UNITED STATESSECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549 FORM 10-K (Mark One)x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended: December 31, 2007 OR o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _____ to _____ Commission
file number: 033-74194-01 (REMINGTON LOGO) REMINGTON
ARMS COMPANY, INC.(Exact name of
registrant as specified in its charter) Delaware
51-0350935(State
 or other jurisdiction of incorporation or organization)
(I.R.S.
 Employer Identification No.) 870
Remington Drive
P.O. Box 700
Madison, North Carolina 27025-0700(Address of principal
executive offices)
(Zip Code) (336) 548-8700(Registrants
telephone number, including area code) Securities
registered pursuant to Section 12(b) of the Act: None Securities
registered pursuant to Section 12(g) of the Act: None  Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
Yes oNox Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.Yes
x   Noo Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yeso   No
x Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.x Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of large accelerated filer, accelerated filer, and smaller
reporting company in Rule 12b-2 of the Exchange Act. (Check one): Large
 accelerated filer o
Accelerated
 filer oNon-accelerated
 filer x
Smaller
 reporting company o(Do
 not check if a smaller reporting company)  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).
 Yes
 o
No
 x There are no shares of the
issuers common equity held by non-affiliates. At March 28, 2008, the number of
shares outstanding of the issuers common stock is as follows: 1,000 shares of
Class A Common Stock, par value $.01 per share. DOCUMENTS
INCORPORATED BY REFERENCE
None    REMINGTON
ARMS COMPANY, INC.

FORM 10-K

December 31, 2007

INDEX

Page No.NOTE
 REGARDING FORWARD-LOOKING STATEMENTSPART I


1ITEM 1.
BUSINESS

1ITEM 1A.
RISK FACTORS

16ITEM 1B.
UNRESOLVED
 STAFF COMMENTS

24ITEM 2.
PROPERTIES

25ITEM 3.
LEGAL
 PROCEEDINGS

26ITEM 4.
SUBMISSION
 OF MATTERS TO A VOTE OF SECURITY HOLDERS

29PART II


30ITEM 5.
MARKET FOR
 REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
 OF EQUITY SECURITIES

30ITEM 6.
SELECTED
 FINANCIAL DATA

31ITEM 7.
MANAGEMENTS
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

36ITEM 7A.
QUANTITATIVE
 AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

59ITEM 8.
FINANCIAL
 STATEMENTS AND SUPPLEMENTARY DATA

60ITEM 9.
CHANGES IN
 AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

115ITEM 9A(T).
CONTROLS
 AND PROCEDURES

116ITEM 9B.
OTHER
 INFORMATION

118PART III


119ITEM 10.
DIRECTORS,
 EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

119ITEM 11.
EXECUTIVE
 COMPENSATION

123ITEM 12.
SECURITY
 OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
 MATTERS

152ITEM 13.
CERTAIN
 RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

153ITEM 14.
PRINCIPAL
 ACCOUNTING FEES AND SERVICES

155PART IV


156ITEM 15.
EXHIBITS,
 FINANCIAL STATEMENT SCHEDULES

156SIGNATURES


157SUPPLEMENTAL
 INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF
 THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
 SECTION 12 OF THE ACT

159EXHIBIT
 INDEX

160NOTE REGARDING FORWARD-LOOKING STATEMENTS

This
annual report on Form 10-K, including the Managements Discussion and Analysis
of Financial Condition and Results of Operations, contains statements which
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements relating to
trends in the operations and financial results and the business and the
products of the Company, as well as other statements including words such as
anticipate, believe, plan, estimate, expect, intend and other
similar expressions. Forward-looking statements are made based upon
managements current expectations and beliefs concerning future developments
and their potential effects on the Company. Such forward-looking statements are
not guarantees of future performance. See Item 7, Managements Discussion and
Analysis of Financial Condition and Results of Operations  Information
Concerning Forward-Looking
Statements.

PART I

Item 1. BUSINESS

References in this report to the Company,we,
us,
our, and words of similar import mean the collective reference to Remington
Arms Company, Inc. (Remington)
and its subsidiaries, RA Brands, L.L.C. (RA
Brands), RA Factors, Inc. (RA Factors) (which was merged with and into
Remington as of December 31, 2006) and Remington Steam, LLC (Remington
Steam), unless the context otherwise requires. References in this report to
Holding are to Remingtons parent, RACI Holding, Inc.

On May 31, 2007(the Closing Date), 100% of
the
shares of Holding, the sole stockholder of Remington, were purchased by
American Heritage Arms, LLC (which was converted into a corporation as of
December 11, 2007, and is now American Heritage Arms, Inc.)(AHA), an
affiliate of Cerberus Capital Management, L.P. (CCM and, along with CCMs
affiliates other than operating portfolio companies, collectively Cerberus),
pursuant to a stock purchase agreement dated as of April 4, 2007 (the AHA
Acquisition).

Company Overview

Founded in 1816 and
currently operating as a corporation, we design, manufacture and market a
comprehensive line of primarily sporting goods products for the global hunting
and shooting sports marketplace under the Remington® brand name. We also design, manufacture and market
products with law
enforcement, military, and government applications. Our 191-year history gives
us a long-established reputation in the marketplace for our products. We
believe that Remington is a
powerful brand in the broader U.S. sporting goods and outdoor recreation
markets and that our products are recognized by sportsmen worldwide for their
superior value, performance and durability.

Our
product lines consist primarily of firearms (shotguns and rifles) and
ammunition, as well as hunting and gun care accessories, clay targets, and
powder metal products.

For
the year ended December 31, 2007, we had consolidated net sales of $489.0
million and a net loss of ($1.5) million.

The
accompanying audited consolidated financial statements of Remington include the
accounts of its wholly owned subsidiaries, RA Brands, RA Factors (which was
merged with and into Remington as of December 31, 2006) and Remington Steam, as
well as reflect the impact of the Companys unconsolidated 50% joint venture
interest in Remington ELSAG Law Enforcement Systems, LLC (RELES) (which was
sold as of September 26, 2007). RA Brands primarily exists to own, protect and
comply with the legal requirements applicable to our patents, trademarks, and
copyrights (as discussed below), RA Factors primarily existed to collect our
accounts receivable, and Remington Steam primarily exists to accommodate
changes to the Companys long-term steam supply at its Ilion, New York
facility. The accounts of Holding, the sole stockholder of Remington, and those
of AHA, the sole stockholder of Holding, are not presented herein. Significant
transactions between the Company, Holding and AHA and the related balances are
reflected in the audited consolidated financial statements and related
disclosures.

Recent Business Developments

Acquisition by AHA

The
shares of Holding, the sole stockholder of Remington, were purchased by AHA on the
Closing Date, pursuant to a stock purchase agreement dated as of April 4, 2007
(the Stock Purchase Agreement) between
Holding, its stockholders and deferred stockholders (including the
ownership interests represented by Bruckmann,
Rosser, Sherrill & Co. II, L.P. and the Clayton & Dubilier Private
Equity Fund IV Limited Partnership (the CDR Fund)), as well as the Holding
stock option holders.

On
the Closing Date of the AHA Acquisition, AHA acquired all of the capital stock
of Holding, consisting of 205,208 shares of issued and outstanding Class A
common stock, par value $0.01 per share (the Common Stock) and 5,851 deferred
shares of Common Stock (which were converted into shares of Common Stock on the
Closing Date), at a value of $330.47 per share less related selling expenses,
escrow and related taxes. In addition, among other things, on the Closing Date
outstanding options to purchase 10,635 shares of Holding Common Stock (the
Stock Options), which constituted all of the outstanding Stock Options,
immediately vested subject to the applicable change in control provisions in
Holdings 1999 Stock Incentive Plan and 2003 Stock Option Plan.

1

As
a result of the AHA Acquisition, Remington made option cancellation
payments on the Closing Date, representing the purchase price of $330.47 per
share less the strike price of $220.31 with respect to each Stock Option less
related selling expenses, escrow and related taxes. AHA provided the funds to
Holding which, in turn, provided the funds to Remington to make these option
cancellation payments. On the Closing Date, AHA also provided Holding with
approximately $48.2 million to pay and satisfy in full as of the Closing Date
the full outstanding amount of principal and interest of Senior Note A due 2011
and Senior Note B due 2012 issued by Holding and held by the CDR Fund (the
Holding Notes).

In
accordance with the terms of the Stock Purchase Agreement, AHA, Holding and
Remington disbursed funds as follows:


AHA paid sellers $59.0
 million, net of $10.7 million of costs incurred by the sellers, certain
 seller withholding taxes, and amounts to be placed in escrow.
AHA provided the escrow
 agent $5.0 million representing amounts withheld from the sellers gross
 sales price.
AHA paid $0.7 million of
 seller-incurred legal fees with amounts withheld from the sellers gross
 sales price.
AHA provided $48.2 million
 to Holding for the payment of the Holding Notes and $0.7 million for certain
 tax withholdings due from sellers.
AHA provided Remington
 with $5.1 million for payment of the management bonus and cancellation of the
 Stock Options, net of seller-related expenses.
Holding paid $48.2 million
 to satisfy in full the Holding Notes.
Holding paid $3.7 million
 of certain AHA Acquisition-related costs with funds provided from Remington
 and provided Remington with $0.7 million associated with tax withholdings
 from the sellers.
Remington provided Holding
 with $3.8 million from its Revolving Credit Facility to pay for certain
 buyer-related AHA Acquisition costs described above.
Remington paid $10.3
 million from its Revolving Credit Facility in connection with obtaining
 waivers, amendments and consents to the Revolving Credit Facility and $200.0
 million 10.5% Senior Notes due 2011 (the Notes).
Remington paid $0.7
 million for cancellations of the Stock Options and $1.1 million of
 withholding taxes from amounts withheld from sellers and option holders.
Remington paid $4.0
 million in management bonuses and related withholding taxes from amounts that
 were withheld from the sellers and from funds provided by AHA.In
addition, subsequent to May 31, 2007, AHA contributed approximately $6.1
million of the initial capital to the capital of Remington. These amounts were
used to pay down the $3.8 million that Remington provided Holding for
transaction-related costs and a portion of the outstanding credit facility
balance at the time.

As
a result of the AHA Acquisition, AHA now controls 100% of the capital stock of
Holding. The preliminary value of the AHA Acquisition was $416.6 million at May
31, 2007, based on a preliminary draft of a third party valuation, which
includes the assumption of all of Remingtons approximately $85.2 million of
funded indebtedness related to the Amended and Restated Credit Agreement, dated
March 15, 2006, by and among Remington, Wachovia Bank, National Association, RA
Factors, Inc., and the lenders from time to time parties thereto (the Credit
Agreement), the $203.8 million principal amount of the Notes and approximately
$3.4 million of certain other indebtedness at the Closing Date, before AHA
Acquisition fees and expenses. The payment for the Common Stock and converted
deferred shares of Common Stock, the Stock Option cancellation payment and
repayment of the Holding Notes was funded by AHAs available cash. In addition,
Remington obtained all necessary waivers, amendments and consents so that
Remingtons Credit Agreement and the indebtedness evidenced by the Notes
remained outstanding and not in default.

Push Down Accounting

In
accordance with the guidelines set forth in SAB Topic 5J, Miscellaneous
Accounting, Pushdown Basis of Accounting Required in Certain Limited
Circumstances, the purchase price paid by AHA plus related purchase accounting
adjustments have been pushed-down and recorded in our financial statements
for the period subsequent to May 31, 2007. This has resulted in a new basis of
accounting reflecting the fair market value of our assets and liabilities for
the successor period beginning June 1, 2007. Information for all
predecessor periods

2

prior to the AHA Acquisition
is presented using our historical basis of accounting. Following is a summary
of the estimated fair values of the assets acquired and liabilities assumed as
of June 1, 2007 based on preliminary valuations, as well as subsequent
adjustments:

As
        of 
        June 1,
        2007
    
    Net
        
        Adjustments
    
    As
        of 
        Dec. 31,
        2007Inventory
    
    $
    180.9
    
    $
    (2.1
    )
    $
    178.8Other
        Current Assets
    
    
    136.4
    
    
    0.2
    
    
    136.6Property,
        Plant and Equipment
    
    
    104.2
    
    
    0.3
    
    
    104.5Goodwill
    
    
    67.0
    
    
    (6.0
    )
    
    61.0Identifiable
        Intangible Assets
    
    
    73.9
    
    
    (0.9
    )
    
    73.0Other
        Long-Term Assets
    
    
    22.1
    
    
    
    
    
    22.1Total
        Assets Acquired
    
    $
    584.5
    
    $
    (8.5
    )
    $
    576.0Current
        Liabilities
    
    $
    91.6
    
    $
    0.2
    
    
    91.8Revolving
        Credit Facility
    
    
    85.2
    
    
    
    
    
    85.210
        1⁄2% Senior Notes Due 2011
    
    
    203.8
    
    
    
    
    
    203.8Pension
        & OPEB
    
    
    40.9
    
    
    (9.5
    )
    
    31.4Other
        Non-Current Liabilities
    
    
    38.8
    
    
    0.8
    
    
    39.6Total
        Liabilities Assumed
    
    
    460.3
    
    
    (8.5
    )
    
    451.8Estimated
        AHA Acquisition Cost
    
    $
    124.2
    
    $
    
    
    $
    124.2Valuations
have been prepared with the assistance of third party valuation experts (for
inventory, property, plant and equipment, intangibles and certain liability
accounts). The allocation of the purchase price is based upon preliminary
valuation data and our estimates, assumptions and allocation to segments are
subject to change. For instance, adjustments to estimated lives of property,
plant and equipment could cause depreciation to change. Also, potential
liabilities associated with improvement initiatives have not yet been finalized
and may change. Any individual item or combination of the above could also
impact accounting for deferred income taxes and segment allocations. Goodwill
would change if any of the other valuations of any asset or liabilities
changes.

Sale of RELES

On
September 26, 2007 (the RELES Closing Date), we entered into a Membership
Interest Purchase and Sale Agreement (the RELES Sale Agreement) with ELSAG,
Inc. and closed the sale of our 50% interest in RELES to ELSAG, Inc. In full
payment for the transferred interest, ELSAG, Inc. paid us $3.0 million on the
RELES Closing Date. Upon the sale of RELES, we recorded a gain of $0.5 million.

Labor Related Matters

On
October 26, 2007, Remington was notified by the International Union, United Mine Workers
of America (the Union), which represents certain individuals employed by the
Company at the Companys Ilion, New York manufacturing facility (collectively,
the Covered Employees), that a new collective bargaining agreement (the New
Agreement) between the Union and the Company had been ratified and approved by
the Covered Employees. The New Agreement supersedes the prior collective
bargaining agreement between the Company and the Union, effective as of October
12, 2002 (the Agreement), as well as all extensions thereof, and also
supersedes all prior collective bargaining agreements between the Union and the
Company. The New Agreement relates to Covered Employees and is for a term that
commenced on October 27, 2007 and expires on October 28, 2012.

The
New Agreement contains provisions and conditions that are customary in
collective bargaining agreements of this type. The New Agreement addresses,
among other things, the scope of work to be performed by the Covered Employees,
management of the manufacturing facility, wage, hour and shift requirements,
Covered Employee seniority, termination and benefits provisions, vacation and
holiday parameters, health and safety

3

requirements and dispute
settlement procedures. Significant changes between the New Agreement and the
Agreement are:


An initial 3.5% increase
 in wages effective for an annual period beginning October 29, 2007, a 3%
 increase in wages effective the first Monday in November for each of the next
 three years thereafter, and a 3.5% increase in wages effective November 7,
 2011;
Modifications to the
 Remington Arms Welfare Plan; and
Acceptance of the proposed
 amendments to the Remington Arms Company, Inc. Pension and Retirement Plan
 (the Pension Plan), which were effective December 31, 2007 and provide,
 among other things, that no participant in the Pension Plan will earn any
 further benefit accruals after December 31, 2007. In 2007, we recognized a
 curtailment gain of $6.4 million related to the amendment to the Pension
 Plan.Second Amendment to Credit Facility

On
November 13, 2007, we entered into the Joinder Agreement, Second Amendment and
Supplement to Amended and Restated Credit Agreement by and among Remington, RA
Brands, L.L.C., Wachovia, and the lenders from time to time parties thereto
(the Second Amendment), which amended the Credit Agreement, by and among the
same parties and RA Factors, Inc., as amended on May 31, 2007 (the First
Amendment), by and among the same parties other than RA Factors, Inc., which
was merged with and into Remington as of December 31, 2006 and is thus not a
separate and distinct party to the First Amendment or the Second Amendment. The
Second Amendment modifies certain terms and conditions of the Credit Agreement
and the First Amendment. Capitalized terms used and not defined herein have the
meanings set forth in the Credit Agreement, the First Amendment and the Second
Amendment.

The
Second Amendment amended certain terms of the Credit Agreement, as previously
amended by the First Amendment, including by:

(1)
Adding a $25.0 million
 Term Loan Commitment against the Remington Trademarks at an interest rate of
 LIBOR plus 200 basis points with monthly principal payments of $520,800, plus
 interest, beginning May 1, 2008 and continuing on the first day of each month
 thereafter, the final installment of which shall be in an amount equal to
 such Lenders Pro Rata share of the remaining principal balance of the Term
 Loan and shall be payable on the Commitment Termination Date;(2)
Increasing the maximum
 commitment of the Revolving Credit Facility from $140.0 million to $155.0
 million while keeping intact the interest rate margins as established by the
 First Amendment;(3)
Increasing the Sub-limit
 from $70.0 million on the Inventory Formula Amount to $77.5 million;(4)
Amending the definition of
 Minimum Availability Condition from $20.0 million to $27.5 million;(5)
Amending the dollar
 amounts of Average Excess Availability by between $2.0 million and $5.0
 million, depending on the tier, to which the Applicable Margin for the
 Euro-Dollar Loans and Base Rate Loans applies; and(6)
Adding RA Brands, L.L.C.
 as a new borrower under the Credit Agreement and releasing RA Brands, L.L.C.
 from its obligations under the Subsidiary Guaranty previously executed by RA
 Brands, L.L.C.We
executed the Second Amendment to provide additional capacity and flexibility to
support strategic initiatives including, but not limited to, factory
improvements, penetration of certain sales channels, new product development,
one or more potential acquisitions and other corporate purposes.

In
connection with the closing of the Marlin Acquisition, as defined under Acquisition
of Marlin Firearms Company later in this section, we entered into
the Joinder Agreement and Supplement to Amended and Restated Credit Agreement
(the Joinder Agreement) on January 28, 2008, by and among Remington and RA
Brands, L.L.C., as the existing borrowers, The Marlin Firearms Company
(Marlin) and H&R 1871, LLC (H&R), as the new borrowers, Wachovia,
in its capacity as administrative and collateral agent for various financial
institutions (the Lenders), and such Lenders. Pursuant to the Joinder
Agreement, each of Marlin and H&R became a Borrower under the Amended and
Restated Credit Agreement.

4

Acquisition of
Marlin Firearms Company

We
completed our acquisition of all of the outstanding shares of Class A and Class
B Common Stock (collectively, the Shares) of Marlin on January 28, 2008 (the
Marlin Closing Date), from the shareholders of Marlin (collectively, the
Marlin Sellers) pursuant to a stock purchase agreement (the Marlin Stock
Purchase Agreement) dated as of December 21, 2007 by and among Marlin,
Remington, the Marlin Sellers party thereto, and Frank Kenna, III, solely in
his capacity as the Shareholders Representative (the Marlin Acquisition).
The Marlin Acquisition includes Marlins 100% ownership interest in H&R.

The
total purchase price for the Marlin Acquisition is estimated to be
approximately $47.6 million (the Purchase Price), subject to certain Purchase
Price reductions. The following is a summary of certain material transactions
related to the closing of the Marlin Acquisition:


Remington purchased
 the Shares and paid other related fees and expenses associated with the
 Marlin Acquisition with available cash on hand, funds available under
 existing credit facilities and an equity contribution provided by AHA to
 Remington through Remingtons parent, Holding. AHA owns 100% of Holding.
Remington
 paid the Marlin Sellers aggregate consideration of $36.0 million (the
 Consideration), of which $5.2 million was deposited into an escrow account
 to secure certain indemnity obligations of the Marlin Sellers under the
 Marlin Stock Purchase Agreement (the Escrow Amount). Any unused portion of
 the Escrow Amount will be released to the Marlin Sellers in two equal
 portions on two dates that are twelve and eighteen months following the
 Marlin Closing Date.
Remington
 paid approximately $5.3 million of Marlin Acquisition-related fees and
 expenses.
At
 the Marlin Closing Date and on behalf of Marlin, Remington repaid
 approximately $6.3 million of borrowings under the Marlin Amended and
 Restated Commercial Revolving Line of Credit Agreement between Marlin and
 Webster Bank, National Association.
The
 Consideration includes a reduction of $2.8 million in respect of an estimate
 of underfunding of Marlins pension plan as of the Marlin Closing Date. If
 the actual amount of the underfunding of the Marlin pension plan as of the
 Marlin Closing Date is less than $2.8 million as finally determined,
 Remington will increase the Consideration paid to the Marlin Sellers by the
 amount of such difference.In
connection with the closing of the Marlin Acquisition, as noted above, we
entered into the Joinder Agreement. Pursuant to the Joinder
Agreement, each of Marlin and H&R became a Borrower under that certain
Amended and Restated Credit Agreement by and among Remington, Wachovia, certain
subsidiaries of Remington, and the lenders from time to time a party thereto,
dated March 15, 2006 and as amended on May 31, 2007 and November 13, 2007.

Financial Information about Segments and Geographic Areas

In
accordance with the provision of Statement of Financial Accounting Standards
No. 131, Disclosures
about Segments of an Enterprise and Related Information (SFAS
131), after consideration of both quantitative and qualitative factors, our
operating segments form two reportable segments  for the firearms and
ammunition operating segments  while the remaining operating segments are
combined into our All Other reporting segment:

(1) Firearms, which
 designs, manufactures and imports, and markets primarily sporting shotguns
 and rifles;(2) Ammunition, which
 designs, manufactures and markets primarily sporting ammunition and
 ammunition reloading components; and(3) All Other, which
 includes accessories and other gun-related products, licensed products.5

The
following table sets forth our net sales for each of our aggregated reporting
segments for the periods shown:

Successor

PredecessorJune
 1-Dec. 31

Jan.
 1-May 312007

2007

2006

2005Firearms

$
138.7

$
80.5

$
223.4

$
202.2Ammunition


169.3


78.9


204.9


184.5All Other


14.0


7.6


17.7


23.7Total

$
322.0

$
167.0

$
446.0

$
410.4See
Note 22 to our audited consolidated financial statements for the year ended
December 31, 2007 appearing elsewhere in this annual report. There are no
significant assets owned by the Company outside of the United States.

NARRATIVE DESCRIPTION OF BUSINESS BY SEGMENT

Firearms

Products

Our
firearms product offerings include a comprehensive line of sporting shotguns
and rifles, as well as firearms for the government, military, and law
enforcement markets, marketed predominantly under the Remington brand name. Our goal has been to
market a broad assortment of general-purpose firearms together with more
specialized products that embody Remingtons emphasis on value, performance and
design.

Our
most popular shotguns are the Model 870 pump-action shotgun, and the Model
1100 and Model
11-87 auto-loading shotguns. Remington shotguns
are offered in versions that are marketed to both novices and experienced gun
owners. Specialty shotguns focus on the deer, turkey and other specialized
hunting markets, recreational and competitive clay target shooting, and various
law enforcement and military applications. We also offer over/under,
side-by-side, and single shot shotguns. Retail list prices for our most popular
shotguns range up to $1,200.

Our
most popular rifles are the Model 700, Model Seven, and Model
770 centerfire rifles and the Model 597 rimfire rifles. The Model
710 has been updated to the Model 770for 2007 to address current market trends. To
appeal to a broad range
of gun owners, we manufacture these rifles in a wide variety of chamberings,
configurations and finishes. Retail list prices for our most popular rifles
range up to $900.

Product
Introductions

We
focus our product development efforts on introducing new products that satisfy
the need for specialized, high-performance firearms. In 2007, we introduced a
new trigger system for the Model 700called the X Mark Pro, and enhanced the Model Seven bolt-action rifle
category through the addition of the Model
Seven XCR with proprietary TriNytecorrosion
control coating. Additionally in 2007, we introduced a new value priced varmint
rifle, the Model
700 SPS Varmint and a line
of tactical firearms as well as the Model 770 Sportsman®rifle
category which featured several upgrades to the popular Model 710 Sportsman®line.
In 2008, Remington announced the R-15 Modular Repeating Rifle,
a version of the popular AR-15 style rifle geared primarily toward the hunting
market. In addition, a uniquely featured new product was presented in the Model 700
VTR (Varmint Target Rifle) with a new triangular barrel
contour and integral muzzle brake as well as a stainless steel version of the Model 770.
In shotguns, Remington announced the new Shur Shot ambidextrous
thumbhole stock on several specialty turkey and deer hunting platforms, as well
as a new premium target shotgun line in the Model 1100 Premier® Sporting.

In
2006, we increased our sourced product offerings, known as International
Sourced Products, to include over/under shotguns, muzzleloaders, rimfire
rifles, and centerfire rifles. These product offerings are part of our ongoing
strategy to enhance our existing product lines. In addition, we have developed
new products internally, including a new titanium receiver auto-loading shotgun
model. These products were introduced to enhance our existing firearms product
lines.

6

Seasonality

We
sell a broad range of firearms products. The majority of our firearms products
are manufactured for hunting, target, and plinking use, while other models are
intended for government, military, and law enforcement applications. As a
result of the core use of our products occurring during the fall hunting season
(September-December), the majority of our sales are seasonal and concentrated
toward the fall hunting season. While we have historically followed the
industry practice of selling products pursuant to a dating plan, allowing the
customer to buy the products commencing at the beginning of our dating plan
periods and pay for them on extended terms, we have now commenced to shorten
the duration of these terms in order to increase cash flow and working capital.

As
a result of the seasonal nature of our sales, the extended payment terms under
our dating plan billing practices, and the aforementioned seasonality, our
historical working capital financing needs generally have significantly
exceeded cash provided by operations during certain parts of the year until
certain of our extended accounts receivable come due and are collected. As a
result, our working capital financing needs tend to be greatest during the spring
and summer months, decreasing during the fall and reaching their lowest points
during the winter.

Competition

Product
image, performance, quality and innovation are the primary competitive factors
in the firearms industry, with price and customer service also being important.
Our shotgun products compete with products offered by O. F. Mossberg &
Sons, Inc., Winchester firearms, Browning, and Beretta. Our rifles compete with
products offered by Sturm, Ruger & Co., Inc., Winchester firearms, Savage
Arms, Inc. and Browning. We believe that we compete effectively with all of our
present competitors. However, there can be no assurance that we will continue
to do so, and our ability to compete could be adversely affected by our leveraged
condition. In 2006, Winchester closed the Winchester rifle factory in New
Haven, Connecticut. In 2007, Smith & Wesson, through its acquisition of
Thompson/Center Arms, Inc. became a competitor with their entry into the long
gun market.

Manufacturing

Our
facility in Ilion, New York manufactures shotguns, rifles, powder metal parts,
extra barrels, and gun parts, and also houses our factory repair services and
custom gun shop. Our facility in Mayfield, Kentucky manufactures rimfire and
centerfire rifles. To manufacture our various firearm models, we utilize a
combination of parts manufactured from raw materials at the Ilion and Mayfield
facilities and components purchased from independent manufacturers. Quality
control processes are employed throughout the production process, utilizing
specifically tailored testing procedures and analyses.

Supply
of Raw Materials

To
manufacture our various products, we utilize numerous raw materials, including
steel, wood, and plastics, as well as parts purchased from independent
manufacturers. For a number of our raw materials, we rely on a limited number
of suppliers. For example, a major portion of our requirements for shotgun
barrel blanks and wood stocks are each currently being met by a limited number
of vendors. In 2006, we began importing sourced products from a few foreign
vendors, which continued in 2007 and we will continue to do so in 2008. See Risk
Factors for additional information on our sole source supplier agreement and
risks associated with this product line.

We
have written purchase agreements with the majority of our suppliers, some of
which contain minimum purchase requirements. See Managements Discussion and
Analysis of Financial Condition and Results of OperationsLiquidity and Capital
ResourcesContractual Obligations and Commercial Commitments. Any disruption
in our relationships with any of these vendors or reductions in the production
of material supplied could, in each case, adversely affect our ability to
obtain an adequate supply of material and could impose additional operational
costs associated with sourcing raw materials from new suppliers. We have had
long-term relationships with each of these vendors and believe that such
relationships are good, and do not currently anticipate any material shortages
or disruptions in supply from these vendors. Although alternative sources exist
from which we could obtain such raw materials, we do not currently have
significant supply relationships with any of these alternative sources and
cannot estimate with any certainty the length of time that would be required to
establish such a supply relationship, or the sufficiency of the quantity or
quality of materials that could be so obtained.

The
price and availability of production materials are affected by a wide variety
of interrelated economic and other factors, including alternative uses of
materials and their components, changes in production capacity, energy prices,
commodity prices, and governmental regulations. Specifically, our manufacturing
sites experienced

7

cost increases
related to metals and other raw material purchases and energy prices. We
believe some of these increases were directly related to supply shortages due
to foreign market demand for domestic scrap and increases in energy costs.
Industry competition and the timing of price increases by suppliers limits to
some extent our ability and the ability of other industry participants to pass
raw material cost increases on to customers in a timely manner. We have
experienced favorable variances in utility costs and expect to continue to see
the leveling continue in the foreseeable future for energy costs. See Managements
Discussion and Analysis of Financial Condition and Results of OperationsLiquidity
and Capital ResourcesFinancial Instruments and Quantitative and Qualitative
Disclosures about Market Risk.

Ammunition

Products

Our
ammunition product offerings consist of a comprehensive line of sporting ammunition
and ammunition reloading components, along with ammunition for the government,
military, and law enforcement markets, marketed predominantly under the Remington brand name, as well as theUMC® brand name.

We
market an extensive line of products that range from high volume, promotionally
priced, ammunition products to premium, high performance products that meet the
needs of the most discriminating hunters and shooters. Those products include,
among other things, shotgun shells, centerfire ammunition for use in rifles and
handguns, and .22 caliber rimfire ammunition. We also produce and market
sporting ammunition components used by smaller ammunition manufacturers, as
well as by individual consumers engaged in the practice of reloading centerfire
cases or shotgun shells.

Our
most popular ammunition products include Core-Lokt® centerfire rifle
ammunition, the brand share leader in the category, Premier STS and Nitro 27
target loads, which management believes are widely viewed as the performance
leader in trap, skeet and sporting clays shooting by virtue of their
combination of superior first firing performance and reloadability. Recent
ammunition product introductions have focused on developing exclusive or
proprietary technology with application to performance oriented hunting
segments.

Product
Introductions

We
focus our product development efforts on introducing new products that satisfy
the need for specialized, high-performance ammunition. In 2007 we introduced
the 17 Remington Fireball® Centerfire Rifle Cartridge, a new lightning fast,
light recoiling round designed specifically to meet the needs of the serious
varmint hunter. Our introduction of Power
LevelAmmunition utilized unique
propellant technology and allowed hunters to obtain multiple performance levels
from their 300 Remington Ultra Mag
Rifle, which previously would only be attainable by switching guns and
cartridges. Finally, Remington reentered the Boxed Component Bullet business
via the introduction of new SKUs of our High Performance Core-Lokt®
Ultra Bonded®
Bullets.

For
2008, Remington announced the introduction of our new AccuTip high performance
deer slug. This saboted, jacketed slug delivers tremendous on-game performance
and incorporates a unique polymer tip configuration that significantly enhances
accuracy for the discriminating shotgun deer hunter. Terminal performance is
assured via the use of Remington proven core bonding technology and patented
spiral nose cut design. Also in 2008, Remington expects to add a new line of
lead-free frangible ammunition to our Law Enforcement product line. The
Disintegrator® CTF
line will be offered in key pistol cartridges and features a sintered
copper-tin projectile that is completely frangible when fired against hard
steel backstops, a particularly desirable trait in Law Enforcement training
activities. In addition, Remington also expects to expand its successful Power
Levelammunition
concept to include the 7mm Remington Ultra Mag cartridge, as well as add three new offerings to
Remingtons established line of Managed Recoil rifle ammunition. Now available in 300 Remington
Ultra Mag, 7mm-08
Remington and 260 Remington, Managed Recoil ammunition reduces felt recoil by roughly 50% and
provides hunters and shooters who are recoil sensitive with an alternative that
provides great on-game performance and a ballistic trajectory that essentially
duplicates full power loads at distances of up to 200 yards. Finally, Remington
intends to expand its presence in the Boxed Component Bullet category through
the addition of both Core-Lokt® and AccuTip bullets in all popular rifle
calibers.

8

Competition

Price,
service, quality and product innovation are the primary competitive factors in the
ammunition industry. In the ammunition market, we compete with the Winchester
division of Olin Corporation, and the Federal Cartridge Co. and CCI units of
Alliant Techsystems, Inc. Additionally, some imported ammunition brands compete
in the domestic market, focusing primarily on price to gain and maintain access
and drive sales. We believe that we compete effectively with all of our present
competitors. However, there can be no assurance that we will continue to do so,
and our ability to compete could be adversely affected by our leveraged
condition.

Seasonality

We
produce and market a broad range of ammunition products. The majority of our
ammunition products are manufactured for hunting use. Sales of some of our
products occur outside the core fall hunting season (September through
December) and consist of several types of ammunition that are intended for
target shooting. In addition, these non-seasonal products include certain types
of ammunition, primarily for pistol and revolver use, as well as ammunition
with government, military, and law enforcement applications. The majority of
our ammunition products, however, are manufactured for hunting use. As a
result, with the majority of the sales of our products being seasonal and concentrated
toward the fall hunting season, we have historically followed the industry
practice of selling products pursuant to a dating plan, allowing the customer
to buy the products commencing at the beginning of our dating plan periods and
pay for them on extended terms. We have now commenced to shorten the duration
of these terms in order to increase cash flow and working capital.

As
a result of the seasonal nature of our sales, the extended payment terms under
our dating plan billing practices, and the aforementioned seasonality, our
working capital financing needs generally have significantly exceeded cash
provided by operations during certain parts of the year until certain of our
extended accounts receivable are collected. As a result, our working capital
financing needs tend to be greatest during the spring and summer months,
decreasing during the fall and reaching their lowest points during the winter.
We continue to see our seasonality compress to later in the fall hunting
season.

Manufacturing

Our
facility in Lonoke, Arkansas manufactures ammunition and ammunition components.
Primer mixture manufactured on site is combined with parts and raw materials to
produce ammunition. Some parts are manufactured on site, while other components
are purchased from independent manufacturers. Throughout the various processes,
our technicians continuously monitor and test the velocity, pressure and
accuracy levels of the ammunition.

Supply
of Raw Materials

To
manufacture our various products, we utilize numerous raw materials, including
steel, lead, brass, powder, and plastics. For a number of our raw materials, we
rely on a limited number of suppliers. For example, our brass strip and lead
requirements are being serviced primarily by a few vendors and our requirements
for smokeless powder are primarily met by three suppliers, who are the only
sources of smokeless powder in the United States and Canada.

We
have written purchase agreements with the majority of our suppliers. See Managements
Discussion and Analysis of Financial Condition and Results of
OperationsLiquidity and Capital ResourcesContractual Obligations and
Commercial Commitments. Any disruption in our relationships with any of these
vendors or reductions in the production of the material supplied could, in each
case, adversely affect our ability to obtain an adequate supply of the material
and could impose additional operational costs associated with sourcing raw
materials from new suppliers. We have had long-term relationships with each of
these vendors and believe such relationships are good, and do not currently
anticipate any material shortages or disruptions in supply from these vendors.
Although alternative sources exist from which we could obtain such raw
materials, we do not currently have significant supply relationships with any
of these alternative sources and cannot estimate with any certainty the length
of time that would be required to establish such a supply relationship, or the sufficiency
of the quantity or quality of materials that could be so obtained.

The
price and availability of production materials are affected by a wide variety
of interrelated economic and other factors, including alternative uses of
materials and their components, changes in production capacity, energy

9

prices,
commodity prices, and governmental regulations. Specifically, in 2006 and 2007
our manufacturing site experienced cost increases related to purchases of base
metals related to our business, increased processing charges and increased
energy costs. These increases were directly related to supply shortages caused
by an increase in foreign market demand for base metals and energy. Industry
competition and the timing of price increases by suppliers limits to some
extent our ability and the ability of other industry participants to pass these
types of cost increases on to customers. We generally use commodity options
contracts to hedge against the risk of increased prices for certain raw materials.
See Managements Discussion and Analysis of Financial Condition and Results of
OperationsLiquidity and Capital ResourcesFinancial Instruments.

All Other Product Lines

Accessories.
We market hunting and shooting accessories (primarily gun parts, gun care and
cleaning products and folding and collectible knives). These items are
primarily purchased by third parties.

Licensing
Income. We have licensed the Remington mark to certain third parties
that manufacture and market sporting and outdoor products that complement our
product line. Currently, the Remington
mark is licensed for use on, among other things, automobiles, sporting and
outdoor apparel, caps, gun cases and slings, tree stands, wildlife feeders,
sporting dog equipment, air guns, game decoys & calls, hunting and shooting
safety and security products, gun safes, and various other nostalgia/novelty
goods. We strive to ensure that the quality, image and appeal of these licensed
products are consistent with the high-quality image of our core products. These
licenses generally grant an exclusive right to sell a specific product
category, with initial terms of various years and various renewals based on
performance. We believe that these licenses increase the market recognition of
the Remingtontrademark and
enhance our ability to market core products, and that licensing facilitates new
cross-marketing promotional opportunities and generates income. Some of our
licensing efforts are carried out under terms established in the Trademark
Settlement Agreement, dated December 5, 1986, between us and Remington Products
Company, L.L.C. (Remington Products) (the Trademark Settlement Agreement),
described below in Other Corporate InformationPatents, Trademarks, and
Copyrights.

Powder
Metal Products. We market commercial powder metal
parts primarily for the automotive, sporting goods, office equipment, and
hardware industries. These items are manufactured at our Ilion, New York
facility.

Clay
Targets. We produce a complete line of clay targets
for use in trap, skeet and sporting clays shooting activities, marketed under
the STS brand name. Targets are
manufactured from a mixture of limestone and petroleum pitch. Our clay targets
are manufactured at one facility located in Findlay, Ohio. Our other facility
in Ada, Oklahoma has been idle due to supply limitations discussed in Note 5 to
our audited consolidated financial statements for the year ended December 31,
2007, appearing in Item 8  Financial Statements and Supplementary Data in
this annual report on Form 10-K.

Former
Unconsolidated Joint Venture

Remington
ELSAG Law Enforcement Systems, LLC (RELES).Pursuant
to a joint venture agreement with ELSAG, Inc., an unaffiliated third party, we
created RELES to sell and service mobile license plate reading technology to
state and local law enforcement agencies and certain federal agencies. The
agreement provided us with a 50% ownership interest which was not considered to
be a material portion of our business. The joint venture agreement called for
each member to provide 50% of required capital investments and receive 50%
of distributions, with an original maximum contribution amount of $1.5 million
by each party. As of December 31, 2006, both parties had made their required
capital contribution. In addition, we provided certain administrative support
functions, while ELSAG, Inc. provided product technology support. As noted
in Recent Business Developments above, we sold our 50% interest in RELES to
ELSAG, Inc. on September 26, 2007.

OTHER CORPORATE INFORMATION

Backlog
Information

As
of February 29, 2008, the backlog of unfilled total orders (excluding those
resulting from the January 2008 Marlin Acquisition) was approximately $115.5
million, which are reasonably expected to be filled during 2008, compared to
$125.8 million as of February 28, 2007. Including orders resulting from the
Marlin Acquisition,

10

as of February 29, 2008, the backlog of unfilled total orders was
approximately $135.2,
which are reasonably expected to be filled during 2008.

Service
and
Warranty

We
support service and repair facilities for all of our firearms products in order
to meet the service needs of our distributors, customers and consumers
nationwide. New Remington firearms products manufactured by the Company in
North America are warranted to the original purchaser to be free from
defects in material and workmanship for a period of two years commencing with
the registered date of purchase by the end customer. Import products are
warranted by our vendors for a period of one year commencing with the registered
date of purchase by the end customer. We also provide limited warranties for
our ammunition products. Warranty expense was $2.4 million, $2.7 million, and
$2.7 million in 2007, 2006, and 2005, respectively.

Customer
Concentration

Approximately
17% of our total 2007 sales consisted of sales made to one customer; Wal-Mart.
National accounts generally provide convenient access for hunting and shooting
consumers to our products but carry a more limited array of products and are
more seasonal in sales. Our sales to Wal-Mart are generally not governed by
written contracts. Although we believe our relationship with Wal-Mart is good,
the loss of this customer or a substantial reduction in sales to this customer
could adversely affect our financial condition, results of operations or cash
flows. No other single customer comprises more than 10% of total sales.

No
material portion of our business is subject to renegotiation of profits or
termination of contracts at the election of a governmental purchaser.

Foreign
sales accounted for approximately 12% in 2007, 6% in 2006, and 5% in 2005 of
our total net sales. Our sales personnel and manufacturers sales
representatives market to foreign distributors generally on a nonexclusive
basis and for a one-year term.

Marketing
and Distribution

Our
products are distributed throughout the United States and in approximately 56
other countries (including Canada and various countries throughout Europe and
Asia). In the United States, Remington
products are distributed primarily through a network of wholesalers and
retailers who purchase the product directly from us for resale to gun dealers
and end users, respectively. The end users include sportsmen, hunters, target
shooters, gun collectors, and members of law enforcement and other government
organizations.

Our
products are marketed and sold via both direct sales representatives and
manufacturers sales representatives. Both groups market and sell principally
to wholesalers, dealers and regional chains. Our direct sales representatives
market and sell only Remington firearms, ammunition and accessory products
while our manufacturers sales representatives market and sell other product
lines as well. Our manufacturers sales representatives are prohibited from
selling competing goods from other manufacturers and are paid variable
commissions based on the type of products that are sold. The customers to which
our sales representatives market and sell our products are authorized to carry
specified types of Remington
products for a non-exclusive one-year term, though not all carry the full range
of products. These customers generally carry broader lines of merchandise than
do the mass merchants and are less seasonal in sales.

Our
direct sales force services four distribution channels: distributors, chains
(regional and national), direct dealers and indirect dealers.

Patents,
Trademarks and Copyrights

Our
operations are not dependent upon any single trademark other than the Remington word mark and the Remington logo mark.
Some of the other
trademarks that we use, however, are nonetheless identified with and important
to the sale of our products. Generally, registered trademarks have perpetual
life, provided that they are renewed on a timely basis and continue to be
properly used as trademarks. Our business is not dependent to a material degree
on patents, copyrights, or trade secrets. We do not believe that the expiration
of any of our patents will have a material adverse effect on our financial
condition or our results of operations. We likewise do not believe that any of
our licenses of intellectual property to third-parties are material to our
business, taken as a whole.

In
June 2000, we formed RA Brands, a Delaware limited liability company and
wholly-owned subsidiary of Remington to which Remington transferred ownership
of all of its patents, trademarks and copyrights. RA Brands

11

owns all of
the above-referenced trademarks and licenses them to Remington at an arms
length royalty rate. We believe that we have adequate policies and
procedures in place to protect our intellectual property.

While
we own the Remington marks (and
registrations thereof) for use in our firearms and ammunition product lines and
certain related products associated with hunting, wildlife and the outdoors,
Spectrum Brands, Inc. (formerly Rayovac Corporation), with its September 2003
purchase of Remington Products Co. LLC, and DESA, LLC, all unrelated companies,
claims rights to the Remington mark with respect to certain
other product areas, particularly personal care products (including electric
razors) and lawn and garden products.

Pursuant
to a Trademark Settlement Agreement reached with Remington Products Co. LLC, we
agreed as follows:


Remington
 Licensing Corporation, a Delaware corporation owned equally by us and
 Remington Products, owns the Remington
 marks in the United States with respect to products of mutual interest to us
 and to Remington Products.
Remington
 Licensing Corporation licenses the Remington
 marks on a royalty-free basis to us and Remington Products for products in
 our and their respective non-core markets.
We are
 restricted in our ability to expand our use of the Remington mark beyond what has been detailed in the
 Trademark Settlement Agreement, as is Remington Products.
If certain
 bankruptcy or insolvency-related events occur with respect to either us or
 Remington Products, the bankrupt or insolvent party may be contractually
 required to sell its interest in Remington Licensing Corporation to the other
 party at book value or fair market value, depending on the circumstances.
 While in some cases this requirement may not be enforceable under the U.S.
 Bankruptcy Code, if Remington Products (now Spectrum Brands) came to own all
 of Remington Licensing Corporation, this could provide Spectrum Brands with
 greater leverage over our licensing relationship with Remington Licensing
 Corporation for the non-core products discussed above.Research and
Development

We
maintain an ongoing research and development program, and employ approximately
30 individuals to work in such capacity at our Elizabethtown, Kentucky facility
as of February 28, 2008. New products and improvements to existing products are
developed based upon the perceived needs and demands of consumers, as well as
successful products introduced to the market by our competitors. Our research
and development program involves an in-house team of engineers and technicians
working with operations personnel using tools such as computer-assisted design.
Research and plant technical staff then collaborate to produce an experimental
prototype, ensuring that products and manufacturing processes are concurrently
designed. Following a successful prototype, a pilot run is commenced to ensure
that plant personnel and equipment can manufacture the product efficiently. We
continue to introduce new products employing innovations in design, manufacturing
and safety in both firearms and ammunition, as outlined in the Product
Introductions sections above.

Research
and development expenditures for our continuing operations for the year ended
December 31, 2007 amounted to approximately $6.3 million, $6.4 million in 2006,
and in 2005 amounted to approximately $5.9 million.

Product Liability

For
information concerning product liability cases and claims involving us, see
Item 3, Legal Proceedings. Because our assumption of financial responsibility
for certain product liability cases and claims involving pre-Asset Purchase
occurrences was limited to an amount that has now been fully paid, with E.I.
DuPont Nemours & Company (DuPont) and its affiliates (collectively, the 1993
Sellers) retaining liability in excess of that amount and indemnifying us in
respect thereof, and because of the passage of time, we believe that product
liability cases and claims involving occurrences arising prior to the Asset
Purchase are not likely to have a material adverse effect upon our financial
condition, results of operations, or cash flows. See BusinessCertain
Indemnities.

While
it is difficult to forecast the outcome of litigation, we do not believe, in
light of relevant circumstances (including the current availability of
insurance for personal injury and property damage with respect to cases and
claims involving occurrences arising after the Asset Purchase, our accruals for
the uninsured costs of such cases and claims and the 1993 Sellers agreement to
bear partial responsibility for certain post-Asset Purchase shotgun-related
product liability costs, as well as the type of firearms products we make),
that the outcome of all pending product liability cases and claims will be
likely to have a material adverse effect upon our financial condition, results
of

12

operations, or
cash flows. However, in part because of the uncertainty as to the nature and
extent of manufacturer responsibility for product liability allegations,
especially as to firearms, as well as the potential nature of firearms-related
injuries, there can be no assurance that our resources will be adequate to
cover both pending and future product liability occurrences, cases or claims,
in the aggregate, or that such a material adverse effect will not result there
from. Because of the nature of our products, we anticipate that we will
continue to be involved in product liability cases and claims in the future.

Since
December 1, 1993, we have maintained insurance coverage for product liability
claims for personal injury or property damage relating to occurrences after the
1993 asset purchase, subject to certain self-insured retentions on a
per-occurrence basis. The current insurance policy extends through November 30,
2008. Certain of our current excess insurance coverage expressly excludes
actions brought by municipalities as described in Legal Proceedings. We paid
$1.4 million, $3.2 million, and $1.5 million in legal fees and settlements in
connection with product liability cases and claims in the years ended December
31, 2007, 2006 and 2005, respectively, excluding insurance costs. At December
31, 2007, our accrual for product liability cases and claims was $12.4 million.
The amount of our accrual for product liability cases and claims is based upon
estimates developed as follows. We establish reserves for anticipated defense
and disposition costs to us of those pending cases and claims for which we are
financially responsible. Based on those estimates and an actuarial analysis of
actual defense and disposition costs incurred by us with respect to product
liability cases and claims in recent years, we determine the estimated defense
and disposition costs for unasserted product liability cases and claims. We
combine the estimated defense and disposition costs for both pending and
unasserted cases and claims to determine the amount of our accrual for product
liability cases and claims. It is reasonably possible that future claims
experience could result in further increases or decreases in the reporting
period in which such information becomes available. We believe that our
accruals for losses relating to such cases and claims are adequate. Our
accruals for losses relating to product liability cases and claims include
accruals for all probable losses the amount of which can be reasonably
estimated. Based on the relevant circumstances (including the current
availability of insurance for personal injury and property damage with respect
to cases and claims involving occurrences arising after the Asset Purchase, our
accruals for the uninsured costs of such cases and claims and the 1993 Sellers
agreement to be responsible for a portion of certain post-Asset Purchase
shotgun-related product liability costs, as well as the type of firearms
products that we make), we do not believe with respect to product liability
cases and claims that any probable loss exceeding amounts already recognized
through our accruals has been incurred.

Because
our assumption of financial responsibility for certain product liability cases
and claims involving pre-Asset Purchase occurrences was limited to an amount
that has now been fully paid, with the 1993 Sellers retaining liability in
excess of that amount and indemnifying us in respect of such liabilities, and
because of our accruals with respect to such cases and claims, we believe that
product liability cases and claims involving occurrences arising prior to the
Asset Purchase are not likely to have a material adverse effect upon our
financial condition, results of operations, or cash flows. Moreover, although
it is difficult to forecast the outcome of litigation, we do not believe, in
light of relevant circumstances (including the current availability of
insurance for personal injury and property damage with respect to cases and
claims involving occurrences arising after the Asset Purchase, our accruals for
the uninsured costs of such cases and claims and the 1993 Sellers agreement to
be responsible for a portion of certain post-Asset Purchase shotgun-related
product liability costs, as well as the type of firearms products that we
make), that the outcome of all pending post-Asset Purchase product liability
cases and claims will be likely to have a material adverse effect upon our
financial condition, results of operations, or cash flows. Nonetheless, in part
because the nature and extent of liability based on the manufacture and/or sale
of allegedly defective products (particularly as to firearms and ammunition) is
uncertain, there can be no assurance that our resources will be adequate to
cover pending and future product liability occurrences, cases or claims, in the
aggregate, or that a material adverse effect upon our financial condition,
results of operations, or cash flows will not result therefrom. Because of the
nature of our products, we anticipate that we will continue to be involved in
product liability litigation in the future. Because of the potential nature of
injuries relating to firearms and ammunition, certain public perceptions of our
products, and recent efforts to expand liability of manufacturers of firearms
and ammunition, product liability cases and claims, and insurance costs
associated with such cases and claims, may cause us to incur significant costs.

Regulation

The
manufacture, sale and purchase of firearms are subject to extensive federal,
state and local governmental regulation. The primary federal laws are the
National Firearms Act of 1934 (NFA) and the Gun Control Act of 1968 (GCA),
which have been amended from time to time. The NFA severely restricts the
private ownership of those firearms defined in that regulation, including fully
automatic weapons. The GCA places certain restrictions on the interstate sale
of firearms, among other things. We do manufacturer one NFA product, which is
not a fully

13

automatic
weapon, primarily for official end users. We possess valid federal licenses for
all of our owned and leased sites to manufacture and/or sell firearms and
ammunition.

In
September 2004, the United States Congress declined to renew a federal law with
a ten-year term which generally prohibited the manufacture of certain firearms
defined under that statute as assault weapons as well as the sale or
possession of assault weapons except for those that, prior to the laws
enactment, were legally in the owners possession. Various states and cities
have adopted their own version of that former federal law and some statutes and
ordinances do cover certain new Remington sporting firearms product.

Bills
have been introduced in Congress to establish, and to consider the feasibility
of establishing, a nationwide database recording so-called ballistic images
of ammunition fired from new guns. Should such a mandatory database be
established, the cost to Remington and its customers could be significant,
depending on the type of firearms and ballistic information included in the
database. To date, only two states have established such registries, and
neither state includes such imaging data from long guns, although there can
be no assurance that these (or other states) will not require the inclusion of
such imaging in the future. Proposed legislation in at least one other state
would be applicable to Remingtonrifles,
and would call for imaging of both cartridges and projectiles. In addition,
bills have been introduced in Congress in the past several years that would
affect the manufacture and sale of handgun ammunition, including bills to
regulate the manufacture, importation and sale of any projectile that is
capable of penetrating body armor, to impose a tax and import controls on
bullets designed to penetrate bullet-proof vests, to prohibit the manufacture,
transfer or importation of .25 caliber, .32 caliber and 9mm handgun
ammunition, to increase the tax on handgun ammunition, to impose a special
occupational tax and registration requirements on manufacturers of handgun
ammunition, and to drastically increase the tax on certain handgun ammunition,
such as 9mm, .25 caliber, and .32 caliber bullets. Some of these bills would
apply to ammunition of the kind we produce, and accordingly, if enacted, could
have a material adverse effect on our business.

In
addition to federal requirements, state and local laws and regulations may
place additional restrictions on gun ownership and transfer. These vary
significantly from jurisdiction to jurisdiction. At least one jurisdiction bans
the possession of a firearm. Some states or other governmental entities have
recently enacted, and others are considering, legislation restricting or
prohibiting the ownership, use or sale of certain categories of firearms and/or
ammunition. Although numerous jurisdictions presently have mandatory waiting
periods for the sale of handguns (and some for the sale of long guns as well),
there are currently few restrictive state or municipal regulations applicable
to handgun ammunition. Remington firearms are covered under several recently
enacted state regulations requiring guns to be sold with internal or external
locking mechanisms. Some states are considering mandating certain design
features on safety grounds, most of which would be applicable only to handguns.
We believe that hunter safety issues may affect sales of firearms, ammunition
and other shooting-related products. In the northeastern United States, for
example, some communities permit deer hunters to use only shotguns (which have
a shorter average range than rifles) to minimize the possibility of shooting
accidents in more densely populated areas.

Remington
is no longer a defendant in any lawsuits brought by municipalities against
participants in the firearms industry. In addition, legislation has been
enacted in approximately 34 states precluding such actions. Similar federal
legislation, entitled The Protection of Lawful Commerce in Arms Act was
signed into law by President Bush on October 26, 2005, after being passed by
the U.S. Senate in August 2005 and by the House of Representatives in October
2005, both by two-to-one margins. However, the applicability of the law to
various types of governmental and private lawsuits has been challenged.

We
believe that existing federal and state regulation regarding firearms and
ammunition has not had a material adverse effect on our sales of these products
to date.However,
there can be no assurance that federal, state, local or foreign regulation of
firearms and/or ammunition will not become more restrictive in the future and
that any such development would not have a material adverse effect on our
business either directly or by placing additional burdens on those who
distribute and sell our products.

Environmental
Matters

Our
operations are subject to a variety of federal, state and local environmental
laws and regulations which govern, among other things, the discharge of
hazardous materials to the air and water, handling, treatment, storage and
disposal of such materials, as well as remediation of contaminated soil and
groundwater. We have in place programs that monitor compliance with these
requirements and believe our operations are in material compliance with them.
In the normal course of our manufacturing operations, we are subject to
occasional governmental proceedings and orders pertaining to waste disposal,
air emissions and water discharges into the environment. We believe that we are
in compliance with applicable environmental regulations in all material
respects, and that the

14

outcome of any
such proceedings and orders will not have a material adverse effect on our
business. Under the terms of the Asset Purchase Agreement (the Purchase
Agreement) pursuant to which the 1993 Sellers were acquired in 1993 (the Asset
Purchase) to constitute Remington in its present form, DuPont agreed to retain
responsibility for certain pre-closing environmental liabilities. In connection
with the Asset Purchase, Remington also entered into an agreement with Dupont
with respect to cooperation and responsibility for specified environmental matters.
See Certain Indemnities.

There
are various pending proceedings associated with environmental liability naming
us for which the 1993 Sellers have accepted liability. Our obligation on these
cases is not expected to be material.

Based
on information known to us, we do not expect current environmental regulations
or environmental proceedings and claims to have a material adverse effect on
our results of operations, financial condition or cash flows. However, it is
not possible to predict with certainty the impact of future environmental
compliance requirements or of the cost of resolution of any future
environmental proceedings and claims, in part because the scope of the remedies
that may be required is not certain, liability under some federal environmental
laws is under certain circumstances joint and several in nature, and
environmental laws and regulations are subject to modification and changes in
interpretation. There can be no assurance that environmental regulation will
not become more burdensome in the future or that unknown conditions will not be
discovered and that any such development would not have a material adverse
effect on our business. We do not anticipate incurring any material capital
expenditures for environmental control facilities for 2008 or 2009.

Employees

As
of February 29, 2008, we employed approximately 2,550 full-time employees of whom
approximately 2,200
were engaged in manufacturing (of which approximately 400 were former Marlin
employees), and
approximately 350 of
whom were engaged in sales, general administration and research and development
(of which approximately 100
were former Marlin employees). An additional work force of temporary employees
is engaged during peak production schedules at certain of our manufacturing
facilities.

On
October 26, 2007, Remington was notified by the Union, which represents
approximately 650 individuals at February 29, 2008 employed by the Company at
the Companys Ilion, New York manufacturing facility, that the New Agreement
between the Union and the Company had been ratified. The New Agreement expires
on October 28, 2012. We also have a labor agreement with Local 2021 of the
United Automobile, Aircraft and Agricultural Implement Workers of America (U.A.W.),
which represents less than 10 hourly employees at our plant in Findlay, Ohio.
This labor agreement is terminable by either party upon notice to the other
party. Employees at our other manufacturing facilities are not represented by
unions. There have been no significant interruptions or curtailments of
operations due to labor disputes since prior to 1968 and we believe that our
relations with our employees are satisfactory.

Available Information

Our
internet address is www.remington.com. The information contained on, or that
can be accessed through, our internet website is not incorporated by reference
into this annual report on Form 10-K. We have included our website address as a
factual reference and do not intend it as an active link to our internet
website. We make available, free of charge, on our internet website our latest
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and amendments to those reports as soon as reasonably practicable
after filing or furnishing such reports with the Securities and Exchange
Commission (SEC) via a link on our website to our page in the SEC electronic
filing database.

15

Item 1A. RISK FACTORS

RISK FACTORS

Our
business and operations are subject to a number of risks and uncertainties as
described below. However, the risks and uncertainties described below are not
the only ones we face. Additional risks and uncertainties that we are unaware
of or that we may currently deem immaterial, may become important factors that
harm our business, financial condition, results of operations or cash flows. If
any of the following risks actually occur, our business, financial condition,
results of operations or liquidity could suffer. You should read and carefully consider
each of the following risks, as well as the other information provided
elsewhere in this report.

Because of the
nature of potential injuries relating
to firearms and ammunition, certain public perceptions of our products, and
recent efforts to expand liability of manufacturers of firearms and ammunition,
product liability cases and claims, and insurance costs associated with such
cases and claims, may cause us to incur significant costs.

We
are currently defending product liability litigation involving Remington brand firearms and our
ammunition products (including ammunition manufactured under the UMCand Petersnames). As of December 31, 2007, approximately 11 individual bodily
injury cases or claims were pending, primarily alleging defective product
design, defective manufacture and/or failure to provide adequate warnings. Some
of these cases seek punitive as well as compensatory damages. As a manufacturer
of shotguns and rifles, since 1999, we were named in three cases (none of which
is pending as to us) of the lawsuits brought by some 30 municipalities and
other governmental entities, primarily against manufacturers and sellers of
handguns.

Because
the nature and extent of liability based on the manufacture and/or sale of
allegedly defective products is uncertain, particularly as to firearms and
ammunition, our resources may not be adequate to cover pending and/or future
product liability occurrences, cases or claims, in the aggregate, and such
cases and claims may have a material adverse effect upon our business,
financial condition or results of operations. In addition, insurance coverage
for these risks may not continue to be available or, if available, we may not
be able to obtain it at a reasonable cost. See Item 3, Legal Proceedings.

Our business
is subject to extensive governmental
legislation and regulation that may restrict our operations, increase our costs
of operations, or adversely affect the demand for our products by limiting the
availability and/or increasing the cost of our products.

The
manufacture, sale and purchase of firearms and ammunition are subject to
extensive federal, state and local governmental regulation. Although we do not
believe that current regulations have had such an impact to date, future
regulations may adversely affect our operations by limiting the types of
products that we can manufacture and/or sell, or imposing additional costs to
us or to our customers in connection with the manufacture and/or sale of our
products. Such regulations may also adversely affect demand for our products by
imposing limitations that increase the costs of our products, making it more
difficult or cumbersome for our distributors or end users to transfer and own
our products, or creating negative consumer perceptions with respect to our
products.

Current
federal regulations include:


Licensing
 requirements for the manufacture and/or sale of firearms and ammunition.
A national
 system of instant background checks for all purchases of firearms from
 federal license holders, including purchases of our firearms products and
 purchases from license holders at gun shows.In
addition, bills have been introduced in Congress to establish, and to consider
the feasibility of establishing, a nationwide database recording so-called ballistic
images of ammunition fired from new guns. Should such a mandatory database be
established, the cost to Remington, its distributors and its customers could be
significant, depending on the type of firearms and ballistic information
included in the database. Bills have also been introduced in Congress in the
past several years that would affect the manufacture and sale of ammunition,
including bills to regulate the manufacture, importation and sale of
armor-piercing bullets, to prohibit the manufacture, transfer or importation of
..25 caliber, .32 caliber and 9mm handgun ammunition, and to increase or impose
new taxes on the sales of certain types of ammunition, as well as bills
addressing the use of lead in ammunition. Certain of these bills would apply to
ammunition of the kind we produce, and accordingly, if enacted, could have a
material adverse effect on our business.

16

State
and local laws and regulations may place additional restrictions on gun
ownership and transfer:


Some states
 have recently enacted, and others are considering, legislation restricting or
 prohibiting the ownership, use or sale of specified categories of firearms
 and ammunition. Many states currently have mandatory waiting period laws in
 effect for the purchase of firearms, including rifles and shotguns. Although
 there are few restrictive state or local regulations applicable to
 ammunition, several jurisdictions are considering such restrictions on a
 variety of bases.
Some states
 have enacted regulations prohibiting the sale of firearms unless accompanied
 by an internal and/or external locking device. In several states, this
 requirement is imposed on both handguns and long guns. Some states are also
 considering mandating the inclusion of various design features on safety
 grounds. Most of these regulations as currently contemplated would be
 applicable only to handguns.
To date, two
 states have established registries of so-called ballistic images of
 ammunition fired from new guns. Although neither law mandates the inclusion
 of such imaging data from long guns in their registries, these or other
 states may do so in the future. Proposed legislation in at least one other
 state would be applicable to Remingtonrifles
 and would call for imaging of both cartridges and projectiles.We
believe that existing federal and state legislation relating to the regulation
of firearms and ammunition has not had a material adverse effect on our sales
of these products. However, the regulation of firearms and ammunition may
become more restrictive in the future and any such development might have a
material adverse effect on our business, financial condition, results of
operations, or cash flows. In addition, regulatory proposals, even if never
enacted, may affect firearms or ammunition sales as a result of consumer
perceptions. See BusinessRegulation.

Environmental
litigation and regulations may restrict
or increase the cost of our operations and/or impair our financial condition.

We
are subject to a variety of federal, state and local environmental laws and
regulations which govern, among other things, the discharge of hazardous
materials into the air and water, the handling, treatment, storage and disposal
of such materials, as well as remediation of contaminated soil and groundwater.
We have programs in place that monitor compliance with those requirements and
believe that our operations are in material compliance with them. In the normal
course of our manufacturing operations, we are subject to occasional
governmental proceedings and orders pertaining to waste disposal, air emissions
and water discharges into the environment.

Based
on information known to us, we do not expect current environmental regulations
or environmental proceedings and claims to have a material adverse effect on
our results of operations, financial condition, or cash flows. However, it is
not possible to predict with certainty the impact on us of future environmental
compliance requirements or of the cost of resolution of future environmental
proceedings and claims, in part because the scope of the remedies that may be
required is not certain, liability under federal environmental laws is, under
certain circumstances, joint and several in nature, and environmental laws and
regulations are subject to modifications and changes in interpretation.
Environmental regulations may become more burdensome in the future and any such
development, or discovery of unknown conditions, may require us to make
material expenditures or otherwise materially adversely affect the way we operate
our business, as well as have a material adverse effect on our results of
operations, financial condition, or cash flows. See BusinessEnvironmental
Matters.

Unfavorable
market trends and social and political
concerns could adversely affect demand for our products and our business.

We
believe that a number of trends currently exist that are potentially
significant to the hunting and shooting sports market:


We believe
 that the development of rural property in many locations has curtailed or
 eliminated access to private and public lands previously available for
 hunting and shooting sports.
Environmental
 issues, such as concern about lead in the environment, may also adversely
 affect the industry.
Although we
 are a manufacturer of long guns, the trends regarding firearms regulation, as
 well as pending industry litigation, and the consumer perception of such
 developments, may adversely affect sales of firearms, ammunition and other
 shooting-related products by such means as increasing costs of production
 and/or reducing the number of distribution outlets for our products.17

These
trends may have a material adverse effect on our business by impairing industry
sales of firearms, ammunition and other shooting-related products.

Our
substantial indebtedness could have a material
adverse effect on our financial health and our ability to obtain financing in
the future and to react to changes in our business.

We
have a significant amount of debt. On December 31, 2007, we had approximately
$229.8 million of debt outstanding and our interest expense for the year ended
December 31, 2007 was approximately $25.5 million. Our significant amount of
debt could limit our ability to satisfy our obligations, limit our ability to
operate our business and impair our competitive position. For example, it
could:


make it more
 difficult for us to satisfy our obligations under the Notes and to the
 lenders under the Amended and Restated Credit Agreement;
increase our
 vulnerability to adverse economic and general industry conditions, including
 interest rate fluctuations, because a portion of our borrowings are and will
 continue to be at variable rates of interest;
require us
 to dedicate a substantial portion of our cash flow from operations to
 payments on our debt, which would reduce the availability of our cash flow
 from operations to fund working capital, capital expenditures or other
 general corporate purposes;
limit our
 flexibility in planning for, or reacting to, changes in our business and
 industry;
place us at
 a disadvantage compared to competitors that have proportionately less debt;
 and
limit our
 ability to obtain additional debt or equity financing due to applicable
 financial and restrictive covenants in our debt agreements.The
agreements and instruments governing our debt place specified limitations on
incurrence of additional debt. Despite current indebtedness levels, we and our
subsidiaries may be able to incur substantial additional indebtedness in the
future. However, if new debt is added to our and our subsidiaries current debt
levels, the related risks would intensify.

Our ability to
generate the significant amount of cash
needed to make payments on and repay the Notes and our other debt and to
operate our business depends on many factors beyond our control.

Payments
on our debt and the funding of working capital needs and planned capital
expenditures will depend on our ability to generate cash and secure financing
in the future. This ability, to an extent, is subject to general economic,
financial, competitive, legislative, regulatory and other factors beyond our
control. If our business does not generate sufficient cash flow from
operations, and sufficient future borrowings are not available to us under our
Amended and Restated Credit Agreement or from other sources of financing, we
may not be able to repay the Notes or our other debt, operate our business or
fund our other liquidity needs. We may not be able to obtain additional
financing, particularly because of our anticipated high levels of debt and the
debt incurrence restrictions imposed by the agreements governing our debt. If
we cannot meet or refinance our obligations when they are due, this may lead us
to sell assets, reduce capital expenditures or take other actions which could have
a material adverse effect on us.

The agreements
and instruments governing our debt
contain restrictions and limitations which could significantly impact the
holders of the Notes and our ability to operate our business.

The
Amended and Restated Credit Agreement and the indenture governing the Notes
contain a number of significant covenants that could adversely impact the
holders of the Notes and our business by limiting our ability to obtain future
financing, make acquisitions or needed capital expenditures, withstand a future
downturn in our business or the economy in general, conduct operations or
otherwise take advantage of business opportunities that may arise. These
covenants, among other things, restrict our ability and the ability of our
subsidiaries to:


pay
 dividends or make other distributions;
make certain
 investments or acquisitions;
enter into
 transactions with affiliates;18


dispose of
 assets or enter into business combinations;
incur or
 guarantee additional debt;
issue equity;
repurchase
 or redeem equity interests and debt;
create or
 permit to exist certain liens; and
pledge
 assets.Furthermore,
the Amended and Restated Credit Agreement requires us to meet specified
financial covenants. Our ability to comply with these provisions may be
affected by events beyond our control. The breach of any of these covenants
will result in a default under the Amended and Restated Credit Agreement, which
could place us in default under the indenture governing the Notes.

If we default
under our Amended and Restated Credit
Agreement, we may not have the ability to make payments on our indebtedness.

In
the event of a default under our Amended and Restated Credit Agreement, the
lenders could elect to declare all amounts borrowed, together with accrued and
unpaid interest and other fees, to be due and payable. If such acceleration
occurs, thereby causing an acceleration of amounts outstanding under the Notes,
we may not be able to repay the amounts due under our Amended and Restated
Credit Agreement or the Notes. This could have serious consequences to the
holders of the Notes and to our financial condition and results of operations,
and could cause us to become bankrupt or insolvent.

Our business
is affected by seasonal fluctuations in
business; inventory management practices have had an effect on our business.

Many
of our firearms products are purchased in anticipation of use during the fall
hunting season. In an effort to reduce the effect of seasonality on our
business, we have historically allowed these products to be purchased under an
early order or dating plan. Under the dating plan, a distributor may purchase
these products beginning in December (the start of our firearms dating plan
year) and pay for them on extended terms. Historically, use of the dating plan
has had the effect of shifting some sales from the second and third quarters to
the first and fourth quarters. We attribute such use of dating plans to the
seasonality that exists within the markets in which we sell our products. Use
of the dating plan and the extended payment terms results in deferral of
collection of accounts receivable.

In
addition, we believe that economic conditions have caused other customers
(dealers and chains) to defer purchases of our products until later in the core
fall hunting seasons (September through December) and to utilize lower
inventory levels than during prior periods. This overall trend in demand
continues to date, and there can be no assurance that such trends will not continue.

As
a result of the seasonal nature of our sales, the extended payment terms under
our dating plan billing practices, and our customers inventory management
practices, our working capital financing needs may significantly exceed cash
provided by operations during certain periods in a year.

Decreases in
consumer confidence and spending and/or
significant increases in commodity and energy prices could have a material
impact on the consolidated financial position, results of operations, or cash
flows of the Company.

The
general economic environment appears to be increasingly volatile and uncertain,
as a result of credit concerns due to the sub-prime mortgage market,
inflationary pressures from higher energy and fuel costs, and an uncertain
geopolitical environment. Leading economic indicators such as employment levels
and income growth predict a downward trend in the United States economy during
2008, and some commentators have predicted a recession. In addition, our
business has been affected by rising commodity prices for raw materials such as
lead, copper, zinc and steel, that have been experienced since 2003. We can
provide no assurance that these economic trends will not continue.

19

A substantial
amount of our business comes from one national
account customer. A substantial portion of our accounts receivable is
concentrated with two customers. Loss of business from these customers could
adversely affect our revenues, operating results and statements of cash flows.

Our
in-house sales force markets our products directly to national accounts
(consisting primarily of mass merchandisers) and to federal, state and local
government agencies. Approximately 17% of our total 2007 sales and 13% of our
December 31, 2007 accounts receivable balance consisted of sales made to one
national account, Wal-Mart. Our sales to Wal-Mart are generally not governed by
a written agreement. In the event that Wal-Mart significantly reduces or
terminates its purchases of firearms and/or ammunition from us, our revenue
could be adversely affected.

Wal-Mart
together with another customer, accounts for approximately 24% of our accounts
receivable. This other customer, due to the timing of its purchasing, usually
maintains significant amounts of accounts receivable at the end of our fiscal
year. In the event that this customer incurs financial difficulty and is unable
to pay its account in full, our cash flows and operating results could be
adversely affected.

We are
dependent on a number of key suppliers. Loss or
damage to our relationships with these suppliers could have a material adverse
effect on our business, financial condition, results of operations and cash
flows.

To
manufacture our various products, we use many raw materials, including steel,
zinc, lead, brass, plastics and wood, as well as manufactured parts purchased
from independent manufacturers. An extended interruption in the supply of these
or other raw materials or in the supply of suitable substitute materials would
disrupt our operations, which could have a material adverse effect on our
business, financial condition and results of operations. Furthermore, we may
incur additional costs in sourcing raw materials from alternative producers.

For
a number of our raw materials, we rely on one or a few suppliers. Alternative
sources, many of which are foreign, exist for each of these materials. We do
not, however, currently have significant supply relationships with any of these
alternative sources. We cannot estimate with any certainty the length of time
that would be required to establish alternative supply relationships, or
whether the quantity or quality of materials that could be so obtained would be
sufficient.

We purchase a
limited number of foreign manufactured
firearms products through third party suppliers as part of our strategy to grow
revenues and improve profitability, which exposes us to additional
uncertainties.

We
introduced an opening price point line known as Spartan
Gunworksin 2004 and
subsequently expanded the line with additional product offerings. This product
line is made by a foreign manufacturer, imported by a third party, and then
resold by us under the Remington brand.

Our
dependence on foreign suppliers means, in part, that we may be affected by
declines in the relative value of the U.S. dollar to foreign currencies.
Although all of our purchases of foreign products are negotiated and paid for
in U.S. dollars, declines in the applicable foreign currency and currency
exchange rates might negatively affect the profitability and business prospects
of our foreign manufacturer. This, in turn, might cause such supplier to demand
higher prices for merchandise, hold up merchandise shipments to us, or
discontinue selling to us, any of which could ultimately reduce our sales or
increase our costs.

We
are also subject to other risks and uncertainties associated with changing
economic and political conditions in foreign countries. These risks and
uncertainties include import duties and quotas, disruptions or delays in
product deliveries, our suppliers on-going quality controls, work stoppages,
economic uncertainties (including inflation), foreign government regulations,
political unrest and trade restrictions. Any event causing a disruption or
delay of imports from our foreign manufacturers, including the imposition of
additional import restrictions, restrictions on the transfer of funds and/or
increased tariffs or quotas, or both, could increase the cost or reduce the
supply of merchandise available to us and adversely affect our business,
financial condition, results of operations, or cash flows.

20

If we are
unable to retain key management personnel,
our business could be adversely affected.

Our
success is dependent to a large degree upon the continued service of our
executive management team. We have entered into employment agreements with
certain of our executives. See Executive CompensationEmployment Agreements.
The loss of any member of our executive management team could have a material
adverse effect on our business, financial condition and results of operations.

We may not be
able to compete successfully within our
highly competitive markets, which could adversely affect our business,
financial condition or cash flows.

The
markets in which we operate are highly competitive. Product image, quality and
innovation are the primary competitive factors in the firearms industry.
Product differentiation exists to a much lesser extent in the ammunition
industry, where price is the primary competitive factor. Reductions in price by
our competitors in the ammunition industry could force us to reduce prices or
otherwise alter terms of sale as a competitive measure, which could adversely
affect our business, financial condition, results of operations or cash flows.

Our
competitors vary by product line. Some of our competitors are subsidiaries of
large corporations with substantially greater financial resources than us.
Although we believe that we compete effectively with all of our present
competitors, we may not continue to do so, and our ability to compete could be
adversely affected by our leveraged condition. See BusinessFirearmsCompetition
and BusinessAmmunitionCompetition.

Our business
is subject to economic, market and other
factors beyond our control or ability to predict.

The
sale of hunting and shooting sports products depends upon a number of factors
related to the level of consumer spending, including the general state of the
economy and the willingness of consumers to spend on discretionary items.
Historically, the general level of economic activity has significantly affected
the demand for sporting goods products in the hunting and shooting sports and
related markets. As economic activity slows, consumer confidence and
discretionary spending by consumers declines. Competitive pressures arising
from any significant or prolonged economic downturn could have a material
adverse impact on our financial condition and results of operations, and such
impact could be intensified by our leveraged condition.

Moreover,
additional risks and uncertainties not currently known to us or that we
currently deem to be immaterial may also materially and adversely affect our
business and operations. These risks and uncertainties include, but are not
limited to, weather and other Acts of God that could result in the loss or destruction
of warehoused inventory and stoppages in our ability to manufacture our key
products for a sustained period of time.

Worse-than-assumed
economic and demographic experience
for our postretirement benefit plans (e.g., discount rates, investment returns,
and health care cost trends) could negatively impact our operating results,
financial condition, and cash flows.

We
sponsor plans to provide postretirement pension and health care for our retired
employees. The measurement of our obligations, costs and liabilities associated
with these benefits, requires that we estimate the present values of projected
future payments to all participants. We use many assumptions in calculating
these estimates, including discount rates, investment returns on designated
plan assets, health care cost trends, and demographic experience (e.g.,
mortality and retirement rates). To the extent that actual results are less
favorable than our assumptions there could be a substantial adverse impact on
our results of operations, financial condition, and cash flows.

An
increase in revenues to the government, law
enforcement, and military sales channels could result in increased uncertainty
to the timing of our sales revenues.

Government,
law enforcement, and military sales channels are typically in the form of
contract sales arrangements. We are exposed to these channels through our sale
of certain firearms and ammunition products, as well as our distribution of
surveillance security technology products. An increasing percentage of our
sales revenues could therefore be subject to contract negotiations. This trend
could cause sales revenue amounts to be increasingly volatile and uncertain
with respect to the timing of orders.

21

The
recent acquisition of RACI Holding by American
Heritage Arms and our acquisition of The Marlin Firearms Company may not meet
our expectations.

We
believe both the Acquisition by AHA and the Marlin Acquisition will strengthen
our ability to grow our leadership position in shotguns, rifles and ammunition
in the United States and provide additional capital to further develop our
market presence internationally and accelerate operational improvements within
the Company. However, we may not experience the anticipated benefits of the
acquisitions. Specifically, our ability to integrate the business of The Marlin
Firearms Company with our business will be complex, time-consuming, and
expensive and may disrupt the combined business. We will need to overcome
significant challenges in order to realize any benefits or synergies from the
Marlin Acquisition.

The
execution of these post-acquisition events will involve considerable risks and
may not be successful. These risks include the following:


The
 potential disruptions of ongoing business and distraction of our management;
The
 potential strain on our financial and managerial controls and reporting
 systems and procedures;
Unanticipated
 expenses and potential delays related to integration of the operations,
 technology, and other resources of the companies;
The impairment
 of relationships with employees, suppliers, and customers as a result of any
 integration of new management personnel;
Greater than
 anticipated costs and expenses related to the integration of our businesses;
The
 potential combination of weaker credit metrics and near-term lower cash flow
 pressuring credit quality and the ratings of companies that actively pursue
 consolidation strategies; and
Potential
 unknown liabilities associated with the Marlin Acquisition and the combined
 operations.We
 may not succeed in addressing these risks or any other problems encountered
 in connection with the Marlin Acquisition or with respect to other potential
 acquisitions. The inability to integrate successfully the operations,
 technology, and personnel of our business, or any significant delay in
 achieving integration, could have a material adverse effect on the Company.The
substantial diversion of managements attention from Remingtons day-to-day
business when evaluating and considering the impact of the acquisitions could
negatively impact our business, operating results or financial condition.

Our
management has spent a significant amount of time addressing various matters
related to the recent acquisitions and has not been able to focus all of its
time on our ongoing business matters. The diversion of our managements
attention and any delay or difficulties encountered in connection with such
acquisitions could result in the disruption of our ongoing business or
inconsistencies in standards, controls, procedures and policies that could
negatively affect our ability to maintain relationships with customers,
suppliers, employees and others with whom we have business dealings.

Any
acquisitions that we undertake in the future could be difficult to integrate,
disrupt our business and harm our operating results.

We
expect to review opportunities to acquire other businesses that would
complement or expand our current products, expand the breadth of our markets,
or otherwise offer growth opportunities. If we make any future acquisitions, we
could incur additional debt or assume contingent liabilities. Our experience in
acquiring other businesses is limited.

22

Management
has been increasing the prices on certain of our products and has been shortening sales terms. These
higher product selling prices coupled with reduced sales terms could limit
sales, which could negatively impact our business, operating results or
financial condition.

Management
has imposed price increases on our customers in an attempt to offset cost increases
relating to materials and energy (including lead, copper, zinc, steel and fuel)
that we have experienced since 2003. Management has also worked to reduce sales
terms over the past year related to certain working capital initiatives. These
higher product prices and shorter sales terms could limit our sales in the
future and could negatively impact our business, operating results or financial
condition.

23

Item 1B. UNRESOLVED STAFF COMMENTS

None.

24

Item 2. PROPERTIES

We
currently own seven facilities for our manufacturing operations. The following
table sets forth selected information regarding each of these facilities:

Plant

Product

Segment

Square
 Feet
 (in thousands)Ilion, New
 York

Shotguns;
 centerfire and rimfire rifles

Firearms

1,000Lonoke,
 Arkansas

Shotshell; rimfire and centerfire ammunition

Ammunition

750Mayfield,
 Kentucky

Rimfire and centerfire rifles

Firearms

44Findlay,
 Ohio

Clay targets

All Other

40Ada,
 Oklahoma

Clay targets

All Other

21North
 Haven, Connecticut

Rifles

Firearms

227Gardner,
 Massachusetts

Rifles
 and shotguns

Firearms

124We
believe that these facilities are suitable for the manufacturing conducted
therein and have capacities appropriate to meet existing production
requirements. The Ilion, Lonoke and Mayfield facilities each contain enclosed
ranges for testing firearms and ammunition. The Ada, Oklahoma facility is
currently idle due to supply limitations discussed in Note 5 to our audited
consolidated financial statements for the year ended December 31, 2007,
contained in Item 8  Financial Statements and Supplementary Data in this
annual report on Form 10-K.

We
acquired the Connecticut and Massachusetts facilities in connection with our
acquisition of The Marlin Firearms Company on January 28, 2008.

Our
headquarters and related operations are conducted in an office building that we
own in Madison, North Carolina. We believe that this facility is suitable
for the activities conducted therein and is appropriately utilized.

Research
and development is conducted at a facility that we own in Elizabethtown,
Kentucky. We believe that this facility is suitable for the activities
conducted therein and is appropriately utilized.

At
December 31, 2007, we owned a facility in Lexington, Missouri, that was used by
a third party for the production of wood stocks. We purchase a number of these
wood stocks to use in the production of certain firearms. This facility was
sold in February 2008 to a third party and we continue to purchase wood stocks
from this third party to use in the production of certain firearms.

All
of the real property owned by us has been mortgaged as collateral for our
obligations under the Amended and Restated Credit Agreement through the Second
Amendment.

We
lease a facility in Memphis, Tennessee from and contract for distribution
services with major third party contractors, which impacts distribution for all
of our reporting segments. We believe that this facility is suitable for the
activities conducted therein and is appropriately utilized.

25

Item 3. LEGAL PROCEEDINGS

Under
the terms of the Purchase Agreement, the 1993 Sellers retained liability for,
and are required to indemnify us against:


liability in
 excess of our limited financial responsibility for environmental claims and
 disclosed product liability claims relating to pre-closing occurrences;
liability
 for product liability litigation related to discontinued products; and
certain tax
 liabilities, and employee and retiree compensation and benefit liabilities
 and intercompany accounts payable which do not represent trade accounts
 payable.These
indemnification obligations of the 1993 Sellers are not subject to any survival
period limitation. We have no current information on the extent, if any, to
which the 1993 Sellers have insured these indemnification obligations. Except
for certain cases and claims relating to shotguns as described below, and
except for all cases and claims relating to products discontinued prior to the
Asset Purchase, we generally bear financial responsibility for the costs of
product liability cases and claims relating to occurrences after the Asset
Purchase and are required to indemnify the 1993 Sellers against such cases and
claims. See Certain Indemnities.

The
main types of legal proceedings include:


Product
 liability litigation filed by individuals.
Product
 liability litigation filed by municipalities.
Environmental
 litigation.Product Liability Litigation

Since
December 1, 1993, we have maintained insurance coverage for product liability
claims subject to certain self-insured retentions on a per-occurrence basis for
personal injury or property damage relating to occurrences arising after the
Asset Purchase. We believe that our current product liability insurance coverage
for personal injury and property damage is adequate for our needs. Our current
product liability insurance policy runs from December 1, 2007 through November
30, 2008 and provides for certain self-insured retention amounts per
occurrence. It also includes a limited batch clause provision, which allows
that a single retention be assessed when the same defects manufactured in a
common lot or batch results in multiple injuries or damages to third parties.
The policy excludes from coverage any pollution-related liability. Based in
part on the nature of our products, there can be no assurance that we will be
able to obtain adequate product liability insurance coverage upon the
expiration of the current policy. Certain of our current excess insurance
coverage expressly excludes actions brought by municipalities as described
below.

As
a result of contractual arrangements, we manage the joint defense of product
liability litigation involving Remingtonbrand firearms and our
ammunition products for both Remington and the 1993 Sellers. As of December 31,
2007, approximately 11 individual bodily injury cases and claims were pending,
primarily alleging defective product design, defective manufacture and/or
failure to provide adequate warnings; some of these cases seek punitive as well
as compensatory damages. We have previously disposed of a number of other cases
involving post-Asset Purchase occurrences by settlement. Of the individual
cases and claims pending as of December 31, 2007, one involves matters for
which the 1993 Sellers retained liability and are required to indemnify us. The
remaining 12 pending cases involve post-Asset Purchase occurrences for which we
bear responsibility under the Purchase Agreement.

The
relief sought in individual cases includes compensatory and, sometimes,
punitive damages. Not all complaints or demand letters expressly state the
amount of damages sought. As a general matter, when specific amounts are
provided, compensatory damages sought range from less than $75,000 to more than
$10 million, while demands for punitive damages may range from less than
$500,000, to as much as $100 million. Of the 11 individual post-Asset Purchase
claims pending as of December 31, 2007, claimants specifying amounts purport to
seek approximately $28.5 million in compensatory and $10 million of punitive
damages. In the Companys experience, initial demands do not generally bear a
reasonable relationship to the facts and circumstances of a particular matter,
and in any event, are typically reduced significantly as a case proceeds. The
Company believes that its accruals for product liability cases and claims, as
described below, are a superior quantitative measure of the cost to it of
product liability cases and claims.

26

At
December 31, 2007, our accrual for product liability cases and claims was $12.4
million. The amount of our accrual for product liability cases and claims is
based upon estimates developed as follows. We establish reserves for
anticipated defense and disposition costs to us of those pending cases and
claims for which we are financially responsible. Based on those estimates and
an actuarial analysis of actual defense and disposition costs incurred by us
with respect to product liability cases and claims in recent years, we
determine the estimated defense and disposition costs for unasserted product
liability cases and claims. We combine the estimated defense and disposition
costs for both pending and unasserted cases and claims to determine the amount
of our accrual for product liability cases and claims. It is reasonably
possible additional experience could result in further increases or decreases
in the period in which such information is made available. We believe that our
accruals for losses relating to such cases and claims are adequate. Our
accruals for losses relating to product liability cases and claims include
accruals for all probable losses the amount of which can be reasonably
estimated. Based on the relevant circumstances (including the current availability
of insurance for personal injury and property damage with respect to cases and
claims involving occurrences arising after the Asset Purchase, our accruals for
the uninsured costs of such cases and claims and the 1993 Sellers agreement to
be responsible for a portion of certain post-Asset Purchase shotgun-related
product liability costs, as well as the type of firearms products that we
make), we do not believe with respect to product liability cases and claims
that any probable loss exceeding amounts already recognized through our
accruals has been incurred.

Because
our assumption of financial responsibility for certain product liability cases
and claims involving pre-Asset Purchase occurrences was limited to an amount
that has now been fully paid, with the 1993 Sellers retaining liability in
excess of that amount and indemnifying us in respect of such liabilities, and
because of our accruals with respect to such cases and claims, we believe that
product liability cases and claims involving occurrences arising prior to the
Asset Purchase are not likely to have a material adverse effect upon our
financial condition, results of operations or cash flows. Moreover, although it
is difficult to forecast the outcome of litigation, we do not believe, in light
of relevant circumstances (including the current availability of insurance for
personal injury and property damage with respect to cases and claims involving
occurrences arising after the Asset Purchase, our accruals for the uninsured
costs of such cases and claims and the 1993 Sellers agreement to be
responsible for a portion of certain post-Asset Purchase shotgun-related
product liability costs, as well as the type of firearms products that we
make), that the outcome of all pending post-Asset Purchase product liability
cases and claims will be likely to have a material adverse effect upon our
financial condition, results of operations or cash flows. Nonetheless, in part
because the nature and extent of liability based on the manufacture and/or sale
of allegedly defective products (particularly as to firearms and ammunition) is
uncertain, there can be no assurance that our resources will be adequate to
cover pending and future product liability occurrences, cases or claims, in the
aggregate, or that a material adverse effect upon our financial condition,
results of operations or cash flows will not result therefrom. Because of the
nature of our products, we anticipate that we will continue to be involved in
product liability litigation in the future. Because of the potential nature of
injuries relating to firearms and ammunition, certain public perceptions of our
products, and recent efforts to expand liability of manufacturers of firearms
and ammunition, product liability cases and claims, and insurance costs
associated with such cases and claims, may cause us to incur material costs.

Municipal
Litigation

In
addition to these individual cases, as a manufacturer of shotguns and rifles,
Remington was named in only three of the actions brought by approximately 30
municipalities, primarily against manufacturers, distributors and sellers of
handguns: (i) City of Boston, et al. v.
Smith & Wesson, et al., No. 99-2590 (Suffolk Super Ct.); (ii) City of St. Louis, Missouri v. Henry Cernicek, et al.,
No. 992-01209 (Cir. Ct. St. Louis) & 00 Civil 1895 (U.S. Dist. Ct E.D.
Missouri); and (iii) City of New York, et
al. v. B.L. Jennings, Inc., et al., 00 Civil 3641 (JBW) (U.S. Dist.
Ct. E.D.N.Y.). Two of these cases (City of Boston and City of St. Louis) have been
dismissed against all defendants, while the third has been limited to claims
against handgun manufacturers (City of New York). Remington is therefore
not a defendant in any pending municipal litigation.

As
a general matter, these lawsuits name several dozens of firearm industry
participants as defendants, and claim that the defendants distribution
practices allegedly permitted their products to enter a secondary market, from
which guns can be obtained by unauthorized users; that defendants fail to
include adequate safety devices in their firearms to prevent unauthorized use
and accidental misuse; and that defendants conduct has created a public
nuisance. Plaintiffs generally seek injunctive relief and money damages
(consisting of the cost of providing certain city services and lost tax and
other revenues), and in some cases, punitive damages, as well.

To
date, most municipal lawsuits have been dismissed and are no longer subject to
appeal, including that involving local California governments. The three
remaining lawsuits are in various stages of motion practice, discovery, and
trial preparation. A majority of states have enacted some limitation on the
ability of local

27

governments to
file such lawsuits against firearms manufacturers. In addition, similar
legislation limiting such lawsuits on a federal level has been proposed in both
houses of Congress, most recently by the House of Representatives on October
20, 2005. President Bush signed the Protection of Lawful Commerce in Arms Act
on October 26, 2005. However, the applicability of the law to various types of
governmental and private lawsuits has been challenged in both state and federal
courts.

Litigation Outlook

We
are involved in lawsuits, claims, investigations and proceedings, including
commercial, environmental and employment matters, which arise in the ordinary
course of business. We do not expect that the ultimate costs to resolve these
matters will have a material adverse effect on our financial position, results
of operations or cash flows.

Certain Indemnities

As
of the closing of the Asset Purchase in December 1993 under the Purchase
Agreement, we assumed:


a number of
 specified liabilities, including certain trade payables and contractual obligations
 of the 1993 Sellers;
limited
 financial responsibility for specified product liability claims relating to
 disclosed occurrences arising prior to the Asset Purchase;
limited
 financial responsibility for environmental claims relating to the operation
 of the business prior to the Asset Purchase; and
liabilities
 for product liability claims relating to occurrences after the Asset
 Purchase, except for claims involving products discontinued at the time of
 closing.All
other liabilities relating to or arising out of the operation of the business
prior to the Asset Purchase are excluded liabilities (the Excluded
Liabilities), which the 1993 Sellers retained. The 1993 Sellers are required
to indemnify Remington and its affiliates in respect of the Excluded
Liabilities, which include, among other liabilities:


liability in
 excess of our limited financial responsibility for environmental claims and
 disclosed product liability claims relating to pre-closing occurrences;
liability
 for product liability litigation related to discontinued products; and
certain tax
 liabilities, and employee and retiree compensation and benefit liabilities
 and intercompany accounts payable which do not represent trade accounts
 payable.The
1993 Sellers overall liability in respect of their representations, covenants
and the Excluded Liabilities under the Purchase Agreement, excluding
environmental liabilities and product liability matters relating to events
occurring prior to the purchase but not disclosed, or relating to discontinued
products, is limited to $324.8 million. With a few exceptions, the 1993
Sellers representations under the Purchase Agreement have expired. We made
claims for indemnification involving product liability issues prior to such
expiration. See Product Liability Litigation.

In
addition, the 1993 Sellers agreed in 1996 to indemnify us against a portion of
certain product liability costs involving various shotguns manufactured prior
to 1995 and arising from occurrences on or prior to
November 30, 1999. These indemnification obligations of the 1993
Sellers relating to product liability and environmental matters (subject to a
limited exception) are not subject to any survival period limitation,
deductible or other dollar threshold or cap. We and the 1993 Sellers are also
party to separate agreements setting forth agreed procedures for the management
and disposition of environmental and product liability claims and proceedings
relating to the operation or ownership of the business prior to the Asset
Purchase, and are currently engaged in the joint defense of certain product
liability claims and proceedings. See Product Liability Litigation.

28

Item 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS

There
were no matters submitted to a vote of the Companys sole stockholder during
the fourth quarter of 2007.

29

PART
II

Item 5. MARKET FOR REGISTRANTS COMMON EQUITY,
 RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market
Information. There is no established public trading
market for the securities issued by AHA, Holding or Remington.

Holders.
As of February 29, 2008, there were 19 holders of the outstanding common stock
of AHA, the 100% owner of Holding. The only holder of Remingtons common stock
is Holding and the only holder of Holdings common stock is AHA.

Dividends.
AHA did not pay any dividends during 2007. Holding did not pay any dividends
during 2006 or 2007 and Remington did not pay any dividends during 2006 or
2007.

The
declaration and payment of future dividends by either Remington, Holding or
AHA, if any, will be at the sole discretion of the Board of Directors of the
respective companies, subject (in the case of Remington) to the restrictions
set forth in the Amended and Restated Credit Agreement, and the indenture for
the Notes, which currently limit the payment of cash dividends by Remington to
its sole stockholder, as well as restrictions, if any, imposed by other
indebtedness outstanding from time to time.

See
Item 7  Managements Discussion and Analysis of Financial Condition and
Results of OperationsLiquidity and Capital Resources and Note 16 to our
audited consolidated financial statements for the year ended December 31, 2007,
appearing in Item 8  Financial Statements and Supplementary Data in this
annual report on Form 10-K.

30

Item 6. SELECTED FINANCIAL DATA

As
a result of the AHA Acquisition, the financial results for the twelve months
ended December 31, 2007 have been separately presented, split between the
Predecessor entity, covering the period from January 1, 2007 through May 31,
2007, and the Successor entity, covering the period from June 1, 2007 through
December 31, 2007. For comparative purposes, we combined the two periods
through December 31, 2007 in the table and related footnotes below. We believe
this presentation provides the reader with a more accurate comparison and the combined
results of operations are what management relies on internally when making
business decisions.

The
following table sets forth certain selected financial information derived from
our audited consolidated financial statements as audited by our independent
registered public accounting firms, Grant Thornton LLP for data for the annual
periods ended December 31, 2007 and December 31, 2006, and
PricewaterhouseCoopers LLP for the annual periods ended December 31, 2005,
December 31, 2004 and December 31, 2003. The table should be read in
conjunction with Item 7  Managements Discussion and Analysis of Financial
Condition and Results of Operations and our audited consolidated financial
statements and related notes and other financial information included elsewhere
in this annual report.

Predecessor






SuccessorYear Ended December 31,

Jan. 1
 May 31
 2007

June 1 
 Dec. 31
 2007

Combined
 20072003

2004

2005

2006(dollars in millions)Income Statement
Data:Net Sales (1)

$
360.7

$
393.0

$
410.4

$
446.0


$
167.0



$
322.0



$
489.0Sales Growth
(Loss) Percentage


(6.0
%)

9.0
%

4.4
%

8.7
%


N/A




N/A




9.6
%Gross Profit


90.5


90.5


85.5


107.6



49.7




52.7




102.4Gross Profit
Percentage


25.1
%

23.0
%

20.8
%

24.1
%


29.8
%



16.4
%



21.0
%Operating Expenses


75.0


69.6


69.8


77.8



28.5




54.0




82.5Impairment Charges (2)








4.7


0.2













Operating Profit
(Loss)


15.5


20.9


11.0


29.6



21.2




(1.3
)



19.9Interest Expense (3)


23.0


24.6


26.4


28.0



10.9




14.6




25.5Income (Loss) from Continuing
Operations
 before Taxes and Equity in Losses from Unconsolidated Joint Venture


(7.5
)

(3.7
)

(15.4
)

1.6



10.3




(15.9
)



(5.6
)Income Tax Expense (Benefit) from
 Continuing Operations (4)


(2.9
)

14.0


0.4


0.9



1.3




(5.9
)



(4.6
)Income (loss) from Discontinued
Operations,
 net of tax (5)


1.4





(0.1
)















Gain on Disposal of Discontinued
 Operations, net of tax (6)





13.6



















Net Income (Loss)


(3.2
)

(4.1
)

(16.9
)

0.3



9.0




(10.5
)



(1.5
)Operating and Other Financial
Data:Depreciation and Amortization
(7)

$
9.5

$
9.2

$
9.6

$
10.0


$
4.2



$
8.3



$
12.5Other Non-Cash Charges (Gains)
(8)


3.4


7.4


6.0


(0.3
)


1.7




(6.2
)



(4.5
)Nonrecurring and Restructuring
Items (9)


0.4


(12.7
)

4.9


3.2



(3.9
)



35.8




31.9Special Payments (10)


4.5






















Equity in Loss for
Unconsolidated Joint
 Venture








1.0


0.4








0.5




0.5Gross Capital
Expenditures


6.9


9.5


10.1


6.5



1.5




6.7




8.2Other Unusual Charges
(11)


2.2






















Adjusted EBITDA related to
Discontinued
 Operations (12)


4.1


0.2



















Cash flows provided by (used
in):Operating
activities

$
(7.3
)
$
(11.8
)
$
(6.0
)
$
13.2


$
(36.3
)


$
65.4



$
29.1Investing
activities


(6.9
)

35.1


(11.1
)

(7.9
)


(12.1
)



(1.4
)



(13.5
)Financing
activities


14.2


(23.3
)

17.2


(5.3
)


56.9




(49.6
)



7.331

Predecessor

SuccessorDec. 312003

2004

2005

2006

2007Balance Sheet Data (end of period):Working
 Capital (13)

$
119.5

$
120.2

$
136.4

$
130.2

166.6Total Assets


362.7


354.4


363.3


371.3

502.1Total Debt
 (14)


230.5


203.5


221.7


221.4

233.3Credit
 Facility


28.3


1.8


19.4


19.4

Stockholders
 Equity (Deficit)


11.8


9.9


(11.1
)

(10.2)

108.0Predecessor



SuccessorJan. 1
 May 31
 2007

June 1 
 Dec. 31
 2007

Combined
 2007Year Ended December 31,2003

2004

2005

2006Adjusted EBITDA and Credit Statistics:Adjusted
 EBITDA (12) (15)

$
39.6

$
38.6

$
31.4

$
42.5


$
23.2



$
38.1



$
61.3Consolidated
 Interest Expense (16)

$
23.0

$
22.8

$
24.7

$
26.4


$
10.3



$
14.2



$
24.5Consolidated
 Coverage Ratio (17)


1.7
x

1.7
x

1.3
x

1.6
x


2.3
x



2.7
x



2.5
xRatio of
 Earnings to Fixed Charges (18)


(18
)

(18
)

(18
)

1.0
x


1.9
x



(18
)



0.8
x(1)
Presented
 net of federal excise taxes. Federal excise taxes were $31.2 million, $33.5
 million, $34.0 million, and $37.4 million for the years ended December 31, 2003,
 2004, 2005, and 2006, respectively. Federal excise taxes were $12.1 million
 for the five months ended May 31, 2007 and $27.2 million for the seven months
 ended December 31, 2007.(2)
These
 impairment charges in 2006 are associated with an incremental write-down in
 certain embellishing fixed assets in the firearms reporting unit and in 2005
 are associated with the write-down in goodwill, trademarks, and fixed assets
 of the Clay Targets reporting unit and with the write-down in certain
 embellishing fixed assets in the Firearms reporting unit. See Note 5 to our
 audited consolidated financial statements for the year ended December 31,
 2007 appearing in Item 8  Financial Statements and Supplementary Data in
 this annual report on Form 10-K.(3)
Interest
 expense included in discontinued operations is $1.8 million, $0.1 million,
 zero, zero and zero, for the years ended December 31, 2003, 2004, 2005, 2006
 and 2007, respectively.(4)
The year
 ended December 31, 2004 and 2005 includes $15.5 million and $0.4 million in
 tax expense associated with recording a valuation allowance against certain
 deferred tax assets. See Note 19 to the audited consolidated financial
 statements for the year ended December 31, 2007 appearing in Item 8 
 Financial Statements and Supplementary Data in this annual report on Form
 10-K.(5)
On February
 9, 2004, we completed the sale of our fishing line business, and the results
 are reflected as discontinued operations for all periods presented.(6)
Reflects the
 Gain on Disposal of assets sold associated with the sale of specified assets
 of our fishing line business on February 9, 2004.(7)
Excludes
 amortization of deferred financing costs of $1.8 million, $1.9 million, $1.8
 million, and $1.6 million for the years ended 2003, 2004, 2005, and 2006,
 respectively, which is included in interest expense. Excludes amortization
 expense of deferred financing costs of $0.6 million for the five month period
 ended May 31, 2007. Excludes amortization expense of deferred financing costs
 of $1.0 million, offset by $0.6 million of amortization associated with the
 premium recorded on the notes for the seven month period ended December 31,
 2007.(8)
Non-cash
 charges consist of the following: (a) for the year ended December 31, 2003, a
 $2.9 million accrual for retiree benefits and a $0.5 million loss on disposal
 of assets; (b) for the year ended December 31, 2004, a $7.1 million accrual
 for retiree benefits and a $0.3 million loss on disposal of assets; (c) for
 the year ended December 31, 2005, a $5.6 million accrual for retiree benefits
 and a $0.4 million loss on disposal of assets; (d) for the year ended
 December 31, 2006, a $6.0 million accrual for32

retiree
 benefits, a $0.8 million loss on disposal of assets, a $7.4 million
 curtailment gain for pension expense, and $0.3 million of other compensation
 expense associated with stock option expense recognition under SFAS 123R; and
 (e) for the five month period ended May 31, 2007, $1.5 million of other
 compensation expense associated with stock option expense and the deferred
 shares recognized under SFAS 123R, and $0.2 million of mark-to-market expense
 associated with redeemable shares of common stock and for the seven month
 period ended December 31, 2007, $0.3
 million accrual for retiree
 benefits, offset by a gain of $6.4 million for curtailment of
 pension plan expense.(9)
Nonrecurring and restructuring expenses consist of the
 following: (a) for the year ended December 31, 2003, $0.2 million of
 severance costs and $0.2 million loss on disposal of assets; (b) for the year
 ended December 31, 2004, $13.6 million gain on sale of the fishing line
 business, offset by $0.2 million of severance costs, and $0.7 million in
 consulting fees associated with the nonrecurring exclusive distribution and
 joint venture agreements for certain technology products; (c) for the year
 ended December 31, 2005, $0.6 million of severance charges, $0.3 million
 associated with the exclusive distribution agreement, a write-off of debt
 issuance costs of $0.5 million associated with the permanent reduction in
 borrowing capacity, $1.0 million associated with the write-down in certain
 embellishing fixed assets in the Firearms reporting segment, and impairment
 charges of $3.7 million associated with the write-down in goodwill,
 trademarks, and fixed assets of the Clay Targets reporting unit, offset by
 $1.2 million gain associated with the settlement of a contract in the
 Firearms reporting unit; (d) for the year ended December 31, 2006, $2.8
 million of nonrecurring professional fees, $0.2 million associated with an
 incremental write-down in certain embellishing fixed assets in the firearms
 reporting unit and $0.2 million associated with the exclusive distribution
 agreements for certain technology products; and (e) for the five month period
 ended May 31, 2007, $4.9 million of non-cash gain associated with the
 unsettled metals hedging contracts from the predecessor company. (The Company
 recognized approximately $2.0 million of this amount as an addition to
 Adjusted EBITDA in the fourth quarter as certain of the unexpired contracts
 as of May 31, 2007 ultimately settled in a gain position and the Company
 received cash for them. Consistent with the treatment of similar gains not
 effected by purchase accounting, management would have experienced those
 gains as a reduction in cost of goods sold based on inventory turnover); $0.1
 million of professional fees related to the Acquisition; $0.1 million of
 professional fees associated with the Haskin settlement agreement; $0.1 million
 of expense associated with certain employee benefits; and $0.7 million
 expense related to certain predecessor company insurance policies, and for
 the seven month period ended December 31, 2007, $3.0 million of professional
 fees and expenses incurred by the Companys Chief Restructuring Officer in
 connection with factory improvement initiatives, $28.7 million related to the
 inventory write-up from the application of purchase accounting to inventory
 as of May 31, 2007 being recognized in cost of sales as the acquired
 inventory is sold at a higher basis, $0.8 million of transaction fees related
 to the Acquisition, $0.4 million of restructuring related fees, $0.2 million
 of other employee expenses, $3.1 million of realized gains associated with
 metals hedging contracts that settled prior to May 31, 2007 that would have
 been reclassified from other comprehensive income (OCI) into cost of goods
 sold based on inventory turnover that were actually accounted for and removed
 from OCI as a result of applying purchase accounting, and $0.5 million of
 gain for our investment in the RELES joint venture.(10)
In February
 2003, Holding distributed on behalf of Remington a special payment to holders
 of all stock options (in connection with the acceleration and resulting cancellation
 of the options) of approximately $220.31 per share, in an aggregate amount of
 $4.5 million.(11)
In January
 2003, $0.7 million of additional interest for early redemption of Remingtons
 9 1⁄2% Senior Subordinated Notes due 2003 (the Refinanced Notes) and $1.5
 million for the unamortized debt issuance costs were expensed related to
 Remingtons prior senior secured credit facility (the Old Credit Facility).(12)
Adjusted
 EBITDA as presented herein has the same meaning as defined in Note 22 to the
 audited consolidated financial statements presented in Item 8  Financial
 Statements and Supplementary Data in this annual report on Form 10-K.
 Discontinued Operations relates solely to the sale of our fishing line
 business on February 9, 2004. Adjusted EBITDA related to Discontinued
 Operations is appropriately included in Consolidated EBITDA as defined in
 the indenture for the Notes for all periods presented.(13)
Working
 capital as presented herein consists of total current assets less total
 current liabilities.(14)
Consists of
 short-term and long-term debt, current portion of long-term debt, note
 payable to Holding and capital lease obligations.33

(15)
Adjusted
 EBITDA differs from the term EBITDA as it is commonly used, and is
 substantially similar to the measure Consolidated EBITDA that is used in
 the Indenture. In addition to adjusting net income (loss) to exclude income
 taxes, interest expense, and depreciation and amortization, Adjusted EBITDA
 also adjusts net income (loss) by excluding items or expenses not typically
 excluded in the calculation of EBITDA, such as noncash items, gain or loss
 on asset sales or write-offs, extraordinary, unusual or nonrecurring items,
 including transaction expenses associated with the AHA Acquisition and
 certain special payments to Remington employees who held options and
 deferred shares in respect of Holding common stock, consisting of amounts
 that are treated as compensation expense by Remington and are paid in
 connection with payments of dividends to holders of Holding common stock.
 Adjusted EBITDA is not a measure of performance defined in accordance with
 GAAP. However, management believes that Adjusted EBITDA is useful to
 investors in evaluating the Companys performance because it is a commonly
 used financial analysis tool for measuring and comparing companies in the
 Companys industry in areas of operating performance. Management believes
 that the disclosure of Adjusted EBITDA offers an additional view of the
 Companys operations that, when coupled with the GAAP results and the
 reconciliation to GAAP results, provides a more complete understanding of the
 Companys results of operations and the factors and trends affecting the
 Companys business.Adjusted
 EBITDA should not be considered as an alternative to net income as an
 indicator of the Companys performance or as an alternative to net cash
 provided by operating activities as a measure of liquidity. The primary
 material limitations associated with the use of Adjusted EBITDA as compared
 to GAAP results is (i) it may not be comparable to similarly titled measures
 used by other companies in the Companys industry, and (ii) it excludes
 financial information that some may consider important in evaluating the
 Companys performance. The Company compensates for these limitations by
 providing disclosure of the differences between Adjusted EBITDA and GAAP
 results, including providing a reconciliation of Adjusted EBITDA to GAAP
 results, to enable investors to perform their own analysis of the Companys
 operating results.The
 indenture for the Notes provides that, in order to enter into the following
 types of transactions, in addition to other applicable requirements, the
 ratio of Consolidated EBITDA (where we use the substantially similar Adjusted
 EBITDA as noted above) to Remingtons consolidated interest expense (subject
 to certain adjustments as provided in the indenture for the Notes) must be
 greater than 2.25 to 1.00 for the four most recent quarters for which
 financial statements are available:
The
 incurrence of indebtedness in addition to limited specified categories of
 permitted indebtedness that is enumerated in the indenture for the Notes.
Mergers and
 consolidations involving Remington.
Dividends,
 investments and other restricted payments in addition to limited specified
 categories of permitted restricted payments and investments that are
 enumerated in the indenture for the Notes.
The
 re-designation of an unrestricted subsidiary as a restricted subsidiary for
 the purposes of the indenture for the Notes.(16)
Consolidated
 Interest Expense as defined in the indenture for the Notes, consists of the
 total interest expense of Remington and its subsidiaries, net of any interest
 income of Remington and its subsidiaries, and includes interest expense
 consisting of (a) interest expense attributable to capital leases, (b)
 amortization of debt discount, (c) interest on debt of other persons
 guaranteed by Remington or any of its subsidiaries, (d) non-cash
 interest expense, (e) the interest portion of any deferred payment obligation
 and (f) commissions, discounts and other fees and charges owed with
 respect to letters of credit and bankers acceptance financing. The
 definition of Consolidated Interest Expense also provides that gross
 interest is to be determined after giving effect to any net payment made or
 received by Remington or its subsidiaries with respect to interest rate
 hedging agreements. Note that Consolidated Interest Expense excludes
 amortization expense associated with the Companys debt acquisition costs of
 $1.8 million, $1.9 million, $1.8 million, and $1.6 million for the years
 ended 2003, 2004, 2005, and 2006, respectively, and includes amounts
 reclassified to discontinued operations of $1.8 million, $0.1 million, zero,
 zero and zero, for the years ended December 31, 2003, 2004, 2005, 2006 and
 2007, respectively. Excludes amortization expense of deferred financing costs
 of $0.5 million for the five month period ended May 31, 2007 and excludes
 amortization expense of deferred financing costs of $1.0 million, offset by
 $0.6 million of amortization associated with the premium recorded on the
 notes for the seven month period ended December 31,34

2007. There were no
 discontinued operation amounts included in 2007.(17)
Consolidated
 Coverage Ratio as defined in the indenture for the Notes is the ratio of
 Consolidated EBITDA (where we use the substantially similar Adjusted EBITDA
 as noted above) for the four most recently ended quarters for which financial
 statements are available to Consolidated Interest Expense (as defined in the
 indenture for the Notes) for the same period. The Consolidated Coverage Ratio
 is presented for illustrative purposes.(18)
For purposes
 of computing this ratio, earnings consists of earnings before income taxes
 and fixed charges, excluding capitalized interest. Fixed charges consist of
 interest expense, capitalized interest, amortization of discount on
 indebtedness and one-third of rental expense (the portion deemed
 representative of the interest factor). Due to our net losses in 2003, 2004,
 and 2005, this ratio was less than 1:1. Additional earnings of $7.5 million,
 $3.7 million and $16.4 million in 2003, 2004 and 2005, respectively, would
 have been required to achieve a ratio of 1:1. Due to our net loss in the
 seven month period ended December 31, 2007, this ratio was less than 1:1.
 Additional earnings of $16.3 million would have been required to achieve a
 ratio of 1:1.35

Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following discussion and analysis should be read in conjunction with the
Selected Financial Data and our audited consolidated financial statements and
related notes and the other financial information appearing elsewhere in this
annual report.

Managements
Discussion and Analysis of Financial Condition and Results of Operations is
separated into the following sections:


Recent
 Developments
Executive
 Overview
Business
 Outlook.
Liquidity
 and Capital Resources.
Results of
 Operations.
Recent
 Accounting Pronouncements.
Critical
 Accounting Policies and Estimates.
Information
 about Forward-Looking Statements.Recent Developments

Acquisition by AHA

The
shares of Holding,
the sole stockholder of Remington, were purchased by AHA on May 31, 2007 (the
Closing Date), pursuant to a stock purchase agreement dated as of April 4,
2007 (the Stock Purchase Agreement) between Holding, its stockholders
and deferred stockholders (including
the ownership interests represented by Bruckmann, Rosser, Sherrill &
Co. II, L.P. and the Clayton & Dubilier Private Equity Fund IV Limited
Partnership (the CDR Fund)), as well as the Holding stock option holders (the
AHA Acquisition).

On
the Closing Date of the AHA Acquisition, AHA acquired all of the capital stock
of Holding, consisting of 205,208 shares of issued and outstanding Class A
common stock, par value $0.01 per share (the Common Stock) and 5,851 deferred
shares of Common Stock (which were converted into shares of Common Stock on the
Closing Date), at a value of $330.47 per share less related selling expenses,
escrow and related taxes. In addition, among other things, on the Closing Date
outstanding options to purchase 10,635 shares of Holding Common Stock (the
Stock Options), which constituted all of the outstanding Stock Options,
immediately vested subject to the applicable change in control provisions in
Holdings 1999 Stock Incentive Plan and 2003 Stock Option Plan.

Remington
made option cancellation payments on the Closing Date, representing the
purchase price of $330.47 per share less the strike price of $220.31 with
respect to each Stock Option less related selling expenses, escrow and related
taxes. AHA provided the funds to Holding which, in turn, provided Remington
with funds sufficient to make these option cancellation payments. On the
Closing Date, AHA also provided Holding with approximately $48.2 million
to pay and satisfy in full as of the Closing Date the full outstanding amount
of principal and interest of Senior Note A due 2011 and Senior Note B due 2012
issued by Holding and held by the CDR Fund (the Holding Notes).

In
accordance with the terms of the Stock Purchase Agreement, AHA, Holding and
Remington disbursed funds as follows:


AHA paid
 sellers $59.0 million, net of $10.7 million of costs incurred by the sellers,
 certain seller withholding taxes, and amounts to be placed in escrow.
AHA provided
 the escrow agent $5.0 million representing amounts withheld from the sellers
 gross sales price.
AHA paid
 $0.7 million of seller-incurred legal fees with amounts withheld from the
 sellers gross sales price.
AHA provided
 $48.2 million to Holding for the payment of the Holding Notes and $0.7
 million for certain tax withholdings due from sellers.
AHA provided
 Remington with $5.1 million for payment of the management bonus and
 cancellation of Stock Options, net of seller-related expenses.
Holding paid
 $48.2 million to satisfy in full the Holding Notes.
Holding paid
 $3.7 million of certain AHA Acquisition-related costs with funds provided
 from Remington and provided Remington with $0.7 million associated with tax
 withholdings from the sellers.36


Remington
 provided Holding with $3.8 million from its Revolving Credit Facility to pay
 for certain buyer- related AHA Acquisition costs described above.
Remington
 paid $10.3 million from its Revolving Credit Facility in connection with
 obtaining waivers, amendments and consents to the Revolving Credit Facility
 and the $200.0 million 10.5% Senior Notes due 2011 (the Notes).
Remington
 paid $0.7 million for cancellation of the Stock Options and $1.1 million of
 withholding taxes from amounts withheld from sellers and option holders.
Remington
 paid $4.0 million in management bonuses and related withholding taxes from
 amounts that were withheld from the sellers and from funds provided by AHA.In
addition, subsequent to May 31, 2007, AHA contributed approximately $6.1
million of the initial capital to the capital of Remington. These amounts were
used to pay down the $3.8 million that Remington provided Holding for
transaction related costs and a portion of the outstanding credit facility
balance at the time.

As
a result of the AHA Acquisition, AHA now controls 100% of the capital stock of
Holding. The preliminary value of the AHA Acquisition was $416.6 million at May
31, 2007, based on a preliminary draft of a third party valuation, which
includes the assumption of all of Remingtons approximately $85.2 million of
funded indebtedness related to the Amended and Restated Credit Agreement, dated
March 15, 2006, by and among Remington, Wachovia Bank, National Association, RA
Factors, Inc., and the lenders from time to time parties thereto (the Credit
Agreement), the $203.8 million principal amount of the Notes and approximately
$3.4 million of certain other indebtedness at the Closing Date, before AHA
Acquisition fees and expenses. The payment for the Common Stock and converted
deferred shares of Common Stock, the Stock Option cancellation payment and
repayment of the Holding Notes was funded by AHAs available cash. In addition,
Remington obtained all necessary waivers, amendments and consents so that
Remingtons Credit Agreement and the indebtedness evidenced by the Notes
remained outstanding and not in default.

Push Down Accounting

In
accordance with the guidelines set forth in SAB Topic 5J, Miscellaneous
Accounting, Pushdown Basis of Accounting Required in Certain Limited
Circumstances, the purchase price paid by AHA plus related purchase accounting
adjustments have been pushed-down and recorded in our financial statements
for the period subsequent to May 31, 2007. This has resulted in a new basis of
accounting reflecting the fair market value of our assets and liabilities for
the successor period beginning June 1, 2007. Information for all
predecessor periods prior to the AHA Acquisition is presented using our
historical basis of accounting. Following is a summary of the estimated fair
values of the assets acquired and liabilities assumed as of June 1, 2007 based
on preliminary valuations, as well as subsequent adjustments:

As
        of
        June 1,
        2007
    
    Net
        Adjustments
    
    As
        of
        Dec. 31,
        2007Inventory
    
    $
    180.9
    
    
    $
    (2.1
    )
    
    
    $
    178.8Other
        Current Assets
    
    
    136.4
    
    
    
    0.2
    
    
    
    
    136.6Property,
        Plant and Equipment
    
    
    104.2
    
    
    
    0.3
    
    
    
    
    104.5Goodwill
    
    
    67.0
    
    
    
    (6.0
    )
    
    
    
    61.0Identifiable
        Intangible Assets
    
    
    73.9
    
    
    
    (0.9
    )
    
    
    
    73.0Other
        Long-Term Assets
    
    
    22.1
    
    
    
    
    
    
    
    
    22.1Total
        Assets Acquired
    
    $
    584.5
    
    
    $
    (8.5
    )
    
    
    $
    576.0Current
        Liabilities
    
    $
    91.6
    
    
    $
    0.2
    
    
    
    
    91.8Revolving
        Credit Facility
    
    
    85.2
    
    
    
    
    
    
    
    
    85.210
        1⁄2% Senior Notes Due 2011
    
    
    203.8
    
    
    
    
    
    
    
    
    203.8Pension
        & OPEB
    
    
    40.9
    
    
    
    (9.5
    )
    
    
    
    31.4Other
        Non-Current Liabilities
    
    
    38.8
    
    
    
    0.8
    
    
    
    
    39.6Total
        Liabilities Assumed
    
    
    460.3
    
    
    
    (8.5
    )
    
    
    
    451.8Estimated
        AHA Acquisition Cost
    
    $
    124.2
    
    
    $
    
    
    
    
    $
    124.237

Valuations
have been prepared with the assistance of third party valuation experts (for
inventory, property, plant and equipment, intangibles and certain liability
accounts). The allocation of the purchase price is based upon preliminary
valuation data and our estimates, assumptions and allocation to segments are
subject to change. For instance, adjustments to estimated lives of property,
plant and equipment could cause depreciation to change. Also, potential
liabilities associated with improvement initiatives have not yet been finalized
and may change. Any individual item or combination of the above could also
impact accounting for deferred income taxes and segment allocations. Goodwill
would change if any of the other valuations of any asset or liabilities
changes.

Increase of Management Depth

Remington
has hired several seasoned professionals over the past several months to
increase management depth. Since the AHA Acquisition, Remington has employed
certain executives in an effort to increase our leadership position in the
industry and add depth to the existing management team. Such positions include
a new Chief Operating Officer, a President of Sales and Marketing, a Chief
Information Officer, and a new Chief Technology Officer.

Sale of RELES

On
September 26, 2007 (the RELES Closing Date), we entered into a Membership
Interest Purchase and Sale Agreement (the RELES Sale Agreement) with ELSAG,
Inc. and closed the sale of our 50% interest in RELES to ELSAG, Inc. In full
payment for the transferred interest, ELSAG, Inc. paid us $3.0 million on the
RELES Closing Date. Upon the sale of RELES, we recorded a gain of $0.5 million.

Labor Related Matters

On October 26, 2007, Remington was
notified by the International Union, United Mine Workers of
America (the Union), which represents certain individuals employed by the
Company at the Companys Ilion, New York manufacturing facility (collectively,
the Covered Employees), that
a new collective bargaining agreement (the New Agreement) between the Union
and the Company had been ratified
and approved by the Covered Employees. The New Agreement
supersedes the prior collective bargaining agreement between the Company and
the Union, effective as of October 12, 2002 (the Agreement), as well as all
extensions thereof, and also supersedes all prior collective bargaining
agreements between the Union and the Company. The New Agreement relates to
Covered Employees and is for a term which commenced on October 27, 2007 and
expires on October 28, 2012.

The
New Agreement contains provisions and conditions that are customary in
collective bargaining agreements of this type. The New Agreement addresses,
among other things, the scope of work to be performed by the Covered Employees,
management of the manufacturing facility, wage, hour and shift requirements,
Covered Employee seniority, termination and benefits provisions, vacation and
holiday parameters, health and safety requirements and dispute settlement
procedures. Significant changes between the New Agreement and the Agreement
are:


An initial
 3.5% increase in wages effective for an annual period beginning October 29,
 2007, a 3% increase in wages effective the first Monday in November for each
 of the next three years thereafter, and a 3.5% increase in wages effective
 November 7, 2011;
Modifications
 to the Remington Arms Welfare Plan; and
Acceptance
 of the proposed amendments to the Remington Arms Company, Inc. Pension and
 Retirement Plan (the Pension Plan), which were effective December 31, 2007
 and provides, among other things, that no participant in the Pension Plan
 will earn any further benefit accruals after December 31, 2007.Second Amendment to Credit Facility

On
November 13, 2007, we entered into the Joinder Agreement, Second Amendment and
Supplement to Amended and Restated Credit Agreement by and among Remington, RA
Brands, L.L.C., Wachovia, and the lenders from time to time parties thereto
(the Second Amendment), which amended the Credit Agreement, by and among the
same parties and RA Factors, Inc., as amended on May 31, 2007 by the First
Amendment, by and among the same parties other than RA Factors, Inc., which was
merged with and into Remington as of December 31, 2006 and

38

is thus not a
separate and distinct party to the First Amendment or the Second Amendment. The
Second Amendment modifies certain terms and conditions of the Credit Agreement
and the First Amendment. Capitalized terms used and not defined herein have the
meanings set forth in the Credit Agreement, the First Amendment and the Second
Amendment.

The
Second Amendment amended certain terms of the Credit Agreement, as previously
amended by the First Amendment, including by:

(1)
Adding a
 $25.0 million Term Loan Commitment against the Remington Trademarks at an interest
 rate of LIBOR plus 200 basis points with monthly principal payments of
 $520,800, plus interest, beginning May 1, 2008 and continuing on the first
 day of each month thereafter, the final installment of which shall be in an
 amount equal to such Lenders Pro Rata share of the remaining principal
 balance of the Term Loan and shall be payable on the Commitment Termination
 Date;(2)
Increasing
 the maximum commitment of the Revolving Credit Facility from $140.0 million
 to $155.0 million while keeping intact the interest rate margins as
 established by the First Amendment;(3)
Increasing
 the Sub-limit from $70.0 million on the Inventory Formula Amount to $77.5
 million;(4)
Amending the
 definition of Minimum Availability Condition from $20.0 million to $27.5
 million;(5)
Amending the
 dollar amounts of Average Excess Availability by between $2.0 million and
 $5.0 million, depending on the tier, to which the Applicable Margin for the
 Euro-Dollar Loans and Base Rate Loans applies; and(6)
Adding RA
 Brands, L.L.C. as a new borrower under the Credit Agreement and releasing RA
 Brands, L.L.C. from its obligations under the Subsidiary Guaranty previously
 executed by RA Brands, L.L.C.We
executed the Second Amendment to provide additional capacity and flexibility to
support strategic initiatives including, but not limited to, factory
improvements, penetration of certain sales channels, new product development,
one or more potential acquisitions and other corporate purposes.

In
connection with the closing of the Marlin Acquisition, as defined in the next
section, we entered into the Joinder Agreement and Supplement to Amended and
Restated Credit Agreement (the Joinder Agreement) on January 28, 2008, by and
among Remington and RA Brands, L.L.C., as the existing borrowers, The Marlin
Firearms Company (Marlin) and H&R 1871, LLC (H&R), as the new
borrowers, Wachovia, in its capacity as administrative and collateral agent for
various financial institutions (the Lenders), and such Lenders. Pursuant to
the Joinder Agreement, each of Marlin and H&R became a Borrower under the
Amended and Restated Credit Agreement.

Acquisition of Marlin Firearms Company

We
completed our acquisition of all of the outstanding shares of Class A and Class
B Common Stock (collectively, the Shares) of Marlin on January 28, 2008 (the
Marlin Closing Date), from the shareholders of Marlin (collectively, the
Marlin Sellers) pursuant to a stock purchase agreement (the Marlin Stock
Purchase Agreement) dated as of December 21, 2007 by and among Marlin,
Remington, the Marlin Sellers party thereto, and Frank Kenna, III, solely in
his capacity as the Shareholders Representative (the Marlin Acquisition).
The Marlin Acquisition includes Marlins 100% ownership interest in H&R.

The total
purchase price for the Marlin Acquisition is estimated to be approximately
$47.6 million (the Purchase Price), subject to certain Purchase Price
reductions. The following is a summary of certain material transactions related
to the closing of the Marlin Acquisition:


Remington purchased the Shares and paid other related fees and
 expenses associated with the Marlin Acquisition with available cash on hand,
 funds available under existing credit facilities and an equity contribution
 provided by AHA to Remington through Remingtons parent, Holding. AHA owns
 100% of Holding.
Remington paid the Marlin Sellers aggregate consideration of $36.0
 million (the Consideration), of which $5.2 million was deposited into an
 escrow account to secure certain indemnity obligations of the Marlin Sellers
 under the Marlin Stock Purchase Agreement (the Escrow Amount). Any unused
 portion39

of the Escrow Amount will be released to the Marlin Sellers in two equal
 portions on two dates that are twelve and eighteen months following the
 Marlin Closing Date.
Remington paid approximately $5.3 million of Marlin
 Acquisition-related fees and expenses.
At the Marlin Closing Date and on behalf of Marlin, Remington repaid
 approximately $6.3 million of borrowings under the Marlin Amended and
 Restated Commercial Revolving Line of Credit Agreement between Marlin and
 Webster Bank, National Association.
The Consideration includes a reduction of $2.8 million in respect of
 an estimate of underfunding of Marlins pension plan as of the Marlin Closing
 Date. If the actual amount of the underfunding of the Marlin pension plan as
 of the Marlin Closing Date is less than $2.8 million as finally determined,
 Remington will increase the Consideration paid to the Marlin Sellers by the
 amount of such difference.Executive Overview

Company Overview

We
evaluate our business primarily on Adjusted EBITDA (as described in Note 22 to
our audited consolidated financial statements for the year ended December 31,
2007, appearing in Item 8  Financial Statements and Supplementary Data in
this annual report on Form 10-K) from two core segments, Firearms and
Ammunition, and to a lesser degree on other operating segments organized within
the All Other reporting segment, consisting of Accessories, Licensed Products,
Clay Targets, and Powder Metal Products. As part of this evaluation, we focus
on managing inventory (including quantity), length and volume of extended
dating sales terms and trade payables through, among other things, production
management, expense control and improving operating efficiencies at our
factories. These segments allow us to focus our strategies and initiatives on
growth opportunities primarily focused on both the hunting and shooting sports
and military/government/law enforcement marketplaces.

We
are committed to refining our core businesses and positioning ourselves to take
advantage of opportunities to strategically grow and improve Remingtons
operations. As we regularly evaluate our overall business, we look for new
products in the hunting, shooting, accessories, law enforcement, government,
and military areas that complement our core strategies, which may include
direct product sourcing, licensing, acquisitions or other business ventures.

Finally,
in order to be well positioned for growth, we recognize the need to protect our
competitive position with the introduction of new, innovative, high quality,
higher performance and cost effective products to support our customers and
consumers. As a result of the market polarization trends we have identified in
Business Outlook  Industry below, we are augmenting our already existing
product lines with import product lines, and we will continue to enhance our
existing product lines both through the internal development of new products
and the further sourcing of product.

The
sale of firearms and ammunition depends upon a number of factors related to the
level of consumer spending, including the general state of the economy and the
willingness of consumers to spend on discretionary items. Historically, the
general level of economic activity has significantly affected the demand for
sporting goods products in the firearms, ammunition, and related markets. As
economic activity gains momentum, confidence and discretionary spending by
consumers has historically improved. See further discussion in Business
Outlook below.

Management
continues to believe that we have successfully maintained the strength of our
brand and our market-leading positions in our primary product categories, and
that we remain poised to take advantage of any significant improvement in the
demand environment. We have engaged in selective efforts to stimulate demand
for our products through targeted new product introductions and promotions in
selected product categories.

We
have continued to experience increasing costs related to materials and energy
(including lead, copper, zinc, steel, and fuel) which continue to be above any
historical comparison. We can provide no assurance that these trends will not
continue. Specifically, management currently estimates that its 2007 annual
costs for certain core materials and energy alone have increased in the range
of $90-110 million over 2003 annual levels. Management has initiated price
increases to our customers in an attempt to partially offset these estimated
costs and will continue to evaluate the need for future price increases in
light of these trends, the Companys competitive landscape, and financial
results. Management estimates that its cumulative price increases initiated
since 2003 have offset greater

40

than 40% of
the estimated cumulative costs incurred. These estimates assume no significant
loss in overall sales or production volume.

Although
we believe that regulation of firearms and ammunition, and consumer concerns
about such regulation, have not had a significant adverse influence on the
market for our firearms and ammunition products for the periods presented
herein, there can be no assurance that the regulation of firearms and
ammunition will not become more restrictive in the future or that any such
development will not adversely affect these markets.

Business Outlook

General

We
believe the general economic environment appears to be increasingly volatile
and uncertain, as a result of credit concerns due to the sub-prime mortgage
industry, inflationary pressures from higher energy and fuel costs, and an
uncertain geopolitical environment. The Federal Reserve Boards recent moves to
lower interest rates by more than was expected supports these indications. In
addition, we believe that the commodity prices for raw materials such as lead,
copper, and steel, as well as energy costs, that our business has experienced
since 2003 continue to be at levels higher than we have ever experienced. See
Part I, Item 3, Quantitative and Qualitative Disclosures About Market Risk.
We can provide no assurance that these economic trends will not continue.
Changes in consumer confidence and spending and/or significant changes in
commodity and energy prices could have a material impact on our consolidated
financial position, results of operations, or cash flows.

Industry

Consumer
spending appears to be softening in certain markets and the retail and consumer
products industries in which we participate (mainly, firearms and ammunition)
continue to experience market polarization and condensed seasonality. The
industry has also attributed this consumer softness to an overall reduction in
consumer spending on discretionary purchases due to economic factors as well as
unseasonably warm weather, which compressed the fall hunting season.

The
market polarization appears to primarily be a function of demand from higher
end retailers and consumers being relatively inelastic and unaffected by
changing economic conditions while lower end retailers and consumers are
generally selling and buying, respectively, opening price point products in the
firearms industry. Because of this trend, management has continued to evaluate
our product line, both through the internal development of new products and the
sourcing of products, in order to focus our products in price points in appropriate
consumer categories.

The
condensed seasonality appears to primarily be a function of a pronounced
customer effort to aggressively manage inventory turns. Management believes
that such conditions have caused customers (dealers, chains and wholesalers) to
defer certain purchases of both our firearms and ammunition products to later
in the year.

Remington
is no longer a defendant in any lawsuits brought by municipalities against
participants in the firearms industry, as described in Part I, Item 3, Legal
Proceedings. In addition, legislation has been enacted in approximately 34
states precluding such actions. Similar federal legislation, entitled The
Protection of Lawful Commerce in Arms Act was signed into law by President
Bush on October 26, 2005, after being passed by the U.S. Senate in August 2005
and by the House of Representatives in October 2005, both by two-to-one
margins. However, the applicability of the law to various types of governmental
and private lawsuits has been challenged.

Remington

Management
is unable to predict whether softening consumer spending trends and uncertain
general economic conditions will impact the demand for our products. However,
management continues to evaluate these trends as well as uncertainties
associated with costs related to producing and procuring materials, energy,
processing and transportation costs.

Managements
strategy in light of the environment noted above has been to raise prices,
contain costs, improve average working capital and preserve liquidity, while
improving profitability. We have also engaged in selective efforts to stimulate
demand for our products through targeted product introductions and promotions
in

41

selected
product categories. We continue to pursue growth initiatives in our government,
military, and law enforcement divisions along with broadening our brand
awareness with selective licensing arrangements.

Seasonality

We
produce and market a broad range of firearms and ammunition products. Sales of
some of our products occur outside the core fall hunting season (September
through December). These products consist of several models of our shotguns and
several types of ammunition that are intended for target shooting. In addition,
these non-seasonal products include certain types of ammunition, primarily for
pistol and revolver use, as well as ammunition with government, military, and
law enforcement applications. The majority of our firearms and ammunition
products, however, are manufactured for hunting use. As a result, the majority
of the sales of our products are seasonal and concentrated toward the fall
hunting season. While we have historically followed the industry practice of
selling products pursuant to a dating plan, allowing the customer to buy the
products commencing at the beginning of our dating plan periods and pay for
them on extended terms, we have now commenced to shorten the duration of these
terms in order to increase cash flow and improve working capital.

As
a result of the seasonal nature of our sales, the extended payment terms under
our dating plan billing practices, and the aforementioned condensed
seasonality, our working capital financing needs generally have significantly
exceeded cash provided by operations during certain parts of the year until
certain of our extended accounts receivable are collected. As a result, our
working capital financing needs tend to be greatest during the spring and
summer months, decreasing during the fall and reaching their lowest points
during the winter. We continue to see our seasonality compress to later in the
fall hunting season.

Liquidity and Capital Resources

As
a result of the AHA Acquisition, the financial results for the twelve months
ended December 31, 2007 have been separately presented in the condensed
consolidated statements of operations, split between the Predecessor entity,
covering the period from January 1, 2007 through May 31, 2007 and the
Successor entity, covering the period from June 1, 2007 through December 31,
2007. For comparative purposes, we combined the two periods through December
31, 2007 in our discussion below. We believe this presentation provides the
reader with a more accurate comparison and the combined results of operations are
what management relies on internally when making business decisions.

Overview

Historically,
our principal debt financing has consisted of borrowings under the 2003 Credit
Agreement, which was replaced by our Amended and Restated Credit Agreement (as
amended by the First and Second Amendments and the Supplement), governing the
revolving credit facility, and the indenture for the Notes. As part of the AHA
Acquisition of Holding, we obtained certain waivers, consents and amendments
related to both the Amended and Restated Credit Agreement and the Indenture as
discussed below.

We
have historically funded expenditures for operations, administrative expenses,
capital expenditures, debt service obligations and dividend payments with
internally generated funds from operations, and satisfied working capital needs
from time to time with borrowings under our 2003 Credit Agreement. We believe
that we will be able to meet our debt service obligations, fund our operating
requirements, and make dividend payments (subject to restrictions in the
Amended and Restated Credit Agreement as amended, and the indenture for the
Notes) in the future with cash flow from operations and borrowings under our
Credit Facility prior to the maturity of the Amended and Restated Credit
Agreement in 2010, although no assurance can be given in this regard. At
present, we do not have the ability to make any dividend payments due to
restrictions placed upon us by the Amended and Restated Credit Agreement and
the indenture for the Notes. We continue to focus on managing inventory levels
to keep them in line with sales projections and management of accounts payable.

Liquidity

As
of December 31, 2007, we had outstanding approximately $229.8 million of
indebtedness, consisting of approximately $203.2 million aggregate carrying
amount of the Notes ($200.0 million principal), a $25.0 million term loan, $0.7
million in capital lease obligations and a $0.9 million note payable to
Holding. As of December 31, 2007, we also had aggregate letters of credit
outstanding of $4.4 million.

With
respect to other significant cash outlays, we contributed $16.8 million during
the year ended December 31, 2007 to plan assets under our funded
defined-benefit pension plan.

42

Financing
for our efforts to strategically grow the Company from direct product sourcing,
licensing, restructuring, plant improvements, acquisitions or business ventures
may be available under our Amended and Restated Credit Agreement, to the extent
permitted under the Indenture.

101⁄2% Senior Notes due 2011

The
Notes were initially issued on January 24, 2003 in an aggregate principal
amount of $200.0 million. The Notes are senior unsecured obligations of
Remington guaranteed by each of Remingtons domestic subsidiaries, except
Remington Steam (RA Brands was released as a guarantor as of November 13, 2007
pursuant to the Second Amendment). The Indenture contains restrictive covenants
that, among other things, limit the incurrence of debt by Remington and its
subsidiaries, the payment of dividends to Holding, the use of proceeds of
specified asset sales and transactions with affiliates.

In
addition, the Indenture permits repurchases of the Notes on the open market,
subject to limitations that may be contained in the Amended and Restated Credit
Agreement and the Indenture.

On
May 17, 2007, Remington, as issuer, RA Brands (which was released as a
guarantor as of November 13, 2007 pursuant to the Second Amendment), as guarantor,
and U.S. Bank National Association, as trustee, entered into a supplemental
indenture (the Supplemental Indenture) that became effective on the Closing
Date of the AHA Acquisition and amended the Indenture relating to the $200.0
million principal amount of the Notes. The Supplemental Indenture gives effect
to the amendments described in the Consent Solicitation Statement, dated May 1,
2007, as supplemented by the Supplement, dated May 16, 2007, pursuant to which
Remington conducted its consent solicitation with respect to the Notes to amend
certain provisions of the Indenture.

The
AHA Acquisition resulted in a new basis of the value of the Notes. Accordingly,
the Notes were adjusted to their estimated fair value as of May 31, 2007 of
$203.8 million. The estimated increase of $3.8 million will be amortized into
interest expense over the remaining term of the Notes. In addition,
approximately $5.2 million of existing debt acquisition costs were written off
as part of the goodwill as a result of the AHA Acquisition. Debt acquisition
costs associated with obtaining waivers, consents and amendments in the amount
of $4.2 million related to the Notes and $1.0 million related to the revolver
have been capitalized as of May 31, 2007.

The
Supplemental Indenture amended the Indenture in the following ways:

(i)
The term
 Permitted Holder, for the purpose of determining whether a Change of
 Control has occurred under the Indenture, now includes Cerberus-related
 persons rather than persons related to former equity owners of Holding, and
 as a result, the AHA Acquisition (and certain other transactions, so long as
 any Permitted Holder retains voting control (subject to certain exceptions)
 of Remington and the specified composition of the board of directors of
 Remington is maintained, each as described in the definition of Change of
 Control in the Indenture, as amended by the Supplemental Indenture) does not
 constitute a Change of Control under the Indenture and the holders of the
 Notes have no put right as a result of the AHA Acquisition (or such other
 transactions);(ii)
Cerberus
 replaced the former Sponsors under the Indenture and thus Remington is
 permitted to make the payments to Cerberus and its affiliates that it was
 permitted to make to the former Sponsors and their affiliates under the
 Indenture, with the exception of the annual management fee which was
 permitted pursuant to certain pre-existing consulting agreements with the
 former Sponsors;(iii)
The
 carve-outs relating to Permitted Holders in sub-section (ii) of the
 definition of the term Change of Control were deleted; and(iv)
The term
 Transaction and related references, including a related restricted payment
 exception, was eliminated from the Indenture.43

The Amended and Restated Credit Agreement

On
March 15, 2006, we entered into the Amended and Restated Credit Agreement that
amended our 2003 Credit Agreement. Our Amended and Restated Credit Agreement
provides up to $140.0 million of borrowing capacity under an asset-based senior
secured revolving credit facility through June 30, 2010. Amounts available
under the Amended and Restated Credit Agreement are subject to a borrowing base
limitation based on certain percentages of eligible accounts receivable and
eligible inventory in addition to minimum availability requirements as
described below. The terms of the Amended and Restated Credit Agreement do not
permit us to borrow against accounts receivable on certain extended terms. The
Amended and Restated Credit Agreement also includes a letter of credit
sub-facility of up to $15.0 million. As of December 31, 2007, approximately $59.9
million in additional borrowings beyond the minimum availability requirements
were available as determined pursuant to the Amended and Restated Credit
Agreement compared to $51.2 million at December 31, 2006.

On
the Closing Date, we entered into the First Amendment to the Amended and
Restated Credit Agreement (the First Amendment), which amended the Amended
and Restated Credit Agreement dated March 15, 2006. The First Amendment
memorializes the consent of Wachovia and the lenders to the AHA Acquisition
(and waiver of any event of default in connection with the AHA Acquisition) and
modifies certain terms and conditions of the Credit Agreement. Capitalized
terms used and not defined herein have the meanings set forth in the Credit
Agreement and the First Amendment.

Key
changes to the Amended and Restated Credit Agreement pursuant to the First
Amendment include:

(1)
Amendment of
 the definition of Applicable Margin so that the interest margin applicable to
 loans under the Credit Agreement, as amended, is based on Average Excess
 Availability, which is defined in the First Amendment as the amount obtained by
 adding the aggregate Excess Availability at the end of each day during the
 period in question and dividing such sum by the number of days in such
 period;(2)
Amendment of
 the definition of Minimum Availability Condition to be fixed at $20 million;(3)
Amendment of
 the definition of Change of Control so that it relates to AHA rather than the
 CDR Fund and BRS Fund;(4)
Increase in
 the maximum amount of Settlement Loans that may be obtained from Wachovia
 under the Credit Agreement, as amended, from $5 million to $10 million;(5)
Amendment of
 the types of permitted transactions between Remington and Affiliates to
 include certain transactions between Remington and AHA and AHAs Affiliates;(6)
Amendment of
 the types of Restricted Payments that may be made by Remington so that
 Remington could, among other things, make a Distribution to Holding to pay
 certain expenses in connection with the AHA Acquisition and repay the total
 outstanding amount of principal and interest of the Holding Notes; and(7)
Elimination
 of the minimum consolidated EBITDA requirement during the Availability Test
 Period.We further
amended the Credit Agreement on November 13, 2007 pursuant to the Second
Amendment. Please refer to Second Amendment to Credit Facility in the Recent
Developments section of the MD&A for a discussion of the Second Amendment.

The
interest rate margin for the ABR and the Euro-Dollar loans at December 31, 2007
was (0.50%) and 1.00%, respectively. The weighted average interest rate under
the Companys outstanding credit facility balance was approximately 7.09% and
7.60% for the years ended December 31, 2007 and 2006, respectively.

Capital & Operating Leases and Other
Long-Term Obligations

We
maintain capital leases mainly for computer equipment. We have several
operating leases, including a lease for our Memphis warehouse that expires in
2010. We also maintain contracts including, among other things, a services
contract with our third party warehouse provider.

44

Cash Flows & Working Capital

Net
cash provided by operating activities was $65.4 million for the seven month
period ended December 31, 2007 and was primarily due to:


Accounts
 receivable decreasing by $21.2 million, which is primarily attributable to
 shorter terms in 2007 compared to 2006;
Inventories
 decreasing by $64.0 million primarily due to higher sales in 2007 compared to
 2006, as well as the rollout of $28.7 million due to purchase price
 accounting; offset by
A net loss
 for the period of $10.5 million; and
Pension plan
 contributions of $11.0 million.Net
cash used in operating activities was $36.3 million for the five month period
ended May 31, 2007 and was primarily due to:


Inventories
 increasing $39.5 million principally due to higher material costs; and
The Other
 category within changes in operating assets and liabilities showed a use of
 cash of $8.1 million due to $6.2 million of realized gains associated with
 hedging activity, as well as the recording of a $4.9 million gain related to
 unsettled contracts at May 31, 2007, all of which were offset by net income
 for the period of $9.0 million.Net
cash provided by operating activities was $13.2 million for the fiscal year ended
December 31, 2006 and was primarily due to:


Depreciation
 and amortization expense of $11.6 million;
Pension plan
 expense of $11.3 million;
An increase
 in accounts payable of $5.8 million; and
Net income for
 the period of $0.3 million, all of which were offset by an increase in
 Inventories of $11.5 million primarily due to higher materials costs.Net
cash used in investing activities for the seven month period ended December 31,
2007 was $1.4 million and was due to the purchase of property, plant and
equipment of $6.7 million, option cancellation payments of $1.1 million,
premiums paid for Company owned life insurance of $0.3 million, offset by $3.7
million of cash received on the surrender of the Company owned life insurance
and $3.0 million in cash received on the sale of the unconsolidated joint
venture.

Net
cash used in investing activities for the five month period ended May 31, 2007
was $12.1 million and was due to the payment of transaction costs of $5.1
million, seller-related payments paid by Remington of $4.7 million, $2.1
million related to the purchase of property, plant and equipment and premiums
paid for Company owned life insurance of $0.2 million.

Net
cash used in investing activities for the fiscal year ended December 31, 2006
was $7.9 million and was due to the purchase of property, plant and equipment
of $7.1 million, premiums paid for Company owned life insurance of $0.6 and a
cash contribution to the unconsolidated joint venture of $0.2 million.

Net
cash used in financing activities for the seven month period ended December 31,
2007 was $49.6 million and resulted from $85.2 million in lower borrowing needs
under the Amended and Restated Credit Agreement, debt issuance costs of $0.5
million, and principal payments on long-term debt of $0.3 million, offset by
$25.0 million in proceeds from the Term Loan, $6.1 million in cash
contributions from AHA and an increase in the book overdraft of $5.3 million.

Net
cash provided by financing activities for the five months ended May 31, 2007
was $56.9 million and resulted from $65.8 million in higher borrowing needs
under the Amended and Restated Credit Agreement, $4.7 million in cash withheld
from sellers provided by AHA, offset by $5.2 million in deferred financing
costs that were written off as a result of the Acquisition, $3.8 million in
amounts paid to Holding related to the Acquisition and a reduction in the book
overdraft of $4.5 million.

Net
cash used in financing activities for the year ended December 31, 2006 was $5.3
million and was primarily due to a reduction in the book overdraft of $4.4
million and cash paid of $0.8 for debt issuance costs associated with our
Amended and Restated Credit Agreement.

45

Dividend Policy

The
declaration and payment of dividends, if any, will be at the sole discretion of
the Board of Directors of the Company, subject to the restrictions set forth in
the Amended and Restated Credit Agreement and the indenture for the Notes,
which currently restrict the payment of dividends by the Company to Holding. We
expect to make future dividend payments to Holding based on available cash
flows as and to the extent permitted by the Amended and Restated Credit
Agreement and the indenture for the Notes. There were no dividends paid in 2007
or 2006. At present, we do not have the ability to make any dividend payments
due to restrictions placed upon us by the Amended and Restated Credit Agreement
and the indenture for the Notes.

Capital Expenditures

Gross
capital expenditures for the year ended December 31, 2007 were $8.2 million,
consisting primarily of capital expenditures both for new equipment related to
the manufacture of firearms and ammunition, as well as maintenance of existing
facilities. We expect capital expenditures
for 2008 to be in a range of $16.0 million to $20.0 million. Our Amended
and Restated Credit Agreement allows for capital expenditures of up to $32.6
million in 2008, including unused capacity carried over from previous years.

Contractual
Obligations and Commercial Commitments

We
have various purchase commitments for services incidental to the ordinary
conduct of business, including, among other things, a services contract with
our third party warehouse provider. We do not believe such commitments are at
prices in excess of current market prices. Included in those purchase
commitments are purchase contracts with certain raw materials suppliers, for
periods ranging from one to five years, some of which contain firm commitments
to purchase minimum specified quantities. However, such contracts had no
material impact on our financial condition, results of operations, or cash
flows during the reporting periods presented herein.

We
support service and repair facilities for all of our firearm products in order
to meet the service needs of our distributors, customers and consumers
nationwide. We provide consumer warranties against manufacturing defects in all
firearm products we manufacture in the United States. Estimated future warranty
costs are accrued at the time of sale. Product modifications or corrections are
voluntary steps taken by us to assure proper usage or performance of a product
by consumers. The cost associated with product modifications and or corrections
are recognized in accordance with SFAS No. 5, Accounting for Contingencies, and
charged to operations. The cost of these programs is not expected to have a
material adverse impact on our operations, liquidity or capital resources.

The
following represents our contractual obligations and other commercial
commitments as of December 31, 2007:

Payments Due by PeriodTotal
 Amounts
 Committed

Less
 Than
 1 Year

1-3
 Years

4-5
 Years

Over
 5 Years(dollars in millions)Contractual
Obligations:101⁄2%
Senior Notes due 2011

$
200.0

$


$


$
200.0

$
Expected
interest payments associated with
 the Senior Notes due 2011


64.4


21.0


42.0


1.4


Required
pension contributions


24.2


4.3


8.5


8.4


3.0Term
Loan


25.0


4.2


20.8





Expected
interest payments associated with
 the Term Loan (a)


3.3


1.6


1.7





Working Capital
Facility Borrowings














Due to RACI
Holding, Inc.


0.9


0.2








0.7Capital Lease
Obligations


0.7


0.4


0.3





Operating Lease
Obligations


3.4


1.2


2.2





Other Long-term
Purchase Obligations (b)


9.1


4.4


3.7


1.0


Total
Contractual Cash Obligations

$
331.0

$
37.3

$
79.2

$
210.8

$
3.7Other Commercial
Commitments:Standby Letters
of Credit

$
4.4

$
4.4

$


$


$
Total
Commercial Commitments

$
4.4

$
4.4

$


$


$
46

(a)
Expected
 interest payments related to the term loan is estimated based on the LIBOR
 rate at December 31, 2007 of 6.84% plus 200 basis points.(b)
Other
 Long-term Purchase Obligations includes minimum obligations due under various
 contracts, including a services contract with our third party warehouse
 provider, and minimum purchases associated with certain materials necessary
 for the manufacturing process.Results of Operations

As
a result of the AHA Acquisition, the financial results for the twelve months
ended December 31, 2007 have been separately presented, split between the
Predecessor entity, covering the period January 1 through May 31, 2007 and
the Successor entity, covering the period June 1, 2007 through December 31,
2007. For comparative purposes, we combined the two periods through December
31, 2007 in our discussion below. We believe this presentation provides the
reader with a more accurate comparison and the combined results of operations
are what management relies on internally when making business decisions. The
following table shows, for the periods indicated, the percentage relationships
to net sales of selected financial data. Our managements discussion and
analysis of our results of operations compares results for the year ended
December 31, 2007 to the year ended December 31, 2006 and the year ended
December 31, 2006 to the year ended December 31, 2005.

Dollars
        in MillionsSuccessor
    
    PredecessorJune
        1-
        December 31
    
    January
        1- 
        May 312007
    
    2007
    
    2006
    
    2005Net
        Sales
    
    100.0
    %
    
    100.0
    %
    
    100.0
    %
    
    100.0
    %Cost
        of Goods Sold
    
    83.6
    
    
    70.2
    
    
    75.9
    
    
    79.2Gross
        Profit
    
    16.4
    
    
    29.8
    
    
    24.1
    
    
    20.8Operating
        Expenses
    
    16.8
    
    
    17.1
    
    
    17.5
    
    
    18.1Operating
        Profit
    
    (0.4
    )
    
    12.7
    
    
    6.6
    
    
    2.7Net
        Income/(Loss) from Continuing Operations
    
    (3.3
    )
    
    5.4
    
    
    0.1
    
    
    (4.1
    )Year Ended December
31, 2007 as Compared to Year Ended December 31, 2006

Net
Sales. The following table compares net sales by
reporting segment for each of the years ended December 31, 2007 and 2006:

(Dollars in Millions)Successor

Predecessor




PredecessorJune
 1 -
 December 31
 2007

January
 1 -
 May 31
 2007

Combined
 2007

Percent
 of Total

2006

Percent
 of Total

$
 Increase/
 (Decrease)

%
 Increase/
 (Decrease)Net SalesFirearms

$
138.7


$
80.5


$
219.2

44.8
%

$
223.4

50.1
%

$
(4.2
)

(1.9
)%Ammunition


169.3



78.9



248.2

50.8



204.9

45.9



43.3


21.1All
Other


14.0



7.6



21.6

4.4



17.7

4.0



3.9


22.0Consolidated

$
322.0


$
167.0


$
489.0

100.0
%

$
446.0

100.0
%

$
43.0


9.6
%Firearms

The
decrease in net sales of $4.2 million for the twelve months ended December 31,
2007 over the prior-year period is due primarily to lower sales volumes of
shotguns of $22.2 million, offset by higher sales volumes of centerfire and
rimfire rifles of $3.5 million, higher volumes of part and service sales of
$2.0 million and higher sales volumes of international sourced products of $1.1
million, as well as realized price increases of $11.4 million.

Ammunition

The
increase in net sales of $43.3 million for the twelve months ended December 31,
2007 over the prior-year period is due predominantly to $28.1 million
associated with realized price increases, which were initiated to generally
offset high core commodity costs, as well as higher sales volumes of $15.2
million. The year-to-date sales

47

volumes are
comprised primarily of higher sales volumes of certain centerfire ammunition of
$12.1 million, higher components and other sales volumes of $3.8 million, and
higher sales volumes of rimfire ammunition of $2.0 million, offset by lower
sales volumes of shotshell ammunition of $2.7 million.

All
Other (including Accessories, Licensing Income, Clay Targets, Powder Metal
Products, and Technology Products)

The
increase in net sales of $3.9 million for the twelve months ended December 31,
2007 over the prior-year period is due primarily to higher accessories sales of
$1.3 million, higher powder metal products of $1.3 million, higher target sales
of $0.8 million associated with higher pricing, and higher technology product
sales of $0.5.

Cost
of Goods Sold. The table below depicts the cost of
goods sold by reporting segment for the years ended December 31, 2007 and 2006:

(Dollars in Millions)Successor

Predecessor




PredecessorJune
 1 -December 312007

January
 1 -
 May 31
 2007

Combined 2007

Percent
 of
 Net Sales

2006

Percent
 of
 Net Sales

$
 Increase/
 (Decrease)

%
 Increase/
 (Decrease)Cost of Goods SoldFirearms

$
108.8


$
55.0


$
163.8

74.7
%

$
169.6

75.9
%

$
(5.8
)

(3.4
)%Ammunition


150.1



56.7



206.8

83.3



156.0

76.1



50.8


32.6All
Other


10.4



5.6



16.0

74.1



12.8

72.3



3.2


25.0Consolidated

$
269.3


$
117.3


$
386.6

79.0
%

$
338.4

76.0
%

$
48.2


14.2
%Firearms

In
connection with accounting for the AHA Acquisition as a business combination
using the purchase method of accounting, inventories that were on hand at May
31, 2007 were required to be written up to their current fair value less a
reasonable selling profit. As a result of this estimated $16.2 million increase
within the firearms business unit, inventory subsequently sold will increase
costs of goods sold, as will higher depreciation expense associated with a
similar adjustment to write up property, plant and equipment to estimated fair
value.

The
decrease in cost of goods sold of $5.8 million for the twelve months ended
December 31, 2007 over the prior-year period is due primarily to lower overall
sales volumes, which resulted in lower cost of goods sold of $15.3 million, as
well as lower pension and post retirement costs of $8.2 million, offset by an
increase of $15.0 million resulting from the purchase accounting adjustments as
discussed above, unfavorable manufacturing variances of $1.4 million, and
higher excess/obsolete inventory expense of $1.2 million. The $15.3 million in
lower cost of goods sold was comprised primarily of lower sales volumes of
shotguns, which caused cost of goods sold to be lower by $19.0 million; higher
sales volumes of international sourced products, which caused cost of goods
sold to be higher by $2.2 million; and higher volumes of parts and service
sales of $1.4 million.

Ammunition

In
connection with accounting for the AHA Acquisition as a business combination
using the purchase method of accounting, inventories that were on hand at May
31, 2007 were required to be written up to their current fair value less a
reasonable selling profit. As a result of this estimated $13.1 million increase
within the ammunition business unit, inventory subsequently sold will increase
costs of goods sold, as will higher depreciation expense associated with a
similar adjustment to write up property, plant and equipment to estimated fair
value.

The
increase in cost of goods sold of $50.8 million for the twelve months ended
December 31, 2007 over the prior-year period is primarily related to higher
sales volumes across all categories of ammunition, except shotshell, which
caused cost of goods sold to be higher by $33.5 million; an increase of $13.1
million resulting from the purchase accounting adjustments as discussed above;
lower hedging gains of $4.0 million; and higher pension and post retirement
costs of $2.1 million, all of which were offset by favorable manufacturing
variances of $1.8 million.

48

All Other
(including Accessories, Licensing Income,
Clay Targets, Powder Metal Products and Technology Products)

In
connection with accounting for the AHA Acquisition as a business combination
using the purchase method of accounting, inventories that were on hand at May
31, 2007 were required to be written up to their current fair value less a
reasonable selling profit. As a result of this estimated $1.4 million increase
within the all other business unit, inventory subsequently sold will increase
costs of goods sold, as will higher depreciation expense associated with a
similar adjustment to write up property, plant and equipment to estimated fair
value.

The
increase in cost of goods sold of $3.2 million for the twelve months ended
December 31, 2007 over the prior-year period is due primarily to the costs
associated with increased sales volumes of the categories noted above in Net
Sales as well as a $0.6 million adjustment resulting from the purchase
accounting adjustments as discussed above.

Operating
Expenses. Operating expenses consist of selling, general and administrative
expense, research and development expense and other expense. The table below
depicts the operating expenses by reporting segment for the years ended
December 31, 2007 and 2006:

(Dollars in Millions)Successor

Predecessor

PredecessorJune 1  
 December 31
 2007

January 1 
 May 31
 2007

Combined
 2007

2006

$
 Increase/ 
 (Decrease)

%
 Increase/ 
 (Decrease)Operating
 ExpensesSG&A

$
52.1

$
30.3

$
82.4

$
73.7

$
8.7


11.8
%R&D


3.6


2.7


6.3


6.4


(0.1
)

(1.6
)Impairment
Charges











0.2


(0.2
)

(100.0
)Other
(Income) Expense


(1.7)


(4.5
)

(6.2
)

(2.3
)

(3.9
)

169.6Consolidated

$
54.0

$
28.5

$
82.5

$
78.0

$
4.5


5.8
%The
increase in selling, general and administrative expenses for the twelve months
ended December 31, 2007 over the prior year period of $8.7 million was
primarily attributable to higher costs associated with incentive
compensation, salaries and benefits expense of $8.0 million (due primarily to
the Company exceeding performance objectives as well as employing additional
executives since May 31, 2007), non-recurring transaction expenses of $2.2
million as a result of the AHA Acquisition, higher marketing expense of $1.5
million and higher travel expense of $0.8 million, offset by lower legal and
professional expenses of $1.6 million, lower expense for bad debts of $0.9
million and lower commissions expense of $0.8 million. The increase in other
income of $3.9 million is primarily related to the recognition of a $4.9 million
non-cash gain for hedging contracts not yet settled at May 31, 2007, offset in
part by the recording of $1.5 million in compensation expense for the option
cancellations as a result of the AHA Acquisition.

In
connection with accounting for the AHA Acquisition as a business combination
using the purchase method of accounting, fixed assets associated with selling,
general and administrative expense have been written up and increased
depreciation expense in selling, general and administrative expenses by $0.1
million for the seven month period ending December 31, 2007. Also in connection
with accounting for the AHA Acquisition as a business combination using the
purchase method of accounting, amortization expense associated with intangible assets
subject to amortization has been recorded and increased selling, general and
administrative expenses by $0.7 million for the seven month period ending
December 31, 2007. As these balances associated with the initial estimate for
purchase accounting are based on preliminary data, these amounts and expenses
are subject to change.

Interest
Expense. Interest expense for the twelve months ended
December 31, 2007 was $25.5 million, a decrease of $2.5 million as compared to
the twelve months ended December 31, 2006. The decrease in interest expense
from the same period in 2006 resulted primarily from reduced interest expense
of $1.9 million due to lower average borrowings under the Amended and Restated
Credit Agreement, as well as a $0.6 million reduction in interest expense
recorded in connection with accounting for the AHA Acquisition due to the fact
that the bond is at a premium. This premium is recorded as a reduction to
interest expense and is estimated to be approximately $1.0 million annually.

Taxes. Our
effective tax rate was (36.0%) for the
successor period June 1, 2007 through December 31, 2007 and 12.6% for the
predecessor period January 1, 2007 through May 31, 2007. The effective tax rate
was 75.0% for the twelve months ended December 31, 2006. The difference between
the actual effective tax rate for the respective periods above and the U.S.
federal statutory rate of 35% is principally due to permanent differences, the

49

benefits of our tax sharing
agreement with RACI Holding and the impact of the valuation allowance which was
eliminated in application of the purchase price method of accounting for
business combinations.

As
of December 31, 2007, no valuation allowance is required as compared to a
valuation allowance of approximately $27.3 million established against deferred
tax assets in accordance with the provisions of Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (SFAS No. 109) as
of December 31, 2006. The $27.3 million change in the valuation allowance
consisted of the following predecessor period amounts: a $3.7 million net
decrease primarily related to the $4.1 million decrease in net deferred tax
assets and an increase of $0.4 million due to an increase in deferred tax liabilities
associated with indefinite-lived intangible assets that have an indefinite
reversal period; and a $0.7 million net decrease consisting of $0.9 million
recorded as a change in equity as a component of other comprehensive income as
a result of a net decrease in the net deferred tax asset associated with other
comprehensive income and $0.2 million credit to equity from the cumulative
effect of a change in accounting principle with the adoption of Financial
Standards Accounting Board Interpretation No. 48, Accounting for Uncertainty in Income
Taxes (FIN 48); the remaining balance of $22.9 million was
eliminated in the allocation of purchase price accounting adjustments.

We
are currently subject to ongoing audits by various state tax authorities.
Depending on the outcome of these audits, we may be required to pay additional
taxes. However, we do not believe that any additional taxes and related
interest or penalties would have a material impact on Remingtons financial
position, results of operations, or cash flows.

We
adopted the provisions of FIN 48, an interpretation of Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109), on January 1, 2007. As
a result of the implementation of FIN 48, we recognized no material adjustment
in our liability for unrecognized tax benefits. At both December 31, 2007 and
the adoption date of January 1, 2007, we had $1.3 million of unrecognized tax
benefits.

Year Ended
December 31, 2006 as Compared to Year Ended December 31, 2005 - Predecessor

Net Sales.
The following table compares net sales by reporting segment for each of the
years ended December 31, 2006 and 2005:

Twelve
 months ended December 31,
 (Dollars in Millions)2006

Percent
 Of Total

2005

Percent
 Of Total

$
 Increase/ 
 (Decrease)

%
 Increase/ 
 (Decrease)Net
 SalesFirearms

$
223.4



50.1
%

$
202.2



49.3
%


$
21.2




10.5
%Ammunition


204.9



45.9



184.5



44.9




20.4




11.1All
Other


17.7



4.0



23.7



5.8




(6.0
)



(25.3
)Consolidated

$
446.0



100
%

$
410.4



100
%


$
35.6




8.7
%Firearms

The
increase in net sales of $21.2 million for the year ended December 31, 2006
over the prior-year period resulted primarily from higher sales volumes of
pump-action shotguns of $6.1 million, centerfire rifles of $8.2 million and
international sourced products of $3.0 million, as well as $4.1 million related
to higher pricing.

Ammunition

The
increase in net sales of $20.4 million for the year ended December 31, 2006
over the prior-year period is due primarily to approximately $23.6 million in
increased sales associated with higher pricing for ammunition products and
higher sales volumes/mix of pistol and revolver ammunition of $3.2 million,
offset by lower sales volumes/mix of shotshell ammunition of $3.9 million,
centerfire ammunition of $1.2 million and components and other of $1.4 million.

All
Other (including Accessories, Licensing Income, Clay Targets, Powder Metal
Products, and Technology Products)

The
decrease in net sales of $6.0 million for the year ended December 31, 2006 over
the prior year period is due primarily to lower accessories sales of $4.0
million associated with converting certain products to licensed

50

products and
lower sales of clay targets of $3.0 million due to the supply limitation
discussed in Note 3 to the consolidated audited financial statements presented
herein, offset by an increase in shipments from our Technology Products
division of $1.7 million.

Cost of Goods
Sold. The table below depicts the cost of goods sold by reporting segment
for the years ended December 31, 2006 and 2005:

Twelve
 months ended December 31,
 (Dollars in Millions)2006

Percent
 Of Total

2005

Percent
 Of Total

$
 Increase/ 
 (Decrease)

%
 Increase/ 
 (Decrease)Cost of
 Goods SoldFirearms

$
169.6



75.9
%

$
154.7



76.4
%


$
14.9




9.6
%Ammunition


156.0



76.1



152.3



82.6




3.7




2.4All
Other


12.8



72.3



17.9



75.5




(5.1
)



(28.5
)Consolidated

$
338.4



75.9
%

$
324.9



79.1
%


$
13.5




4.2
%Firearms

The
increase of $14.9 million for the year ended December 31, 2006 over the
prior-year period is due primarily to increased sales volume of shotguns,
centerfire rifles, and international sourced products. Additionally, there has
been a change in sales mix toward products with a higher cost of production,
including centerfire rifles, and lower sales volumes of rimfire rifles with a
lower cost of production. Also contributing to the change in cost of goods sold
is higher pension and post retirement cost of $1.0 million, offset by a
reduction in pension expense of $1.6 million resulting from the curtailment of
the pension plan.

Ammunition

The
increase of $3.7 million for the year ended December 31, 2006 over the
prior-year period is due primarily to higher manufacturing costs of $18.3
million associated with higher materials costs of lead, copper, and zinc
commodities, and to a lesser extent in plastics and energy costs. This was
partially offset by realized hedging gains from the settlement of our option
contracts of $8.3 million and a reduction in pension expense of $4.3 million
resulting from the curtailment of the pension plan, as well as lower sales
volumes/mix, particularly in shotshell ammunition, centerfire ammunition and
components and other.

All Other
(including Accessories, Licensing Income,
Clay Targets, Powder Metal Products and Technology Products)

The
decrease of $5.1 million for the year ended December 31, 2006 over the
prior-year period is due primarily to lower accessories sales volumes associated
with converting certain products to licensed products, lower sales volumes of
clay targets due to the supply limitation discussed in Note 3 to the
consolidated audited financial statements presented herein, offset by higher
sales volumes of our Technology Products division.

Operating
Expenses. Operating expenses consist of selling, general and administrative
expense, research and development expense and other expense.

Twelve
 months ended December 31,
 (Dollars in Millions)2006

2005

$
 Increase/ 
 (Decrease)

%
 Increase/ 
 (Decrease)Operating ExpensesSG&A

$
73.7

$
66.7


$
7.0




10.5
%R&D


6.4


5.9



0.5




8.5Impairment
Charges


0.2


4.7



(4.5
)



(95.7
)Other


(2.3
)

(2.8
)


0.5




(17.9
)Consolidated

$
78.0

$
74.5


$
3.5




4.7
%The
increase of $3.5 million in operating expenses for the year ended December 31,
2006 compared to the same period in 2005 was primarily attributable to higher
costs associated with legal fees, higher provisions for bad debts expense,
higher incentive compensation expense and higher selling and marketing
expenses, offset by a reduction in pension expense of $1.3 million resulting
from the curtailment of the pension plan and impairment charges

51

of $3.7 million in 2005 associated with the Clay Targets business unit
and $0.8 million for the firearms equipment that did not recur in 2006, as
explained in Note 3 to the audited consolidated financial statements for the
year ended December 31, 2006 appearing elsewhere in this annual report.

Interest
Expense. Interest expense for the
year ended December 31, 2006 was $28.0 million,an increase of$1.6
million from the same period in 2005.The increase in interest expense during
2006 resulted primarily from higher average borrowings on the Credit Facility
of $1.9 million, partially offset by lower interest on capital lease expenses
of $0.1 million.

Taxes. Our
effective tax rate relating to continuing operations is 75.0% for the year
ended December 31, 2006. The change to 75.0% from 2.4% for the same period in
2005 is primarily attributable to an increase in the valuation allowance
originally established in 2004 on deferred tax assets.

As
of December 31, 2006, a valuation allowance of approximately $27.3 million has
been established against deferred tax assets in accordance with the provisions
of Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes (SFAS No. 109) as compared to the $25.6 million reserve that existed
as of December 31, 2005. The $1.7 million net change in the valuation allowance
consisted of an increase of $1.9 million taken as a charge against earnings
primarily related to the $0.9 million increase in net deferred tax assets in
2006 for which the benefits may not be realized and an increase of $1.0 million
due to an increase in deferred tax liabilities associated with indefinite-lived
intangible assets that have an indefinite reversal period. A change of $0.2
million was recorded against equity as a component of other comprehensive
income as a result of a decrease in the net deferred tax asset associated with
other comprehensive income. Therefore, the income tax expense in the statements
of operations primarily reflects state income taxes and the increase in
deferred tax liabilities associated with indefinite-lived intangible assets
that have an indefinite reversal period.

Realization
of the deferred tax assets is largely dependent upon future profitable
operations, if any, and the reversals of existing taxable temporary
differences. As a result of previous pre-tax losses from continuing operations
and future taxable income expected to arise primarily from the reversal of and
creation of temporary differences for the foreseeable future, we determined
that in accordance with SFAS No. 109, it is not appropriate to recognize these
deferred tax assets. Although there can be no assurance that such events will
occur, the valuation allowance may be reversed in future periods to the extent
that the related deferred income tax assets no longer require a valuation
allowance under the provisions of SFAS No. 109.

We
are currently subject to ongoing audits by various state tax authorities.
Depending on the outcome of these audits, we may be required to pay additional
taxes. However, we do not believe that any additional taxes and related
interest or penalties would have a material impact on Remingtons financial
position, results of operations, or cash flows.

In
July 2006, the FASB issued FIN 48, which clarifies the accounting for
uncertainty in tax positions. This interpretation requires that we recognize
the impact of a tax position in our financial statements if that position is
more likely than not of being sustained under or as a result of audit, based on
the technical merits of the position. The provisions of FIN 48 are effective as
of January 1, 2007, with the cumulative effect of the change in accounting
principle, if any, recorded as an adjustment to opening retained earnings of
the earliest year presented in those financial statements. We have not fully
completed the process of evaluating the impact of adopting FIN 48. Nevertheless,
we have performed procedures to estimate the anticipated impact of such
adoption. We anticipate less than a $1.0 million impact to accumulated deficit,
an expected reclassification of approximately $1.5 million from current to
long-term liabilities and an impact of less than $0.5 million to net operating
loss carryforwards, which would be fully offset by a valuation allowance. These
amounts are subject to revision as management completes its analysis.

52

Discontinued
Operations.

The
following represents a summary of key components of income from discontinued
operations:

Discontinued
 Operations:

December 31,
 2005Net Sales


$
Pre-tax operating results



(0.1
)Interest Expense
 Allocation



Income from operations,
 after tax



(0.1
)Recent Accounting Pronouncements

In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements(SFAS 157). SFAS 157 defines fair value,
establishes a framework for measuring fair value, and expands disclosure
requirements regarding fair value measurement. Where applicable, SFAS 157
simplifies and codifies fair value related guidance previously issued within
GAAP. Although SFAS 157 does not require any new fair value measurements, its
application may, in certain instances, change current practice. SFAS 157 is
effective for us in 2008. We expect the impact, if any, of adopting SFAS 157 to
be minimal on our results of operations, financial condition and liquidity.

In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No.
115 (SFAS 159). SFAS 159 permits an entity to elect fair value as the initial
and subsequent measurement attribute for many financial assets and liabilities.
Entities electing the fair value option would be required to recognize changes
in fair value in earnings. Entities electing the fair value option are required
to distinguish, on the face of the statement of financial position, the fair
value of assets and liabilities for which the fair value option has been
elected and similar assets and liabilities measured using another measurement
attribute. SFAS 159 will become effective for the Company as of January 1, 2008.
The adjustment to reflect the difference between the fair value and the
carrying amount would be accounted for as a cumulative-effect adjustment to
retained earnings as of the date of initial adoption. We expect the impact, if
any, of adopting SFAS 159 to be minimal on our Consolidated Financial
Statements.

In
December 2007, the FASB issued SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements
(SFAS 160). This standard will improve, simplify, and converge internationally
the reporting of noncontrolling interests
in consolidated financial statements. SFAS 160 requires all entities to report
noncontrolling (minority) interests
in subsidiaries in the same way - as equity in the consolidated financial
statements. Moreover, SFAS 160 requires that transactions between an entity and
noncontrolling interests be treated as equity transactions. SFAS 160 is
effective for fiscal years beginning after December 15, 2008. The Company is
currently evaluating the impact that adopting SFAS 160 will have on its results
of operations, financial condition and equity.

In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations (SFAS 141(R)). SFAS 141(R) retains the
fundamental requirements of the original pronouncement requiring that the
purchase method be used for all business combinations. SFAS 141(R) defines the
acquirer as the entity that obtains control of one or more businesses in the
business combination, establishes the acquisition date as the date that the
acquirer achieves control and requires the acquirer to recognize the assets
acquired, liabilities assumed and any non-controlling interest at their fair
values as of the acquisition date. SFAS 141(R) also requires that
acquisition-related costs be recognized separately from the acquisition. SFAS
141(R) amends the goodwill impairment test requirements in SFAS 142. For a
goodwill impairment test as of a date after the effective date of SFAS 141(R),
the value of the reporting unit and the amount of implied goodwill, calculated
in the second step of the test, will be determined in accordance with the
measurement and recognition guidance on accounting for business combinations
under SFAS 141(R). This change could effect the determination of what amount,
if any, should be recognized as an impairment loss for goodwill recorded before
the effective date of SFAS 141(R). This accounting will be required when SFAS
141(R) becomes effective (January 1, 2009 for the Company) and applies to
goodwill related to acquisitions accounted for originally under SFAS 141 as
well as those accounted for under SFAS 141(R). The Company has $61.0 million of
goodwill at December 31, 2007 related to previous business combinations. The
Company has not determined what effect, if any, SFAS 141(R) will have on the
results of its impairment testing subsequent to December 31, 2008.

53

Critical Accounting Policies and
Estimates

Our
discussion and analysis of our financial condition, results of operations, and
cash flows are based upon our audited consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an ongoing basis, we evaluate our estimates, including
those related to inventories, supplies, accounts receivable, warranties,
long-lived assets, product liability, revenue recognition (inclusive of cash
discounts, rebates, and sales returns), advertising and promotional costs,
self-insurance, pension and post-retirement benefits, deferred tax assets, and
goodwill. We base our estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources. As
noted below, in some cases, our estimates are also based in part on the
findings of independent advisors. Actual results may differ from these
estimates under different assumptions or conditions.

Management
has addressed and reviewed our critical accounting policies and considers them
appropriate. We believe the following critical policies utilize significant
judgments and estimates used in the preparation of our audited consolidated
financial statements:

Revenue
recognition. Sales, net of an estimate for discounts, returns and allowances, and
related cost of sales are recorded when goods are shipped, at which time risk
of loss and title transfer to the customer. We continually evaluate our sales
terms against criteria outlined in SEC Staff Accounting Bulletin 104, Revenue Recognition, which supersedes SAB
101, Revenue Recognition in
Financial Statements. We
follow the industry practice of selling firearms pursuant to a dating plan,
allowing the customer to purchase these products commencing in December (the
start of our dating plan year) and to pay for them on extended terms. We
believe that allowing extended payment terms for early orders helps to level
out the demand for these otherwise seasonal products throughout the year.
Historically, use of the dating plan has had the effect of shifting some
firearms sales from the second and third quarters to the first and fourth
quarters. We believe that the dating plan helps facilitate a more efficient
manufacturing schedule. As a competitive measure, we also offer extended terms
on select ammunition purchases. However, use of the dating plans also results
in deferral of collection of accounts receivable until the latter part of the
year. Customers do not have the right to return unsold product. Management uses
historical trend information as well as other economic data to estimate future
discounts, returns, rebates and allowances.

Allowance for
doubtful accounts. We maintain an allowance for doubtful
receivables for estimated losses resulting from the inability of our trade
customers to make required payments. We provide an allowance for specific
customer accounts where collection is doubtful and also provide an allowance
for customer deductions based on historical collection and write-off
experience. Additional allowances would be required if the financial conditions
of our customers deteriorated.

Inventories.
Our inventories are valued at the lower of cost or market. We evaluate the
quantities of inventory held against past and future demand and market
conditions to determine excess or slow moving inventory. For those product
classes of inventory identified, we estimate their market value based on
current and projected selling prices. If the projected market value is less
than cost, we provide an allowance to reflect the lower value of that
inventory. This methodology recognizes projected inventory losses at the time
such losses are evident rather than at the time goods are actually sold.

The
AHA Acquisition resulted in a new basis for the value of the Companys
inventory. Accordingly, inventory was adjusted to its estimated fair value as
of May 31, 2007, which was estimated to be approximately $30.0 million over its
previous net book value.

Property, Plant
and Equipment.Property, plant and equipment are stated at
cost less accumulated depreciation. Depreciation is determined on a
straight-line basis over the estimated lives of the assets. The estimated
useful lives are principally 10 to 40 years for buildings and improvements, and
3 to 15 years for machinery and equipment. The AHA Acquisition resulted in a
new basis for the value of the Companys property, plant and equipment.
Accordingly, property, plant and equipment was adjusted to its estimated fair
value as of May 31, 2007, which was estimated to be approximately $37.7 million
over its previous net book value.

In
accordance with Statement of Financial Accounting Standard No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets (SFAS 144), management assesses property, plant
and equipment for impairment whenever facts and circumstances indicate that the
carrying amount may not be fully recoverable. To analyze

54

recoverability, management
projects undiscounted future cash flows resulting from the use of the asset
over the remaining life of the asset. If these projected cash flows are less
than the carrying amount of the asset, an impairment loss is recognized,
resulting in a write-down of property, plant and equipment with a corresponding
charge to operating income. Any impairment loss is measured based upon the
difference between the carrying amount of the asset and the present value of
future cash flows. The Company uses a discount rate equal to its average cost
of funds to discount the expected future cash flows.

Maintenance
and repairs are charged to operations; replacements and betterments are
capitalized. Computer hardware and software costs under capital leases are
amortized over the term of the lease. The cost and related accumulated
depreciation applicable to assets sold or retired are removed from the accounts
and the gain or loss on disposition is recognized in operations, included in
the other income and expenses.

Interest
is capitalized in connection with the construction of major projects. The
capitalized interest is recorded as part of the asset to which it relates and
is amortized over the assets useful life.

Goodwill,
Goodwill Impairment, Intangible Assets and Debt
Issuance Costs. Prior to January 1,
2002, intangibles, consisting primarily of goodwill, trade names and
trademarks, were amortized on a straight-line basis over their estimated useful
lives of 40 years. The Company adopted the provisions of Statement of Financial
Accounting Standards No. 142, Goodwill and
Other Intangible Assets (SFAS 142) on January 1, 2002 and has
accounted for its goodwill, intangible assets, and debt issuance costs pursuant
to SFAS 142 since that time. Each year the Company tests for impairment of
goodwill according to a two-step approach. In the first step, the Company
estimates the fair values of its reporting units using the present value of
future cash flows approach, subject to a comparison for reasonableness to its
market capitalization at the date of valuation. If the carrying amount exceeds
the fair value, the second step of the goodwill impairment test is performed to
measure the amount of the impairment loss, if any. In the second step the implied
fair value of the goodwill is estimated as the fair value of the reporting unit
used in the first step less the fair values of all other net tangible and
intangible assets of the reporting unit. If the carrying amount of the goodwill
exceeds its implied fair market value, an impairment loss is recognized in an
amount equal to that excess, not to exceed the carrying amount of the goodwill.
In addition, goodwill of a reporting unit is tested for impairment between
annual tests if an event occurs or circumstances change that would more likely
than not reduce the fair value of a reporting unit below its carrying value.
For other intangible assets, the impairment test consists of a comparison of
the fair value of the intangible assets to their respective carrying amount.
The Company uses a discount rate equal to its average cost of funds to discount
the expected future cash flows. Debt issuance costs are amortized over the life
of the related debt or amendment.

As
part of the application of purchase accounting resulting from the AHA
Acquisition, on May 31, 2007, the Company recorded an initial estimate
associated with goodwill and identifiable intangible assets to each reporting
segment of $67.0 million and $73.9 million, respectively. Subsequent to May 31,
2007, goodwill was adjusted downward by $6.0 million to $61.0 million and
intangible assets were adjusted downward by $0.9 million to $73.0 million.

Reserves for
product liability. We provide for estimated defense and
settlement costs related to product liabilities when it becomes probable that a
liability has been incurred and reasonable estimates of such costs are
available. Estimates for accruals for product liability matters are based on
historical patterns of the number of occurrences, costs incurred and a range of
potential outcomes. We also utilize independent advisors to assist in analyzing
the adequacy of such reserves. Due to the inherently unpredictable nature of
litigation, actual results will likely differ from estimates. As part of the
application of purchase accounting resulting from the AHA acquisition, product
liability accruals were adjusted as of May 31, 2007, based on preliminary
valuation data.

Warranty
accrual. We provide consumer
warranties against manufacturing defects in all firearm products we sell in
North America. Estimated future warranty costs are accrued at the time of sale,
using the percentage of actual historical repairs to shipments for the same
period, which is included in other accrued liabilities. Product modifications
or corrections are voluntary steps taken to assure proper usage or performance
of a product by consumers. The cost associated with product modifications and
or corrections are recognized in accordance with Statement of Financial Accounting
Standard No. 5, Accounting for Contingencies, and charged to operations.

Employee Benefit
Plans. We have defined benefit plans that cover a significant portion of our
salaried and hourly paid employees. On October 9, 2006, our Board of Directors
approved an amendment to our defined benefit plan related to our salaried
employees. In 2006 we recognized a curtailment gain of $7.4 million relating to
the amendment. In addition, as part of a new collective bargaining agreement
reached on October 26, 2007, an

55

amendment was made to the
defined benefit plan for our hourly paid employees. In 2007, we recognized a
curtailment gain of $6.4 million because of that amendment. As a result of the
two amendments, future accrued benefits for all employees were frozen as of
January 1, 2008. For the year ended December 31, 2007, we had $0.9 million of
total pension benefit expense, which is comprised of $7.3 million of net
periodic benefit expense less the
curtailment gain of $6.4 million. We derive pension benefit expense from an
actuarial calculation based on the defined benefit plans provisions and
managements assumptions regarding discount rate, rate of increase in
compensation levels and expected long-term rate of return on assets. Management
determines the expected long-term rate of return on plan assets based upon
historical actual asset returns and the expectations of asset returns over the
expected period to fund participant benefits based on the current investment
mix of our plans. We note that in 2007 we had returns on plan assets of
approximately 5.6% as compared to an assumption of 8%. Management sets the
discount rate based on the yield of high quality fixed income investments
expected to be available in the future when cash flows are paid. The rate of
increase in compensation levels is established based on managements
expectations of current and foreseeable future increases in compensation. In
addition, management also consults with independent actuaries in determining
these assumptions. See Note 13 to our audited consolidated financial statements
for the year ended December 31, 2007, appearing elsewhere in this annual report,
for more information on our employee benefit plans.

Self-Insurance. We are self-insured for elements of our
employee benefit plans
including, among others, medical, workers compensation and elements of our
property and liability insurance programs, but limit our liability through
stop-loss insurance and annual plan maximum coverage limits. Self-insurance
liabilities are based on claims filed and estimates for claims incurred but not
yet reported.

Reserves for
workers compensation liability. We provide for estimated medical and
indemnity compensation costs related to workers compensation liabilities when
it becomes probable that a liability has been incurred and reasonable estimates
of such costs are available. Estimates for accruals for workers compensation
liability matters are based on historical patterns of the number of
occurrences, costs incurred and a range of potential outcomes. We also utilize
independent advisors to assist in analyzing the adequacy of such reserves. As part
of the application of purchase accounting resulting from the AHA acquisition,
workers compensation liability accruals were adjusted as of May 31, 2007, based
on preliminary valuation data and subsequently were adjusted based on updated
valuation data relating to the product liability reserves.

Income Taxes.
Income
tax expense is based on pretax financial accounting income. The Company
recognizes deferred tax assets and liabilities based on the difference between
the financial reporting and tax bases of assets and liabilities, applying tax
rates applicable to the year in which the differences are expected to reverse,
in conjunction with Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes(SFAS 109). A valuation allowance is recorded
when it is more likely than not that the deferred tax asset will not be
realized. Because the Company files its income taxes in a consolidated tax
return with AHA, the 100% owner of our sole stockholder, Holding, the cash
taxes paid or received supplemental cash flow disclosure reflects the total
impact of any cash taxes paid or received on behalf of Holding. As part of the
application of purchase accounting resulting from the AHA acquisition, the
valuation allowance was eliminated as of May 31, 2007.

Information Concerning Forward-Looking
Statements

This
Managements Discussion and Analysis of Financial Condition and Results of
Operations contains statements which constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
including statements relating to trends in the operations and financial results
and the business and the products of the Company, as well as other statements
including words such as anticipate, believe, plan, estimate, expect,
intend and other similar expressions.

Forward-looking
statements are made based upon managements current expectations and beliefs
concerning future developments and their potential effects on the Company. Such
forward-looking statements are not guarantees of future performance. The
following important factors, and those important factors described elsewhere in
this annual report, including the matters set forth in Risk Factors, or in
our other SEC filings, could affect (and in some cases have affected) our
actual results and could cause such results to differ materially from estimates
or expectations reflected in such forward-looking statements.

56


Our ability to make
 scheduled payments of principal or interest on, or to refinance our
 obligations with respect to our indebtedness and to comply with the covenants
 and restrictions contained in the instruments governing such indebtedness
 will depend on our future operating performance and cash flow, which are subject
 to prevailing economic conditions, prevailing interest rate levels, and
 financial, competitive, business and other factors beyond our control
 including the responses of competitors, changes in customer inventory
 management practices, changes in customer buying patterns, regulatory
 developments and increased operating costs.
The degree to which we are
 leveraged could have important consequences, including the following: (i) our
 ability to obtain additional financing for working capital or other purposes
 in the future may be limited; (ii) a substantial portion of our cash flow
 from operations will be dedicated to the payment of principal and interest on
 our indebtedness, thereby reducing funds available for operations; (iii)
 certain of our borrowings will be at variable rates of interest, which could
 cause us to be vulnerable to increases in interest rates; and (iv) we may be
 more vulnerable to economic downturns and be limited in our ability to
 withstand competitive pressures.
Our ability to meet our
 debt service and other obligations will depend in significant part on
 customers purchasing our products during the fall hunting season.
 Notwithstanding our cost containment initiatives and continuing management of
 costs, a decrease in demand during the fall hunting season for our higher
 priced, higher margin products would require us to further reduce costs or
 increase our reliance on borrowings under the Credit Facility to fund
 operations. No assurance can be given that we would be able to reduce costs
 or increase our borrowings sufficiently to adjust to such a reduction in
 demand.
Lead, copper and zinc
 prices have experienced significant increases over the past three years
 primarily due to increased demand (including increased demand from China).
 Furthermore, fuel and energy costs have increased over the same time period,
 although at a slower rate of increase. We purchase copper, lead, and zinc
 options contracts (we first purchased zinc contracts during the second
 quarter of 2006) to hedge against price fluctuations of anticipated commodity
 purchases. With the volatility of pricing that the Company has recently
 experienced, there can be no assurance that we will not see
 further material adverse changes in commodity pricing or energy costs,
 and such further changes, were they to occur, could have a material
 adverse impact on our consolidated financial position, results of operations,
 or cash flows of the Company.
Because of the nature of
 our products, we anticipate that we will continue to be involved in product
 liability litigation in the future. Our ability to meet our product liability
 obligations will depend (among other things) upon the availability of
 insurance, the adequacy of our accruals, the 1993 Sellers ability to satisfy
 their obligations to indemnify us against certain product liability cases and
 claims and the 1993 Sellers agreement to be responsible for certain
 post-Asset Purchase shotgun related costs.
Achieving the benefits of
 the acquisitions will depend in part on the integration of products and
 internal operating systems in a timely and efficient manner. Such integration
 may be unpredictable, and subject to delay because the products and systems
 typically were developed independently and were designed without regard to
 such integration. If we cannot successfully integrate such products and
 internal operating systems on a timely basis, we may lose customers and our
 business and results of operations may be harmed.
We face significant
 competition. Our competitors vary according to product line. Certain of these
 competitors are subsidiaries of large corporations with substantially greater
 financial resources than us. There can be no assurance that we will continue
 to compete effectively with all of our present competition, and our ability
 to so compete could be adversely affected by our leveraged condition.
Sales made to Wal-Mart
 accounted for approximately 17% of our total net revenues in 2007 and 13% of
 the accounts receivable balance as of December 31, 2007. Our sales to
 Wal-Mart are generally not governed by a written contract between the
 parties. In the event that Wal-Mart were to significantly reduce or terminate
 its purchases of firearms and/or ammunition from us, our financial condition
 or results of operations could be adversely affected.
We utilize numerous raw
 materials, including steel, zinc, lead, brass, plastics and wood, as well as
 manufactured parts, which are purchased from one or a few suppliers. Any
 disruption in our relationship with these suppliers could increase the cost
 of operations.
The purchase of firearms
 is subject to federal, state and local governmental regulation. Regulatory
 proposals, even if never enacted, may affect firearms or ammunition sales as
 a result of consumer perceptions. While we57

do not believe that
 existing federal and state legislation relating to the regulation of firearms
 and ammunition has had a material adverse effect on our sales from 2004
 through 2007, no assurance can be given that more restrictive regulations, if
 proposed or enacted, will not have a material adverse effect on us in the
 future.
As a manufacturer of
 firearms, we were named as a defendant in certain lawsuits brought by
 municipalities or organizations challenging manufacturers distribution
 practices and alleging that the defendants have also failed to include a
 variety of safety devices in their firearms. Our insurance coverage regarding
 such claims may be limited. In the event that additional such lawsuits were
 filed, or if certain legal theories advanced by plaintiffs were to be
 generally accepted by the courts, our financial condition and results of
 operations could be adversely affected.Any
forward-looking statement speaks only as of the date on which it is made, and
we undertake no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events. Except as required by law, we
undertake no obligation to publicly revise our forward-looking statements to
reflect events or circumstances that arise after the date of this annual report
that include forward-looking statements.

58

Item 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

We
are exposed to market risk in the normal course of our business operations due
to our purchases of certain commodities and our ongoing investing and financing
activities. The risk of loss can be assessed from the perspective of adverse
changes in fair values, cash flows and future earnings. We have established
policies and procedures governing our management of market risks and the use of
financial instruments to manage exposure to such risks.

Certain
of our financial instruments are subject to interest rate risk. As of December
31, 2007, we had long-term borrowings of $225.0 million ($221.0 million at
December 31, 2006 and $221.3 million at December 31, 2005), of which $20.8
($19.4 million at December 31, 2006 and $19.4 million at December 31, 2005) was
issued at variable rates. Assuming no changes in the $47.1 million of monthly
average variable-rate debt levels for the year ended December 31, 2007 ($65.4
million for the year ended December 31, 2006), we estimate that a hypothetical
change of 100 basis points in the LIBOR and ABR interest rates from year-end
2007 would impact interest expense by $0.5million ($0.7 million at December 31,
2006) on an annualized pretax basis. We were not a party to any interest rate
cap or other protection arrangements with respect to our variable rate
indebtedness as of December 31, 2007, 2006, or 2005.

The
estimated value of our debt at December 31, 2007 was $233.3 million compared to
a carrying value of $227.1 million. The estimated value and carrying value
of our debt at December 31, 2006 was $213.2 million and $224.7 million,
respectively. All fixed rate indebtedness was valued based on current market
quotes. All variable rate indebtedness is assumed at market.

The
Company purchases copper, lead, and zinc option contracts to hedge against
price fluctuations of anticipated commodity purchases. Lead, copper, and zinc
prices have experienced significant increases since 2003 primarily due to
increased demand (including increased demand from China). We use commodity
option contracts to hedge against the risk of increased prices for lead,
copper, and zinc to be used in the manufacture of our ammunition products. The
amounts of premiums paid for commodity contracts outstanding at December 31,
2007, 2006, and 2005 were $8.8 million, $5.4 million, and $1.3 million,
respectively. At December 31, 2007, 2006 and 2005, the market value
of our outstanding contracts relating to firm commitments and margin balance up
to eighteen months from the respective date was $6.8 million, $6.6 million, and
$5.6 million, respectively, as determined with the assistance of a third party.
Assuming a hypothetical 10% increase in lead, copper, and zinc commodity prices
which are currently hedged, we would experience an approximate $4.0 million
($9.2 million at December 31, 2006) increase in our cost of related inventory
purchased, which would be partially offset by an approximate $0.6 million ($2.6
million at December 31, 2006) increase in the value of related hedging
instruments. With the volatility of pricing the Company has experienced, we
believe that significant changes in commodity pricing could have a future
material impact on our consolidated financial position, results of operations,
or cash flows of the Company.

We
also purchase steel supplies for use in the manufacture of certain firearms,
ammunition, and accessory products. Assuming a hypothetical 10% increase in
steel prices, we would experience an approximate $0.7 million (an approximate
$0.7 million at December 31, 2006) increase in our cost of related inventory
purchased.

We
do not believe that we have a material exposure to fluctuations in foreign
currencies.

We
do not hold or issue financial instruments for speculative purposes.

59

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent
Registered Public Accounting Firm

To the Board
of Directors
Remington Arms Company, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of
Remington Arms Company, Inc. (a Delaware corporation) and Subsidiaries as of
December 31, 2007 (Successor) and as of December 31, 2006 (Predecessor), and
the related consolidated statements of operations, shareholders equity
(deficit) and comprehensive income (loss), and cash flows for the period from
June 1, 2007 to December 31, 2007 (Successor), January 1, 2007 to May 31, 2007
(Predecessor), and  the years ended December 31, 2006 and 2005
(Predecessor). Our audits of the basic financial statements included the
financial statement schedule listed in the index appearing under Item 15
(a)(2). These financial statements and the financial statement schedule are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Remington
Arms Company, Inc. and subsidiaries as of December 31, 2007 (Successor) and as
of December 31, 2006 (Predecessor), and the results of its operations and its
cash flows for the period from June 1, 2007 to December 31, 2007 (Successor),
January 1, 2007 to May 31, 2007 (Predecessor), and for each of the years ended
December 31, 2006 and 2005 (Predecessor), in conformity with accounting
principles generally accepted in the United States of America. Also in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

As discussed in Note 19 to the consolidated financial statements, the
Predecessor adopted Financial Accounting Standards Board Statement (FASB)
Interpretation No. 48, Accounting for Uncertainty in Income Taxes, as of
January 1, 2007. Also, as discussed in Note 13 to the consolidated financial
statements, the Successor adopted FASB No. 158, Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans, as of December 31,
2007.

/s/ Grant
Thornton LLP
Charlotte, North Carolina
March 28, 2008

60

Remington Arms Company, Inc.Consolidated Balance Sheets
(Dollars in Millions, Except Per Share Data)

Successor

PredecessorDecember 31, 2007

December 31, 2006ASSETSCurrent
 AssetsCash and
 Cash Equivalents

$
23.4

$
0.5Accounts
 Receivable Trade - net


72.8


92.8Inventories
 - net


116.9


110.8Supplies


6.3


7.7Prepaid
 Expenses and Other Current Assets


18.2


13.0Deferred Tax
 Assets


11.1


0.9Total Current Assets


248.7


225.7Property,
 Plant and Equipment - net


102.7


69.3Goodwill and
 Intangibles - net


132.6


59.1Debt
 Issuance Costs - net


4.7


5.7Other
 Noncurrent Assets


13.4


11.5Total
Assets

$
502.1

$
371.3LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current
 LiabilitiesAccounts
 Payable

$
30.4

$
30.8Book
 Overdraft


5.3


4.5Short-Term
 Debt


3.5


3.1Current
 Portion of Long-Term Debt


0.6


0.4Current
 Portion of Long-Term Term Loan


4.2


Current
 Portion of Product Liability


3.1


2.9Income Taxes
 Payable


0.1


1.5Other
 Accrued Liabilities


34.9


52.3Total Current
Liabilities


82.1


95.5Long-Term
 Debt, net of Current Portion


225.0


221.0Retiree
 Benefits, net of Current Portion


42.8


45.2Product
 Liability, net of Current Portion


9.3


7.6Deferred Tax
 Liabilities


28.4


10.0Other
 Long-Term Liabilities


6.5


2.2Total
Liabilities


394.1


381.5Commitments
 and ContingenciesStockholders
 Equity (Deficit)Total
Stockholders Equity (Deficit)


108.0


(10.2
)Total Liabilities and Stockholders Equity (Deficit)

$
502.1

$
371.3The accompanying notes are an integral part
of these consolidated financial statements.

61

Remington Arms Company, Inc.Consolidated
Statements of Operations 
(Dollars in Millions)

Successor

PredecessorJune 1 -
 December 31

January 1 -
 May 31

Year-To-Date December 31,2007

2007

2006

2005(See
 Note 3)

(See Note 3)Net Sales

$
322.0

$
167.0

$
446.0

$
410.4Cost of Goods Sold


269.3


117.3


338.4


324.9Gross
Profit


52.7


49.7


107.6


85.5Selling, General and
Administrative
 Expenses


52.1


30.3


73.7


66.7Research and Development
Expenses


3.6


2.7


6.4


5.9Impairment Charges








0.2


4.7Other Income


(1.7
)

(4.5
)

(2.3
)

(2.8
)Operating
Profit (Loss)


(1.3
)

21.2


29.6


11.0Interest Expense


14.6


10.9


28.0


26.4Income (Loss)
from Continuing Operations
 before Taxes, Equity in Losses from Unconsolidated Joint Venture


(15.9
)

10.3


1.6


(15.4
)Income Tax Provision
(Benefit)


(5.9
)

1.3


0.9


0.4Equity in Losses from
Unconsolidated Joint
 Venture


0.5





0.4


1.0Net Income
(Loss) from Continuing
 Operations


(10.5
)

9.0


0.3


(16.8
)Loss from Discontinued
Operations, net of
 tax expense of zero











(0.1
)Net Income
(Loss)

$
(10.5
)
$
9.0

$
0.3

$
(16.9
)The accompanying notes are an integral part
of these consolidated financial statements.

62

Remington Arms Company, Inc.Consolidated
Statements of Cash Flows 
(Dollars in Millions)

Successor

PredecessorJune
 1 -
 December 31

January
 1 -
 May 31

Year-To-Date
 December 31,2007

2007

2006

2005(See
 Note 3)

(See
 Note 3)Operating
ActivitiesNet Income (Loss)

$
(10.5
)
$
9.0

$
0.3

$
(16.9
)Adjustments to reconcile Net
Income (Loss) to Net Cash used in
 Operating Activities:Depreciation
and Amortization of Debt Issuance Costs


10.0


4.8


11.6


11.4Equity in
Losses from Unconsolidated Joint Venture


0.5





0.4


1.0Pension Plan
Contributions


(11.0
)

(5.9
)

(8.0
)

(7.1
)Pension Plan
Expense


3.2


3.7


11.3


11.5Pension
Curtailment


(6.4
)




(7.4
)

Provision for
Deferred Income Taxes, net


(6.2
)

0.3


1.1


2.8Other Non-cash
charges


6.9


1.9


1.0


5.6Changes in
Operating Assets and Liabilities:Accounts
Receivable Trade - net


21.2


(1.2
)

(0.6
)

(11.0
)Inventories


64.0


(39.5
)

(11.5
)

(6.7
)Prepaid
Expenses and Other Current and Long-Term Assets


(8.6
)

(8.1
)

(1.2
)

(0.3
)Accounts
Payable


(8.6
)

8.2


5.8


0.5Income Taxes
Payable


0.6


(1.4
)

0.1


0.6Other Accrued
and Long-Term Liabilities


10.3


(8.1
)

10.3


2.6Net Cash
provided by (used in) Operating Activities


65.4


(36.3
)

13.2


(6.0
)Investing
ActivitiesOption
Cancellation Payments


(1.1
)







Purchase of
Property, Plant and Equipment


(6.7
)

(2.1
)

(7.1
)

(9.4
)Premiums paid
for Company Owned Life Insurance


(0.3
)

(0.2
)

(0.6
)

(0.7
)Cash Surrender
Value of Company Owned Life Insurance


3.7








Cash Received
on Sale of Unconsolidated Joint Venture


3.0








Seller Related
Expenses Paid by Remington





(4.7
)




Transaction
Costs Related to the Acquisition





(5.1
)




Cash
Contribution to Unconsolidated Joint Venture








(0.2
)

(1.0
)Net Cash used
in Investing Activities


(1.4
)

(12.1
)

(7.9
)

(11.1
)Financing
ActivitiesProceeds from
Revolving Credit Facility


84.8


103.1


178.3


214.3Payments on
Revolving Credit Facility


(170.0
)

(37.3
)

(178.3
)

(196.7
)Proceeds from
Term Loan


25.0








Cash Withheld
from Sellers Provided by AHA





4.7





Cash
Contributions from AHA


6.1








Debt Issuance
Costs


(0.5
)

(5.2
)

(0.8
)

Amount Paid to
Holding for Acquisition Costs





(3.8
)




Principal
(Payments) Borrowings on Long-Term Debt


(0.3
)

(0.1
)

(0.3
)

0.6Capital
Contribution Received from RACI Holding, Inc.








0.3


Cash (Paid to)
Received from RACI Holding, Inc.








(0.1
)

0.1Change in Book
Overdraft


5.3


(4.5
)

(4.4
)

(1.1
)Net Cash (used
in) provided by Financing Activities


(49.6
)

56.9


(5.3
)

17.2Change in Cash and Cash
Equivalents


14.4


8.5





0.1Cash and Cash Equivalents at
Beginning of Year


9.0


0.5


0.5


0.4Cash and Cash Equivalents at End
of Year

$
23.4

$
9.0

$
0.5

$
0.5The accompanying notes are an integral part of these consolidated
financial statements.

63

Remington Arms Company, Inc.Consolidated
Statements of Cash Flows 
(Dollars in Millions)

Successor

PredecessorJune
 1 -
 December 31

January
 1 -
 May 31

Year-To-Date
 December 31,2007

2007

2006

2005(See
 Note 3)

(See
 Note 3)Supplemental Cash Flow
Information:Cash Paid
During the Year for:Interest

$
12.3

$
11.8

$
26.0

$
24.7Income
Taxes

$
0.1

$
0.1

$


$
Previously
accrued Capital Expenditures

$


$
0.6

$
1.3

$
1.8Noncash
Financing and Investing Activities:Financing of
insurance policies

$
3.5

$
1.9

$
3.1

$
Acquisition of
Parent Company by AHA

$
118.1

$


$


$
Change in
Capital Expenditures Capitalized

$


$


$
(0.7
)
$
(1.0
)Capital Lease
Obligations Incurred

$


$


$
0.2

$
1.1Conversion of
Parent Company Stock Liability to Equity

$


$
0.1

$
0.3

$
The accompanying notes are an integral part of these consolidated
financial statements.

64

Remington Arms Company, Inc.Consolidated
Statement of Stockholders
Equity (Deficit) and Comprehensive Income (Loss) 
(Dollars in Millions)

       Paid-in
                    Capital

                

                Accumulated
                    Other
                    Comprehensive
                    Income (Loss)

                

                Retained
                    Earnings
                    (Accumulated
                    Deficit)

                

                Total
                    Stockholder’s
                    Equity (Deficit)PredecessorBalance, December 31,
                    2004

                

                $

                89.0

                

                $

                0.6

                

                $

                (79.7

                )

                $

                9.9Comprehensive
                    Loss:Net Loss

                

                

                —

                

                

                —

                

                

                (16.9

                )

                

                (16.9

                )Other comprehensive income
                    (loss):Minimum pension liability,
                    net of tax effect of ($0.7)

                

                

                —

                

                

                (5.2

                )

                

                —

                

                

                (5.2

                )Net derivative gains, net
                    of tax effect of $2.0

                

                

                —

                

                

                3.2

                

                

                —

                

                

                3.2Net derivative gains
                    reclassified as earnings, net of tax effect of ($1.4)

                

                

                —

                

                

                (2.2

                )

                

                —

                

                

                (2.2

                )Total Comprehensive
                    Loss

                

                

                

                

                

                

                

                

                

                

                

                (21.1

                )Cash Contribution From RACI
                    Holding, Inc.

                

                

                0.1

                

                

                —

                

                

                —

                

                

                0.1Balance, December 31,
                    2005

                

                $

                89.1

                

                $

                (3.6

                )

                $

                (96.6

                )

                $

                (11.1

                )Comprehensive
                    Income:Net Income

                

                

                —

                

                

                —

                

                

                0.3

                

                

                0.3Other comprehensive
                    income:Minimum pension liability,
                    net of tax effect of ($2.5)

                

                

                —

                

                

                2.0

                

                

                —

                

                

                2.0Net derivative gains, net
                    of tax effect of $4.9

                

                

                —

                

                

                5.8

                

                

                —

                

                

                5.8Net derivative gains
                    reclassified as earnings, net of tax effect of ($4.6)

                

                

                —

                

                

                (7.4

                )

                

                —

                

                

                (7.4

                )Total Comprehensive
                    Income

                

                

                

                

                

                

                

                

                

                

                

                0.7Capital Contribution from
                    RACI Holding, Inc.

                

                

                0.3

                

                

                —

                

                

                —

                

                

                0.3Cash Payment to RACI
                    Holding, Inc.

                

                

                (0.1

                )

                

                —

                

                

                —

                

                

                (0.1

                )Balance, December 31,
                    2006

                

                $

                89.3

                

                $

                (3.2

                )

                $

                (96.3

                )

                $

                (10.2

                )Comprehensive
                    Income:Net Income

                

                

                —

                

                

                —

                

                

                9.0

                

                

                9.0Other comprehensive
                    income:Minimum pension
                    liability

                

                

                —

                

                

                3.0

                

                

                —

                

                

                3.0Net derivative gains, net
                    of tax effect of $2.3

                

                

                —

                

                

                3.6

                

                

                —

                

                

                3.6Net derivative gains
                    reclassified as earnings, net of tax effect of ($2.3)

                

                

                —

                

                

                (3.8

                )

                

                —

                

                

                (3.8

                )Total Comprehensive
                    Income

                

                

                

                

                

                

                

                

                

                

                

                11.8Non Cash Contribution from
                    RACI Holding, Inc.

                

                

                1.7

                

                

                —

                

                

                —

                

                

                1.7Amount Paid to RACI
                    Holding, Inc. for Acquisition Costs

                

                

                —

                

                

                —

                

                

                (3.8

                )

                

                (3.8

                )Cumulative Effect of Change
                    inAccounting
                    Principle

                

                

                —

                

                

                —

                

                

                0.2

                

                

                0.2Balance, May 31,
                    2007

                

                $

                91.0

                

                $

                (0.4

                )

                $

                (90.9

                )

                $

                (0.3

                )SuccessorAcquisition of Parent
                    Company by AHA - June 1, 2007

                

                $

                124.2

                

                $

                —

                

                $

                —

                

                $

                124.2Comprehensive
                    Loss:Net Loss

                

                

                —

                

                

                —

                

                

                (10.5

                )

                

                (10.5

                )Other comprehensive income
                    (loss):Minimum pension liability,
                    net of tax effect of ($3.3)

                

                

                —

                

                

                (5.4

                )

                

                —

                

                

                (5.4

                )Net derivative gains, net
                    of tax effect of $0.5

                

                

                —

                

                

                0.8

                

                

                —

                

                

                0.8Net derivative gains
                    reclassified as earnings, net of tax effect of ($0.7)

                

                

                —

                

                

                (1.1

                )

                

                —

                

                

                (1.1

                )Total Comprehensive
                    Loss

                

                

                

                

                

                

                

                

                

                

                

                (16.2

                )Balance, December 31,
                    2007

                

                $

                124.2

                

                $

                (5.7

                )

                $

                (10.5

                )

                $

                108.0The accompanying notes are an integral part
of these consolidated financial statements.

65

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS 
(dollars in millions, except per share data)

Note 1Basis of Presentation

Organizational
Structure

On
May 31, 2007, 100% of the shares of RACI Holding, Inc. (Holding), the sole
stockholder of Remington Arms Company, Inc. (Remington), were purchased by
American Heritage Arms, LLC (now American Heritage Arms, Inc.) (AHA), an
affiliate of Cerberus Capital Management, L.P. (CCM, and along with CCMs
affiliates other than operating portfolio companies, collectively Cerberus).

The
accompanying audited consolidated financial statements of Remington Arms
Company, Inc. (Remington) include the accounts of its wholly owned
subsidiaries, RA Brands, L.L.C. (RA Brands), RA Factors, Inc. (RA Factors)
(which was merged with and into Remington as of December 31, 2006) and
Remington Steam, LLC (Remington Steam), (collectively with Remington, the
Company), and also reflect the impact of the Companys unconsolidated 50%
joint venture interest in Remington ELSAG Law Enforcement Systems, LLC
(RELES). The Company sold this interest on September 26, 2007 (see Note 17).

All
significant intercompany accounts and transactions have been eliminated. The
accounts of the Companys parent, Holding, which owns 100% of the 1,000 shares
authorized, issued and outstanding of Remington common stock (at par value of
$0.01 per share), and those of AHA, the 100% owner of Holding, are not
presented herein. Significant transactions between the Company, Holding and AHA
and the related balances are reflected in the audited consolidated financial
statements and related disclosures.

Although
Remington continued as the same legal entity after May 31, 2007, the
accompanying audited consolidated statement of operations, cash flows and
stockholders equity (deficit) are presented for two periods: predecessor and
successor, which relate to the period preceding May 31, 2007 and the period
succeeding May 31, 2007, respectively. The Company refers to the operations of
Remington and its subsidiaries for both the predecessor and successor periods.
Unless otherwise noted, the results of operations of the Marlin Firearms
Company, which Remington acquired on January 28, 2008, as discussed in Note 4,
are not included in these financial statements.

Application
of Purchase Method of Accounting

In
accordance with the guidelines set forth in SAB Topic 5J, Miscellaneous
Accounting, Pushdown Basis of Accounting Required in Certain Limited
Circumstances, the purchase price paid by AHA plus related purchase accounting
adjustments have been pushed-down and recorded in our financial statements
for the period subsequent to May 31, 2007. This has resulted in a new basis of
accounting reflecting the fair market value of our assets and liabilities for
the successor period beginning June 1, 2007. Information for all
predecessor periods prior to the AHA Acquisition is presented using our
historical basis of accounting. As a result of the application of purchase
accounting, the predecessor periods are not comparable to the successor period.

The
AHA Acquisition and the allocation of the purchase price to the opening balance
sheet accounts of the successor have been recorded as of the beginning of the
first day of our new accounting period (June 1, 2007). The results are further
separated by a heavy black line to indicate the effective date of the new basis
of accounting.

Valuations
have been prepared with the assistance of third party valuation experts (for
inventory, property, plant and equipment, intangibles, income taxes and certain
liability accounts). These valuations are preliminary and subject to change.
The summary of the estimated fair values of the assets acquired and liabilities
assumed is presented in Note 3.

Reclassification

A
revision to the classification of other accrued and long-term liabilities in
the Consolidated Statement of Cash Flows was made to financial information from
prior periods to conform to the presentation format at December 31, 2007 and
2006.

66

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

Note 2Description of the Business

The
Company is engaged in the design, manufacture, import and sale of primarily
sporting goods products for the hunting/shooting sports and related markets.
The Company also designs, manufactures and sells certain products to certain
federal agency, law enforcement, and military markets including the firearms
and ammunition markets. The Companys product lines consist of firearms,
ammunition, hunting/gun care accessories, clay targets, licensed products,
powder metal products, and technology and security products sold under the Remington name and other labels. The
Companys products are distributed throughout the United States and in
approximately 56 other countries (including Canada, Europe, and Asia). In the
United States, Remington products
are distributed primarily through a network of wholesalers and retailers who
purchase the product directly from the Company for resale to gun dealers and
end users, respectively. The end users include sportsmen, hunters, target
shooters, gun collectors, and members of law enforcement and other government
organizations.

Note 3  Acquisition by American Heritage Arms, Inc. (formerly
American Heritage Arms, LLC)

The
shares of Holding, the sole stockholder of Remington, were purchased by AHA on
May 31, 2007 (the Closing Date), pursuant to the stock purchase agreement
dated as of April 4, 2007 (the Stock Purchase Agreement), between Holding,
its stockholders and holders of deferred stock (including the ownership
interests represented by Bruckmann, Rosser, Sherrill & Co. II, L.P. and the
Clayton & Dubilier Private Equity Fund IV Limited Partnership (the CDR Fund)),
as well as the Holding stock option holders (the AHA Acquisition).

On
the Closing Date of the AHA Acquisition, pursuant to the terms of the Stock
Purchase Agreement, AHA acquired all of the capital stock of Holding,
consisting of 205,208 shares of issued and outstanding Class A common stock,
par value $0.01 per share (the Common Stock) and 5,851 deferred shares of
Common Stock (which were converted into shares of Common Stock on the Closing
Date), at a value of $330.47 per share less related selling expenses, taxes and
amounts placed in escrow. In addition, among other things, on the Closing Date
outstanding options to purchase 10,635 shares of Holding Common Stock (the
Stock Options), which constituted all of the outstanding Stock Options, immediately
vested subject to the applicable change in control provisions in Holdings 1999
Stock Incentive Plan and 2003 Stock Option Plan. Remington made option
cancellation payments representing the purchase price of $330.47 per share less
the strike price of $220.31 with respect to each Stock Option less related
selling expenses, amounts placed in escrow and related withholding taxes. AHA
provided the funds to Holding which, in turn, were provided to Remington to
make these option cancellation payments. On the Closing Date, AHA also provided
Holding with approximately $48.2 to pay and satisfy in full as of the Closing
Date the full outstanding amount of principal and interest of Senior Note A due
2011 and Senior Note B due 2012 issued by Holding and held by the CDR Fund (the
Holding Notes).

The
AHA Acquisition was financed with $125.0 of funds contributed to AHA by its
members and approximately $14.5 of borrowings from Remingtons Revolving Credit
Facility. In accordance with the terms of the Stock Purchase Agreement, the
following is a summary of the transactions between AHA, Holding and Remington,
which disbursed funds as follows:


AHA paid sellers $59.0,
  net of $10.7 of costs incurred by the sellers, certain seller withholding
  taxes, and amounts to be placed in escrow.
AHA provided the escrow
  agent $5.0 representing amounts withheld from the sellers gross sales price.
AHA paid $0.7 of
  seller-incurred legal fees with amounts withheld from the sellers gross
  sales price.
AHA provided $48.2 to
  Holding for the payment of the Holding Notes and $0.7 for certain tax
  withholdings due from sellers.
AHA provided Remington
  with $5.1 for payment of the management bonus and cancellation of options,
  net of seller-related expenses.
Holding paid $48.2 to
  satisfy in full the Holding Notes.
Holding paid $3.7 of
  certain AHA Acquisition-related costs with funds provided from Remington and
  provided Remington with $0.7 associated with tax withholdings from the
  sellers.
Remington provided Holding
  with $3.8 from its Revolving Credit Facility to pay for certain buyer-related
  AHA Acquisition costs described above.67

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)


Remington paid $10.3 from
  its Revolving Credit Facility in connection with obtaining waivers,
  amendments and consents to the Revolving Credit Facility and $200.0 10.5%
  Senior Notes due 2011.
Remington paid $0.7 for
  cancellation of options and $1.1 of withholding taxes from amounts withheld
  from sellers and option holders.
Remington paid $4.0 in
  management bonuses and related withholding taxes from amounts that were
  withheld from the sellers and from funds provided by AHA.In
addition, subsequent to May 31, 2007, AHA contributed approximately $6.1 of the
initial capital to the capital of Remington. These amounts were used to pay
down the $3.8 that Remington provided Holding for transaction related costs and
a portion of the outstanding credit facility balance at the time.

The
preliminary value of the AHA Acquisition as of May 31, 2007, was estimated to
be $416.6, based on preliminary valuation estimates, which included the
assumption of all of Remingtons approximately $85.2 of funded indebtedness
related to the Amended and Restated Credit Agreement, dated March 15, 2006, by
and among Remington, Wachovia Bank, National Association (Wachovia), RA
Factors, Inc., and the lenders from time to time parties thereto (the Amended
and Restated Credit Agreement), the $200.0 principal amount ($203.8 estimated
fair value at May 31, 2007) of Remingtons 101⁄2% Senior Notes due 2011 (the
Notes) and approximately $3.4 of certain other indebtedness at the Closing Date.
The payment for the Common Stock and converted deferred shares of Common Stock,
the Stock Option cancellation payment and repayment of the Holding Notes was
funded by AHAs available cash. In addition, Remington obtained all necessary
waivers, amendments and consents so that Remingtons Credit Agreement and the
indebtedness evidenced by the Notes remained outstanding and not in default.

The
AHA Acquisition was accounted for as a business combination using the purchase
method of accounting, in accordance with FASB Statement No. 141, Business Combinations(FASB 141),
whereby the purchase price (including assumed liabilities) is allocated and
pushed down to the assets acquired based on their estimated fair market values
at the date of the AHA Acquisition. An independent third party appraiser was
engaged to assist management and perform valuations of certain of the tangible
and intangible assets acquired as of May 31, 2007. The excess of the purchase
price over the fair value of the Companys net assets was allocated to
goodwill.

The
allocation of the purchase price is based upon preliminary valuation data and
our estimates, assumptions and allocation to segments are subject to change.
For instance, adjustments to the estimated lives of property, plant and
equipment could cause depreciation to change. Also, potential liabilities
associated with improvement initiatives have not yet been finalized and may
change. Any individual item or combination of the items could also impact
values applied to deferred income taxes and segment allocations. Goodwill would
change if any of the other valuations of any asset or liabilities changes.

68

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

Following is a summary of
the estimated fair values of the assets acquired and liabilities assumed as of
June 1, 2007 based on preliminary valuations, as well as subsequent adjustments
through the period ended December 31, 2007:

As of
  June 1,
  2007

Net
  Adjustments

As of
  Dec. 31,
  2007Inventory

$
180.9


$
(2.1
)

$
178.8Other Current
Assets


136.4



0.2



136.6Property,
Plant and Equipment


104.2



0.3



104.5Goodwill


67.0



(6.0
)


61.0Identifiable
Intangible Assets


73.9



(0.9
)


73.0Other
Long-Term Assets


22.1







22.1Total Assets
Acquired

$
584.5


$
(8.5
)

$
576.0Current
Liabilities

$
91.6


$
0.2



91.8Revolving
Credit Facility


85.2







85.210 1⁄2%
Senior Notes Due 2011


203.8







203.8Pension &
OPEB


40.9



(9.5
)


31.4Other
Non-Current Liabilities


38.8



0.8



39.6Total
Liabilities Assumed


460.3



(8.5
)


451.8Estimated AHA Acquisition
Cost

$
124.2


$



$
124.2As
part of the application of purchase accounting, the Company recorded an initial
estimate associated with goodwill and identifiable intangible assets to each
reporting segment of $67.0 and $73.9, respectively. Subsequent to that, net
adjustments of ($6.0) decreased the balance of goodwill to $61.0 and net
adjustments of ($0.9) decreased the balance to $73.0. The goodwill adjustments
were a ($2.1) adjustment to reduce inventory, a $0.2 adjustment to increase
other current deferred tax assets and a $0.3 adjustment to increase property,
plant and equipment to include capital leases and the impact of recording
actual versus estimated depreciation on the revalued fixed assets, offset by
adjustments of $0.2 to increase current liabilities related to current deferred
tax assets and accrued expenses, a ($9.5) adjustment to decrease the OPEB
pension liability based on additional valuation data, as well as $0.8 in
adjustments to increase other non-current liabilities based on updated
valuation data relating to the product liability and workers compensation
reserves and long-term income taxes payable and long-term deferred tax
liabilities.

For
income tax purposes, since the AHA Acquisition was a purchase of stock, the
respective tax basis of the assets and liabilities were not changed. The
identifiable intangibles and goodwill are not deductible for tax purposes.

The
estimated amortizable lives for identifiable intangible assets are two to 20
years and the estimated useful lives for property, plant and equipment ranges
from less than one year to 33 years. Note 10 identifies the preliminary lives
of identifiable intangible assets.

Pro
Forma Financial Information

The
following unaudited pro forma results of operations assume that the AHA
Acquisition occurred at the beginning of the respective years, adjusted for the
impact of certain AHA Acquisition-related items, such as additional
depreciation expense of property, plant and equipment; additional amortization
expense of identified intangible assets; additional interest expense on
acquisition debt, net of bond premium amortization; reduced pension expense;
recognition of write-up in cost of sales as inventory is sold and the related
income tax effects. Income taxes are provided at the estimated statutory rate.
This unaudited pro forma information should not be relied upon as necessarily
being indicative of historical results that would have been obtained if the AHA
Acquisition had actually occurred on that date, nor the results that may be
obtained in the future.

69

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

Unaudited
  Pro Forma Financial Results

For
  the Twelve Months EndedDecember
  31, 2007

December
  31, 2006Net Sales


$
489.0



$
446.0Operating Income(Loss)



14.8




(7.9
)Net Income (Loss)



(7.1
)



(22.1
)Acquisition-related
costs

During
the predecessor period from January 1, 2007 to May 31, 2007, the Company
expensed $1.1 of costs related to the AHA Acquisition. These costs, which are
included in Selling, General & Administrative Expenses, consist of
accounting, legal, insurance and other costs associated with the AHA
Acquisition. A compensation charge of approximately $1.5 related to the
accelerated vesting and buyout of stock options and the conversion of the
deferred shares to equity was recorded as well as a mark-to-market charge of
$0.2 related to redeemable shares was also recorded.

Note 4  Subsequent Event  Acquisition of Marlin Firearms
Company

Remington
completed its acquisition of all of the outstanding shares of Class A and Class
B Common Stock (collectively, the Shares) of The Marlin Firearms Company
(Marlin) on January 28, 2008 (the Marlin Closing Date), from the
shareholders of Marlin (collectively, the Marlin Sellers) pursuant to a stock
purchase agreement (the Marlin Stock Purchase Agreement) dated as of December
21, 2007 by and among Marlin, Remington, the Marlin Sellers party thereto, and
Frank Kenna, III, solely in his capacity as the Shareholders Representative
(the Marlin Acquisition). The Marlin Acquisition includes Marlins 100%
ownership interest in H&R 1871, LLC (H&R).

On
the Marlin Closing Date, Remington acquired all of the capital stock of Marlin,
consisting of 86,773 shares of issued and outstanding Class A Common Stock, par
value $25 per share, and 760,936 shares of issued and outstanding Class B
Common Stock, no par value, $0.01 stated value.

Because
the Marlin Acquisition was not completed until January 28, 2008, the results of
operations of Marlin for the year ended December 31, 2007 are not included in
the accompanying financial statements or the notes to the financial statements.

The
Marlin Acquisition is being accounted for as a business combination using the
purchase method of accounting, in accordance with FASB 141, whereby the
purchase price (including assumed liabilities) is allocated and pushed down to
the assets acquired based on their estimated fair market values at the date of
the Marlin Acquisition. As of the filing date of this Form 10-K, the purchase
price allocations have not been finalized because the Company has not yet
received the preliminary valuation data from the independent third party
appraisers that were engaged to assist management and perform valuations of
certain of the tangible and intangible assets acquired as of January 28, 2008.

The
total purchase price for the Marlin Acquisition was estimated to be
approximately $47.6 (the Purchase Price), subject to certain Purchase Price
reductions. The following is a summary of certain material transactions related
to the closing of the Marlin Acquisition:


Remington purchased the
  Shares and paid other related fees and expenses associated with the Marlin
  Acquisition with available cash on hand, funds available under existing
  credit facilities and an equity contribution provided by AHA to Remington
  through Remingtons parent, Holding. AHA owns 100% of Holding.70

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in
millions, except per share
data)


Remington paid the Marlin
  Sellers aggregate consideration of $36.0 (the Consideration), of which $5.2
  was deposited into an escrow account to secure certain indemnity obligations
  of the Marlin Sellers under the Marlin Stock Purchase Agreement (the Escrow
  Amount). Any unused portion of the Escrow Amount will be released to the
  Marlin Sellers in two equal portions on two dates that are twelve and
  eighteen months following the Marlin Closing Date.
Remington paid
  approximately $5.3 of Marlin Acquisition related fees and expenses.
At the Marlin Closing Date
  and on behalf of Marlin, Remington paid approximately $6.3 of borrowings
  under the Marlin Amended and Restated Commercial Revolving Line of Credit
  Agreement between Marlin and Webster Bank, National Association.
The Consideration includes
  a reduction of $2.8 in respect of an estimate of underfunding of Marlins
  pension plan as of the Marlin Closing Date. If the actual amount of the
  underfunding of the Marlin pension plan as of the Marlin Closing Date is less
  than $2.8 as finally determined, Remington will increase the Consideration
  paid to the Marlin Sellers by the amount of such difference.In
connection with the closing of the Marlin Acquisition, Remington entered into
the Joinder Agreement and Supplement to Amended and Restated Credit Agreement
(the Joinder Agreement) on January 28, 2008, by and among Remington and RA
Brands, L.L.C., as the existing borrowers, Marlin and H&R, as the new
borrowers, Wachovia Bank, National Association (Wachovia), in its capacity as
administrative and collateral agent for various financial institutions (the
Lenders), and such Lenders. Pursuant to the Joinder Agreement, each of Marlin
and H&R became a Borrower under that certain Amended and Restated Credit
Agreement by and among Remington, Wachovia, certain subsidiaries of Remington,
and the lenders from time to time a party thereto, dated March 15, 2006 and as
amended on May 31, 2007 and November 13, 2007.

Note 5  Impairment Charges

In
accordance with SFAS 144, management assesses property, plant and equipment for
impairment whenever facts and circumstances indicate that the carrying value amount
may not be fully recoverable. In 2007, due to the application of purchase
accounting as described in Note 1, whereas property, plant and equipment was
adjusted to fair market value, management determined that there were no further
facts and circumstances to indicate that the carrying value amount may not be
fully recoverable. As a result, there were no impairment charges incurred in
2007.

SFAS
142 indicates that if other types of assets (in addition to goodwill) of a
reporting unit are being tested for impairment at the same time as goodwill,
then those assets are to be tested for impairment prior to performing the
goodwill impairment testing. Since there were no other assets of a reporting
unit being tested for impairment in 2007, no SFAS 142 testing was deemed
necessary.

As
of each year end December 31, 2006 and 2005, the Company performed evaluations
for impairment in accordance with its policy and SFAS 144 on certain of its
fixed assets and recorded associated impairment charges of $0.2 and $1.0 for
the years ended December 31, 2006 and 2005, respectively, in the accompanying
statement of operations. The evaluations in 2006 and 2005 were triggered from
the Company completing its budget process for the fiscal 2007 and 2006 years and
determining that certain assets would have a decline in the extent and manner
in which they are currently being used due to changes in product offerings.
Management compared the expected undiscounted cash flows from the fixed assets
with the carrying value of these same fixed assets, and concluded that
impairment existed. The resulting impairment charge was determined by the
difference between the fair value estimated using a discounted cash flow model
and the carrying value of the fixed assets.

At
December 31, 2006, the remaining carrying value associated with the Clay
Targets reporting unit for trademarks, property and equipment are $1.8. As of
September 30, 2006, the Company performed the required annual evaluation for
impairment evaluation for goodwill and trademarks in accordance with the
provisions of SFAS 142 and determined that there was no impairment.

As
of March 31, 2005, the Company performed an evaluation for impairment on its
goodwill, trademarks, and fixed assets for the Clay Targets reporting unit and
recorded associated impairment charges of $3.7 in the accompanying consolidated
statement of operations, which were composed of goodwill impairment of $2.9,
indefinite-

71

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

lived trademark impairment
of $0.7, and property and equipment impairment of $0.1. The Clay Targets
reporting unit is included in the All Other reporting segment in Note 22. The
evaluation resulted from the Company being notified by the primary supplier of
a critical raw material to the Companys Clay Targets business that materials
would not be supplied beginning in the third quarter of 2005. No alternative
supplier has currently been located. Management considered the loss of the
supplier a change in the business climate that created a specific triggering
event necessitating such a review.

Note 6Summary of Significant Accounting Policies

Cash and Cash Equivalents:

Cash
and cash equivalents include demand deposits with banks and highly liquid
investments with remaining maturities, when purchased, of three months or less.

Inventories:

Inventories
are stated at the lower of cost or market. The cost of inventories is
determined by the first-in, first-out (FIFO) method. Inventory costs
associated with Semi-Finished Products and Finished Products include material,
labor, and overhead; while costs associated with Raw Materials include only
material. The Company provides inventory allowances for any excess and obsolete
inventories.

The
AHA Acquisition resulted in a new basis for the value of the Companys
inventory. Accordingly, inventory was adjusted to its estimated fair value as
of May 31, 2007, which was estimated to be approximately $30.5 over its
previous net book value. Subsequent to May 31, 2007 and through December 31,
2007, approximately $28.7 has been recognized as a component of cost of goods
sold. In addition, finished products inventory was adjusted down approximately
$2.1 based on additional information relating to applying the purchase method
of accounting.

Supplies:

The
cost of supplies is determined by the average cost method adjusted to the lower
of cost and market.

Service and Warranty:

The
Company supports service and repair facilities for all of its firearm products,
with the exception of its internationally sourced product lines, which are
serviced and repaired by the Companys third party vendors, in order to meet
the service needs of its distributors, customers and consumers worldwide.

The
Company provides consumer warranties against manufacturing defects in all
firearm products manufactured in the United States. Estimated future warranty
costs are accrued at the time of sale. Product modifications or corrections are
voluntary steps taken by the Company to assure proper usage or performance of a
product by consumers. The cost associated with product modifications and/or
corrections is recognized in accordance with Statement of Financial Accounting
Standard No. 5, Accounting for Contingencies
(SFAS 5), and charged to operations.

Property, Plant and Equipment:

Property,
plant and equipment are stated at cost less accumulated depreciation.
Depreciation is determined on a straight-line basis over the estimated lives of
the assets. The estimated useful lives are principally 10 to 40 years for
buildings and improvements, and 3 to 15 years for machinery and equipment. The AHA
Acquisition resulted in a new basis for the value of the Companys property,
plant and equipment. Accordingly, property, plant and equipment was adjusted to
its estimated fair value as of May 31, 2007, which was estimated to be
approximately $37.7 over its previous net book value. Subsequent to May 31,
2007, property, plant and equipment was adjusted upward $0.3 based on
additional information relating to applying the purchase method of accounting.

In
accordance with SFAS 144, management assesses property, plant and equipment for
impairment whenever facts and circumstances indicate that the carrying amount
may not be fully recoverable. To analyze recoverability,

72

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

management projects
undiscounted future cash flows resulting from the use of the asset over the
remaining life of the asset. If these projected cash flows are less than the
carrying amount of the asset, an impairment loss is recognized, resulting in a
write-down of property, plant and equipment with a corresponding charge to
operating income. Any impairment loss is measured based upon the difference
between the carrying amount of the asset and the present value of future cash
flows. The Company uses a discount rate equal to its average cost of funds to
discount the expected future cash flows. See Note 5 for impairment charges
incurred in 2005 and 2006. There were no impairment charges in 2007.

Maintenance
and repairs are charged to operations, replacements and betterments are
capitalized. Computer hardware and software costs under capital leases are
amortized over the term of the lease. The cost and related accumulated
depreciation applicable to assets sold or retired are removed from the accounts
and the gain or loss on disposition is recognized in operations, included in
the other income, net line item on the consolidated statement of operations.

Interest
is capitalized in connection with the construction of major projects. The
capitalized interest is recorded as part of the asset to which it relates and
is amortized over the assets useful life. There was no capitalized interest in
2006 and 2007. In 2005, capitalized interest was less than $0.1.

Goodwill, Goodwill Impairment,
Intangible Assets and Debt Issuance Costs:

Management
assesses goodwill for impairment whenever facts and circumstances indicate that
the carrying amount may not be fully recoverable. Each year the Company tests
for impairment of goodwill according to a two-step approach. In the first step,
the Company estimates the fair values of its reporting units using the present
value of future cash flows approach, subject to a comparison for reasonableness
to its market capitalization at the date of valuation. If the carrying amount
exceeds the fair value, the second step of the goodwill impairment test is
performed to measure the amount of the impairment loss, if any. In the second
step the implied fair value of the goodwill is estimated as the fair value of
the reporting unit used in the first step less the fair values of all other net
tangible and intangible assets of the reporting unit. If the carrying amount of
the goodwill exceeds its implied fair market value, an impairment loss is
recognized in an amount equal to that excess, not to exceed the carrying amount
of the goodwill. In addition, goodwill of a reporting unit is tested for
impairment between annual tests if an event occurs or circumstances change that
would more likely than not reduce the fair value of a reporting unit below its
carrying value. For other intangible assets, the impairment test consists of a
comparison of the fair value of the intangible assets to their respective
carrying amount. The Company uses a discount rate equal to its average cost of
funds to discount the expected future cash flows. See Note 5 for impairment
charges incurred in 2005. There was no goodwill or intangible assets deemed
impaired as of December 31, 2007 and 2006. As part of the application of
purchase accounting resulting from the AHA Acquisition, on May 31, 2007, the
Company recorded an initial estimate associated with goodwill and identifiable
intangible assets to each reporting segment of $67.0 and $73.9, respectively.
Subsequent to May 31, 2007 and through December 31, 2007, goodwill has been
adjusted downward approximately $6.0 and identifiable intangible assets has
been adjusted downward approximately $0.9 based on additional information
relating to applying the purchase method of accounting.

Debt
issuance costs are amortized over the life of the related debt or amendment. As
a result of the AHA Acquisition, approximately $5.2 of existing debt
acquisition costs were eliminated in purchase accounting. In addition, debt
acquisition costs associated with obtaining waivers, consents and amendments in
the amount of $4.2 related to the Notes and $1.0 related to the revolver were
capitalized. Amortization expense for debt issuance costs in 2007, 2006, and
2005 was $1.5, $1.6, and $1.8, respectively, and is estimated to be
approximately $1.6 in 2008, $1.6 in 2009, $1.4 in 2010, and less than $0.1 in
2011 based upon the expected maturities of the Amended and Restated Credit
Agreement as described in Note 14.

Financial Instruments:

The
Company does not use financial instruments for trading purposes. Financial
instruments are used to manage well-defined commodity price risks and are
considered hedges when certain criteria are met.

All
of the Companys commodity option contracts are accounted for as cash flow
hedges under Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities (SFAS

73

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

133), as amended by
Statement of Financial Accounting Standards No. 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities  an amendment of FASB Statement No. 133 (SFAS 138) and
Statement of Financial Accounting Standards No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities (SFAS 149). SFAS 133, as amended, requires that all
derivative instruments be reported on the balance sheet at fair value and
establishes criteria for designation and effectiveness of hedging
relationships. The fair value of the Companys cash flow hedges at the time of
purchase are recorded on the balance sheet in the Prepaid Expenses and Other
Current Assets line and the Other Noncurrent Assets line, and are marked to
fair value at each balance sheet date. Unrealized gains and losses associated
with these changes in fair value are recorded on the balance sheet as
accumulated other comprehensive income in stockholders equity (deficit) and
recognized in the statement of operations as a component of cost of goods sold
when the related inventory is sold and associated revenue is recognized.

To
the extent that the Companys cash flow hedges are deemed ineffective, under
the criteria of SFAS 133, as amended, at hedging the commodity price risk, the
portion of ineffectiveness would be required to be recognized in the statement
of operations immediately. No ineffectiveness was recorded in 2007, 2006 or
2005.

Market
values of financial instruments were estimated in accordance with Statement of
Financial Accounting Standards No. 107, Disclosures
about Fair Value of Financial Instruments (SFAS 107), and are
based on quoted market prices, where available, or on current rates offered to
the Company for debt with similar terms and maturities. Unless otherwise
disclosed, the fair value of financial instruments approximates their recorded
values. See Note 21.

Stock Options:

Effective
January 1, 2006, the Company adopted Statement of Financial Accounting
Standards No. 123R, Share-Based Payment(SFAS
123R). Because the Company is a debt registrant, it is considered a nonpublic
company for purposes of applying SFAS 123R. Prior to the AHA Acquisition, all
stock purchase and option plans outstanding were associated with common shares
of Holding. In addition, because the shares underlying managements stock
options were accounted for by Holding as liabilities under Statement of
Financial Accounting Standards No. 150, Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and
Equity (SFAS 150), the stock options were considered liabilities
under SFAS 123R. Since the Company meets the definition of a private company
and the stock options were considered liabilities, the Company was permitted to
choose its valuation approach as a matter of accounting policy. The Company
elected to account for its stock options using the intrinsic value method. SFAS
123R requires the Company to make this valuation at each balance sheet date and
record any gain or loss in the Companys consolidated statement of operations.

The
adoption on January 1, 2006 had no impact on the Companys consolidated
financial statements because at adoption, all issued options were
out-of-the-money, as they all had an exercise price of $220.31 per share
compared to a fair value of $160 per share. On January 1, 2006, the Company had
two stock-based compensation plans, with 284 vested options and 12,621 unvested
options. The 12,621 unvested options had a total weighted average remaining
term of 4.2 years.

As
a result of the change in control as described in Note 3, the Company incurred
$1.5 of compensation cost related to the remainder of the unvested Stock
Options held by employees and directors of Remington and the conversion of
deferred shares to equity held by employees of Remington, which was recorded in
other income for the period ended May 31, 2007. On the Closing Date, all of the
outstanding Stock Options immediately vested subject to the applicable change
in control provisions in Holdings 1999 Stock Incentive Plan and 2003 Stock
Option Plan. Remington made option cancellation payments in the aggregate of
approximately $0.7 on the Closing Date, which represents the purchase price of
$330.47 per share less the strike price of $220.31 with respect to each Stock
Option less related expenses, amounts placed in escrow and related taxes. In
addition, on the Closing Date, the deferred shares were converted to equity and
subsequently purchased by AHA.

Prior to the effective date, the stock-based compensation plans were accounted
for under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees
(APB 25) and related interpretations, and had adopted the disclosure-only
provisions of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation
(SFAS 123), as amended. Pro-forma information regarding the impact of total
stock-

74

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

based
compensation on net income for prior periods is also required by SFAS 123R.
Under APB 25, generally no cost was recorded for stock options issued to
employees unless the option exercise price was below fair value at the time
options were granted. Since all options were granted at exercise prices equal
to the estimated fair value of the underlying Common Stock, no compensation
expense was ever recognized with respect to the grant of any outstanding stock
options.

Had
compensation expense for such option grants been recognized under SFAS No. 123
based on the fair value of such options during the years ended December 31,
2005, the Companys net loss on a pro forma basis would not have had a material
impact on the Company and would have appeared as follows:

2005Net Loss

As Reported

$
(16.9
)Add:

Stock-based employee compensation expense included in reported net
  loss, net of related tax effects


Deduct:

Total stock-based employee compensation expense determined under fair
  value based method for all awards, net of related tax effects


Net Loss

Pro forma

$
(16.9
)Income Taxes:

The
Company accounts for income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to be applied to taxable income in the years
in which those temporary differences are expected to be recovered or settled. A
valuation allowance is recorded when it is more likely than not that the
deferred tax asset will not be recognized.

Effective
January 2007, the Company adopted the provisions of FASB Interpretation
No. 48, Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48
clarifies the accounting for uncertainty in income taxes recognized in an
enterprises financial statements in accordance with SFAS No. 109,
Accounting for Income Taxes. FIN 48 requires a company to evaluate whether
the tax position taken by a company will more likely than not be sustained upon
examination by the appropriate taxing authority. It also provides guidance on
how a company should measure the amount of benefit that the company is to
recognize in its financial statements. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The Companys reassessment of our tax
positions in accordance with FIN 48 did not have a material impact on our
results of operations, financial condition or liquidity. The Companys
continuing practice is to recognize interest and/or penalties related to income
tax matters in income tax expense.

The
Company has a tax sharing agreement among Holding and its subsidiaries
providing that consolidated federal and state tax liabilities are allocated
among the members with positive taxable income. Therefore, the agreement does
not provide for payment to Holding for losses that are availed of by the
profitable members of the affiliated group. Because the Company files its
income taxes in a consolidated tax return with AHA, the 100% owner of our sole
stockholder, Holding, the cash taxes paid or received supplemental cash flow
disclosure reflects the total impact of any cash taxes paid or received for the
Company, as well as any cash taxes paid or received on behalf of Holding.

Product
Liability:

The
Company provides for estimated defense and settlement costs related to product
liabilities when it becomes probable that a liability has been incurred and
reasonable estimates of such costs are available in accordance with Statement
of Financial Accounting Standards No. 5, Accounting for Contingencies(SFAS 5).
The Company maintains insurance coverage for product liability claims, subject
to certain policy limits and to certain self-insured retentions for personal
injury or property damage relating to occurrences arising after
December 1, 1993. The current insurance policy extends through
November 30, 2008. Product liabilities are recorded at the Companys best
estimate

75

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

of the most probable
exposure in accordance with SFAS 5, including consideration of historical
payment experience and the self-insured retention limits. For the years ended
December 31, 2007, 2006 and 2005, there were no recoveries recorded. The
Companys estimate of its liability for product liability cases and claims
outstanding at December 31, 2007 and 2006 was $12.4 and $10.5, respectively.
Management uses independent advisors in their determination of the accrual.
Associated with product liability cases, the Company has also recorded a
receivable in Other Noncurrent Assets of $3.7 and $0.6, respectively, at
December 31, 2007 and 2006 for the estimated liabilities expected to be
recovered through insurance coverage. The Company made total payments in 2007,
2006, and 2005 of $1.4, $3.2 and $1.5, respectively (including pre-Asset
Purchase occurrences for which the Company assumed responsibility) related to
defense and settlement costs. See Note 18.

As
December 31, 2007, product liability is discounted to its present value at a
discount rate of 4.75%. The aggregate undiscounted product liability, net of
estimated recoveries from insurance, at December 31, 2007 was $9.5. Expected
payments for each of the five succeeding years and aggregate amount thereafter
are:

Year

Amount2008


$
3.12009



2.42010



1.62011



0.92012



0.5Thereafter



1.2Workers
Compensation:

As
December 31, 2007, workers compensation is discounted to its present value at a
discount rate of 4.75%. The aggregate undiscounted product liability, net of
estimated recoveries from insurance, at December 31, 2007 was $4.3. Management
uses independent advisors in their determination of the accrual. Expected
payments for each of the five succeeding years and aggregate amount thereafter
are:

Year

Amount2008


$
1.82009



1.12010



0.82011



0.52012



0.1Thereafter



0.0Revenue
Recognition:

Sales,
net of an estimate for discounts, returns, rebates and allowances, and related
cost of sales are recorded in income when goods are shipped at which time risk
of loss and title transfers to the customer in accordance with Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements (SAB 101), as
amended by Staff Accounting Bulletin No. 104, Revenue Recognition (SAB
104). Sales are presented net of Federal Excise Taxes of $27.2, $12.1, $37.4
and $34.0 for the successor period from June 1, 2007 through December 31, 2007,
the predecessor period from January 1, 2007 through May 31, 2007, and the years
ended December 31, 2006 and 2005, respectively.

The
Company has historically followed the industry practice of selling firearms in
certain sales distribution channels pursuant to a dating plan, allowing the
customer to purchase these products commencing in December (the start of the
Companys dating plan year) and to pay for them on extended terms. Discounts
are offered for early payment under this plan. The Company believes that
allowing extended payment terms for early orders helps to level out the demand
for these otherwise seasonal products throughout the year and accordingly helps
facilitate a more efficient manufacturing schedule. Historically, use of the dating
plan has had the effect of shifting some firearms sales from the second and
third quarters to the first and fourth quarters. As a competitive measure, the
Company also offers

76

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

extended terms
on select ammunition purchases. Use of the dating plans, however, also results
in deferral of collection of accounts receivable. While we have historically
followed the industry practice of selling products pursuant to a dating plan,
we have commenced to shorten the duration of these terms in order to increase
cash flow and working capital. Customers do not have the right to return unsold
products.

Shipping and
Handling Costs:

Shipping
and handling costs are included in Selling, General and Administrative expense
and are expensed as incurred. Shipping and handling costs totaled $7.9, $4.5,
$12.3 and $12.4, for the successor period from June 1, 2007 through December
31, 2007, the predecessor period from January 1, 2007 through May 31, 2007, and
the years ended December 31, 2006 and 2005, respectively.

Advertising and
Promotions:

Advertising
and promotional costs including print ads, commercials, catalogs, brochures and
co-op are expensed during the year incurred. Advertising and promotional costs
totaled $4.4 for the successor period from June 1, 2007 through December 31,
2007, $8.0 for the predecessor period from January 1, 2007 through May 31,
2007, $11.1 in 2006 and $10.5 in 2005. The Company licenses certain of its
brands and trademarks. The income from such licensing was $2.3 for the
successor period from June 1, 2007 through December 31, 2007, $1.2 for the
predecessor period from January 1, 2007 through May 31, 2007, $3.6 in 2006 and
$2.6 in 2005, which is reflected in Other Income, net.

Research and
Development Costs:

Internal
research and development costs including salaries, administrative expenses,
building operating costs of our research and development facility, and related
project expenses are expensed as incurred. Research and development costs
totaled $3.6, $2.7, $6.4 and $5.9 for the successor period from June 1, 2007
through December 31, 2007, the predecessor period from January 1, 2007 through
May 31, 2007 and the years ended December 31, 2006 and 2005, respectively.

Self-Insurance:

The
Company is self-insured for elements of its employee benefit plans including,
among others, medical, workers compensation and elements of its property and
liability insurance programs, but limits its liability through stop-loss
insurance and annual plan maximum coverage limits. Self-insurance liabilities
are based on claims filed and estimates for claims incurred but not yet
reported.

Pension and
Postretirement:

The
Company adopted Statement of Financial Accounting Standards No. 158, Accounting
for Defined Benefit Pension and Other Postretirement Plans (SFAS
158) as of December 31, 2007. SFAS 158 requires the Company to recognize the
funded status of its defined benefit post retirement plan in the Companys
statement of financial position. The funded status was previously disclosed in
the notes to the Companys financial statements, but differed from the amount
recognized in the statement of financial position. SFAS 158 does not change the
accounting for the Companys defined contribution plan. The implementation of
SFAS 158 had the effect of reclassifying approximately $13.6 of expected
contributions to the plan to be made in 2008 from current to long-term
liabilities.

Use of
Estimates:

The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

77

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

Recent
Accounting Pronouncements:

In
September 2006, the FASB issued SFAS No. 157, Fair
Value Measurements(SFAS 157). SFAS 157 defines fair value,
establishes a framework for measuring fair value, and expands disclosure
requirements regarding fair value measurement. Where applicable, SFAS 157
simplifies and codifies fair value related guidance previously issued within
GAAP. Although SFAS 157 does not require any new fair value measurements, its
application may, in certain instances, change current practice. SFAS 157 is
effective for us in 2008. We expect the impact, if any, of adopting SFAS 157 to
be minimal on our results of operations, financial condition and liquidity.

In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities  Including an amendment of FASB Statement No.
115 (SFAS 159). SFAS 159 permits an entity to elect fair value as
the initial and subsequent measurement attribute for many financial assets and
liabilities. Entities electing the fair value option would be required to
recognize changes in fair value in earnings. Entities electing the fair value
option are required to distinguish, on the face of the statement of financial
position, the fair value of assets and liabilities for which the fair value
option has been elected and similar assets and liabilities measured using
another measurement attribute. SFAS 159 will become effective for the Company
as of January 1, 2008. The adjustment to reflect the difference between the
fair value and the carrying amount would be accounted for as a cumulative-effect
adjustment to retained earnings as of the date of initial adoption. We expect
the impact, if any, of adopting SFAS 159 to be minimal on our Consolidated
Financial Statements.

In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial 
Statements an Amendment of ARB 51(SFAS 160). This standard will
improve, simplify, and converge internationally the reporting of noncontrolling
interests in consolidated financial statements. SFAS 160 requires all entities
to report noncontrolling (minority) interests in subsidiaries in the same way -
as equity in the consolidated financial statements. Moreover, SFAS 160 requires
that transactions between an entity and noncontrolling interests be treated as
equity transactions. SFAS 160 is effective for fiscal years beginning after
December 15, 2008. The Company is currently evaluating the impact that adopting
SFAS 160 will have on its results of operations, financial condition and
equity.

In
December 2007, the FASB issued SFAS No. 141 (revised 2007) Business Combinations (SFAS 141(R)).
SFAS 141(R) retains the fundamental requirements of the original
pronouncement requiring that the purchase method be used for all business
combinations. SFAS 141(R) defines the acquirer as the entity that obtains
control of one or more businesses in the business combination, establishes the
acquisition date as the date that the acquirer achieves control and requires
the acquirer to recognize the assets acquired, liabilities assumed and any
non-controlling interest at their fair values as of the acquisition date.
SFAS 141(R) also requires that acquisition-related costs be recognized
separately from the acquisition. SFAS 141(R) amends the goodwill impairment
test requirements in SFAS 142. For a goodwill impairment test as of a date
after the effective date of SFAS 141(R), the value of the reporting unit and
the amount of implied goodwill, calculated in the second step of the test, will
be determined in accordance with the measurement and recognition guidance on
accounting for business combinations under SFAS 141(R). This change could
effect the determination of what amount, if any, should be recognized as an
impairment loss for goodwill recorded before the effective date of SFAS 141(R).
This accounting will be required when SFAS 141(R) becomes effective (January 1,
2009 for the Company) and applies to goodwill related to acquisitions accounted
for originally under SFAS 141 as well as those accounted for under SFAS 141(R).
The Company has $61.0 of goodwill at December 31, 2007 related to previous
business combinations. The Company has not determined what effect, if any, SFAS
141(R) will have on the results of its impairment testing subsequent to
December 31, 2008.

Note 7Concentrations of Credit Risk

Concentrations
of credit risk with respect to trade accounts receivable are generally
insignificant, except as noted below, due to the large number of customers
comprising the Companys customer base. The Company reviews a customers credit
history and, in most cases, financial condition before extending credit. An
allowance for doubtful accounts is established based upon factors surrounding
the credit risk of specific customers, historical trends and other information.
Bad debt expense, net of any recoveries, was ($0.1) in 2007 and $0.8 and ($0.1)
for years ended 2006 and 2005, respectively. The allowance for doubtful
accounts amounted to $0.7 as of December 31, 2007 and $1.2 as of December 31,
2006.

78

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data)

Sales
to the Companys largest customer, Wal-Mart, comprised approximately 17% of
sales in 2007, 18% of sales in 2006 and 17% of sales in 2005. No other customer
accounted for sales equal to or greater than 10% of sales for the years
presented. The accounts receivable balance from Wal-Mart comprised
approximately 13% and 11% of total outstanding accounts receivable at December
31, 2007 and 2006, respectively.

At
December 31, 2007 and 2006, one other customer comprised approximately 11% and
12%, respectively, of the outstanding accounts receivable balance. No other
customers accounted for accounts receivable greater than 10% at December 31,
2007 or 2006.

Note 8Inventories

At
December 31, Inventories  net, consisted of the following:

Successor

Predecessor2007

2006Raw
 Materials

$
22.7

$
24.1Semi-Finished
 Products


27.1


23.5Finished
 Products


67.1


63.2Total

$
116.9

$
110.8Note 9Property, Plant and Equipment

At December
31, Property, Plant and Equipment consisted of the following:

Successor

Predecessor2007

2006Land

$
13.7

$
1.5Building and
 Improvements


38.5


28.0Equipment
 Leased Under Capital Leases


0.9


5.8Machinery
 and Equipment


52.4


152.4Construction
 in Progress


5.5


3.4Subtotal


111.0


191.1Less:
 Accumulated Depreciation


(8.3)


(121.8
)Total

$
102.7

$
69.3Depreciation
expense for the seven months ended December 31, 2007 was $8.3. Depreciation
expense for the five months ended May 31, 2007 was $4.2. Depreciation expense
for year-to-date periods December 31, 2006 and 2005 were $10.0, and $9.6,
respectively. Accumulated depreciation on assets leased under capital leases
was $0.2 and $4.8 as of December 31, 2007 and 2006, respectively.

Note 10Goodwill and Other Intangible Assets

The
carrying amount of goodwill and identifiable intangible assets attributable to
each reporting segment is outlined in the following tables. As disclosed in
Note 5, the Company recorded impairment charges related to goodwill and
identifiable intangible assets associated with its Clay Targets business in
March 2005. No other impairment provisions were necessary during 2007, 2006 or
2005.

79

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data)

The
carrying amount of goodwill and identifiable intangible assets attributable to
each reporting segment are outlined in the following tables:

Successor

PredecessorGoodwill


December 31,
 2007

December 31,
 2006Firearms

$
29.7


$
12.8Ammunition


14.5



5.2All Other


16.8



Total

$
61.0


$
18.0Successor

PredecessorIdentifiable
Intangible Assets


December 31,
 2007

December 31,
 2006Firearms

$
46.8


$
20.4Ammunition


10.5



19.4All Other


15.7



1.3Total


73.0



41.1Less:
 Accumulated Amortization


(1.4
)


Total

$
71.6


$
41.1As
part of the application of purchase accounting, the Company recorded an initial
estimate associated with goodwill and identifiable intangible assets to each
reporting segment of $67.0 and $73.9, respectively. Subsequent to that, net
adjustments of ($6.0) were made to the initial estimate of goodwill to decrease
the balance to $61.0 and net adjustments of ($0.9) were made to identifiable
intangible assets to decrease the balance to $73.0.

The
following table is a summary of the initial preliminary estimate as well as
subsequent adjustments and accumulated amortization by major intangible asset:

June 1, 2007
 Balance

Net
 Adjustments

Dec. 31,
 2007
 Balance

Accumulated
 Amortization

Net Balance

Amortization
 PeriodGoodwill


$
67.0



$
(6.0
)


$
61.0




N/A



$
61.0


IndefiniteIdentifiable
Intangible AssetsTradenames and Trademarks


$
39.4



$




$
39.4




N/A



$
39.4


IndefiniteCustomer
Relationships



26.4




(0.9
)



25.5




(0.8
)



24.7


20 YearsLicense
Agreements



8.4









8.4




(0.7
)



7.7


7 YearsInternally
Developed Software



0.1









0.1









0.1


2 YearsLeasehold
Interest



(0.4
)








(0.4
)



0.1




(0.3
)

3.5 YearsTotal
Identifiable Intangible Assets


$
73.9



$
(0.9
)


$
73.0



$
(1.4
)


$
71.6We estimate
annual amortization for identifiable intangible assets over the next five
calendar years to be as follows:

Year

Amount2008


$ 2.42009


2.42010


2.42011


2.52012


2.580

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

Note 11Other Accrued Liabilities

At
December 31, Other Accrued Liabilities consisted of the following:

Successor

Predecessor2007

2006Retiree
 Benefits

$
0.8

$
18.6Marketing


10.4


9.2Healthcare
 Costs


5.1


6.1Workers
 Compensation


1.8


4.5Incentive
 Compensation


6.8


2.1Other


10.0


11.8Total

$
34.9

$
52.3Note 12Warranty Accrual

The
Company provides consumer warranties against manufacturing defects on all
firearm products manufactured in the United States. Estimated future warranty
costs are accrued at the time of sale, using the percentage of actual
historical repairs to shipments for the same period, which is included in other
accrued liabilities. Product modifications or corrections are voluntary steps
taken by the Company to assure proper usage or performance of a product by
consumers. The cost associated with product modifications and or corrections
are recognized in accordance with SFAS 5, and charged to operations. Activity
in the warranty accrual consisted of the following for the periods:

Successor

PredecessorJune 1-
 December 31,
 2007

January 1-
 May 31,
 2007

Year ended
 December 31,
 2006Beginning
 warranty accrual

$
0.7


$
0.8


$
0.8Current
 period accruals


1.3



1.0



2.7Current
 period charges


(1.3
)


(1.1
)


(2.7
)Ending
 warranty accrual

$
0.7


$
0.7


$
0.8In
addition to our warranty accrual, we have a nationwide product safety program
under which we offer to clean, inspect and modify certain bolt action
centerfire firearms manufactured prior to 1982 to remove the bolt-lock feature.
As of December 31, 2007 and 2006, our accrual for the costs of the product
safety program was less than $0.1.

Note 13Retiree Benefits

Defined Benefit Pension Plans:

Adoption
of SFAS No. 158:

The
Company sponsors a defined benefit pension plan (the Plan) and a supplemental
defined benefit pension plan (the SERP). For disclosure purposes, the Plan
and the SERP have been combined. On December 31, 2007 the Company adopted SFAS
No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plansan amendment of FASB Statements
No. 87, 88, 106, and 132R (SFAS 158). SFAS 158 requires the
Company to recognize the funded status of its defined benefit post retirement
plan in the Companys statement of financial position. The funded status was
previously disclosed in the notes to the Companys financial statements, but
differed from the amount recognized in the statement of financial position.
SFAS 158 does not change the accounting for the Companys defined contribution
plan.

81

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

The
adoption of SFAS 158 had the following effect on the Companys statement of
financial position as of December 31, 2007 related to the Plan and the SERP.
There was no impact on the Companys Postretirement Benefit Obligation:

As of December 31, 2007Prior to
 adoption of
 FASB 158

Effect of
 adopting FASB
 158

As
 AdjustedCurrent
 Liability for Pension Benefits

$ 13.8


($
13.6
)


$
0.2Long-term
 Liability for Pension Benefits

$ 13.5


$
14.6



$
28.1The
adoption of SFAS 158 did not affect the Companys statement of operations for
the year ended December 31, 2007, or any prior periods.

Pension
Curtailment:

As
part of a new collective bargaining agreement reached on October 26, 2007, an
amendment was made to the Plan for our hourly paid employees to be effective
January 1, 2008 (the 2007 Amendment). In addition, on October 9, 2006, the
Companys Board of Directors approved amendments to the Plan and the SERP for
our salaried employees (the 2006 Amendments) also to be effective January 1,
2008. As a result of the amendments made to the Plan and SERP, as approved by
the Board of Directors since 2006, all future benefits were frozen as of
January 1, 2008. For service accrued up to January 1, 2008, the pension
calculations did not change. The amendments resulted in the Company recognizing
curtailment gains of $6.4 and $7.4 in 2007 and 2006, respectively.

Impact
of Purchase Accounting:

The
AHA Acquisition resulted in a new basis for the value of the Plan and the SERP.
Accordingly, the Company increased its estimated liability to equal the
estimated difference between the fair value of plan assets and the estimated
projected benefit obligation in connection with applying the purchase method of
accounting. As of May 31, 2007, this resulted in increasing the liability for
the Plan by $9.0 and the SERP by $0.2. The Company utilized the actuarial pension
assumptions from December 31, 2006, including a discount rate of 6.0%.

In
connection with the AHA Acquisition, the obligations and assets related to our
pension plans were valued at fair value as of May 31, 2007, the date of AHA
Acquisition, using a discount rate of 6.0%, as follows:

Benefit
 Obligations at Fair Value

$
182.2Assets held
 by defined benefit pension plan, at fair value


148.6Excess of
 benefit obligations over assets


33.6Less
 previously recorded benefit plan obligations recorded by predecessor


(24.4
)Adjustment
 to benefit plan obligation

$
9.282

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data)

Results
at December 31, 2007:

The
following provides a reconciliation of benefit obligations, plan assets and
funded status of the Plan and the SERP:

Change in Benefit Obligation:

Successor

PredecessorJune 1-
December 31,
2007

January 1-
May 31,
2007

2006Benefit
  Obligation at Beginning of Period

$
182.2

$
178.7

$
176.1Service Cost


2.9


2.0


5.1Interest
  Cost


6.3


4.4


10.0Plan
  Amendments/Curtailment


(6.4)





(7.4
)Actuarial
  Assumption Changes


(1.0)





(6.1
)Actuarial
  (Gain)/Loss


1.0





6.9Benefits
  Paid


(4.9)


(2.9
)

(5.9
)Benefit
  Obligation at End of Period

$
180.1

$
182.2

$
178.7Change in Plan Assets:

Successor

PredecessorJune 1-
December
31, 2007

January 1-
May 31,
2007

2006Fair Value
  of Plan Assets at Beginning of Period

$
148.6

$
135.1

$
117.4Actual
  Return on Plan Assets


(3.0)


10.5


16.1Employer
  Contributions


11.1


5.9


8.1Benefits
  Paid and Expenses


(4.9)


(2.9
)

(6.5
)Fair Value
  of Plan Assets at End of Period

$
151.8

$
148.6

$
135.1Successor

PredecessorJune 1-
December
31, 2007

January 1-
May 31,
2007

2006Funded
  Status

$
(28.3)

$
(33.6
)
$
(43.6
)Unamortized
  Prior Service Cost








(0.4
)Unrecognized
  Net Actuarial Loss








17.5Net amount
  recognized in the balance sheet

$
(28.3)

$
(33.6
)
$
(26.5
)Amounts
recognized in the balance sheet as of:

Successor

PredecessorDecember
31, 2007

May 31,
2007

2006Accrued
  Benefit Liability

$
(28.3)

$
(33.6
)
$
(36.0
)Accumulated
  other comprehensive income


5.4





9.5Deferred Tax
  Assets


3.3





Net Amount
  Recognized

$
(19.6)

$
(33.6
)
$
(26.5
)The
accrued benefit liability is recorded on the consolidated balance sheet in the
Retiree Benefits, net of Current Portion, as well as in the Other Accrued
Liabilities line item as described in Note 11.

83

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data)

Following
is certain information about our pension plans that have accumulated benefit obligations
in excess of the fair value of their plan assets as of:

Successor

PredecessorDecember 31,
2007

May 31,
2007

2006Projected
  benefit obligation

$
180.1

$
182.2

$
178.7Accumulated
  benefit obligation


180.1


174.7


171.1Fair value
  of plan assets


151.8


148.6


135.1Components of Net Periodic Pension Cost:

Successor

Predecessor2007

2007

2006

2005June 1 
December 31

January 1 
May 31

December 31

December 31Service Cost

$
2.9

$
2.0

$
5.1

$
5.0Interest
  Cost


6.3


4.4


10.0


9.5Return on
  Assets


(6.7
)

(4.4
)

(9.7
)

(8.7
)Amortization
  of Prior Service Cost





(0.1
)

(0.9
)

(0.2
)Recognized
  Net Actuarial Loss


0.9


2.0


7.2


5.9Net Periodic
  Pension Cost


3.4


3.9


11.7


11.5Curtailment
  Gain


(6.4
)




(7.4
)

Total Cost

($
3.0
)
$
3.9

$
4.3

$
11.5Weighted average assumptions
used to
  determine net periodic benefit cost for years ended December 31:

2007

2006

2005Discount Rate


6.25
%

5.75
%

6.00
%Expected Long-Term return on
plan assets


8.00


8.00


8.00Rate of Compensation
Increase


4.00


4.00


4.00Weighted average assumptions
used to
  determine benefit obligations at December 31:

2007

2006

2005Discount Rate


6.00
%

6.00
%

5.75
%Rate of Compensation
Increase


4.00


4.00


4.00Our
policy is to review the pension assumptions annually. Pension benefit income or
expense is determined using assumptions as of the beginning of the year, while
the funded status is determined using assumptions as of the end of the year.
The assumptions are determined by management and established at the respective
balance sheet date using the following principles: (1) The expected long-term
rate of return on plan assets is established based upon historical actual asset
returns and the expectations of asset returns over the expected period to fund
participant benefits based on the current investment mix of the Plan; (2) The
discount rate is set based on the yield of high quality fixed income
investments expected to be available in the future when cash flows are paid;
and (3) The rate of increase in compensation levels is established based on
managements expectations of current and foreseeable future increases in total
eligible compensation, while maintaining a consistent inflation component for
all economic assumptions. In addition, management considers advice from
independent actuaries on each of these three assumptions.

Our
investment strategy for Plan assets is based on the long-term growth of
principal while attempting to mitigate overall risk to ensure that funds are
available to pay benefit obligations. The Plan has adopted a strategic asset
allocation designed to meet the Plans long-term obligations. The Plans assets
are invested in a variety of investment classes, including domestic and
international equities, domestic and international fixed income securities and
other investments. Allowable investment structures include mutual funds,
separate accounts, commingled funds, and collective trust funds. Prohibited
investments are defined as commodities, private placements, and derivative
instruments used solely for leverage. In 2007 and 2006, upon recommendation of
the Companys investment advisors,

84

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in millions, except per share data)

the Companys
Benefits and Investments Committee elected to invest in certain private
investment (hedge) funds that are deemed permitted under the Companys current
investment strategy. These private investment funds are not currently subject
to any direct regulation by the Securities and Exchange Commission, the
National Association of Securities Dealers, or any other federal regulating
commissions.

The
Plan weighted average asset allocations at December 31, 2007 and 2006 by asset
category are as follows:

Target
  Allocations

Actual
  Allocations2007

2006

2007

2006Asset Category:Domestic
  equity funds


50.0
%

50.0
%

43.0
%

47.0
%International
  equity funds


15.0


15.0


16.0


18.0Domestic
  fixed income funds


20.0


20.0


19.0


17.0International
  fixed income funds


5.0


5.0


5.0


5.0Private
  investment (hedge) funds


10.0


10.0


12.0


12.0Cash and
  cash equivalents








5.0


1.0Total


100.0
%

100.0
%

100.0
%

100.0
%Anticipated Contributions:

The
Company expects to make cash contributions of approximately $13.6 to the Plan
during the 12 months ending December 31, 2008.

Estimated
Future Benefit Payments  Following is a summary, as
of December 31, 2007, of the estimated future benefit payments from the Plans
to our retirees in each of the next five fiscal years and in the aggregate for
five fiscal years thereafter.

2008


$  7.72009


8.52010


9.32011


10.02012


10.9Years
  2013-2017


61.6Savings Plans:

Prior
to January 1, 2006, the Company sponsored a qualified defined contribution plan
and matched 50% of a participants contributions up to a maximum of 6% of a
participants compensation. All employees hired after May 31, 1996 were also
eligible for a discretionary contribution. The Companys matching expense and
contribution to this plan was approximately $0.4 in 2007, approximately $0.5 in
2006 and approximately $1.5 in 2005.

Effective
January 1, 2006, the Company established a second qualified defined
contribution plan that matches 100% of the first 4% of a participants
contributions of a participants compensation (the 401(k) Plan). All
employees hired after May 31, 1996 were also eligible for a discretionary
contribution. The 401(k) Plan includes the employees of the Company not covered
under the collective bargaining agreement in Ilion, New York. The Companys
matching expense and contribution to this plan was approximately $1.9 in 2007
and $1.7 in 2006. The existing qualified defined contribution plan that matches
50% of a participants contributions up to a maximum of 6% of a participants
compensation remains for all employees not included in the 401(k) Plan.

85

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

Effective
January 1, 1998, the Company adopted a non-qualified defined contribution plan.
The Companys matching expense and contribution was $0.0 in 2007, $0.1 in 2006,
and approximately $0.2 in 2005. This plan was amended in 2006 to allow
participants to make an election to receive a distribution of their full
accounts balance. On January 16, 2007, $2.1 was distributed to the
participants.

Postretirement Benefit Plan:

The
Company sponsors an unfunded postretirement defined benefit plan which provides
certain employees and their covered dependents and beneficiaries with retiree
health and welfare benefits.

Impact
of Purchase Accounting:

The
AHA Acquisition resulted in a new basis for the value of the postretirement
defined benefit plan. Accordingly, the Company decreased its estimated
liability to equal the estimated projected benefit obligation in connection
with applying the purchase method of accounting. This resulted in decreasing
the liability for the plan by $9.5.

Change in Benefit Obligation:

Successor

PredecessorJune 1-
December
31,2007

January 1-May
31,2007

2006Benefit
  Obligation at Beginning of Year

$
15.3

$
15.6

$
22.6Service Cost


0.3


0.2


0.7Interest
  Cost


0.5


0.4


1.3Amendments








(6.1
)Actuarial
  Loss


(0.6
)

(0.4
)

(1.8
)Benefits
  Paid


(0.3
)

(0.5
)

(1.1
)Benefit
  Obligation at End of Year

$
15.2

$
15.3

$
15.6Accrued Benefit Cost:

Successor

PredecessorJune 1-
  December 31,2007

January 1-
  May 31,2007

2006Unfunded
  Status

$
(15.2
)
$
(15.3
)
$
(15.6
)Unrecognized
  Net Actuarial Loss (Gain)





0.5


0.9Unrecognized
  Prior Service Cost





(10.0
)

(10.5
)Accrued
  Postretirement Benefit Obligation

$
(15.2
)
$
(24.8
)
$
(25.2
)The
accrued postretirement benefit obligation is recorded on the consolidated
balance sheet in the Retiree Benefits, net of Current Portion line.

86

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

Components of Net Periodic Benefit Cost for
the year ended December 31:

Successor

Predecessor2007

2007

2006

2005June 1

December 31

January
1 
May 31

December
31

December
31Service Cost

$
0.2

$
0.2

$
0.7

$
0.6Interest
 Cost


0.5


0.4


1.3


1.3Net
 Amortization and Deferral


(0.7
)

(0.5
)

0.1


Net Periodic
 Benefit Cost

$
0.0

$
0.1

$
2.1

$
1.9Weighted average assumptions used to
determine net periodic benefit cost for years ended December 31:

Successor

Predecessor2007

2007

2006

2005Discount
 Rate

6.00
%

6.00
%

5.75
%

6.00
%Rate of
 compensation increase

4.00
%

4.00
%

4.00
%

4.00
%Assumed
Healthcare cost trend rates at December 31:

2007

2006

2005Healthcare
 cost trend rate assumed for next year




10.00
%

10.00
%

7.30
%Rate to
 which the cost trend rate is assumed to decline (the ultimate trend rate)




4.25
%

4.25
%

3.00
%Year that
 the rate reaches the ultimate trend rate




2012


2011


2011Weighted
average assumptions used to determine benefit obligations at December 31:

Successor

Predecessor2007

2007

2006

2005Discount
 Rate

6.00
%

6.00
%

5.75
%

6.00
%Rate of
 compensation increase

4.00
%

4.00
%

4.00
%

4.00
%Assumed
health care cost trend rates have a significant effect on the amounts reported
for the health care plans. A one-percentage point change in assumed health care
cost trend rates would have the following effects:

1-Percentage Point
 Increase

1-Percentage Point
 DecreaseEffect on
 total of service and interest cost


$



$Effect on
 accumulated postretirement benefit obligation






Estimated
Future Benefit Payments  Following is a summary, as
of December 31, 2007, of the estimated future benefit payments for our
postretirement benefit plan in each of the next five fiscal years and in the
aggregate for five fiscal years thereafter.

2008

$
0.62009


0.72010


0.82011


0.92012


1.1Years
 2013-2017


6.187

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data)

Note 14Debt

Short-term
debt of $3.5 and $3.1 at December 31, 2007 and 2006, respectively, consists of
an unsecured, fixed interest agreement for financing the Companys insurance
premiums. The interest rate under this agreement was 4.9% and 5.5% at December
31, 2007 and 2006, respectively.

Long-term
debt at December 31, 2007 and 2006 consisted of the following:

Successor

Predecessor2007

2006Revolving
 Credit Facility


$




$
19.410.5% Senior
 Subordinated Notes due 2011



203.2




200.0Term Loan



25.0




Capital
 Lease Obligations (Note 15)



0.7




1.1Due to RACI
 Holding, Inc.



0.9




0.9Subtotal



229.8




221.4Less:
 Current Portion



4.8




0.4Total


$
225.0



$
221.0The
AHA Acquisition resulted in a new basis of the value of the Companys 101⁄2%
Senior Subordinated Notes due 2011 (the Notes). Accordingly, the Notes were
adjusted to their estimated fair value of $203.8 as of May 31, 2007 estimates.
The premium associated with the adjustment will be amortized into interest
expense over the remaining term of the debt. In addition, approximately $5.2 of
existing debt acquisition costs were eliminated in purchase accounting as a
result of the AHA Acquisition. Debt acquisition costs associated with obtaining
waivers, consents and amendments in the amount of $4.2 related to the Notes and
$1.0 related to the revolver have been capitalized.

On
March 15, 2006, the Company entered into the Amended and Restated Credit
Agreement, which replaced the credit agreement, dated as of January 24, 2003,
as amended through October 14, 2005, among Remington, RA Factors, Inc.,
Wachovia, as Agent, and the lenders from time to time party thereto (the 2003
Credit Agreement). Existing fees of approximately $1.4 that were previously
capitalized as debt issuance costs were written off as part of the $5.2 of debt
issuance costs written off related to the AHA Acquisition as discussed above.

The
Companys Amended and Restated Credit Agreement provides up to $155.0 of
borrowings under an asset-based senior secured revolving credit facility
through June 30, 2010. Amounts available under the Amended and Restated Credit
Agreement are subject to a borrowing base limitation based on certain
percentages of eligible accounts receivable and eligible inventory in addition
to the minimum availability requirement described below. The Amended and
Restated Credit Agreement also includes a letter of credit sub-facility of up
to $15.0, under which the Company has aggregate outstanding letters of credit
of $4.4 as of December 31, 2007.

Waivers/Amendments to Amended and Restated
Credit Agreement

As
of May 31, 2007, Remington entered into the First Amendment to the Amended and
Restated Credit Agreement by and among Remington, Wachovia, and the lenders
from time to time parties thereto (the First Amendment), which amended the
Amended and Restated Credit Agreement (the Credit Agreement), by and among
the same parties and RA Factors, Inc., which was merged with and into Remington
as of December 31, 2006 and is thus not a separate and distinct party to the
First Amendment. The First Amendment memorializes the consent of Wachovia and
the lenders to the AHA Acquisition (and waiver of any event of default in
connection with the AHA Acquisition) and modifies certain terms and conditions
of the Credit Agreement. Capitalized terms used and not defined herein have the
meanings set forth in the Amended and Restated Credit Agreement.

88

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)


Key terms of the First Amendment include
the following:

(1)
Amending the
 definition of Applicable Margin so that the interest margin applicable to
 loans under the Credit Agreement, as amended, is based on Average Excess
 Availability, which is defined in the First Amendment as the amount obtained
 by adding the aggregate Excess Availability at the end of each day during the
 period in question and dividing such sum by the number of days in such
 period;(2)
Amending the
 definition of Minimum Availability Condition to be fixed at $20.0;(3)
Amending the
 definition of Change of Control so that it relates to AHA rather than the CDR
 Fund and BRS Fund;(4)
Increasing
 the maximum amount of Settlement Loans that may be obtained from Wachovia
 under the Credit Agreement, as amended, from $5.0 to $10.0;(5)
Amending the
 types of permitted transactions between Remington and Affiliates to include
 certain transactions between Remington and AHA and AHAs Affiliates;(6)
Amending the
 types of Restricted Payments that may be made by Remington so that Remington
 could, among other things, make a Distribution to Holding to pay certain
 expenses in connection with the AHA Acquisition and repay the total
 outstanding amount of the Holding Notes;(7)
Eliminating
 the minimum consolidated EBITDA requirement during the Availability Test
 Period; and(8)
Amending the
 Availability Test Period so that the termination coincides with the
 Commitment Termination Date.Second Amendment to Credit Facility

On
November 13, 2007, we entered into the Joinder Agreement, Second Amendment and
Supplement to Amended and Restated Credit Agreement by and among Remington, RA
Brands, L.L.C., Wachovia, and the lenders (the Second Amendment), which
amended the Credit Agreement, among the same parties and RA Factors, Inc., as
amended on May 31, 2007 by the First Amendment, among the same parties other
than RA Factors, Inc., which was merged with and into Remington as of December
31, 2006 and is therefore not a separate and distinct party to the First
Amendment or the Second Amendment. The Second Amendment modifies certain terms
and conditions of the Credit Agreement and the First Amendment. Capitalized
terms used and not defined herein have the meanings set forth in the Credit
Agreement, the First Amendment and the Second Amendment.

The
Second Amendment amended certain terms of the Credit Agreement, as previously
amended by the First Amendment, including by:

(1)
Adding a
 $25.0 Term Loan Commitment against the Remington Trademarks at an interest
 rate of LIBOR (which was 6.84% at December 31, 2007) plus 200 basis points
 with monthly principal payments of $0.5, plus interest, beginning May 1, 2008
 and continuing on the first day of each month thereafter, the final
 installment of which shall be in an amount equal to such Lenders Pro Rata
 share of the remaining principal balance of the Term Loan and shall be
 payable on the Commitment Termination Date;(2)
Increasing
 the maximum commitment of the Revolving Credit Facility from $140.0 to $155.0
 while keeping intact the interest rate margins as established by the First
 Amendment;(3)
Increasing
 the Sub-limit from $70.0 on the Inventory Formula Amount to $77.5;(4)
Amending the
 definition of Minimum Availability Condition from $20.0 to $27.5;(5)
Amending the
 dollar amounts of Average Excess Availability by between $2.0 and $5.0,
 depending on the tier, to which the Applicable Margin for the Euro-Dollar
 Loans and Base Rate Loans applies; and(6)
Adding RA
 Brands, L.L.C. as a new borrower under the Credit Agreement and releasing RA
 Brands, L.L.C. from its obligations under the Subsidiary Guaranty previously
 executed by RA Brands, L.L.C.89

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

We
executed the Second Amendment to provide additional capacity and flexibility to
support strategic initiatives including, but not limited to, factory
improvements, penetration of certain sales channels, new product development,
one or more potential acquisitions and other corporate purposes.

In
connection with the closing of the Marlin Acquisition, and pursuant to the
Joinder Agreement, each of Marlin and H&R became a Borrower under the
Amended and Restated Credit Agreement.

The
interest rate margin for the ABR and the Euro-Dollar loans at December 31, 2007
was (0.50%) and 1.00%, respectively. The interest rate under the Companys Term
Loan is LIBOR plus 200 basis points, which at December 31, 2007 was 6.84%. The
weighted average interest rate under the Companys outstanding credit facility
was 7.09% and 7.60% for the year-to-date periods ended December 31, 2007 and
2006, respectively.

As
of December 31, 2007 approximately $59.9 in additional borrowings beyond the
minimum availability requirement of $27.5 was available as determined pursuant
to the Amended and Restated Credit Agreement.

The
Notes became redeemable at the option of the Company, in whole or in part, any
time on or after February 1, 2007. The redemption price range of the principal
amount in 2008 is 103% and 100% in the year 2009 and thereafter. The Notes are
unsecured senior obligations of the Company that are contractually pari passuwith all existing and future
senior indebtedness, if any, of the Company, but are effectively subordinate to
secured indebtedness, including its indebtedness under the Amended and Restated
Credit Agreement to the extent of the assets securing such indebtedness.

The
indenture for the Notes, dated as of January 24, 2003, among the Company, U.S.
Bank National Association, as trustee, and RA Brands, as guarantor, (the
Indenture) and the Amended and Restated Credit Agreement, as amended by the
First Amendment and the Second Amendment, contain various restrictions on the
Companys ability to incur debt, pay dividends and enter into certain other
transactions. In addition, the Indenture permits repurchases of the Notes on
the open market, subject to a $20.0 limitation contained in the Amended and
Restated Credit Agreement. On November 13, 2007, RA Brands was released as a
guarantor of the Companys indebtedness under the Indenture.

Amendments to Indenture

On
May 17, 2007, Remington, as issuer, RA Brands, as guarantor, and U.S. Bank
National Association, as trustee, entered into a supplemental indenture (the
Supplemental Indenture) that became effective on the Closing Date and amended
the existing Indenture. The Supplemental Indenture gives effect to the
amendments described in the Consent Solicitation Statement, dated May 1, 2007,
as supplemented by the Supplement, dated May 16, 2007, pursuant to which
Remington conducted its consent solicitation with respect to the Notes to amend
certain provisions of the Indenture.

The
Supplemental Indenture amended the Indenture in the following ways:

(i)

The term
 Permitted Holder, for the purpose of determining whether a Change of
 Control has occurred under the Indenture, now includes Cerberus-related
 persons rather than persons related to former equity owners of Holding, and
 as a result, the AHA Acquisition (and certain other transactions, so long as
 any Permitted Holder retains voting control (subject to certain exceptions)
 of Remington and the specified composition of the board of directors of
 Remington is maintained, each as described in the definition of Change of
 Control in the Indenture, as amended by the Supplemental Indenture) does not
 constitute a Change of Control under the Indenture and the holders of the
 Notes have no put right as a result of the AHA Acquisition (or such other
 transactions);(ii)

Cerberus
 replaced the former Sponsors under the Indenture and thus Remington is
 permitted to make the payments to Cerberus and its affiliates that it was
 permitted to make to the former Sponsors and their affiliates under the
 Indenture, with the exception of the annual management fee, which was
 permitted pursuant to certain pre-existing consulting agreements with the
 former Sponsors;90

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

(iii)

The
 carve-outs relating to Permitted Holders in sub-section (ii) of the
 definition of the term Change of Control were deleted; and(iv)

The term
 Transaction and related references, including a related restricted payment
 exception, was eliminated from the Indenture.Note 15Leases

Future
minimum lease payments under capital leases and noncancellable operating
leases, together with the present value of the net minimum capital lease
payments at December 31, 2007, are as follows:

Capital
 Leases

OperatingLeasesMinimum
 Lease Payments for Years Ending December 31:2008

$
0.4

$
1.22009


0.2


1.12010


0.1


1.02011





2012





Thereafter





Total Minimum
Lease Payments


0.7

$
3.3Less: Amount
 representing interest


Present Value
of Net Minimum Lease Payments

$
0.7Rental
expenses for operating leases for the seven months ended December 31, 2007 was
$0.9. Rental expenses for operating leases for the five months ended May 31,
2007 was $0.6. Rental expenses for operating leases for year-to-date periods
December 31, 2006 and 2005 were $1.5 and $1.8, respectively. The Company leases
a portion of its equipment under operating leases that expire at various dates
through 2011.

Note 16Stock Purchase, Option Plans and Restricted Stock
Awards

As
a result of the change in control as described in Note 3, the Company incurred
$1.5 and $0.3 of compensation cost in 2007 and 2006, respectively, related to
the remainder of the unvested Stock Options held by employees and directors of
Remington and the deferred shares held by employees of Remington. On the
Closing Date, all of the outstanding Stock Options immediately vested subject to
the applicable change in control provisions in Holdings 1999 Stock Incentive
Plan and 2003 Stock Option Plan. Remington made option cancellation payments in
the aggregate of approximately $0.7 on the Closing Date, which represents the
purchase price of $330.47 per share less the strike price of $220.31 with
respect to each Stock Option less related expenses, amounts placed in escrow
and related taxes. In addition, on the Closing Date the deferred shares were
converted to equity and subsequently purchased by AHA.

As
a result of a merger of AHA and another Cerberus portfolio company in December
2007, certain restricted units in this other Cerberus portfolio company were
converted to performance-based and service-based restricted common stock of
AHA. As these shares were provided to individuals that are now employees of
Remington and the vesting of such shares are based on their employment with
Remington, any
compensation expense related to the remaining vesting period will be recognized
by Remington. The 180,733 unvested common shares vest based on achievement of
certain service and performance criteria at various times through 2010.

Note 17Investment in Unconsolidated Joint
Venture

The
Company entered into a joint venture agreement with ELSAG, Inc., an
unaffiliated third party, which formed the joint venture Remington ELSAG Law Enforcement
Systems, LLC (RELES) in August 2004. RELES sells and services mobile license
plate reading technology products sold to state and local law enforcement
agencies along with certain federal agencies. The agreement provided Remington
a 50% ownership interest. The agreement

91

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

called for
each member to invest 50% of required capital investments and receive 50% of
distributions, with an original maximum contribution amount of $1.5 by each
party.

Since
inception, the Company had made a total of $1.5 (no contributions were made
during 2007) in cumulative cash contributions to RELES and, accordingly, the
Company had no more contractual commitments to fund RELES.

Management
assessed the accounting treatment of RELES under the provisions of FASB
Interpretation No. 46R, Consolidation of
Variable Interest Entities (revised December 2003)  an interpretation of ARB
No. 51(FIN 46R), and APB 18, The
Equity Method of Accounting for Investments in Common Stock(APB
18), and concluded that RELES was a variable interest entity. However, as the
Company was not the primary beneficiary, RELES was accounted for under the
equity method of accounting. Accordingly, an investment was recognized on the
Companys balance sheet (included in Other Noncurrent Assets) at the carrying
value of the Companys cumulative cash contributions to RELES adjusted for the
Companys cumulative equity in losses recorded on the Companys statement of
operations, and the Companys 50% share of RELESs operating results was
recorded in the Companys statement of operations (included in Equity in
Losses from Unconsolidated Joint Venture) during each period that RELES
produced financial results. If the Companys share of cumulative net losses
exceeded the investment in RELES, the Company discontinued recognition of net
losses in accordance with APB 18 since the Company did not guarantee or was not
otherwise committed to fund the obligations of RELES.

During
the second quarter of 2006, the Company reduced its investment in RELES to zero
and discontinued the recognition of net losses.

The
AHA Acquisition resulted in a new basis of the value of the Companys interest
in the joint venture. Accordingly, the Companys investment in the
unconsolidated joint venture was adjusted to a preliminary estimated fair value
as of May 31, 2007 of $2.8 based on a letter of intent less estimated selling
costs.

The
operating agreement of the joint venture provided a provision for ELSAG, Inc.
to acquire the Companys interest in the joint venture upon a change in control.
As a result of the AHA Acquisition, ELSAG, Inc. elected to pursue this option.
On September 26, 2007 (the RELES Closing Date), the Company entered into a
Membership Interest Purchase and Sale Agreement with ELSAG, Inc. and closed the
sale of the Companys 50% interest in RELES to ELSAG, Inc. In full payment for
the transferred interest, ELSAG, Inc. paid the Company $3.0 on the RELES
Closing Date. In relation to the sale of RELES, the Company recorded a gain of
$0.5, which is included in Other Income.

The
following summarizes the Companys investment account balance associated with
RELES at:

Successor

PredecessorAccount

June 1- 
December 31,
2007

January 1- 
May 31, 2007

December 31,
2006

December 31,
2005Investment
 in UnconsolidatedJoint
 Venture

$


$


$


$
0.2Equity in
 Losses fromUnconsolidated
 Joint Venture


0.5





0.4


1.0Note 18Commitments and Contingencies

Purchase Commitments

The
Company has various purchase commitments, approximating $4.4 for 2008, $2.2 for
2009, $1.5 for 2010, $0.6 for 2011 and $0.4 for 2012, for services incidental
to the ordinary conduct of business, including, among other things, a services
contract with its third party warehouse provider. Such commitments are not at
prices in excess of current market prices. Included in the purchase commitment
amount are the Companys purchase contracts with

92

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

certain raw
materials suppliers, for periods ranging from one to seven years, some of which
contain firm commitments to purchase minimum specified quantities. During the
fourth quarter of 2005, the Company entered into a settlement of a contract in
the Firearms reporting segment, recognizing a $1.2 gain in the accompanying
statement of operations included in the Other Income, net line item. That
contract would otherwise have expired in 2012. The Company has leased equipment
that allows the Company to manufacture its own steam supply as a result of the
contract settlement and accordingly is no longer dependent on a third party for
this manufacturing requirement. Otherwise, such contracts had no significant
impact on the Companys financial condition, results of operations, or cash
flows during the reporting periods presented herein.

Product Liability Litigation

Since
December 1, 1993, we have maintained insurance coverage for product liability
claims subject to certain self-insured retentions on a per-occurrence basis for
personal injury or property damage relating to occurrences arising after the
Asset Purchase. We believe that our current product liability insurance
coverage for personal injury and property damage is adequate for our needs. Our
current product liability insurance policy runs from December 1, 2007 through
November 30, 2008 and provides for a self-insured retention of certain
self-insured retention amounts per occurrence. It also includes a limited batch
clause provision. Applicable to our primary Products policy, this allows that a
single retention be assessed when the same defects manufactured in a common lot
or batch results in multiple injuries or damages to third parties. The policy
excludes from coverage any pollution-related liability. Based in part on the
nature of our products, economic conditions, and other events, there can be no
assurance that we will be able to obtain adequate product liability insurance
coverage upon the expiration of the current policy. Certain of our current
excess insurance coverage expressly excludes actions brought by municipalities
as described below.

As
a result of contractual arrangements, we manage the joint defense of product
liability litigation involving Remingtonbrand
firearms and our ammunition products for both Remington and the 1993 Sellers.
As of December 31, 2007, approximately 11 individual bodily injury cases and
claims were pending, primarily alleging defective product design, defective
manufacture and/or failure to provide adequate warnings; some of these cases
seek punitive as well as compensatory damages. We have previously disposed of a
number of other cases involving post-Asset Purchase occurrences by settlement.
Of the individual cases and claims pending as of December 31, 2007, one
involves a matter for which the 1993 Sellers retained liability and are
required to indemnify us. The remaining approximately 11 pending cases involve
post-Asset Purchase occurrences for which we bear responsibility under the
Purchase Agreement.

The
relief sought in individual cases includes compensatory and, sometimes,
punitive damages. Not all complaints or demand letters expressly state the
amount of damages sought. As a general matter, when specific amounts are
provided, compensatory damages sought range from less than $0.1 to more than
$10.0, while demands for punitive damages may range from less than $0.5, to as
much as $100.0. Of the 11 individual post-Asset Purchase claims pending as of
December 31, 2007, where specific initial demands have been made, claimants
purport to seek approximately $18.0 in compensatory and no specific amount in
punitive damages. In the Companys experience, initial demands do not generally
bear a reasonable relationship to the facts and circumstances of a particular
matter, and in any event, typically are reduced significantly as a case
proceeds. The Company believes that its accruals for product liability cases
and claims are a superior quantitative measure of the cost to it of product
liability cases and claims.

Municipal
Litigation

In
addition to the individual cases, as a manufacturer of shotguns and rifles,
Remington was named in only three of the actions brought by approximately 30
municipalities, primarily against manufacturers, distributors and sellers of
handguns: (i) City of Boston, et al. v.
Smith & Wesson, et al., No. 99-2590 (Suffolk Super Ct.); (ii) City of St. Louis, Missouri v. Henry Cernicek, et al.,
No. 992-01209 (Cir. Ct. St. Louis) & 00 Civil 1895 (U.S. Dist. Ct E.D. Missouri);
and (iii) City of New York, et al. v. B.L.
Jennings, Inc., et al., 00 Civil 3641 (JBW) (U.S. Dist. Ct.
E.D.N.Y.). Two of these cases (City of
Boston and City of St. Louis)
have been dismissed against all defendants, while the third has been limited to
claims against handgun manufacturers (City
of New York). Remington is therefore not a defendant in any pending
municipal action.

93

REMINGTON ARMS COMPANY,
INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars
in millions, except per share data)

As
a general matter, these lawsuits named several dozens of firearm industry
participants as defendants, and claim that the defendants distribution
practices allegedly permitted their products to enter a secondary market, from
which guns can be obtained by unauthorized users; that defendants fail to
include adequate safety devices in their firearms to prevent unauthorized use and
accidental misuse; and that defendants conduct has created a public nuisance.
Plaintiffs generally seek injunctive relief and money damages (consisting of
the cost of providing certain city services and lost tax and other revenues),
and in some cases, punitive damages, as well.

To date, most
municipal lawsuits have been
dismissed and are no longer subject to appeal, including that involving local
California governments. The remaining lawsuits are in various stages of motion
practice, discovery, and trial preparation. A majority of states have enacted
some limitation on the ability of local governments to file such lawsuits
against firearms manufacturers. In addition, similar legislation limiting such
lawsuits on a federal level has been passed in both houses of Congress, most
recently by the House of Representatives on October 20, 2005. President Bush
signed the Protection of Lawful Commerce in Arms Act on October 26, 2005.
However, the applicability of the law to various types of governmental and
private lawsuits has been challenged in both state and federal courts.

On March
16, 2007, Remington, Holding, Clayton Dubilier & Rice, Inc. and certain
affiliates, Bruckmann, Rosser, Sherrill & Co., LLC and certain affiliates,
Thomas Millner (Remingtons President, Chief Executive Officer and a director),
Leon Hendrix (Remingtons Chairman), and Michael Babiarz (a Remington
director), as defendants, and Robert Haskin (a former Remington director and
employee), as plaintiff, entered into an agreement under which Remington agreed
to pay Mr. Haskin $0.8 in consideration for dismissal of a non-employment
related lawsuit and the granting of mutual releases by the parties. The $0.8
was recorded as an expense in the December 31, 2006, results of operations in
accordance with SFAS 5 as the loss contingency became probable and reasonably
estimated. In the lawsuit, filed in
2006 in the General Superior Court of Justice, Superior Court Division,
Guilford County, North Carolina, Mr. Haskin alleged he was entitled to receive
a fee in connection with a transaction completed by the Company. The lawsuit
initially sought in excess of $1.0.

The
Company is involved in lawsuits, claims, investigations and proceedings,
including commercial, environmental and employment matters, which arise in the
ordinary course of business. The Company does not expect that the ultimate
costs to resolve these matters will have a material adverse effect on its
financial position, results of operations or cash flows.

Certain Indemnities

As of the closing of the Asset Purchase in
December 1993 under the Purchase Agreement, we assumed:


a number of specified
  liabilities, including certain trade payables and contractual obligations of
  the 1993 Sellers;
limited financial
  responsibility for specified product liability claims relating to disclosed
  occurrences arising prior to the Asset Purchase;
limited financial
  responsibility for environmental claims relating to the operation of the
  business prior to the Asset Purchase; and
liabilities for product
  liability claims relating to occurrences after the Asset Purchase, except for
  claims involving products discontinued at time of closing.All
other liabilities relating to or arising out of the operation of the business
prior to the Asset Purchase are excluded liabilities (the Excluded
Liabilities), which the 1993 Sellers retained. The 1993 Sellers are required
to indemnify Remington and its affiliates in respect of the Excluded
Liabilities, which include, among other liabilities:


liability in excess of our
  limited financial responsibility for environmental claims and disclosed
  product liability claims relating to pre-closing occurrences;
liability for product
  liability litigation related to discontinued products; and
certain tax liabilities,
  employee and retiree compensation and benefit liabilities, and intercompany
  accounts payable which do not represent trade accounts payable.The
1993 Sellers overall liability in respect of their representations, covenants
and the Excluded Liabilities under the Purchase Agreement, excluding
environmental liabilities and product liability matters relating to events

94

REMINGTON ARMS COMPANY,
INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars
in millions, except per share data)

occurring prior to the
purchase but not disclosed, or relating to discontinued products, is limited to
$324.8. With a few exceptions, the 1993 Sellers representations under the
Purchase Agreement have expired. We made claims for indemnification involving
product liability issues prior to such expiration.

In
addition, the 1993 Sellers agreed in 1996 to indemnify us against a portion of
certain product liability costs involving various shotguns manufactured prior
to 1995 and arising from occurrences on or prior to November 30, 1999. These
indemnification obligations of the 1993 Sellers relating to product liability
and environmental matters (subject to a limited exception) are not subject to
any survival period limitation, deductible or other dollar threshold or cap. We
and the 1993 Sellers are also party to separate agreements setting forth agreed
procedures for the management and disposition of environmental and product
liability claims and proceedings relating to the operation or ownership of the
business prior to the Asset Purchase, and are currently engaged in the joint
defense of certain product liability claims and proceedings.

Litigation Outlook

Because
the Companys assumption of financial responsibility for certain product
liability cases and claims involving pre-Asset Purchase occurrences was limited
to an amount that has now been fully paid, with the 1993 Sellers retaining
liability in excess of that amount and indemnifying the Company in respect of
such liabilities, and because of the Companys accruals with respect to such
cases and claims, the Company believes that product liability cases and claims
involving occurrences arising prior to the Asset Purchase are not likely to have
a material adverse effect upon the financial condition, results of operations,
or cash flows of the Company. Moreover, although it is difficult to forecast
the outcome of litigation, the Company does not believe, in light of relevant
circumstances (including the current availability of insurance for personal
injury and property damage with respect to cases and claims involving
occurrences arising after the Asset Purchase, the Companys accruals for the
uninsured costs of such cases and claims and the 1993 Sellers agreement to be
responsible for a portion of certain post-Asset Purchase shotgun-related
product liability costs, as well as the type of firearms products made by the
Company), that the outcome of all pending post-Asset Purchase product liability
cases and claims will be likely to have a material adverse effect upon the
financial condition, results of operations, or cash flows of the Company.
Nonetheless, in part because the nature and extent of liability based on the
manufacture and/or sale of allegedly defective products (particularly as to
firearms and ammunition) is uncertain, there can be no assurance that the
Companys resources will be adequate to cover pending and future product
liability occurrences, cases or claims, in the aggregate, or that a material
adverse effect upon our financial condition, results of operations, or cash
flows will not result therefrom. Because of the nature of its products, the
Company anticipates that it will continue to be involved in product liability
litigation in the future.

At
December 31, 2007 and 2006, the Companys accrual for product liability cases
and claims was $12.4 and $10.5, respectively. The amount of the Companys
accrual for product liability cases and claims is based upon estimates developed
as follows. We establish reserves for anticipated defense and disposition costs
to us of those pending cases and claims for which we are financially
responsible. Based on those estimates and an actuarial analysis of actual
defense and disposition costs incurred by the Company with respect to product
liability cases and claims in recent years, the Company determines estimated
defense and disposition costs for unasserted product liability cases and
claims. The Company combines the estimated defense and disposition costs for
both pending and unasserted cases and claims to determine the amount of the
Companys accrual for product liability cases and claims. It is reasonably
possible additional experience could result in further increases or decreases in
the period in which such information is made available. The Company believes
that its accruals for losses relating to such cases and claims are adequate.
The Companys accruals for losses relating to product liability cases and
claims includes accruals for all probable losses the amount of which can be
reasonably estimated. Based on the relevant circumstances (including the
current availability of insurance for personal injury and property damage with
respect to cases and claims involving occurrences arising after the Asset
Purchase, the Companys accruals for the uninsured costs of such cases and
claims and the 1993 Sellers agreement to be responsible for a portion of
certain post-Asset Purchase shotgun-related product liability costs, as well as
the type of firearms products made by the Company), the Company does not
believe with respect to product liability cases and claims that any reasonably
possible loss exceeding amounts already recognized through the Companys
accruals has been incurred.

Because
our assumption of financial responsibility for certain product liability cases
and claims involving pre-Asset Purchase occurrences was limited to an amount
that has now been fully paid, with the 1993 Sellers retaining liability in
excess of that amount and indemnifying us in respect of such liabilities, and
because of our accruals with

95

REMINGTON ARMS COMPANY,
INC.



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars
in millions, except per share data)

respect to such cases and
claims, we believe that product liability cases and claims involving
occurrences arising prior to the Asset Purchase are not likely to have a
material adverse effect upon our financial condition, results of operations or
cash flows. Moreover, although it is difficult to forecast the outcome of
litigation, we do not believe, in light of relevant circumstances (including
the current availability of insurance for personal injury and property damage
with respect to cases and claims involving occurrences arising after the Asset
Purchase, our accruals for the uninsured costs of such cases and claims and the
1993 Sellers agreement to be responsible for a portion of certain post-Asset
Purchase shotgun-related product liability costs, as well as the type of
firearms products that we make), that the outcome of all pending post-Asset
Purchase product liability cases and claims will be likely to have a material
adverse effect upon our financial condition, results of operations or cash
flows. Nonetheless, in part because the nature and extent of liability based on
the manufacture and/or sale of allegedly defective products (particularly as to
firearms and ammunition) is uncertain, there can be no assurance that our
resources will be adequate to cover pending and future product liability
occurrences, cases or claims, in the aggregate, or that a material adverse
effect upon our financial condition, results of operations or cash flows will
not result therefrom. Because of the nature of our products, we anticipate that
we will continue to be involved in product liability litigation in the future.
Because of the potential nature of injuries relating to firearms and
ammunition, certain public perceptions of our products, and recent efforts to
expand liability of manufacturers of firearms and ammunition, product liability
cases and claims, and insurance costs associated with such cases and claims,
may cause us to incur material costs.

Environmental

The
Company does not expect current environmental regulations to have a material
adverse effect on the financial condition, results of operations or cash flows.
However, the Companys liability for future environmental remediation costs is
subject to considerable uncertainty due to the complex, ongoing and evolving
process of identifying the necessity for, and generating cost estimates for,
remedial work. Furthermore, there can be no assurance that environmental
regulations will not become more restrictive in the future. The Company has not
identified any loss contingencies with respect to environmental remediation
costs the realization of which the Company believes to be reasonably possible.

Note 19Income Taxes

The
provision (benefit) for income taxes consists of the following components:

Successor

PredecessorJune 1-
  December 31,2007

January 1-
  May 31,2007

2006

2005Federal:Current


$
0.1



$
0.9



$




$
(2.4
)Deferred



(5.5
)



0.3




0.9




2.9State:Current



0.2




0.1




(0.2
)



Deferred



(0.7
)








0.2




(0.1
)($
5.9
)


$
1.3



$
0.9



$
0.496

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in millions, except per share data)

The
tax effects of temporary differences that give rise to significant portions of
the deferred tax assets and deferred tax liabilities are presented below:

Successor

Predecessor2007

2006Current

Noncurrent

Current

NoncurrentDeferred tax
 assets:Accrued
employee and retiree benefits


$
3.7


$
9.5


$
3.7


$
16.1Product
liabilities, deferred revenue and
 other liabilities



2.1



3.6



2.1



3.7Receivables and
inventory



4.0







4.7



0.2Debt
Acquisition Costs and Bond Accretion







2.7







Other
comprehensive income hedging



0.2











Other
comprehensive income pension







3.3







3.6Federal tax
credits



0.3



0.2







0.4State tax
credits



0.2



1.5







1.7Net operating
losses



1.8



0.8







3.5Total
 deferred tax assets



12.3



21.6



10.5



29.2Valuation
 allowance











(7.2
)


(20.1
)Net deferred
 tax assets



12.3



21.6



3.3



9.1Deferred tax
 liabilities:Deferred
revenue



(1.2
)










Property, plant
and equipment







(23.4
)






(10.6
)Intangible
assets







(26.6
)






(8.5
)Other
comprehensive income hedging











(2.4
)


Total
 deferred tax liabilities



(1.2
)


(50.0
)


(2.4
)


(19.1
)Net deferred
 tax asset (liability)


$
11.1


($
28.4
)

$
0.9


($
10.0
)As
of December 31, 2007, no valuation allowance is required as compared to a
valuation allowance of approximately $27.3 established against deferred tax
assets in accordance with the provisions of Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes (SFAS No. 109) as of
December 31, 2006. The $27.3 change in the valuation allowance consisted of the
following predecessor amounts: a $3.7 net decrease primarily related to the
$4.1 decrease in net deferred tax assets and an increase of $0.4 due to an
increase in deferred tax liabilities associated with indefinite-lived
intangible assets that have an indefinite reversal period; and a $0.7 net
decrease consisting of $0.9 recorded as a change in equity as a component of
other comprehensive income as a result of a net decrease in the net deferred
tax asset associated with other comprehensive income and $0.2 credit to equity
from the cumulative effect of a change in accounting principle with the
adoption of FIN 48; the remaining balance of $22.9 was eliminated in the
allocation of purchase price accounting adjustments. With the allocation of
purchase price accounting adjustments, management concluded that based on the
weight of available evidence, a valuation allowance was not required for the
deferred tax asset associated with deductible temporary differences and the
operating loss and tax credit carryforwards.

Income
tax payments were approximately $0.2 in 2007 and zero in both 2006 and 2005,
respectively. In both 2006 and 2005, there were net tax refunds of
approximately $2.4. There were no net tax refunds in 2007.

97

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in millions, except per share data)

At
December 31, 2007 the Company has various losses, credit and other
carry-forwards available to reduce future taxable income and tax thereon. The
carry-forwards, as well as the related tax benefits associated with the
carry-forwards, will expire as follows:

Expiration

US Federal loss
 carry-forwards

State loss
 carry-forwards

Tax credit and
 other carry-
 forwards1  5 years


$




$
0.2



$
6  20 years



3.2




2.1




1.1Beyond 20
 years













2.1Total


$
3.2



$
2.3



$
3.2The following
is a reconciliation of the statutory federal income tax rate to the Companys
effective income tax rates:

Successor

PredecessorJune 1-
 December 31
 2007

January 1-
 May 31
 2007

2006

2005Federal
 statutory rate



(35.0
)%



35.0
%



35.0
%



(35.0
)%State income
 taxes, net of federal benefits



(1.4
)



5.2




(60.9
)



(9.6
)Permanent
 differences



2.3




1.8




(8.5
)



3.6State tax
 credits, net of federal benefits



(0.4
)



4.4




(6.1
)



(4.4
)Change in
 valuation allowance








(35.9
)



175.3




53.4Federal tax
 credits


















(2.3
)Federal net
 operating loss



(1.6
)








(56.4
)



Other



0.1




2.1




(3.4
)



(3.3
)Effective
income tax rate



(36.0
)%



12.6
%



75.0
%



2.4
%The Company
adopted the provisions of FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes (FIN 48), on January 1, 2007. As a result of the
implementation of FIN 48, the Company recognized no material adjustment in the
liability for unrecognized tax benefits. A reconciliation of the change in
gross unrecognized tax benefits from January 1, 2007 to December 31, 2007 is as
follows:

Gross Unrecognized Tax Benefits

Gross
 AmountBalance January 1,
2007


$
0.8Gross
increases/(decreases) in unrecognized
 benefits taken during prior period (predecessor)



Gross
increases/(decreases) in unrecognized
 benefits taken during current period (successor)



Gross decreases
because of settlement
 (predecessor)



Gross decreases
because of lapse in
 applicable statute of limitations (predecessor)



Balance December 31,
2007


$
0.8Of the
December 31, 2007 balance in unrecognized tax positions, $0.8 would not, if
recognized, affect the annual effective tax rate, but would impact goodwill. As
of December 31, 2007, changes to our tax positions that are reasonably possible
in the next twelve months are not considered material.

98

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in millions, except per share data)

The Company
recognizes interest and/or penalties related to income tax matters in income
tax expense. The Company recognized an immaterial amount of expense associated
with interest and penalties for the period January 1, 2007 through May 31, 2007
(predecessor), and an immaterial amount of expense associated with interest and
penalties was recognized for the June 1, 2007 through December 31, 2007 period
(successor). The Company had approximately $0.5 and $0.5 accrued for
interest/penalties at January 1 and December 31, 2007, respectively.

We
are currently subject to ongoing audits by federal and various state tax
authorities. Depending on the outcome of these audits, we may be required to
pay additional taxes. However, we do not believe that any additional taxes and
related interest or penalties would have a material impact on Remingtons
financial position, results of operations, or cash flows. The tax years 2004
through 2007 remain open to examination by the major tax jurisdictions to which
we are subject.

Note 20Related Party Transactions

Predecessor

BRSE,
L.L.C., the general partner of the BRS Fund, which owned 61.3% of the
outstanding Common Stock of Holding at December 31, 2006, is a private
investment fund managed by Bruckmann, Rosser, Sherrill & Co. L.L.C.
(BRS). The CDR Fund, which owned 13.0% of the outstanding Common Stock of
Holding at December 31, 2006 (and through proxy controlled 26.6% of the voting
rights), is a private investment fund managed by Clayton, Dubilier & Rice,
Inc. (CD&R). CD&R also held the Holding Notes until the Closing Date
of the AHA Acquisition. Both BRS and CD&R received an annual fee for
management and financial consulting services provided to the Company and
reimbursement of related expenses. Fees and expenses paid to CD&R and BRS
for the five months ending May 31, 2007 were $0.3 and $0.3, respectively.
Subsequent to May 31, 2007 and as a result of the AHA Acquisition, neither the
BRS Fund nor the CDR Fund own any of the common stock of Remington or Holding.

Remington
paid fees to the law firm of Debevoise & Plimpton LLP during 2007 for legal
services rendered. Franci J. Blassberg, Esq., a member of Debevoise
& Plimpton LLP, is married to Joseph L. Rice, III, who is the Chairman, a
director and a stockholder of CD&R and a general partner of Associates IV.
Fees and expenses paid to Debevoise & Plimpton LLP for the five months
ending May 31, 2007 were $0.3.

During
January 1 through May 31, 2007, the Company recorded
$1.5 of compensation expense relating to the employee stock options and the
deferred shares expense in accordance with SFAS 123R. In addition, the Company
recorded $0.2 of mark-to-market expense related to the redeemable shares in
accordance with SFAS 123R.

Remington
paid fees to the law firm of Debevoise & Plimpton LLP during 2006 for legal
services rendered. Franci J. Blassberg, Esq., a member of Debevoise
& Plimpton LLP, is married to Joseph L. Rice, III, who is the Chairman, a
director and a stockholder of CD&R and a general partner of Associates IV.
Fees and expenses paid to Debevoise & Plimpton LLP for 2006 and 2005 were
$1.5 and $0.4, respectively.

During
2005, Holding contributed to the Company $0.1 associated with cash reserves at
Holding that were transferred to the Company.

During
2006, the Company recorded $0.3 of compensation expense relating to the
employee stock options in accordance with SFAS 123R.

As
of December 31, 2006, $0.9 ($1.0 as of December 31, 2005) is due to RACI
Holding, Inc. representing the outstanding principal balance of three notes
established in connection with the Kentucky economic development project.
During 2006, a payment of $0.1 was made to RACI Holding, Inc. for interest
expense in connection with loans for a Kentucky economic development project.

Successor

Remington
paid Meritage Capital Advisors, LLC a fee of $2.0 in connection with the bond
consent solicitation, amendment to the Credit Agreementand other transaction advisory
services.
Walter McLallen serves as a member of Remingtons Board of Directors and is a
principal of Meritage Capital Advisors, LLC.

99

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in millions, except per share data)

Remington
paid Cerberus Operations fees totaling $0.4 during the seven month period
between June 1 and December 31, 2007 for consulting services provided in
connection with improving operations. AHA, which owns 100% of the outstanding
common stock of Holding (which in turn owns 100% of the outstanding common
stock of Remington), is controlled by Cerberus.

As
of December 31, 2007, $0.9 is due to RACI Holding, Inc. representing the outstanding
principal balance of three notes established in connection with the Kentucky
economic development project.

Note 21Financial Instruments

The
estimated fair value of the Companys debt at December 31, 2007 was $233.3
compared to a carrying value of $227.1. These 2007 amounts include short-term
debt of $3.5 for the financing of the Companys insurance policies. The
estimated fair value and the carrying value of the Companys debt at December
31, 2006 were $213.0 and $224.5, respectively. These 2006 amounts include
short-term debt of $3.1 for financing of the Companys insurance policies. The
estimated fair value of long-term debt is primarily based upon quoted market
prices for the Companys Notes, and based upon carrying value for the Companys
short term indebtedness and its variable-rate Credit Facility.

The
Company purchases copper, lead, and zinc options contracts to hedge against
price fluctuations of anticipated commodity purchases. The options contracts
limit the unfavorable effect that cost increases will have on these metal
purchases.

In
accordance with the provisions of Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging Activities
(SFAS 133), as amended by Statement of Financial Accounting Standards
No. 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities  an amendment of FASB Statement No. 133
(SFAS 138) and by Statement of Financial Accounting Standards No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities
(SFAS 149), commodity contracts are designated as cash flow hedges, with the
fair value of these financial instruments recorded in prepaid expenses and
other current assets, changes in fair value recorded in accumulated other
comprehensive income, and net gains/losses reclassified to cost of sales based
upon inventory turnover, indicating consumption and sale of the underlying
commodity in the Companys products.

Predecessor

At
December 31, 2006, the fair value of the Companys outstanding derivatives
contracts relating to firm commitments and anticipated consumption (aggregate
notional amount of 44.6 million pounds of copper and lead) up to eighteen
months from such date was $6.6, as determined with the assistance of a third
party.

The
option contracts designated as cash flow hedges that had settled prior to May
31, 2007 and the associated realized gain was deferred and was to be recognized
in cost of sales as the inventory was sold. In connection with accounting for
the AHA Acquisition, the deferred gain of $1.2 was considered as part of the
preliminary purchase price allocation.

At
May 31, 2007 the fair value of the Companys outstanding option contracts
designated as cash flow hedges relating to firm commitments and anticipated
consumption (aggregate notional amount of 30.2 million pounds of copper, lead
and zinc) was $9.6, fixing the cost on a like amount of pounds purchased. At
May 31, 2007, the Company assessed the hedge effectiveness and determined that
there will be no future commodity purchases by the predecessor company (for
financial reporting purposes), and therefore the Company has concluded that the
unsettled option contracts did not meet the requirements for cash flow hedge
accounting. This resulted in a gain of $4.9 being recorded on May 31, 2007 for
the unsettled contracts, which was recorded in other income (loss). The
successor assumed the outstanding contracts as part of the AHA Acquisition.

During
the five month period ended May 31, 2007, a net gain on a net-of-tax basis of
$3.8 on derivative instruments was reclassified to earnings from accumulated
other comprehensive income. During the twelve month period ended December 31,
2006, a net gain on a net-of-tax basis of $7.4 on derivative instruments was
reclassified to

100

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in millions, except per share data)

cost of sales
from accumulated other comprehensive income, and a net gain on a net-of-tax
basis of $5.8 was recorded to accumulated other comprehensive income and to
prepaid expenses and other assets.

Successor

At
December 31, 2007, the fair value of the Companys outstanding option contracts
designated as cash flow hedges relating to firm commitments and anticipated
consumption (aggregate notional amount of 45 million pounds of copper, lead and
zinc) up to eighteen months from such date was $6.8, as determined with the
assistance of a third party. During the seven months ended December 31, 2007, a
net gain on a net-of-tax basis of $1.1 on derivative instruments was
reclassified to cost of sales from accumulated other comprehensive income, and
a net gain on a net-of-tax basis of $0.8 was recorded to accumulated other
comprehensive income and to prepaid expenses and other current assets.

Note 22Segment Information

The
Company identifies its reportable segments in accordance with Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and
Related Information (SFAS 131). Based upon SFAS 131, the Companys
business is classified into two reportable segments: Firearms, which designs,
manufactures and imports, and markets primarily sporting shotguns and rifles,
and Ammunition, which designs, manufactures and markets sporting ammunition and
ammunition reloading components. The remaining operating segments, which
include accessories and other gun-related products, the manufacture and
marketing of clay targets and powder metal products, licensed products, and
surveillance technology products primarily for the government, law enforcement,
and military markets, are combined into our All Other reporting segment. Other
reconciling items include corporate, other assets not allocated to the
individual segments and discontinued operations. The chief operating decision
maker is the Companys chief executive officer.

Although
the Company reports its financial results in accordance with United States (U.S.)
GAAP, the Company primarily evaluates the performance of its segments and
allocates resources to them based on the non-GAAP financial measure Adjusted
EBITDA,which is unaudited.
Adjusted EBITDA differs from the term EBITDA as it is commonly used, and is
substantially similar to the measure Consolidated EBITDA that is used in the
Indenture. In addition to adjusting net income (loss) to exclude income taxes,
interest expense, and depreciation and amortization, Adjusted EBITDA also
adjusts net income (loss) by excluding items or expenses not typically excluded
in the calculation of EBITDA, such as noncash items, gain or loss on asset
sales or write-offs, extraordinary, unusual or nonrecurring items, including
certain transaction activity associated with the AHA Acquisition and certain
special payments to Remington employees who held options and deferred shares
in respect of Holding common stock, consisting of amounts that are treated as
compensation expense by Remington and are paid in connection with payments of
dividends to holders of Holding common stock.

In managing
the Companys business, the Company utilizes Adjusted EBITDA to evaluate
performance of the Companys business segments and allocate resources to those
business segments. The Company believes that Adjusted EBITDA provides useful
supplemental information to investors and enables investors to analyze the
results of operations in the same way as management.

Adjusted
EBITDA is not a measure of performance defined in accordance with GAAP.
However, management believes that Adjusted EBITDA is useful to investors in
evaluating the Companys performance because it is a commonly used financial
analysis tool for measuring and comparing companies in the Companys industry
in areas of operating performance. Management believes that the disclosure of Adjusted EBITDA offers an additional view
of the Companys operations that, when coupled with the GAAP results and the
reconciliation to GAAP results, provides a more complete understanding of the
Companys results of operations and the factors and trends affecting the
Companys business.

Adjusted
EBITDA should not be considered as an alternative to net income as an indicator
of the Companys performance or as an alternative to net cash provided by
operating activities as a measure of liquidity. The primary material
limitations associated with the use of Adjusted EBITDA as compared to GAAP
results is (i) it may not be comparable to similarly titled measures used by
other companies in the Companys industry, and (ii) it excludes financial
information that some may consider important in evaluating the Companys
performance. The Company

101

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in millions, except per share data)

compensates
for these limitations by providing disclosure of the differences between
Adjusted EBITDA and GAAP results, including providing a reconciliation of
Adjusted EBITDA to GAAP results, to enable investors to perform their own
analysis of the Companys operating results.

A
reconciliation containing adjustments from GAAP results to Adjusted EBITDA is
included in this Note 22.

Information on
Segments:

Successor

Predecessor2007

2007

2006

2005June 1 
 December 31

January 1-
 May 31

January 1-
 December 31

January 1-
 December 31Net Sales:Firearms


$
138.7



$
80.5



$
223.4



$
202.2Ammunition



169.3




78.9




204.9




184.5All
Other



14.0




7.6




17.7




23.7Consolidated
Net Sales


$
322.0



$
167.0



$
446.0



$
410.4Adjusted
 EBITDA:Firearms


$
21.8



$
12.3



$
22.9



$
21.4Ammunition



17.4




10.5




17.5




6.6All
Other



2.3




0.6




1.1




3.1Other
Reconciling Items



(3.4
)



(0.2
)



1.0




0.3Adjusted
EBITDA


$
38.1



$
23.2



$
42.5



$
31.4Successor

PredecessorDecember 31,
 2007

December 31,
 2006

December 31,
 2005Assets:Firearms


$
147.4



$
151.0



$
153.3Ammunition



137.0




122.2




114.6All
Other



29.6




21.5




15.5Other
Reconciling Items



188.1




76.6




79.9Consolidated
Assets


$
502.1



$
371.3



$
363.3Successor

Predecessor2007
 June 1 
 December 31

2007
 January 1-
 May 31

December 31,
 2006

December 31,
 2005Gross
 Capital Expenditures:Firearms


$
2.9



$
0.3



$
2.8



$
4.3Ammunition



2.6




1.0




2.8




3.9All Other













0.8




0.1Other
 Reconciling Items



1.2




0.2




0.1




1.8Gross
 Capital Expenditures


$
6.7



$
1.5



$
6.5



$
10.1102

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in millions, except per share data)

The
following table illustrates the calculation of Adjusted EBITDA, by reconciling
Net Income (Loss) to Adjusted EBITDA:

Successor

Predecessor2007

2007

2006

2005June 1 
 December 31

January 1-
 May 31

January 1-
 December 31

January 1-
 December 31Net Income
 (Loss)


$
(10.5
)


$
9.0



$
0.3



$
(16.9
)Adjustments:Depreciation
Expense



8.3




4.2




10.0




9.6Interest
Expense (A)



14.6




10.9




28.0




26.4Intangible
Amortization (B)



1.4














Equity in
Losses FromUnconsolidated
Joint Venture



0.5









0.4




1.0Other Noncash
Charges (C)



(6.1
)



1.7




(0.3
)



6.0Non-Recurring
Items (D)



7.1




(3.9
)



3.2




4.9Inventory
Write-Up (E)



28.7














Income Tax
(Benefit) Expense



(5.9
)



1.3




0.9




0.4Adjusted
 EBITDA


$
38.1



$
23.2



$
42.5



$
31.4(A)
Interest expense includes
 amortization expense of deferred financing costs of $1.0, offset by $0.6, of
 amortization associated with the premium recorded on the Notes for the seven
 month period ended December 31, 2007. Amortization expense of deferred
 financing costs included in the five month period ended May 31, 2007 is $0.6.
 Interest expense includes amortization of deferred financing costs of $1.6
 and $1.8, for the years ended December 31, 2006 and 2005, respectively.(B)
Amortization expense on
 created intangibles as a result of the purchase method of accounting. See
 Note 10.(C)
Other Non-cash Charges
 consist of the following: (i) the seven months ended December 31, 2007,
 included expense of $0.3 accrual
 for retiree benefits, offset by a gain of $6.4 associated with an amendment to the
 defined benefit pension plan to freeze benefits for hourly paid employees
 under a new collective bargaining agreement reached in October. For the five
 month predecessor period ended May 31, 2007, other non-cash charges consisted
 of $1.5 of other compensation expense associated with the accelerated vesting
 and buyout of stock options and the conversion of the deferred shares to
 equity under SFAS 123R, and $0.2 of mark-to-market expense associated with
 the redeemable shares of common stock; (ii) the year ended December 31, 2006
 included $6.0 accrual for retiree benefits, $0.8 loss on disposal of assets,
 and $0.3 of other compensation expense associated with stock option expense
 recognition under SFAS 123R, offset by a curtailment gain of $7.4 associated
 with an amendment to the pension plan to freeze benefits for salaried
 employees; and (iii) for the year ended December 31, 2005, included $5.6
 accrual for retiree benefits and $0.4 loss on disposal of assets.(D)
Nonrecurring items consist
 of the following: (i) the seven month period ended December 31, 2007 included
 $3.0 of professional fees and expenses incurred by the Companys Chief
 Restructuring Officer in connection with factory improvement initiatives,
 $0.8 of transaction fees related to the AHA Acquisition, $0.5 of
 restructuring fees, $0.2 of other employee expenses, and $3.1 of realized
 gains associated with metals hedging contracts that settled prior to May 31,
 2007 that would have been reclassified from other comprehensive income
 (OCI) into cost of goods sold based on inventory turnover that were
 actually accounted for and removed from OCI as a result of applying the
 purchase method of accounting, and offset in part by $0.5 gain for our
 investment in the RELES joint venture. Included in the five month predecessor
 period ended May 31, 2007 is ($4.9) gain associated with the unsettled metals
 hedging contracts from the predecessor; $0.1 of professional fees related to
 the AHA Acquisition; $0.1 of professional fees associated with the Haskin
 settlement agreement; $0.1 of expense associated with certain employee
 benefits; and $0.7 of expense related to certain predecessor company
 insurance policies; (ii) the year ended December 31, 2006, included $2.8
 associated with professional fees, $0.2 associated with the write-down in
 embellishing fixed assets in the firearms reporting unit, and $0.2 associated
 with an exclusive distribution agreement; and (iii) the year ended December
 31, 2005, included $0.6 for severance charges, $0.3 for fees associated with
 an exclusive distribution agreement, a write-off of debt issuance costs of
 $0.5 associated with the permanent reduction in borrowing capacity, $1.0
 associated with the write-down in embellishing fixed assets in the Firearms
 reporting unit, and impairment charges of $3.7 associated with the write-down
 in goodwill, trademarks, and fixed assets of the103


REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in millions, except per share data)

Clay Targets reporting
 unit, offset by $1.2 gain associated with the settlement of a contract in the
 Firearms reporting unit.(E)
$28.7 related to the
 inventory write-up from the application of the purchase method of accounting
 to inventory as of May 31, 2007 being recognized in cost of sales as the
 acquired inventory is sold.Geographic Information:

Successor

Predecessor2007
 June 1 
 December 31

2007
 January 1-
 May 31

2006
 January 1-
 December 31

2005
 January 1-
 December 31Net Sales:Domestic


$
289.2



$
142.4



$
418.3



$
388.0Foreign



32.8




24.6




27.7




22.4Consolidated
Net Sales


$
322.0



$
167.0



$
446.0



$
410.4There
are no material assets owned by the Company outside the United States.
Approximately 20% of the Companys sales in the seven months ended December 31,
2007 and approximately 12% of the Companys sales in the five months ended May
31, 2007 consisted of sales made to a single customer. Approximately 18% in
2006 and 17% in 2005 consisted of sales made to a single customer. This
customer affects sales to both our Firearms and Ammunition segments. The
Companys sales to this customer are generally not governed by a written
contract between the parties. Although the Company believes its relationship
with this customer is good, the loss of this customer or a substantial reduction
in sales to this customer could adversely affect the Companys financial
condition or results of operations. No other single customer comprises greater
than or equal to 10% of sales.

Note 23Financial Position and Results of
Operations of Remington Arms Company, Inc.

The
following condensed consolidating financial data provides information regarding
the financial position and results of operations of Remington Arms Company,
Inc. (Remington), including Remingtons 100% owned subsidiaries, RA Brands, RA
Factors (which was merged with and into Remington as of December 31, 2006), and
Remington Steam. This information complies with Rule 3-10 of Regulation S-X and
does not contain the financial statement disclosures required for a complete
set of financial statements as required by GAAP. Separate financial statements of Holding, Remingtons sole
stockholder, and AHA, Holdings sole stockholder, are not presented because
management has determined that they would not be material to holders of the
Notes as neither Holding nor AHA are guarantors of the Notes. The Notes are
fully and unconditionally guaranteed on a joint and several basis by all of
Remingtons subsidiaries, except Remington Steam. Remington Steam is a discrete
legal entity; it is disregarded as an entity separate from its owner and has no
separate financial information. Holding does not have any significant
independent operations or assets other than their interests in Remington.

104

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

REMINGTON ARMS COMPANY, INC.
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2007

Successor

Remington
And
RemingtonSteam

Combined
Guarantor
Subsidiary

Eliminations

Remington
Arms Co. and
SubsidiaryASSETSCurrent
  Assets


$
247.5



$
1.2



$




$
248.7Receivable
  from Remington, Net








86.7




86.7




Equity method
  investment in subsidiaries



114.6









114.6




Noncurrent
  Assets



206.3




47.1









253.4Total
Assets


$
568.4



$
135.0



$
201.3



$
502.1LIABILITIES AND SHAREHOLDERS EQUITYCurrent
  Liabilities


$
82.1



$




$




$
82.1Payable to
  RACI Holding, Inc., Net



0.7














0.7Payable to
  RA Brands, L.L.C., Net



86.7









86.7




Noncurrent
  Liabilities



290.9




20.4









311.3Stockholders
  Equity



108.0




114.6




114.6




108.0Total
Liabilities and Stockholders Equity


$
568.4



$
135.0



$
201.3



$
502.1105

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

REMINGTON ARMS COMPANY, INC.
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2006

Predecessor

Remington
And 
Remington
Steam


Combined
Guarantor
Subsidiary


Eliminations

Remington
Arms Co. and
SubsidiaryASSETSCurrent
  Assets


$
224.3



$
1.4



$




$
225.7Receivable
  from Remington, Net








67.7




67.7




Equity
  method investment in subsidiaries



104.8









104.8




Noncurrent
  Assets



102.3




43.3









145.6Total
Assets


$
431.4



$
112.4



$
172.5



$
371.3LIABILITIES AND SHAREHOLDERS EQUITYCurrent
  Liabilities


$
95.4



$
0.1



$




$
95.5Payable to
  RACI Holding, Inc., Net



0.9














0.9Payable to
  RA Brands, L.L.C., Net



67.7









67.7




Noncurrent
  Liabilities



277.6




7.5









285.1Stockholders
  Equity



(10.2
)



104.8




104.8




(10.2
)Total
  Liabilities and Stockholders Equity


$
431.4



$
112.4



$
172.5



$
371.3106

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)


REMINGTON ARMS COMPANY, INC.CONDENSED CONSOLIDATING STATEMENTS OF
OPERATIONS

Successor


        June 1 -
                    December 31, 2007

                

                

                Remington
                    and
                    Remington
                    Steam

                

                Combined Guarantor
                    Subsidiary

                

                

                Eliminations

                

                

                Remington and
                    SubsidiaryNet Sales

                

                

                $

                322.0

                

                

                

                $

                —

                

                

                

                $

                —

                

                

                

                $

                322.0Cost of Sales

                

                

                

                (269.3

                )

                

                

                

                —

                

                

                

                

                —

                

                

                

                

                (269.3

                )Gross Profit

                

                

                

                52.7

                

                

                

                

                —

                

                

                

                

                —

                

                

                

                

                52.7Subsidiary Income
                    (Expense)

                

                

                

                (13.2

                )

                

                

                

                13.2

                

                

                

                

                —

                

                

                

                

                —Research and Development
                    Expenses

                

                

                

                —

                

                

                

                

                (3.6

                )

                

                

                

                —

                

                

                

                

                (3.6

                )All Other Income
                    (Expenses)

                

                

                

                (56.1

                )

                

                

                

                (3.5

                )

                

                

                

                —

                

                

                

                

                (59.6

                )Income from Equity
                    Investees

                

                

                

                6.1

                

                

                

                

                —

                

                

                

                

                6.1

                

                

                

                

                —Net Income
                    (Loss)

                

                

                $

                (10.5

                )

                

                

                $

                6.1

                

                

                

                $

                6.1

                

                

                

                $

                (10.5

                )Predecessor

January 1 -
May 31, 2007


Remington
and
Remington
Steam


Combined
Guarantor
Subsidiary


Eliminations


Remington
and
SubsidiaryNet Sales


$
167.0



$




$




$
167.0Cost of
  Sales



(117.3
)













(117.3
)Gross Profit



49.7














49.7Subsidiary
  Income (Expense)



(7.0
)



7.0









Research and
  Development Expenses








(2.7
)








(2.7
)All Other
  Income (Expenses)



(37.5
)



(0.5
)








(38.0
)Income from
  Equity Investees



3.8









3.8




Net Income


$
9.0



$
3.8



$
3.8



$
9.0107

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data)

Year Ended
 December 31, 2006

Remington
 and
 Remington
 Steam

Combined
 Guarantor
 Subsidiary

Eliminations

Remington
 and
 SubsidiaryNet Sales


$
446.0



$




$




$
446.0Cost of
 Sales



(338.4
)













(338.4
)Gross Profit



107.6














107.6Subsidiary
 Income (Expense)



(31.2
)



31.2









Research and
 Development Expenses








(6.4
)








(6.4
)All Other
 Expense



(100.2
)



(0.7
)








(100.9
)Income from
 Equity Investees



24.1









24.1




Net Income


$
0.3



$
24.1



$
24.1



$
0.3Year Ended
 December 31, 2005

Remington

Combined
 Guarantor
 Subsidiaries

Eliminations

Remington
 and
 SubsidiariesNet Sales


$
410.4



$




$




$
410.4Cost of
 Sales



(324.9
)













(324.9
)Gross Profit



85.5














85.5Subsidiary
 Income (Expense)



(27.4
)



27.4









Research and
 Development Expenses








(5.9
)








(5.9
)Impairment
 Charges



(4.7
)













(4.7
)All Other
 Income (Expenses)



(91.7
)



(0.1
)








(91.8
)Income from
 Equity Investees



21.4









21.4




Net (Loss)
 Income


$
(16.9
)


$
21.4



$
21.4



$
(16.9
)108

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data)

REMINGTON ARMS COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
June 1  December 31, 2007

SuccessorRemington
 and
 Remington
 Steam

Combined
 Guarantor
 Subsidiary

Eliminations

Remington
 and
 SubsidiaryOperating
 ActivitiesNet Cash
Provided by Operating Activities


$
65.3



$
0.1



$




$
65.4Investing
 ActivitiesOption
Cancellation Payments



(1.1
)













(1.1
)Purchase of
Property, Plant and Equipment



(6.7
)













(6.7
)Premiums paid
for Company-Owned Life
 Insurance



(0.3
)













(0.3
)Cash Surrender
Value of Company-Owned Life
 Insurance



3.7














3.7Cash Received
on Sale of Unconsolidated Joint
 Venture



3.0














3.0Net Cash Used
in Investing Activities



(1.4
)













(1.4
)Financing
 ActivitiesNet Payments on
Revolving Credit Facility



(85.2
)













(85.2
)Proceeds from
Term Loan



25.0














25.0Cash
Contributions from AHA



6.1














6.1Debt Issuance
Costs



(0.5
)













(0.5
)Principal
Payments on Long-Term Debt



(0.3
)













(0.3
)Change in Book
Overdraft



5.3














5.3Net Cash Used
in Financing Activities



(49.6
)













(49.6
)Change in Cash
and Cash Equivalents



14.3




0.1









14.4Cash and Cash
Equivalents at Beginning of
 Period



9.0














9.0Cash and Cash
Equivalents at End of Period


$
23.3



$
0.1



$




$
23.4109

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data)

REMINGTON ARMS COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
January 1  May 31, 2007

PredecessorRemington
 and
 Remington
 Steam

Combined
 Guarantor
 Subsidiary

Eliminations

Remington
 and
 SubsidiaryOperating
 ActivitiesNet Cash Used
in Operating Activities


$
(36.1
)


$
(0.2
)


$




$
(36.3
)Investing
 ActivitiesSeller Related
Expenses Paid by Remington



(4.7
)













(4.7
)Transaction
Costs Related to the AHA
 Acquisition



(5.1
)













(5.1
)Purchase of
Property, Plant and Equipment



(2.1
)













(2.1
)Premiums paid
for Company-Owned Life
 Insurance



(0.2
)













(0.2
)Net Cash Used
in Investing Activities



(12.1
)













(12.1
)Financing ActivitiesNet Proceeds
from Revolving Credit Facility



65.8














65.8Cash Withheld
from Sellers, Provided by AHA



4.7














4.7Debt Issuance
Costs



(5.2
)













(5.2
)Amount Paid to
Holding for AHA Acquisition
 Costs



(3.8
)













(3.8
)Principal
Payments on Long-Term Debt



(0.1
)













(0.1
)Change in Book
Overdraft



(4.5
)













(4.5
)Net Cash
Provided by Financing Activities



56.9














56.9Change in
 Cash and Cash Equivalents



8.7




(0.2
)








8.5Cash and
 Cash Equivalents at Beginning of Period



0.3




0.2









0.5Cash and
 Cash Equivalents at End of Period


$
9.0



$




$




$
9.0110

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

REMINGTON ARMS COMPANY, INC. 
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS 
December 31, 2006

Predecessor

Remington
 and
 Remington
 Steam

Combined
 Guarantor
 Subsidiary

Eliminations

Remington
 and
 SubsidiaryOperating
 ActivitiesNet Cash
Provided by Operating Activities


$
13.0



$
0.2



$




$
13.2Investing
 ActivitiesPurchase of
Property, Plant & Equipment



(7.1
)













(7.1
)Premiums Paid
for Company Owned Life Insurance



(0.6
)













(0.6
)Cash
Contribution to Unconsolidated Joint Venture



(0.2
)













(0.2
)Net Cash Used
in Investing Activities



(7.9
)













(7.9
)Financing
 ActivitiesNet Borrowings
on Revolving Credit Facility


















Principal
Payments on Long-Term Debt



(0.3
)













(0.3
)Debt Issuance
Costs for Revolving Credit Facility



(0.8
)













(0.8
)Capital
Contribution Received from RACI Holding, Inc.



0.3














0.3Cash
Contribution to RACI Holding, Inc.



(0.1
)













(0.1
)Change in Book
Overdraft



(4.4
)













(4.4
)Net Cash Used
in Financing Activities



(5.3
)













(5.3
)Change in
 Cash and Cash Equivalents



(0.2
)



0.2









Cash and
 Cash Equivalents at Beginning of Year



0.5














0.5Cash and
 Cash Equivalents at End of Year


$
0.3



$
0.2



$




$
0.5111

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(dollars in millions, except per share data)

REMINGTON ARMS COMPANY, INC. 
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS 
December 31, 2005

Remington

Combined
 Guarantor
 Subsidiaries

Eliminations

Remington
 Arms Co.,
 Inc. and
 SubsidiariesOperating
 ActivitiesNet Cash Used
in Operating Activities


$
(6.0
)


$




$




$
(6.0
)Investing
ActivitiesPurchase of
 Property, Plant & Equipment



(9.4
)













(9.4
)Premiums
 Paid for Company Owned Life Insurance



(0.7
)













(0.7
)Cash
 Contribution to Unconsolidated Joint Venture



(1.0
)













(1.0
)Net Cash Used
in Investing Activities



(11.1
)













(11.1
)Financing
 ActivitiesNet Borrowings
on Revolving Credit Facility



17.6














17.6Principal
Borrowings on Long-Term Debt



0.6














0.6Cash
Contribution from RACI Holding, Inc.



0.1














0.1Change in Book
Overdraft



(1.1
)













(1.1
)Net Cash
Provided by Financing Activities



17.2














17.2Change in
 Cash and Cash Equivalents



0.1














0.1Cash and
 Cash Equivalents at Beginning of Year



0.4














0.4Cash and
 Cash Equivalents at End of Year


$
0.5



$




$




$
0.5112

REMINGTON ARMS COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data)

Note 24Quarterly Financial Data

Predecessor

Successor2007

Jan 1  
  Mar 31

Apr 1 
  May 31

Jun 1 
  Jun 30

Jul 1-
  Sep 30

Oct 1 
  Dec 31Net Sales

$
102.3

$
64.7

$
45.1

$
157.3

$
119.6Gross Profit
  (1)


31.0


18.7


4.1


23.8


24.8Net Income
  (Loss) (1)


4.8


4.2


(3.8
)

(5.6
)

(1.1
)2006

First

Second

Third

FourthNet Sales

$
96.5

$
91.1

$
131.9

$
126.5Gross Profit
  (1)


18.3


18.2


30.7


40.4Net (Loss)
  Income (1)


(7.3
)

(8.8
)

2.6


13.8(1)
Curtailment gains of $6.4 and $7.4, were recorded in the fourth quarters of
2007 and 2006, respectively, associated with changes to the Defined Benefit
Plan and the Supplemental Plan  See Note 13.

113

Schedule II

REMINGTON ARMS COMPANY, INC.

Valuation and
Qualifying Accounts
Years Ended December 31, 2007, 2006, and 2005
(Dollars in Millions)

Balance at
  Beginning
  of Period

Charged to
  Costs and
  Expenses

Deductions
  to Reserve

Balance at
  End of
  PeriodDescription:Deducted from
Asset Account:Allowance for
Doubtful AccountsYEAR ENDEDDecember 31,
2007


$
(1.2
)


$
0.1



$
0.4



$
(0.7
)YEAR ENDEDDecember 31,
2006


$
(0.5
)


$
(0.8
)


$
0.1



$
(1.2
)YEAR ENDEDDecember 31,
2005


$
(0.5
)


$
0.0



$
0.0



$
(0.5
)Description:Deducted from
Asset Account:Inventory
ReservesYEAR ENDEDDecember 31,
2007


$
(2.1
)


$
(1.4
)


$
1.0



$
(2.5
)YEAR ENDEDDecember 31,
2006


$
(1.9
)


$
(0.7
)


$
0.5



$
(2.1
)YEAR ENDEDDecember 31,
2005


$
(1.6
)


$
(1.2
)


$
0.9



$
(1.9
)Description:Deducted from
Asset Account:Valuation
allowance for deferred tax assetsYEAR ENDEDDecember 31,
2007


$
(27.3
)


$
3.7



$
0.7



$
0*YEAR ENDEDDecember 31,
2006


$
(25.6
)


$
(1.9
)


$
0.2



$
(27.3
)YEAR ENDEDDecember 31,
2005


$
(15.5
)


$
(8.7
)


$
(1.4
)


$
(25.6
)*($22.9)
Balance of the valuation allowance was eliminated in the allocation of the
purchase price.

114

Item 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

115

Item 9A(T). CONTROLS AND
PROCEDURES

Managements Evaluation of Disclosure
Controls and Procedures

The
Company maintains disclosure controls and procedures (as defined in Rule
15d-15(e) under the Exchange Act), which are designed to ensure that
information required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commissions
rules and forms, and that such information is accumulated and communicated to
the Companys management, including its Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure.

We have restated our
previously issued financial statements for the quarter ended June 30, 2007 (the
Quarterly Period) to reflect the correction of an error related to our
provision for income taxes which resulted from the Company incorrectly
accounting for income taxes for the Quarterly Period by applying an estimated
effective tax rate for the annual period beginning January 1, 2007 and ending
December 31, 2007 to the Quarterly Period.

As
of and for the period ended December 31, 2007 (the Evaluation Date), an
evaluation of the effectiveness of the Companys disclosure controls and
procedures was conducted under the supervision of, and reviewed by, the
Companys Chief Executive Officer and Chief Financial Officer. Based on that
evaluation, the Companys Chief Executive Officer and Chief Financial Officer
concluded that the Companys disclosure controls and procedures were effective
at the Evaluation Date.

Impact of the
Restatement on Disclosure Controls and
Procedures

Our
disclosure controls and procedures are designed to ensure that information
required to be disclosed in our financial reports have been made known to
management, including our Chief Executive Officer and Chief Financial Officer,
and other persons responsible for preparing such reports so that such
information may be recorded, processed, summarized and reported in a timely
manner. The circumstances surrounding the error related to our provision for
income taxes were made known to the Companys Chief Executive Officer and Chief
Financial Officer through operation of our disclosure controls and procedures
during our review of the Evaluation Date period. In consideration of the
disclosure circumstances surrounding the discovery of the error, the Companys
Chief Executive Officer and Chief Financial Officer concluded that the
disclosure controls and procedures were operating effectively at the Evaluation
Date.

Managements
Assessment of Internal Control Over
Financial Reporting

Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act Rules 13a-15(f)
and 15d-15(f). The Companys internal control over financial reporting includes
those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors
of the Company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition
of the Companys assets that could have a material effect on the financial
statements.

Internal
control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements prepared for external purposes in accordance with
generally accepted accounting principles. Because of its inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

Under
the supervision and with the participation of the Companys Chief Executive
Officer and Chief Financial Officer, management conducted an evaluation of the
effectiveness of our internal control over

116

financial
reporting as of December 31, 2007 based on the framework in Internal Control  Integrated Frameworkissued
by the Committee of Sponsoring Organizations of the Treadway Commission
and in accordance with the interpretive guidance issued by the SEC in Release
No. 34-55929. Based on that evaluation, management
concluded that the Companys internal control over financial reporting was
effective as of December 31, 2007.

This
annual report does not include an attestation report of the Companys
registered public accounting firm regarding internal control over financial
reporting. Managements report was not subject to attestation by the Companys
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only managements
report in this annual report.

Impact of Restatement on Internal Control over
Financial Reporting and Changes in Internal Control over Financial Reporting

In
conducting its assessment of internal control over financial reporting,
management considered the control deficiency (which was determined to
constitute a significant deficiency) in internal control over financial
reporting that resulted in the need to restate our previously issued financial
statements. We reviewed and analyzed the Securities and Exchange Commissions
Staff Accounting Bulletin (SAB) No. 99, Materiality, Accounting Principles
Board Opinion No. 28, Interim Financial Reporting, paragraph 29 and SAB Topic
5 F (Accounting Changes Not Retroactively Applied Due to Immateriality). As
part of the analysis, our management considered the impact of the restatement
adjustment on the financial statements of prior interim periods and determined
to restate our previously issued financial statements because the impact of the
error was material to the current years reported net income (loss). Based on
our review and analysis, including the foregoing, our management also concluded
that the control deficiency in internal control over financial reporting that
resulted in the restatement of the prior period financial statements did
constitute a significant deficiency, but did not constitute a material
weakness. The Companys management concluded that this significant deficiency
did not constitute a material weakness because it arose from an inadvertent
oversight in a highly complex area of accounting and reporting for business
combinations using the purchase method of accounting. The Companys management
believes that the oversight was an isolated incident that was not due to a lack
of recognition of the risk or effort by management to make appropriate and
accurate financial disclosures. Accordingly, the Companys management believes
that it is not indicative of a material weakness in internal control over
financial reporting. This significant deficiency has been reported to the audit
committee by our management and to our independent registered public accounting
firm. The Companys internal controls have been strengthened through increased
review and communication by the Company and its outside tax advisors to help
ensure compliance in the area of accounting for certain of the Companys
non-routine transactions. Management believes that there were no other material
events that occurred during or with respect to the quarter ended December 31,
2007, that materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.

117

Item 9B. OTHER INFORMATION

None.

118

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The
names, ages and positions of the directors and executive officers of Remington
are set forth below. All directors are elected annually and hold office until
their successors are elected and qualified, or until their earlier removal or
resignation.

Name

Age

PositionPaul A.
 Miller (a)(d)

49

Director,
 ChairmanBobby R.
 Brown (c)

75

DirectorGrant
 Gregory

67

DirectorGeneral
 Michael W. Hagee (Ret.) (a)

63

DirectorGeneral
 George A. Joulwan (Ret.) (d)

68

DirectorGeorge
 Kollitides, II (a)(c)(d)

38

DirectorWalter
 McLallen (a)(c)

42

DirectorScott Parker
 (b)

41

DirectorJames J.
 Pike

65

DirectorEdward H.
 Rensi

64

DirectorMadhu
 Satyanarayana (b)

26

DirectorFrank A.
 Savage

60

DirectorGeorge
 Zahringer III (b)

54

DirectorThomas L.
 Millner(a)

54

Director,
 Chief Executive OfficerStephen P.
 Jackson, Jr.

39

Chief
 Financial Officer, Treasurer, and Corporate SecretaryTheodore A.
 Torbeck

51

Chief
 Operating OfficerJohn
 DeSantis

58

Chief
 Technology OfficerE. Scott
 Blackwell

46

President,
 Global Sales and MarketingMark A.
 Little

60

Chief
 Administrative OfficerIgor Popov

42

Chief
 Restructuring OfficerJeffrey B.
 Costantin

48

Chief
 Information OfficerJohn M.
 Dwyer, Jr.

49

Senior Vice President of Brand
Management
 and Product Development Firearms and Ammunition(a)
Member,
 Executive Committee(b)
Member,
 Investment and Benefits Committee(c)
Member,
 Audit Committee(d)
Member,
 Compensation CommitteeAfter
being elected by the sole stockholder, RACI Holding, Inc., each of our
directors holds office until the next succeeding annual meeting of the
stockholders.

None
of our officers or directors has any family relationship with any director or
other officer. Family relationship for this purpose means any relationship by
blood, marriage or adoption, not more remote than first cousin.

The
business experience during the past five years of each of the directors and
executive officers listed above is as follows:

Paul
A. Millerhas served as Vice President of Cerberus
Operations & Advisory Company since January 2007. From January 2006 until
January 2007, he served as President of TechExec, Inc. From November 2004 until
January 2006, Mr. Miller served as Chief Operating Officer of Velocita Wireless
LLC. From October 2004 until prior to 2003, he served as President of TechExec,
Inc. Mr. Miller was appointed by the Board of Remington to serve as Chairman of
the Board and to serve as chairman of the compensation committee. Mr.

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Miller
is also on the board of directors of BFI Holdings LLC, Bushmaster Firearms
International LLC, Tier 1 Group LLC and Bushmaster Custom Shop LLC.

Bobby
R. Brown has served as a director of Remington since
prior to 2003. Mr. Brown currently serves as a director of Delta Trust and Bank
and Patriot Coal Company, Inc. Mr. Brown serves on the compensation committee
of Delta Trust and Bank and the executive committee and the compensation committee of
Patriot Coal Company, Inc.

Grant
Gregoryhas been employed by Cerberus Operations &
Advisory Company since 2005. From prior to 2003 to 2005, Mr. Gregory was
employed with Gregory & Hoenemeyer Investments. Mr. Gregory currently
serves as a director on the boards of AMBAC Inc., AMBAC Indemnity, Inc., MCI,
and DoubleClick, Inc.

General
Michael W. Hagee (Ret.)retired on January 1, 2007,
after serving as the 33rd Commandant of the Marine Corps from
January 2003 through November 2006. General Hagee (Ret.) serves on the board of
directors of Bushmaster Firearms International LLC, IAP World Wide Services and
National Interest Security Co. LLC.

General
George A. Joulwan (Ret.)has been self-employed with
One Team, Inc., as a strategic consultant since 2003. He has been retired from
the United States Army since prior to 2003. General Joulwan (Ret.) serves on
the board of directors of General Dynamics, Inc., Alion, nGRAIN and IAP World
Wide Services.

George
Kollitides has been employed with Cerberus since 2004,
and is presently a Managing Director. From 2004 to prior to 2003, he was
President and Managing Director of TenX Capital Management. Mr. Kollitides was
appointed by the Board to serve as a member of the Compensation Committee. Mr.
Kollitides serves on the board of directors of Bushmaster Firearms
International LLC, IAP World Wide Services, DPMS Panther, The Marlin Firearms
Company, Rafaella Apparel Group, Inc., Tier 1 Group and ZNR.

Walter
McLallenhas been a principal of Meritage Capital
Advisors since January 2004. Prior to January 2004, Mr. McCallen was a Managing
Director at CIBC World Market (CIBC) since prior to 2003. He currently serves
as a director of Bushmaster Firearms.

Scott
Parkerjoined Cerberus in 2006. Prior to joining
Cerberus, he was Chief Financial Officer of GE Capital Solutions since 2005.
From 2005 to 2003, Mr. Parker was Chief Financial Officer of GE Corporate
Financial Services. From 2003 and prior, he was Vice President, Financial
Planning and Analysis of GE Capital Services.

James
J. Pikehas served as chairman and chief executive
officer of CTA Acoustics, Inc., Therma Fiber, Inc., VHC Inc. and WMI Inc. since
prior to 2003. Mr. Pike serves on the Lindsey Wilson College Board of Trustees
and the Board of the Detroit Institute of Ophthalmology.

Edward
H. Rensihas been an owner and Chief Executive Officer
of Team Rensi Motorsports, which sponsors two cars in the NASCAR Nationwide Series,
since prior to 2003. From prior to 2003, Mr. Rensi was President and Chief
Executive Officer of McDonalds U.S.A. Mr. Rensi serves as a Director of Great
Wolf Resorts, Inc. and of International Speedway Corporation.

Madhu
Satyanarayanajoined Cerberus in 2005. Prior to
joining Cerberus, he was an investment banker at UBS Investment Bank. Mr.
Satyanarayana received his B.A. in Economics from Harvard University in 2003.

Frank
A. Savagehas served as a Vice Chairman of US
Investment Banking for Lazard Freres & Co. LLC since January 2003. From
prior to 2003 until joining Lazard, he served as Co-Head of the Restructuring
Practice at BT Alex Brown Inc.

George
Zahringer III has served as a Senior Managing Director
at Bear Stearns & Co. Inc. since prior to 2003. Mr. Zahringer currently
serves on the boards of directors for Chrysler, LLC and NewPage Corporation.

Thomas
L. Millner has served as President, Chief Executive
Officer and a director of Remington and Holding since prior to 2003. In May
2007, he became Remingtons Chief Executive Officer. Mr. Millner

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currently
serves on the Board of Directors of Stanley Furniture Co., Inc., LazyDays RV
SuperCenter, Bushnell Outdoor Products, and U.S. Sportsmens Alliance.

Stephen
P. Jackson, Jr. joined Remington in June 2003 as Vice President  Finance, Treasurer, and
Corporate Secretary. In June 2005, he became Senior Vice President  Finance
and Service Operations, Treasurer, and Corporate Secretary. In April 2006, he
became Senior Vice President, Chief Financial Officer, Treasurer, and Corporate
Secretary. In May 2007, he became Chief Financial Officer, Treasurer and
Corporate Secretary. From 2002 to 2003, he was a partner at PricewaterhouseCoopers
LLP.

Theodore
H. Torbeck joined Remington as the Chief Operating
Officer in February 2008. Prior to his employment with Remington, Mr. Torbeck
had been an employee of General Electric Company since 1978, serving in various
positions, including the Vice President Operations of GE Industrial from
October 2006 to October 2007, President and Chief Executive Officer of GE Rail
Services from September 2004 to September 2006, and Vice President and General
Manager  Global Supply Chain of GE Aircraft Engines from prior to 2003 to
September 2004.

John
DeSantisjoined Remington in July 2007 as President,
Firearms Operations. In January 2008, he became Remingtons Chief Technology
Officer. From April 2006 through June 2007, he served as CEO of Bushmaster
Firearms International LLC. From prior to 2003 to April 2006, Mr. DeSantis
served as CEO of Bushmaster Firearms International LLC.

E. Scott
Blackwelljoined Remington in
July 2007 as President, Global Sales and Marketing. From September 2006 through
June 2007, he served as President and Chief Sales and Marketing Officer of
Bushmaster Firearms International LLC. From prior to 2003 through August 2006,
Mr. Blackwell served as Division Manager and Executive Vice President of Law
Enforcement of Beretta USA Corp.

Mark
A. Little has served as Chief Administrative Officer
of Remington since May 2007. From April 2006 to May 2007, he served as
Remingtons Executive Vice President and Chief Administrative Officer. From
prior to 2003 until April 2006, he served as Remingtons Executive Vice
President and Chief Financial Officer.

Igor
Popovjoined Remington in June 2007 as Chief
Restructuring Officer. From December 2006 through May 2007, Mr. Popov served as
an associate of Cerberus Operations and Advisory Company. From September 2005
through November 2006, he served as a self-employed consultant to APW, Ltd. Mr.
Popov was employed as the President of Stolper, LLC from February 2004 through
July 2005, and was Principal Consultant for TRG from prior to 2003 through
February 2004.

Jeffrey
B. Costantin joined Remington in November 2007 as
Chief Information Officer. From 2004 to November 2007, he served in various
information technology positions with Cerberus companies. From prior to 2003 to
2004, Mr. Costantin was employed as a Senior Consultant with SBI Enteris Inc.

John
M. Dwyer, Jr. has served as Remingtons Senior Vice
President of Brand Management and Product Development  Firearms &
Ammunition since October 2007. From prior to 2003 until October 2007, he served
as Remingtons Vice President  Sales and Marketing for Ammunition and Clay
Targets.

Involvement in Certain Regulatory Proceedings

In
March 2004, following a prolonged process during which Mr. McLallen disputed
the foundation of the allegations made by the New York Stock Exchange, Inc.
(the NYSE), and without admitting or denying guilt, Mr. McLallen settled a
disciplinary proceeding (the Settlement) resulting from a Stipulation of Facts
and Consent to Penalty that he entered into with the Division of Enforcement of
the NYSE. The Settlement was related to personal stock trades that Mr. McLallen
made in 2001 in the aggregate amount of almost $44,000 while he was employed at
CIBC. The NYSE stipulated that (i) Mr. McLallen was in possession of material
non-public information regarding a possible restatement of financial statements
for a particular company, and (ii) he avoided losses of approximately $28,000
by selling that companys common stock in August 2001. Additionally, the NYSE
stipulated that Mr. McLallen, when asked by CIBC regarding his sale of such
common stock, made an omission of a material fact by failing to disclose to
CIBC all of the facts relating to his recent dealings with the company.
Pursuant to the Settlement, Mr. McLallen consented to findings that he engaged
in conduct inconsistent with just and equitable principles of trade, and
without admitting or denying any of the findings of fact (around which
significant controversy existed), agreed to a censure, a fine of $25,000, and a
six

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month bar from
membership, allied membership, approved person status and from employment or
association in any capacity with any NYSE member or member organization. The
six month bar expired in November 2004.

Audit Committee Composition

The
Company has a separately designated standing audit committee established in
accordance with Section 3(a) (58) (A) of the Exchange Act. The Audit Committee,
which currently consists of Bobby R. Brown, Chairman, George Kollitides II, and
Walter McLallen, has the authority and responsibility, among other things, to
recommend to the Board the selection of one or more independent registered
public accounting firms; to approve the fees paid to the independent registered
public accounting firm; to discuss with the independent registered public
accounting firm the results of the annual audit and quarterly reviews; to
review and evaluate the systems of internal control over financial reporting, compliance
with laws and regulations, and operational efficiency and effectiveness; and to
make reports to the Board periodically with respect to its findings.

Audit Committee Financial Expert

Remingtons
board of directors has determined that in its judgment, Bobby R. Brown is an
independent director and qualifies as an audit committee financial expert in
accordance with the applicable rules and regulations of the SEC. An audit
committee financial expert is a person who has (1) an understanding of
generally accepted accounting principles and financial statements; (2) the
ability to assess the general application of such principles in connection with
the accounting for estimates, accruals and reserves; (3) experience preparing,
auditing, analyzing or evaluating financial statements that present a breadth
and level of complexity of accounting issues that are generally comparable to
the breadth and complexity of issues that can reasonably be expected to be
raised by Remingtons financial statements, or experience actively supervising
one or more persons engaged in such activities; (4) an understanding of
internal control over financial reporting; and (5) an understanding of audit
committee functions.

Code of Ethics

Remington
has a code of ethics that applies to all salaried employees and members of the
Board of Directors. Our code of ethics, referred to as Business Ethics Policy
and Procedures is publicly available on our website under Investor Relations
at www.remington.com and is available in print to any stockholder who requests
it. Remington will disclose on the Investor Relations page on its website any
amendments and waivers with respect to the code of ethics that would otherwise
be required to be disclosed under Item 5.05 of Form 8-K.

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Item 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

We
want our executive officers to take appropriate risks with our capital in order
to generate returns for our stockholder and bondholders, while at the same time
sharing the downside risk if those risks result in poor performance or even
loss. Through our compensation processes and programs, we endeavor to create an
environment that fosters and rewards measured risk-taking while aligning our
compensation programs with our overall compensation philosophy and principles,
which consist of the following:

1.
Compensation
  should be a management tool to achieve business results;2.
Competitive
  total compensation opportunities should be provided based primarily on
  institutional knowledge of our industry and research regarding the
  compensation practices typical of our industry; and3.
Total
  compensation should be aligned with relative internal performance targets and
  contribution to the overall achievement of our business objectives and should
  be focused on operating performance, working capital management, and business
  process improvement, which we refer to as Adjusted EBITDA. Adjusted EBITDA
  consists of earnings before interest, taxes, depreciation and amortization,
  as adjusted for certain non-recurring or unusual transactions and as defined
  in Note 22 to the consolidated audited financial statements included in this
  annual report on Form 10-K.We
foster an attitude of shared risk-taking with our executive officers by
providing a significant portion of our executive officers incentive
compensation through long-term and short-term operating performance-based
awards. We evaluate and reward executive officers based on dynamic factors such
as whether they are willing and able to challenge existing processes, adapt to
sudden or frequent changes in priorities and capitalize on windows of
opportunity.

Our
Compensation Committee reviews and approves our executive compensation
policies.

Executive Compensation PolicyRemingtons
  compensation programs consist of the following components:
Annual base salary
Annual cash bonus incentive plan
Perquisites
Equity awards
Long Term Incentive Compensation Plan
  (LTIP)
Pension and retirement benefits
Other benefits
Special discretionary benefits
Change in control and severance benefitsWe
use short-term compensation (base salary, annual cash bonuses, and perquisites)
and long-term compensation (equity awards, LTIP, pension and retirement, and
other benefits) to achieve our goal of driving long-term growth in Adjusted
EBITDA and generation of free cash flow. Based on our ownership structure as
well as precedent for officers of similar companies, the Board of Directors,
upon the recommendation of the Compensation Committee, determined it was
appropriate to enter into employment agreements that include change in control
and severance benefits for certain Named Executive Officers in order to provide
certain protections for Remington post-termination for a reasonable and
measurable cost. The annual cash bonuses and the long-term compensation
elements, particularly the equity awards and LTIP, are designed to emphasize the
performance measures our executive officers need to achieve in order to deliver
value to Remington. In short, compensation for our executive officers is
structured to emphasize variable pay based on performance, with base salary and
annual cash incentive opportunities established based on historical averages
that reflect updates based on actual performance each annual period.

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As
of January 1, 2007, the Compensation Committee was composed entirely of
non-management directors, each of whom had been determined in the Boards
business judgment to be independent based on the standards for independence
adopted by the Board of Directors. As a result of the acquisition of our sole
stockholder, RACI Holding, Inc. (Holding) by American Heritage Arms (AHA)
(the AHA Acquisition) on May 31, 2007, a new Compensation Committee was
appointed shortly thereafter. Although the current Compensation Committee is
still composed of non-management directors, they have not all been deemed to be
independent. The Compensation Committee evaluates the percentage mix of
compensation components that it believes is appropriate for each of our
executive officers. This is not a mechanical process, and the Compensation
Committee uses its judgment and experience and works with our board of
directors, along with our ownership, to determine total compensation and the
appropriate mix of our various compensation components. The Compensation
Committee has responsibility for oversight and review of our total compensation
strategy, taking into consideration existing company-wide benefit plans, and
has responsibility for certain executive benefit plans, including administering
our annual management cash bonus incentive compensation plan, determining the
compensation for the Chief Executive Officer and reviewing and approving the
compensation for the Chief Financial Officer and our other officers, including
those identified below, whom we refer to collectively with the Chief Executive
Officer as our Named Executive Officers.

The
Compensation Committee reviews, on at least an annual basis, the
appropriateness and effectiveness of our compensation processes and programs as
enumerated in the Overview section above. The Compensation Committee approves,
on an annual basis, target award opportunities and performance criteria to be
utilized in the annual cash bonus incentive plan. In addition, the Compensation
Committee considers, on an annual basis and subject to periodic review,
equity-based awards and long-term incentive plans, including the LTIP.

We
informally consider competitive market practices with respect to the salaries
and total compensation of our officers. We review the market practices by
speaking to recruitment agencies and reviewing annual reports on Form 10-K or
similar information of other companies within our industry. In addition, the
Compensation Committee has the authority to engage an outside compensation and
benefits consultant to make recommendations relating to the overall
compensation philosophy, comparable base salary levels, short-term and
long-term incentive compensation plans, appropriate performance parameters for
such plans, and related compensation matters. The Compensation Committee, prior
to the AHA Acquisition, utilized Heidrick & Struggles (the Consultant) to
assist in establishing salary ranges and incentive compensation percentages for
certain of Remingtons officers.

Components of Total
Compensation

Annual Base Salary. Base salary is used to recognize the
experience, skills, knowledge and responsibilities required of the officers in
their roles. Salaries are reviewed on an annual basis, as well as at the time
of promotion or other changes in responsibilities. The leading factor in
determining increases in base salary level is the employment market for senior
executives with similar levels of experience and skills. When establishing the
base salaries of the Named Executive Officers, the Compensation Committee and
Chief Executive Officer consider a number of factors including the seniority of
the Named Executive Officer, the functional role of the position, the level of
the Named Executive Officers responsibility, and our ability or likelihood to
replace the Named Executive Officer with an individual with similar skills and
experience.

For
fiscal year 2007, the Compensation Committee, after considering our recent
financial performance, overall roles and responsibilities, corporate goals and
objectives, and incorporating the Consultants recommendations, increased the
base salaries of Thomas L. Millner, Paul L. Cahan and John M. Dwyer, Jr. by
approximately 10%, 11% and 7%, respectively, effective January 26, 2007.
Effective July 1, 2007, the base salaries of Stephen P. Jackson, Jr. and Thomas
L. Millner were increased by approximately 20% and 8%, respectively, as the
result of additional responsibilities resulting from the AHA Acquisition. On
July 1, 2007, John DeSantis was hired as an executive officer of Remington. His
salary was determined by reviewing his previous salary, his responsibilities
and the unique skills that are required to perform his responsibilities as
President of Firearms Operations. In addition, Mr. Dwyers compensation was
increased by approximately 20% on October 15, 2007, as a result of his promotion
to Senior Vice President Brand Management and Product Development-Firearms and
Ammunition.

Annual Cash BonusIncentive
Compensation. Each year the Compensation Committee
considers whether to adopt an annual cash bonus incentive compensation plan for
our executive officers and certain other employees based on the budgeted
performance of Remington. In January 2007, the Compensation Committee

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approved the
2007 Incentive Compensation Plan, which provides for eligible participants to
earn incentive compensation upon Remingtons achievement of certain Adjusted
EBITDA performance targets. For 2007, the plan was created to pay each
participant 5% of his or her bonus target for each 1% increase in Remingtons
performance, starting at 81% of $54.0 million of Adjusted EBITDA. Each
participants individual bonus percentage was to be computed on base salary at
December 31 multiplied by the pre-established target bonus percentage. The 2007
plan called for a maximum award of 110% of Adjusted EBITDA, or 150% of an
individuals target. At 90% Adjusted EBITDA performance, each plan participant
would receive 50% of his or her target bonus. At 100% Adjusted EBITDA
performance, each plan participant would receive 100% of his or her target
bonus. At 110% Adjusted EBITDA performance, each plan participant would receive
150% of his or her target bonus. With respect to the Named Executive Officers
and a limited number of other participants, 10% of their individual total award
is based on 12 monthly goals which each account for 0.833% of that bonus. The
goals are expressed as a percentage of the last 12 month average working
capital as a percentage of last 12 months net sales on a rolling 12 month
total. The 2007 plan was structured based on the 2007 budget, which contained
improved goals, whereas the 2006 plan was developed with motivation of
employees as a key objective, along with improved financial performance.

In
February 2008, the Compensation Committee approved the removal of the maximum
cash bonus award limitations for the 2007 plan as a reward to all the
participants for their 2007 efforts and expected financial results.

The
performance criteria applicable to the Chief Executive Officer, Chief Financial
Officer, and the other Named Executive Officers for purposes of the 2007
incentive compensation plan are determined based solely on Remingtons
corporate performance. Upon achievement of certain levels of Adjusted EBITDA,
the Compensation Committee provided for a percentage of the achieved Adjusted
EBITDA level to be paid to the employees participating in the 2007 plan. Once
that total dollar amount was determined, then each employee would be allocated
his or her bonus based on his or her target incentive award percentages of base
salary. For 2007, the Compensation Committee provided that the target incentive
award would begin for the Chief Executive Officer at 100% and for the Chief
Financial Officer and other Named Executive Officers, depending on position, at
60% to 100% of base salary. Mr. Jacksons and Mr. Littles target incentive
awards were increased to 100% in July and October 2007, respectively, effective
in 2007, in order to be in alignment with other direct reports to the Chief
Executive Officer. In
addition, in connection with his promotion to Senior Vice President of Brand
Management and Product Development  Firearms and Ammunition, Mr. Dwyers
target incentive award was increased to 80% of his base salary effective in
2008.

In 2007, the Named Executive Officers earned incentive compensation based
on $54.0 million of Adjusted EBITDA. Accordingly, members of management who
were Named Executive Officers in 2007 were eligible for and will receive bonus
payments for the year ended December 31, 2007 in the aggregate amount of
$2,826,699. See the 2007 Grants of Plan-Based Awards table for a breakout of
amounts paid to each of the Chief Executive Officer, Chief Financial Officer
and the remaining active Named Executive Officers. Mr. Cahan, who retired in
August 2007, is entitled to $197,667 as full settlement of all obligations and
liabilities relating to both the 2007 Incentive Compensation Plan as well as
the LTIP as discussed below in Severance  Paul L. Cahan.

Annual
cash bonuses are intended to reward corporate performance during the year and
can therefore be highly variable from year to year.

Perquisites.

Personal
Financial Services Consulting. We retain the services
of a financial services firm to assist Messrs. Millner, Jackson, and Little
with their personal asset management. Remington provides this benefit in order
for the officers to focus more of their time to the direction of our
operations. See footnotes 9, 10 and 11 of the 2007 Summary Compensation Table
for a breakout of the cost of these services, including tax gross-up amounts,
for Messrs. Millner, Jackson and Little.

Living
Expenses Reimbursement. Remington provided Mr. Cahan
with amounts for basic living expenses (including apartment rental) and income
taxes thereon, which were incurred in connection with the fulfillment of his
duties and responsibilities with respect to Remingtons manufacturing
operations in Ilion, New York before he resigned in August 2007. Mr. Cahans
primary residence is outside the state of New York. After July 1, 2007
Remington provided Mr. DeSantis with amounts for basic living and commuting
expenses and income taxes thereon. Mr. DeSantis expenses were incurred in
connection with his fulfillment of duties

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and
responsibilities with respect to Remingtons manufacturing operations in Ilion,
New York and Mayfield, Kentucky. Mr. DeSantis primary residence is outside the
state of New York. Remington provided these amounts because of the
responsibilities related to these particular positions and unique skills
required to perform these responsibilities. See footnotes 11 and 13 of the
2007 Summary Compensation Table for the amounts, including tax gross-up, of
these costs for each of Messrs. Cahan and DeSantis.

Equity
Awards.Equity awards, which, if awarded, are
expected to be awarded as interests in AHA common stock, will be intended to
align executive managements interests directly with those of AHA. The equity
interests would be intended to reward company performance during the year and
incent management continuity and retention along with longer-term strategic
thinking. As a result, the Compensation Committee periodically determines if
equity interests should be awarded after taking into account Remingtons
overall compensation philosophy and the interests of AHA. We do not engage in
option timing of any kind and we expect that our equity awards will be highly
variable from year to year.

Prior
to the AHA Acquisition, we historically compensated certain of our executive
officers with equity interests in Holdings common stock. No equity interests
in Holding or AHA were granted in 2007 or 2006 to employees of Remington in
connection with their service to Remington. However, as a result of the AHA
Acquisition on May 31, 2007, the Company incurred $1.5 million of employee
stock compensation expense related to the remainder of unvested stock options
held by employees and directors of Remington and the deferred shares held by
employees of Remington. In addition, the Company recorded $0.2 mark-to-market
expense related to the conversion of Holdings redeemable shares. Upon
completion of AHAs acquisition of Holding, all of these outstanding stock
options immediately vested subject to the applicable change in control provisions
in Holdings 1999 Stock Incentive Plan and 2003 Stock Option Plan and were
subsequently cancelled by Holding. In addition, the deferred shares were
converted to equity and subsequently purchased by AHA.

Long-Term
Incentive Compensation Plan. We believe that
long-term performance is achieved by requiring management to achieve certain
levels of Adjusted EBITDA that generate certain levels of cash flows. In August
2006, the Compensation Committee recommended and the Board of Directors
approved the 2006 Long-Term Incentive Compensation Plan for certain executive
employees, including the Named Executive Officers. The LTIP is based on our
total Adjusted EBITDA performance for each individual year between 2006 and
2009 and the total amount earned during the period will be paid out in the
first quarter of 2010. In order to receive the 2010 payment, each Named
Executive Officer or other participant must be an employee of Remington on
December 31, 2009. The Compensation Committee approved a target payout for all
executive officers, including the Named Executive Officers, of 40% of base
salary as of the end of each calendar year over the 2006-2009 periods. The
Compensation Committee established Adjusted EBITDA target goals of $40.0
million, $42.0 million, $44.1 million, and $46.3 million for 2006, 2007, 2008,
and 2009, respectively. These goals were established as a target that we
believed that the stockholder and bondholders would deem as successful to
highly successful. Remington achieved its LTIP target goals in 2006 and 2007.

Accordingly,
LTIP participants who were Named Executive Officers in 2007 were eligible for
and earned awards for 2007 in the aggregate amount of $753,400. See the 2007
Grants of Plan-Based Awards table for the individual amounts earned by the
Chief Executive Officer, Chief Financial Officer and the remaining Named
Executive Officers.

Long-term
incentive compensation, and specifically this LTIP, is intended to reward
corporate performance, promote longer-term strategic thinking and promote
continuity and retention and can therefore be highly variable from year to
year.

Pension and Retirement Benefits.

Defined
Benefit Plans. The Remington Arms Company, Inc.
Pension and Retirement Plan, which we refer to as the Retirement Plan, was
established effective December 1, 1993 to provide retirement income and
survivor benefits to Remingtons employees and their beneficiaries through a
tax-qualified program. We also adopted the Retirement Plan in order to maintain,
and to decrease, employee turnover levels, as well as to protect our
competitive benefits position in our industry. Pension benefits under the
Retirement Plan are limited in accordance with the provisions of the Internal
Revenue Code of 1986, as amended, which we refer to as the Code, governing
tax-qualified pension plans. We also adopted a Supplemental Pension Plan
effective January 1, 1998, that provides eligible participants with retirement
benefits of 2% of average monthly earnings multiplied by years of service,
reduced by the amount actually earned by such participants under the Retirement
Plan. The Supplemental Pension Plan is a non-qualified plan under the Code.
Remington also adopted the Supplemental

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Plan in order
to provide an equitable pension award amount as a percent of salary, in
conjunction with the Retirement Plan, for those employees whose salaries were
above certain IRS limitations. We refer to the Retirement Plan and the
Supplemental Plan collectively as the Pension Plans. Messrs. Millner, Little,
and Cahan were eligible to participate in the Pension Plans during the year
ended December 31, 2007, and each of them remain eligible to participate in the
Pension Plans except for Mr. Cahan, who retired in August 2007. Mr. Dwyer is eligible
to participate in the Retirement Plan. Mr. Jackson is eligible to participate
in the Supplemental Plan. Benefits under the Supplemental Plan are not
pre-funded and are paid by Remington when due.

Retirement
benefits under the Pension Plans are generally based on an employees years of
benefit service as computed under the applicable provisions of each of the
Retirement Plan and Supplemental Plan. Generally, an employees benefit service
under the Pension Plans includes all of his service with Remington and his
service, if any, with DuPont prior to the 1993 Acquisition; however, eligible
employees who elected to retire from DuPont will receive retirement income from
the DuPont retirement plan in connection with the 1993 Acquisition. Retirement
benefits are generally paid in annuity form, for life, commencing at the
employees 65th birthday, although longer service employees may
elect to commence receiving retirement income at an earlier age.

Benefits
recognized under the Pension Plans for the years ended December 31, 2007 and
2006 generally include an employees average monthly compensation including the
last full month of service. Compensation for this purpose includes base salary
and 50% of annual cash incentive compensation awards. Compensation does not
include awards and payments under any other special compensation plans such as
the LTIP, payments for severance, relocation or other special payments.

In
October 2006, the Board of Directors, upon the recommendation of the Benefit
and Investment Committee, approved an amendment to the Retirement Plan to be
effective December 31, 2007. As a result of the amendment, for the Named
Executive Officers in the Retirement Plan (Messrs. Millner, Little, and Dwyer),
future accrued benefits were frozen as of January 1, 2008. In addition, for
Named Executive Officers in the Supplemental Plan (Messrs. Millner, Jackson and
Little), future accrued benefits also were frozen as of December 31, 2007,
although years of service will continue to accrue when calculating eligibility
for early retirement. For accrued service through December 31, 2007, the
pension benefit calculation will not change. Mr. Cahan retired in August 2007,
and accordingly his benefits have stopped accruing and are not affected by
these amendments.

The
decision to freeze the Pension Plans for certain employees, including all Named
Executive Officers, was a result of the cost associated with the Pension Plans
as compared to the benefits realized by Remington, the levels of cash required
to maintain appropriate funding levels of the plans, and the competitive
requirements in our industry having changed since the inception of the Pension
Plans.

Defined
Contribution Plans. Prior to January 1, 2006, we sponsored
a qualified defined contribution plan, which we refer to as the Defined
Contribution Plan, and matched 50% of a participants contributions up to a
maximum of 6% of a participants compensation for all eligible employees.
Effective January 1, 2006, we established a second qualified defined
contribution plan that matches 100% of the first 4% of a participants
contributions, which we refer to as the 401(k) Plan. The 401(k) Plan includes
all nonunion employees of Remington, including the Named Executive Officers
listed below. The Defined Contribution Plan remains in existence for all Ilion
union employees who are not included in the 401(k) Plan. Messrs. Millner,
Jackson, Little, DeSantis and Dwyer participate in the 401(k) Plan. Since these
amounts are characterized as defined contribution, payments are provided to the
employees upon their termination from Remington in a manner decided upon by
each respective employee in accordance with his or her own personal financial
situation.

In
addition, effective January 1, 1998, Remington adopted the Supplemental Savings
Plan, which we refer to as the SERP Savings Plan. This plan is a non-qualified
defined contribution plan under the Code. The SERP Savings Plan provides for
matching of compensation contributions beyond the IRS covered compensation
limits in order to allow the Named Executive Officers the same salary matching
afforded to all employees. Per the provisions of the plan, each participant was
allowed to make a one-time election in 2006 to receive the full balance of his
or her account on a specified date after December 31, 2006. During the third
quarter of 2006, each participant elected to receive a distribution of their
respective account balances on January 16, 2007. As such, on January 16, 2007,
the following gross amounts relating to the SERP Savings Plan, less applicable
federal and state income taxes and including interest at the prime rate (as
identified in the Wall Street Journal) as of December 31, 2006 plus 2% (10.25%
at December 31, 2006) were distributed: Mr. Millner 

127

$886,726, Mr.
Jackson  $67,734, Mr. Little  $485,176, Mr. Dwyer  $13,020 and Mr. Cahan
 $328,312. Although the plan still exists, it is currently not an active
plan.

Postretirement
Plan. We also maintain a Postretirement Benefit Plan,
which we refer to as the OPEB Plan, whereby employees covered by the Retirement
Plan who have at least 15 years of service at Remington may continue certain
medical, dental, and life insurance benefits upon retirement, unless said
employees are required to utilize DuPont health and life insurance benefits
upon retirement. Medical coverage for participants in the Postretirement
Benefit Plan can continue until age 65 or until the retiree becomes eligible
for Medicare. At age 65, the retiree is eligible to receive a Medigap
reimbursement of up to $75 each month for the employee and his covered spouse
to purchase Medigap insurance. The Postretirement Benefit Plan also provides
life insurance equal to the final base pay of the participant upon retirement
and the percent amount gradually declines after age 65 and becomes the greater
of $10,000 or 25% of last base annual earnings. At December 31, 2007, the OPEB
Plan includes Messrs. Millner, Little and Dwyer.

Other
Benefits.

Extended
Medical Coverage.
In an effort to provide additional benefits to our executive
officers, we extended medical coverage to certain key employees (including Messrs.
Millner, Jackson, Little and DeSantis), which allows
them to continue to participate in our Health and Welfare Benefit Plan under
certain circumstances. In the event of a change of control, or in the case of a
key participants retirement, resignation or termination (except in the case of
termination for cause), each participant will be entitled to continue to
participate in the Health and Welfare Benefit Plan or any successor plans, at a
cost equal to the cost for active Remington employees and on the same basis
until attaining the age of 65.

Company-provided
Life Insurance.We maintain a Life Insurance Plan
whereby we provide life insurance to all employees, including the Named
Executive Officers. All employees receive 100% of their annual base salary to
be paid in a lump sum after death. To receive benefits, all covered persons
must be active employees of Remington at the time of death. We provide this
benefit through the purchase of insurance policies on behalf of each employee,
and Remington pays these annual premiums. See the 2007 Summary Compensation
Table for the premiums paid for each of the Named Executive Officers.

Special
Plan. Under a Special Supplemental Retirement Plan for
Paul L. Cahan, which we refer to as the Special Plan, Mr. Cahan was entitled to
additional supplemental retirement benefits of (i) a lump-sum payment of
$77,000, payable on the date of commencement of benefits under the Supplemental
Plan and (ii) credit in the Supplemental Plan as if he had received additional
non-incentive compensation in March 2003 equal to $38,000, payable at the same
time and in the same form as Mr. Cahans Supplemental Plan benefit. As a result
of his retirement in August 2007, the $77,000 was paid to Mr. Cahan.

Death
Benefit Plan. In January 2001, the Remington Arms
Company, Inc. Death Benefit Plan was adopted to cover the Named Executive
Officers and certain other employees. The Death Benefit Plan stipulates that in
the event of the death of the employee while employed by Remington, a covered
employees beneficiary receives two times the deceased employees annual base
salary to be paid over a period of four years (one forty-eighth of such sum is
payable in monthly installments) after death. The payments commence on the
first day of the month beginning after the anniversary of the employees death.
The covered employee must be an employee of Remington at the time of death in
order to receive any benefits from the Death Benefit Plan. We are not insured
for these potential amounts owed and proceeds would be paid by the Company. The
Death Benefit Plan specifically excludes those employees who participate in the
Supplemental Plan. Accordingly, only Messrs. DeSantis and Dwyer are eligible
for this benefit.

128

Special
Discretionary Benefit

On
April 27, 2007 the stockholders of Holding approved the payment of a cash bonus
from the proceeds of the stockholders in an aggregate amount of $3.8 million to
certain of Remingtons Named Executive Officers, pending the successful closing
of the AHA Acquisition. This bonus was paid on May 31, 2007 to each of the
following Named Executive Officers with funds withheld from the stockholders
and provided to Remington for processing. The amounts paid to Named Executive Officers
were:

Name

Title

Bonus AmountThomas L.
  Millner

Chief
  Executive Officer

$
1,933,333Stephen P.
  Jackson, Jr.

Chief
  Financial Officer

$
966,667Paul L.
  Cahan

Former
  President, Ammunition and Clay Target Operations

$
450,000Mark A.
  Little

Chief
  Administrative Officer, Executive Vice President

$
450,000Change in Control
and Severance

Based
on our ownership structure as well as precedent for officers of similar
companies, the Board of Directors, upon the recommendation of the Compensation
Committee, determined it was appropriate to enter into employment agreements
with certain of our Named Executive Officers. As part of this decision, the
Compensation Committee considered (1) restricting the ability of the
individuals to solicit employees or customers from Remington subsequent to
termination, (2) an estimated length of time for an individual to find
comparable employment at a similar level and (3) consistency with terms and
arrangements that our ownership had provided with other companies in which it
has an interest. An overriding premise in entering into these agreements was to
provide certain protections for Remington post-termination for a reasonable and
measurable cost. It was thus decided that Remington would enter into employment
agreements that the Compensation Committee believed would be beneficial to
Remington (the addition of confidentiality, non-competition and
non-solicitation provisions) and beneficial to the employee (severance
arrangements). See Executive Employment Agreements below. It was considered
by the Compensation Committee that, given the time it would take for an
employee at this level to find a similar job, a decision to terminate without
cause would effectively freeze such Named Executive Officers career for a
period of time. Thus, the payment of an individuals severance was considered
reasonable given the employees position with Remington.

Executive Employment Agreements - Severance.
 As of May 31, 2007, we entered into employment agreements with each of Messrs. Millner, Jackson, Little, Cahan and
DeSantis, each of which was approved and authorized by the Board. These
agreements were entered into in order to provide certain protection for Remington
post-termination for a reasonable and measurable cost for which precedent
exists for officers of similar companies. Upon Mr. Cahans retirement in August
2007, Mr. Cahan entered into a Severance Agreement that generally superseded
the terms of his employment agreement, except for certain covenants that remain
in effect. See Severance  Paul L. Cahan below.

Our
employment agreement with each of Messrs. Millner, Jackson, Little and DeSantis
continues until terminated by us or by the executive. Each agreement provides
for a minimum annual base salary that may increase from time to time in the
discretion of the Board. Each executive is also eligible to participate in our
2006 Long Term Incentive Plan and our annual incentive compensation plan for our
executive officers. The targeted annual bonus percentage for the annual
incentive compensation plan is 100% for each of the executives, except for Mr.
Little whose targeted bonus percentage in the agreement was 90%. However, Mr.
Littles percentage was amended to 100% in October 2007.

If
the employment of any of Messrs. Millner, Jackson, Little or DeSantis
terminates due to his death or disability or if we terminate his employment for
Cause, as such term is defined in the employment agreement, he will receive
the amount of his base salary earned and due but not paid through the date of
termination. In addition, if the termination is due to death or disability, the
individual also will receive a pro rata amount of

129

incentive
compensation pursuant to the Annual Incentive Compensation Plan. If we
terminate without cause or the executive terminates for Good Reason, as
such terms are defined in the employment agreement, the individual is entitled
to receive the following during his severance period:

 Base
        salary in semi-monthly installments; A
        pro rata portion of incentive compensation payable through the termination
        date; Any
        incentive compensation earned under the Long Term Incentive Plan as of
        the termination date; Continuation
        of health and insurance benefits until Executive attains age 65 or, if
        later, the end of the severance period; Reimbursement
        of premiums paid by the Executive on any supplemental long-term disability
        policy maintained by the Executive as of January 1, 2007; Financial
        planning services and a gross-up payment for the tax liability attributable
        to receipt of such services (although Mr. DeSantis is not entitled to
        receive financial planning services during his severance period); Vested
        accrued benefits under our retirement plan and the executives benefits
        under his SERP; and Continuation
        in group life insurance plan.The
severance period begins on the termination date and lasts three years in the
case of Mr. Millner, two years for Messrs. Little and DeSantis, and for Mr.
Jackson such period is 24 months as of the effective date of his employment
agreement and reduced by one month for each of month of service until the
severance period equals 12 months.

During
the term of employment and any severance period each executive is restricted
from competing with us or soliciting any of our employees or customers.

In
the event we experience a change in control, each employment agreement requires
that we obtain the agreement of any successor to assume and perform the
employment agreement. If we do not obtain such agreement from a successor, the
executive will be entitled to severance benefits as if he were terminated
Without Cause.

Severance
payments for each of the Named Executive Officers with whom we have entered
into employment Agreements are in addition to our obligation to pay such
officers salary during the requisite notice period.

Stock Option
Plans  Change in Control.
At May 31, 2007 there were 10,635 outstanding options to purchase Holding
common stock under the 1999 Stock Incentive Plan and the 2003 Stock Option
Plan, at a per share price of $220.31, of which an aggregate of 8,365 options
were held by the Named Executive Officers. Upon a change in control, the
following options immediately vested: Mr. Millner, 3,632 options; Mr. Jackson,
680 options; Mr. Little, 2,270 options; Mr. Dwyer, 1,103 options and Mr. Cahan,
680 options. As a result of the change in control that occurred upon the
acquisition of Holding by AHA in May 2007, Remington incurred $0.8 million of
compensation cost for the unvested stock options held by employees of
Remington. Upon completion of the AHA Acquisition, all of these outstanding
stock options immediately vested subject to the applicable change in control
provisions in Holdings 1999 Stock Incentive Plan and 2003 Stock Option Plan
and were subsequently cancelled by Holding. Holding made payments in the
aggregate, net of selling expenses and before taxes, of approximately $0.8
million to Messrs. Millner, Jackson, Little, Dwyer and Cahan for the stock
options.

Additionally,
at May 31, 2007, there were 5,851 deferred shares of Holding that were
converted to common equity as a result of the change in control, of which an
aggregate of 4,853 deferred shares were held by the Named Executive Officers as
follows: Mr. Millner, 3,393 shares; Mr. Little, 1,000 shares; Mr. Dwyer, 195
shares; and Mr. Cahan, 265 shares. The Company recorded $0.7 million of
compensation expense related to the conversion of Holdings deferred shares to
equity. Messrs. Millner, Little, Dwyer and Cahan recognized earnings of
approximately $0.4 million, net of selling and expenses and before taxes, for
the conversion of the deferred shares to equity which were subsequently purchased by
AHA. See Non-Qualified Deferred Compensation below.

130

Role of Executive
Officers in Executive Compensation

The
Compensation Committee recommends and approves the final determination of total
compensation for our Chief Executive Officer, Tommy Millner. The Compensation
Committee evaluates the total compensation of our other Named Executive
Officers acting with advice from Mr. Millner. Mr. Millner plays no role in
determining his own compensation.

Conclusion

Remingtons
compensation policies and programs are designed to retain and motivate our
Named Executive Officers and to ultimately reward them for both current
operating results and long-term strategic performance.

Compensation Committee Report

The
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis that accompanies this report with our management. Based on its
review and discussions, the Compensation Committee recommended to the Board
that the Compensation Discussion and Analysis be included in our Annual Report
on Form 10-K for the year ended December 31, 2007.

Except
for the Annual Report on Form 10-K described above, this Compensation Committee
report is not incorporated by reference into any of our previous or future
filings with the SEC, unless any such filing explicitly incorporates the
report.

PaulA. Miller,
ChairmanGeneral George A. Joulwan
 (Ret.)George Kollitides,
IISummary Compensation Table

The
following tables summarize the compensation paid by Remington for services in
all capacities rendered to Remington during the years ended December 31, 2007
and 2006 by its Chief Executive Officer, its Chief Financial Officer, and by
each of its three other most highly compensated executive officers and departed
officers who would have been included in the total except for the fact that
their employment was terminated. We refer to these individuals collectively as
our Named Executive Officers. In 2007, there are a total of six employees
presented since Mr. Cahan would have been a qualifying highly compensated employee
but for his retirement from Remington in August 2007.

In
2007 and 2006, there was SFAS 123R expense recorded of $1.5 million and $0.3
million, respectively, the results of which are reflected below. See Note 16 to
the accompanying audited consolidated financial statements contained in Item 8
 Financial Statements and Supplementary Data in this annual report on Form
10-K. See the Potential Payments Upon Termination or Change of Control
section below for an explanation of the material terms of any applicable
employment agreements, which are not included in the table below. As shown in
the Summary Compensation Table below, salary and bonus categories generally
constitute less than 50% of our Named Executive Officers total compensation in
our effort to reward our officers for operating performance and to encourage
long-term strategic action. In addition, the NQDC referenced in the column
header that follows refers to Non-Qualified Deferred Compensation plans, of
which we have the SERP Savings Plan and the Special Plan.

131

2007 Summary Compensation TableName & Principal
Position

Year

Salary
($)

Bonus
($)**

Stock
Awards ($)
(1)

Option
Awards ($)
(1)

Non-Equity
Incentive Plan
Compensation
($)
(2)

Change in
Pension
Value and
NQDC
Earnings ($)

All Other
Comp.
($)

Total
($)Thomas L. Millner,Chief ExecutiveOfficer

2007

$
602,900

$


$
283,383

$
260,434

$
1,310,400

$
450,562
(3)
$
1,966,926
(8)
$
4,874,6052006

$
528,000

$


$


$
107,418

$
543,000

$
256,673
(3)
$
32,954
(8)
$
1,468,045Stephen P.Jackson, Jr.,Chief Financial Officer,Treasurer, and CorporateSecretary

2007

$
279,167

$


$


$
48,760

$
624,000

$
37,951
(4)
$
1,000,109
(9)
$
1,989,9872006

$
233,333

$


$


$
20,111

$
218,000

$
36,641
(4)
$
16,245
(9)
$
524,330Mark A. Little,ChiefAdministrativeOfficer

2007

$
269,500

$


$
83,520

$
162,776

$
560,560

$
225,484
(5)
$
482,513
(10)
$
1,784,3532006

$
269,500

$


$


$
67,132

$
258,900

$
177,443
(5)
$
24,686
(10)
$
797,661John DeSantis,Chief TechnologyOfficer

2007

$
225,000

$


$


$


$
558,000


N/A

$
37,409
(11)
$
820,4092006

$


$


$


$


$



N/A

$

(11)
$
John M. Dwyer,Jr., Senior VicePresident BrandManagement andProductDevelopment Firearms andAmmunition

2007

$
200,904

$


$
16,286

$
75,168

$
329,472

$
128,481
(6)
$
16,429
(12)
$
766,7402006

$
181,500

$


$


$
36,544

$
141,100

$
77,889
(6)
$
12,645
(12)
$
449,678Paul L. Cahan,FormerPresident,Ammunition &Clay TargetOperations*

2007

$
194,292

$


$
22,133

$
48,760

$
197,667

$
272,350
(7)
$
756,150
(13)
$
1,491,3522006

$
269,500

$


$


$
20,111

$
258,900

$
262,668
(7)
$
21,644
(13)
$
832,823*
 If employed for entire year would have been included in table. Mr. Cahan
 retired effective August 31, 2007.**
 Annual cash incentive compensation earned pursuant to the 2007 Incentive
 Compensation Plan is included in non-equity incentive plan compensation
 column.(1)

Amount
 reflects the Named Executive Officers portion of deferred shares which were
 converted to equity and subsequently purchased by AHA, as well as the options that
 immediately vested and were subsequently cancelled and were paid pursuant to
 SFAS 123(R) as a result of the AHA Acquisition.(2)

Refer to the
 Grants of Plan-Based Awards table below for a break out of these amounts.132

(3)

For 2007,
 amount reflects change in amount accrued from December 31, 2006 to December
 31, 2007 for the Retirement Plan of $28,315, the Supplemental Plan of
 $397,450, and the OPEB Plan of $20,985 and the earnings associated with the
 SERP Savings Plan of $3,812. For 2006, amount reflects change in amount
 accrued from December 31, 2005 to December 31, 2006 for the Retirement Plan
 of $33,168, the Supplemental Plan of $128,683, and the OPEB Plan of $8,550,
 and the earnings and Company contributions during the same period associated
 with the SERP Savings Plan of $95,272. Does not include incremental three
 years of service under the Supplemental Plan that would be entitled for
 termination without cause subject to the Executive Employment Agreement, as
 discussed below.(4)

For 2007,
 amount reflects change in amount accrued from December 31, 2006 to December
 31, 2007 for the Supplemental Plan of $37,628 and the earnings associated
 with the SERP Savings Plan of $323. For 2006, amount reflects change in
 amount accrued from December 31, 2005 to December 31, 2006 for the
 Supplemental Plan of $24,427 and the earnings and Company contributions
 during the same period associated with the SERP Savings Plan of $12,214. Does
 not include incremental 18 months of service under the Supplemental Plan that
 would be entitled for termination without cause subject to the Executive
 Employment Agreement, as discussed below.(5)

For 2007,
 amount reflects change in amount accrued from December 31, 2006 to December
 31, 2007 for the Retirement Plan of $37,718, the Supplemental Plan of
 $182,666, the OPEB Plan of $2,996 and the earnings associated with the SERP Savings Plan of $2,104. For 2006, amount reflects change in
 amount accrued from December 31, 2005 to December 31, 2006 for the Retirement
 Plan of $44,675, the Supplemental Plan of $82,145 and the OPEB Plan of
 $1,535, and the earnings and Company contributions during the same period
 associated with the SERP Savings Plan of $49,088. Does not include
 incremental two years of service under the Supplemental Plan that would be
 entitled for termination without cause subject to the Executive Employment
 Agreement, as discussed below.(6)

For 2007,
 amount reflects change in amount accrued from December 31, 2006 to December
 31, 2007 for the Retirement Plan of $120,242 and the OPEB Plan of $8,180 and
 earnings associated with the SERP Savings Plan of $59. For 2006, amount
 reflects change in amount accrued from December 31, 2005 to December 31, 2006
 for the Retirement Plan of $74,104 and the OPEB Plan of $2,580, and the
 earnings and Company contributions during the same period associated with the
 SERP Savings Plan of $1,205.(7)

For 2007,
 amount reflects change in amount accrued from December 31, 2006 to August 31,
 2007 for the Retirement Plan of $73,724, the Supplemental Plan of $195,331
 and the OPEB Plan of $1,858 and earnings associated with the SERP Savings
 Plan of $1,437. For 2006, amount reflects change in amount accrued from
 December 31, 2005 to December 31, 2006 for the Retirement Plan of $51,612 and
 the Supplemental Plan of $175,838, and the earnings and Company contributions
 during the same period associated with the SERP Savings Plan of $35,218.(8)

For 2007,
 amount reflects a cash bonus of $1,933,333, as a result of the closing of the
 AHA Acquisition, as well as premiums paid by Remington for a Disability
 Insurance Policy, premiums for the Life Insurance Plan, personal financial
 consulting services, a tax gross-up on these personal financial consulting
 services and Company matching contributions to the 401(k) Plan in the amounts
 of $4,151, $2,663, $10,548, $7,231, and $9,000, respectively. For 2006,
 amount reflects premiums paid by Remington for a Disability Insurance Policy,
 premiums for the Life Insurance Plan, personal financial consulting services,
 a tax gross-up on these personal financial consulting services, and Company
 matching contributions to the 401(k) Plan in the amounts of $4,151, $2,328,
 $10,054, $8,307, and $5,765, respectively. Mr. Millners also includes $1,049
 for the receipt of a Model 105Cti autoloading shotgun, which was provided to
 all of the members of our Board of Directors.(9)

For 2007,
 amount reflects a cash bonus of $966,667 as a result of the closing of the
 AHA Acquisition, as well as premiums for the Life Insurance Plan, personal
 financial consulting services, a tax gross-up on these personal financial
 consulting services, and Company matching contributions to the 401(k) Plan of
 $301, $14,466, $9,675, and $9,000, respectively. For 2006, amount reflects
 premiums for the Life Insurance Plan, personal financial consulting services,
 a tax gross-up on these personal financial consulting services, and Company
 matching contributions to the 401(k) Plan of $492, $8,420, $3,568, and
 $3,765, respectively.(10)

For 2007,
 amount reflects a cash bonus of $450,000 as a result of the closing of the
 AHA Acquisition, as well as premiums paid by Remington for a Disability
 Insurance Policy, premiums for the Life Insurance Plan, personal financial
 consulting services, a tax gross-up on these personal financial consulting
 services, and Company matching contributions to the 401(k) Plan in the
 amounts of $3,851, $2,332, $10,389, $6,941, and $9,000, respectively. For
 2006, amount reflects premiums paid by Remington for a Disability Insurance
 Policy, premiums for the Life Insurance Plan, personal financial consulting
 services, a tax gross-up on these personal financial consulting services, and
 Company matching contributions to133

the 401(k) Plan in the amounts of $3,850,
 $1,968, $9,850. $3,253 and $5,765 respectively.(11)

Amount
 reflects premiums for the Life Insurance Plan, living and commuting expenses,
 a tax gross up on the commuting expenses, and Company matching contributions
 to the 401(k) Plan for Mr. DeSantis of $1,644, $17,739, $9,776, and $8,250,
 respectively.(12)

For 2007,
 amount reflects premiums for the Life Insurance Plan, taxidermy benefits, the
 tax gross up on the taxidermy benefits, and Company matching contributions to
 the 401(k) Plan of $496, $5,545, $2,352 and $8,036, respectively. For 2006,
 amount reflects premiums for the Life Insurance Plan, the Death Benefit Plan,
 and Company matching contributions to the 401(k) Plan of $456, $4,929, and
 $7,260, respectively.(13)

For 2007,
 amount reflects a cash bonus of $450,000 as a result of the closing of the
 AHA Acquisition, a special severance benefit equal to $186,687, a Special
 Supplemental Retirement Plan amount of $77,000, as well as premiums for the
 Life Insurance Plan, commuting expenses, a tax gross-up on the commuting
 expenses, vacation termination payments, and Company matching contributions
 to the 401(k) Plan of $5,477, $8,453, $5,427, $17,106, and $6,000,
 respectively. For 2006, amount reflects premiums for the Life Insurance Plan,
 basic living expenses (including apartment rental) as discussed in Compensation
 Discussion and Analysis above, a tax gross-up on these living expenses, and
 Company matching contributions to the 401(k) Plan for Mr. Cahan of $9,288,
 $4,069, $2,522 and $5,765, respectively.Grants of Plan-Based Awards

The
following Grants of Plan-Based Awards Tables summarize the awards to be made to
our executive officers under any plan in 2007 and awards made to our executive
officers under any plan in 2006. The only relevant plans during 2007 were the
2007 Incentive Compensation Plan and the Long-Term Incentive Plan, and a
discussion of each is outlined below. There were no grants of equity incentive
plan awards during 2007. The amounts in the table below are also included in
the Non-Equity Incentive Plan Compensation column of the Summary Compensation
Table.
134
2007 Grants of Plan-Based AwardsEstimated Possible Payouts Under Non-Equity
 Incentive Plan AwardsName

Grant Date


Threshold
($) (3)

Target
($) (3)

Maximum
($) (3)Thomas L. Millner,Chief Executive OfficerInc. Comp. Plan
(1)

1/26/2007




$
1,058,400

LTIP
(2)

8/2/2006




$
252,000

Stephen P. Jackson, Jr.,Chief Financial Officer,Treasurer, and CorporateSecretaryInc. Comp. Plan
(1)

1/26/2007




$
504,000

LTIP
(2)

8/2/2006




$
120,000

Mark A. Little, Chief




Administrative OfficerInc. Comp. Plan
(1)

1/26/2007




$
452,760

LTIP
(2)

8/2/2006




$
107,800

John DeSantis, Chief









Technology OfficerInc. Comp. Plan
(1)

7/1/2007




$
378,000

LTIP
(2)

7/1/2007




$
180,000






John M. Dwyer, Jr.,Senior Vice President ofBrand Mgmt andProduct Development Firearms andAmmunitionInc. Comp. Plan
(1)

1/26/2007




$
235,872

LTIP
(2)

8/2/2006




$
93,600

Paul L. Cahan, FormerPresident, Ammunition& Clay TargetOperationsInc. Comp. Plan
(1)

1/26/2007




$
197,667

LTIP
(2)

8/2/2006




$


(1)
The annual
 cash bonus incentive compensation as discussed in the Compensation
 Discussion and Analysis and the narrative preceding the chart is paid out
 pursuant to this plan.(2)
A component
 of Remingtons long-term incentive compensation, as discussed in the Compensation
 Discussion and Analysis and the narrative preceding the chart, is paid out
 pursuant to this plan. In 2007, each individual in the plan earned 40% of
 their year-end salary which will be paid in the first quarter of 2010, if the
 individual is still employed with Remington on December 31, 2009.(3)
Threshold
 and Maximum amounts in the above table are not applicable for disclosure
 purposes because as of March 15, 2008, the threshold is known to have been
 met and the maximum has been eliminated. As a result, Target is the only
 applicable disclosure amount. The Target amount for the incentive
 compensation135

plan
 reflects what was actually paid out to the individual on March 7, 2008.(4)
Mr. Cahan
 retired from Remington on August 31, 2007 and as a result was not eligible to
 be compensated under the long-term incentive plan during 2007.The
2007 Incentive Compensation Plan provides for eligible participants to earn
incentive compensation upon Remingtons achievement of certain Adjusted EBITDA
performance targets. For 2007, the threshold target at which incentive
compensation is triggered begins at 81% of $54.0 million of Adjusted EBITDA.
Each participant is generally entitled to receive 5% of his target bonus for
each 1% of Adjusted EBITDA beginning at 81% of the $54.0 million of Adjusted
EBITDA threshold up to what was originally determined to be a maximum of 110%
of Adjusted EBITDA. On February 29, 2008, the Compensation Committee decided to
eliminate the maximum cash bonus award limitation in order to reward efforts
during 2007 and expected financial performance. With respect to the Named
Executive Officers and a limited number of other participants, 10% of their
individual total award will be held back if specific monthly working capital
goals are not met. The size of each cash award is determined by establishing
target incentive awards expressed as a percentage of the participants base
salary as approved by the compensation committee.

The
performance criteria applicable to the Chief Executive Officer, Chief Financial
Officer, and the other Named Executive Officers for purposes of the incentive
compensation plan are determined based solely on corporate performance. Upon
achievement of certain levels of Adjusted EBITDA, the Compensation Committee
provided for a percentage of the achieved Adjusted EBITDA level to be paid to
the employees in the plan. Once that total dollar amount was determined, then
each employee was allocated their bonus based on a pro-rata portion of the
allocable pool based on their target incentive award percentages of salary. For
2007, the Compensation Committee provided that the target incentive award would
begin for the Chief Executive Officer, Chief Financial Officer and Chief
Administrative Officer at 100%, and other Named Executive Officers depending on
position at 60% to 100% of base salary.

The
Long-Term Incentive Compensation Plan is based on our total Adjusted EBITDA
performance for each individual year between 2006 and 2009 and the total amount
earned during the period will be paid out in the first quarter of 2010. In
order to receive the 2010 payment, each Named Executive Officer or other
participant must be an employee of Remington on December 31, 2009. In August
2006, the Compensation Committee approved a target payout for all executive
officers, including the Chief Executive Officer and Chief Financial Officer, of
40% of base salary as of the end of each calendar year over the 2006-2009
periods. The Compensation Committee established an Adjusted EBITDA target goal
of $42 million for 2007 and Remington achieved its goal in 2007. Mr. Cahan, who
retired in August 2007, was not eligible for and did not earn any compensation
attributable to the LTIP for the year ended December 31, 2007.

Executive
Employment Agreements - Severance.As of May 31, 2007, we entered
into employment agreements with each of Messrs. Millner, Jackson, Little, Cahan
and DeSantis, each of which was approved and authorized by the Board. These
agreements were entered into in order to provide certain protection for
Remington post-termination for a reasonable and measurable cost for which
precedent exists for officers of similar companies. Upon Mr. Cahans retirement
in August 2007, Mr. Cahan entered into a Severance Agreement that generally
superseded the terms of his employment agreement, except for certain covenants
that remain in effect. See Severance  Paul L. Cahan below.

Our
employment agreement with each of Messrs. Millner, Jackson, Little and DeSantis
continues until terminated by us or by the executive. Each agreement provides
for a minimum annual base salary that may increase from time to time in the
discretion of the Board. Each executive is also eligible to participate in our
2006 Long Term Incentive Plan and our annual incentive compensation plan for
our executive officers. The targeted annual bonus percentage for the annual
incentive compensation plan is 100% for each of the executives, except for Mr.
Little whose targeted bonus percentage in the agreement was 90%. However, Mr.
Littlespercentage was amended to
100% in October 2007.

If
the employment of any of Messrs. Millner, Jackson, Little or DeSantis
terminates due to his death or disability or if we terminate his employment for
Cause, as such term is defined in the employment agreement, he will receive
the amount of his base salary earned and due but not paid through the date of
termination. In addition, if the termination is due to death or disability, he
also will receive a pro rata amount of incentive compensation pursuant to the
Annual Incentive Compensation Plan. If we terminate Without Cause or the
executive terminates for Good Reason, as such terms are defined in the
employment agreement, he is entitled to receive during his severance period:

136

       Base salary
 in semi-monthly installments;       A pro rata
 portion of incentive compensation payable through the termination date;       Any
 incentive compensation earned under the Long Term Incentive Plan as of the
 termination date;       Continuation
 of health and insurance benefits until Executive attains age 65 or, if later,
 the end of the severance period;       Reimbursement
 of premiums paid by the Executive on any supplemental long-term disability
 policy maintained by the Executive as of January 1, 2007;       Financial
 planning services and a gross-up payment for the tax liability attributable
 to receipt of such services (although Mr. DeSantis is not entitled to receive
 financial planning services during his severance period);       Vested
 accrued benefits under our retirement plan and the executives benefits under
 his SERP; and       Continuation
 in group life insurance plan.The
severance period begins on the termination date and lasts three years in the
case of Mr. Millner, two years for Messrs. Little and DeSantis, and for Mr.
Jackson such period is 24 months as of the effective date of his employment
agreement and reduced by one month for each of month of service until the
severance period equals 12 months.

During
the term of employment and any severance period each executive is restricted
from competing with us or soliciting any of our employees or customers.

In
the event we experience a change in control, each employment agreement requires
that we obtain the agreement of any successor to assume and perform the
employment agreement. If we do not obtain such agreement from a successor, the
executive will be entitled to severance benefits as if he were terminated Without
Cause.

As
used in these employment agreements, Cause means:


the failure
 of the executive substantially to perform his duties (other than any such
 failure due to physical or mental illness) or other material breach by the
 executive of any of his obligations, after a demand for substantial
 performance or cure of such breach is delivered, and a reasonable opportunity
 to cure is given, to the executive by Remington, which demand identifies the
 manner in which Remington believes that the executive has not substantially
 performed his duties or breached his obligations;
The
 executives engaging in gross negligence or serious misconduct that has
 caused or would reasonably be expected to result in material injury to
 Remington or any of its affiliates;
The
 executives conviction of, or entering a plea of nolo contendere to, a crime
 that constitutes a felony; or
violation of
 any provision of Remingtons business ethics policy.In
addition, the executive agreements provide for a severance payment if
employment is terminated for good reason.

As
used in these employment agreements, Good Reason means termination of
employment by the executive within thirty days following the occurrence of any
of the following without the executives consent:


the
 assignment of the executive to a position the duties of which are a material
 diminution of the duties of his current title and position;
a reduction
 of the executives base salary or the percentage of such base salary made
 available as an incentive compensation opportunity;
the
 assignment of the executive to a principal office located beyond a 50-mile
 radius of the executives current work place; or
a material
 breach by Remington of any of its obligations under the employment agreement.137
Outstanding Equity Awards at Fiscal Year-End
Table

No
equity awards were granted in 2007 to any of our Named Executive Officers while
employed by Remington.

At
May 31, 2007 there were 10,635 outstanding options to purchase Holding common
stock under Holdings 1999 Stock Incentive Plan and the 2003 Stock Option Plan,
at a per share price of $220.31, of which an aggregate of 8,365 options were
held by the Named Executive Officers. Upon the change in control resulting from
the AHA Acquisition in May 2007, the following options immediately vested: Mr.
Millner, 3,632 options; Mr. Jackson, 680 options; Mr. Little, 2,270 options;
Mr. Dwyer, 1,103 options and Mr. Cahan, 680 options. As a result of the change
in control that occurred upon the acquisition of Holding by AHA in May 2007,
Remington incurred $0.8 million of compensation cost for the unvested stock
options held by employees of Remington. Upon completion of the AHA Acquisition,
all of these outstanding stock options immediately vested subject to the
applicable change in control provisions in Holdings 1999 Stock Incentive Plan
and 2003 Stock Option Plan and were subsequently cancelled by Holding.
Holding made payments in the aggregate, net of selling expenses and before
taxes, of approximately $0.8 million to Messrs. Millner, Jackson, Little, Dwyer
and Cahan for the stock options. Thus, there were no outstanding options to
purchase Holding or AHA common stock held by any of the aforementioned Named
Executive Officers at December 31, 2007.

Additionally,
at May 31, 2007, there were 5,851 deferred shares of Holding that were
converted to common equity as a result of the change in control resulting from
the AHA Acquisition, of which 4,853 deferred shares were held by the Named
Executive Officers as follows: Mr. Millner, 3,393 shares; Mr. Little, 1,000
shares; Mr. Dwyer, 195 shares; and Mr. Cahan, 265 shares. Messrs. Millner,
Little, Dwyer and Cahan recognized earnings of approximately $0.4 million, net
of selling and expenses and before taxes, for the conversion of the deferred
shares to equity which were subsequently purchased by AHA. Thus, there were no
deferred shares or other equity awards outstanding held by any of the
aforementioned Named Executive Officers at December 31, 2007.

As
a result of a merger of AHA and another Cerberus portfolio company in December
2007, Mr. DeSantis received performance-based and service-based restricted
common stock of AHA. This award of AHA restricted common stock replaced the performance-based
and service-based restricted units in the same Cerberus portfolio company that
had been awarded to Mr. DeSantis in April 2006 in connection with his prior
employment with that portfolio company. The vested shares of AHA common stock
beneficially owned by Mr. DeSantis as of December 31, 2007 were received based
upon Mr. DeSantis service to, and performance of, the other Cerberus portfolio
company through December 31, 2007. As a Remington employee, the vesting
schedule for the remaining shares subject to the original award will be based
on service with Remington and Remingtons performance over such term, though
vesting may be continued if he were to be employed by AHA or any of AHAs
affiliates.

138

Option
  Awards

Stock
  AwardsName

Grant Date

NumberofSecurities
  Underlying
  Unexercised
  Options(#)Exercisable

Number of
  Securities
  Underlying
  Unexercised
  Options(#)Unexercisable

Equity
  Incentive
  Plan Awards:
  Number of
  Securities
  Underlying
  Unexercised
  Unearned
  Options(#)

Option
  Exercise
  Price($)

Option
  Expiration
  Date

Number of
  Shares or
  Units of
  Stock That
  Have Not
  Vested(#)

Market
  Value ofShares or
  Units of
  Stock That
  Have Not
  Vested($)

Equity
  Incentive
  Plan
  Awards:
  Number
  of
  Unearned
  Shares,
  Units or
  Other
  Rights
  That
  Have Not
  Vested(#)(1)

Equity
  Incentive
  Plan
  Awards:
  Market or
  Payout
  Value of
  Unearned
  Shares,
  Units or
  Other
  Rights That
  Have Not
  Vested($)(2)John A.
  DeSantis,
  Chief
  Technology
  Officer

4/13/2006















106,553

421,950(1)          The
original grant of service and performance-based restricted stock vests over a
period of four years and any unvested portion of such award is generally
forfeited upon termination of employment. If Mr. DeSantis remains an employee
of Remington or an affiliate of AHA, the service-based component of his
restricted stock award vests as follows: 11,519, 17,279 and 20,159 shares on
each of April 13, 2008, 2009 and 2010, respectively. The performance-based
component of Mr. DeSantis restricted stock award vests as follows: 20,159,
17,279 and 20,159 shares on the date of delivery of the audit opinion with
respect to Remingtons financial statements for the previous fiscal year in
each of 2008, 2009 and 2010, respectively. The performance target for each of
2008, 2009 and 2010 associated with the performance-based component of the
restricted stock award is based on the achievement of certain budgeted
financial results of Remington approved by Remingtons Board of Directors.

(2)          There
is no established market value for the AHA common stock. As such, the value is
based upon $3.96 per share, the fair value of the AHA common stock utilized at
the time of the December 2007 merger between AHA and the other Cerberus
portfolio company.

Option Exercises and Stock Vested Table

The
table below shows (i) the number of shares of Holding common stock subject to
options that immediately vested and were subsequently cancelled subject to the
applicable change in control provisions in Holdings 1999 Stock Incentive Plan
and 2003 Stock Option Plan, and (ii) the deferred shares that were converted
into shares of Holding common stock and subsequently purchased by AHA in connection
with the closing of the AHA Acquisition on May 31, 2007. Prior to the AHA
Acquisition, we historically compensated certain of our executive officers with
equity interests in Holdings common stock. Although no equity interests in
Holding or AHA were granted during 2007 to employees of Remington in connection
with their employment at Remington, as a result of the AHA Acquisition
outstanding options to purchase 10,635 shares of Holding common stock (the
Stock Options), which constituted all of the outstanding Stock Options,
immediately vested subject to the applicable change in control provisions in
Holdings 1999 Stock Incentive Plan and 2003 Stock Option Plan. Remington made
option cancellation payments on May 31, 2007, representing the purchase price
of $330.47 per share less the strike price of $220.31 per share with respect to each
Stock Option less related selling expenses, escrow and related taxes. AHA
provided the funds to Holding which, in turn, provided the funds to Remington
to make these option cancellation payments.


139
Option Awards

Stock AwardsName

Number of
  Shares
  Acquired
  on Exercise
  (#)

Value Realized
  on Exercise
  ($) (1)

Number of
  Shares
  Acquired
  on Vesting
  (#)

Value Realized
  on Vesting
  ($) (2)Thomas L.
  Millner, 
  Chief Executive Officer


3,632


$
260,434



3,393


$
283,383Stephen P.
  Jackson, Jr.,
  Chief Financial Officer,
  Treasurer and 
  Corporate Secretary


680


$
48,760







Mark A.
  Little,
  Chief Administrative 
  Officer


2,270


$
162,776



1,000


$
83,520John
  DeSantis, 
  Chief Technology 
  Officer














John M.
  Dwyer, Jr., Senior Vice President
  Brand Management and 
  Product Development  
  Firearms and 
  Ammunition


1,103


$
75,168



195


$
16,286Paul L.
  Cahan,
  Former President,
  Ammunition & Clay 
  Target Operations


680


$
48,760



265


$
22,133(1)
Amounts
  represent the difference between the stock option exercise price of $330.47 per share
  and the strike price of $220.31 per share of Holdings common stock on the date of
  cancellation less transaction costs and amounts placed in escrow and the
  amounts recognized as earned in 2006, rounded to the nearest dollar.(2)
Amounts represent
  the difference between the fair value of Holdings common stock on
  the conversion date of $330.47 per share less the grant price of $220.31 per share, less
  transaction costs and amounts placed in escrow, rounded to the nearest
  dollar.Pension and Retirement Benefits

Refer
to Pension and Retirement Benefits in the Compensation Discussion &
Analysis for a description of our pension and retirement benefit plans, the
reasons for the establishment of multiple plans, and the material terms and
conditions of benefits under each plan, including benefit formulas and
eligibility standards with respect to normal retirement payment. The following
tables summarize pension and retirement benefits as of December 31, 2007 and
2006 for each of our Named Executive Officers. The changes in this table are
reflected in the Change in Pension Value and NQDC Earnings column of the
Summary Compensation Table.

The
amounts presented in the 2007 table below for the Retirement Plan and the
Supplemental Plan represent the present value of the current accrued
accumulated benefit obligation as of December 31, 2007, and are based on a 6%
discount rate and use the 1994 Uninsured Pensioners Mortality Table for males
as deferred

140

to age 65
annuities. Mr. Jackson will not be vested in the Supplemental Plan until 2008,
but his amount presented below assumes his continued service until that time.

In
order to be eligible for early retirement, the relevant Named Executive Officer
must be age 50 and have 15 years of qualifying service. Once these two criteria
have been met, the Named Executive Officer can receive payments under the
Retirement Plan and the Supplemental Plan before the age of 65 at a reduced
level. The Postretirement Plan benefits are unaffected for early retirement
status.

Payment
provisions for the Pension Plans are the same under early and normal
retirements, and in order to get payment plans other than a single life annuity
or 50% joint and survivor, an employee must have 15 years of service. Once an
employee has more than 15 years of service, then the payment options become
single life annuity, qualified joint and survivor, and income leveling (only
for early retirements prior to age 62), the last two of which have several
options for structuring payments to surviving spouses.

See the
Potential Payments Upon Termination or Change of Control section below for an
explanation of the material terms of any applicable employment agreements,
which are not included in the table below.

2007 Pension and Retirement BenefitsName

Plan Name

Number of
 Years of
 Credited
 Service
 (#)

Present Value
 of
 Accumulated
 Benefit
 ($)


Payments
 During Last
 Fiscal Year
 ($)Thomas L.
 Millner, Chief 
 Executive Officer

Pension Plan (1)

13.6

194,588


$
Supplemental Plan (2)

13.6

1,033,911
(4)


OPEB Plan (3)

13.6

87,178



Stephen P.
 Jackson, Jr.,
 CFO, Treasurer and 
 Corporate Secretary

Pension Plan

N/A

N/A



N/ASupplemental Plan (2)

4.5

77,679


$
OPEB Plan

N/A

N/A



N/AMark A.
 Little, CAO

Pension Plan (1)

11.5

243,497


$
Supplemental Plan (2)

11.5

474,148
(5)


OPEB Plan (3)

11.5

13,778



John
 DeSantis, CTO

Pension Plan

N/A

N/A



N/ASupplemental Plan

N/A

N/A



N/AOPEB Plan

N/A

N/A



N/AJohn M.
 Dwyer, Jr., SVP 
 of Brand Management 
 and Product 
 Development  Firearms 
 and Ammunition

Pension Plan (1)

29.5

658,312
(6)


N/ASupplemental Plan

N/A

N/A



N/AOPEB Plan (3)

29.5

37,133



N/APaul L.
 Cahan, Former 
 President, Ammunition & 
 Clay Target Operations

Pension Plan (1)

12.4

396,180


$
11,212Supplemental Plan (2)

12.4

682,820



19,324OPEB Plan (3)

12.4

55,179



2,119141

(1)
The Pension
 Plan in the above chart refers to the Pension Plan as discussed in
 Compensation Discussion and Analysis, above.(2)
The
 Supplemental Plan in the above chart refers to the Supplemental Plan as
 discussed in Compensation Discussion and Analysis, above.(3)
The OPEB
 Plan in the above chart refers to the Postretirement Plan as discussed in
 Compensation Discussion and Analysis, above.(4)
The amount
 presented excludes incremental three years of service subject to Mr.
 Millners executive employment agreement of $270,484. See Executive
 Agreements below for additional information.(5)
The amount
 presented excludes incremental two years of service subject to Mr. Littles
 executive employment agreement of $123,898. See Executive Agreements below
 for additional information.(6)
The amount
 presented for Mr. Dwyer assumes that at age 58, he will have sufficient
 service to receive full benefits under the Pension Plan at that time. All
 other executives in the Pension Plan cannot receive full benefits until the
 age of 65.Non-Qualified
Deferred Compensation

The
following table summarizes the non-qualified deferred compensation (the SERP
Savings Plan) that was earned by our Named Executive Officers in 2007. The SERP
Savings Plan was a non-qualified defined contribution plan under the Code. The
SERP Savings Plan provided for matching of compensation contributions beyond
the IRS covered compensation limits in order to allow the Named Executive
Officers the same salary matching afforded to all employees. In addition, we
paid interest on the balance of each account at the prime rate of interest as
of December 31, 2006 (identified in the Wall Street Journal) plus 2% (10.25% at
December 31, 2006). During the third quarter of 2006, each participant elected
to receive a distribution of their respective account balances on January 16,
2007.

Under
the Special Plan, Mr. Cahan was entitled to additional supplemental retirement
benefits of (i) a lump-sum payment of $77,000, payable on the date of
commencement of benefits under the Supplemental Plan, which is the
non-qualified defined benefit plan as defined in Compensation Discussion and
Analysis, above, and (ii) credit in the Supplemental Plan as if he had
received additional non-incentive compensation in March 2003 equal to $38,000,
payable at the same time and in the same form as Mr. Cahans Supplemental Plan
benefit. The lump-sum payment is reflected in the Nonqualified Deferred
Compensation table below and was paid to Mr. Cahan upon his retirement in
August 2007.

142

2007 Nonqualified Deferred CompensationName

Aggregate
 Balance at
 December 31,
 2006 ($)

Accrued
 Aggregate
 Earnings in
 2007 ($) (2)

Transfer to
 Qualified
 Defined
 Contribution
 Plan ($)

Aggregate
 Withdrawals /
 Distributions
 ($)



Aggregate
 Balance at
 12/31/07 ($)Thomas L.
 Millner,Chief
 Executive Officer

$
911,714

$
3,812

$
(28,800
)
$
(886,726
)


$
Stephen P.
 Jackson, Jr.,CFO,
 Treasurer andCorporate
 Secretary

$
91,211

$
323

$
(23,800
)
$
(67,734
)


$
Mark A. Little,
 ChiefAdministrative
 Officer

$
511,872

$
2,104

$
(28,800
)
$
(485,176
)


$
John
 DeSantis, CTO


N/A


N/A


N/A


N/A




N/AJohn M.
 Dwyer, Jr.,Senior Vice
 Presidentof Brand
 Management andProduct Development
 Firearms
 &Ammunition

$
12,961

$
59




$
(13,020
)


$
Paul L.
 Cahan,Former
 President,Ammunition
 & ClayTarget
 Operations

$
355,675

$
1,437

$
(28,800
)
$
(328,312
)


$
$
77,000

$


$


$
(77,000
) (1)


$
(1)
Reflects
 amounts associated with the Special Plan disclosed in the Compensation Discussion
 and Analysis section and the narrative preceding this table above.(2)
Represents
 interest earned in 2007. No contributions were made by the Company or the
 employees in 2007.Potential Payments
Upon Termination or Change-in-Control

Severance -
Employment Agreements

The
employment agreements of Messrs. Millner, Jackson, Little and DeSantis entitle
them to a severance payment if employment is terminated without cause.

As
used in these employment agreements, Cause means:


the failure
 of the executive substantially to perform his duties (other than any such
 failure due to physical or mental illness) or other material breach by the
 executive of any of his obligations, after a demand for substantial
 performance or cure of such breach is delivered, and a reasonable opportunity
 to cure is given, to the executive by Remington, which demand identifies the
 manner in which Remington believes that the executive has not substantially
 performed his duties or breached his obligations;
The
 executives gross negligence or serious misconduct that has caused or would
 reasonably be expected to result in material injury to Remington or any of
 its affiliates;
The
 executives conviction of, or entering a plea of nolo contendere to, a crime
 that constitutes a felony; or
violation of
 any provision of Remingtons business ethics policy.143

In
addition, the executive employment agreements provide for a severance payment
if employment is terminated for good reason.

As
used in these employment agreements, Good Reason means termination of
employment by executive within thirty days following the occurrence of any of
the following without executives consent:


the
  assignment of the executive to a position the duties of which are a material
  diminution of the duties of his current title and position;
a reduction
  of the executives base salary or the percentage of such base salary made
  available as an incentive compensation opportunity;
the
  assignment of the executive to a principal office located beyond a 50-mile
  radius of the executives current work place; or
a material
  breach by Remington of any of its obligations under the employment agreement.Finally,
the employment agreement allows for the employer to provide for a severance
payment of up to twelve (12) months if employment is terminated without good
reason.

The
severance period begins on the termination date and lasts three years in the
case of Mr. Millner, two years for Messrs. Little and DeSantis, and for Mr.
Jackson such period is 24 months as of the effective date of his employment
agreement and reduced by one month for each of month of service until the
severance period equals 12 months.

In
the event we experience a change in control each employment agreement requires
that we obtain the agreement of any successor to assume and perform the
employment agreement. If we do not obtain such agreement from a successor, the
executive will be entitled to severance benefits as if he were terminated
Without Cause.

Long Term Incentive
Plan(LTIP).

A
change in control is defined by the LTIP as:

          the
  acquisition by any person, entity or group (as defined in Section 13(d) of
  the Securities Exchange Act of 1934, as amended), other than Remington, any
  of its affiliates, any employee benefit plan of Remington or any of its
  affiliates, or the Funds, of 50% or more of the combined voting power of
  Holdings then outstanding voting securities; or          the
  merger or consolidation of Remington, as a result of which any person, entity
  or group (as defined in Section 13(d) of the Securities Exchange Act of
  1934, as amended), other than Remington, any of its affiliates, any employee
  benefit plan of Remington or any of its affiliates, owns, directly or
  indirectly, more than 50% of the combined voting power entitled to vote
  generally in the election of directors of the merged or consolidated company;
  or          the
  sale, transfer or other disposition of all or substantially all of the assets
  of Remington to any person, entity or group (as defined in Section 13(d) of
  the Securities Exchange Act of 1934, as amended), other than Remington, any
  of its affiliates, any employee benefit plan of Remington or any of its
  affiliates.Upon
a change in control, each participant who is actively employed by Remington or
was actively employed by Remington immediately prior to such change in control
will be entitled to a lump sum payment which shall be equal to (i) the amount,
if any, credited to each participant as of the date of the change in control
plus (ii) the amount that would have been credited to each participant in
respect of the fiscal year of the change in control and each subsequent fiscal
year if the participant had remained employed through the vesting date and Remington
had achieved the aggregate Adjusted EBITDA target for each such fiscal year.
Such payment shall be made on the date of such change of control.
Notwithstanding the foregoing, if the acquirer in such change in control
decides to continue the LTIP at the targets outlined following the change in
control, the amounts shall not be paid and the LTIP shall continue through the
original payment date.

The
LTIP plan did not change as a result of the AHA Acquisition, except for the
addition of John DeSantis and one other officer to the plan.

144

Summary Tables for
Potential Payments upon Termination or Change in Control

The
following tables set forth potential payments to our Named Executive Officers
upon termination of their employment or a change in control under their current
employment agreements and other applicable agreements as of December 31, 2007.

Thomas L. Millner
Chief Executive OfficerTerminated
with Cause

Terminated
without
Cause

Resign with
Good
Reason

Resign
without
Good
Reason (10)

Change in
Control (9)Salary

$


$
1,890,000
(1)
$
1,890,000
(1)
$
630,000

$
1,890,000
(1)Cash Bonus (2)





1,058,400


1,058,400





1,058,400Supplemental Plan (3)





270,484


270,484





270,484Extended Medical (4)





1,235


1,235





1,235LTIP (5)





463,200


463,200





463,200Disability Premiums (6)





12,453


12,453





12,453Life Insurance (7)





7,989


7,989





7,989Financial Planning (8)





53,337


53,337





53,337$


$
3,757,098

$
3,757,098

$
630,000

$
3,757,098(1)
Salary is
  three times Mr. Millners base salary paid in equal installments over thirty-six
  months (3 years) in accordance with Mr. Millners executive employment
  agreement.(2)
Cash Bonus
  is Mr. Millners portion of annual cash incentive compensation that would
  have been payable assuming he was terminated at the end of the year, to be
  paid in a lump sum amount in accordance with Mr. Millners executive
  employment agreement.(3)
Supplemental
  Plan is the estimated actuarial value of an additional three years of service
  credit under Remingtons Supplemental Plan in accordance with Mr. Millners
  executive employment agreement.(4)
Extended
  Medical is the estimated annual amount of healthcare costs expected to be
  paid by the Company for Mr. Millner and his family, which is received until
  the age of 65 in accordance with the extended Medical Plan. The estimate is
  based on the past four years of actual experience, less estimated
  contributions to be made by Mr. Millner.(5)
LTIP is
  amount accrued for years 2006 and 2007.(6)
Disability
  Premiums is the estimated annual amount of premiums paid for a supplemental
  long-term disability policy, based on 2007 premiums, for the three year
  severance period.(7)
Life
  Insurance is the estimated annual amount of insurance premiums to participate
  in the Remington All Groups Life Insurance Plan, based on 2007 premiums, for
  the three year severance period.(8)
Financial
  Planning is the estimated annual amount for personal financial consulting
  services plus a tax gross-up on these personal financial consulting services,
  based on 2007, for the three year severance period.(9)
Per
  employment agreement, any successor must assume and perform the same
  employment agreement or the executive is entitled to severance benefits as if
  he were terminated Without Cause.(10)
Assumes that
  employer has exercised its right under the employment agreement to provide
  one year of salary.145

Stephen P. Jackson, Jr.
Chief Financial OfficerTerminated
with Cause

Terminated
without
Cause

Resign with
Good
Reason

Resign
without
Good
Reason(10)

Change in
Control (9)Salary

$


$
425,000
(1)
$
425,000
(1)
$
300,000

$
425,000
(1)Cash Bonus (2)





504,000


504,000





504,000Supplemental Plan (3)














Extended Medical (4)





2,850


2,850





2,850LTIP (5)





220,000


220,000





220,000Disability Premiums (6)














Life Insurance (7)





452


452





452Financial Planning (8)





36,212


36,212





36,212$


$
1,188,514

$
1,188,514

$
300,000

$
1,188,514(1)
Salary is
  two times Mr. Jacksons base salary (as of the date of termination) reduced
  by one month for each month of service until the severance period equals 12
  months payable in equal installments over twenty-four months (2 years).(2)
Cash Bonus
  is Mr. Jacksons portion of annual cash incentive compensation that would
  have been payable assuming he was terminated at the end of the year, to be
  paid in a lump sum amount in accordance with Mr. Jacksons executive
  employment agreement.(3)
Supplemental
  Plan representing additional years of service credit under Remingtons
  Supplemental Plan is not applicable for Mr. Jackson.(4)
Extended
  Medical is the estimated annual amount of healthcare costs expected to be
  paid by the Company for Mr. Jackson and his family, which is received until
  the age of 65 in accordance with the extended Medical Plan. The estimate is
  based on the past four years of actual experience, less estimated
  contributions to be made by Mr. Jackson.(5)
LTIP is
  amount accrued for years 2006 and 2007.(6)
Disability
  Premiums is not applicable per the terms of his employment agreement.(7)
Life
  Insurance is the estimated annual amount of insurance premiums to participate
  in the Remington All Groups Life Insurance Plan, based on 2007 premiums, for
  the 17 month severance period remaining as of December 31, 2007.(8)
Financial
  Planning is the estimated annual amount for personal financial consulting
  services plus a tax gross-up on these personal financial consulting services,
  based on 2007, for the 17 month severance period remaining as of December 31,
  2007.(9)
Per
  employment agreement, any successor must assume and perform the same
  employment agreement or the executive is entitled to severance benefits as if
  he were terminated Without Cause.(10)
Assumes that
  employer has exercised its right under the employment agreement to provide
  one year of salary.146

Mark A. Little
Chief Administrative OfficerTerminated
with Cause

Terminated
without
Cause

Resign with
Good Reason

Resign
without
Good
Reason(10)

Change in
Control (9)Salary

$


$
539,000
(1)
$
539,000
(1)
$
269,500

$
539,000
(1)Cash Bonus (2)





452,760


452,760





452,760Supplemental Plan (3)





123,898


123,898





123,898Extended Medical (4)





9,600


9,600





9,600LTIP (5)





215,600


215,600





215,600Disability Premiums (6)





7,702


7,702





7,702Life Insurance (7)





4,664


4,664





4,664Financial Planning (8)





34,660


34,660





34,660$


$
1,387,884

$
1,387,884

$
269,500

$
1,387,884(1)
Salary is
  two times Mr. Littles base salary paid in equal installments over
  twenty-four months (2 years) in accordance with Mr. Littles executive
  employment agreement.(2)
Cash Bonus
  is Mr. Littles portion of annual cash incentive compensation that would have
  been payable assuming he was terminated at the end of the year, to be paid in
  a lump sum amount in accordance with Mr. Littles executive employment
  agreement.(3)
Supplemental
  Plan is the estimated actuarial value of an additional two years of service
  credit under Remingtons Supplemental Plan in accordance with Mr. Littles
  executive employment agreement.(4)
Extended
  Medical is the estimated annual amount of healthcare costs expected to be
  paid by the Company for Mr. Little and his family, which is received until
  the age of 65 in accordance with the extended Medical Plan. The estimate is
  based on the past four years of actual experience, less estimated
  contributions to be made by Mr. Little.(5)
LTIP is
  amount accrued for years 2006 and 2007.(6)
Disability
  Premiums is the estimated annual amount of premiums paid for a supplemental
  long-term disability policy, based on 2007 premiums, for the two year
  severance period.(7)
Life
  Insurance is the estimated annual amount of insurance premiums to participate
  in the Remington All Groups Life Insurance Plan, based on 2007 premiums, for
  the two year severance period.(8)
Financial
  Planning is the estimated annual amount for personal financial consulting
  services plus a tax gross-up on these personal financial consulting services,
  based on 2007, for the two year severance period.(9)
Per
  employment agreement, any successor must assume and perform the same
  employment agreement or the executive is entitled to severance benefits as if
  he were terminated Without Cause.(10)
Assumes that
  employer has exercised its right under the employment agreement to provide
  one year of salary.147

John DeSantis
Chief Technology OfficerTerminated
with Cause

Terminated
without
Cause

Resign with
Good Reason

Resign
without
Good
Reason (10)

Change in
Control (9)Salary

$


$
900,000
(1)
$
900,000
(1)
$
450,000

$
900,000
(1)Cash Bonus (2)





378,000


378,000





378,000Supplemental Plan (3)














Extended
  Medical (4)





1,590


1,590





1,590LTIP (5)





180,000


180,000





180,000Disability Premiums (6)














Life Insurance (7)





6,576


6,576





6,576Financial Planning (8)














$


$
1,466,166

$
1,466,166

$
450,000

$
1,466,166(1)
Salary is
  two times Mr. DeSantis base salary paid in equal installments over
  twenty-four months (2 years) in accordance with Mr. DeSantis executive
  employment agreement.(2)
Cash Bonus
  is Mr. DeSantis portion of annual cash incentive compensation that would
  have been payable assuming he was terminated at the end of the year, to be
  paid in a lump sum amount in accordance with Mr. DeSantis executive
  employment agreement.(3)
Supplemental
  Plan representing additional years of service credit under Remingtons
  Supplemental Plan is not applicable for Mr. DeSantis.(4)
Extended
  Medical is the estimated annual amount of healthcare costs expected to be
  paid by the Company for Mr. DeSantis and his family, which is received until
  the age of 65 in accordance with the extended Medical Plan. The estimate is
  based on the past six months of actual experience, less estimated
  contributions to be made by Mr. DeSantis.(5)
LTIP is
  amount accrued for 2007.(6)
Disability
  Premiums is not applicable to Mr. DeSantis per the terms of his employment
  agreement.(7)
Life Insurance
  is the estimated annual amount of insurance premiums to participate in the
  Remington All Groups Life Insurance Plan, based on 2007 annualized premiums,
  for the two year severance period.(8)
Financial
  Planning is not applicable to Mr. DeSantis.(9)
Per
  employment agreement, any successor must assume and perform the same
  employment agreement or the executive is entitled to severance benefits as if
  he were terminated Without Cause.(10)
Assumes that
  employer has exercised its right under the employment agreement to provide
  one year of salary.Severance Paul L.
Cahan

Effective
August 31, 2007, Mr. Cahan retired from Remington, and accordingly received no
payments under his employment agreement for salary and other benefits. In
connection with Mr. Cahans retirement, Mr. Cahan and Remington entered into a
Confidential Severance Agreement and General Release effective as of August 31,
2007 (the Severance Agreement). Per the terms of the Severance Agreement,
during the six-month period that began September 1, 2007 and ending February
28, 2008, Mr. Cahan is entitled to receive a special severance benefit equal to
$186,687 (the Severance Benefit) payable in six equal monthly installments of
$31,144.50. In addition, Mr. Cahan is entitled to receive $197,667 (the
Incentive Amount) as full settlement of all obligations and liabilities of
Remington with respect to Mr. Cahan, which is payable in six equal monthly
installments of $32,944.50 over the Severance Pay Period. In the event of his
death before the end of the Severance Pay Period, the Severance Benefit and
Incentive Amount will be paid to his surviving spouse, or if he shall leave no
surviving spouse, then to his estate. Mr. Cahan is also entitled to receive the
benefits provided by the Special Supplemental Retirement Plan for Paul Cahan
and certain medical and retirement plan benefits.

148

Director Compensation

During
2007, members of the Board of Directors of Remington who were not employees of
Remington, Holding, AHA, or Cerberus, who we refer to as eligible directors,
received a per meeting fee of $1,000 for each Remington board and committee
meeting attended and an annual retainer of $25,000. The Eligible Directors
included Messrs. Bobby R. Brown, Thomas F. LEsperance, Richard A. Gilleland,
Richard E. Heckert, Hubbard C. Howe, General H. Norman Schwarzkopf (Ret.),
General Michael W. Hagee (Ret.), General George Joulwan (Ret.), Stephen L.
Hammerman, James J. Pike, Walter McLallen, Frank A. Savage and George Zahringer
III. The 2007 annual retainer was pro rated for Messrs. Hagee, Joulwan,
Hammerman, Pike, McLallen, Savage and Zahringer and paid in 2008. An additional
fee of $1,000 per meeting was paid to the chairman of each committee. All
directors were reimbursed for reasonable travel and lodging expenses incurred
to attend meetings. Mr. Hammerman resigned as of March 12, 2008 and Mr. Rensi
was not appointed until March 24, 2008.

The
Board of Directors previously approved outside directors under the age of 65 to
participate in Remingtons Medical Plan. In 2006 and for the first five months
of 2007, Mr. Richard A. Gilleland, as an outside director, was enrolled in the
Medical Plan and reimbursed Remington at the same cost as an active employee.

Mr.
Leon J. (Bill) Hendrix, Jr. was also an employee of Remington prior to his
resignation as a director in 2007. In 2007 and 2006 he received salaries of
$25,227 and $60,000, respectively, and was included in the Medical Plan, the
Supplemental Plan, the SERP Savings Plan, the 401(k) Plan, and the Death
Benefit Plan.

149

The
following table summarizes our director compensation during the 2007 fiscal
year. NQDC referenced in the column header refers to Non-Qualified Deferred
Compensation plans, of which only the SERP Savings Plan is applicable to
directors.

Director CompensationName

Fees Earned
($)

Change in
Pension
Value and
NQDC
Earnings

Stock
Awards ($)
(1)

Option
Awards ($)
(1)

All Other
Compensation
($)

Total
($)Bobby R. Brown*

$
38,000

$





$
22,889

$


$
60,889General Michael W. Hagee
(Ret.)*


16,000














16,000General George A. Joulwan
(Ret.)*


17,000














17,000James J. Pike*


9,833














9,833Walter McLallen*


21,083














21,083Frank A. Savage*


12,417














12,417George Zahringer III*


13,917














13,917Paul A. Miller*

















Grant Gregory*

















George Kollitides,
II*

















Scott Parker*

















Madhu Satyanarayana*

















Edward H. Rensi*

















Thomas F.
LEsperance**


11,417














11,417Richard A. Gilleland
**


17,917








22,889


5,958
(3)

46,764Richard E. Heckert**


14,917








22,889





37,806Leon J. Hendrix,
Jr.**





2,771
(2)

21,167


45,981


25,227
(4)

95,146Hubbard C. Howe**


12,917








22,889





35,806General H. Norman Schwarzkopf
(Ret.)**


13,917








22,889





36,806B. Charles Ames**

















Michael G. Babiarz**

















Thomas E. Ireland**

















Stephen C. Sherrill**

















Kurt B. Larsen***

















Stephen L.
Hammerman****


10,833














10,833*
Current
  board member. Mr. Rensi was appointed effective March 24, 2008.**
Resigned
  effective May 31, 2007.***
Resigned
  effective October 16, 2007.****
Resigned effective
  March 12, 2008.(1)
Amount
  reflects the Directors portion of options that immediately vested and were
  paid pursuant to SFAS 123(R) as a result of the AHA Acquisition.(2)
Includes
  interest on behalf of the director to the Remington Savings and Investment
  Plans in the amount of $1,144, Company matching contributions to the 401(k)
  Plan in the amount of $1,009 and group life insurance of $618.(3)
Represents
  net benefits paid as a result of inclusion in the Remington Medical and
  Dental Plan of $5,958.(4)
Represents
  salary of $25,227.150

Compensation Committee Interlocks and Insider
Participation

The
Board of Directors of Remington has established a Compensation Committee to
review all compensation arrangements for executive officers of Remington. The
individuals appointed to the Compensation Committee after the AHA Acquisition
were Paul A. Miller, Chairman, General George A. Joulwan (Ret.) and George
Kollitides, II. The individuals serving on the Compensation Committee prior to
the AHA Acquisition in 2007 and during 2006 were Richard A. Gilleland,
Chairman, H. Norman Schwarzkopf,and
Richard E. Heckert. None of the members of our Compensation Committee during
2007 or 2006 has ever served as an officer or employee of the Company. During
2007 and 2006, none of our executive officers served on the compensation
committee (or equivalent), or the board of directors, of another entity whose
executive officer(s) served on our Compensation Committee or Board of
Directors. In addition, during 2007 and 2006 none of the members of our
Compensation Committee had any relationship requiring disclosure under Item 404
of Regulation S-K.

151

Item 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

AHA
owns all of the outstanding common stock of Holding, which in turn owns all of
the outstanding common stock of Remington. Shares of preferred stock and shares
of common stock of AHA are held by various entities and individuals. Each share
of AHA common stock is entitled to one vote. The preferred shares vote together
with the common stock. The following table sets forth the beneficial ownership,
as of March 27, 2008, of the shares of preferred stock and common stock of AHA
by each director of Remington, by all directors and executive officers of
Remington as a group, by each Named Executive Officer of Remington, and by each
person who owns beneficially more than five percent of the outstanding shares
of preferred stock and common stock of AHA. Beneficial ownership is determined
in accordance with the rules of the SEC. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options or warrants held by that person that
are currently exercisable or that are or may become exercisable within
60 days of March 27, 2008 are deemed outstanding. These shares, however,
are not deemed outstanding for purposes of computing the percentage ownership
of any other person. Except as indicated in the footnotes to this table and
under applicable community property laws, each stockholder named in the table
has sole voting and dispositive power with respect to the shares set forth
opposite the stockholders name. Unless otherwise indicated, the address of all
listed stockholders is c/o Remington Arms Company, Inc., 870 Remington Drive,
P.O. Box 700, Madison, North Carolina 27025-0700.

Preferred

CommonName of Beneficial
Owner

Number of
 Shares

Percent of
 Class

Number of
 Shares

Percent of
 ClassStephen Feinberg
(1)(2)

18,627,463.5

99.63
%
15,847,341

95.81
%Tommy Millner

70,000

*

70,000

*Paul A. Miller





80,194

*Bobby R. Brown







Grant Gregory







General Michael W. Hagee
(Ret.)





9,597

*General George A. Joulwan
(Ret.)





9,597

*George Kollitides, II







Walter McLallen





153,589

*Scott Parker







James J. Pike







Edward H. Rensi







Madhu Satyanarayana







Frank A. Savage







George Zahringer III







Stephen P. Jackson,
Jr.







John DeSantis





115,192

*Mark A. Little







John M. Dwyer, Jr.







Directors and executive officers
as a group
 (22 Persons)

70,000

*

518,363

3.13
%*
Less than 1%(1)
AHA is
 controlled by Cerberus, which owns 18,627,463.5 shares of Series A Preferred
 Stock and 15,847,341 shares of Common Stock of AHA. Stephen Feinberg
 exercises sole voting and investment authority over all of the securities
 owned by Cerberus. Thus, pursuant to Rule 13d-3 under the Exchange Act,
 Stephen Feinberg is deemed to beneficially own 18,627,463.5 shares of AHAs
 Series A Preferred Stock and 15,847,341 shares of AHAs Common Stock.(2)
The address
 for Stephen Feinberg, Paul Miller, Grant Gregory, George Kollitides, II,
 Scott Parker and Madhu Satyanarayana is c/o Cerberus Capital Management L.P.,
 299 Park Avenue, New York, New York 10171.152

Item 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Predecessor

BRSE,
L.L.C., the general partner of the BRS Fund, which owned 61.3% of the
outstanding Common Stock of Holding at December 31, 2006, is a private
investment fund managed by Bruckmann, Rosser, Sherrill & Co. L.L.C.
(BRS). The CDR Fund, which owned 13.0% of the outstanding Common Stock of
Holding at December 31, 2006 (and through proxy controlled 26.6% of the voting
rights), is a private investment fund managed by Clayton, Dubilier & Rice,
Inc. (CD&R). CD&R also held the Holding Notes until the Closing Date
of the AHA Acquisition. Both BRS and CD&R received an annual fee for
management and financial consulting services provided to the Company and
reimbursement of related expenses. Fees and expenses paid to CD&R and BRS
for the five months ending May 31, 2007 were $0.3 million and $0.3 million,
respectively. Subsequent to May 31, 2007 and as a result of the AHA
Acquisition, neither the BRS Fund nor the CD&R Fund own any of the common
stock of Remington or Holding.

Remington
paid fees to the law firm of Debevoise & Plimpton LLP during 2007 for legal
services rendered. Franci J. Blassberg, Esq., a member of Debevoise
& Plimpton LLP, is married to Joseph L. Rice, III, who is the Chairman, a
director and a stockholder of CD&R and a general partner of Associates IV.
Fees and expenses paid to Debevoise & Plimpton LLP for the five months
ending May 31, 2007 were $0.3 million.

During
January 1 through May 31, 2007, the Company recorded $1.5 million of employee
stock option expense in accordance with SFAS 123R. In addition, the Company
recorded $0.2 million of expense related to the conversion of RACI Holding,
Inc. deferred shares to common stock in accordance with SFAS 123R.

Successor

Remington
paid Meritage Capital Advisors, LLC a fee of $2.0 million in connection with
the bond consent solicitation, amendment to the Credit Agreement and other transaction
advisory
services. Walter McLallen serves as a member of Remingtons Board of Directors
and is a principal of Meritage Capital Advisors, LLC.

Remington
paid Cerberus management fees totaling approximately $0.4 million during the
seven month period from June 1, 2007 to December 31, 2007 for consulting
services provided in connection with improving operations. AHA, which owns 100%
of the outstanding common stock of Holding (which in turn owns 100% of the
outstanding common stock of Remington), is controlled by Cerberus.

As
of December 31, 2007, $0.9 million is due to RACI Holding, Inc. representing
the outstanding principal balance of three notes established in connection with
the Kentucky economic development project.

Related Person Transaction Policy

The
Board adopted a written related person transaction policy in March 2007. This
policy has been adopted on a going-forward basis from the date of adoption and
prior related person transactions were approved by the Audit Committee, but not
pursuant to the new written related person transaction policy.

The
Board recognizes that related person transactions, as defined in the Companys
related person transaction policy, present a heightened risk of actual or
perceived conflicts of interest that could damage the reputation and public
trust of the Company. The Board therefore has adopted this policy to govern the
procedures for review and consideration of all related person transactions
involving the Company to help ensure that any such transactions are timely
identified and given appropriate consideration. It is the Companys policy to
enter into or ratify related person transactions only when the Board, acting
through the Audit Committee or as otherwise prescribed by the related person
transaction policy, determines that the related person transaction in question
is in, or is not inconsistent with, the best interests of the Company and its
stockholder.

The
Audit Committee will annually review this policy and will recommend amendments,
if any, to the Board for its consideration. In addition, the Board has
determined that the Audit Committee of the Board shall consider and, if deemed
advisable, approve each related person transaction. The Audit Committee will
consider all of the relevant facts and circumstances available to the Audit
Committee, including but not limited to (i) the

153

benefits to
the Company; (ii) the impact on a directors independence in the event the
related person is a director, an immediate family member of a director or an
entity in which a director is a partner, stockholder or executive officer;
(iii) the availability of other sources for comparable products or services;
(iv) the terms of the proposed related person transaction; and (v) the terms
available to unrelated third parties or to employees generally in an
arms-length negotiation. No member of the Audit Committee will participate in
any review, consideration or approval of any related person transaction with
respect to which such member or any of his or her immediate family members is
the related person.

Director Independence

The
Board of Directors uses the definition of independent director as set forth
in Rule 4200(a)(15) of The NASDAQ Stock Market LLC in determining whether the
members of the Board are independent. An independent director per the NASDAQ
definition, generally means a person other than an executive officer or
employee of Remington or any other individual having a relationship which, in
the opinion of Remingtons Board, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director. The
NASDAQ definition also includes a series of objective tests that would not
allow a director to be considered independent if the director has or has had
certain employment, business or family relationships with us.

The
Board of Directors has affirmatively determined that the following current directors are
independent directors within the meaning of NASDAQ Rule 4200(a)(15): Bobby R. Brown,
Frank A. (Terry) Savage, General Michael W. Hagee (Ret.), James J. Pike, George
Zahringer III, General George Joulwan (Ret.) and Edward H. Rensi.
Although no longer serving as Remington directors, each of Richard E. Heckert, H. Norman Schwarzkopf,
Richard E. Gilleland, Hubbard C. Howe and Stephen L. Hammerman served as directors of Remington during 2007
and satisfy the definition of independent director as set forth in
NASDAQ Rule 4200(a)(15). With respect
to each of these directors, there were no transactions, relationships or
arrangements that were considered by the Board but rejected as not impairing
such directors independence. Although the Board has not deemed them to be independent, each of George Kollitides, II and
Walter McLallen serves as a member of our Audit Committee and each of Paul A. Miller
and Mr. Kollitides serves as a member of our Compensation Committee.

Although
our Board does not consist of a majority of independent directors, we would be
a controlled company as defined by NASDAQ listing standards and thus would
not be required to comply with the NASDAQ requirement that our Board consist of a
majority of independent directors. A controlled company for these purposes is
a company of which more than 50% of the voting power is held by an individual,
group or another company. Since (i) 100% of our common stock is owned by
Holding; (ii) 100% of Holdings common stock is owned by AHA; and (iii) the
Cerberus Entities maintain voting control, in the aggregate, of over 95% of AHAs
outstanding
common stock and over 99% of AHAs outstanding preferred stock, we would satisfy the
definition of a controlled company and thus would not be subject to the
requirement that a majority of our Board consist of independent directors, as
that term is defined by NASDAQ Rule 4200(a)(15).

154

Item 14. PRINCIPAL ACCOUNTING FEES AND
SERVICES

Audit Fees

Our
audit fees to Grant Thornton LLP were $0.7 million in 2007 and $0.4 million in
2006 for professional services rendered in connection with the annual audit and
quarterly reviews of the financial statements.

Audit-Related Fees

Our
audit-related fees to Deloitte were less than $0.1 million in 2007 for services
related to compliance with the Sarbanes-Oxley Act of 2002 and related rules and
regulations. Our audit-related fees to Grant Thornton were less than $0.1
million in 2006 for services related to compliance with the Sarbanes-Oxley Act
of 2002 and related rules and regulations.

Tax Fees

Our
tax-related fees to Deloitte were less than $0.1 million for 2007, primarily
for professional services rendered with respect to federal and state tax review
services and the implementation of Financial Standards Accounting Board
Interpretation No. 48, Accounting for
Uncertainty in Income Taxes (FIN 48). Our tax-related fees to
Grant Thornton LLP were less than $0.1 million for 2007, primarily with respect
to professional services rendered in federal and state tax review services and
the implementation of FIN 48. Our tax-related fees paid to Grant Thornton LLP
were less than $0.1 million for 2006, primarily for professional services
rendered in return preparation and state tax consulting and review services.

Other Fees

In
2006, we paid fees of less than $0.1 to Grant Thornton LLP primarily related to
an audit of the stand-alone financial statements of Holding. In 2007, there
were no Other Fees paid.

Audit Fee Approval

The
percentage of fees paid to Grant Thornton LLP for audit fees, audit-related
fees, tax fees and all other fees that were approved by the Companys Audit
Committee was 100% in fiscal 2007 and 2006.

Audit Committee Pre-Approval Policy

The
Companys Audit Committee approves all fees for audit and non-audit services of
the Companys independent registered public accounting firm prior to
engagement. It is the policy of the Audit Committee to pre-approve, to the
extent required by applicable law, all audit and non-audit services provided to
the Company by its independent registered public accounting firm.

155

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT
SCHEDULES.

(a) Documents filed as part of this report:(1)

Financial
 StatementsPageReport
 of Independent Registered Public Accounting Firm

60Consolidated
 Balance Sheets as of December 31, 2007 and 2006

61Consolidated
 Statements of Operations for the years ended December 31, 2007, 2006, and
 2005

62Consolidated
 Statements of Cash Flows for the years ended December 31, 2007, 2006, and
 2005

63-64Consolidated
 Statements of Stockholders Equity and Comprehensive Income (Loss) for the
 years ended December 31, 2007, 2006, and 2005

65Notes
 to the Consolidated Financial Statements

66(2)

Financial
 Statement ScheduleValuation
 and Qualifying Accounts

114(3)

List of
 ExhibitsThe exhibits
 listed in the Exhibit Index, which appears immediately following the
 signature page and is incorporated herein by reference, are filed as part of
 this annual report on Form 10-K

160(b)

ExhibitsSee the
 Exhibit Index

160(c)

Separate Financial Statements and SchedulesNone.156

SIGNATURES

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

Date:
March 28, 2008

REMINGTON
 ARMS COMPANY, INC.By:
/S/ THOMAS L. MILLNERName:
Thomas L.
 MillnerTitle:
Chief Executive OfficerPursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

Signature

Title

Date/s/ Thomas L. Millner

Chief Executive Officer and
Director
 (Principal Executive Officer)

March 28, 2008Thomas L. Millner/s/ Stephen P. Jackson, Jr.

Chief Financial Officer,
Treasurer and
 Corporate Secretary (Principal Financial Officer and Principal Accounting
 Officer)

March 28, 2008Stephen P. Jackson, Jr./s/ Paul A. Miller

Chairman and
 Director

March 28, 2008Paul A. Miller/s/ Bobby R. Brown

Director

March 28, 2008Bobby R. Brown/s/ Grant Gregory

Director

March 28, 2008Grant Gregory/s/ Michael W. Hagee

Director

March 28, 2008Michael W. Hagee/s/ George A. Joulwan

Director

March 28, 2008George A. Joulwan/s/ George Kollitides, II

Director

March 28, 2008George Kollitides, II/s/ Walter McLallen

Director

March 28, 2008Walter McLallen/s/ Scott Parker

Director

March 28, 2008Scott Parker157

Signature

Title

Date/s/ James J. Pike

Director

March 28, 2008James J. PikeDirector

March 28, 2008Edward H. Rensi/s/ Madhu Satyanarayana

Director

March 28, 2008Madhu Satyanarayana/s/ Frank A. Savage

Director

March 28, 2008Frank A. Savage/s/ George Zahringer III

Director

March 28, 2008George Zahringer III158

Supplemental Information to be
Furnished with Reports Filed Pursuant to Section 15(d) of the Act by
Registrants Which Have Not Registered Securities Pursuant to Section 12 of the
Act.

No
annual report or proxy material has
been or will be distributed to our sole stockholder, RACI Holding, Inc.

159

EXHIBIT INDEX
Form 10-K for Fiscal Year Ended December 31, 2007

Exhibit
  Number

Description of Document2.1

Asset Purchase Agreement, dated
as of
  November 24, 1993, among Remington Arms Company, Inc., formerly named RACI
  Acquisition Corporation (Remington), E.I. du Pont de Nemours and Company
  (DuPont) and Sporting Goods Properties, Inc., formerly named Remington Arms
  Company, Inc. (Sporting Goods); previously filed as Exhibit 2.1 to
  Registration Statement No. 333-04520, 333-04520-01 under the Securities Act
  of 1933, as amended, filed May 3, 1996 by Remington and RACI Holding, Inc.
  (Holding), and herein incorporated by reference.2.2

Understanding and Agreement
Regarding
  Product Liability Litigation, dated as of June 1, 1996, between DuPont and
  Remington; previously filed as Exhibit 2.2 to Amendment No. 2 to Registration
  Statement No. 333-04520, 333-04520-01 under the Securities Act of 1933, as
  amended, filed April 23, 1997 by Remington and Holding, and herein
  incorporated by reference.2.3

Non-Competition Agreement,
dated as of
  December 1, 1993, among DuPont, Sporting Goods and Remington; previously
  filed as Exhibit 2.3 to Registration Statement No. 333-04520, 333-04520-01
  under the Securities Act of 1933, as amended, filed May 3, 1996 by Remington
  and Holding, and herein incorporated by reference.2.4

Product Liability Services and
Defense
  Coordination Agreement, dated as of December 1, 1993, among DuPont, Sporting
  Goods and Remington; previously filed as Exhibit 2.4 to Registration
  Statement No. 333-04520, 333-04520-01 under the Securities Act of 1933,
  as amended, filed May 3, 1996 by Remington and Holding, and herein
  incorporated by reference.2.5

Environmental Liability
Services Agreement,
  dated as of December 1, 1993, between DuPont and Remington; previously filed
  as Exhibit 2.5 to Registration Statement No. 333-04520, 333-04520-01 under
  the Securities Act of 1933, as amended, filed May 3, 1996 by Remington and
  Holding, and herein incorporated by reference.3.1

Certificate of Incorporation of
Remington,
  dated October 21, 1993, as amended on November 23, 1993; previously filed as
  Exhibit 3.3 to Registration Statement No. 33-74194, under the Securities Act
  of 1933, as amended, filed January 14, 1994 by Remington and Holding, and
  herein incorporated by reference.3.2

Remington Arms Company, Inc.
By-Laws, as
  amended and restated on October 10, 2007; previously filed as Exhibit 3.2 to
  Remingtons Quarterly Report on Form 10-Q for the quarterly period ending September
  30, 2007, filed November 14, 2007, and herein incorporated by reference.3.3

Certificate of Formation of RA
Brands
  L.L.C., dated June 29, 2000; previously filed as Exhibit 3.5 to Amendment No.
  1 to Registration Statement No. 333-104141, under the Securities Act of 1933,
  as amended, filed May 16, 2003 by Remington, and herein incorporated by
  reference.3.4

Limited Liability Company
Agreement of RA
  Brands, L.L.C., dated June 30, 2000; previously filed as Exhibit 3.6 to
  Amendment No. 1 to Registration Statement No. 333-104141, under the
  Securities Act of 1933, as amended, filed May 16, 2003 by Remington, and
  herein incorporated by reference.4.1

Specimen of Holding Class A
Common Stock
  Certificate; previously filed as Exhibit 4.1 to Holdings Annual Report on
  Form 10-K for the fiscal year ended December 31, 1997, filed March 30, 1998,
  and herein incorporated by reference.4.2

Specimen of Holding Class B
Common Stock
  Certificate; previously filed as Exhibit 4.2 to160

Holdings Annual Report on Form
10-K for the fiscal year ended
  December 31, 1997, filed March 30, 1998, and herein incorporated by
  reference.4.3


Indenture, dated as of January
24, 2003,
  among Remington, RBC Holding, Inc., RA Brands, L.L.C., RA Factors, Inc. and
  U.S. Bank National Association with respect to Remingtons 101⁄2% Senior Notes
  due 2011 (the form of which is included in such Indenture); previously
  filed as Exhibit 4.7 to Registration Statement No. 333-104141, under the
  Securities Act of 1933, as amended, filed March 31, 2003­ by Remington, and
  herein incorporated by reference.4.4


Supplemental Indenture, dated
as of May 17,
  2007, by and among Remington, U.S. Bank National Association, and RA Brands,
  L.L.C.; previously filed as Exhibit 4.1 to Remingtons Current Report on Form
  8-K, filed May 21, 2007, and herein incorporated by reference.10.1


Borrower Security Agreement,
dated January
  24, 2003, between Remington and Wachovia Bank, National Association, as
  administrative and collateral agent; previously filed as Exhibit 10.18 to
  Registration Statement No. 333-104141, under the Securities Act of 1933, as
  amended, filed March 31, 2003 by Remington, and herein incorporated by
  reference.10.2


Borrower Security Agreement,
dated January
  24, 2003, between RA Factors, Inc. and Wachovia Bank, National
  Association, as administrative and collateral agent; previously filed as
  Exhibit 10.19 to Registration Statement No. 333-104141, under the Securities
  Act of 1933, as amended, filed March 31, 2003 by Remington, and herein
  incorporated by reference.10.3


Subsidiary Security Agreement,
dated as of
  January 24, 2003, between RA Brands, L.L.C. and Wachovia Bank, National
  Association, as administrative and collateral agent; previously filed as
  Exhibit 10.20 to Registration Statement No. 333-104141, under the Securities
  Act of 1933, as amended, filed March 31, 2003 by Remington, and herein
  incorporated by reference.10.4


Pledge Agreement, dated January
24, 2003,
  between RA Brands, L.L.C. and Wachovia Bank, National Association, as
  administrative and collateral agent; previously filed as Exhibit 10.22 to
  Registration Statement No. 333-104141, under the Securities Act of 1933, as
  amended, filed March 31, 2003 by Remington, and herein incorporated by
  reference.10.5


Pledge Agreement, dated January
24, 2003,
  between Remington and Wachovia Bank, National Association, as
  administrative and collateral agent; previously filed as Exhibit 10.23 to
  Registration Statement No. 333-104141, under the Securities Act of 1933, as
  amended, filed March 31, 2003 by Remington, and herein incorporated by
  reference.10.6


Pledge Agreement, dated January
24, 2003,
  between Holding and Wachovia Bank, National Association, as
  administrative and collateral agent; previously filed as Exhibit 10.25 to
  Registration Statement No. 333-104141, under the Securities Act of 1933, as
  amended, filed March 31, 2003 by Remington, and herein incorporated by
  reference.10.7


Patent and Trademark Security
Agreement,
  dated January 24, 2003, between RA Brands, L.L.C. and Wachovia Bank, National
  Association, as administrative and collateral agent; previously filed as
  Exhibit 10.26 to Registration Statement No. 333-104141, under the Securities
  Act of 1933, as amended, filed March 31, 2003 by Remington, and herein
  incorporated by reference.10.8


Subsidiary Guaranty, dated
January 24,
  2003, between RA Brands, L.L.C. and Wachovia Bank, National Association, as
  administrative and collateral agent; previously filed as Exhibit 10.27 to
  Registration Statement No. 333-104141, under the Securities Act of 1933, as
  amended, filed March 31, 2003 by Remington, and herein incorporated by
  reference.10.9


Contribution Agreement, dated
January 24,
  2003, by and among Remington, RA Factors, Inc., RA Brands, L.L.C., and RBC
  Holding, Inc., and Wachovia Bank, National Association, as administrative and
  collateral agent; previously filed as Exhibit 10.29 to Registration Statement
  No. 333-104141, under the Securities Act of 1933, as amended, filed March 31,
  2003 by Remington, and herein incorporated by reference.161

10.10


Form of Director Stock
Subscription
  Agreement; previously filed as Exhibit 10.2 to Holdings Quarterly Report on
  Form 10-Q for the quarterly period ending September 30, 1997, filed November
  14, 1997, and herein incorporated by reference.*10.11


Form of Executive Employment
Agreement;
  previously filed as Exhibit 10.38 to Amendment No. 2 to Registration
  Statement No. 333-104141, under the Securities Act of 1933, as amended, filed
  July 7, 2003 by Remington, and herein incorporated by reference.*10.12


Director Stock Subscription
Agreement;
  previously filed as Exhibit 10.1 to Holdings Quarterly Report on Form 10-Q
  for the quarterly period ending June 30, 1999, filed August 11, 1999, and
  herein incorporated by reference.*10.13


Director Matching Deferred
Share Award
  Agreement; previously filed as Exhibit 10.2 to Holdings Quarterly Report on
  Form 10-Q for the quarterly period ending June 30, 1999, filed August 11,
  1999, and herein incorporated by reference.*10.14


1999 RACI Holding, Inc. Stock
Incentive
  Plan; previously filed as Exhibit 10.3 to Holdings Quarterly Report on Form
  10-Q for the quarterly period ending June 30, 1999, filed August 11, 1999,
  and herein incorporated by reference.*10.15


Form of Management Stock
Subscription
  Agreement; previously filed as Exhibit 10.4 to Holdings Quarterly Report on
  Form 10-Q for the quarterly period ending June 30, 1999, filed August 11,
  1999, and herein incorporated by reference.*10.16


Form of Management Stock
Subscription
  AgreementPerformance Option; previously filed as Exhibit 10.5 to
  Holdings Quarterly Report on Form 10-Q for the quarterly period ending June
  30, 1999, filed August 11, 1999, and herein incorporated by reference.*10.17


Form of Management Stock
Subscription
  AgreementService Option; previously filed as Exhibit 10.6 to Holdings
  Quarterly Report on Form 10-Q for the quarterly period ending June 30, 1999,
  filed August 11, 1999, and herein incorporated by reference.*10.18


Form of Stock Purchase Right
Deferred Share
  Award Agreement; previously filed as Exhibit 10.7 to Holdings Quarterly
  Report on Form 10-Q for the quarterly period ending June 30, 1999, filed
  August 11, 1999, and herein incorporated by reference.*10.19


Form of Matching Deferred Share
Award
  Agreement; previously filed as Exhibit 10.8 to Holdings Quarterly Report on
  Form 10-Q for the quarterly period ending June 30, 1999, filed August 11,
  1999, and herein incorporated by reference.*10.20


Remington Arms Co., Inc. Profit
Based Bonus
  Plan; previously filed as Exhibit 10.11 to Holdings Quarterly Report on
  Form 10-Q for the quarterly period ending June 30, 1999, filed August
  11, 1999, and herein incorporated by reference.*10.21


Form of Management Stock
Subscription
  Agreement; previously filed as Exhibit 10.46 to Holdings Annual Report on
  Form 10-K for the fiscal year ended December 31, 2001, filed March 8, 2002,
  and herein incorporated by reference.*10.22


Form of Management Stock Option
Agreement 
  Service Option; previously filed as Exhibit 10.47 to Holdings Annual Report
  on Form 10-K for the fiscal year ended December 31, 2001, filed March 8,
  2002, and herein incorporated by reference.*10.23


Form of Deferred Share Award
Agreement;
  previously filed as Exhibit 10.48 to Holdings Annual Report on Form 10-K for
  the fiscal year ended December 31, 2001, filed March 8, 2002, and herein
  incorporated by reference.*10.24


RACI Holding, Inc. 2003 Stock
Option Plan,
  adopted June 13, 2003; previously filed as Exhibit 10.53 to Amendment No. 2
  to Registration Statement No. 333-104141, under the Securities Act of 1933,
  as amended, filed July 7, 2003 by Remington, and herein incorporated by
  reference.*10.25


Form of RACI Holding, Inc.
Management Stock
  Option Agreement, dated as of June 13, 2003; previously filed as Exhibit
  10.54 to Amendment No. 2 to Registration Statement No. 333-104141, under the
  Securities Act of 1933, as amended, filed July 7, 2003 by Remington, and
  herein incorporated by reference.*10.26


Form of RACI Holding, Inc.
Director Stock
  Option Agreement, dated as of June 13, 2003; previously filed as Exhibit
  10.55 to Amendment No. 2 to Registration Statement No. 333-162

104141, under the Securities Act of
1933, as amended, filed July 7,
  2003 by Remington, and herein incorporated by reference.*10.27


Form of RACI Holding, Inc.
Management Stock
  Subscription Agreement; previously filed as Exhibit 10.56 to Amendment No. 2
  to Registration Statement No. 333-104141, under the Securities Act of 1933,
  as amended, filed July 7, 2003 by Remington, and herein incorporated by
  reference.*10.28


Form of RACI Holding, Inc.
Director Stock
  Subscription Agreement; previously filed as Exhibit 10.57 to Amendment No. 2
  to Registration Statement No. 333-104141, under the Securities Act of 1933,
  as amended, filed July 7, 2003 by Remington, and herein incorporated by
  reference.*10.29


Asset Purchase Agreement, dated
February 6,
  2004, among Remington, RA Brands, L.L.C., Pure Fishing, Inc., Pure Fishing I,
  LLC and Pure Fishing II, LLC; previously filed as Exhibit 10.1 to Remingtons
  Current Report on Form 8-K, filed February 19, 2004, and herein incorporated
  by reference.10.30


Form of Death Benefit Plan,
effective
  January 1, 2001; previously filed as Exhibit 10.51 to Remingtons Annual
  Report on Form 10-K for the fiscal year ended December 31, 2004, filed March
  24, 2005, and herein incorporated by reference. *10.31


Special Supplemental Retirement
Plan for
  Paul Cahan; previously filed as Exhibit 10.53 to Remingtons Annual Report on
  Form 10-K for the fiscal year ended December 31, 2004, filed March 24, 2005,
  and herein incorporated by reference. *10.32


The Remington Arms Company,
Inc. Pension
  and Retirement Plan, January 1, 2001 Restatement; previously filed as Exhibit
  10.41 to Remingtons Annual Report on Form 10-K for the fiscal year ended
  December 31, 2005, filed March 31, 2006, and herein incorporated by
  reference. *10.33


The Remington Arms Company, Inc.
  Supplemental Pension Plan, effective January 1, 1998; previously filed as
  Exhibit 10.43 to Remingtons Annual Report on Form 10-K for the fiscal year
  ended December 31, 2005, filed March 31, 2006, and herein incorporated by
  reference. *10.34


Amended and Restated Credit
Agreement,
  dated March 15, 2006, by and among Remington, RA Factors, Inc., Wachovia Bank,
  National Association, as Agent and Lender and other financial institutions
  party to the Amended and Restated Credit Agreement; previously filed as
  Exhibit 10.1 to Remingtons Current Report on Form 8-K, filed March 21, 2006,
  and herein incorporated by reference.10.35


The Remington Arms Company,
Inc. 2006 Long
  Term Incentive Plan; previously filed as Exhibit 10.1 to Remingtons
  Quarterly Report on Form 10-Q for the quarterly period ending September 30,
  2006, filed November 14, 2006, and herein incorporated by reference.*10.36


The Remington Supplemental
Savings Plan,
  amended and restated as of August 2006; previously filed as Exhibit 10.2 to
  Remingtons Quarterly Report on Form 10-Q for the quarterly period ending
  September 30, 2006, filed November 14, 2006, and herein incorporated by
  reference.*10.37


Severance Agreement, dated as
of December
  31, 2006, between Remington and Stephen P. Jackson, previously filed as
  Exhibit 10.1 to Remingtons Current Report on Form 8-K, filed December 7,
  2006, and herein incorporated by reference.*10.38


Summary of Amendments to The
Remington Arms
  Company, Inc. Pension and Retirement Plan and The Remington Arms Company,
  Inc. Supplemental Pension Plan, previously filed as Exhibit 10.45 to Remingtons
  Annual Report on Form 10-K, filed April 2, 2007, and herein incorporated by
  reference.*10.39


Description of 2007 Incentive
Compensation
  Plan, previously filed as Exhibit 10.47 to Remingtons Annual Report on Form
  10-K, filed April 2, 2007, and herein incorporated by reference.*10.40


Confidential Settlement
Agreement, dated as
  of March 16, 2007, between Remington,163

Holding, The Clayton & Dubilier
Private Equity Fund IV, L.P. (the
  CDR Fund), Clayton & Dubilier Associates IV Limited Partnership,
  Clayton Dubilier & Rice, Inc., Thomas Millner, Leon Hendrix, Michael
  Babiarz, Bruckmann, Rosser, Sherrill & Co., LLC, Bruckmann, Rosser,
  Sherrill & Co. II, L.P. (the BRS Fund), BRSE, L.L.C., Bruckmann Rosser
  Sherrill & Co., Inc., and Robert Haskin, previously filed as Exhibit 10.1
  to Remingtons Quarterly Report on Form 10-Q for the quarterly period ending
  March 31, 2007, filed May 7, 2007, and herein incorporated by reference.10.41


First Amendment to Amended and
Restated
  Credit Agreement, dated May 31, 2007, by and among Remington, Wachovia Bank,
  National Association, and the lenders from time to time parties thereto;
  previously filed as Exhibit 4.2 to Remingtons Quarterly Report on Form 10-Q
  for the quarterly period ending June 30, 2007, filed August 20, 2007, and
  herein incorporated by reference.10.42


Executive Employment Agreement,
dated as of
  May 31, 2007, between Remington and Thomas L. Millner; previously filed as
  Exhibit 10.1 to Remingtons Quarterly Report on Form 10-Q for the quarterly
  period ending June 30, 2007, filed August 20, 2007, and herein incorporated
  by reference.*10.43


Executive Employment Agreement,
dated as of
  May 31, 2007, between Remington and Stephen Jackson; previously filed as
  Exhibit 10.2 to Remingtons Quarterly Report on Form 10-Q for the quarterly
  period ending June 30, 2007, filed August 20, 2007, and herein incorporated
  by reference.*10.44


Executive Employment Agreement,
dated as of
  May 31, 2007, between Remington and E. Scott Blackwell; previously filed as
  Exhibit 10.3 to Remingtons Quarterly Report on Form 10-Q for the quarterly
  period ending June 30, 2007, filed August 20, 2007, and herein incorporated
  by reference.*10.45


Executive Employment Agreement,
dated as of
  May 31, 2007, between Remington and John DeSantis; previously filed as
  Exhibit 10.4 to Remingtons Quarterly Report on Form 10-Q for the quarterly
  period ending June 30, 2007, filed August 20, 2007, and herein incorporated
  by reference.*10.46


Executive Employment Agreement,
dated as of
  May 31, 2007, between Remington and Paul Cahan; previously filed as Exhibit
  10.5 to Remingtons Quarterly Report on Form 10-Q for the quarterly period
  ending June 30, 2007, filed August 20, 2007, and herein incorporated by
  reference.*10.47


Executive Employment Agreement,
dated as of
  May 31, 2007, between Remington and Mark Little; previously filed as Exhibit
  10.6 to Remingtons Quarterly Report on Form 10-Q for the quarterly period
  ending June 30, 2007, filed August 20, 2007, and herein incorporated by
  reference.*10.48


Severance Agreement, dated as
of May 31,
  2007, between Remington and Donald Campbell; previously filed as Exhibit 10.7
  to Remingtons Quarterly Report on Form 10-Q for the quarterly period ending
  June 30, 2007, filed August 20, 2007, and herein incorporated by reference.*10.49


Confidential Severance
Agreement and
  General Release, dated as of August 31, 2007, between Remington and Paul L.
  Cahan; previously filed as Exhibit 10.1 to Remingtons Quarterly Report on
  Form 10-Q for the quarterly period ending September 30, 2007, filed November
  14, 2007, and herein incorporated by reference.*10.50


Union Extension Agreement,
dated as of
  September 14, 2007, between Remington and the International Union, United
  Mine Workers of America, previously filed as Exhibit 10.2 to Remingtons
  Quarterly Report on Form 10-Q for the quarterly period ending September 30,
  2007, filed November 14, 2007, and herein incorporated by reference.*10.51


Severance
  Agreement, dated as of October 25, 2007, between Remington and Jeff
  Costantin.*10.52


Collective
  Bargaining Agreement, dated as of October 27, 2007, between Remington, the
  International Union, and United Mine Workers of America.*10.53


Joinder Agreement,
  Second Amendment and Supplement to Amended and Restated Credit Agreement,
  dated as of November 13, 2007, between Remington, RA Brands, L.L.C., and
  Wachovia Bank, National Association.164

10.54


Stock
  Purchase Agreement, dated as of December 21, 2007, by and among Remington,
  The Marlin Firearms Company, the Shareholders of The Marlin Firearms Company
  thereto and Frank Kenna, III, as Shareholders Representative, previously
  filed as Exhibit 10.1 to Remingtons Current Report on Form 8-K, filed
  December 28, 2007, and herein incorporated by reference.10.55


Joinder
  Agreement and Supplement to Amended and Restated Credit Agreement, dated as
  of January 28, 2008, between Remington, RA Brands, L.L.C., The Marlin
  Firearms Company, and H&R 1871, LLC, and Wachovia Bank, National
  Association.10.56


Executive
  Employment Agreement, dated as of February 4, 2008, between Remington and
  Theodore H. Torbeck.*10.57


Description
  of 2008 Incentive Compensation Plan.*12.1


Statement
  Re: Computation of Ratio of Earnings to Fixed Charges.16.1


Letter from
PricewaterhouseCoopers LLP to
  the United States Securities and Exchange Commission regarding change in
  certifying accountant, dated November 15, 2005; previously filed as Exhibit
  16 to Remingtons Current Report on Form 8-K, filed November 15, 2005, and
  herein incorporated by reference.21.1


List of
  Subsidiaries.31.1


Certification
  Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of
  1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley
  Act of 2002.31.2


Certification
  Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of
  1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley
  Act of 2002.32.1


Certification
  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002.**32.2


Certification
  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002.**99.1


Press Release, dated February
10, 2004,
  previously filed as Exhibit 99.1 to Remingtons Current Report on Form 8-K,
  filed February 19, 2004­, and herein incorporated by reference.99.2


Stock Purchase Agreement, dated
as of April
  4, 2007, among American Heritage Arms, LLC, as Buyer, Holding and the
  stockholders of Holding, including the ownership interests represented by the
  BRS Fund and the CDR Fund, as Sellers and the stock option holders of
  Holding, previously filed as Exhibit 99.1 on Remingtons Current Report on
  Form 8-K/A, filed April 12, 2007, and herein incorporated by reference.Our SEC file
  number reference for documents filed with the SEC pursuant to the Securities
  Exchange Act of 1934, as amended, is 033-74194-01.*


Management contract or
compensatory plan or
  arrangement.**


The
  following exhibits shall not be deemed filed for purposes of Section 18 of
  the Securities Exchange Act of 1934, or otherwise subject to the liability of
  that Section. In addition, Exhibit No. 32.1 and Exhibit No. 32.2 shall not be
  deemed incorporated into any filing under the Securities Act of 1933 or the
  Securities Exchange Act of 1934.165