|----------|--------------|--|---------------|---------------------------------|------------------------|--|----------------------------|----------|---------|--|--------|--------|---------|--|--------|-------------------------------|--------|--|--|
| ASSETS                                                |  | Consolidated |          | Eliminations |  | ParentCompany |                                 | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
| Current assets                                        |  | $            | 478.7    |         |  | $             |     — |                   |  | $                          | 256.5    |    |  | $      | 35.8   |    |  | $      | 186.4                         |   |
| Intercompanyreceivables                               |  |         | —  |         |  |          | (1,526.4                        | )                 |  |                       | 850.7    |    |  |   | 471.5  |    |  |   | 204.2                         |   |
| Investment insubsidiaries                             |  |         | —  |         |  |          | 277.6                           |                   |  |                       | (228.1   | )  |  |   | (107.8 | )  |  |   | 58.3                          |   |
| Property,plant and equipment, net                     |  |         | 133.4    |         |  |          | —                         |                   |  |                       | 118.1    |    |  |   | 2.9    |    |  |   | 12.4                          |   |
| Otherassets                                           |  |         | 134.0    |         |  |          | —                         |                   |  |                       | 107.8    |    |  |   | 4.5    |    |  |   | 21.7                          |   |
| Goodwill,net                                          |  |         | 185.9    |         |  |          | —                         |                   |  |                       | 156.6    |    |  |   | 2.1    |    |  |   | 27.2                          |   |
| Totalassets                                           |  | $            | 932.0    |         |  | $             | (1,248.8                        | )                 |  | $                          | 1,261.6  |    |  | $      | 409.0  |    |  | $      |     510.2 |   |
| **LIABILITIESAND STOCKHOLDER'S DEFICIENCY**           |  |
| Currentliabilities                                    |  | $            | 496.8    |         |  | $             | —                         |                   |  | $                          | 355.5    |    |  | $      | 30.9   |    |  | $      | 110.4                         |   |
| Intercompanypayables                                  |  |         | —  |         |  |          | (1,526.4                        | )                 |  |                       | 501.0    |    |  |   | 645.9  |    |  |   | 379.5                         |   |
| Long-termdebt                                         |  |         | 1,750.1  |         |  |          | —                         |                   |  |                       | 1,742.9  |    |  |   | 6.5    |    |  |   | 0.7                           |   |
| Other long-termliabilities                            |  |         | 325.0    |         |  |          | —                         |                   |  |                       | 302.1    |    |  |   | 15.5   |    |  |   | 7.4                           |   |
| Totalliabilities                                      |  |         | 2,571.9  |         |  |          | (1,526.4                        | )                 |  |                       | 2,901.5  |    |  |   | 698.8  |    |  |   | 498.0                         |   |
| Stockholder's(deficiency) equity                      |  |         | (1,639.9 | )       |  |          | 277.6                           |                   |  |                       | (1,639.9 | )  |  |   | (289.8 | )  |  |   | 12.2                          |   |
| Totalliabilities and stockholder's (deficiency)equity |  | $            | 932.0    |         |  | $             | (1,248.8                        | )                 |  | $                          | 1,261.6  |    |  | $      | 409.0  |    |  | $      | 510.2                         |   |
|                                                       |

F-28

----

Condensed Consolidating Statement ofOperations For the Year Ended December 31, 2002 (dollars inmillions)

|                                             |  |              |         |              |  |               |         |                        |  |                            |         |         |  |        |         |         |  |        |       |         |  |  |
|---------------------------------------------|--|--------------|---------|--------------|--|---------------|---------|------------------------|--|----------------------------|---------|---------|--|--------|---------|---------|--|--------|-------|---------|--|--|
|                                        |  | Consolidated |         | Eliminations |  | ParentCompany |         | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
| Netsales                                    |  | $            | 1,119.4 |         |  | $             | (134.4  | )                 |  | $                          | 697.4   |    |  | $      | 187.9   |    |  | $      | 368.5 |    |
| Cost ofsales                                |  |         | 503.7   |         |  |          | (134.4  | )                 |  |                       | 297.3   |    |  |   | 156.7   |    |  |   | 184.1 |    |
| Gross profit                                |  |         | 615.7   |         |  |          | — |                   |  |                       | 400.1   |    |  |   | 31.2    |    |  |   | 184.4 |    |
| Selling,general and administrative expenses |  |         | 711.1   |         |  |          | — |                   |  |                       | 483.3   |    |  |   | 37.3    |    |  |   | 190.5 |    |
| Restructuring costs and other,net           |  |         | 13.6    |         |  |          | — |                   |  |                       | 8.0     |    |  |   | 0.3     |    |  |   | 5.3   |    |
| Operatingloss                               |  |         | (109.0  | )       |  |          | — |                   |  |                       | (91.2   | )  |  |   | (6.4    | )  |  |   | (11.4 | )  |
| Other expenses(income):                     |  |
| Interest expense,net                        |  |         | 156.9   |         |  |          | — |                   |  |                       | 155.7   |    |  |   | 0.5     |    |  |   | 0.7   |    |
| Loss on sale of brand andfacilities, net    |  |         | 1.0     |         |  |          | — |                   |  |                       | — |    |  |   | — |    |  |   | 1.0   |    |
| Miscellaneous,net                           |  |         | 10.3    |         |  |          | — |                   |  |                       | (23.5   | )  |  |   | (5.4    | )  |  |   | 39.2  |    |
| Equityin earnings of subsidiaries           |  |         | — |         |  |          | (139.4  | )                 |  |                       | 61.7    |    |  |   | 78.7    |    |  |   | (1.0  | )  |
| Other expenses,net                          |  |         | 168.2   |         |  |          | (139.4  | )                 |  |                       | 193.9   |    |  |   | 73.8    |    |  |   | 39.9  |    |
| Loss before income taxes                    |  |         | (277.2  | )       |  |          | 139.4   |                   |  |                       | (285.1  | )  |  |   | (80.2   | )  |  |   | (51.3 | )  |
| Provision(benefit) for income taxes         |  |         | 4.6     |         |  |          | — |                   |  |                       | (3.3    | )  |  |   | 3.3     |    |  |   | 4.6   |    |
| Netloss                                     |  | $            | (281.8  | )       |  | $             | 139.4   |                   |  | $                          | (281.8  | )  |  | $      | (83.5   | )  |  | $      | (55.9 | )  |
|                                             |

CondensedConsolidating Statement of Cash Flow For the Year Ended December31, 2002 (dollars inmillions)

|                                                                   |  |              |        |              |  |               |                                 |                        |  |                           |        |         |  |        |         |         |  |        |                              |         |  |  |
|-------------------------------------------------------------------|--|--------------|--------|--------------|--|---------------|---------------------------------|------------------------|--|---------------------------|--------|---------|--|--------|---------|---------|--|--------|------------------------------|---------|--|--|
|                                                              |  | Consolidated |        | Eliminations |  | ParentCompany |                                 | Guarantor Subsidiaries |  | Non-GuarantorSubsidiaries |
| **CASHFLOWS FROM OPERATING ACTIVITIES:**                          |  |
| Net cash (usedfor) provided by operatingactivities                |  | $            | (112.3 | )       |  | $             |     — |                   |  | $                         | (113.3 | )  |  | $      | (11.0   | )  |  | $      |     12.0 |    |
| **CASH FLOWS FROMINVESTING ACTIVITIES:**                          |  |
| Capitalexpenditures                                               |  |         | (16.0  | )       |  |          | —                         |                   |  |                      | (13.6  | )  |  |   | — |    |  |   | (2.4                         | )  |
| Proceedsfrom the sale of brand and certainassets                  |  |         | 1.8    |         |  |          | —                         |                   |  |                      | 1.8    |    |  |   | — |    |  |   | —                      |    |
| Net cashused for investingactivities                              |  |         | (14.2  | )       |  |          | —                         |                   |  |                      | (11.8  | )  |  |   | — |    |  |   | (2.4                         | )  |
| **CASH FLOWS FROM FINANCINGACTIVITIES:**                          |  |
| Net increase in short-termborrowings – third parties        |  |         | 8.0    |         |  |          | —                         |                   |  |                      | 0.1    |    |  |   | 2.8     |    |  |   | 5.1                          |    |
| Proceeds from theissuance of long-term debt – third parties |  |         | 175.6  |         |  |          | —                         |                   |  |                      | 155.2  |    |  |   | 14.2    |    |  |   | 6.2                          |    |
| Repayment of long-term debt – thirdparties.                 |  |         | (73.0  | )       |  |          | —                         |                   |  |                      | (57.2  | )  |  |   | (8.4    | )  |  |   | (7.4                         | )  |
| Payment offinancing costs                                         |  |         | (0.3   | )       |  |          | —                         |                   |  |                      | (0.3   | )  |  |   | — |    |  |   | —                      |    |
| Net cashprovided by financing activities                          |  |         | 110.3  |         |  |          | —                         |                   |  |                      | 97.8   |    |  |   | 8.6     |    |  |   | 3.9                          |    |
| Effect of exchange rate changes on cash and cashequivalents       |  |         | (1.3   | )       |  |          | —                         |                   |  |                      | 0.3    |    |  |   | 0.1     |    |  |   | (1.7                         | )  |
| Net (decrease) increase in cash and cashequivalents               |  |         | (17.5  | )       |  |          | —                         |                   |  |                      | (27.0  | )  |  |   | (2.3    | )  |  |   | 11.8                         |    |
| Cashand cash equivalents at beginning ofperiod                    |  |         | 103.3  |         |  |          | —                         |                   |  |                      | 55.1   |    |  |   | 10.1    |    |  |   | 38.1                         |    |
| Cashand cash equivalents at end ofperiod                          |  | $            | 85.8   |         |  | $             |     — |                   |  | $                         | 28.1   |    |  | $      | 7.8     |    |  | $      | 49.9                         |    |
|                                                                   |

F-29

----

Condensed Consolidating Statement ofOperations For the Year Ended December 31, 2001 (dollars inmillions)

|                                                 |  |              |         |              |  |               |         |                        |  |                            |         |         |  |        |         |         |  |        |         |         |  |  |
|-------------------------------------------------|--|--------------|---------|--------------|--|---------------|---------|------------------------|--|----------------------------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                            |  | Consolidated |         | Eliminations |  | ParentCompany |         | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
| Netsales                                        |  | $            | 1,277.6 |         |  | $             | (132.9  | )                 |  | $                          | 800.6   |    |  | $      | 155.6   |    |  | $      | 454.3   |    |
| Cost ofsales                                    |  |         | 544.2   |         |  |          | (132.9  | )                 |  |                       | 323.8   |    |  |   | 121.5   |    |  |   | 231.8   |    |
| Gross profit                                    |  |         | 733.4   |         |  |          | — |                   |  |                       | 476.8   |    |  |   | 34.1    |    |  |   | 222.5   |    |
| Selling,general and administrative expenses     |  |         | 676.6   |         |  |          | — |                   |  |                       | 432.6   |    |  |   | 36.0    |    |  |   | 208.0   |    |
| Restructuring costs and other,net               |  |         | 38.1    |         |  |          | — |                   |  |                       | 25.4    |    |  |   | 1.4     |    |  |   | 11.3    |    |
| Operating income(loss)                          |  |         | 18.7    |         |  |          | — |                   |  |                       | 18.8    |    |  |   | (3.3    | )  |  |   | 3.2     |    |
| Otherexpenses (income):                         |  |
| Interestexpense, net                            |  |         | 137.8   |         |  |          | — |                   |  |                       | 132.4   |    |  |   | 1.6     |    |  |   | 3.8     |    |
| Loss (gain) on sale of brandand facilities, net |  |         | 14.4    |         |  |          | — |                   |  |                       | — |    |  |   | (0.4    | )  |  |   | 14.8    |    |
| Miscellaneous,net                               |  |         | 11.1    |         |  |          | — |                   |  |                       | (17.0   | )  |  |   | (12.7   | )  |  |   | 40.8    |    |
| Loss onearly extinguishment of debt             |  |         | 3.6     |         |  |          | — |                   |  |                       | 3.6     |    |  |   | — |    |  |   | — |    |
| Equity inearnings of subsidiaries               |  |         | — |         |  |          | (102.4  | )                 |  |                       | 51.9    |    |  |   | 49.0    |    |  |   | 1.5     |    |
| Other expenses,net                              |  |         | 166.9   |         |  |          | (102.4  | )                 |  |                       | 170.9   |    |  |   | 37.5    |    |  |   | 60.9    |    |
| Loss before income taxes                        |  |         | (148.2  | )       |  |          | 102.4   |                   |  |                       | (152.1  | )  |  |   | (40.8   | )  |  |   | (57.7   | )  |
| Provision for incometaxes                       |  |         | 4.0     |         |  |          | — |                   |  |                       | 0.1     |    |  |   | 2.6     |    |  |   | 1.3     |    |
| Netloss                                         |  | $            | (152.2  | )       |  | $             | 102.4   |                   |  | $                          | (152.2  | )  |  | $      | (43.4   | )  |  | $      | (59.0   | )  |
|                                                 |

CondensedConsolidating Statement of Cash Flow For the Year Ended December31, 2001 (dollars inmillions)

|                                                                      |  |              |         |              |  |               |         |                        |  |                           |         |         |  |        |         |         |  |        |         |         |  |  |
|----------------------------------------------------------------------|--|--------------|---------|--------------|--|---------------|---------|------------------------|--|---------------------------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                                 |  | Consolidated |         | Eliminations |  | ParentCompany |         | Guarantor Subsidiaries |  | Non-GuarantorSubsidiaries |
| **CASHFLOWS FROM OPERATING ACTIVITIES:**                             |  |
| Net cash (usedfor) provided by operatingactivities                   |  | $            | (86.5   | )       |  | $             | (1.0    | )                 |  | $                         | (42.0   | )  |  | $      | 11.5    |    |  | $      | (55.0   | )  |
| **CASH FLOWS FROMINVESTING ACTIVITIES:**                             |  |
| Capitalexpenditures                                                  |  |         | (15.1   | )       |  |          | — |                   |  |                      | (13.0   | )  |  |   | (1.7    | )  |  |   | (0.4    | )  |
| Proceedsfrom the sale of brand and certainassets                     |  |         | 102.3   |         |  |          | — |                   |  |                      | 6.7     |    |  |   | 56.8    |    |  |   | 38.8    |    |
| Net cashprovided by (used for) investingactivities                   |  |         | 87.2    |         |  |          | — |                   |  |                      | (6.3    | )  |  |   | 55.1    |    |  |   | 38.4    |    |
| **CASH FLOWS FROMFINANCING ACTIVITIES:**                             |  |
| Net (decrease) increase inshort-term borrowings – thirdparties |  |         | (11.3   | )       |  |          | — |                   |  |                      | — |    |  |   | 1.6     |    |  |   | (12.9   | )  |
| Proceeds from the issuanceof long-term debt – third parties    |  |         | 698.5   |         |  |          | — |                   |  |                      | 657.5   |    |  |   | 22.9    |    |  |   | 18.1    |    |
| Repayment of long-term debt – thirdparties                     |  |         | (614.0  | )       |  |          | — |                   |  |                      | (520.3  | )  |  |   | (31.3   | )  |  |   | (62.4   | )  |
| Intercompany dividends and net change in intercompanyobligations     |  |         | — |         |  |          | 1.0     |                   |  |                      | (17.6   | )  |  |   | (52.6   | )  |  |   | 69.2    |    |
| Netdistribution from affiliate                                       |  |         | (1.0    | )       |  |          | — |                   |  |                      | (1.0    | )  |  |   | — |    |  |   | — |    |
| Paymentof financingcosts                                             |  |         | (25.9   | )       |  |          | — |                   |  |                      | (25.9   | )  |  |   | — |    |  |   | — |    |
| Netcash provided by (used for) financingactivities                   |  |         | 46.3    |         |  |          | 1.0     |                   |  |                      | 92.7    |    |  |   | (59.4   | )  |  |   | 12.0    |    |
| Effect ofexchange rate changes on cash and cashequivalents           |  |         | — |         |  |          | — |                   |  |                      | — |    |  |   | — |    |  |   | — |    |
| Net increase (decrease) in cash and cashequivalents                  |  |         | 47.0    |         |  |          | — |                   |  |                      | 44.4    |    |  |   | 7.2     |    |  |   | (4.6    | )  |
| Cashand cash equivalents at beginning ofperiod                       |  |         | 56.3    |         |  |          | — |                   |  |                      | 10.7    |    |  |   | 2.9     |    |  |   | 42.7    |    |
| Cashand cash equivalents at end ofperiod                             |  | $            | 103.3   |         |  | $             | — |                   |  | $                         | 55.1    |    |  | $      | 10.1    |    |  | $      | 38.1    |    |
|                                                                      |

F-30

----

11.    FinancialInstruments

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

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

The carrying amounts of cashand cash equivalents, marketable securities, trade receivables, notesreceivable, accounts payable and short-term borrowings approximatetheir fair values.

12.    Income Taxes

In June 1992,Holdings, Revlon, Inc., Products Corporation and certain of itssubsidiaries, and Mafco Holdings entered into a tax sharing agreement(as subsequently amended, the "Tax SharingAgreement"), pursuant to which Mafco Holdings has agreedto indemnify Revlon, Inc. and Products Corporation against federal,state or local income tax liabilities of the consolidated or combinedgroup of which Mafco Holdings (or a subsidiary of Mafco Holdings otherthan Revlon, Inc. and Products Corporation or its subsidiaries) is thecommon parent for taxable periods beginning on or after January 1, 1992during which Revlon, Inc. and Products Corporation or a subsidiary ofProducts Corporation is a member of such group. Pursuant to the TaxSharing Agreement, for all taxable periods beginning on or afterJanuary 1, 1992, Products Corporation will pay to Revlon, Inc., whichin turn will pay to Holdings, amounts equal to the taxes that suchcorporation would otherwise have to pay if they were to file separatefederal, state or local income tax returns (including any amountsdetermined to be due as a result of a redetermination arising from anaudit or otherwise of the consolidated or combined tax liabilityrelating to any such period which is attributable to ProductsCorporation), except that Products Corporation will not be entitled tocarry 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 theCredit Agreement from making tax sharing payments to Revlon, Inc. TheCredit Agreement prohibits Products Corporation from making such taxsharing payments other than in respect of state and local income taxes.Since the payments to be made under the Tax Sharing Agreement will bedetermined by the amount of taxes that Products Corporation wouldotherwise have to pay if it were to file separate federal, state orlocal income tax returns, the Tax Sharing Agreement will benefit MafcoHoldings to the extent Mafco Holdings can offset the taxable incomegenerated by Products Corporation against losses and tax creditsgenerated by Mafco Holdings and its other subsidiaries. The Tax SharingAgreement was amended, effective as of January 1, 2001, to eliminate acontingent payment to Revlon, Inc. under certain circumstances inreturn for a $10 note with interest at 12% and interest andprincipal payable by Mafco Holdings on December 31, 2005. As a resultof net operating tax losses and prohibitions under the Credit Agreementthere were no federal tax payments or payments in lieu of taxespursuant to the Tax Sharing Agreement for 2003, 2002 or 2001. ProductsCorporation had a liability of $0.9 to Revlon, Inc. in respect ofalternative minimum taxes for 1997 under the Tax Sharing Agreement.However, as a result of tax legislation enacted in the first quarter of2002, the Company was able to recognize tax benefits of $0.9 in 2002,which completely offset this liability.

Pursuant to the assettransfer agreement referred to in Note 15, Products Corporation assumedall tax liabilities of Holdings other than (i) certain income taxliabilities arising prior to January 1, 1992 to the extent suchliabilities exceeded reserves on Holdings' books as of January 1,1992 or were not of the nature reserved for and (ii) other taxliabilities to the extent such liabilities are related to the businessand assets retained by Holdings. During the second quarter of 2003, theCompany resolved various tax audits, which resulted in a tax benefit of$13.9, of which $6.9 was recorded directly to capital deficiency sinceit 

F-31

----

relates to liabilities assumed by ProductsCorporation in connection with the transfer agreements related toProducts Corporation's formation in 1992 (See Note 15).

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

|                                        |  |                        |        |         |  |        |         |         |  |        |         |         |  |  |
|----------------------------------------|--|------------------------|--------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                   |  | Year Ended December31, |
|                                   |  | 2003                   |        | 2002    |  | 2001   |
| Loss before incometaxes:               |  |
| Domestic                               |  | $                      | (136.9 | )  |  | $      | (208.5  | )  |  | $      | (81.8   | )  |
| Foreign                                |  |                   | (16.8  | )  |  |   | (68.7   | )  |  |   | (66.4   | )  |
|                                   |  | $                      | (153.7 | )  |  | $      | (277.2  | )  |  | $      | (148.2  | )  |
| Provision (benefit) for incometaxes:   |  |
| Federal                                |  | $                      | (4.4   | )  |  | $      | (0.9    | )  |  | $      | — |    |
| State and local                        |  |                   | 0.2    |    |  |   | 0.2     |    |  |   | 0.3     |    |
| Foreign                                |  |                   | 4.5    |    |  |   | 5.3     |    |  |   | 3.7     |    |
|                                   |  | $                      | 0.3    |    |  | $      | 4.6     |    |  | $      | 4.0     |    |
|                                   |  |
| Current                                |  | $                      | 8.1    |    |  | $      | 7.8     |    |  | $      | 7.6     |    |
| Deferred                               |  |                   | 1.9    |    |  |   | (1.2    | )  |  |   | — |    |
| Benefits ofoperating losscarryforwards |  |                   | (1.9   | )  |  |   | (2.0    | )  |  |   | (3.6    | )  |
| Taxes previously accrued andreversed   |  |                   | (7.8   | )  |  |   | — |    |  |   | — |    |
|                                   |  | $                      | 0.3    |    |  | $      | 4.6     |    |  | $      | 4.0     |    |
|                                        |

The effective tax rate onloss before income taxes is reconciled to the applicable statutoryfederal income tax rate as follows:

|                                                                         |  |                        |         |          |  |        |         |          |  |        |         |          |  |  |
|-------------------------------------------------------------------------|--|------------------------|---------|----------|--|--------|---------|----------|--|--------|---------|----------|--|--|
|                                                                    |  | YearEnded December 31, |
|                                                                    |  | 2003                   |         | 2002     |  | 2001   |
| Statutory federal income taxrate                                        |  |                   | (35.0   | )%  |  |   | (35.0   | )%  |  |   | (35.0   | )%  |
| State and local taxes, net of federal income taxbenefit                 |  |                   | 0.1     |     |  |   | 0.1     |     |  |   | 0.1     |     |
| Foreign and U.S. tax effects attributable to operationsoutside the U.S. |  |                   | 2.1     |     |  |   | (4.1    | )   |  |   | 0.5     |     |
| Nondeductible amortizationexpense                                       |  |                   | — |     |  |   | — |     |  |   | 1.4     |     |
| Change in valuation allowance                                           |  |                   | 38.0    |     |  |   | 44.2    |     |  |   | 29.1    |     |
| Sale ofbusinesses                                                       |  |                   | — |     |  |   | (3.2    | )   |  |   | 9.8     |     |
| Reversal of income taxes previouslyaccrued                              |  |                   | (5.1    | )   |  |   | — |     |  |   | — |     |
| Other                                                                   |  |                   | 0.1     |     |  |   | (0.3    | )   |  |   | (3.2    | )   |
| Effectiverate                                                           |  |                   | 0.2     | %   |  |   | 1.7     | %   |  |   | 2.7     | %   |
|                                                                         |

F-32

----

The tax effects of temporary differencesthat give rise to significant portions of the deferred tax assets anddeferred tax liabilities at December 31, 2003 and 2002 are presentedbelow:

|                                                                |  |              |        |         |  |        |        |         |  |  |
|----------------------------------------------------------------|--|--------------|--------|---------|--|--------|--------|---------|--|--|
|                                                           |  | December 31, |
|                                                           |  | 2003         |        | 2002    |
| Deferred taxassets:                                            |  |
| Accounts receivable, principally dueto doubtful accounts       |  | $            | 2.2    |    |  | $      | 5.0    |    |
| Inventories                                                    |  |         | 14.9   |    |  |   | 18.9   |    |
| Net operating loss carryforwards –domestic.              |  |         | 318.6  |    |  |   | 261.5  |    |
| Netoperating loss carryforwards – foreign.               |  |         | 135.5  |    |  |   | 122.6  |    |
| Accruals and relatedreserves                                   |  |         | 2.9    |    |  |   | 5.9    |    |
| Employeebenefits                                               |  |         | 70.1   |    |  |   | 67.3   |    |
| Stateand local taxes                                           |  |         | 12.6   |    |  |   | 12.2   |    |
| Advertising, sales discounts and returns and couponredemptions |  |         | 35.7   |    |  |   | 53.5   |    |
| Capital loss carryover                                         |  |         | 7.3    |    |  |   | 7.8    |    |
| Deferred interestexpense                                       |  |         | 28.5   |    |  |   | 9.7    |    |
| Other                                                          |  |         | 30.5   |    |  |   | 34.2   |    |
| Total gross deferred taxassets                                 |  |         | 658.8  |    |  |   | 598.6  |    |
| Lessvaluationallowance                                         |  |         | (624.3 | )  |  |   | (564.6 | )  |
| Net deferred tax assets                                        |  |         | 34.5   |    |  |   | 34.0   |    |
| Deferred taxliabilities:                                       |  |
| Plant, equipment and otherassets                               |  |         | (27.0  | )  |  |   | (25.8  | )  |
| Other                                                          |  |         | (2.4   | )  |  |   | (3.2   | )  |
| Total gross deferred taxliabilities                            |  |         | (29.4  | )  |  |   | (29.0  | )  |
| Net deferred taxassets                                         |  | $            | 5.1    |    |  | $      | 5.0    |    |
|                                                                |

In assessing the recoverability of itsdeferred tax assets, management considers whether it is more likelythan not that some portion or all of the deferred tax assets will notbe realized. The ultimate realization of deferred tax assets isdependent upon the generation of future taxable income during theperiods in which those temporary differences become deductible.Management considers the scheduled reversal of deferred taxliabilities, projected future taxable income, and tax planningstrategies in making this assessment. Based upon the level ofhistorical taxable income for certain international markets andprojections for future taxable income over the periods in which thedeferred tax assets are deductible, management believes it is morelikely than not that the Company will realize the benefits of certaindeductible differences existing at December 31, 2003.

Thevaluation allowance increased by $59.7 during 2003 and increased by$115.9 during 2002.

During 2003, 2002 and 2001, certain of theCompany's foreign subsidiaries used operating loss carryforwardsto credit the current provision for income taxes by $1.9, $2.0, and$3.6, respectively. Certain other foreign operations generated lossesduring 2003, 2002 and 2001 for which the potential tax benefit wasreduced by a valuation allowance. At December 31, 2003, the Company hadtax loss carryforwards of approximately $1,339.0 of which $910.3 aredomestic and $428.7 are foreign, and which expire in future years asfollows: 2004-$29.1; 2005-$59.2; 2006-$52.6 2007-$44.1 2008 andbeyond-$974.0; and unlimited-$180.0. The Company could receive thebenefit of such tax loss carryforwards only to the extent it hastaxable income during the carryforward periods in the applicable taxjurisdictions. In addition, based upon certain factors, including theamount and nature of gains or losses recognized by Mafco Holdings andits other subsidiaries included in Mafco Holdings' consolidatedfederal income tax return, the amount of net operating losscarryforwards attributable to Mafco Holdings and such othersubsidiaries and the amounts of alternative minimum tax liability ofMafco Holdings and such other subsidiaries, pursuant to the provisionsof the Internal Revenue Service's Consolidated Income TaxRegulations, all or a portion of the domestic operating losscarryforwards may not be available to the Company should the Companycease being a member of Mafco Holdings' consolidated federalincome tax return at any time in the future. In the event ProductsCorporation effects a reduction of debt through the issuance ofadditional equity 

F-33

----

securities of Revlon, Inc. in the DebtReduction Transactions and such issuance results in Revlon, Inc. nolonger being part of the affiliated group for U.S. tax purposes ofwhich Mafco Holdings is the common parent, Revlon, Inc. will berequired to file separate tax returns for U.S. federal tax purposes. Itis impossible to estimate accurately the amount of consolidated netoperating losses of the group ("CNOLs") thatwill be allocated to Revlon, Inc. if Revlon, Inc. and its U.S.subsidiaries cease to be members of Mafco Holdings consolidated groupas of the end of the day on which the exchange offers close becausevarious factors could increase or decrease or eliminate these amountsbefore that time. These factors include, but are not limited to, theactual date that the exchange offers close and the amount and nature ofthe income, gains or losses that Revlon, Inc. and its U.S. subsidiariesrecognize in the period from January 1, 2004, through the day on whichthe exchange offers close. Furthermore, the amount and nature of theincome, gains or losses that the other members of the Mafco Holdingsconsolidated group recognize in the 2004 taxable year will alsodetermine the amount of CNOLs that will be allocated to Revlon, Inc.because any CNOLs, pursuant to Treasury regulations, are first used tooffset the taxable income of the Mafco Holdings group for the entireconsolidated return year ending December 31, 2004. Only the amount ofany CNOLs that the Mafco Holdings consolidated group does not absorbwill be available to be allocated to Revlon, Inc. and its U.S.subsidiaries for its taxable years beginning on the day after theexchange offers close. This may significantly reduce, or eveneliminate, the amount of CNOLs available to Revlon, Inc. 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 lossesand nil in alternative minimum tax losses available to it if suchdeconsolidation were to occur at March 31, 2004.

AppropriateU.S. and foreign income taxes have been accrued on foreign earningsthat have been or are expected to be remitted in the near future.Unremitted earnings of foreign subsidiaries which have been, or arecurrently intended to be, permanently reinvested in the future growthof the business are nil at December 31, 2003, excluding those amountswhich, if remitted in the near future, would not result in significantadditional taxes under tax statutes currently in effect.

13.    Post-retirement Benefits

Pension:

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

OtherPost-retirement Benefits:

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

The Medicare Act became law inDecember 2003 and introduced both a Medicare prescription-drug benefitand a federal subsidy to sponsors of retiree health-care plans thatprovide a benefit at least "actuariallyequivalent" to the Medicare benefit. The Company'sother postretirement benefit plans do provide for suchprescription-drug benefits. The Company has made a one-time election todefer accounting for the economic effects of the Medicare Act, aspermitted by FASB Staff Position 106-1. The FASB plans to issueauthoritative guidance on the accounting for the subsidies in 2004. Theissued guidance could require the Company to change previously reportedinformation.

F-34

----

Information regarding the Company'ssignificant pension and other post-retirement plans at the datesindicated is as follows:

|                                                               |  |               |        |                                |  |        |        |         |  |        |         |         |  |        |         |         |  |  |
|---------------------------------------------------------------|--|---------------|--------|--------------------------------|--|--------|--------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                          |  | PensionPlans  |        | Other Post-retirement Benefits |
|                                                          |  | September 30, |
|                                                          |  | 2003          |        | 2002                           |  | 2003   |        | 2002    |
| Change in BenefitObligation:                                  |  |
| 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     |    |  |   | 0.7     |    |
| Foreign 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 PlanAssets:                                         |  |
| 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     |    |  |   | 0.7     |    |
| Plan participantcontributions                                 |  |          | 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 ofcurrent year |  |          | 298.6  |                           |  |   | 253.2  |    |  |   | — |    |  |   | — |    |
| Funded status ofplans                                         |  |          | (219.6 | )                         |  |   | (215.3 | )  |  |   | (17.1   | )  |  |   | (15.1   | )  |
| Amounts contributed to plans during fourth quarter            |  |          | 1.7    |                           |  |   | 1.5    |    |  |   | 0.2     |    |  |   | 0.2     |    |
| Unrecognized net loss                                         |  |          | 133.2  |                           |  |   | 137.0  |    |  |   | 1.5     |    |  |   | 0.8     |    |
| Unrecognized prior servicecost                                |  |          | (4.7   | )                         |  |   | (5.5   | )  |  |   | — |    |  |   | — |    |
| Unrecognized net transition asset                             |  |          | (0.1   | )                         |  |   | (0.2   | )  |  |   | — |    |  |   | — |    |
| Accrued benefitcost                                           |  | $             | (89.5  | )                         |  | $      | (82.5  | )  |  | $      | (15.4   | )  |  | $      | (14.1   | )  |
|                                                               |

|                                                                 |  |              |        |         |  |        |        |         |  |        |         |         |  |        |         |         |  |  |
|-----------------------------------------------------------------|--|--------------|--------|---------|--|--------|--------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                            |  | December 31, |
|                                                            |  | 2003         |        | 2002    |  | 2003   |        | 2002    |
| Amounts recognizedin the Consolidated Balance Sheets consistof: |  |
| 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    |    |  |   | — |    |  |   | — |    |
| Accumulatedother comprehensive loss                             |  |         | 112.1  |    |  |   | 113.6  |    |  |   | — |    |  |   | — |    |
| Other long-termassets                                           |  |         | 0.3    |    |  |   | 0.3    |    |  |   | — |    |  |   | — |    |
|                                                            |  | $            | (89.5  | )  |  | $      | (82.5  | )  |  | $      | (15.4   | )  |  | $      | (14.1   | )  |
|                                                                 |

Withrespect to the above accrued benefit costs, the Company has recorded areceivable from affiliates of $1.4 and $1.3 at December 31, 2003 and2002, respectively, relating to Holdings' participation

F-35

----

in the Company's pension plans and $1.1and $1.2 at December 31, 2003 and 2002, respectively, for otherpost-retirement benefits costs attributable to Holdings.

Thefollowing weighted-average assumptions were used in accounting for boththe benefit obligations and net periodic benefit cost of the pensionplans:

|                                     |  |           |      |                    |  |        |     |         |  |        |     |         |  |        |     |         |  |        |     |         |  |        |     |         |  |  |
|-------------------------------------|--|-----------|------|--------------------|--|--------|-----|---------|--|--------|-----|---------|--|--------|-----|---------|--|--------|-----|---------|--|--------|-----|---------|--|--|
|                                |  | U.S.Plans |      | InternationalPlans |
|                                |  | 2003      |      | 2002               |  | 2001   |     | 2003    |  | 2002   |     | 2001    |
| Discountrate                        |  |      | 6.0  | %             |  |   | 6.5 | %  |  |   | 7.0 | %  |  |   | 5.4 | %  |  |   | 5.6 | %  |  |   | 5.8 | %  |
| Expectedreturn on planassets        |  |      | 8.75 |               |  |   | 9.0 |    |  |   | 9.5 |    |  |   | 7.1 |    |  |   | 7.5 |    |  |   | 8.5 |    |
| Rateof future compensationincreases |  |      | 4.0  |               |  |   | 4.3 |    |  |   | 5.0 |    |  |   | 3.6 |    |  |   | 3.5 |    |  |   | 3.7 |    |
|                                     |

TheCompany considers a number of factors to determine its expected rate ofreturn on plan assets assumption, including historical performance ofplan assets, asset allocation and other third-party studies andsurveys. The Company reviewed the historical performance of plan assetsover a ten-year period (from 1993 to 2003), the results of whichexceeded the 8.75% rate of return assumption that the Companyultimately selected for domestic plans. The Company also considered theplan portfolios' asset allocations over a variety of time periodsand compared them with third-party studies and surveys of annualizedreturns of similarly balanced portfolio strategies. The historicalreturn of this universe of similar portfolios also exceeded the returnassumption that the Company ultimately selected. Finally, the Companyreviewed performance of the capital markets in recent years and, uponadvice 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 tablepresents domestic and foreign pension plan assets information atSeptember 30, 2003, 2002, and 2001 (the measurement date of pensionplan assets):

|                         |  |           |       |                    |  |      |       |        |  |      |       |        |  |   |      |        |  |   |      |        |  |   |      |        |  |  |
|-------------------------|--|-----------|-------|--------------------|--|------|-------|--------|--|------|-------|--------|--|---|------|--------|--|---|------|--------|--|---|------|--------|--|--|
|                    |  | U.S.Plans |       | InternationalPlans |
|                    |  | 2003      |       | 2002               |  | 2001 |       | 2003   |  | 2002 |       | 2001   |
| Fairvalue of planassets |  | $         | 272.1 |               |  | $    | 232.2 |   |  | $    | 259.4 |   |  | $ | 26.5 |   |  | $ | 21.0 |   |  | $ | 23.4 |   |
|                         |

ThePlans' Investment Committee has adopted an investment policy fordomestic pension plan assets designed to meet or exceed the expectedrate of return on plan assets assumption. To achieve this, the pensionplans retain professional investment managers that invest plan assetsin the following asset classes: equity and fixed income securities,real estate, and cash and other investments, which may include hedgefunds and private equity. The Company has the following target rangesfor these asset classes, which are readjusted quarterly when an assetclass weighting is outside its target range (recognizing that these areflexible target ranges that may vary from time to time) with the goalof achieving the required return at a reasonable risk level asfollows:

|                           |  |              |  |  |  |  |
|---------------------------|--|--------------|--|--|--|--|
|                      |  | TargetRanges |
| AssetCategory:            |  |         |
| Equitysecurities          |  | 45%- 55%     |
| Fixed incomesecurities    |  | 35% -45%     |
| Real estate               |  | 0% -7%       |
| Cash and otherinvestments |  | 0% -16%      |
|                           |

F-36

----

The domestic pension plansweighted-average asset allocations at September 30, 2003 and 2002 byasset categories were as follows:

|                           |  |                           |        |         |  |        |        |         |  |  |
|---------------------------|--|---------------------------|--------|---------|--|--------|--------|---------|--|--|
|                      |  | PlanAssetsat September30, |
|                      |  | 2003                      |        | 2002    |
| AssetCategory:            |  |                      |   |    |  |   |   |    |
| Equitysecurities          |  |                      | 57.0   | %  |  |   | 51.0   | %  |
| Fixedincomesecurities     |  |                      | 34.0   |    |  |   | 38.0   |    |
| Realestate                |  |                      | 5.0    |    |  |   | 6.0    |    |
| Cash and otherinvestments |  |                      | 4.0    |    |  |   | 5.0    |    |
|                      |  |                      | 100.0  | %  |  |   | 100.0  | %  |
|                           |

Withinthe equity securities asset class, the investment policy provides forinvestments in a broad range of publicly-traded securities ranging fromsmall to large capitalization stocks and domestic and internationalstocks. Within the fixed income securities asset class, the investmentpolicy provides for investments in a broad range of publicly-tradeddebt securities ranging from US Treasury issues, corporate debtsecurities, mortgages and asset-backed issues, as well as internationaldebt 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 theclasses listed above, provided that such investments receive approvalof the investment committee prior to their selection.

ThePlans' investment committee allows its investment managers to usederivatives to reduce risk exposures or to replicate exposures of aparticular asset class, but does not allow the use of derivatives forspeculative purposes.

Other company-sponsored post-retirementbenefits consist of health and life insurance. These plans are notpre-funded.

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

|                                     |  |                       |         |                               |  |        |         |         |  |        |       |         |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|-------------------------------------|--|-----------------------|---------|-------------------------------|--|--------|---------|---------|--|--------|-------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                |  | PensionPlans          |         | Other Post-retirementBenefits |
|                                |  | Year EndedDecember31, |
|                                |  | 2003                  |         | 2002                          |  | 2001   |         | 2003    |  | 2002   |       | 2001    |
| Servicecost                         |  | $                     | 11.8    |                          |  | $      | 8.6     |    |  | $      | 10.4  |    |  | $      | 0.3     |    |  | $      | 2.1     |    |  | $      | 0.4     |    |
| Interestcost                        |  |                  | 29.2    |                          |  |   | 28.9    |    |  |   | 28.3  |    |  |   | 1.0     |    |  |   | 0.8     |    |  |   | 0.8     |    |
| Expectedreturn on planassets        |  |                  | (21.3   | )                        |  |   | (24.7   | )  |  |   | (30.8 | )  |  |   | — |    |  |   | — |    |  |   | — |    |
| Amortizationof prior servicecost    |  |                  | (0.8    | )                        |  |   | (1.2    | )  |  |   | (1.0  | )  |  |   | — |    |  |   | — |    |  |   | — |    |
| Amortizationof net transitionasset  |  |                  | (0.1    | )                        |  |   | (0.1    | )  |  |   | (0.2  | )  |  |   | — |    |  |   | — |    |  |   | — |    |
| Amortizationof actuarial loss(gain) |  |                  | 9.5     |                          |  |   | 2.9     |    |  |   | 0.9   |    |  |   | (0.1    | )  |  |   | (0.1    | )  |  |   | (0.1    | )  |
| Settlementloss                      |  |                  | — |                          |  |   | — |    |  |   | 0.8   |    |  |   | — |    |  |   | — |    |  |   | — |    |
| Curtailmentloss                     |  |                  | — |                          |  |   | — |    |  |   | 1.5   |    |  |   | — |    |  |   | — |    |  |   | — |    |
|                                |  |                  | 28.3    |                          |  |   | 14.4    |    |  |   | 9.9   |    |  |   | 1.2     |    |  |   | 2.8     |    |  |   | 1.1     |    |
| Portionallocated toHoldings         |  |                  | (0.3    | )                        |  |   | (0.3    | )  |  |   | (0.3  | )  |  |   | — |    |  |   | — |    |  |   | — |    |
|                                |  | $                     | 28.0    |                          |  | $      | 14.1    |    |  | $      | 9.6   |    |  | $      | 1.2     |    |  | $      | 2.8     |    |  | $      | 1.1     |    |
|                                     |

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

|                              |  |             |       |        |  |        |       |        |  |        |       |        |  |  |
|------------------------------|--|-------------|-------|--------|--|--------|-------|--------|--|--------|-------|--------|--|--|
|                         |  | December31, |
|                         |  | 2003        |       | 2002   |  | 2001   |
| Projectedbenefitobligation   |  | $           | 518.2 |   |  | $      | 468.5 |   |  | $      | 424.6 |   |
| Accumulatedbenefitobligation |  |        | 502.4 |   |  |   | 451.0 |   |  |   | 407.9 |   |
| Fairvalue of planassets      |  |        | 298.6 |   |  |   | 253.2 |   |  |   | 280.0 |   |
|                              |

Contributions:

The Company expects to contribute approximately $40 in cash to itspension plans and $1 to its other post-retirement benefit plans in2004.

14.    Stock Compensation Plan

Since March 5,1996, Revlon, Inc. has had the Amended Stock Plan, which is astock-based compensation plan and is described below. ProductsCorporation applies APB Opinion No. 25 and its related interpretationsin accounting for the Amended Stock Plan. Under APB Opinion No. 25,because the exercise price of employee stock options under the AmendedStock Plan equals the market price of the underlying stock on the dateof grant, no compensation cost has been recognized. The fair value ofeach option grant is estimated on the date of the grant using theBlack-Scholes option-pricing model assuming no dividend yield, expectedvolatility of approximately 70% in 2003, 71% in 2002 and68% in 2001; weighted average risk-free interest rate of3.72% in 2003, 3.86% in 2002, and 5.07% in 2001;and a seven-year expected average life for the Amended StockPlan's options issued in 2003, 2002 and 2001.

Under theAmended Stock Plan, awards may be granted to employees and directors ofRevlon, Inc. and its subsidiaries, including the Company, for up to anaggregate of 10.5 million shares of Class A Common Stock, of which upto 3,000,000 shares may be issued as restricted stock. Non-qualifiedoptions granted under the Amended Stock Plan have a term of 10 yearsduring which the holder can purchase shares of Class A Common Stock atan exercise price, which must be not less than the market price on thedate of the grant. Option grants vest over service periods that rangefrom one to five years, subject to limited exceptions and except asdisclosed below. Options granted in February 1999 with an originalfour-year vesting term were modified in May 1999 to allow the optionsto become fully vested on the first anniversary date of the grant.Options granted in May 2000 under the Amended Stock Plan vest25% on each anniversary of the grant date and will become100% vested on the fourth anniversary of the grant date;provided that an additional 25% of such options would vest oneach subsequent anniversary date of the grant if the Company achievedcertain performance objectives relating to the Company'soperating income for the fiscal year preceding such anniversary date,which objectives were not achieved in 2003, 2002 or 2001. The optiongrant of 400,000 shares in February 2002 to Mr. Jack L. Stahl, theCompany's President and Chief Executive Officer, vests in full onthe fifth anniversary of such grant, provided that one-half of suchoptions vest on the day after which the 20-day average closing price ofClass A Common Stock on the New York Stock Exchange (the"NYSE") equals or exceeds $30.00 per shareand the balance will vest on the day after which such 20-day averageclosing price equals or exceeds $40.00 per share. Additionally, variousoption grants made by Revlon, Inc. to its employees vest upon a"change in control" as defined in therespective stock option agreements. During each of 2002 and 2001,Revlon, Inc. granted to Mr. Perelman, Revlon, Inc.'s Chairman ofthe Board, options to purchase 100,000 and 225,000, shares of Revlon,Inc. Class A Common Stock, respectively, which grants will vest33% on each anniversary date of the grant and will become100% vested on the third anniversary date of the grant date asto the 2002 grant, and will vest 25% on each anniversary date ofthe grant and will become 100% vested on the fourth anniversarydate 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 3,296,133options exercisable under the Amended Stock Plan,respectively.

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

|                                |  |             |          |                               |  |        |         |        |  |  |
|--------------------------------|--|-------------|----------|-------------------------------|--|--------|---------|--------|--|--|
|                           |  | Shares(000) |          | WeightedAverageExercise Price |
| Outstanding at January 1,2001  |  |        | 6,603.5  |                          |  | $      | 21.59   |   |
|                           |  |        |     |                          |  |   |    |   |
| Granted                        |  |        | 1,087.6  |                          |  |   | 5.69    |   |
| Exercised                      |  |        | (0.2     | )                        |  |   | 7.06    |   |
| Forfeited                      |  |        | (788.8   | )                        |  |   | 19.16   |   |
| Outstandingat December 31,2001 |  |        | 6,902.1  |                          |  |   | 19.37   |   |
|                           |  |        |     |                          |  |   |    |   |
| Granted                        |  |        | 3,306.8  |                          |  |   | 3.94    |   |
| Exercised                      |  |        | —  |                          |  |   | — |   |
| Forfeited                      |  |        | (2,322.8 | )                        |  |   | 19.54   |   |
| Outstandingat December 31,2002 |  |        | 7,886.1  |                          |  |   | 12.83   |   |
|                           |  |        |     |                          |  |   |    |   |
| Granted                        |  |        | 1,091.6  |                          |  |   | 3.00    |   |
| Exercised                      |  |        | —  |                          |  |   | — |   |
| Forfeited                      |  |        | (1,270.1 | )                        |  |   | 17.43   |   |
| Outstandingat December 31,2003 |  |        | 7,707.6  |                          |  |   | 10.66   |   |
|                                |

Theweighted 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 StockPlan's options outstanding, at December 31, 2003:

|                       |  |                        |         |                               |  |                              |        |                        |  |                              |        |        |  |        |         |        |  |        |        |        |  |  |
|-----------------------|--|------------------------|---------|-------------------------------|--|------------------------------|--------|------------------------|--|------------------------------|--------|--------|--|--------|---------|--------|--|--------|--------|--------|--|--|
|                  |  | Outstanding            |         | Exercisable                   |
| RangeofExercisePrices |  | NumberofOptions(000's) |         | WeightedAverageYearsRemaining |  | WeightedAverageExercisePrice |        | NumberofOptions(000's) |  | WeightedAverageExercisePrice |
| $2.78to$3.78          |  |                   | 2,945.7 |                          |  |                         | 9.01   |                   |  | $                            | 3.49   |   |  |   | 651.7   |   |  | $      | 3.73   |   |
| 3.82to6.88            |  |                   | 1,693.8 |                          |  |                         | 7.89   |                   |  |                         | 4.90   |   |  |   | 582.8   |   |  |   | 5.34   |   |
| 7.06to15.00           |  |                   | 1,674.7 |                          |  |                         | 5.98   |                   |  |                         | 9.91   |   |  |   | 1,164.3 |   |  |   | 10.70  |   |
| 18.50to50.75          |  |                   | 1,393.4 |                          |  |                         | 4.11   |                   |  |                         | 33.75  |   |  |   | 1,393.4 |   |  |   | 33.75  |   |
| 2.78to50.75           |  |                   | 7,707.6 |                          |  |                         |   |                   |  |                         |   |   |  |   | 3,792.2 |   |  |   |   |   |
|                       |

TheAmended Stock Plan also provides that restricted stock may be awardedto employees and directors of Revlon, Inc. and its subsidiaries,including the Company. On September 17, 2002 and June 18, 2001 (the"Grant Dates"), the Compensation and StockPlan Committee (the "Compensation Committee")awarded 50,000 shares and 120,000 shares, respectively, of restrictedstock to Mr. Perelman as a director of Revlon, Inc. and the Company.The restricted stock awards are subject to execution of a RestrictedStock Agreement by each grantee. Provided the grantee remainscontinuously employed by the Company (or, in the case of Mr. Perelman,he continuously provides services as a director to Revlon, Inc. and theCompany), the restricted stock awards, subject to limited exceptions,will vest as to one-third of the restricted shares on the day afterwhich the 20-day average of the closing price of Revlon, Inc.'sClass A Common Stock on the NYSE equals or exceeds $20.00 per share, anadditional one-third of such restricted shares will vest on the dayafter which the 20-day average of the closing price of Revlon,Inc.'s Class A Common Stock on the NYSE equals or exceeds $25.00per share and the balance will vest on the day after which the 20-dayaverage of the closing price of Revlon, Inc.'s Class A CommonStock on the NYSE equals or exceeds $30.00 per share, provided that (i)subject to clause (ii) below, no portion of the restricted stock awardswill vest until the second anniversary following the Grant Dates(except that the restrictions will lapse on the February 2002 grant of470,000 restricted shares to Mr. Stahl under the 

F-39

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Amended Stock Plan prior to the secondanniversary if the 20-day average closing price of Class A Common Stockon the NYSE has equaled or exceeded $25.00 per share), (ii) all of theshares 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 previouslyvested will fully vest on the third anniversary of the Grant Dates. Therestrictions lapse on the February 2002 grant of restricted stock toMr. Stahl as to 25% of such grant on June 18, 2004, anadditional 25% on February 17, 2006 and in full on February 17,2007. No dividends will be paid on unvested restricted stock, providedhowever, that in connection with the 2002 grant of restricted stock toMr. Stahl, in the event any cash or in-kind distributions are made inrespect of Class A Common Stock or Class B common stock, with a parvalue of $0.01 per share (the "Class B CommonStock" and, together with the Class A Common Stock, the"Common Stock"), prior to the lapse of therestrictions relating to any of Mr. Stahl's restricted stock asto which the restrictions have not lapsed, such dividends will be heldby Revlon, Inc. and paid to Mr. Stahl when and if such restrictionslapse. At December 31, 2003 and 2002, there were 1,440,000 and1,475,000 shares, respectively, of restricted stock outstanding andunvested under the Amended Stock Plan. The Company recordedcompensation 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 December31, 2003 and 2002, respectively, for the restricted stock awards.

On February 17, 2002, Revlon, Inc. adopted the Revlon, Inc. 2002Supplemental Stock Plan (the "Supplemental StockPlan"), the purpose of which is to provide Mr. Stahl, thesole eligible participant, with inducement awards to entice him to jointhe Company to enhance the Company's long-term performance andprofitability. The Supplemental Stock Plan covers 530,000 shares of theClass A Common Stock. Awards may be made under the Supplemental StockPlan in the form of stock options, stock appreciation rights andrestricted or unrestricted stock. On February 17, 2002, theCompensation Committee granted Mr. Stahl an Award of 530,000 restrictedshares of Class A Common Stock, the full amount of the shares ofRevlon, Inc.'s Class A Common Stock issuable under theSupplemental Stock Plan. The terms of the Supplemental Stock Plan andthe foregoing grant of restricted shares to Mr. Stahl are substantiallythe same as the Amended Stock Plan and the February 2002 grant ofrestricted shares to Mr. Stahl under such plan. Pursuant to the termsof the Supplemental Stock Plan, such grant was made conditioned uponMr. Stahl's execution of the Company's standard EmployeeAgreement as to Confidentiality and Non-Competition.

15.    Related Party Transactions

As of December 31,2003, MacAndrews & Forbes beneficially owns shares of Revlon,Inc.'s Common Stock and Series B convertible preferred stock (the"Series B Preferred Stock") havingapproximately 97% of the combined voting power of theoutstanding shares of Revlon, Inc.'s Common Stock and Series BPreferred Stock. Revlon, Inc. in turn directly owns all of theCompany's common stock. As a result, MacAndrews & Forbes isable to elect the entire Board of Directors of Revlon, Inc. and theCompany and control the vote on all matters submitted to a vote ofRevlon, Inc.'s and the Company's stockholders. MacAndrews& Forbes is wholly owned by Ronald  O. Perelman, Chairman ofthe Board of Directors of Revlon, Inc. **(See "RecentDevelopments" for important information)**.

Transfer Agreements

In June 1992, Revlon, Inc. and ProductsCorporation entered into an asset transfer agreement with Holdings andcertain of its wholly-owned subsidiaries (the "AssetTransfer Agreement"), and Revlon, Inc. and ProductsCorporation entered into a real property asset transfer agreement withHoldings (the "Real Property TransferAgreement" and, together with the Asset TransferAgreement, the "Transfer Agreements"), andpursuant to such agreements, on June 24, 1992 Holdings transferredassets to Products Corporation and Products Corporation assumed all ofthe liabilities of Holdings, other than certain specifically excludedassets and liabilities (the liabilities excluded are referred to as the"Excluded Liabilities"). Certain consumerproducts lines sold in demonstrator-assisted distribution channelsconsidered not integral to Revlon, Inc.'s business and whichhistorically had not been profitable (the "RetainedBrands") and certain other assets and liabilities wereretained by Holdings. Holdings agreed to indemnify Revlon, Inc. andProducts Corporation against losses arising from the ExcludedLiabilities, and Revlon, Inc. and Products Corporation agreed toindemnify Holdings against losses arising from the 

F-40

----

liabilities assumed by Products Corporation.The amounts reimbursed by Holdings to Products Corporation for theExcluded Liabilities for 2003, 2002 and 2001 were $0.3, $0.5 and $0.2,respectively.

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

Reimbursement Agreements

Revlon, Inc., Products Corporationand MacAndrews Holdings have entered into reimbursement agreements (the"Reimbursement Agreements") pursuant to which(i) MacAndrews Holdings is obligated to provide (directly or throughaffiliates) certain professional and administrative services, includingemployees, to Revlon, Inc. and its subsidiaries, including ProductsCorporation, and purchase services from third party providers, such asinsurance, legal and accounting services and air transportationservices, on behalf of Revlon, Inc. and its subsidiaries, includingProducts Corporation, to the extent requested by Products Corporation,and (ii) Products Corporation is obligated to provide certainprofessional and administrative services, including employees, toMacAndrews Holdings (and its affiliates) and purchase services fromthird party providers, such as insurance and legal and accountingservices, on behalf of MacAndrews Holdings (and its affiliates) to theextent requested by MacAndrews Holdings, provided that in each case theperformance of such services does not cause an unreasonable burden toMacAndrews Holdings or Products Corporation, as the case may be.Products Corporation reimburses MacAndrews Holdings for the allocablecosts of the services purchased for or provided to Products Corporationand its subsidiaries and for reasonable out-of-pocket expenses incurredin connection with the provision of such services. MacAndrews Holdings(or such affiliates) reimburses Products Corporation for the allocablecosts of the services purchased for or provided to MacAndrews Holdings(or such affiliates) and for the reasonable out-of-pocket expensesincurred in connection with the purchase or provision of such services.Each of Revlon, Inc. and Products Corporation, on the one hand, andMacAndrews Holdings, on the other, has agreed to indemnify the otherparty for losses arising out of the provision of services by it underthe Reimbursement Agreements other than losses resulting from itswillful misconduct or gross negligence. The Reimbursement Agreementsmay be terminated by either party on 90 days' notice. ProductsCorporation does not intend to request services under the ReimbursementAgreements unless their costs would be at least as favorable toProducts Corporation as could be obtained from unaffiliated thirdparties. Products Corporation participates in MacAndrews &Forbes' directors and officers liability insurance program, whichcovers Products Corporation, Revlon, Inc., as well as MacAndrews &Forbes and its other affiliates. The limits of coverage are availableon an aggregate basis for losses to any or all of the participatingcompanies and their respective directors and officers. ProductsCorporation reimburses MacAndrews & Forbes for its allocableportion of the premiums for such coverage, which Products Corporationbelieves, is more favorable than the premiums Products Corporationwould pay were it to secure stand-alone coverage. The amount paid byProducts Corporation to MacAndrews & Forbes for premiums isincluded in the amounts paid under the Reimbursement Agreement. The netamounts reimbursable by (payable to) MacAndrews Holdings to (by)Products Corporation for the services provided under the ReimbursementAgreements 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 MafcoHoldings are parties to the Tax Sharing Agreement, which is describedin Note 12. Since payments to be made under the Tax Sharing Agreementwill be determined by the amount of taxes that Products Corporationwould otherwise have to pay if it were to file separate federal, stateor local income tax returns, the Tax Sharing Agreement will benefitMafco Holdings to the extent Mafco Holdings can offset the taxableincome generated by Products Corporation against losses and tax creditsgenerated by Mafco Holdings and its other subsidiaries. There were nocash payments in respect of federal taxes made by Products Corporationpursuant to the Tax Sharing Agreement for 2003, 2002 and 2001.

F-41

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

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

Other

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

Effective September 2001, Revlon, Inc. acquired from Holdings allthe assets and liabilities of the Charles of the Ritz business (whichRevlon, Inc. contributed to Products Corporation in the form of acapital contribution), in consideration for 400,000 newly issued sharesof Revlon, Inc.'s Class A Common Stock and 4,333 shares of newlyissued voting (with 433,333 votes in the aggregate) Series B PreferredStock which are convertible into 433,333 shares in the aggregate ofRevlon, Inc.'s Class A Common Stock, which conversion rights wereapproved by the stockholders of Revlon, Inc. at its 2002 Annual Meetingof Stockholders. As Holdings and Products Corporation are under commoncontrol, the transaction has been accounted for at historical cost in amanner similar to that of a pooling of interests and, accordingly, allprior period financial statements presented have been restated as ifthe acquisition took place at the beginning of such periods. Aninvestment banking firm rendered its written opinion that the terms ofthe transaction were fair from a financial standpoint to Revlon, Inc.The effect of the acquisition was to increase both operating income andnet income by $2.3 for 2001. The net equity of the Charles of the Ritzbusiness is included in total stockholder's deficiency atDecember 31, 2003.

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

The Credit Agreement and ProductsCorporation's 12% Senior Secured Notes are supported by,among other things, guarantees from Revlon, Inc., and, subject tocertain limited exceptions, all of the domestic subsidiaries ofProducts Corporation. The obligations under such guarantees are securedby, among other things, the capital stock of Products Corporation and,subject to certain limited exceptions, the capital stock of all ofProducts Corporation's domestic subsidiaries and 66% ofthe capital stock of Products Corporation's and its domesticsubsidiaries' first-tier foreign subsidiaries.

In March2002, prior to the passage of the Sarbanes-Oxley Act of 2002, ProductsCorporation made an advance of $1.8 to Mr. Jack L. Stahl, theCompany's President and CEO, pursuant to his employment agreementwhich was entered into in February 2002, for tax assistance related toa grant of restricted stock provided to Mr. Stahl pursuant to suchagreement, which loan bears interest at the applicable federal rate. InMay 2002, prior to the passage of the Sarbanes-Oxley Act of 2002,Products Corporation made an advance of $2.0 to Mr. Stahl pursuant tohis employment agreement in connection with the purchase of hisprincipal residence in the New York City metropolitan area, which loanbears interest at the applicable federal rate. Mr. Stahl repaid $0.1and $0.1 of such loan during 2003 and 2002, respectively. Pursuant tohis employment agreement, Mr. Stahl receives from Products Corporationadditional compensation payable on a monthly basis equal to the amountactually paid by him in respect of interest and principal on such $2.0advance, which for 2003 and 2002 was $0.1 and $0.1, respectively. TheCompany also pays Mr. Stahl a gross up for any taxes payable by Mr.Stahl as a result of such additional compensation, which tax gross upamount was $0.1 and $0.1 in 2003 and 2002, respectively.

F-42

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During 2000, prior to the passage of theSarbanes-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 theapplicable federal rate. Mr. Greeff repaid $0.2, $0.2 and $0.2 during2003, 2002 and 2001, respectively. Pursuant to his employmentagreement, Mr. Greeff is entitled to receive bonuses from ProductsCorporation, payable on each May 9th commencing on May 9, 2001 andending on May 9, 2005, in each case equal to the sum of the principaland interest on the advance repaid in respect of such year by Mr.Greeff, provided that he is employed by Products Corporation on eachsuch May 9th, which bonus installments were paid to Mr. Greeff in eachof May 2001, 2002 and 2003.

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

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

During 2003, 2002 and 2001, ProductsCorporation made payments of nil, nil and $0.1, respectively, to afitness center, in which an interest is owned by members of theimmediate family of Mr. Donald Drapkin, who is a member of Revlon,Inc.'s Board of Directors, for discounted health club dues for anexecutive 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) undera written agreement pursuant to which she provides voiceover servicesfor certain of the Company's advertisements.

The law firmof which Mr. Edward Landau was Of Counsel to and from which he retiredin February 2003, Wolf, Block, Schorr and Solis-Cohen LLP, did notprovide any legal services to Products Corporation during 2003, but didprovide such services in 2002 and 2001. It is anticipated that suchfirm could continue to provide such services in 2004.

During2003, 2002 and 2001, Products Corporation employed Mr. Perelman'sdaughter in a marketing position, with compensation paid in each of2003, 2002 and 2001 of less than $0.1.

During 2003, 2002 and2001, Products Corporation employed Mr. Drapkin's daughter in amarketing position, with compensation paid in each of 2003, 2002 and2001 of less than $0.1.

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

16.    Commitments and Contingencies

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

The Company has minimum purchase commitments withsuppliers of finished goods, raw materials and components. The minimumpurchase commitments under these agreements aggregated $37.4; suchcommitments for each of the five years subsequent to December 31, 2003are $37.4, nil, nil, nil and nil, 

F-43

----

respectively. The amount the Companypurchased under minimum purchase commitments during 2003, 2002 and 2001was $65.3, $63.7 and $32.0, respectively.

The Company and itssubsidiaries are defendants in litigation and proceedings involvingvarious matters. In the opinion of the Company's management,based upon advice of its counsel handling such litigation andproceedings, adverse outcomes, if any, will not result in a materialeffect on the Company's consolidated financial condition orresults of operations.

17.    Quarterly Results of Operations(Unaudited)

The following is a summary of the unauditedquarterly results of operations:

|                |  |                             |       |            |  |            |       |            |  |        |       |         |  |        |       |         |  |  |
|----------------|--|-----------------------------|-------|------------|--|------------|-------|------------|--|--------|-------|---------|--|--------|-------|---------|--|--|
|           |  | YearEnded December 31, 2003 |
|           |  | 1stQuarter                  |       | 2ndQuarter |  | 3rdQuarter |       | 4thQuarter |
| Net sales      |  | $                           | 292.0 |       |  | $          | 322.3 |       |  | $      | 316.5 |    |  | $      | 368.5 |    |
| Gross profit   |  |                        | 180.5 |       |  |       | 197.1 |       |  |   | 189.4 |    |  |   | 231.2 |    |
| Net loss(a)(d) |  |                        | (48.4 | )     |  |       | (38.2 | )     |  |   | (54.7 | )  |  |   | (12.7 | )  |
|                |

    

|              |  |                             |       |            |  |            |       |               |  |        |       |         |  |        |        |         |  |  |
|--------------|--|-----------------------------|-------|------------|--|------------|-------|---------------|--|--------|-------|---------|--|--------|--------|---------|--|--|
|         |  | Year Ended December 31,2002 |
|         |  | 1stQuarter                  |       | 2ndQuarter |  | 3rdQuarter |       | 4thQuarter(c) |
| Net sales    |  | $                           | 275.4 |       |  | $          | 308.2 |          |  | $      | 323.2 |    |  | $      | 212.6  |    |
| Gross profit |  |                        | 166.4 |       |  |       | 188.4 |          |  |   | 201.6 |    |  |   | 59.3   |    |
| Net loss(b)  |  |                        | (45.8 | )     |  |       | (37.7 | )        |  |   | (21.5 | )  |  |   | (176.8 | )  |
|              |

|  |
|--|
|  |  |
|  |

| (a) | Includesrestructuring 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 Companyrecorded expenses of approximately $104 (of which approximately $100was recorded in the fourth quarter of 2002) related to theimplementation of the stabilization and growth phase of theCompany's plan. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

F-44

----

18.    Geographic,Financial and Other Information

The Company manages itsbusiness on the basis of one reportable operating segment. See Note 1for a brief description of the Company's business. As of December31, 2003, the Company had operations established in 16 countriesoutside of the U.S. and its products are sold throughout the world. TheCompany is exposed to the risk of changes in social, political andeconomic conditions inherent in foreign operations and theCompany's results of operations and the value of its foreignassets are affected by fluctuations in foreign currency exchange rates.Net sales by geographic area are presented by attributing revenues fromexternal customers on the basis of where the products are sold. During2003, 2002 and 2001, Wal-Mart and its affiliates worldwide accountedfor approximately 20.6%, 22.5% and 19.7%,respectively, of the Company's consolidated net sales. TheCompany expects that Wal-Mart and a small number of other customerswill, in the aggregate, continue to account for a large portion of theCompany's net sales. Although the loss of Wal-Mart or one or moreof the Company's other customers that may account for asignificant portion of the Company's sales, or any significantdecrease in sales to these customers or any significant decrease inretail display space in any of these customers' stores, couldhave a material adverse effect on the Company's business,financial condition or results of operations, the Company has no reasonto believe that any such loss of customer or decrease in sales willoccur. In January 2002, Kmart Corporation filed a petition forreorganization under Chapter 11 of the U.S. Bankruptcy Code and in May2003 emerged from bankruptcy. Throughout 2002 and continuing into 2003Kmart continued to close underperforming stores. Kmart accounted forless than 3% of the Company's net sales in 2003. Althoughthe Company plans to continue doing business with Kmart for theforeseeable future and, based upon the information currently available,believes that Kmart's prior bankruptcy proceedings and storeclosings will not have any material adverse effect on theCompany's business, financial condition or results of operations,there can be no assurances that further deterioration, if any, inKmart's financial condition will not have such an effect on theCompany.

|                        |  |                        |         |        |  |        |         |        |  |        |         |        |  |  |
|------------------------|--|------------------------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                   |  | YearEnded December 31, |
|                   |  | 2003                   |         | 2002   |  | 2001   |
| **GeographicAreas:**   |  |
| Netsales:              |  |
| UnitedStates           |  | $                      | 837.0   |   |  | $      | 716.1   |   |  | $      | 825.1   |   |
| Canada                 |  |                   | 53.6    |   |  |   | 44.0    |   |  |   | 45.2    |   |
| UnitedStates andCanada |  |                   | 890.6   |   |  |   | 760.1   |   |  |   | 870.3   |   |
| International          |  |                   | 408.7   |   |  |   | 359.3   |   |  |   | 407.3   |   |
|                   |  | $                      | 1,299.3 |   |  | $      | 1,119.4 |   |  | $      | 1,277.6 |   |
|                        |

|                        |  |             |       |        |  |        |       |        |  |  |  |  |  |  |
|------------------------|--|-------------|-------|--------|--|--------|-------|--------|--|--|--|--|--|--|
|                   |  | December31, |       |
|                   |  | 2003        |       | 2002   |  |
| Long-livedassets:      |  |
| UnitedStates           |  | $           | 378.7 |   |  | $      | 375.2 |   |  |
| Canada                 |  |        | 3.9   |   |  |   | 3.5   |   |  |
| UnitedStates andCanada |  |        | 382.6 |   |  |   | 378.7 |   |  |
| International          |  |        | 79.8  |   |  |   | 74.6  |   |  |
|                   |  | $           | 462.4 |   |  | $      | 453.3 |   |  |
|                        |

|                                    |  |                       |         |        |  |        |         |        |  |        |         |        |  |  |
|------------------------------------|--|-----------------------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                               |  | YearEnded December31, |
|                               |  | 2003                  |         | 2002   |  | 2001   |
| **Classes of SimilarProducts:**    |  |
| Netsales:                          |  |
| Cosmetics, skin care andfragrances |  | $                     | 872.4   |   |  | $      | 723.9   |   |  | $      | 831.0   |   |
| Personalcare                       |  |                  | 426.9   |   |  |   | 395.5   |   |  |   | 446.6   |   |
|                               |  | $                     | 1,299.3 |   |  | $      | 1,119.4 |   |  | $      | 1,277.6 |   |
|                                    |

F-45

----

19.    Subsequent Events

OnFebruary 12, 2004, Revlon, Inc. announced that its Board of Directorshad approved agreements with Fidelity Management & Research Co.("Fidelity") and MacAndrews & Forbeswhich will dramatically strengthen the Company's balance sheet(the "Debt Reduction Transactions"). As aresult of the agreements reached, the Company expects that its debtwill be reduced by approximately $930 and the Company anticipates thatat least $780 of its debt will be eliminated during the first quarterof 2004 through a debt-for-equity exchange.

In connection withthe Debt Reduction Transactions, MacAndrews & Forbes has agreed toexchange an aggregate of approximately $475 of the Company'sindebtedness for shares of Revlon, Inc.'s Class A Common Stock.Fidelity has also agreed to exchange an aggregate of $155 of theCompany's indebtedness for shares of Revlon, Inc.'s Class ACommon Stock. On February 20, 2004, Revlon, Inc. commenced exchangeoffers to holders of any and all of the Company's outstanding8 1/8% Senior Notes due 2006, 9% SeniorNotes due 2006 and 8 5/8% Senior SubordinatedNotes due 2008, each of which has been fully and unconditionallyguaranteed by Revlon, Inc., on the same terms as agreed with Fidelityand MacAndrews & Forbes.

Fidelity and MacAndrews &Forbes have agreed to tender for exchange in the exchange offers anaggregate of approximately $440 of outstanding8 1/8% Senior Notes, 9% Senior Notes and8 5/8% Senior Subordinated Notes for shares ofRevlon, Inc. Class A Common Stock, at a ratio of 400 shares of Revlon,Inc. Class A Common Stock for each $1,000 principal amount of8 1/8% Senior Notes or 9% Senior Notestendered for exchange or 300 shares of Revlon, Inc. Class A CommonStock for each $1,000 principal amount of 8 5/8%Senior Subordinated Notes tendered for exchange. Fidelity may elect toreceive cash or additional shares of Revlon, Inc. Class A Common Stockin 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 asof February 12, 2004 held $76, $47 and $32, respectively, in principalamount of the 8 1/8% Senior Notes, 9%Senior Notes and 8 5/8% Senior SubordinatedNotes.

In the exchange offers for the outstanding8 1/8% Senior Notes, 9% Senior Notes and8 5/8% Senior Subordinated Notes, holders otherthan MacAndrews & Forbes and Fidelity are being offered theopportunity to exchange their notes for (i) shares of Revlon, Inc.Class A Common Stock at the same ratios applicable to Fidelity andMacAndrews & Forbes in the support agreements, or (ii) cash up to amaximum of $150 aggregate principal amount of tendered notes, subjectto proration. Notes tendered for cash would receive $830 per $1,000face amount for the 8 1/8% Senior Notes, $800per $1,000 face amount for the 9% Senior Notes and $620 per$1,000 face amount for the 8 5/8% SeniorSubordinated Notes. Accrued interest will also be paid on tenderednotes in cash or additional shares of Revlon, Inc. Class A CommonStock, at the holder's option. The maximum principal amount ofnotes that may be exchanged for cash is $150 reduced by the aggregateprincipal amount of any notes tendered and exchanged in the exchangeoffers for shares of Revlon, Inc. Class A Common Stock in excess of theamounts Fidelity and MacAndrews & Forbes currently hold and haveagreed to tender for exchange. The exchange offers commenced onFebruary 20, 2004.

To the extent that $150 aggregate principalamount of notes, other than the notes to be tendered by Fidelity andMacAndrews & Forbes, are not tendered in the exchange offers,MacAndrews & Forbes has agreed to subscribe for additional sharesof Revlon, Inc. Class A Common Stock at a purchase price of $2.50 pershare to make up for any such shortfall, with the proceeds of suchinvestment to be used to repay the Company's indebtedness.MacAndrews & Forbes has also agreed to subscribe for additionalshares of Revlon, Inc. Class A Common Stock in an aggregatesubscription amount equal to the amount of cash required to be paid byRevlon, Inc. in exchange for notes which are tendered for cash,excluding cash payable with respect to accrued interest. If, as aresult of these transactions, MacAndrews & Forbes makes aninvestment in Revlon, Inc. Class A Common Stock for cash, the otherstockholders of record of Revlon, Inc. as of a date prior to thetermination of the exchange offer will be provided the opportunity tosubscribe for Revlon, Inc. Class A Common Stock at the same $2.50subscription price.

F-46

----

In addition to the exchange offers whichthe Company expects will reduce its indebtedness by an aggregate ofapproximately $780, Revlon, Inc. plans to conduct further rights andequity offerings in such amounts as to ensure that the total debtreduction will be at least $830 by the end of 2004 and at least $930 bythe end of March 2006. The terms of the rights offering to beconsummated prior to December 31, 2004 and any other equity offeringsto be undertaken in connection with the Debt Reduction Transactions,including the subscription prices will be determined by Revlon,Inc.'s Board of Directors at the appropriatetimes.

Included in the obligations to be exchanged for Revlon,Inc. Class A Common Stock are any and all outstanding amounts owing toMacAndrews & Forbes, as of the closing date of the exchange offers,under the Mafco $100 million term loan (which the Company currentlyexpects will be $110 at March 31, 2004), the 2004 Mafco $125 millionterm loan (which the Company currently expects will be $55 at March 31,2004), the Mafco $65 million line of credit (which the Companycurrently expects will be nil at March 31, 2004) (each as hereinafterdefined) and approximately $24 of certain subordinated promissory notespayable to MacAndrews & Forbes. Each $1,000 principal amount ofindebtedness outstanding under the Mafco $100 million term loan, Mafco$65 million line of credit and 2004 Mafco $125 million term loan willbe exchanged for 400 shares of Revlon, Inc. Class A Common Stock andeach $1,000 principal amount of indebtedness outstanding under thesubordinated promissory notes will be exchanged for 300 shares ofRevlon, Inc. Class A Common Stock. The remainder of the 2004 Mafco $125million term loan and the Mafco $65 million line of credit which is notexchanged in the exchange offers shall remain available to the Companyin accordance with their respective terms. As part of the DebtReduction Transactions, under the stockholders agreement Revlon, Inc.agreed with Fidelity to cause the Company to limit outstandingaggregate borrowings under the Mafco $65 million line of credit and theMafco 2004 $125 million term loan to an amount not greater than $125million less the indebtedness under such loans that is exchanged in theexchange offers, at any time after closing the Debt ReductionTransactions. MacAndrews & Forbes, which beneficially owns100% of the outstanding shares of Revlon, Inc.'s Series Apreferred stock, having an aggregate liquidation preference of $54.6,and 100% of Revlon, Inc.'s outstanding Series Bconvertible preferred stock, has also agreed to exchange its shares ofRevlon, Inc.'s Series A preferred stock for 160 shares of Revlon,Inc. Class A Common Stock for each $1,000 of liquidation preference andto convert its shares of Revlon, Inc. Series B Preferred Stock into anaggregate of 433,333 shares of Revlon, Inc. Class A Common Stock.

As part of the Debt Reduction Transactions, Revlon, Inc. andFidelity have entered into a stockholders agreement pursuant to which,among other things, (i) Revlon, Inc. agreed to continue to maintain amajority of independent directors (as defined by NYSE listingstandards) on its Board of Directors as it currently does; and (ii)Revlon, Inc. would establish and maintain a Nominating and CorporateGovernance Committee of the Board of Directors.

MacAndrews &Forbes has agreed to act by written consent to approve the DebtReduction Transactions to the extent that such approval is required,including the approval of the issuance of the necessary additionalshares of Revlon, Inc. Class A Common Stock as consideration in theexchange offers and the transactions contemplated by the supportagreements with Fidelity and MacAndrews & Forbes. The Board ofDirectors has fixed February 17, 2004 as the record date for thedetermination of stockholders entitled to notice of the action bywritten consent. The decision to enter into the transactions describedabove follows the announcement in December 2003 that Revlon,Inc.'s Board of Directors had authorized management to beginexploring various alternatives to strengthen the Company'sbalance sheet and increase equity. Revlon, Inc. filed an InformationStatement with the Securities and Exchange Commissions and mailedexchange offer materials to note holders on February 20, 2004. As acondition to the exchange of its exchange notes in the exchange offers,Fidelity is entitled to nominate two directors to be appointed toRevlon, Inc.'s Board of Directors, one of whom shall be appointedto each of the committees of Revlon, Inc.'s Board of Directors,subject to satisfying applicable NYSE listing standards. Revlon, Inc.indicated that certain aspects of the Debt Reduction Transactions maybe subject to Board of Director, stockholder, lender, and regulatoryapprovals.

As a result of the Debt Reduction Transactions, inFebruary 2004 the Company sought and secured amendments of its CreditAgreement to permit various aspects of such transactions, includingpermitting (i) the prepayment of the Mafco $100 million term loan andthe Mafco $125 million term loan as a result 

F-47

----

of the indebtedness thereunder outstanding atthe consummation of the exchange offers being fully converted to equityin connection with the exchange offers; (ii) the reduction of thecommitment of the Mafco $65 million line of credit to its undrawnamount at the consummation of the exchange offers; (iii) the exclusionfrom Revlon, Inc.'s obligation to make capital contributions tothe Company using the proceeds from Revlon, Inc.'s equityofferings raised by Revlon, Inc. in connection with the Debt ReductionTransactions; (iv) any proceeds remaining after such transactions to becontributed to the Company and used to prepay or repurchase any of itsoutstanding indebtedness, provided that the Company takes action tomake such prepayment or repurchase within 30 days after receipt of suchcontribution and grants a first-priority security interest in theamount contributed pending its application to such prepayment orrepurchase; (v) permitting Revlon, Inc. to enter into certaininvestment or subscription agreements in connection with the DebtReduction Transactions, including the support agreements and any otherinvestment or subscription agreements; and (vi) the aggregate term loancommitments under the Credit Agreement to be increased by$64.4.

In December 2003, Revlon, Inc. announced that its Board ofDirectors approved the 2004 M&F Loan and the $25 million M&FLoan from MacAndrews Holdings. The 2004 Mafco $125 million term loanbecame available to the Company effective in January 2004, if needed,to enable the Company to continue to implement and refine its plan. The2004 M&F Loan and $25 million M&F Loan were consolidated intothe 2004 Mafco $125 million term loan. The 2004 Mafco $125 million termloan is a senior unsecured multiple-draw term loan at an interest rateof 12% per annum. The 2004 Mafco $125 million term loan is onsubstantially the same terms as the Mafco $100 million term loanprovided by MacAndrews & Forbes earlier in 2003, including thatinterest on such loans is not payable in cash, but will accrue and beadded to the principal amount each quarter and be paid in full at finalmaturity on December 1, 2005, provided that $25 of such loan may berepaid at the option of the Company prior to December 31,2005.

EBITDA (as defined in the Credit Agreement) was $144.4 forthe four consecutive fiscal quarters ended December 31, 2003, which wasless than the minimum of $230 required under the EBITDA covenant of theCredit Agreement for that period and the Company's leverage ratiowas 1.66:1.00, which was in excess of the maximum ratio of 1.1:1.00permitted under the leverage ratio covenant of the Credit Agreement forthat period. Accordingly, the Company sought and on January 28, 2004secured the 2004 Bank Amendment including waivers of compliance withthese covenants for the four quarters ended December 31, 2003 and, inlight of the Company's expectation that the continuedimplementation of, and refinement to, the Company's plan wouldaffect its ability to comply with these covenants during 2004, theCompany also secured as part of the 2004 Bank Amendment an amendment toeliminate the EBITDA and leverage ratio covenants for the first threequarters of 2004 and a waiver of compliance with such covenants for thefour quarters ending December 31, 2004 expiring on January 31, 2005.The 2004 Bank Amendment to the Credit Agreement also included certainother amendments to allow for the continued implementation of, andrefinement to, the Company's plan, including, among other things:(i) providing exceptions from the limitations under the indebtednesscovenant to permit the 2004 Mafco $125 million term loan, (ii)permitting the Company to borrow up to an additional $50 in workingcapital loans from MacAndrews Holdings or its affiliates, if necessary,(iii) extending the maturity of the Mafco $65 million line of credituntil June 30, 2005 and providing that as a condition to the Companyborrowing under such line from and after the effective date of theamendment that at least $100 shall have been borrowed under the 2004Mafco $125 million term loan, (iv) continuing the $20 minimum liquiditycovenant, (v) increasing the applicable margin on loans under theCredit Agreement by 0.25%, the incremental cost of which to theCompany, assuming the Credit Agreement is fully drawn, would beapproximately $0.5 from February   1, 2004 through the end of2004, and (vi) permitting Revlon, Inc. to guarantee certain classes ofthe Company's public indebtedness to consummate the DebtReduction Transactions.

F-48

----

ScheduleII

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIESVALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2003,2002 and 2001 (dollars inmillions)

|                                                |  |                            |        |                            |  |                 |        |                      |  |   |        |           |  |   |      |        |  |  |
|------------------------------------------------|--|----------------------------|--------|----------------------------|--|-----------------|--------|----------------------|--|---|--------|-----------|--|---|------|--------|--|--|
|                                           |  | Balanceat Beginningof Year |        | Charged to CostandExpenses |  | OtherDeductions |        | Balance atEndof Year |
| **Year ended December31, 2003:**               |  |                       |   |                       |  |
| Applied againstassetaccounts:                  |  |                       |   |                       |  |            |   |                 |  |
| Allowancefor doubtfulaccounts                  |  | $                          | 15.8   |                       |  | $               | 3.2    |                 |  | $ | (11.3) | (1)  |  | $ | 7.7  |   |
| Allowancefor volume and early paymentdiscounts |  | $                          | 8.2    |                       |  | $               | 40.4   |                 |  | $ | (36.9) | (2)  |  | $ | 11.7 |   |
|                                           |  |
| **Yearended December 31,2002:**                |  |                       |   |                       |  |
| Applied againstasset accounts:                 |  |                       |   |                       |  |
| Allowance for doubtfulaccounts                 |  | $                          | 8.3    |                       |  | $               | 9.5    |                 |  | $ | (2.0)  | (1)  |  | $ | 15.8 |   |
| Allowancefor volume and early paymentdiscounts |  | $                          | 7.1    |                       |  | $               | 31.7   |                 |  | $ | (30.6) | (2)  |  | $ | 8.2  |   |
|                                           |  |
| **Yearended December 31,2001:**                |  |                       |   |                       |  |
| Applied againstasset accounts:                 |  |                       |   |                       |  |
| Allowance for doubtfulaccounts                 |  | $                          | 7.6    |                       |  | $               | 3.5    |                 |  | $ | (2.8)  | (1)  |  | $ | 8.3  |   |
| Allowancefor volume and early paymentdiscounts |  | $                          | 8.5    |                       |  | $               | 30.0   |                 |  | $ | (31.4) | (2)  |  | $ | 7.1  |   |
|                                                |

|  |
|--|
|  |  |
|  |

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

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

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

F-49

----

SIGNATURES

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

Revlon Consumer ProductsCorporation (Registrant)

|                                                           |  |                                                                    |  |                                                                 |  |  |  |  |  |  |
|-----------------------------------------------------------|--|--------------------------------------------------------------------|--|-----------------------------------------------------------------|--|--|--|--|--|--|
| By: /s/Jack L. Stahl                                      |  | By: /s/ Thomas E. McGuire                                          |  | By: /s/ JohnF. Matsen, Jr.                                      |
|                                            |  |                                                     |  |                                                  |
| JackL. StahlPresident, Chief ExecutiveOfficer andDirector |  | Thomas E. McGuireExecutive VicePresident andChiefFinancial Officer |  | John F. Matsen, Jr.Senior Vice Presidentand CorporateController |
|                                                           |

Dated: February 24, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934,this report has been signed by the following persons on behalf of theRegistrant on February 24, 2004 and in the capacitiesindicated.

|                                                               |  |                                                                        |  |  |  |  |
|---------------------------------------------------------------|--|------------------------------------------------------------------------|--|--|--|--|
| Signature                                                     |  | Title                                                                  |
| *______________________________(RonaldO.Perelman)             |  |     Chairmanof the Board andDirector               |
| *______________________________(HowardGittis)                 |  |     Vice Chairman of the Board andDirector         |
| *______________________________(DonaldG. Drapkin)             |  |     Director                                       |
| /s/ Jack L. Stahl______________________________(Jack L.Stahl) |  |     President, Chief Executive Officer andDirector |
| *______________________________(Alan S.Bernikow)              |  |     Director                                       |
|                                                          |  |                                                                   |
| *______________________________(EdwardJ. Landau)              |  |     Director                                       |
|                                                               |

*Robert K. Kretzman, by signing his name hereto, does hereby sign thisreport on behalf of the directors of the registrant after whose typednames asterisks appear, pursuant to powers of attorney duly executed bysuch directors and filed with the Securities and ExchangeCommission.

By: /s/ Robert K. Kretzman

Robert K.KretzmanAttorney-in-fact

----