REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except for share and per share amounts)

(1)    Basis of Presentation

REV Holdings LLC (‘‘REV Holdings’’ and together with its subsidiaries, the ‘‘Company’’) is a Delaware limited liability company. REV Holdings conducts its business exclusively through its indirect subsidiary, Revlon Consumer Products Corporation and its subsidiaries (‘‘Products Corporation’’). The Company manufactures and sells an extensive array of cosmetics, skincare, fragrances, beauty tools, hair color, anti-perspirants/deodorants and other personal care products. The Company's principal customers include large mass volume retailers and chain drug stores, as well as certain department stores and other specialty stores, such as perfumeries. The Company also sells consumer products to U.S. military exchanges and commissaries and has a licensing group, pursuant to which the Company licenses certain of its key brand names to third parties for complimentarycomplementary beauty-related products and accessories. Products Corporation is a wholly-owned subsidiary of Revlon, Inc.

The accompanying Consolidated Financial Statements are unaudited. In management’s opinion, all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation have been made. The Unaudited Consolidated Financial Statements include the accounts of the Company after elimination of all material intercompany balances and transactions.

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. The Unaudited Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and related notes contained in REV Holdings' Annual Report on Form 10-K for the year ended December 31, 2005. All terms not defined elsewhere herein have the same meaning ascribed to them in REV Holdings’ Annual Report on Form 10-K for the year ended December 31, 2005. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Significant estimates made in the accompanying Unaudited Consolidated Financial Statements include, but are not limited to, allowances for doubtful accounts, inventory valuation reserves, expected sales returns and allowances, certain assumptions related to the recoverability of intangible and long-lived assets, reserves for estimated tax liabilities, certain estimates and assumptions used in the calculation of the fair value of stock options issued to employees and the derived compensation expense and certain estimates regarding the calculation of the net periodic benefit costs and the projected benefit obligation for the Company’s pension and other post-retirement plans. The Unaudited Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and related notes contained in REV Holdings’ Annual Report on Form 10-K for the year ended December 31, 2005. All terms not defined elsewhere herein have the same meaning ascribed to them in REV Holdings’ Annual Report on Form 10-K for the year ended December 31, 2005.

As of March 31,June 30, 2006, REV Holdings owned 20,819,333 shares of Class A Common Stock of Revlon, Inc. (‘‘Class A Common Stock’’) and 31,250,000 shares of Class B Common Stock (together with the Class A Common Stock, the ‘‘Common Stock’’) of Revlon, Inc. (representing approximately 13% of the Common Stock and approximately 48% of the combined voting power of the Common Stock). The REV Holdings membership interest is owned by its sole member, Revlon Holdings LLC (‘‘Revlon Holdings’’), whose membership interest, in turn, is owned indirectly by MacAndrews & Forbes Holdings Inc. (‘‘MacAndrews & Forbes Holdings’’ and, together with its affiliates, ‘‘MacAndrews & Forbes’’), a corporation wholly owned by Ronald O. Perelman. As of March 31,June 30, 2006, MacAndrews & Forbes Holdings beneficially owned approximately 60% of the Common Stock (representing approximately 76% of the combined voting power of the Common Stock).

In accordance with Accounting Research Bulletin No. 51, the Company does not reflect the minority owners’ interest in Revlon, Inc. on the accompanying Consolidated Financial Statements because the losses applicable to the minority interest have exceeded the minority interest in the equity capital of Revlon, Inc. and there is no obligation of the minority interest to make good such losses.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except for share and per share amounts)

The results of operations and financial position, including working capital, for interim periods are not necessarily indicative of those to be expected for a full year.

Table

Certain prior year amounts have been reclassified to conform to the current period's presentation, due to the transfer, during the second quarter of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(all tabular amounts in millions, except2006, of management responsibility for share and per share amounts)the Company’s Canadian operations from the Company’s North American operations to the European region of its international operations.

Stock-Based Compensation

Prior to January 1, 2006 (including the fiscal quarterthree- and six-month periods ended March 31,June 30, 2005), the Company applied the intrinsic value method as outlined in Accounting Principles Board (‘‘APB’’) Opinion No. 25, ‘‘Accounting for Stock Issued to Employees’’ (‘‘APB No. 25’’) and related interpretations in accounting for stock options granted. Under the intrinsic value method, no compensation expense was recognized in fiscal periods ended prior to January 1, 2006 if the exercise price of the Company’s employee stock options equaledwas greater than or equal to the market price of Revlon, Inc.’s Class A common stock, par value of $0.01 per share on the date of the grant. Since all options granted under Revlon, Inc.’s Stock Plan (as hereinafter defined) had an exercise price equal to the market value of the underlying Class A Common Stock on the date of grant, no compensation costexpense was recognized in the accompanying consolidated statements of operations for the fiscal periods ended on or before December 31, 2005 (including the fiscal quarterthree- and six-month periods ended March 31,June 30, 2005) on stock options granted to employees.

Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards (‘‘SFAS’’) No. 123(R), ‘‘Share-Based Payment’’ (‘‘SFAS No. 123(R)’’). This statement, which replaces SFAS No. 123, ‘‘Accounting for Stock-Based Compensation’’ (‘‘SFAS No. 123’’) and supersedes APB No. 25. SFAS No. 123(R), requires that effective for fiscal periods ending after December 31, 2005 all stock-based compensation be recognized as an expense, net of the effect of expected forfeitures, in the financial statements and that such costexpense be measured at the fair value of the Company’s stock-based awards. The Company adopted SFAS No. 123(R) effective for fiscal periods ending after December 31, 2005 usinguses the modified prospective method of application, which requires recognition of compensation expense on a prospective basis. Therefore, the Company’s financial statements for fiscal periods ended on or before December 31, 2005 have not been restated to reflect compensation expense in respect of awards of stock options under the Stock Plan. Under this method, in addition to reflecting compensation expense for new share-based awards granted on or after January 1, 2006, expense is also recognized to reflect the remaining service period (generally, the vesting period of the award) of awards that had been included in the Company’s pro-formapro forma disclosures in fiscal periods ended on or before December 31, 2005. SFAS No. 123(R) also requires that excess tax benefits related to stock option exercises be reflected as financing cash inflows instead of operating cash inflows. For the three-month fiscalsix-month period ended March 31,June 30, 2006, no adjustments have been made to the cash flow statement, as any excess tax benefits that would have been realized have been fully provided for, given the Company’s historical losses and deferred tax valuation allowance.

Recent Accounting Pronouncements

In June 2006, the FASB issued Financial Interpretation Number (‘‘FIN’’) 48, ‘‘Accounting for Uncertainty in Income Taxes – an interpretation of SFAS No. 109’’. This interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, ‘‘Accounting for Income Taxes.’’ FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the impact of FIN 48.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except for share and per share amounts)

(2)    Stock Compensation Plan

Stock options:

Total net stock-based compensation expense includes amounts attributable to the granting of, and the remaining requisite service period of, stock options issued under theRevlon, Inc. maintains an Amended and Restated Revlon, Inc. Stock Plan (the ‘‘Stock Plan’’) (whichwhich provides for the issuance of awards of shares of Revlon, Inc.'s Class A Common Stock in the form of stock options, stock appreciation rights and restricted or unrestricted stock to eligible employees and directors of Revlon, Inc. and its subsidiaries, including Products Corporation),Corporation.

Stock options

Total net stock option compensation expense includes amounts attributable to the granting of, and the remaining requisite service period of, stock options issued under the Stock Plan, which awards were unvested at January 1, 2006 or granted on or after such date. Net stock-basedstock option compensation expense in the three-month fiscal periodthree- and six-month periods ended March 31,June 30, 2006 was $2.4 million.$2.1 million and $4.5 million, respectively. As of March 31,June 30, 2006, the total unrecognized stock option compensation costexpense related to unvested stock awardsoptions in the aggregate was $11.7$8.8 million.

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

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(all tabular amounts in millions, except for share and per share amounts)

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

A summary of the status of stock option grants under the Stock Plan as of March 31,June 30, 2006 and changes during the three-month fiscalsix-month period then ended is presented below:

				Shares (000’s)				Weighted Average Exercise Price					Shares (000’s)						Weighted Average Exercise Price
Outstanding at January 1, 2006	Outstanding at January 1, 2006				33,033.1			$	4.25						33,033.1					$	4.25
Granted	Granted				12.5				3.05						12.5						3.05
Exercised	Exercised				(47.2	)			3.02						(47.2	)					3.02
Forfeited and expired	Forfeited and expired				(593.2	)			4.84						(593.2	)					4.84
Outstanding at March 31, 2006	Outstanding at March 31, 2006				32,405.2				4.24						32,405.2						4.24
Granted															10.0						1.46
Exercised															(13.3	)					2.59
Forfeited and expired															(1,351.8	)					3.51
Outstanding at June 30, 2006															31,050.1						4.27

The weighted average grant date fair value of options granted during the three-month fiscalsix-month periods ended March 31,June 30, 2006 and 2005 approximated $1.67$1.30 and $1.63,$1.37, respectively, and werewas estimated using the Black-Scholes option valuation model with the following weighted-average assumptions:

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except for share and per share amounts)

Three Months Ended March 31,

Six Months Ended June 30,

2006

2005

2006

2005

Expected life of option(a)

Expected life of option(a)

4.75 years

4.75 years

Expected life of option(a)

4.75 years

4.75 years

Risk-free interest rate(b)

Risk-free interest rate(b)

4.61%

3.95%

Risk-free interest rate(b)

4.84%

3.95%

Expected volatility(c)

Expected volatility(c)

62%

61%

Expected volatility(c)

64%

61%

Expected dividend yield(d)

Expected dividend yield(d)

N/A

N/A

Expected dividend yield(d)

N/A

N/A

(a)	The expected life of an option is calculated using a formula based on the vesting term and contractual life of the option.

(b)	The risk-free interest rate is based upon the rate in effect at the time of the option grant on a zero coupon U.S. Treasury bill for periods approximating the expected life of the option.

(c)	Expected volatility is based on the daily historical volatility of the NYSE closing price of Revlon, Inc.’s Class A Common Stock price over the expected life of the option.

(d)	Assumes a dividend rate of nil on Revlon, Inc.’s Class A Common Stock for options granted during the six-month periods ended June 30, 2006 and 2005, respectively.

The following table summarizes information about the Stock Plan's options outstanding at March 31,June 30, 2006:

				Outstanding												Exercisable
Range of Exercise Prices				Number of Options (000’s)				Weighted Average Years Remaining				Weighted Average Exercise Price				Number of Options (000’s)				Weighted Average Exercise Price
$  2.31 to $  3.78					29,086.4				5.34			$	2.99				14,043.8			$	3.07
3.82 to     6.88					1,453.9				5.47				4.87				976.7				5.31
7.06 to   15.00					1,023.5				3.63				10.56				1,023.5				10.56
18.50 to   50.00					841.4				1.69				38.67				841.4				38.67
2.31 to   50.00					32,405.2												16,885.4

			Outstanding																		Exercisable
Range of Exercise Prices			Number of Options (000’s)						Weighted Average Years Remaining						Weighted Average Exercise Price						Number of Options (000’s)						Weighted Average Exercise Price
$1.46 to $3.78					27,832.4						5.09					$	2.99						13,869.7					$	3.07
3.82 to 6.88					1,400.6						5.36						4.84						972.1						5.28
7.06 to 15.00					992.4						3.38						10.62						992.4						10.62
18.50 to 50.00					824.7						1.44						38.85						824.7						38.85
1.46 to 50.00					31,050.1																		16,658.9

Restricted stock awards:awards

The Stock Plan also allows for awards of restricted stock to employees and directors of Revlon, Inc. and its subsidiaries, including Products Corporation. The restricted stock awards vest over service periods that range from three to five years.

A summary of the status of grants of restricted stock under the Stock Plan and Supplemental Stock Plan (as hereinafter defined) as of June 30, 2006 and changes during the six-month period then ended is presented below:

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except for share and per share amounts)

			Shares (000’s)
Outstanding at January 1, 2006					3,810.0
Granted					—
Vested (a)(b)					(300.0	)
Forfeited and expired.					—
Outstanding at March 31, 2006					3,510.0
Granted					—
Vested (b)					(1,421.7	)
Forfeited and expired.					(63.3	)
Outstanding at June 30, 2006					2,025.0

(a)	Of the amount vested during the three-month period ended March 31, 2006, 17,594 shares were withheld by Revlon, Inc. to satisfy a certain grantee’s minimum withholding tax requirements. (See discussion under ‘‘Treasury Stock’’ below).

(b)	Of the amount vested during the three- and six-month periods ended June 30, 2006, 156,857 and 174,451 shares, respectively were withheld by Revlon, Inc. to satisfy certain grantees’ minimum withholding tax requirements. (See discussion under ‘‘Treasury Stock’’ below).

In 2002, Revlon, Inc. adopted the Revlon, Inc. 2002 Supplemental Stock Plan (the ‘‘Supplemental Stock Plan’’), the purpose of which was to provide Mr. Jack Stahl, the sole eligible participant, with

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(all tabular amounts in millions, except for share and per share amounts)

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

Generally, no dividends will be paid on unvested restricted stock, provided, however, that in connection with the 2002 grants to Mr. Stahl of 470,000 shares of restricted stock under the Stock Plan and 530,000 shares of restricted stock under the Supplemental Stock Plan (of which an aggregate 500,000 shares of restricted stock from both plans remained unvested at March 31,June 30, 2006), in the event any cash or in-kind distributions are made in respect of Common Stock prior to the lapse of the restrictions on such shares, such dividends will be held by the Company and paid to Mr. Stahl when and if such restrictions lapse.

The Company recognizes non-cash compensation expense related to restricted stock awards under the Stock Plan and Supplemental Stock Plan using the straight-line method over the remaining service period. The Company recorded compensation expense related to restricted stock awards under the Stock Plan and Supplemental Stock Plan of $1.3$2.6 million and $1.7$2.9 million during the three-month fiscalsix-month periods ended March 31,June 30, 2006 and 2005, respectively, andrespectively. The deferred stock-based compensation related to restricted stock awards of $5.2is $3.8 million at March 31,June 30, 2006. At June 30, 2006, there were 2,025,004 shares of restricted stock unvested under the Stock Plan and the Supplemental Stock Plan.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except for share and per share amounts)

Treasury stock:stock

DuringIn the three-monthfirst and second fiscal period ended March 31,quarters of 2006, an executive,certain executives, in lieu of paying withholding taxes on the vesting of certain restricted stock, authorized the withholding of an aggregate 17,594 and 156,857 shares, respectively, of Revlon, Inc. Class A Common Stock to satisfy the minimum statutory tax withholding requirements related to such vesting in accordance with the share withholding provisions of the Stock Plan. These shares were recorded as treasury stock by Revlon, Inc. using the cost method, at $3.56 and $3.16 per share, respectively, the market price on the respective vesting date,dates, for a total of approximately $0.1 million.and $0.5 million, respectively.

Pro forma net loss:loss

The following table illustrates the pro forma effect on net loss as if the Company had applied the fair value method to its stock-based compensation under the disclosure provisions of SFAS No. 123 and amended disclosure provisions of SFAS No. 148 to all outstanding awards for the three-month fiscal period ended March 31, 2005:148:

				Three Months Ended March 31, 2005					Three Months Ended June 30, 2005						Six Months Ended June 30, 2005
Net loss as reported	Net loss as reported			$	(47.4	)				$	(36.5	)				$	(83.9	)
Add: Stock-based employee compensation expense included in reported net loss	Add: Stock-based employee compensation expense included in reported net loss				1.7						1.4						3.1
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards	Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards				(5.7	)					(5.2	)					(10.9	)
Pro forma net loss	Pro forma net loss			$	(51.4	)				$	(40.3	)				$	(91.7	)

(3)    Post-retirement Benefits

Revlon, Inc. sponsors pension plans and certain other post-retirement benefit plans for a substantial portion of its U.S. employees, as well as certain other non-U.S. employees. DescriptionsRelevant aspects of these plans are

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(all tabular amounts in millions, except for share and per share amounts)

disclosed in the Company’sREV Holdings’ Annual Report on Form 10-K for the year ended December 31, 2005. Currently, Revlon, Inc. expects to contribute approximately $32.2$32.3 million to its pension plans and approximately $1.0 million to other post-retirement plans in 2006.

The components of net periodic benefit cost for the pension and the other post-retirement benefit plans for the three-month fiscal periodperiods ended March 31,June 30, 2006 and 2005, respectively, are as follows:

				Pension Plans								Other Post-retirement Benefit Plans									Pension Plans												Other Post-retirement Benefit Plans
				2006				2005				2006				2005					2006						2005						2006						2005
Service cost	Service cost			$	2.6			$	2.6			$	—			$	(0.2	)				$	2.6					$	2.6					$	0.1					$	—
Interest cost	Interest cost				7.9				7.8				0.2				0.1						7.9						7.8						0.2						0.2
Expected return on plan assets	Expected return on plan assets				(7.9	)			(7.1	)			—				—						(7.9	)					(7.1	)					—						—
Amortization of prior service cost	Amortization of prior service cost				(0.1	)			(0.1	)			—				—						(0.1	)					(0.1	)					—						—
Amortization of actuarial loss	Amortization of actuarial loss				1.7				2.0				—				—						1.7						2.0						—						—
					4.2				5.2				0.2				(0.1	)					4.2						5.2						0.3						0.2
Portion allocated to Revlon Holdings LLC	Portion allocated to Revlon Holdings LLC				—				—				—				—						(0.1	)					(0.1	)					—						—
				$	4.2			$	5.2			$	0.2			$	(0.1	)				$	4.1					$	5.1					$	0.3					$	0.2

(4) Inventories

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

(5) Comprehensive Loss

The components of comprehensive loss for the three-month fiscal period ended March 31, 2006 and 2005 are as follows:

				Three Months Ended March 31,
				2006				2005
Net loss				$	(16.6	)		$	(47.4	)
Other comprehensive income (loss):
Revaluation of foreign currency forward exchange contracts					0.6				1.1
Currency translation adjustment					—				(1.5	)
Other comprehensive income (loss)					0.6				(0.4	)
Comprehensive loss				$	(16.0	)		$	(47.8	)

(6) Restructuring Costs, net

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

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except for share and per share amounts)

The components of net periodic benefit cost for the pension and the other post-retirement benefit plans for the six-month periods ended June 30, 2006 and 2005, respectively, are as follows:

			Pension Plans												Other Post-retirement Benefit Plans
			2006						2005						2006						2005
Service cost				$	5.2					$	5.2					$	0.1					$	(0.2	)
Interest cost					15.8						15.6						0.4						0.3
Expected return on plan assets					(15.8	)					(14.2	)					—						—
Amortization of prior service cost					(0.2	)					(0.2	)					—						—
Amortization of actuarial loss					3.4						4.0						—						—
					8.4						10.4						0.5						0.1
Portion allocated to Revlon Holdings LLC					(0.1	)					(0.1	)					—						—
				$	8.3					$	10.3					$	0.5					$	0.1

(4)    Inventories

			June 30, 2006						December 31, 2005
Raw materials and supplies				$	59.1					$	60.7
Work-in-process					18.7						17.6
Finished goods					152.4						142.3
				$	230.2					$	220.6

(5)    Comprehensive Loss

The components of comprehensive loss for the three- and six-month periods ended June 30, 2006 and 2005, respectively, are as follows:

			Three Months Ended June 30,												Six Months Ended June 30,
			2006						2005						2006						2005
Net loss				$	(88.1	)				$	(36.5	)				$	(104.7	)				$	(83.9	)
Other comprehensive (loss) income:
Revaluation of foreign currency forward exchange contracts					—						1.5						0.6						2.6
Currency translation adjustment					0.1						(3.5	)					0.1						(5.0	)
Other comprehensive (loss) income					0.1						(2.0	)					0.7						(2.4	)
Comprehensive loss				$	(88.0	)				$	(38.5	)				$	(104.0	)				$	(86.3	)

(6)    Restructuring Costs, Net

During the six-month period ended June 30, 2006, the Company recorded net charges of $9.5 million, primarily for employee severance and other personnel benefits related to the organizational realignment announced by Revlon, Inc. in February 2006. The organizational realignment largely involved the consolidation of certain functions within the Company’s sales, marketing and creative groups, as well as certain headquarters functions, which changes arewere designed to streamline internal processes and to

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except for share and per share amounts)

enable the Company to continue to be more effective and efficient in meeting the needs of its consumers and retail customers (the ‘‘2006 program’’). During the three-month fiscal periodsix months ended March 31,June 30, 2005, the Company recorded separate charges of $1.7$1.5 million primarilyin restructuring expense for employee severance and other personnel benefits related to the 2004 program.

Details of the activities described above during the three-month fiscalsix-month period ended March 31,June 30, 2006 are as follows:

				Balance as of January 1, 2006				Expenses, Net				Utilized, Net								Balance as of March 31, 2006					Balance as of January 1, 2006						Expenses, Net						Utilized, Net												Balance as of June 30, 2006
												Cash				Noncash			Balance as of March 31, 2006																	Cash						Noncash					Balance as of June 30, 2006
Employee severance and other personnel benefits:	Employee severance and other personnel benefits:
2003 program	2003 program			$	1.2			$	—			$	—			$	—			$	1.2					$	1.2					$	—					$	(0.6	)				$	—					$	0.6
2004 program	2004 program				2.4				—				(0.5	)			—				1.9						2.4						—						(0.7	)					—						1.7
2006 program	2006 program				—				9.0				(1.5	)			—				7.5						—						9.7						(3.5	)					—						6.2
					3.6				9.0				(2.0	)			—				10.6						3.6						9.7						(4.8	)					—						8.5
Leases and equipment write-offs	Leases and equipment write-offs				0.6				—				—				—				0.6						0.6						(0.2	)					—						—						0.4
				$	4.2			$	9.0			$	(2.0	)		$	—			$	11.2					$	4.2					$	9.5					$	(4.8	)				$	—					$	8.9

(7)    Geographic Information

The Company manages its business on the basis of one reportable operating segment. The Company has operations established in 16 countries outside of the U.S. and its products are sold throughout the world. TheCertain prior year amounts have been reclassified to conform to the current period's presentation, due to the transfer, during the second quarter of 2006, of management responsibility for the Company’s results ofCanadian operations andfrom the valueCompany’s North American operations to the European region of its assets and liabilities may be adversely affected by, among other things, weak economic conditions, political uncertainties, military actions, terrorist activities, adverse currency fluctuations, category weakness, competitive activities, retailer inventory management and changes in consumer purchasing habits, including with respect to shopping channels.international operations.

				Three Months Ended March 31,									Three Months Ended June 30,												Six Months Ended June 30,
				2006				2005					2006						2005						2006						2005
Geographic area:	Geographic area:
Net sales:	Net sales:
United States	United States			$	198.4			$	179.3					$	180.0					$	181.2					$	378.3					$	360.5
Canada					17.8				14.9
United States and Canada					216.2				194.2
International	International				109.3				106.7						141.1						137.1						268.3						258.7
				$	325.5			$	300.9					$	321.1					$	318.3					$	646.6					$	619.2

			June 30, 2006						December 31, 2005
Long-lived assets:
United States				$	390.8					$	366.9
International					90.0						84.8
				$	480.8					$	451.7

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except for share and per share amounts)

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

				Three Months Ended March 31,									Three Months Ended June 30,												Six Months Ended June 30,
				2006				2005					2006						2005						2006						2005
Classes of similar products:	Classes of similar products:
Net sales:	Net sales:
Cosmetics, skin care and fragrances	Cosmetics, skin care and fragrances			$	216.6			$	201.2					$	197.5					$	208.6					$	414.1					$	409.8
Personal care	Personal care				108.9				99.7						123.6						109.7						232.5						209.4
				$	325.5			$	300.9					$	321.1					$	318.3					$	646.6					$	619.2

(8)    Derivative Financial Instruments

The Company uses derivative financial instruments, primarily foreign currency forward exchange contracts, to reduce the effects of fluctuations in foreign currency exchange rates. These contracts, which have been designated as cash flow hedges, arewere entered into primarily to hedge anticipated inventory purchases and certain intercompany payments denominated in foreign currencies and have maturities of less than one year. Any unrecognized income (loss) related to these contracts is recorded in the Statement of Operations primarily in cost of goods sold when the underlying transactions hedged are realized (e.g., when inventory is sold or intercompany transactions are settled). Products Corporation enters into these contracts with counterparties that are major financial institutions, and accordingly the Company believes that the risk of counterparty nonperformance is remote. The notional amount of the foreign currency forward exchange contracts outstanding at March 31,June 30, 2006 and December 31, 2005 was $33.4$37.4 million and $31.9 million, respectively. The fair value of the foreign currency forward exchange contracts outstanding at March 31,June 30, 2006 and December 31, 2005 was $0.4 million and $(0.2) million, respectively.

(9)    Long-term Debt and Rights Offering

				March 31, 2006				December 31, 2005					June 30, 2006						December 31, 2005
2004 Credit Agreement:	2004 Credit Agreement:
Term Loan Facility due 2010	Term Loan Facility due 2010			$	700.0			$	700.0					$	700.0					$	700.0
Multi-Currency Facility due 2009	Multi-Currency Facility due 2009				1.0				—						104.6						—
8 5/8% Senior Subordinated Notes due 2008	8 5/8% Senior Subordinated Notes due 2008				327.1				327.0						217.4						327.0
9½% Senior Notes due 2011, net of discounts	9½% Senior Notes due 2011, net of discounts				386.5				386.4						386.6						386.4
13% Senior Secured Notes due 2007	13% Senior Secured Notes due 2007				18.5				18.5						18.5						18.5
2004 Consolidated MacAndrews & Forbes Line of Credit	2004 Consolidated MacAndrews & Forbes Line of Credit				—				—						—						—
Advances under the New Keepwell Agreement	Advances under the New Keepwell Agreement				4.8				3.6						4.8						3.6
					1,437.9				1,435.5						1,431.9						1,435.5
Less current portion	Less current portion				(134.0	)			—						(28.6	)					—
				$	1,303.9			$	1,435.5					$	1,403.3					$	1,435.5

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(all tabular amounts in millions, except for share and per share amounts)

Amendment to Credit Agreement

In February 2006, Products Corporation secured an amendment to the credit agreement that it and certain of its subsidiaries entered into in 2004 with a syndicate of lenders and Citicorp USA, Inc., as multi-currency administrative agent, term loan administrative agent and collateral agent (the ‘‘2004 Credit Agreement’’). The amendment excludes from various financial covenants certain charges in connection with Products Corporation’s organizational realignment announced in February 2006 described in Note 6 above, as well as some start-up costs incurred by the Company in 2005 related to the launch of its new Vital

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except for share and per share amounts)

Radiance brand and the re-launchre-stage of the Almay brand. Specifically, the amendment provides for the add-back to the definition of ‘‘EBITDA’’ the lesser of (i) $50 million; or (ii) the cumulative one-time charges associated with (a) the aforementioned February 2006 organizational realignment and (b) the non-recurring costs in the third and fourth quarters of 2005 associated with the launch of the Company's new Vital Radiance brand and the re-launchre-stage of the Almay brand. Under the 2004 Credit Agreement, EBITDA is used in the determination of Products Corporation's senior secured leverage ratio and the consolidated fixed charge coverage ratio. (See also ‘‘Subsequent Events’’, Note 10)11 for a description of a second amendment to the 2004 Credit Agreement).

Products Corporation’s 2004 Credit Agreement originally provided up to $960.0 million, which consisted of a term loan facility of $800.0 million (the ‘‘Term Loan Facility’’) and a $160.0 million asset-based, multi-currency revolving credit facility (the ‘‘Multi-Currency Facility’’ and, together with the Term Loan Facility, the ‘‘2004 Credit Facilities’’). Availability under the Multi-Currency Facility varies based upon the borrowing base that is determined by the value of eligible accounts receivable, eligible inventory and eligible real property and equipment in the U.S. and the U.K. from time to time. In March 2005, the Term Loan Facility was reduced to $700.0 million following Products Corporation’s March 2005 prepayment of $100.0 million and in July 2006, as described in ‘‘Subsequent Events’’ in Note 11 to the Unaudited Consolidated Financial Statements, the Term Loan Facility was increased to $800 million as a result of the $100 million Term Loan Add-on (as hereinafter defined). Products Corporation may request the Multi-Currency Facility to be increased from time to time in an aggregate principal amount not to exceed $50.0 million subject to certain exceptions and subject to the lenders’ agreement.

The Multi-Currency Facility will terminate on July 9, 2009 and the loans under the Term Loan Facility will mature on July 9, 2010; provided that the 2004 Credit Agreement will terminate on October 30, 2007, if Products Corporation’s 8 5/8% Senior Subordinated Notes (as hereinafter defined) are not redeemed, repurchased, defeased or repaid on or before such date such that not more than $25.0 million in aggregate principal amount of the 8 5/8% Senior Subordinated Notes remain outstanding.

Redemption of 8 5/8% Senior Subordinated Notes

In March 2006, Revlon, Inc. completed its $110 million Rights Offering (as hereinafter defined) and promptly transferred the proceeds from the Rights Offering to Products Corporation which it used in April 2006, together with available cash, to complete the redemption of $109.7 million aggregate principal amount of its 8 5/8% Senior Subordinated Notes due 2008 (the ‘‘8 5/8% Senior Subordinated Notes’’) in satisfaction of the applicable requirements under its 2004 Credit Agreement, at an aggregate redemption price of $111.8 million, including $2.1 million of accrued and unpaid interest up to, but not including, the redemption date. Following such redemption there remained outstanding $217.4 million in aggregate principal amount of the 8 5/8% Senior Subordinated Notes.

(10)    Rights Offering

OnIn March 22, 2006, Revlon, Inc. completed the $110 million rights offering (including the private placement to MacAndrews & Forbes, the ‘‘Rights Offering’’) that it launched in February 2006 which allowed stockholders to purchase additional shares of Class A Common Stock. The subscription price for each share of Class A Common Stock purchased in the Rights Offering, including shares purchased in the private placement by MacAndrews & Forbes, was $2.80 per share. Upon completing the Rights Offering, Revlon, Inc. promptly transferred the proceeds to Products Corporation, which it used as described under Note 9 – ‘‘Redemption of 8 5/8% Senior Subordinated Notes’’.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in Note 10.millions, except for share and per share amounts)

In completing the Rights Offering, Revlon, Inc. issued an additional 39,285,714 shares of its Class A Common Stock, including 15,885,662 shares subscribed for by public shareholders (other than MacAndrews & Forbes) and 23,400,052 shares issued to MacAndrews & Forbes in a private placement directly from Revlon, Inc. pursuant to a stock purchase agreement between MacAndrews & Forbes and Revlon, Inc. The shares issued to MacAndrews & Forbes represented the number of shares of Revlon, Inc.'s Class A Common Stock that MacAndrews & Forbes would otherwise have been entitled to purchase pursuant to its basic subscription privilege in the Rights Offering (which was approximately 60% of the shares of Revlon, Inc.'s Class A Common Stock offered in the Rights Offering).

As a result of completing the Rights Offering, Revlon, Inc.'s total number of outstanding shares of Class A Common Stock increased to 380,041,688 shares and the total number of shares of Common Stock outstanding, including Revlon, Inc.'s existing 31,250,000 shares of Class B Common Stock, increased to 411,291,688 shares. Following the completion of these transactions, MacAndrews & Forbes beneficially owned approximately 56% of Revlon, Inc.'s outstanding Class A Common Stock and approximately 60% of Revlon Inc.'s total outstanding Common Stock, which shares together represent approximately 76% of the combined voting power of such shares.

(10)(11)    Subsequent Events

Redemption of 8 5/8 Senior Subordinated Notes

On April 21,July 28, 2006, using the proceeds of the Rights Offering, together with available cash,Revlon, Inc. announced that Products Corporation completed the redemption of $109.7 million aggregate principal amount of its 8 5/8% Senior Subordinated Notes due 2008 (the ‘‘8 5/8% Senior Subordinated Notes’’) in satisfaction of the applicable requirements underhad secured an amendment to its 2004 Credit Agreement atto, among other things, add an aggregate redemption priceadditional $100 million to the 2004 Credit Agreement's Term Loan Facility (the ‘‘Term Loan Add-on’’). While not required, the amendment also reset the Senior Secured Leverage Ratio covenant to 5.5 to 1.0 through June 30, 2007, stepping down to 5.0 to 1.0 for the remainder of $111.8the term of the 2004 Credit Agreement. The amendment also amended the EBITDA definition to enable Products Corporation to exclude up to $25 million including $2.1related to restructuring charges (in addition to the restructuring charges permitted to be added back pursuant to the first amendment to the 2004 Credit Agreement – See Note 9) and charges for certain product returns and/or product discontinuances. Products Corporation used the net proceeds from the Term Loan Add-on to repay amounts outstanding under the Multi-Currency Facility, without any reduction in the commitment under that facility.

In July 2006, Revlon, Inc. also reiterated that it currently intends to conduct a further $75 million equity issuance in late 2006 or early 2007, the net proceeds of which are intended to be used to reduce Products Corporation's indebtedness. As previously disclosed, the backstop obligations of MacAndrews & Forbes under the 2004 Investment Agreement between Revlon, Inc. and MacAndrews & Forbes will remain in effect to ensure that Revlon, Inc. issues an additional $75 million of accrued and unpaid interest upequity by March 31, 2007. The existing $87 million line of credit from MacAndrews & Forbes, which was undrawn as of June 30, 2006, will remain available to but not including,Products Corporation through the redemption date.completion of the $75 million equity issuance.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(all tabular amounts in millions, except for share and per share amounts)

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

Commitment for New 2006 Credit Facility

In May 2006, Products Corporation signed a commitment letter (the ‘‘Bank Commitment’’) with Citigroup Global Markets Inc. (‘‘Citigroup’’), J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. (together, ‘‘JPMorgan’’), in which Citigroup and JPMorgan have agreed to arrange a $960.0 million credit facility (the ‘‘New 2006 Credit Facility’’), pursuant to an amendment and restatement of Products Corporation's existing 2004 Credit Agreement. Citigroup and JPMorgan have committed to provide the entire amount of the New 2006 Credit Facility, subject to a number of customary conditions, including, among other things: (1) that no event, development or circumstance occur which could reasonably be expected to have a material adverse effect on Revlon, Inc.'s business, operations, property or condition, taken as a whole; (2) that Revlon, Inc. consummates the issuance of $75 million in equity securities; and (3) that the necessary credit agreement and security documents be finalized and signed. The Bank Commitment provides for a 7-year $800 million term loan facility and a 6-year $160 million asset-based revolving credit facility. It is expected that the New 2006 Credit Facility would be secured by substantially the same collateral package as secures the 2004 Credit Agreement.

While there can be no assurances that the New 2006 Credit Facility will be finalized and closed, if Products Corporation completes this refinancing, the Company believes that it will result in annual interest savings due to lower interest margins, provide the Company with greater financial and other covenant flexibility and extend the maturity dates of Products Corporation's 2004 Credit Agreement. Products Corporation expects to use the proceeds of the New 2006 Credit Facility to: (1) repay in full the $700.0 million of outstanding indebtedness (plus accrued interest and the prepayment fee) under the Term Loan Facility of its current 2004 Credit Agreement; (2) redeem approximately $75.0 million aggregate principal amount of Products Corporation's 8 5/8% Senior Subordinated Notes; and (3) pay fees and expenses incurred in connection with the New 2006 Credit Facility. The balance of such proceeds is expected to be available for general corporate purposes, including investment in the Company’s brands. Products Corporation expects to close and fund the New 2006 Credit Facility in July 2006.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Overview of the Business

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

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

The Company operates in a single segment and manufactures, markets and sells an extensive array of cosmetics, skincare, fragrances, beauty tools, hair color, anti-perspirants/deodorants and other personal care products. The Company's principal customers include large mass volume retailers and chain drug and food stores, as well as certain department stores and other specialty stores, such as perfumeries. The Company also sells beauty products to U.S. military exchanges and commissaries and has a licensing group, pursuant to which the Company licenses certain of its key brand names to third parties for complimentarycomplementary beauty-related products and accessories.

Revlon is one of the world's leading mass-market beauty brands. Revlon believes that its global brand name recognition, product quality and marketing experience have enabled it to create one of the strongest consumer brand franchises in the world. The Company's products are sold worldwide and marketed under such brand names as Revlon, ColorStay, Fabulash, Super Lustrous and Revlon Age Defying makeup with Botafirm, as well as the newly re-launchedre-staged Almay brand, including the Company’s new Almay Intense i-Color collection, and the Company’s latest brand, Vital Radiance, in cosmetics; a new Almay, skincare line, as well as Ultima II and Gatineau in skincare; Charlie and Jean Naté in fragrances; Revlon and Expert Effect in beauty tools; Colorsilk and Custom Effects in hair color; and Mitchum, Flex and Bozzano in personal care products.

In 2005, Revlon, Inc. launched two major brand initiatives (the ‘‘brand initiatives’’). One initiative involved a complete relaunch ofThe Company’s objective is to increase revenues and achieve profitability over the Almay brand and buildslong-term, capitalizing onAlmay’s healthy beauty heritage and the desire among consumers for simplicity and personalization. The second initiative focused on the more mature consumer and involved the launch of a complete line of cosmetics under a new brand name, Vital Radiance, that is designed to serve this affluent and growing consumer demographic currently underserved in the marketplace.

Overview of the Company’s Plan

The Company intends to capitalize on the actions taken during the earlier phases of its plan. The Company intends to assess and take appropriate actions toward this objective in response to marketplace conditions, including competitive activities. These actions include optimizing the effectiveness of all of its brands, including the Revlon brand across the various product categories in which it competes, including color cosmetics, women’s hair color, beauty tools and fragrances, as well as its newly-restaged Almay brand and its new Vital Radiance brand.

In July 2006, Revlon, Inc. announced that the performance of its Vital Radiance brand in large format mass retailers has been well below Revlon, Inc’s expectations. In response, Revlon, Inc. is seeking to optimize the Vital Radiance brand in the categories and retail formats in which it has been most successful. Given the underperformance in certain stores, Revlon, Inc. announced that it expects a reduction of some of the retail space it gained for Vital Radiance. Revlon, Inc.’s plan moving forward for Vital Radiance is to focus resources on its revised retail footprint, its most effective marketing drivers and the most productive products in the line. As a result of Revlon, Inc.’s modified approach to Vital Radiance, the Company recorded charges in the second quarter of 2006 of approximately $25 million comprised of $11.2 million for returns and allowances associated with the objective of increasing revenuesVital Radiance retail space reduction, approximately $6 million for returns and achieving profitability over the long term. The Company’s plan includes various actions that represent refinements of and additionsallowances related to the actions taken duringmodification to the earlier phasesVital Radiance brand for 2007 in connection with new product offerings, approximately $4.3 million of inventory obsolescence related to estimated excess inventory, and approximately $3.5 million for the plan, withacceleration of amortization and write-off of certain permanent displays, as well as the objectivewrite-off of balancing top-line growth with an improved operating profit margin. These ongoing initiatives include, among other things, actions to:certain excess marketing and promotional materials.

	(i)	further improve the new product development and introduction process with even deeper insights into the Company’s consumers and the categories in which it competes;

	(ii)	continue to increase the effectiveness and reduce the cost of the Company's display walls across categories and brands;

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

	(iii)	drive efficiencies across the Company's overall supply chain, including reducing manufacturing costs by, among other things, continuing to rationalize components and by sourcing strategically;

	(iv)	optimize the effectiveness of the Company’s advertising, marketing and promotions;

	(v)	continue the training and development of the organization so that the Company may continue to improve its capabilities to execute its strategies while providing enhanced job satisfaction for the Company’s employees; and

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

In July 2006, Revlon, Inc. also indicated that the restage of its Almay brand, while tracking behind Revlon, Inc.'s expectations, is contributing to consumption growth at retail in the first half of 2006, following the strong year the brand achieved in 2005. As a result of the less than expected performance of Almay, the Company recognized approximately $6.1 million of obsolescence charges in the second quarter of 2006 related to estimated excess inventory. Revlon, Inc. believes that Almay, with its restaged position in the marketplace, provides an important platform for future growth.

Revlon, Inc. has delayed the launch of its new fragrance for 2007 and it is currently evaluating various options for this launch. As a result of this delay, the Company recorded charges of approximately $1 million in the second quarter of 2006 primarily due to the write-off of certain marketing and promotional material.

The Company believes that it has strengthened its organizational capabilities and it intends to continue doing so.to focus on the opportunities that the Company believes exist to increase its operating profit margin over time, with key areas of focus being actions intended to improve results in the areas of cost of goods sold and returns, as well as overhead and administrative expenses. The Company’s cost savings initiatives include, among other things, actions intended to improve product life cycle management, improve in-store merchandising, improve on cost of goods sold (through, among other things, value analysis, package rationalization and strategic sourcing), improve the effectiveness and efficiency of trade promotions, focus on savings from strategic procurement in general and administrative costs, optimize the Company’s international supply chain and optimize the Company's overall cost structure. In February 2006, Revlon, Inc. announced an organizational realignment which is intendedlargely involving the consolidation of certain functions within the Company’s U.S. sales, marketing and creative groups, as well as certain headquarters functions. These changes are designed to streamline internal processes to enable the Company to continue to be more effective and efficient in meeting the needs of its consumers and retail customers. The Company also believesestimates that it has strengthenedongoing annualized savings associated with this realignment should be approximately $15 million, most of which the Company expects to realize in 2006. (See Note 6 to the Unaudited Consolidated Financial Statements).

Certain prior year amounts have been reclassified to conform to the current period's presentation, due to the transfer, during the second quarter of 2006, of management responsibility for the Company's Canadian operations from the Company’s North American operations to the European region of its relationships with its key retailers in the U.S.international operations.

Overview of Net Sales and Earnings Results

Net sales in the firstsecond quarter of 2006 increased $24.6$2.8 million, or 8.2%0.9%, to $325.5$321.1 million, as compared with $300.9$318.3 million in the firstsecond quarter of 2005, driven by approximately $38 million of higher shipments and lower returns,favorable foreign currency translation, partially offset by approximately $34 million of higher returns and allowances. Net sales for the first half of 2006 increased $27.4 million, or 4.4%, to $646.6 million, as compared with $619.2 million for the first half of 2005, driven by approximately $67 million of higher shipments and favorable foreign currency translation, partially offset by approximately $38 million of higher returns and allowances.

In the U.S., net sales for the second quarter of 2006 decreased $1.2 million, or 0.7%, to $180.0 million, from $181.2 million in the second quarter of 2005. In the first half of 2006, net sales increased $17.8 million, or 4.9%, to $378.3 million from $360.5 million in the first half of 2005. The decrease in net sales in the second quarter of 2006 was primarily due to approximately $17.3 million of higher returns and allowances related to the reduction of Vital Radiance retail distribution and modification to the offerings of Vital Radiance-branded products for 2007 new products and higher allowances and discounts primarily related to the Almayand unfavorable foreign currency translation.

InVital Radiance brands, partially offset by the United Stateshigher dollar value of shipments of Revlon-branded cosmetics, Vital Radiance-branded cosmetics and Canada,key beauty care products, including hair color and beauty tools. The increase in net sales for the first quarterhalf of 2006 increased $22.0 million, or 11.3%, to $216.2 million, from $194.2 million in the first quarter of 2005. This increase was primarily due to the higher dollar value of shipments of color cosmetics, stemming from the rollout of the Company’s new Vital Radiance brand and the re-stage of the Almay brand, partially offset by lower shipments of Revlon-branded cosmetics and higher allowances and discounts related to the launch of the Vital Radiance brand, and the re-stagehigher dollar value of shipments of other key

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
(all tabular amounts in millions)

beauty care products, partially offset by the aforementioned approximately $17.3 million of higher returns and allowances related to Vital Radiance-branded products and higher allowances and discounts primarily related to the launch of the Almay brand. The increase in net sales was also driven by higher shipments in other key categories and lower returns due in part to lower promotional shipments. Vital Radiance brand initiatives.

In the Company’s international operations, net sales for the firstsecond quarter of 2006 increased $2.6$4.0 million, or 2.4%2.9%, to $109.3$141.1 million from $106.7$137.1 million in the second quarter of 2005. In the first half of 2006, net sales increased $9.6 million, or 3.7%, to $268.3 million from $258.7 million in the first quarterhalf of 2005. The increase in net sales in the second quarter and first quarterhalf of 2006, as compared with the second quarter and first quarterhalf of 2005, was due primarily to the higher dollar value of shipments, partially offset by unfavorable foreign currency translation.higher returns and allowances.

Net loss for the firstsecond quarter of 2006 decreased $30.8increased $51.6 million to $16.6$88.1 million, as compared with $47.4a net loss of $36.5 million in the second quarter of 2005. In the first half of 2006 net loss increased $20.8 million to $104.7 million, as compared with a net loss of $83.9 million in the first quarterhalf of 2005. The decreaseincrease in net loss reflects a gain on issuancefor the second quarter reflected the higher dollar value of subsidiary stock of $42.3 million in 2006 primarily from the Rights Offering (as hereinafter defined), higher net salesshipments and higher gross profit,lower compensation and a lower loss on early extinguishment of debt. These amounts were partiallyother general and administrative expenses, which was more than offset by an increase inhigher returns and allowances, increased inventory obsolescence charges, primarily related to estimated excess inventory of Almay and Vital Radiance-branded products, and higher selling, general and administrative expenses (‘‘SG&A’’), primarily related to higher restructuring costs (primarily dueadvertising and promotion in support of the Almay and Vital Radiance brand initiatives. The increase in net loss for the first half of 2006 reflected a net gain of $41.9 million on the issuance of subsidiary stock primarily from the Rights Offering (as hereinafter defined) and the higher dollar value of shipments, which were more than offset by higher returns and allowances, inventory obsolescence charges primarily related to the organizational realignment previously announced in February 2006)aforementioned Almay and Vital Radiance-branded products, higher interest expense. SG&A expenses were higher in 2006 primarily duerelated to costsadvertising and promotion expense incurred to support the launch of the Almay and Vital Radiancebrand initiatives, including costs for advertising, consumer promotion and accelerated amortization on certain existing permanent displays,higher restructuring expense and higher compensation expenses.interest expense.

Overview of U.S. Market Share Data

In terms of U.S. marketplace performance, the U.S. color cosmetics category for the firstsecond quarter of 2006 increased approximately 3.8%4.2% versus the second quarter of 2005 and 4.4% for the first half of 2006 versus the first quarterhalf of 2005. Combined U.S. mass-market share for the Revlon, Almay and Vital Radiance brands totaled 21.3%22.0% for the firstsecond quarter of 2006, compared with 22.1%22.2% for the firstsecond quarter of 2005, with the Revlon brand registering a share of 14.3%14.2% for the firstsecond quarter of 2006, compared with 15.6%to 15.7% for the firstsecond quarter of 2005; the Almay brand registering a share of 6.4% for the firstsecond quarter of 2006, which was even withcompared to 6.5% for the firstsecond quarter of 2005; and the newly-launched Vital Radiance brand registering a share of 0.6%1.4% for the second quarter of 2006, compared to nil for the 2005 period. Combined U.S. mass-market share for the Revlon, Almay, and Vital Radiance brands totaled 21.8% for the first quarterhalf of 2006.2006, compared with 22.2% for the first half of 2005, with the Revlon brand registering a share of 14.4% for the first half of 2006, compared to 15.6% for the first half of 2005; the Almay brand registering a share of 6.4% for the first half of 2006, compared to 6.5% for the first half of 2005; and the newly-launched Vital Radiance brand registering a share of 1.0% for the first half of 2006, compared to nil for the 2005 period. In women’s hair color and beauty tools, the Company gained market share in the second quarter of 2006, compared with the second quarter of 2005, increasing respectively, from a 8.5% market share for the second quarter of 2005 to 9.0% for the second quarter of 2006 and 25.6% market share for the second quarter of 2005 to 27.0% for the second quarter of 2006. Market share for anti-perspirants/deodorants was essentially even, at 6.4% in the second quarter of 2006, as compared to 6.3% in the second quarter of 2005. In women’s hair color and beauty tools, the Company gained market share in the first half of 2006, compared with the first half of 2005, increasing respectively, from a 8.4% market share for the first half of 2005 to 8.9% for the first half of 2006 and 25.1% market share for the first half of 2005 to 26.7% for the first half of 2006. Market share for anti-perspirants/deodorants was even, at 6.2% in the first half of 2006, as compared to 6.2% in the first half of 2005.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

beauty tools, the Company gained market share in the first quarter of 2006, compared with the first quarter of 2005, increasing, respectively, from a 8.3% market share for the first quarter of 2005 to 8.8% for the first quarter of 2006, and 24.6% market share for the first quarter of 2005 to 26.5% for the first quarter of 2006. Market share performance for anti-perspirants/deodorants was essentially even, at 6.1% in the first quarter of 2006, as compared to 6.2% in the first quarter of 2005.

All U.S. market share and market position data herein for the Company's brands are based upon retail dollar sales, which are derived from ACNielsen data. ACNielsen measures retail sales volume of products sold in the U.S. mass-market distribution channel. Such data represent ACNielsen's estimates based upon data gathered by ACNielsen from market samples and are therefore subject to some degree of variance. Additionally, as of August 4, 2001, ACNielsen's data dodoes not reflect sales volume from Wal-Mart, Inc., which is the Company’s largest customer, representing approximately 24% of the Company's 2005 worldwide net sales. From time to time, ACNielsen adjusts its methodology for data collection and reporting, which may result in adjustments to the categories and market shares tracked by ACNielsen for both current and prior periods. The category and market share data contained herein has been updated to reflect ACNielsen's July 2005 adjustments.

Overview of Financing Activities

The Company’s plan includes actions intended to, among other things, strengthen the Company's balance sheet and capital structure. Many of these actions were accomplished during 2004, 2005 and through the first quarterhalf of 2006, including most recently the Rights Offering (as hereinafter defined) completed in March 2006 and the related redemption of approximately $110 million of Products Corporation's 8 5/8% Senior Subordinated Notes due 2008 (the ‘‘8 5/8% Senior Subordinated Notes’’) completed in April 2006. (See ‘‘Financial Condition, Liquidity and Capital Resources-2006 FinancingResources − 2006 Refinancing Transactions’’ and ‘‘Recent Developments’’).

OnIn March 22, 2006, Revlon, Inc. completed its $110 million rights offering (including the private placement to MacAndrews & Forbes, the ‘‘Rights Offering’’) and issued an additional 39,285,714 shares of its Class A common stock, par value of $0.01 per share (the ‘‘Class A Common Stock’’), including 15,885,662 shares subscribed for by public shareholders (other than MacAndrews & Forbes) and 23,400,052 shares issued to MacAndrews & Forbes in a private placement directly from Revlon, Inc. Revlon, Inc. promptly transferred the net proceeds of such Rights Offering to Products Corporation which it used in April 2006, together with available cash, to redeem $109.7 million in aggregate outstanding principal amount of its 8 5/8% Senior Subordinated Notes due 2008 (the ‘‘8 5/8% Senior Subordinated Notes’’). (See ‘‘Recent Developments-Redemption of 8 5/8% Senior Subordinated Notes’’ and ‘‘Financial Condition, Liquidity and Capital Resources – 2006 FinancingRefinancing Transactions’’).

Recent Developments

Redemption of 8 5/8% Senior Subordinated Notes

On April 21,July 28, 2006, using the proceeds of the Rights Offering, together with available cash,Revlon, Inc. announced that Products Corporation completed the redemption of $109.7 million aggregate principal amount of its 8 5/8% Senior Subordinated Notes in satisfaction of the applicable requirements underhad secured an amendment to its 2004 Credit Agreement (as hereinafter defined) to, among other things, add an additional $100 million to the 2004 Credit Agreement's Term Loan Facility (as hereinafter defined) (the ‘‘Term Loan Add-on’’). While not required, the amendment also reset the Senior Secured Leverage Ratio covenant to 5.5 to 1.0 through June 30, 2007, stepping down to 5.0 to 1.0 for the remainder of the term of the 2004 Credit Agreement. The amendment also amended the EBITDA definition to enable Products Corporation to exclude up to $25 million related to restructuring charges (in addition to the restructuring charges permitted to be added back pursuant to the first amendment to the 2004 Credit Agreement – See Note 9 to the Unaudited Consolidated Financial Statements) and charges for certain product returns and/or product discontinuances. Products Corporation used the net proceeds from the Term Loan Add-on to repay amounts outstanding under the Multi-Currency Facility (as hereinafter defined), atwithout any reduction in the commitment under that facility.

In July 2006, Revlon, Inc. also reiterated that it currently intends to conduct a further $75 million equity issuance in late 2006 or early 2007, the net proceeds of which are intended to be used to reduce Products Corporation's indebtedness. As previously disclosed, the backstop obligations of MacAndrews & Forbes under the 2004 Investment Agreement between Revlon, Inc. and MacAndrews & Forbes will remain in effect to ensure that Revlon, Inc. issues an aggregate redemption price of $111.8 million, including $2.1additional $75 million of accrued and unpaid interest upequity by March 31, 2007. The existing $87 million line of credit from MacAndrews & Forbes, which was undrawn on June 30, 2006, will remain available to but not including,Products Corporation through the redemption date. Following such redemption there remained outstanding $217.4 million in aggregate principal amountcompletion of the 8 5/8% Senior Subordinated Notes.

Commitment for New 2006 Credit Facility

In May 2006, Products Corporation signed a commitment letter (the ‘‘Bank Commitment’’) with Citigroup Global Markets Inc. (‘‘Citigroup’’), J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. (together, ‘‘JPMorgan’’), in which Citigroup and JPMorgan have agreed to arrange a $960.0$75 million equity issuance.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

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

While there can be no assurances that the New 2006 Credit Facility will be finalized and closed, if Products Corporation completes this refinancing, the Company believes that it will result in annual interest savings due to lower interest margins, provide the Company with greater financial and other covenant flexibility and extend the maturity dates of Products Corporation's 2004 Credit Agreement. Products Corporation expects to use the proceeds of the New 2006 Credit Facility to: (1) repay in full the $700.0 million of outstanding indebtedness (plus accrued interest and the prepayment fee) under the Term Loan Facility of its current 2004 Credit Agreement; (2) redeem approximately $75.0 million aggregate principal amount of Products Corporation's 8 5/8% Senior Subordinated Notes; and (3) pay fees and expenses incurred in connection with the New 2006 Credit Facility. The balance of such proceeds is expected to be available for general corporate purposes, including investment in the Company’s brands. Products Corporation expects to close and fund the New 2006 Credit Facility in July 2006.

Discussion of Critical Accounting Policies

Stock-Based Compensation

Prior to January 1, 2006 (including the fiscal quarter ended March 31,June 30, 2005), the Company applied the intrinsic value method as outlined in Accounting Principles Board (‘‘APB’’) Opinion No. 25, ‘‘Accounting for Stock Issued to Employees,’’ (‘‘APB No. 25’’) and related interpretations in accounting for stock options granted under theRevlon, Inc.'s Amended and Restated Revlon, Inc. Stock Plan (the ‘‘Stock Plan’’), which provides for the issuance of awards in the form of stock options, stock appreciation rights and restricted or unrestricted stock to eligible employees and directors of Revlon, Inc. and its subsidiaries, including Products Corporation. Under the intrinsic value method, no compensation expense was recognized in fiscal periods ended prior to January 1, 2006 if the exercise price of the Company’s employee stock options equaled the market price of Revlon, Inc.’s Class A Common Stock on the date of the grant. Since all options granted under Revlon, Inc.’s Stock Plan had an exercise price equal to the market value of the underlying Class A Common Stock on the date of grant, no compensation costexpense was recognized in the accompanying consolidated statements of operations for the fiscal periods ended on or before December 31, 2005 on stock options granted to employees.

Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards (‘‘SFAS’’) No. 123(R), ‘‘Share-Based Payment’’ (‘‘SFAS No. 123(R)’’). This statement, which replaces SFAS No. 123, ‘‘Accounting for Stock-Based Compensation’’ (‘‘SFAS No. 123’’) and supersedes APB No. 25. SFAS No. 123(R), requires that effective for fiscal periods ending after December 31, 2005 all stock-based compensation be recognized as an expense, net of the effect of expected forfeitures, in the financial statements and that such costexpense be measured at the fair value of the Company’s stock based awards. The Company adopted SFAS No. 123(R) effective for fiscal periods ending after December 31, 2005 usinguses the modified prospective method of application, which requires recognition of compensation expense on a prospective basis. Therefore, the Company’s financial statements for fiscal periods ended on or before December 31, 2005 have not been restated to reflect compensation expense in respect of awards of stock options under the Stock Plan.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

Under this method, in addition to reflecting compensation expense for new share-based awards granted on or after January 1, 2006, expense is also recognized to reflect the remaining service period (generally, the vesting period of the award) of awards that had been included in the Company's pro-formapro forma disclosures in fiscal periods ended on or before December 31, 2005. SFAS No. 123(R) also requires that excess tax benefits related to stock option exercises be reflected as financing cash inflows instead of operating cash inflows. For the three-month fiscalsix-month period ended March 31,June 30, 2006, no adjustments have been made to the cash flow statement, as any excess tax benefits that would have been realized have been fully provided for, given the Company’s historical losses and deferred tax valuation allowance.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model based on the weighted-average assumptions listed in Note 2 to the Unaudited Consolidated Financial Statements. Expected volatilities are based on the daily historical volatility of the NYSE closing stock price of Revlon, Inc.’s Class A Common Stock, over the expected life of the option. The expected life of the options represents the period of time that options granted are expected to be outstanding, which the Company calculated using a formula based on the vesting term and the contractual life of the respective option. The risk-free interest rate for periods during the expected life of the option is based upon the rate in effect at the time of the grant on a zero coupon U.S. Treasury bill for periods approximating the expected life of the option. If factors change and the Company employs different assumptions in the application of SFAS 123(R) in future periods, the compensation expense that the Company records under SFAS 123(R) may differ significantly from what has been recorded in the current period. In addition, judgment is also required in estimating the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from these estimates, stock-based compensation expense and the Company’s results of operations could be materially impacted.

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

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
(all tabular amounts in millions)

Results of Operations

In the tables, numbers in parenthesis ( ) denote unfavorable variances. Certain prior year amounts have been reclassified to conform to the current period's presentation, due to the transfer, during the second quarter of 2006, of management responsibility for the Company's Canadian operations from the Company’s North American operations to the European region of its international operations.

Net sales:

Net sales in the firstsecond quarter of 2006 increased $24.6$2.8 million, or 8.2%0.9%, to $325.5$321.1 million, as compared with $300.9$318.3 million in the firstsecond quarter of 2005, driven by approximately $38 million of higher shipments primarily attributable to the Almayand Vital Radiance brand initiatives in the U.S., from the Company’s international operations and lower returns company-wide. These increases werefavorable foreign currency translation, partially offset by approximately $34 million of higher allowancesreturns and discounts, primarily attributableallowances. Net sales for the first half of 2006 increased $27.4 million, or 4.4%, to $646.6 million, as compared with $619.2 million for the launchfirst half of the brand initiatives in the U.S.,2005, driven by approximately $67 million of higher shipments and unfavorablefavorable foreign currency translation.translation, partially offset by approximately $38 million of higher returns and allowances.

				Three Months Ended March 31,								Change									Three Months Ended June 30,												Change
				2006				2005				$				%					2006						2005						$						%
United States and Canada				$	216.2			$	194.2			$	22.0				11.3	(1)
United States																						$	180.0					$	181.2					$	(1.2	)					(0.7	)
International	International				109.3				106.7				2.6				2.4	(2)					141.1						137.1						4.0						2.9	(1)
				$	325.5			$	300.9			$	24.6				8.2	(3)				$	321.1					$	318.3					$	2.8						0.9	(2)

(1)	Excluding the impact of foreign currency fluctuations, U.S. and CanadaInternational net sales increased 10.8%2.0%.

(2)	Excluding the impact of foreign currency fluctuations, consolidated net sales increased 0.5%.

			Six Months Ended June 30,												Change
			2006						2005						$						%
United States				$	378.3					$	360.5					$	17.8						4.9
International					268.3						258.7						9.6						3.7	(1)
				$	646.6					$	619.2					$	27.4						4.4	(2)

(1)	Excluding the impact of foreign currency fluctuations, International net sales increased 4.9%3.8%.

(3)(2)	Excluding the impact of foreign currency fluctuations, consolidated net sales increased 8.7%4.5%.

United States and Canada.

Second quarter results

In the U.S. and Canada, net sales were $216.2 million, for the firstsecond quarter of 2006, compared with $194.2 million for the first quarter of 2005, an increase of $22.0net sales decreased $1.2 million, or 11.3%. Excluding the impact of Canadian currency fluctuations, net sales increased $21.00.7%, to $180.0 million, or 10.8%,from $181.2 million in the first quarter of 2006, as compared with the firstsecond quarter of 2005. The increasedecrease in net sales in the U.S.second quarter was primarily due to the approximately $17.3 million of higher returns and Canadaallowances related to the reduction of Vital Radiance retail distribution in 2006 and the first quartermodification to the brand offerings of 2006, as compared withVital Radiance-branded products for 2007 related to the first quarterintroduction of 2005,new products. The decrease in net sales was drivenalso impacted by higher shipmentsallowances and discounts of color cosmetics, stemming fromapproximately $13 million primarily related to the rollout of the Company’s newAlmay and Vital Radiance brand and the re-stage of the Almay brand, partiallyinitiatives. These were almost completely offset by lowerthe higher dollar value of shipments of Revlon-branded cosmetics and higher allowancesof key beauty care products, including hair color and discounts related to the launch of thebeauty tools, as well as Vital Radiance brand and the re-stage of the Almay brand. The increase in net sales was also driven by higher shipments in other key categories and lower returns due in part to lower promotional shipments.

International.

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

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

Year-to-date results

In the U.S., for the six months ended June 30, 2006, net sales were $378.3 million, compared with $360.5 million for the six months ended June 30, 2005, an increase of $17.8 million, or 4.9%. The increase in net sales in the U.S. for the six months ended June 30, 2006, as compared with the six months ended June 30, 2005, was primarily due to the higher dollar value of shipments of color cosmetics, stemming from the rollout of the Company’s re-staged Almay brand, the launch of the Vital Radiance-brand and shipments of key beauty care products, including hair color and beauty tools, partially offset by the aforementioned approximately $17.3 million of higher returns and allowances related to Vital Radiance-branded products and higher allowances and discounts of approximately $21 million primarily related to the launch of the Almay and Vital Radiance brand initiatives.

International

For the second quarter of 2006, net sales in the Company’s international operations were $141.1 million, compared with $137.1 million for the second quarter of 2005, an increase of $4.0 million, or 2.9%. In the first half of 2006, net sales in the Company’s international operations were $268.3 million, compared with $258.7 million for the first half of 2005, an increase of $9.7 million, or 3.7%. Excluding the impact of foreign currency fluctuations, international net sales increased in the second quarter of 2006 by $5.2$2.7 million, or 4.9%2.0%, and in the first quarterhalf of 2006 by $9.9 million, or 3.8%, as compared withto the second quarter and first quarter 2005.half of 2005, respectively. The increase in net sales fromin the second quarter and first half of 2006 in the Company’s international operations, in the first quarter of 2006, as compared with the second quarter and first quarterhalf of 2005, was driven primarily fromby the higher dollar value of shipments, which were partially offset by higher returns and lower returns.allowances.

Second quarter results by region

In Asia Pacific and Africa, net sales decreased by $2.5 million, or 4.3%, to $56.3 million for the firstsecond quarter of 2006, net sales were substantially unchanged at $58.4 million, as compared with $58.8 million for the firstsecond quarter of 2005. Excluding the impact of foreign currency fluctuations, in the second quarter of 2006 net sales in Asia Pacific and Africa decreased $0.6increased $1.3 million, or 0.9%2.2%, in the first quarter of 2006, as compared with the firstsecond quarter of 2005. This decline in net sales, excluding the impact of foreign currency fluctuations, was due to lower shipments in Australia, New Zealand and certain distributor markets (which the Company estimates contributed to an approximate 2.4% reduction in net sales for the region for the first quarter of 2006, as compared with the first quarter of 2005), which was partially offset by increased shipments in South Africa and China (which the Company estimates contributed to an approximate 1.8% increase in net sales for the region for the first quarter of 2006, as compared with the first quarter of 2005).

In Europe, which is comprised of Europe and the Middle East, net sales were unchanged at $27.0 million for the first quarter of 2006, as compared with the first quarter of 2005. Excluding the impact of foreign currency fluctuations, net sales in Europe increased by $2.3 million, or 8.7%, in the first quarter of 2006, as compared with the first quarter of 2005. The increase in net sales, excluding the impact of foreign currency fluctuations, was due to increasedthe higher dollar value of shipments in Australia and New Zealand and lower returns allowances and discounts in the U.K. and in certain distributor marketsSouth Africa (which factors the Company estimates contributed to an approximate 9.2%3.8% increase in net sales for the region for the firstsecond quarter of 2006, as compared with the firstsecond quarter of 2005), which increase was partially offset by the lower dollar value of shipments in FranceHong Kong and certain distributor markets and higher returns in Japan (which factors the Company estimates contributed to approximately 0.7% reductionan approximate 1.6% decrease in net sales for the region for the firstsecond quarter of 2006, as compared with the second quarter of 2005).

In Europe, which is comprised of Europe, Canada and the Middle East, for the second quarter of 2006, net sales increased by $0.9 million, or 1.8%, to $51.7 million, as compared with $50.8 million for the second quarter of 2005. Excluding the impact of foreign currency fluctuations, in the second quarter of 2006 net sales in Europe decreased by $0.5 million, or 1.0%, as compared with the second quarter of 2005. The decrease in net sales, excluding the impact of foreign currency fluctuations, was due to higher returns, allowances and discounts in Canada and Italy, as well as the lower dollar value of shipments in certain distributor markets (which factors the Company estimates contributed to an approximate 6.6% decrease in net sales for the region for the second quarter of 2006, as compared with the second quarter of 2005). This decrease was partially offset by the higher dollar value of shipments in the U.K. and Israel (which factor the Company estimates contributed to an approximate 5.6% increase in net sales for the region for the second quarter of 2006).

In Latin America, which is comprised of Mexico, Central America and South America, for the second quarter of 2006, net sales increased by $5.1$2.9 million, or 24.4%10.3%, to $26.0$31.0 million, as compared with $28.1 million for the first quarter of 2006, as compared with $20.9 million for the firstsecond quarter of 2005. Excluding the impact of foreign currency fluctuations, in the

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
(all tabular amounts in millions)

second quarter of 2006 net sales in Latin America increased by $3.4$1.9 million, or 16.4%6.8%, in the first quarter of 2006, as compared with the firstsecond quarter of 2005. The increase in net sales, excluding the impact of foreign currency fluctuations, was driven primarily by increasedthe higher dollar value of shipments in Mexico, Venezuela, Argentina and in certain distributor markets (which factor the Company estimates contributed to an approximate 14.0%10.7% increase in net sales for the region in the second quarter of 2006, as compared with the second quarter of 2005), which was partially offset by higher returns and allowances in Brazil and Chile (which factor the Company estimates contributed to an approximate 3.9% decrease in net sales for the region for the second quarter of 2006).

Year-to-date results by region

In Asia Pacific and Africa, for the first half of 2006, net sales decreased by $2.4 million, or 2.1%, to $114.6 million, as compared with $117.0 million for the first half of 2005. Excluding the impact of foreign currency fluctuations, net sales in Asia Pacific and Africa increased $0.7 million, or 0.6%, in the first half of 2006, as compared to the first half of 2005. This increase in net sales, excluding the impact of foreign currency fluctuations, was driven by the higher dollar value of shipments in South Africa, Australia and China (which factor the Company estimates contributed to an approximate 2.3% increase in net sales for the region in the first quarterhalf of 2006, as compared with the first quarterhalf of 2005), partially offset by the lower dollar value of shipments in Hong Kong, Taiwan and in certain distributor markets, as well as higher returns in Japan (which factors the Company estimates contributed to an approximate 1.7% decrease in net sales for the region for the first half of 2006, as compared with the first half of 2005).

In Europe, for the first half of 2006, net sales increased by $4.1 million, or 4.4%, to $96.7 million, as compared to $92.6 million for the first half of 2005. Excluding the impact of foreign currency fluctuations, in the first half of 2006 net sales in Europe increased by $3.9 million, or 4.2%, as compared to the first half of 2005. The increase in net sales, excluding the impact of foreign currency fluctuations, was due to the higher dollar value of shipments, as well as lower returns, in the U.K. and Canada (which factors the Company estimates contributed to an approximate 6.2% increase in net sales for the region for the first half of 2006, as compared with the first half of 2005), partially offset by the lower dollar value of shipments in certain distributor markets, as well as higher returns and allowances in Italy (which factors the Company estimates contributed to an approximate 2.0% decrease in net sales for the region for the first half of 2006, as compared with the first half of 2005).

In Latin America, for the first half of 2006, net sales increased by $8.0 million, or 16.3%, to $57.0 million, as compared with $49.0 million for the first half of 2005. Excluding the impact of foreign currency fluctuations, in the first half of 2006 net sales in Latin America increased by $5.4 million, or 11.0%, as compared to the first half of 2005. The increase in net sales, excluding the impact of foreign currency fluctuations, was driven primarily by the higher dollar value of shipments in Venezuela, Argentina and in certain distributor markets, as well as lower returns and allowances in Mexico (which factors the Company estimates contributed to an approximate 12.4% increase in net sales for the region in the first half of 2006, as compared with the first half of 2005). These were partially offset by higher returns and allowances in Brazil (which factor the Company estimates contributed to an approximate 1.5% decrease in net sales for the region for the first half of 2006, as compared with the first half of 2005).

Gross profit:

				Three Months Ended March 31,
				2006				2005				Change
Gross profit				$	208.2			$	186.7			$	21.5

			Three Months Ended June 30,												Change						Six Months Ended June 30,												Change
			2006						2005												2006						2005
Gross profit				$	183.1					$	199.4					$	(16.3	)				$	391.3					$	386.1					$	5.2

GrossFor the second quarter of 2006, gross profit increased $21.5decreased $16.3 million to $208.2$183.1 million, as compared with $199.4 million for the first quarter 2006, as compared with $186.7 million for the firstsecond quarter of 2005,2005. The decrease in gross profit was primarily due to higher shipments, lower returns and a lower costsallowances of sales percentageapproximately $34 million primarily related to the Company’s Almay and Vital

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
(all tabular amounts in millions)

Radiance-branded products, as a resultwell as inventory obsolescence charges of favorable changes in sales mixapproximately $6.0 million and lower manufacturing costs,$4.3 million, respectively, related to estimated excess inventory levels for these brands, which was partially offset by higher allowances and discounts. Excluding foreign currency fluctuations, gross profit increased $22.9 million forrelated to the firsthigher dollar value of shipments in the second quarter of 2006. For the second quarter of 2006, as compared with the first quarter of 2005. Grossgross profit as a percent of net sales, excluding the impact of foreign currency fluctuations, increaseddecreased to 64.1% in57.1%, as compared with 62.6% for the firstsecond quarter of 2006 from 62.1% in the first quarter 2005, primarily due to the aforementioned lowerhigher returns and aallowances and the aforementioned higher inventory obsolescence charges.

For the first half of 2006, gross profit increased $5.2 million to $391.3 million, as compared with $386.1 million for the first half of 2005. The increase in gross profit was primarily due to the higher dollar value of shipments, favorable changes in sales mix and lower cost of sales percentage,manufacturing costs, which was partially offset by higher returns, allowances and discounts.discounts primarily related to the Company's Almay and Vital Radiance-branded products. In addition, gross profit was negatively impacted by the aforementioned inventory obsolescence charges related to the Company’s Almay and Vital Radiance brands. For the first half of 2006, gross profit as a percentage of net sales, excluding the impact of foreign currency fluctuations, decreased to 60.6% as compared with 62.4% for the first half of 2005, which was primarily due to the aforementioned higher returns and allowances primarily related to the Vital Radiance brand.

SG&A expenses:

			Three Months Ended June 30,												Change						Six Months Ended June 30,												Change
			2006						2005												2006						2005
SG&A expenses				$	228.5					$	200.0					$	(28.5	)				$	445.0					$	387.1					$	(57.9	)

For the second quarter of 2006, SG&A expenses increased $28.5 million, or 14.3%, to $228.5 million, as compared with $200.0 million for the second quarter of 2005. Such increase was primarily due to $35.0 million of higher brand support, including higher advertising and consumer promotional spending primarily to support the launch of the Almay and Vital Radiance brand initiatives. Additionally, the Company recorded approximately $4.0 million of accelerated amortization and write-off charges for certain permanent displays related to the reduction of retail distribution of the Company's Vital Radiance-branded products. The increase in SG&A was also impacted by $2.1 million of amortization expense for stock options, resulting from the Company’s adoption of SFAS No. 123(R) effective January 1, 2006. These were partially offset by reductions in compensation and other general and administrative expenses.

For the first half of 2006, SG&A expenses increased $57.9 million, or 15.0%, to $445.0 million, as compared with $387.1 million for the first half of 2005. Such increase was primarily due to higher brand support and display amortization of approximately $57 million, including higher advertising and consumer promotional spending, primarily to support the launch of the Almay and Vital Radiance brand initiatives and the aforementioned charges related to Vital Radiance and approximately $4.0 million of the aforementioned charges for the accelerated amortization and write-off of certain permanent displays. In addition, in the first half of 2006 SG&A was higher due to approximately $4.5 million of amortization expense attributable to stock options, resulting from the Company’s aforementioned adoption of SFAS No. 123(R) effective January 1, 2006.

Restructuring costs (benefit), net:

			Three Months Ended June 30,												Change						Six Months Ended June 30,												Change
			2006						2005												2006						2005
Restructuring costs (benefit), net				$	0.5					$	(0.2	)				$	(0.7	)				$	9.5					$	1.5					$	(8.0	)

During the second quarter and first half of 2006, the Company recorded $0.5 million and $9.5 million, respectively, in restructuring for employee severance and other personnel benefits (See Note 6 to the

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

SG&A expenses:

				Three Months Ended March 31,
				2006				2005				Change
SG&A expenses				$	216.5			$	187.1			$	(29.4	)

SG&A expenses increased $29.4 million, or 15.7%, to $216.5 million for the first quarter of 2006, as compared to $187.1 million in the first quarter of 2005, in part due to higher brand support of $21.6 million, including higher advertising and consumer promotional spending, as well as higher display amortization, primarily to support the launch of the brand initiatives. In addition, SG&A was higher due to increased compensation expenses of $6.3 million, which includes $2.4 million of amortized costs attributable to the Company’s expensing of stock options, resulting from the aforementioned adoption of SFAS No. 123(R) effective January 1, 2006.

Restructuring costs, net:

				Three Months Ended March 31,
				2006				2005				Change
Restructuring costs, net				$	9.0			$	1.7			$	(7.3	)

During the first quarter of 2006, the Company recorded charges of $9.0 million primarily for employee severance and other personnel benefits (See Note 6 to the unaudited consolidated financial statementsUnaudited Consolidated Financial Statements regarding the organizational realignment announced by Revlon, Inc. in February 2006). During the firstsecond quarter of 2005, the Company revised its estimate of the cost to be incurred related to the 2004 restructuring program by $0.2 million. During the first half of 2005, the Company recorded additional charges of $1.7$1.5 million primarilyin restructuring for employee severance and other personnel benefits.benefits related to the 2004 program.

Other expenses (income) expenses:, net :

				Three Months Ended March 31,
				2006				2005				Change
Interest expense				$	35.8			$	30.3			$	(5.5	)

			Three Months Ended June 30,												Change						Six Months Ended June 30,												Change
			2006						2005												2006						2005
Interest expense				$	36.5					$	32.4					$	(4.1	)				$	72.3					$	62.7					$	(9.6	)

The increase in interest expense of $5.5 million forFor the firstsecond quarter of 2006, interest expense increased by $4.1 million, as compared towith the firstsecond quarter of 2005,2005. Such increase was primarily due to higher average debt outstanding and higher weighted average borrowing rates, duringas compared with second quarter of 2005. For the first quarterhalf of 2006, interest expense increased by $9.6 million, as compared with the first half of 2005. Such increase was primarily due to higher average debt outstanding and higher weighted average interest rates, as compared with the first quarterhalf of 2005.

				Three Months Ended March 31,
				2006				2005				Change
Loss on early extinguishment of debt				$	—			$	7.5			$	7.5

			Three Months Ended June 30,												Change						Six Months Ended June 30,												Change
			2006						2005												2006						2005
Gain on issuance of subsidiary stock, net.				$	0.4					$	—					$	(0.4	)				$	(41.9	)				$	—					$	41.9

The loss on early extinguishment of debt forFor the first quarter of 2005 represents the $5.0 million prepayment fee related to the prepayment of $100.0 million of indebtedness outstanding under the Term Loan Facility (as hereinafter defined) of the 2004 Credit Agreement in March 2005, as well as the write-off of the portion of deferred financing costs related to such prepaid amount.

				Three Months Ended March 31,
				2006				2005				Change
Gain on issuance of subsidiary stock				$	(42.3	)		$	—			$	42.3

During the firstsecond quarter of 2006, REV Holdings recognized a net loss of $0.4 million, which represents $0.5 million of additional fees relating to the Rights Offering, offset in part by a gain of $42.2$0.1 million in connection with the exercise of Revlon, Inc. stock options. For the first half of 2006, REV Holdings recognized a gain, net of fees, of $41.7 million on the issuance by Revlon, Inc. of Class A Common Stock to third parties in the Rights Offering. REV Holdings also recognized a gain of $0.1$0.2 million during the first quarterhalf of 2006 in connection with the exercise of Revlon, Inc. stock options.

			Three Months Ended June 30,												Change						Six Months Ended June 30,												Change
			2006						2005												2006						2005
Loss on early extinguishment of debt				$	0.4					$	1.5					$	1.1					$	0.4					$	9.0					$	8.6

For the second quarter and first half of 2006, the loss on early extinguishment of debt represents the loss on the redemption in April 2006 of approximately $110 million in aggregate principal amount of Products Corporation’s 8 5/8% Senior Subordinated Notes. For the second quarter of 2005, the loss on early extinguishment of debt represents the loss on the redemption in April 2005 of all of the $116.2 million in aggregate principal amount outstanding of Products Corporation’s 8 1/8% Senior Notes and all of the $75.5 million in aggregate principal amount outstanding of Products Corporation’s 9% Senior Notes. For the first half of 2005, the loss on early extinguishment of debt also includes the $5.0 million prepayment fee related to the prepayment in March 2005 of $100.0 million of indebtedness outstanding under the Term Loan Facility of the 2004 Credit Agreement, as well as the write-off of the portion of deferred financing costs related to such prepaid amount.

Provision for income taxes:

			Three Months Ended June 30,												Change						Six Months Ended June 30,												Change
			2006						2005												2006						2005
Provision for income taxes				$	3.3					$	3.3					$	—					$	8.7					$	6.9					$	(1.8	)

For the second quarter of 2006 there was no change in the tax provision as compared with the second quarter of 2005, as a result of the favorable resolution of various international tax matters, which offset

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

Provision forthe effect of higher taxable income taxes:

				Three Months Ended March 31,
				2006				2005				Change
Provision for income taxes				$	5.4			$	3.6			$	(1.8	)

in certain markets outside the U.S. The increase in the tax provision for income taxes in the first quarterhalf of 2006, as compared with the first quarterhalf of 2005, was primarily attributable to higher taxable income in certain markets outside the U.S., offset in part by the favorable resolution of various international tax matters.

Financial Condition, Liquidity and Capital Resources

NetIn the first half of 2006, net cash providedused by operating activities in the first quarter of 2006 improvedincreased to $7.3$96.7 million, as compared to $8.8with $48.0 million used in the first quarterhalf of 2005. Net loss improved $30.8 million primarilyThis increase was due to the larger net loss partially offset by a $42.2$41.7 million noncashnon-operating gain related to the issuance of stock to third parties in the Rights Offering, in the first quarter of 2006. In addition, this improvement resulted from cash provided by changes in working capital of $69.0 million in the first quarter of 2006, compared with cash provided by changes in working capital of $22.5 million in the first quarter of 2005, with the improvement in the first quarter of 2006 due primarily to higher collections on accounts receivable, partially offset by the increase in net loss before non-cash charges and the increase inincreased purchases of permanent displays.displays and favorable changes in net working capital.

NetFor the first half of 2006 and 2005, net cash used in investing activities was $4.8$11.3 million and $200.6$9.6 million, respectively, in each case for capital expenditures.

For the first quartershalf of 2006 and 2005, respectively. Net cash used in investing activities of $4.8 million in the first quarter of 2006 was for capital expenditures. Net cash used in investing activities in the first quarter of 2005 included a $197.9 million payment into a debt defeasance trust in respect of the principal, interest and applicable premium necessary to redeem all of Products Corporation’s 8 1/8% Senior Notes due 2006 and all of Products Corporation’s 9% Senior Notes due 2006, as well as $2.7 million in capital expenditures.

Netnet cash provided by financing activities was $102.6$97.5 million and $194.9$6.6 million, forrespectively. For the first quartershalf of 2006, and 2005, respectively. Netnet cash provided by financing activities for the first quarter of 2006 included net proceeds of $107.7$107.2 million from theRevlon, Inc.’s issuance of Class A Common Stock as a result of the closingcompletion of the Rights Offering onin March 22, 2006, partially offset by bank overdrafts and $104.6 million from borrowings during the paymentsecond quarter of certain financing costs.2006 under the Multi-Currency Facility. The net proceeds from Revlon, Inc.’s proceeds from the Rights Offering were promptly transferred to Products Corporation, which it used in April 2006, together with available cash, to redeem $109.7 million aggregate principal amount of its 8 5/8% Senior Subordinated Notes at an aggregate redemption price of $111.8 million, including $2.1 million of accrued and unpaid interest up to, but not including, the redemption date.date and paid related financing costs of $3.3 million. (See ‘‘Recent Developments-Redemption of 8 5/8% Senior Subordinated Notes’’ and ‘‘Financial Condition, Liquidity and Capital Resources – 2006 FinancingRefinancing Transactions’’). NetFor the first half of 2005, net cash provided by financing activities for the first quarter of 2005 included proceeds from the issuance in March 2005 of $310 million aggregate principal amount of Products Corporation’s 9½% Senior Notes due 2011 (the ‘‘9½% Senior Notes’’), offset by. The proceeds from such issuance of the prepayment of9½% Senior Notes were used to prepay $100 million of indebtedness under the Term Loan Facility of Products Corporation’s 2004 Credit Agreement, along with the defeasance$5.0 million prepayment fee. Products Corporation also used such proceeds to redeem all of allthe $116.2 million aggregate principal amount outstanding of Products Corporation’s 8 1/8%8% Senior Notes, plus accrued interest, and all of the $75.5 million aggregate principal amount outstanding of Products Corporation’s 9% Senior Notes, along withplus accrued interest and the $5.0 million prepayment fee in connection with the partial prepayment of the Term Loan Facility described above,applicable premium and the payment of financing costs.

At MarchJuly 31, 2006, Revlon, Inc. and Products Corporation had a liquidity position, excluding cash in compensating balance accounts, of approximately $241.8$213 million, consisting of cash and cash equivalents (net of any outstanding checks) of $11.8approximately $5 million, as well as $143.0approximately $121 million in available borrowings under the Multi-Currency Facility (as hereinafter defined) and $87.0$87 million in available borrowings under the 2004 Consolidated MacAndrews & Forbes Line of Credit (as hereinafter defined). Excluded from the Company’s liquidity position at March 31, 2006 is the aforementioned $109.7 million in aggregate principal amount used in April 2006 to redeem an equivalent principal amount of Products Corporation’s 8 5/8% Senior Subordinated Notes.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

2004 Credit Agreement

Products Corporation’s credit agreement that itCorporation and certain of its subsidiaries entered into a credit agreement in 2004 with a syndicate of lenders and Citicorp USA, Inc., as multi-currency administrative agent, term loan administrative agent and collateral agent (the ‘‘2004 Credit Agreement’’) originally provided up to $960.0. The 2004 Credit Agreement consists of an $800 million which consisted of a term loan facility of $800.0(after giving effect to the $100 million (prior to being reduced to $700.0 million following Products Corporation’s March 2005 prepayment of $100.0 million)Term Loan Add-on described in ‘‘Recent Developments’’) (the ‘‘Term Loan Facility’’) and a $160.0 million asset-based, multi-currency revolving credit facility (the ‘‘Multi-Currency Facility’’). Availability under the availability under whichMulti-Currency Facility varies based upon the borrowing base that is determined based uponby the value of eligible accounts receivable, eligible inventory and eligible real property and equipment in the U.S. and the U.K. from time to time (the ‘‘Multi-Currency Facility’’).time. Products Corporation may request the Multi-Currency Facility to be increased from time to time in an aggregate principal amount not to exceed $50.0 million subject to certain exceptions and subject to the lenders’ agreement. (For further discussions on the terms of the 2004 Credit Agreement,

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
(all tabular amounts in millions)

see ‘‘Recent Developments’’ in this Form 10-Q, as well as Note 9 to the Unaudited Consolidated Financial Statements of this Form 10-Q, as well as Note 9 ‘‘Long-Term Debt’’ to the Consolidated Financial Statements in REV Holdings’ Annual Report on Form 10-K for the year ended December 31, 2005) (See ‘‘Recent Developments-Commitment for New 2006 Credit Facility’’).

The Multi-Currency Facility will terminate on July 9, 2009 and the loans under the Term Loan Facility will mature on July 9, 2010; provided that the 2004 Credit Agreement will terminate on October 30, 2007 if Products Corporation’s 8 5/8%8 Senior Subordinated Notes are not redeemed, repurchased, defeased or repaid on or before such date such that not more than $25.0 million in aggregate principal amount of the 8 5/8% Senior Subordinated Notes remain outstanding. In March 2006, Revlon, Inc. completed itsAs a result of the redemption of approximately $110 million Rights Offering and promptly transferredof the 8 5/8 Senior Subordinated Notes using the net proceeds fromof the Rights Offering to Products Corporation which it used in April (See ‘‘2006 together withRefinancing Transactions’’ below), as well as available cash, to redeem $109.7 million aggregate principal amount of its 8 5/8% Senior Subordinated Notes, in satisfaction of the applicable requirements under the 2004 Credit Agreement, at an aggregate redemption price of $111.8 million, including $2.1 million of accrued and unpaid interest up to, but not including, the redemption date. (See ‘‘Recent Developments-Redemption of 8 5/8% Senior Subordinated Notes’’ and ‘‘Financial Condition, Liquidity and Capital Resources – 2006 Financing Transactions’’). Accordingly, at AprilJune 30, 2006 there remained outstanding $217.4 million in aggregate principal amount of the 8 5/8%8 Senior Subordinated Notes.

Borrowings under the Multi-Currency Facility (other than loans in foreign currencies) bear interest at a rate equal to, at Products Corporation’s option, either (A) the Alternate Base Rate plus 1.50%; or (B) the Eurodollar Rate plus 2.50%. Loans in foreign currencies bear interest in certain limited circumstances or if mutually acceptable to Products Corporation and the relevant foreign lenders at the Local Rate, and otherwise at the Eurocurrency Rate, in each case plus 2.50%. The loans under the Term Loan Facility bear interest at a rate equal to, at Products Corporation’s option, either (A) the Alternate Base Rate plus 5.00%; or (B) the Eurodollar Rate plus 6.00%. At March 31, 2006, the weighted average rate for borrowings under the Term Loan Facility and the Multi-Currency Facility was 10.7% and 9.3%, respectively (See ‘‘Recent Developments-Commitment for New 2006 Credit Facility’’).

At MarchJuly 31, 2006, the Term Loan Facility was fully drawn (after giving effect to the $100 million Term Loan Add-on described in ‘‘Recent Developments’’) and availability under the $160 million Multi-Currency Facility, based upon the calculated borrowing base less approximately $16$14 million of outstanding letters of credit and approximately $1$25 million then drawn on the Multi-Currency Facility, was approximately $143$121 million. (See ‘‘Overview of Financing Activities’’, ‘‘2006 Refinancing Transactions’’ and ‘‘2006 Financing Transactions’Recent Developments’’ for certain amendments to the 2004 Credit Agreement in February 2006, including amendments to certain financial covenants)Agreement).

2004 Consolidated MacAndrews & Forbes Line of Credit

Products Corporation has a $87 million line of credit with MacAndrews & Forbes Inc., which had an initial commitment of $152.0 million, which reduced to $87.0 million in July 2005 (as amended, the ‘‘2004

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

Consolidated MacAndrews & Forbes Line of Credit’’). As of MarchJuly 31, 2006, the 2004 Consolidated MacAndrews & Forbes Line of Credit was undrawn. In February 2006, Products Corporation entered into an amendment to its 2004 Consolidated MacAndrews & Forbes Line of Credit extending the term of such agreement until the consummation of Revlon, Inc.’s planned $75 million equity issuance.issuance, which is currently intended to be conducted in late 2006 or early 2007. (For further detail regarding the 2004 Consolidated MacAndrews & Forbes Line of Credit, see Note 9 ‘‘Long-Term Debt’’ to the Consolidated Financial Statements in REV Holdings’ Annual Report on Form 10-K for the year ended December 31, 2005 and ‘‘2006 FinancingRefinancing Transactions’’).

2006 FinancingRefinancing Transactions

On March 22, 2006, Revlon, Inc. completed thea $110 million Rights Offering that it launched in February 2006 which allowed stockholders to purchase additional shares of Class A Common Stock. The subscription price for each share of Class A Common Stock purchased in the Rights Offering, including shares purchased in the private placement by MacAndrews & Forbes, was $2.80 per share. Upon completing the Rights Offering, Revlon, Inc. promptly transferred the proceednet proceeds to Products Corporation, which it used as described in ‘‘Recent Developments-Redemptionto redeem $109.7 million aggregate principal amount of its 8 5/8% Senior Subordinated Notes’’.Notes in satisfaction of the applicable requirements under the 2004 Credit Agreement, at an aggregate redemption price of $111.8 million, including $2.1 million of accrued and unpaid interest up to, but not including, the redemption date.

In completing the Rights Offering, Revlon, Inc. issued an additional 39,285,714 shares of its Class A Common Stock, including 15,885,662 shares subscribed for by public shareholders (other than MacAndrews & Forbes) and 23,400,052 shares issued to MacAndrews & Forbes in a private placement directly from Revlon, Inc. pursuant to a stock purchase agreement between MacAndrews & Forbes and Revlon, Inc. The shares issued to MacAndrews & Forbes represented the number of shares of Revlon, Inc.’s Class A Common Stock that MacAndrews & Forbes would otherwise have been entitled to purchase pursuant to its basic subscription privilege in the Rights Offering (which was approximately 60% of the shares of Revlon, Inc.’s Class A Common Stock offered in the Rights Offering).

As a result of completing the Rights Offering, Revlon, Inc.’s total number of outstanding shares of Class A Common Stock increased to 380,041,688 shares and the total number of shares of common stock outstanding, including Revlon, Inc.’s existing 31,250,000 shares of Class B common stock, with a par value of $0.01 per share (together with the Class A Common Stock, the ‘‘Common Stock’’), increased to 411,291,688 shares. Following the completion of these transactions, MacAndrews & Forbes beneficially owned approximately 56% of Revlon, Inc.’s outstanding Class A Common Stock and approximately 60% of Revlon, Inc.’s total outstanding Common Stock, which shares together represent approximately 76% of the combined voting power of such shares.

In February 2006, Products Corporation secured an amendment to the credit agreement that it and certain of its subsidiaries entered into in 2004 with a syndicate of lenders, and Citicorp USA, Inc., as multi-currency administrative agent, term loan administrative agent and collateral agent. The amendmentCredit Agreement which excludes from various financial covenants certain charges in connection with Products Corporation’s

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
(all tabular amounts in millions)

organizational realignment announced in February 2006 and as described further in Note 6 to the unaudited consolidated financial statements,Unaudited Consolidated Financial Statements, as well as some start-up costs incurred by the Company in 2005 related to the launch of its new Vital Radiance brand and the re-launchre-stage of the Almay brand. Specifically, the amendment provides for the add-back to the definition of ‘‘EBITDA’’ the lesser of (i) $50 million; or (ii) the cumulative one-time charges associated with (a) the aforementioned February 2006 organizational realignment; and (b) the non-recurring costs in the third and fourth quarters of 2005 associated with the launch of the Company’s new Vital Radiance brand and the re-launchre-stage of theits Almay brand. Under the 2004 Credit Agreement, EBITDA is used in the determination of Products Corporation’s senior secured leverage ratio and the consolidated fixed charge coverage ratio.ratio (See ‘‘Recent Developments-Commitment for New 2006Developments’’ regarding an additional amendment to the 2004 Credit Facility’’)Agreement in July 2006).

In FebruaryJuly 2006, Revlon, Inc. announcedreiterated that it currently intends to conduct a further $75 million equity issuance through an underwritten public offering by June 30, 2006.in late 2006 or early 2007, the net proceeds of which are intended to be used to reduce Products Corporation's indebtedness. In connection with such further equity issuance, Revlon, Inc. also announced in February 2006 that it had entered into an amendment to its Investment Agreement with MacAndrews & Forbes which extendsextending MacAndrews & Forbes’ back-stop of

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

obligations to ensure that Revlon, Inc.’s planned issues an additional $75 million of equity issuance fromby March 31, 2007. Additionally, in February 2006 until June 30, 2006 to, among other things, provide Revlon, Inc. with sufficient time to complete, following the Rights Offering, an underwritten public offering of its Class A Common Stock, the proceeds of which would be transferred by Revlon, Inc. to Products Corporation to be available for general corporate purposes. Revlon, Inc. also announced that Products Corporation had entered into an amendment to its 2004 Consolidated MacAndrews & Forbes Line of Credit, extendingwhich was undrawn on June 30, 2006, to ensure that such line of credit remains available to Products Corporation through the term of such agreement until the consummationcompletion of Revlon, Inc.’s's planned $75 million equity issuance.

Sources and Uses

The Company’s principal sources of funds are expected to be operating revenues, cash on hand net cash proceeds from Revlon, Inc.’s planned $75 million equity issuance described in ‘‘2006 Financing Transactions’’ and funds available for borrowing under the 2004 Credit Agreement (including after giving effect to the Term Loan Add-on discussed in ‘‘Recent Developments’’), the 2004 Consolidated MacAndrews & Forbes Line of Credit, and other permitted lines of credit, andas well as advances under the New Keepwell Agreement (as hereinafter defined). The 2004 Credit Agreement, the 2004 Consolidated MacAndrews & Forbes Line of Credit and the indentures governing the 9½% Senior Notes and the 8 5/8% Senior Subordinated Notes contain certain provisions that by their terms limit Products Corporation and its subsidiaries’ ability to, among other things, incur additional debt. The New REV Holdings Notes (as hereinafter defined) contain certain provisions that by their terms limit REV Holdings’ ability to, among other things, incur additional debt.

The Company’s principal uses of funds are expected to be the payment of operating expenses, including expenses in connection with the continued implementation of, and refinement to, the Company’s plan, (including the Company’s brand initiatives referred to in ‘‘– Overview – Overview of the Business’’), purchases of permanent wall displays, capital expenditure requirements, payments in connection with the Company’s restructuring programs (including the Company’s organizational realignment announced in February 2006)2006 and any additional actions), debt service payments and costs and regularly scheduled pension and post-retirement benefit plan contributions. Cash contributions to Products Corporation’sRevlon Inc.’s pension and post-retirement benefit plans were approximately $29 million in 2005, and Products CorporationRevlon Inc. expects themthese payments to be approximately $33 million in the aggregate in 2006. The Company’s working capitalinventory and accounts receivable increased significantly during the second half of 2005, due principally to the Vital Radiance and Almaybrand initiatives,initiatives. Inventory and isaccounts receivable are expected to return to more normalized levels in relation to net sales duringin the second half of 2006. Products Corporation currently estimates that for 2006 purchases of wall displays will be approximately $85$105 million to $95$110 million and capital expenditures will be approximately $35$26 million.

The Company has undertaken, and continues to assess, refine and implement, a number of programs to efficiently manage its cash and working capital including, among other things, programs to carefully manage inventory levels, centralized purchasing to secure discounts and efficiencies in procurement, and providing additional discounts to U.S. customers for more timely payment of receivables and careful management of accounts payable.payable and most recently targeted controls on general and administrative spending.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
(all tabular amounts in millions)

Continuing to implement and refine the Company’s plan could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new brands or products, further refining the Company’s approach to retail merchandising and/or taking further actions to optimize its manufacturing, sourcing and organizational size and structure. Any of these actions, whose intended purpose would be to create value through profitable growth, could result in the Company making investments and/or recognizing charges related to executing against such opportunities.

The Company expects that operating revenues, cash on hand, net cash proceeds from the aforementioned planned Revlon, Inc. $75 million equity issuance and funds available for borrowing under the 2004 Credit Agreement (including after giving effect to the Term Loan Add-on discussed in ‘‘Recent Developments’’), the 2004 Consolidated MacAndrews & Forbes Line of Credit, and other permitted lines of credit andas well as advances under the New Keepwell Agreement will be sufficient to enable the Company to cover its operating expenses for 2006, including cash requirements in connection with the

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

Company’s operations, the continued implementation of, and refinement to, the Company’s plan, (including the Company’s brand initiatives referred to in ‘‘– Overview – Overview of the Business’’), cash requirements in connection with the Company’s restructuring programs (including the Company’s organizational realignment announced in February 2006)2006 and any additional actions), the debt service requirements of the Company and its subsidiaries for 2006, including without limitation, interest payments on the New REV Holdings Notes, and regularly scheduled pension and post-retirement plan contributions. However, there can be no assurance that such funds will be sufficient to meet the Company’s cash requirements on a consolidated basis. If the Company’s anticipated level of revenue growth is not achieved because, for example, of decreased consumer spending in response to weak economic conditions or weakness in the mass-market cosmetics category, adverse changes in currency, increased competitioncompetitive activities from the Company’s competitors, changes in consumer purchasing habits, including with respect to shopping channels, retailer inventory management, orretailer space reconfigurations, less than anticipated results from the Company’sCompany's advertising and marketing plans, orincluding for its Almay and Vital Radiance brand initiatives, are not as successful as anticipated, or if the Company’s expenses, including for returns related to the reduction of retail space or product discontinuances, associated with the continued implementation of, and refinement to, the Company’s plan exceed the anticipated level of expenses, the Company’s current sources of funds may be insufficient to meet the Company’s cash requirements.

In the event of a decrease in demand for the Company’s products, reduced sales, lack of increases in demand and sales, changes in consumer purchasing habits, including with respect to shopping channels, retailer inventory management, retailer space reconfigurations, product discontinuances and/or increased returns or expenses associated with the continued implementation of, and refinement to, the Company’s plan, exceeding its expectations or less than anticipated results from the Company's advertising and marketing plans, including for its brand initiatives, any such development, if significant, could reduce Products Corporation’s revenues and could adversely affect Products Corporation’s ability to comply with certain financial covenants under the 2004 Credit Agreement and in such event the Company could be required to take measures, including reducing discretionary spending. (See also Item 1A. ‘‘Risk Factors’’ in REV Holdings’ Annual Report on Form 10-K for the fiscal year ended December 31, 2005 for further discussion of risks associated with the Company’s business).

If the Company is unable to satisfy its cash requirements from the sources identified above or comply with its debt covenants, the Company could be required to adopt one or more alternatives, such as delaying the implementation of or revising aspects of its plan, including one or more aspects of its brand initiatives referred to in the ‘‘Overview’’, reducing or delaying purchases of wall displays or advertising or promotional expenses, reducing or delaying capital spending, delaying, reducing or revising restructuring programs, restructuring indebtedness, selling assets or operations, seeking additional capital contributions or loans from MacAndrews & Forbes, the Company’s other affiliates and/or third parties, selling additional equity securities of Revlon, Inc. (or debt securities of Products Corporation)the Company or reducing other discretionary spending. There can be no assurance that the Company would be able to take any of the actions referred to above because of a variety of commercial or market factors or constraints in REV Holdings and/or Products Corporation’s debt instruments, including, for example, market conditions being unfavorable for an equity or debt issuance, additional capital contributions or loans not being available from affiliates or third

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
(all tabular amounts in millions)

parties, or that the transactions may not be permitted under the terms of REV Holdings and/or Products Corporation’s various debt instruments then in effect, because of restrictions on the incurrence of debt, incurrence of liens, asset dispositions and related party transactions. In addition, such actions, if taken, may not enable Products Corporationthe Company to satisfy its cash requirements or comply with its debt covenants if the actions do not generate a sufficient amount of additional capital. (See also Item 1A. ‘‘Risk Factors’’ in REV Holdings’ Annual Report on Form 10-K for the fiscal year ended December 31, 2005 for further discussion of risks associated with the Company’s business).

Upon completion of the Rights Offering, Revlon, Inc. promptly transferred the proceeds from the Rights Offering to Products Corporation which it used in April 2006, together with available cash, to redeem $109.7 million aggregate principal amount of its 8 5/8% Senior Subordinated Notes, in satisfaction of the applicable requirements under the 2004 Credit Agreement, at an aggregate redemption price of

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

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

Revlon, Inc., as a holding company, will be dependent on the earnings and cash flow of, and dividends and distributions from, Products Corporation to pay its expenses and to pay any cash dividend or distribution on Revlon, Inc.’s Class A Common Stock that may be authorized by the Board of Directors of Revlon, Inc. The terms of the 2004 Credit Agreement, the 2004 Consolidated MacAndrews & Forbes Line of Credit and the indentures governing Products Corporation’s 9½% Senior Notes and its 8 5/8% Senior Subordinated Notes generally restrict Products Corporation from paying dividends or making distributions, except that Products Corporation is permitted to pay dividends and make distributions to Revlon, Inc. to enable Revlon, Inc., among other things, to pay expenses incidental to being a public holding company, including, among other things, professional fees, such as legal and accounting fees, regulatory fees, such as SEC filing fees, and other miscellaneous expenses related to being a public holding company and, subject to certain limitations, to pay dividends or make distributions in certain circumstances to finance the purchase by Revlon, Inc. of its Class A Common Stock in connection with the delivery of such Class A Common Stock to grantees under the Stock Plan.

REV Holdings, as a holding company, will be dependent on advances from affiliates to pay its expenses and will also be dependent upon advances under the New Keepwell Agreement to pay interest when due on the New REV Holdings Notes. REV Holdings anticipates that it will be required to adopt one or more alternatives to pay the principal amount at maturity of the New REV Holdings Notes, such as refinancing its indebtedness, repaying its indebtedness with the proceeds from the sale of assets or operations of Revlon, Inc., selling its equity securities or equity securities of Revlon, Inc. or seeking additional capital contributions or loans from MacAndrews & Forbes, the Company's other affiliates and/or third parties. There can be no assurance that any of the foregoing actions could be effected on satisfactory terms, that any of the foregoing actions would enable REV Holdings to pay the principal amount at maturity of the New REV Holdings Notes or that any of such actions would be permitted by the terms of the New Indenture (as hereinafter defined) or any other debt instrument of the Company and the Company's subsidiaries then in effect, because, among other reasons, market conditions may be unfavorable for an equity or debt offering or the transactions may not be permitted under the terms of the Company's various debt instruments then in effect, because of restrictions on the incurrence of debt, incurrence of liens, asset dispositions and related party transactions. In addition, such actions, if taken, may not enable the Company to satisfy its cash requirements if the actions do not generate a sufficient amount of additional capital. None of the Company's affiliates, including MacAndrews & Forbes, is required to make any capital contribution, loan or other payment to REV Holdings with respect to principal or interest on the New REV Holdings Notes (other than as provided in the New Keepwell Agreement).

On January 21, 2004, REV Holdings consummated an exchange offer (the ‘‘REV Holdings Exchange Offer’’) with respect to its 12% Senior Secured Notes due 2004 (the ‘‘REV Holdings Notes’’) for 13% Senior Secured Notes due 2007 (the ‘‘New REV Holdings Notes’’). In connection therewith, REV Holdings issued $18.5 million principal amount of New REV Holdings Notes in exchange for a like principal amount of REV Holdings Notes. In addition, at maturity on February 1, 2004, REV Holdings' parent contributed $7.9 million principal amount of REV Holdings Notes it held and $54.1 million of cash to retire the remaining outstanding REV Holdings Notes.

As of March 31,June 30, 2006, the New REV Holdings Notes, which bear interest semi-annually and mature on February 1, 2007, are secured by a pledge of 2,325,291 shares of Revlon, Inc. Class A Common Stock, including all dividends, cash instruments and property and proceeds from time to time received in respect

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
(all tabular amounts in millions)

of the foregoing shares (collectively, the ‘‘Collateral’’). In addition, the indenture governing the New REV Holdings Notes (the ‘‘New Indenture’’) contains covenants that, among other things, limit, subject to

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

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

In connection with the REV Holdings Exchange Offer, GSB Investments Corp., an affiliate of the Company, entered into an agreement with REV Holdings (the ‘‘New Keepwell Agreement’’) pursuant to which GSB Investments Corp. has agreed to provide REV Holdings with funds equal to any interest payment due on the New REV Holdings Notes, to the extent that REV Holdings does not have sufficient funds on hand to make such payment on the applicable due date. REV Holdings currently anticipates that it will use advances under the New Keepwell Agreement to pay interest when due under the New REV Holdings Notes. The New Keepwell Agreement, however, is not a guarantee of the payment of interest on the New REV Holdings Notes. The obligations of GSB Investments Corp. under the New Keepwell Agreement are only enforceable by REV Holdings, and may not be enforced by the holders of the New REV Holdings Notes or the trustee under the New Indenture. Any failure of GSB Investments Corp. to make a payment to REV Holdings under the New Keepwell Agreement will not be an event of default under the New Indenture. Further, the New Indenture has no requirement that REV Holdings maintain the New Keepwell Agreement. In addition, although REV Holdings has the right to enforce the New Keepwell Agreement, there can be no assurance that GSB Investments Corp. will have sufficient funds to make any payments to REV Holdings under the New Keepwell Agreement or that it will comply with its obligations under the New Keepwell Agreement.

GSB Investments Corp. has advised REV Holdings that it expects either to have cash flow from dividends on its investments or to obtain capital contributions from its affiliates that, in the aggregate, willwould be sufficient to satisfy its obligations under the New Keepwell Agreement. There can be no assurance, however, that GSB Investments Corp. (a) will have such cash flow, because, among other things, a portion of its investments are pledged and its investees are under no obligation to pay dividends, or (b) could obtain any such contribution or loan because, among other things, its affiliates are under no obligation to provide them to GSB Investments Corp.

The New Keepwell Agreement will terminate at such time as there are no New REV Holdings Notes outstanding, at which time GSB Investments Corp. may require repayment of advances under the New Keepwell Agreement. As of March 31, 2006, advancesAdvances under the New Keepwell Agreement were $4.8 million.million from its inception through June 30, 2006 and were $1.2 million during the six month period ended June 30, 2006.

As a result of dealing with suppliers and vendors in a number of foreign countries, Products Corporation enters into foreign currency forward exchange contracts and option contracts from time to time to hedge certain cash flows denominated in foreign currencies. There were foreign currency forward exchange contracts with a notional amount of $33.4$37.4 million outstanding at March 31,June 30, 2006. The fair value of foreign currency forward exchange contracts outstanding at March 31,June 30, 2006 was $0.4 million.

Disclosures about Contractual Obligations and Commercial Commitments

As of March 31,June 30, 2006, there had been no material changes to the Company’s total contractual cash obligations aswhich are set forth in the contractual obligations and commercial commitments table included in REV Holdings’ Annual Report on Form 10-K for the year ended December 31, 2005. However, as previously described, on April 21,2005, with the exception of certain advertising commitments entered into in the second quarter of 2006, Products Corporation redeemedthe repayment of approximately $109.7 million aggregate principal amount of itsProducts Corporation’s 8 5/8% Senior Subordinated Notes. (See ‘‘Recent Developments – RedemptionNotes in April 2006 and $104.6 million drawn under the Multi-Currency Facility as of 8 5/8% Senior Subordinated Notes’’ and ‘‘Financial Condition, Liquidity and Capital Resources – 2006 Financing Transactions’’).June 30, 2006. The following table reflects the impact of such redemption on the Company’sforegoing:

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)

long-term debt obligations, as of April 30, 2006:

				Payments Due by Period (dollars in millions)																					Payments Due by Period in (dollars in millions)
Contractual Obligations As of April 30, 2006				Total				Less than 1 year				1-3 years				3-5 years				After 5 years
Contractual Obligations As of June 30, 2006																									Total						2006 Q3-Q4						2007-2008						2009-2010						After 2010
Long-term Debt(a)	Long-term Debt(a)			$	1,326.9			$	18.5			$	217.4	*		$	701.0			$	390.0		Long-term Debt(a)					$	1,435.3					$	1.7					$	254.9					$	788.7	(d)				$	390.0
Interest on Long-term Debt(b)																											543.8						72.1						267.7						194.7						9.3
Other Long-term Obligations(c)																											68.1						18.1						49.5						0.5						—

* (a)	Amount reflects the impact of the aforementioned redemption onin April 21, 2006 of $109.7 million aggregate principal amount of Products Corporation’s 8 5/8% Senior Subordinated Notes.Notes and $104.6 million drawn under the Multi-Currency Facility as of June 30, 2006.

(b)

Consists of interest primarily on the New REV Holdings Notes, as well as Products Corporation’s 9½% Senior Notes and 8 5/8% Senior Subordinated Notes, borrowings under the Multi-Currency Facility as of June 30, 2006 and the $700 million Term Loan Facility under the 2004 Credit Agreement (before giving effect to the $100 million Term Loan Add-on described in ‘‘Recent Developments’’) through the respective maturity dates based upon assumptions regarding the amount of debt outstanding under the 2004 Credit Agreement and assumed interest rates.

(c)	Consists primarily of obligations related to advertising, insurance, employment contracts and other personnel service contracts. Such amounts exclude severance and other contractual commitments related to restructuring, which are discussed under ‘‘Restructuring Costs’’. Amount reflects the additional impact of advertising commitments entered into in the second quarter of 2006.

(d)	As of July 28, 2006, $100 million was added to the 2004 Credit Agreement's Term Loan Facility, which is not reflected in the contractual obligations table above.

Off-Balance Sheet Transactions

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

Effect of Recent Accounting Pronouncements

See discussion of recent accounting pronouncements in Note 1 ‘‘Basis of Presentation’’ to the Unaudited Consolidated Financial Statements.

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES

(all tabular amounts in millions, except per share amounts)millions)

Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

The Company has exposure to market risk both as a result of changing interest rates and movements in foreign currency exchange rates. The Company’s policy is to manage market risk through a combination of fixed and floating rate debt, the use of derivative financial instruments and foreign exchange forward and option contracts. The Company does not hold or issue financial instruments for trading purposes. The qualitative and quantitative information presented in Item 7A of REV Holdings’ Annual Report on Form 10-K for the year ended December 31, 2005 (‘‘Item 7A’’) describes significant aspects of the Company’s financial instrument programs that have material market risk as of December 31, 2005. The following table presents the information required by Item 7A as of March 31,June 30, 2006 (See ‘‘Recent Developments-Redemption of 8 5/8% Senior Subordinated Notes’’ and ‘‘Financial Condition, Liquidity and Capital Resources – 2006 FinancingRefinancing Transactions’’ as to the redemption in April 2006 of $109.7 million aggregate principal amount of Products Corporation’s 8 5/8% Senior Subordinated Notes):

				Expected Maturity date for the year ended December 31,																								Total				Fair Value March 31, 2006					Expected Maturity date for the year ended December 31,																																				Total						Fair Value June 30, 2006
				2006				2007				2008				2009				2010				Thereafter			Total									2006						2007						2008						2009						2010						Thereafter					Total
Debt	Debt
Short-term variable rate (various currencies)	Short-term variable rate (various currencies)			$	10.8																							$	10.8			$	10.8					$	12.1					$	—					$	—					$	—					$	—					$	—					$	12.1					$	12.1
Average interest rate (a)	Average interest rate (a)				12.8	%																																	11.1	%
Long-term fixed rate – third party ($US)	Long-term fixed rate – third party ($US)			$	109.7	*		$	18.5			$	217.4											$	390.0			$	735.6				715.2												18.5						217.4	*																	390.0						625.9						563.5
Average interest rate (a)	Average interest rate (a)				8.6	%			13.0	%			8.6	%											9.5	%																			13.0	%					8.6	%																	9.5	%
Long-term variable rate – third party ($US)	Long-term variable rate – third party ($US)			$	1.0															$	700.0							$	701.0				701.0						1.7						7.1						7.1						111.7						677.0	**											804.6						804.6
Average interest rate (a)	Average interest rate (a)				9.5	%															11.2	%																	11.6	%					11.6	%					11.6	%					8.8	%					11.6	%
Total debt (excluding affiliate debt)	Total debt (excluding affiliate debt)			$	121.5			$	18.5			$	217.4				—			$	700.0			$	390.0			$	1,447.4			$	1,427.0					$	13.8					$	25.6					$	224.5					$	111.7					$	677.0					$	390.0					$	1,442.6					$	1,380.2

Forward Contracts	Forward Contracts			Average Contractual Rate $/FC				Original US Dollar Notional Amount				Contract Value March 31, 2006				Fair Value March 31, 2006					Average Contractual Rate $/FC						Original US Dollar Notional Amount						Contract Value June 30, 2006						Fair Value June 30, 2006
Sell Hong Kong Dollars/Buy USD	Sell Hong Kong Dollars/Buy USD				0.1289			$	0.8			$	0.8			$	—						0.1288					$	0.4					$	0.4					$	—
Sell Euros/Buy USD	Sell Euros/Buy USD				1.2197				1.2				1.2				—						1.2440						1.0						1.0						—
Sell British Pounds/Buy USD	Sell British Pounds/Buy USD				1.7692				4.2				4.3				0.1						1.8141						5.0						4.9						(0.1	)
Sell Australian Dollars/Buy USD	Sell Australian Dollars/Buy USD				0.7398				6.1				6.3				0.2						0.7519						3.9						3.9						—
Sell Canadian Dollars/Buy USD	Sell Canadian Dollars/Buy USD				0.8620				12.6				12.6				—						0.8904						18.6						18.3						(0.3	)
Sell South African Rand/Buy USD	Sell South African Rand/Buy USD				0.1520				4.0				3.8				(0.2	)					0.1567						4.1						4.6						0.5
Sell New Zealand Dollars/Buy USD	Sell New Zealand Dollars/Buy USD				0.6591				0.6				0.6				—						0.6286						0.6						0.6						—
Buy Australian Dollars/Sell New Zealand Dollars	Buy Australian Dollars/Sell New Zealand Dollars				1.0986				3.9				4.2				0.3						1.1366						3.8						4.1						0.3
Total forward contracts	Total forward contracts							$	33.4			$	33.8			$	0.4											$	37.4					$	37.8					$	0.4

(a)	Weighted average variable rates are based upon implied forward rates from the yield curves at March 31,June 30, 2006.

*

While the 8 5/8% Senior Subordinated Notes are due in February 2008, under the 2004 Credit Agreement, Products Corporation must refinance such notes by October 30, 2007, such that not more than $25.0 million of such notes remain outstanding. In April 2006, Products Corporation redeemed $109.7 million in aggregate principal amount of its 8 5/8% Senior Subordinated Notes. Accordingly, at AprilJune 30, 2006 there remained outstanding $217.4 million in aggregate principal amount of such notes. (See ‘‘Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Overview of Financing Transactions’’ and).

**	Effective July 28, 2006 Products Corporation increased the Term Loan Facility by an additional $100 million to a total Term Loan Facility of $800 million. (See ‘‘Recent Developments-Redemption of 8 5/8% Senior Subordinated Notes’Developments’’).

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES

Item 4.	Controls and Procedures

Item 4.    Controls and Procedures

(a)    Disclosure Controls and Procedures.    The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including REV Holdings’ Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company's management, with the participation of REV Holdings’ Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of REV Holdings’ disclosure controls and procedures as of the end of the three-month fiscal period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.

(b)    Changes in Internal Control Over Financial Reporting.    There have not been any changes in the Company’s internal control over financial reporting during the three-month fiscal period ended March 31,June 30, 2006 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the second quarter and six months ended March 31,June 30, 2006, as well as other public documents and statements of the Company, contain forward-looking statements that involve risks and uncertainties, which are based on the beliefs, expectations, estimates, projections, forecasts, plans, anticipations, targets, outlooks, initiatives, destination model, visions, objectives, strategies, opportunities, drivers and intents of the Company’s management. While the Company believes that its estimates and assumptions are reasonable, the Company cautions that it is very difficult to predict the impact of known factors, and, of course, it is impossible for the Company to anticipate all factors that could affect its results. The Company's actual results may differ materially from those discussed in such forward-looking statements. Such statements include, without limitation, the Company's expectations and estimates (whether qualitative or quantitative) as to:

	(i)	the Company's future financial performance, including the Company's belief that it has strengthened its organizational capabilities (and its expectation to continue to do so) and that it has strengthened its relationships with its key retailers in the U.S.;performance;

	(ii)	the effect on sales of weak economic conditions, political uncertainties, military actions, terrorist activities, adverse currency fluctuations, category weakness, competitive activities, retailer inventory management, retailer space reconfigurations, less than anticipated results from the Company's advertising and marketing plans, including for its brand initiatives, and changes in consumer purchasing habits, including with respect to shopping channels;

	(iii)	the Company's belief that the continued implementation and refinement to its plan could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more of its brands or product lines, launching additional new brands or product lines,products, including, without limitation, the Company’s plans to launch a new fragrance for 2007, further refining its approach to retail merchandising including, without limitation, the Company’s plans to re-enter the U.S. prestige fragrance market in 2006, and/or takingtake further actions to optimize its manufacturing, sourcing and organizational size and structure, any of which, whose intended purpose would be to create value through profitable growth, could result in the Company making investments and/or recognizing charges related to executing against such opportunities;

	(iv)	the Company's expectations regarding its plan, including the Company's plans to capitalize on the actions taken during the previous phases of its plan with the objective of increasing revenues and achieving profitability over the long term,long-term by capitalizing on actions taken during the earlier phases of its plan, including taking actions to support this objective by assessing and the Company's expectation that suchtaking appropriate actions would help it achievein response to marketplace conditions, including competitive activities, with the objective of balancing top-line growth with an improved ‘‘Destination Model’’ operating profit margin;optimizing the effectiveness of all of its brands, including the Revlon brand across the various product categories in which it competes, including color cosmetics, women’s hair color and beauty tools, as well as its newly-restaged Almay brand and its new Vital Radiance brand;

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES

	(v)	the Company's plans to furthercontinue to focus on the opportunities that the Company believes exist to increase its operating profit margin over time, with key areas of focus being actions intended to improve results in the areas of cost of goods sold and returns, as well as overhead and administrative expenses and that its newcost savings initiatives would include, among other things, actions intended to improve product developmentlife cycle management, improve in-store merchandising, improve cost of goods sold, improve the effectiveness and introduction process;efficiency of trade promotions, focus on savings from strategic procurement in general and administrative costs, optimize the Company’s international supply chain and optimize the Company’s overall cost structure;

	(vi)	the Company's expectations and plans as to continueits Vital Radiance brand initiative, including seeking to increaseoptimize the effectiveness of its display walls acrossVital Radiance brand in the categories and brands;retail formats in which it has been most successful and focusing resources on its revised retail footprint, its most effective marketing drivers and the most productive products in the line, as well as its expectations as to a reduction of some of the retail space it gained for Vital Radiance;

	(vii)	the Company's plans to drive efficiencies acrossCompany’s belief that Almay, with its overall supply chain, including reducing manufacturing costs by, among other things, continuing to rationalize components and by sourcing strategically;restaged position in the marketplace, provides an important platform for future growth;

	(viii)	the Company's plans to optimize the effectiveness of its advertising, marketing and promotions;

	(ix)	the Company's plans to continue training and development of its organization so that it may continue to improve its capabilities to execute the Company's strategies, while providing enhanced job satisfaction for its employees;

	(x)	the Company's belief that the Almay brand initiative will build on its healthy beauty heritage and desire among consumers for simplicity and personalization;

	(xi)	the Company's belief that its Vital Radiance brand initiative, focused on the more mature cosmetics consumer, will serve an affluent and growing consumer demographic currently underserved in the marketplace;

	(xii)	the Company’s expectation that in connection with the brand initiatives, working capital will return to more normalized levels in relation to sales duringin the second half of 2006;

	(xiii)(ix)	the Company’s plans to continue to strengthen its balance sheet and capital structure, including Revlon, Inc.’s plans to refinance the balance of Products Corporation’s 8 5/8% Senior Subordinated Notes before October 30, 2007 prior to their maturity, Revlon, Inc.’s plans to conduct an additional equity issuance of $75 million by June 30,in late 2006 and Products Coporation’s plans to enter into the New 2006 Credit Facility and the terms thereof,or early 2007 and its expectedintent to use of the net proceeds thereof, including, among other things, to redeem approximately $75 million of Products Corporation’s 8 5/8% Senior Subordinated Notes and the expected benefits from such refinancing, including resulting in annual interest savings due to lower interest margins, providing the Company with greater financial and covenant flexibility and extending the maturity dates under Products Corporation’s 2004 Credit Agreement;reduce debt;

	(xiv)(x)	restructuring activities, restructuring costs, the timing of restructuring payments and annual savings and other benefits from such activities;activities, including the Company’s expectations that ongoing annualized savings associated with the realignment announced in February 2006 should be approximately $15 million, most of which the Company expects to realize in 2006;

	(xv)(xi)	the Company’s expectation that operating revenues, cash on hand net cash proceeds of the planned $75 million equity issuance, and funds available for borrowing under Products Corporation's 2004 Credit Agreement (including the $100 million Term Loan Add-on), the 2004 Consolidated MacAndrews & Forbes Line of Credit and other permitted lines of credit and advances under the New Keepwell Agreement will be sufficient to satisfy the Company's operating expenses in 2006, including cash requirements referred to in item (xviii)(xiv) below;

	(xvi)(xii)	the Company’s expected sources of funds, including the availability of funds from Products Corporation's 2004 Credit Agreement (including the $100 million Term Loan Add-on), the 2004 Consolidated MacAndrews & Forbes Line of Credit and other permitted lines of credit, as well as advances under the New Keepwell Agreement, restructuring indebtedness, selling assets or operations, capital contributions and/or loans from MacAndrews & Forbes, the Company's other affiliates and/or third parties and/or the sale of additional equity securities of Revlon, Inc. and/or REV Holdings or additional debt securities of Products Corporation and the net cash proceeds of the planned Revlon, Inc. $75 million equity issuance described in ‘‘2006 Financing Transactions’’;Company;

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES

	(xvii)(xiii)	the availability of advances under the New Keepwell Agreement being sufficient to satisfy REV Holdings' cash requirements, GSB Investments Corp.'s plan to obtain capital contributions or loans from its affiliates to make advances under the New Keepwell Agreement if it does not have sufficient cash flow from dividends on its investments and the sale of equity securities of REV Holdings to pay the principal amount at maturity of the New REV Holdings Notes;

	(xviii)(xiv)	the Company's expected uses of funds, including amounts required for the payment of operating expenses, including expenses in connection with the continued implementation of, and refinement to, the Company's plan, (including in connection with its brand initiatives), payments in connection with the Company's purchases

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES

		of permanent wall displays, capital expenditure requirements, restructuring programs (including the organizational realignment announced in February 2006)2006 and any additional actions), debt service payments and costs and regularly scheduled pension and post-retirement plan contributions, and its estimates of operating expenses, working capital expenses, wall display costs, capital expenditures, cash contributions to the Company's pension plans and post-retirement benefit plans and debt service payments (including payments required under Products Corporation's debt instruments and interest payments under the New REV Holdings Notes);

	(xix)(xv)	matters concerning the Company's market-risk sensitive instruments;

	(xx)(xvi)	the expected effects of the Company's adoption of certain accounting principles; and

	(xxi)(xvii)	the Company's plan to efficiently manage its cash and working capital, including, among other things, by carefully managing inventory levels, centralizingcentralized purchasing to secure discounts and efficiencies in procurement, and providing additional discounts to U.S. customers for more timely payment of receivables and carefully managing accounts payable.payable and most recently targeted controls on general and administrative spending.

Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language such as ‘‘estimates,’’ ‘‘objectives,’’ ‘‘visions,’’ ‘‘projects,’’ ‘‘forecasts,’’ ‘‘plans,’’ ‘‘targets,’’ ‘‘strategies,’’ ‘‘opportunities,’’ ‘‘drivers,’’ ‘‘believes,’’ ‘‘intends,’’ ‘‘destination model,’’ ‘‘outlooks,’’ ‘‘initiatives,’’ ‘‘expects,’’ ‘‘scheduled to,’’ ‘‘anticipates,’’ ‘‘seeks,’’ ‘‘may,’’ ‘‘will,’’ or ‘‘should’’ or the negative of those terms, or other variations of those terms or comparable language, or by discussions of strategy, targets, models or intentions. Forward-looking statements speak only as of the date they are made, and except for the Company's ongoing obligations under the U.S. federal securities laws, the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Investors are advised, however, to consult any additional disclosures REV Holdings made in its Annual Report on Form 10-K for the fiscal year ended December 31, 2005 and makes in its Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, in each case filed with the Securities and Exchange Commission (the ‘‘SEC’’) in 2006 (which, among other places, can be found on the SEC's website at http://www.sec.gov). A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. See also Item 1A. ‘‘Risk Factors’’ in REV Holdings’ Annual Report on Form 10-K for the fiscal year ended December 31, 2005 for further discussion of risks associated with the Company’s business. In addition to factors that may be described in the Company's filings with the SEC, including this filing, the following factors, among others, could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by the Company:

	(i)	unanticipated circumstances or results affecting the Company's financial performance, including decreased consumer spending in response to weak economic conditions or weakness in the mass-market cosmetics category; changes in consumer preferences, such as reduced consumer demand for the Company's color cosmetics and other current products; changes in consumer purchasing habits, including with respect to shopping channels; lower than expected retail customer acceptance or consumer acceptance of the Company’s brand initiatives and other product offerings; higher than expected returns or decreased sales of the Company’s

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES

		existing Revlon, Almay and/or Vital Radiance branded products, as a result ofincluding less than anticipated results from the Company’sCompany's advertising and marketing plans, including for its brand initiatives; the Company’s advertising or marketing plans are not as successful as anticipated; actions by the Company’s customers, such as retailer inventory management;management and greater than anticipated retailer space reconfigurations and/or product discontinuances; and changes in the competitive environment and actions by the Company's competitors, including business combinations, technological breakthroughs, new products offerings, continued increased advertising, marketing and promotional spending and marketing and promotional successes, including increases in market share;

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES

	(ii)	the effects of and changes in economic conditions (such as inflation, monetary conditions and foreign currency fluctuations, as well as in trade, monetary, fiscal and tax policies in international markets) and political conditions (such as military actions and terrorist activities);

	(iii)	unanticipated costs or difficulties or delays in completing projects associated with the continued implementation of, and refinement to, the Company's plan or lower than expected revenues or inability to achieve profitability over the long termlong-term as a result of such plan, including lower than expected sales, or higher than expected costs, including as may arise from any additional repositioning, repackaging or reformulating of one or more of the Company's brands or product lines, launching of new brands or product lines, including difficulties or delays in launching its new products in 2007, further refining its approach to retail merchandising, including, without limitation, difficulties, delays or the inability to complete, or unanticipated circumstances or costs in connection with the Company’s plans to re-enter the prestige fragrance market in 2006 and/or difficulties, delays or increased costs in connection with taking further actions to optimize the Company’s manufacturing, sourcing or organizational size and structure;

	(iv)	difficulties, delays or unanticipated costs in implementing and refining the Company's plan, including difficulties, delays or unanticipated costs in taking actions to capitalize on the actions taken during the previousearlier phases of its plan, which could affect the Company's ability to achieve its objectives of increasing revenues and achieving profitability over the long termlong-term, including less than anticipated results, such as lower than expected revenues, from actions intended to optimize the Revlon brand across the various product categories in which it competes, including color cosmetics, women’s hair color and/or beauty tools, as well as its newly-restaged Almay brand and balancing top-line growth with an improved operating profit margin under its ‘‘Destination Model’’;new Vital Radiance brand;

	(v)	difficulties, delays or unanticipated costs in connection with the Company's plans to furtherincrease its operating profit margin over time, such as difficulties, delays or the inability to take actions intended to improve its newresults in cost of goods sold, returns and/or overhead and administrative expenses, including as a result of difficulties, delays or the inability to take actions intended to improve product developmentlife cycle management, in-store merchandising, costs of goods sold, the effectiveness and introduction process, which could affectefficiency of trade promotions and/or generate savings from strategic procurement in general and administrative costs, from improvements in the Company's ability to effectively launch new and restaged productsCompany’s international supply chain and/or reposition, repackage and/or reformulate one or more offrom improvements in the Company's brands or product lines and generate revenues from such sources;Company’s overall cost structure;

	(vi)	difficulties, delaysless than anticipated results of the Vital Radiance brand, such as less than anticipated consumer or unanticipated costs in implementingretail customer acceptance thereof and/or greater than anticipated reduction of retail shelf space for the Company's plans to continue to increase the effectiveness of its display walls;Vital Radiance brand;

	(vii)	difficulties, delaysless than expected results from the Company’s Almay brand, including as a result of less than anticipated consumer or unanticipated costs in implementingretail customer acceptance of the Company's plans to drive efficiencies across its overall supply chain, including reducing manufacturing costs by, among other things, rationalizing components and by sourcing strategically;restaged Almay brand;

	(viii)	difficulties, delays or unanticipated costs in implementing the Company's plans to optimize the effectiveness of its advertising, marketing and promotions;

	(ix)	difficulties, delays or unanticipated costs in the Company continuing to train and develop its organization so that it may continue to improve its capabilities to execute the Company's strategies, while providing enhanced job satisfaction for its employees;

	(x)	the Almay brand initiative does not achieve its anticipated marketing effects and less than anticipated consumer or retail customer acceptance thereof;

	(xi)	the Vital Radiance brand initiative targeted to the more mature consumer does not achieve its anticipated marketing effects and less than anticipated consumer or retail customer acceptance thereof;

	(xii)	higher than anticipated working capital or unforeseen circumstances affecting the timing or levels thereof;

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES

	(xiii)(ix)	difficulties, delays or unanticipated costs in, or the Company's inability to consummate, transactions to strengthen its balance sheet and capital structure, including difficulties, delays or increased costs associated with, or the inability to consummate, in whole or in part, the refinancing of the balance of Products Corporation’s 8 5/8% Senior Subordinated Notes before October 30, 2007 prior to their maturity, or difficulties, delays or increased costs associated with conducting, or Revlon, Inc.’s inability to consummate, in whole or in part, the additional planned Revlon, Inc. $75 million equity issuance by June 30,in late 2006 or difficulties delays or Products Corporation’s inability to consummate, in whole or in part, its entering into of the New 2006 Credit Facility or less than anticipated benefits from such refinancing, such as difficulties, delays or the inability to redeem $75 million of the 8 5/8% Senior Subordinated Notes or higher than anticipated interest rates, less than anticipated financial and/or covenant flexibility or shorter than anticipated maturity dates;early 2007;

	(xiv)(x)	difficulties, delays or unanticipated costs or less than expected savings and other benefits resulting from the Company's restructuring activities;activities, such as less than anticipated annualized savings from the organizational realignment announced in February 2006;

	(xv)(xi)	lower than expected operating revenues, the inability to secure capital contributions or loans from MacAndrews & Forbes, the Company's other affiliates and/or third parties;

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES

	(xvi)(xii)	the unavailability of funds under Products Corporation's 2004 Credit Agreement, the 2004 Consolidated MacAndrews & Forbes Line of Credit and/or other permitted lines of credit or advances under the New Keepwell Agreement, or from selling additional shares of Revlon, Inc., restructuring indebtedness, selling assets or operations and/or the sale of additional equity or debt securities or from Revlon, Inc.’s planned $75 million equity issuance;of the Company;

	(xvii)(xiii)	advances under the New Keepwell Agreement being insufficient to satisfy REV Holdings' cash requirements or GSB Investments Corp.'s inability to obtain capital contributions or loans from its affiliates to make advances under the New Keepwell Agreement if it has not received sufficient dividend income from its investments;

	(xviii)(xiv)	higher than expected operating expenses (including in connection with the brand initiatives), sales returns, working capital expenses, wall display costs, capital expenditures, restructuring costs, regularly scheduled cash pension plan contributions, post-retirement benefit plan contributions or debt service payments;

	(xix)(xv)	interest rate or foreign exchange rate changes affecting the Company and its market-risk sensitive financial instruments;

	(xx)(xvi)	unanticipated effects of the Company's adoption of certain new accounting standards; and

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

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

Table of Contents

REV HOLDINGS LLC AND SUBSIDIARIES

PART II – OTHER INFORMATION

Item 1A.	Risk Factors.Factors

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

Item 6.	Exhibits.Exhibits

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

		4	.1				Amendment No. 2 dated July 28, 2006 to the 2004 Credit Agreement (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Products Corporation filed with the SEC on July 28, 2006).
		10	.1				Fifth Amendment, dated June 1, 2006, to the Investment Agreement, dated as of February 20, 2004, by and between Revlon, Inc. and MacAndrews & Forbes Holdings Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Revlon, Inc. filed with the SEC on June 2, 2006).
		*31	.1				Certification of Ronald O. Perelman, Chief Executive Officer, dated August 10, 2006, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
		*31	.2				Certification of Paul G. Savas, Chief Financial Officer, dated August 10, 2006, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
	32.1 (furnished herewith)						Certification of Ronald O. Perelman, Chief Executive Officer, dated August 10, 2006, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2 (furnished herewith)						Certification of Paul G. Savas, Chief Financial Officer, dated August 10, 2006, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Filed herewith.

Table of Contents

REVLON HOLDINGS LLC AND SUBSIDIARIES

S I G N A T U R E S

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

Dated: May 12,August 10, 2006

REV HOLDINGS LLC
Registrant

By:   /s/					Paul G. Savas
			Paul G. Savas
				Executive Vice President,
				Chief Financial Officer,
				Chief Accounting Officer and
				Manager