UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

               QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended September 30, 2004                Commission File Number 1-922

                              THE GILLETTE COMPANY
             (Exact name of registrant as specified in its charter)

Incorporated  in  Delaware                                04-1366970
(State  or  other  jurisdiction  of            (IRS Employer Identification No.)
incorporation or organization)


Prudential Tower Building,
Boston, Massachusetts                                                   02199
(Address of principal executive offices)                              (Zip Code)


Registrant's telephone number, including area code                (617) 421-7000


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                                             Yes   X          No______


Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).


                                             Yes   X          No______


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Title of each class


Common Stock, $1.00 par value

Shares Outstanding October 25, 2004 . . . . . . . . . . . . . . . . 992,811,387
<PAGE>

                                     PAGE 1
                          PART I. FINANCIAL INFORMATION
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                        CONSOLIDATED STATEMENT OF INCOME
                      (Millions, except per share amounts)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                       Three Months Ended       Nine Months Ended
                                                          September 30             September 30
                                                       ------------------       ------------------
                                                         2004       2003         2004        2003
                                                         ----       ----         ----        ----
<S>                                                  <C>       <C>            <C>       <C>
Net Sales ..........................................   $ 2,691    $ 2,405      $ 7,369     $  6,630
Cost of Sales ......................................     1,082        982        2,928        2,716
                                                       -------    -------      -------      -------
  Gross Profit .....................................     1,609      1,423        4,441        3,914

Selling, General and Administrative Expenses .......       920        819        2,586        2,425
                                                       -------    -------      -------      -------
  Profit from Operations ...........................       689        604        1,855        1,489

Nonoperating Charges (Income):
  Interest income ..................................        (4)        (2)         (10)          (8)
  Interest expense .................................        14         13           37           43
  Exchange .........................................         2         (7)          20           (2)
  Other charges - net ..............................         7          7            7            4
                                                       -------    -------      -------      -------
                                                            19         11           54           37
                                                       -------    -------      -------      -------
Income before Income Taxes .........................       670        593        1,801        1,452

Income Taxes .......................................       195        177          524          435
                                                       -------    -------      -------      -------
  Net Income .......................................   $   475    $   416      $ 1,277      $ 1,017
                                                       =======    =======      =======      =======

Net Income per Common Share:
  Basic ............................................   $   .48    $   .41      $  1.27      $   .99
                                                       =======    =======      =======      =======
  Assuming full dilution ...........................   $   .47    $   .41      $  1.26      $   .99
                                                       =======    =======      =======      =======

Dividends per Common Share:
  Declared .........................................   $     -    $     -      $ .3250      $ .3250
  Paid .............................................   $ .1625    $ .1625      $ .4875      $ .4875

Weighted average number of common shares outstanding
  Basic ............................................       997      1,017        1,002        1,025
  Assuming full dilution ...........................     1,006      1,019        1,009        1,027
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
                                     PAGE 2
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                                     ASSETS
                                   (Millions)
                                   (Unaudited)
<CAPTION>
                                                           September 30   December  31   September 30
                                                               2004          2003            2003
                                                           ------------   ------------   ------------
<S>                                                        <C>          <C>            <C>
Current Assets:
  Cash and cash equivalents ..............................   $  891       $   681           $845
  Trade receivables, less allowances, Sept. 2004, $43;
    December 2003, $53; Sept. 2003, $61    ................     970           920          1,249
  Other receivables ......................................      388           351            350
  Inventories
     Raw materials and supplies ..........................      123           114            115
     Work in process .....................................      241           196            206
     Finished goods ......................................    1,089           784            856
                                                            -------       -------        -------
       Total Inventories .................................    1,453         1,094          1,177
                                                            -------       -------        -------

  Deferred income taxes ..................................      294           322            333
  Other current assets ...................................      195           282            271
                                                            -------       -------        -------
       Total Current Assets ..............................    4,191         3,650          4,225
                                                            -------       -------        -------

Property, Plant and Equipment, at cost ...................    7,284         7,099          6,775
Less accumulated depreciation ............................   (3,747)       (3,455)        (3,265)
                                                            -------       -------        -------
       Net Property, Plant and Equipment .................    3,537         3,644          3,510
                                                            -------       -------        -------

Goodwill .................................................    1,024         1,023            996
Intangible Assets, less accumulated amortization .........      564           494            512
Other Assets .............................................    1,145         1,170          1,067
                                                            -------       -------        -------

                                                            $10,461       $ 9,981        $10,310
                                                            =======       =======        =======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>

                                     PAGE 3
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      (Millions, except per share amount)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                       September 30   December  31   September 30
                                                           2004          2003           2003
                                                       ------------   ------------   ------------
<S>                                                   <C>            <C>           <C>
Current Liabilities:
  Loans payable ....................................   $    211       $    117       $    732
  Current portion of long-term debt ................        760            742            432
  Accounts payable .................................        588            574            515
  Accrued liabilities ..............................      1,895          1,795          1,816
  Dividends payable ................................          -            163              -
  Income taxes .....................................        401            293            223
                                                       --------       --------       --------
     Total Current Liabilities .....................      3,855       $  3,684       $  3,718
                                                       --------       --------       --------

Long-Term Debt .....................................      2,361          2,453          2,715
Deferred Income Taxes ..............................        659            626            709
Other Long-Term Liabilities ........................        936            929            898
Minority Interest ..................................         71             65             71

Stockholders' Equity:
  Common stock, par value $1.00 per share:
    Authorized 2,320 shares
    Issued: Sept. 2004, 1,379 shares;
            Dec.  2003, 1,374 shares;
            Sept. 2003, 1,373 shares ...............      1,379          1,374          1,373
  Additional paid-in capital .......................      1,413          1,273          1,243
  Earnings reinvested in the business ..............      8,283          7,333          7,292
  Accumulated other comprehensive loss .............     (1,055)        (1,088)        (1,248)
  Treasury stock, at cost: Sept. 2004, 386 shares;
    Dec. 2003, 367 shares; and Sept. 2003, 361 shares    (7,441)        (6,665)        (6,461)
  Deferred stock-based compensation ................          -             (3)             -
                                                       --------       --------       --------
          Total Stockholders' Equity ...............      2,579          2,224          2,199
                                                       --------       --------       --------
                                                       $ 10,461       $  9,981       $ 10,310
                                                       ========       ========       ========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
                                     PAGE 4
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Millions)
                                   (Unaudited)

<CAPTION>
                                                            Nine Months Ended
                                                               September 30
                                                            ------------------
                                                            2004         2003
                                                            ----         ----
<S>                                                        <C>         <C>
Operating Activities
    Net income .......................................    $1,277       $1,017
    Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization ..................       448          430
      Deferred income taxes ..........................        52           70
      Other ..........................................        11            3
      Changes in assets and  liabilities,  excluding
      effects of acquisitions and divestitures:
        Trade and other accounts receivable ..........       (97)           5
        Inventories ..................................      (369)        (179)
        Accounts payable and accrued liabilities .....       123          263
        Other working capital items ..................       108          (17)
        Other noncurrent assets and liabilities ......        78          110
                                                           -----        -----
          Net cash provided by operating activities        1,631        1,702
                                                           -----        -----
Investing Activities

    Additions to property, plant and equipment .......      (379)        (218)
    Disposals of property, plant and equipment .......        44           28
    Acquisitions, net of cash acquired ...............      (117)        (161)
    Other ............................................         2            3
                                                           -----        -----
          Net cash used in investing activities ......      (450)        (348)
                                                           -----        -----
Financing Activities

    Purchase of treasury stock .......................      (775)      (1,069)
    Proceeds from exercise of stock option and
         purchase plans ..............................       145           48
    Proceeds from long-term debt .....................       346          684
    Repayment of long-term debt ......................      (389)        (534)
    Increase in loans payable ........................        93           51
    Dividends paid ...................................      (490)        (501)
    Net settlements, debt-related derivative contracts       101            6
                                                           -----        -----
          Net cash used in financing activities ......      (969)      (1,315)
                                                           -----        -----
Effect of Exchange Rate Changes on Cash ..............       (2)            5
                                                           -----        -----
Increase in Cash and Cash Equivalents ................       210           44
Cash and Cash Equivalents at Beginning of Period .....       681          801
                                                           -----        -----
Cash and Cash Equivalents at End of Period ...........    $  891        $ 845
                                                           =====        =====
Supplemental disclosure of cash paid for:

    Interest .........................................    $   34        $  45
    Income taxes .....................................    $  307        $ 359

</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
                                     PAGE 5
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                   (Millions)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                         Three Months Ended      Nine Months Ended
                                            September 30           September 30
                                         ------------------      -----------------
                                           2004        2003        2004       2003
                                           ----        ----        ----       ----
<S>                                       <C>         <C>         <C>        <C>
Net Income, as reported                   $ 475       $ 416      $1,277     $1,017
  Other Comprehensive Income,
    net of tax:
  Foreign Currency Translation               28           8          35        270
  Cash Flow Hedges                           (1)          1          (2)         5
                                          -----       -----      ------     ------
Comprehensive Income                      $ 502       $ 425      $1,310     $1,292
                                          =====       =====      ======     ======
</TABLE>

Accumulated Other Comprehensive Loss
------------------------------------
The balances for the components of Accumulated Other Comprehensive Loss are:
<TABLE>
                                                                           Accumulated
                                   Foreign                                    Other
                                   Currency      Pension     Cash Flow    Comprehensive
                                  Translation   Adjustment     Hedges         Loss
                                  -----------   ----------   -----------  -------------
<S>                                <C>            <C>          <C>          <C>
Balance  December 31, 2002         $(1,332)      $  (186)      $   (5)       $(1,523)
Change in period                         2             -            3              5
Income tax benefit (expense)            89             -           (1)            88
                                    ------        ------       ------         ------
Balance  March 31, 2003            $(1,241)      $  (186)      $   (3)       $(1,430)
Change in period                       185             -            3            188
Income tax benefit (expense)           (14)            -           (1)           (15)
                                    ------        ------       ------         ------
Balance June 30, 2003              $(1,070)      $  (186)      $   (1)       $(1,257)
Change in period                         9             -            2             11
Income tax benefit (expense)            (1)            -           (1)            (2)
                                    ------        ------       ------         ------
Balance September 30, 2003         $(1,062)      $  (186)      $    -        $(1,248)
                                    ======        ======       ======         ======

Balance December 31, 2003          $  (898)      $  (193)      $    3        $(1,088)
Change in period                         2             -            -              2
Income tax benefit (expense)             9             -            -              9
                                    ------        ------       ------         ------
Balance March 31, 2004             $  (887)         (193)           3         (1,077)
Change in period                        (7)            -           (2)            (9)
Income tax benefit (expense)             3             -            1              4
                                    ------        ------       ------         ------
Balance June 30, 2004              $  (891)      $  (193)      $    2        $(1,082)
Change in period                        34             -           (1)            33
Income tax benefit (expense)            (6)            -            -             (6)
                                    ------        ------       ------         ------
Balance September 30, 2004         $  (863)      $  (193)      $    1        $(1,055)
                                    ======        ======       ======         ======

See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
                                     PAGE 6
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Accounting Comments
-------------------
Reference is made to the registrant's 2003 Annual Report to Shareholders,  which
contains, at pages 37 through 66, the audited consolidated  financial statements
and the notes thereto, which are incorporated by reference into the registrant's
Annual Report on Form 10-K for the year ended December 31, 2003.

With respect to the financial  information for the interim  periods  included in
this report, which is unaudited, the management of the Company believes that all
adjustments  necessary for a fair  presentation  of the results for such interim
periods have been included.

The Company's annual financial statements are prepared on a calendar year basis.
For interim reporting,  the Company divides the calendar year into thirteen-week
quarterly  reporting  periods.  The first and fourth quarter may be more or less
than 13 weeks,  by zero to six  days,  which can  affect  comparability  between
periods.  The first quarter of 2003 consisted of 12 weeks and 4 days,  while the
first quarter of 2004  consisted of 12 weeks and 3 days.  The fourth  quarter of
2003  consisted  of 13 weeks and 4 days,  while the fourth  quarter of 2004 will
consist of 13 weeks and 6 days.

Under generally accepted accounting principles,  shipping and handling costs may
be  reported as a  component  of either  cost of sales or  selling,  general and
administrative expenses. The Company formerly reported all such costs related to
outbound  freight in the  Consolidated  Statement  of Income as a  component  of
selling, general and administrative expenses. Beginning in 2004, the Company has
elected to report the costs related to outbound  freight in cost of sales.  This
change resulted in the following  reclassifications  to the third quarter,  2003
and nine months  ended  September  30, 2003,  Consolidated  Statement of Income:
increased  cost of sales and  reduced  gross  profit and  selling,  general  and
administrative  expenses  by $47  million and $133  million,  respectively;  and
reduced  gross profit as a percentage  of net sales from 61.1% to 59.2% and from
61.0% to 59.1%, respectively. There was no impact on profit from operations, net
income or earnings per share as a result of this reclassification.

The Company  accounts  for its stock option  plans under  Accounting  Principles
Board (APB)  Opinion No. 25,  "Accounting  for Stock Issued to  Employees,"  and
related Interpretations.  No compensation cost is recorded on the date of grant,
as all options granted under the plans had an exercise price equal to the market
value  of the  underlying  common  stock.  The  Company  recognizes  stock-based
compensation  expense related to stock appreciation  rights. The following table
illustrates  the effect on net  income  and net  income per common  share if the
Company had applied the  fair-value-based  method  under  Statement of Financial
Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based  Compensation,"
to record expense for stock options.
<TABLE>
<CAPTION>
                                            Three Months          Nine Months
                                          Ended Sept. 30,       Ended Sept. 30,
(Millions, except per share amounts)      2004       2003       2004       2003
------------------------------------      ----       ----       ----       ----
<S>                                       <C>      <C>          <C>      <C>
Net income, as reported                   $  475    $  416     $1,277    $1,017
Add:  Compensation expense included in
      reported net income, net of
      related tax effects                      1         -          2         -
Less: Compensation expense for option
      awards determined by the fair-
      value-based method, net of
      related tax effects                    (24)      (25)       (73)      (76)
                                          ------    ------     ------    ------
Pro forma net income                      $  452    $  391     $1,206    $  941
                                          ======    ======     ======    ======

Net income per common share
Basic
  As reported                             $  .48   $   .41     $ 1.27    $  .99
  Pro forma                                  .45       .38       1.20       .92
Assuming full dilution
  As reported                             $  .47    $  .41     $ 1.26    $  .99
  Pro forma                                  .45       .38       1.20       .92
</TABLE>

<PAGE>
                                     PAGE 7
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Accounting Comments (Continued)
-------------------
In May 2004, the Company's  shareholders  approved the 2004 Long-Term  Incentive
Plan (the  "Plan"),  which  authorizes  the Board of  Directors,  or a  delegate
thereof,  to grant stock options,  stock appreciation  rights,  restricted stock
units, cash awards and other stock-based  awards. Key employees and non-employee
directors of the Company and its subsidiaries are eligible to participate in the
Plan. The Plan became effective on May 20, 2004 and expires on May 19, 2014. The
number of shares authorized for grant under the Plan is 37,380,295. At September
30, 2004, 27,747,603 shares were available for future grants.

The fair value of each option grant for the Company's  plans is estimated on the
date of the grant using the Black-Scholes option pricing model.

Certain amounts in the prior year financial statements have been reclassified to
conform to the 2004 presentation.


Accounting Pronouncements
-------------------------
In December, 2003, the Medicare Prescription Drug, Improvement and Modernization
Act of 2003 was enacted.  The Act  introduced a plan sponsor  subsidy based on a
percentage of a beneficiary's annual prescription drug benefits,  within defined
limits,  and the opportunity for a retiree to obtain  prescription drug benefits
under Medicare.

In May  2004,  the  FASB  issued  FASB  Staff  Position  (FSP)  No.  FAS  106-2,
"Accounting  and Disclosure  Requirements  Related to the Medicare  Prescription
Drug,  Improvement and  Modernization  Act ("the Act") of 2003" which supersedes
FSP FAS 106-1 of the same title. The Staff Position clarifies the accounting for
the benefits attributable to new government subsidies for companies that provide
prescription drug benefits to retirees.

The  Company  had  elected to defer any  accounting  for the  effects of the Act
pursuant to FAS 106-1 and made that election in the quarter  ended  December 31,
2003.  The  Company  adopted  FAS 106-2  prospectively  as of July 1, 2004,  the
beginning  of  its  third  quarter.  The  Company  and  its  actuarial  advisors
determined  that  benefits  provided  by the  plan  were  at  least  actuarially
equivalent to Medicare Part D. The Company  remeasured the effects of the act on
the  Accumulated  Plan Benefit  Obligation as of July 1, 2004. The effect of the
federal  subsidy  to which the  Company is  entitled  has been  estimated  as an
actuarial  gain of $72.8  million.  The subsidy will have the effect of reducing
postretirement  expense  for the period  from  adoption,  July 1, 2004,  through
December 31, 2004 by $5.3  million.  The  components  of the decrease in expense
were a decrease in the  amortization  of the actuarial  loss of $2.7 million,  a
reduction in service  cost of $0.4 million and a reduction in the interest  cost
on the benefit  obligation  of $2.2  million.  Approximately  $2.65  million was
recorded  in the third  quarter  of 2004 as a  reduction  in net  postretirement
benefit expense.  Net postretirement  benefit expense for the three months ended
December 31, 2004 will include the same  reduction in expense due to the effects
of the Act.

The  assumptions  used for 2004 expense are a discount rate and health care cost
trend rate of 6.00% and 12.00%, respectively.  These assumptions were determined
to be appropriate as of July 1, 2004.
 <PAGE>
                                     PAGE 8
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Goodwill and Intangible Assets
------------------------------
Total goodwill by segment follows.
<TABLE>
<CAPTION>
Net Carrying Amount       September 30    December 31     September 30
(Millions)                    2004            2003            2003
                          ------------    ------------    ------------
<S>                          <C>             <C>             <C>
Blades & Razors              $ 140          $  140          $  140
Duracell                       633             632             605
Oral Care                      191             191             173
Braun                           60              60              78
Personal Care                    -               -               -
                             -----           -----           -----
  Total                     $1,024          $1,023          $  996
                             =====           =====           =====

The detail of intangible assets follows.
<CAPTION>
                              Weighted
                              Average      September 30, 2004       December 31, 2003        September 30, 2003
                           Amortization  ----------------------   ----------------------   ----------------------
                              Period     Carrying  Accumulated    Carrying  Accumulated    Carrying  Accumulated
(Millions)                    (Years)     Amount   Amortization    Amount   Amortization    Amount   Amortization
                           ------------  --------  ------------   --------  ------------   --------  ------------
<S>                                 <C>   <C>        <C>          <C>          <C>          <C>        <C>
Amortized Intangible Assets
  Patents                          7      $  83      $  62        $  101        $  69        $ 101      $  64
  Trademarks                       9         16         11            16            9           14          7
  Endorsements                     -         61         61            61           61           61         61
  Other                           18         24          6            23            3           20          3
                                           ----       ----         -----        -----        -----      -----
Total                                     $ 184      $ 140        $  201        $ 142        $ 196      $ 135
                                           ----       ----         -----        -----        -----      -----
Unamortized Intangible Assets
  Trademarks                              $ 508                   $  423                     $ 436
  Pension                                    12                       12                        15
                                           ----                    -----                     -----
Total                                     $ 520                   $  435                     $ 451
                                           ----                    -----                     -----
Intangible Assets, net                    $ 564                   $  494                     $ 512
                                           ====                    =====                     =====
Aggregate Amortization Expense:
  For the three months ended
    Sept. 30, 2004              $ 5
    Sept. 30, 2003              $ 4
  For the nine months ended:
    Sept. 30, 2004              $16
    Sept. 30, 2003              $15

Estimated Amortization Expense:
  For the Years ending
    December 31, 2004           $21
                 2005           $ 8
                 2006           $ 5
                 2007           $ 5
                 2008           $ 4
                 2009           $ 3
</TABLE>
In the second quarter of 2004, the Company made two acquisitions within the Oral
Care business  segment.  In April 2004, the Company completed the acquisition of
assets   associated  with  the  Rembrandt  brand  of  at-home  and  professional
teeth-whitening  products  from the  Den-Mat  Corporation.  The  values  of both
indefinite-lived and definite-lived  intangible assets may be adjusted in future
periods as the purchase price  allocation for the acquisition is not final.  The
preliminary  purchase price  allocation  resulted in the  capitalization  of $87
million  related to the Rembrandt  trademark as an  indefinite-lived  intangible
asset.  In June  2004,  the  Company  acquired  shares  representing  all equity
interests  in Zooth,  Inc.,  a leader in  licensed  manual and power  children's
toothbrushes.  The purchase  price  accounting  for this  transaction is not yet
final.  Both  acquisitions  had,  in  addition  to the base  purchase  price,  a
contingent cash consideration component based on certain revenue-based financial
metrics.  In total,  contingent  cash  consideration  payments  are  capped at a
maximum of $72 million and are expected to be  substantially  paid over a period
of four years.
<PAGE>
                                    PAGE 9
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Share Repurchase Program
------------------------
In the three and nine months ended  September 30, 2004, the Company  repurchased
ten million  and  nineteen  million  shares for $420  million and $775  million,
respectively. As of September 30, 2004, there are 32 million shares remaining on
the share  repurchase  program which was authorized on September 16, 2003. These
shares  may  be  purchased  in  the  open  market  or  in   privately-negotiated
transactions, depending on market conditions and other factors.

Financial Information by Business Segment
-----------------------------------------
Net sales, profit (loss) from operations and identifiable assets for each of the
Company's  business  segments  are  set  forth  below.  There  are  no  material
intersegment revenues.
<TABLE>
<CAPTION>
                                                        Net Sales
                                    --------------------------------------------------
                                     Three Months Ended            Nine Months Ended
                                        September 30                 September 30
                                    ---------------------        ---------------------
(Millions)                            2004        2003             2004        2003
                                     ------      ------           ------      ------
<S>                                  <C>         <C>              <C>         <C>
Blades & Razors                      $1,108      $1,034           $3,243      $2,930
Duracell                                592         514            1,462       1,330
Oral Care                               418         328            1,091         939
Braun                                   320         293              874         792
Personal Care                           253         236              699         639
                                     ------      ------           ------      ------
   Total                             $2,691      $2,405           $7,369      $6,630
                                     ======      ======           ======      ======

<CAPTION>
                                               Profit/(Loss) from Operations
                                  ----------------------------------------------------
                                     Three Months Ended            Nine Months Ended
                                        September 30                  September 30
                                  ---------------------------  -----------------------
(Millions)                            2004        2003             2004        2003
                                     ------      ------           ------      ------
<S>                                  <C>         <C>              <C>         <C>
Blades & Razors                      $  434      $  413           $1,271      $1,121
Duracell                                161         106              324         199
Oral Care                                62          64              185         166
Braun                                    22          22               66          43
Personal Care                            34          26               71          50
                                     ------      ------           ------      ------
 Subtotal Reportable Segments           713         631            1,917       1,579
 All Other                              (24)        (27)             (62)        (90)
                                     ------      ------           ------      ------
   Total                             $  689      $  604           $1,855      $1,489
                                     ======      ======           ======      ======
<CAPTION>

                                            Identifiable Assets
                                      -------------------------------
                                      Sept. 30    Dec. 31    Sept. 30
(Millions)                              2004        2003       2003
                                      ---------   -------    ---------
<S>                                  <C>         <C>         <C>
Blades & Razors                      $ 3,241     $ 3,106     $ 3,331
Duracell                               2,761       2,754       2,841
Oral Care                              1,475       1,275       1,227
Braun                                  1,346       1,237       1,141
Personal Care                            462         470         530
                                     -------     -------     -------
Subtotal Reportable Segments           9,285       8,842       9,070
All Other                              1,176       1,139       1,240
                                     -------     -------     -------
  Total                              $10,461     $ 9,981     $10,310
                                     =======     =======     =======
</TABLE>
<PAGE>
                                     PAGE 10
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

<TABLE>
Computation of net income per common share
(Millions, except per share amounts)
------------------------------------------
<CAPTION>
                                             Three Months Ended     Nine Months Ended
                                                September 30           September 30
                                             ------------------     ------------------
                                                2004      2003         2004      2003
                                                ----      ----         ----      ----
<S>                                           <C>       <C>          <C>       <C>
Net Income .............................      $  475    $  416       $1,277    $1,017
                                              ======    ======       ======    ======
Common shares, basic ..................          997     1,017        1,002     1,025
Effect of dilutive securities:
    Stock options ......................           9         2            7         2
                                              ------    ------       ------    ------
Common shares, assuming full dilution          1,006     1,019        1,009     1,027
                                              ======    ======       ======    ======
Net Income per Common Share:

  Basic ................................      $ 0.48    $ 0.41       $ 1.27    $ 0.99
                                              ======    ======       ======    ======
  Assuming full dilution ...............      $ 0.47    $ 0.41       $ 1.26    $ 0.99
                                              ======    ======       ======    ======

</TABLE>
For the  three-month  periods ended  September 30, 2004 and 2003,  respectively,
37.2 million and 65.5 million shares  attributable to outstanding stock options,
were excluded  from the  calculation  of diluted  earnings per share because the
exercise  prices of the stock options were greater than the average market price
for the quarter,  and therefore their  inclusion would have been  anti-dilutive.
For the nine-month  periods ended  September 30, 2004 and 2003, 31.4 million and
62.4 million shares attributable to outstanding stock options were excluded from
the calculation of diluted earnings per share because the exercise prices of the
stock  options were greater than the average  market price of the common  shares
for the period.
<TABLE>
<CAPTION>
Pensions and Other Retiree Benefits
-----------------------------------
(Millions)
                                                                     Other                                       Other
                                          Pension Benefits     Retiree Benefits       Pension Benefits     Retiree Benefits
                                         ------------------   ------------------     ------------------   ------------------
                                         Three Months Ended   Three Months Ended     Nine Months Ended    Nine Months Ended
                                            September 30         September 30           September 30         September 30
                                         ------------------   ------------------     ------------------   ------------------
                                           2004       2003       2004       2003       2004       2003       2004       2003
                                           ----       ----       ----       ----       ----       ----       ----       ----
<S>                                       <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Components of Net Defined Benefit Expense
  Service cost-benefits earned             $20        $17        $ 1        $ 1        $ 60       $ 51       $ 3        $ 3
  Interest cost on benefit obligation       40         36          5          7         120        110        19         21
  Estimated return on assets               (45)       (40)        (1)        (1)       (136)      (120)       (3)        (3)
  Net amortization and other                21         22          0          1          63         66         2          3
                                           ---        ---        ---        ---        ----       ----       ---        ---
Net defined benefit expense                $36        $35        $ 5        $ 8        $107       $107       $21        $24
                                           ===        ===        ===        ===        ====       ====       ===        ===
</TABLE>
The Company  contributed  $50  million  and $84  million to its  pension  plans,
respectively,  for the three and nine  months  ended  September  30,  2004.  The
Company  expects to contribute  at least an  additional  $16 million for a total
contribution  of at least  $100  million  to its  pension  plans  in  2004.  The
Company's contributions to other retiree benefit plans were zero and $3 million,
respectively,  for the three and nine  months  ended  September  30,  2004.  The
Company  continues to monitor  financial  markets and other  factors that impact
plan asset and  liability  balances.  Such factors may  influence  the Company's
decisions  regarding  additional  contributions to its pension and other retiree
benefit plans in 2004,  however,  no determination has been made at this time as
to what, if any, additional amounts will be contributed.  The Company previously
disclosed  total 2004 estimated  contributions  of $52 million to pension and $3
million to other retiree benefit plans.

 <PAGE>
                                     PAGE 11
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Functional Excellence, 2003 Manufacturing Realignment,
Restructuring, and Asset Impairments
-------------------------------------------------------

Functional Excellence
---------------------

In the second  quarter of 2002,  the Company began actions  associated  with its
Functional Excellence initiative.  This initiative impacts all business segments
and is focused on  upgrading  capabilities,  while  reducing  overhead  costs by
improving processes and eliminating  duplication across all functions.  Specific
program activities include outsourcing certain information technology functions,
implementing new worldwide technology tools and processes, streamlining customer
management and marketing programs, and consolidating financial functions.

Total pretax  charges  under the  Functional  Excellence  initiative,  including
employee  termination benefits and other costs, were $21 million and $17 million
for the three months ended  September 30, 2004 and 2003,  respectively.  For the
nine months ended  September 30, 2004 and 2003,  total pretax  charges under the
program were $40 million and $103 million,  respectively.  Functional excellence
charges in 2004  included  $10 and $14  million  which were  recorded to cost of
goods sold,  and $11 million  and $26  million  which were  recorded to selling,
general and  administrative  expense in the three and nine month  periods  ended
September 30, 2004, respectively.  Employee-related terminations are intended to
be  completed  within 12 months of  accrual.  The  employee-related  termination
benefits are calculated using the Company's long-standing severance formulas and
vary on a country-by-country  basis,  depending on local statutory  requirements
and local  practices.  Other  costs  include  items  such as  consulting,  lease
buy-outs,  project team expenses,  and asset  write-downs  related to Functional
Excellence programs.

2003 Manufacturing Realignment Program
--------------------------------------

During December,  2003, the Company  announced a blade and razor  manufacturing,
packaging and warehouse  operations  realignment  program  throughout Europe and
Russia.  The  program  will  significantly   reduce  costs,   improve  operating
efficiency,  and streamline manufacturing,  packaging, and warehouse operations.
The program began in December 2003 and is expected to be completed by 2007.

The Company  recorded,  in the three and nine months ended  September  30, 2004,
approximately $8 million and $24 million,  respectively to cost of sales related
to project expenses and accelerated depreciation on the Isleworth, U.K. facility
which  will  cease  to be used as a  manufacturing  facility  after  2006.  This
facility will eventually be sold but does not yet meet the requirements of "held
for sale" accounting  treatment.  Other project expenses consisted  primarily of
severance,  based on the amounts that have been earned as of September 30, 2004,
at current  service levels and pay rates and expenses  related to the relocation
of equipment between impacted  locations.  Severance  payments will span through
2007, when the Isleworth facility will be completely closed.
<PAGE>

                                     PAGE 12
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

<TABLE>
<CAPTION>
Functional Excellence and 2003
Manufacturing Realignment Program
---------------------------------
                                                                       Charges    Charges
                                          Accrual   Accrual            and Uses   and Uses   Charges   Accrual
                                          through   Third               through   Third     and Uses   Balance
                                          June 30   Quarter  Total     June 30    Quarter     Since    Sept. 30
(Millions)                                  2004     2004   Accruals     2004      2004    Inception     2004
                                          -------   ------  --------   --------   -------  ---------   -------
<S>                                      <C>      <C>       <C>        <C>        <C>        <C>         <C>
Functional Excellence:
Employee-related expenses                  $236     $ 14      $250      $(173)    $ (16)     $(189)     $  61
Other                                        41        7        48        (37)       (6)       (43)         5
                                           ----     ----      ----      -----     -----      -----      -----
Total Functional Excellence Program        $277     $ 21      $298      $(210)    $ (22)     $(232)     $  66
                                           ----     ----      ----      -----     -----      -----      -----

2003 Manufacturing Realignment Program:
Employee-related expenses
  Severance payments                         35        1        36         (1)       (2)        (3)        33
  Other benefits                              6        -         6          -         -          -          6
Asset-related expenses:
  Asset write-offs                            5        -         5         (5)        -         (5)         -
  Loss on sales of assets                     4        -         4          -         -          -          4
Contractual obligations and other            16        7        23        (13)       (7)       (20)         3
                                           ----     ----      ----      -----     -----      -----      -----
Total 2003 Realignment Program               66        8        74        (19)       (9)       (28)        46
                                           ----     ----      ----      -----     -----      -----      -----
     Total                                 $343     $ 29      $372      $(229)    $ (31)     $(260)     $ 112
                                           ====     ====      ====      =====     =====      =====      =====

</TABLE>
<PAGE>
                                     PAGE 13
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Management's Discussion  and  Analysis of  Financial  Condition
and Results of Operations The Gillette Company and Subsidiary Companies
-----------------------------------------------------------------------

EXECUTIVE OVERVIEW
------------------
The Gillette  Company achieved record  third-quarter  and nine-months net sales,
profit from operations,  net income,  and net income per common share,  diluted,
for the periods ended September 30, 2004.

For the third  quarter of 2004,  net sales  increased 12% as compared with 2003,
driven by the  ongoing  strength  of existing  products,  strong  sell-in of new
offerings from its Blades and Razors,  Oral Care, and Personal Care  businesses,
and heightened  hurricane-related  sales of batteries in the United States.  The
impact of currency movement on sales was a 4% gain, primarily related to Europe.
Profit  from  operations  rose 14%,  growing at a faster  pace than sales due to
strong growth of new product  offerings,  trade-up to premium product offerings,
the impact of various cost-savings  programs,  including Functional  Excellence,
and other manufacturing-related initiatives and overhead cost reductions, offset
in part  by  higher  advertising  spending.  Within  nonoperating  charges,  net
interest  expense  was  slightly  below last year though  foreign  transactional
exchange  impact  moved from income in 2003 to expense in 2004 for the  quarter.
The Company's  effective income tax rate was reduced one percentage point to 29%
versus 2003, consistent with the nine month-to-date tax rate. Net income climbed
14% and net income per common share, diluted,  increased 15%, slightly outpacing
the percentage increase in net income due to share repurchase activity.

Blades and Razors net sales for the third quarter of 2004  increased  versus the
comparable  period in 2003,  driven by the launch of M3Power in the UK,  Germany
and Japan,  trade-up to premium  products in developing and emerging markets and
favorable foreign currency,  primarily in Europe, offset partially by a decrease
in North American sales due to  year-to-year  comparisons  being affected by the
timing of product launches  (MACH3Turbo Champion introduced in the third quarter
of 2003 and M3Power  and Venus  Divine,  in the first half of 2004).  Blades and
Razors  profit  from  operations  increased  due to higher  sales of new product
offerings,  trade-up to premium products, and higher prices, offset partially by
an increase in  advertising  spending  and costs  associated  with the  European
manufacturing  realignment.  Duracell's net sales increased as compared with the
third  quarter of 2003 due to  hurricane  activity  in North  America,  category
growth in Europe and emerging markets,  and the acquisition of the Nanfu battery
company in August 2003.  Duracell  profit from  operations  rose  significantly,
reflecting continued cost and expense reduction activities and lower promotional
activity,  offset in part by higher  advertising  expenses.  Oral Care net sales
increased due to a significant  number of new product launches,  the acquisition
of Rembrandt and Zooth,  Inc.,  strong  trade-up  activity in both developed and
emerging  markets,  and growth in the manual toothbrush  segment.  In the second
quarter of 2004,  the  Company  acquired  the  Rembrandt  brand of  at-home  and
professional tooth-whitening products and also Zooth, Inc., a leader in licensed
manual and power toothbrushes for children. Oral Care profit from operations was
slightly  below last year as the impact of higher  sales was more than offset by
higher advertising and other expenses.  Braun net sales increased in the quarter
due to a strong performance in the Africa, Middle East and Eastern Europe (AMEE)
region,  particularly in female  epilators and household  appliances,  favorable
foreign  exchange  and male  shaver  growth in China,  partially  offset by male
shaver  category  softness  in North  America  and  Europe.  Braun  profit  from
operations  was  unchanged  versus 2003,  as increased  sales and  reductions in
overhead   costs   were   offset   by  higher   exchange-driven   European-based
manufacturing costs,  incremental advertising expenses, and increased Functional
Excellence  costs.  Personal Care net sales  increased,  driven by  double-digit
percentage growth in Europe and the AMEE region  reflecting  trade-up to premium
products and new product introductions. Personal Care profit from operations was
higher  due to  strong  new  product  sales,  favorable  product  mix,  and cost
reduction activities.

For the nine month period ended  September  30,  2004,  total  Company net sales
increased 11%, profit from operations  increased 25% and operating profit margin
increased by 3 percentage  points to 25.2%.  The lower net interest  expense was
more than offset by an unfavorable impact of foreign transactional exchange. The
effective  income tax rate declined by one  percentage  point to 29%. Net income
climbed 26% and net income per common share,  diluted,  increased 27%, outpacing
the  percentage  increase in net income due to share  repurchase  activity.  The
Company  delivered strong free cash flow (as defined in the Financial  Condition
section) of $1.30 billion in the period.
 <PAGE>
                                     PAGE 14
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS
---------------------
<TABLE>
Third Quarter 2004 versus 2003
------------------------------
Selected statement of income data is presented below.
<CAPTION>
                                           For Three Months Ended September 30
                                         ---------------------------------------
                                                % of            % of      %
(millions, except per share                      Net             Net    Increase/
 amounts and percentages)                2004   Sales   2003    Sales  (Decrease)
---------------------------               --------------------------------------
<S>                                     <C>    <C>      <C>     <C>    <C>
Net sales                               $2,691         $2,405             12
Gross profit                             1,609   59.8   1,423   59.2      13
   Advertising                             318   11.8     219    9.1      45
   Sales promotion                          92    3.4      82    3.4      12
   Other selling, general and
     administrative (SG&A) expense         510   19.0     518   21.5      (2)
                                         -----          -----
Total SG&A expense                      $  920   34.2     819   34.1      12
                                         -----          -----
Profit from operations                  $  689   25.6  $  604   25.1      14

Nonoperating charges (income):
     Net interest expense                   10             11             (9)
     Foreign exchange                        2             (7)         >(100)
     Other                                   7              7              -
                                         -----          -----
Total nonoperating charges (income)         19    0.7      11    0.4      73
                                         -----          -----
Income taxes                             $ 195    7.2   $ 177    7.4      10
Net income                               $ 475   17.7   $ 416   17.3      14
Net income per common share, diluted     $0.47          $0.41             15

</TABLE>
Total Company
-------------
Net sales for the third quarter of 2004 were $2.69  billion,  an increase of 12%
versus $2.41 billion in the third quarter of 2003, of which 4% resulted from the
impact of favorable foreign exchange. Volume/mix added 8%, and pricing was flat.
Sales increased due to strong new product  introductions and ongoing strength of
established  products across all regions,  especially in the emerging markets of
Latin America and AMEE. New product introductions included M3Power in Blades and
Razors in the UK,  Germany and Japan and an  unprecedented  level of new product
activity in the Oral Care  segment.  Battery  sales  increased  due to hurricane
activity in North  America.  Acquisitions  added 1% to net sales in the quarter.
The Company  acquired  the Nanfu  battery  business in August  2003,  as well as
Rembrandt and Zooth, Inc. in the second quarter of 2004.

Gross profit was $1.61 billion in the third quarter of 2004, compared with $1.42
billion in the third  quarter of 2003.  As a percent of net sales,  gross profit
was 59.8%,  compared with 59.2% in 2003. The improvement in gross profit was due
mainly to strong growth of new, premium product offerings and manufacturing cost
savings,  particularly  at Duracell and Personal Care,  partially  tempered by a
change in business  mix, as the Oral Care and  Duracell  businesses  grew faster
than Blades and Razors.

Total selling,  general and  administrative  expenses amounted to 34.2% of third
quarter 2004 net sales,  versus 34.1% in the comparable  period of 2003.  Within
selling, general and administrative expenses, advertising expenses increased 45%
to  11.8% of net  sales,  from  9.1% of net  sales in the  prior  year.  In each
operating  segment  and in  each  region,  advertising  grew  by a  double-digit
percentage.  Advertising  expenses increased in support of new product programs,
and helped to drive stepped-up demand in developing markets.  Sales promotion at
3.4% of sales was flat in the third  quarter of 2004 vs. the prior  year.  Other
selling,  general and  administrative  expenses decreased 2%, and were down as a
percentage  of  sales,  to  19.0%  from  21.5%  in the  third  quarter  of 2003,
reflecting cost reduction efforts.
<PAGE>
                                     PAGE 15
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Profit  from   operations  was  $689  million  in  the  third  quarter  of  2004
representing  25.6% of net sales,  compared with $604 million in the same period
of 2003,  which  represented  25.1% of net sales.  The 14% profit  increase  was
driven  by  favorable  mix  to  higher-margin  premium  products,  manufacturing
productivity  and  overhead  cost-saving  programs,  partially  offset by higher
advertising expenses.

Within nonoperating charges/income, net interest expense amounted to $10 million
in the third  quarter of 2004,  as compared  to $11 million in 2003,  reflecting
lower average long-term debt levels. Net foreign  transactional  exchange in the
third  quarters  of 2004 and  2003  were $2  million  (expense)  and $7  million
(income), respectively.

The  effective  income tax rate was 29% in the third  quarter of 2004,  compared
with 30% for the same period of 2003. The reduction in the 2004 effective income
tax rate was  primarily  due to a  favorable  change in the mix of  earnings  to
countries  taxed at rates  lower than the U.S.  statutory  rate.  The  effective
income tax rate is  expected  to remain in line with the  current  level for the
balance of 2004.

Net income was $475 million in the third quarter of 2004  representing  17.7% of
net  sales,  compared  with $416  million  in the third  quarter  of 2003  which
represented  17.3% of net sales,  or an increase  of 14%.  Net income per common
share,  diluted,  was $.47,  compared  with $.41 in the third  quarter  of 2003,
representing  growth of 15%. The 2004 percentage growth in net income per common
share,  diluted,  which  outpaced  the  percentage  growth  in net  income,  was
favorably impacted by share repurchase program activity.
 <TABLE>
Nine Months Ended September 30, 2004 versus 2003
------------------------------------------------
Selected statement of income data is presented below.
<CAPTION>
                                            For Nine Months Ended September 30
                                         ---------------------------------------
                                                % of            % of       %
(millions, except per share                      Net             Net    Increase/
 amounts and percentages)                2004   Sales   2003    Sales  (Decrease)
----------------------------------       ----------------------------------------
<S>                                     <C>    <C>     <C>     <C>     <C>
Net sales                               $7,369         $6,630             11
Gross profit                             4,441   60.3   3,914   59.1      13
   Advertising                             812   11.0     572    8.6      42
   Sales promotion                         258    3.5     253    3.8       2
   Other selling, general and
     administrative (SG&A) expense       1,516   20.6   1,600   24.1      (5)
                                        ------         ------
Total SG&A expense                      $2,586   35.1  $2,425   36.6       7
                                        ------         ------

Profit from operations                  $1,855   25.2  $1,489   22.5      25

Nonoperating charges (income):
     Net interest expense                   27             35            (23)
     Foreign exchange                       20            (2)          >(100)
     Other                                   7              4             75
                                         -----          -----
Total nonoperating charges (income)     $   54    0.8  $   37   0.6       46
                                         -----          -----

Income taxes                            $  524    7.1  $  435   6.6       20
Net income                              $1,277   17.3  $1,017   15.3      26
Net income per common share, diluted    $ 1.26         $ 0.99             27
</TABLE>
<PAGE>
                                     PAGE 16
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Total Company
-------------
Net sales for the nine months ended  September 30, 2004 were $7.37  billion,  an
increase of 11% versus $6.63 billion in the first nine months of 2003. Favorable
volume/mix  contributed 6% to net sales and pricing was flat, as price increases
in  Blades  and  Razors  were  offset  by  higher   promotional   spending   for
merchandising  activities in Oral Care and Personal Care. Foreign exchange had a
favorable  5%  impact  on  net  sales.   Sales  increased  due  to  new  product
introductions,  ongoing  trade-up to premium  priced  products and the impact of
acquisitions.

Gross profit was $4.44  billion in the first nine months of 2004,  compared with
$3.91 billion in the first nine months of 2003. As a percent of net sales, gross
profit was 60.3% in the first nine  months of 2004,  compared  with 59.1% in the
first nine months of 2003.  The  improvement  in gross  profit was due mainly to
strong growth of new product  offerings,  trade-up to premium product  offerings
and manufacturing cost savings, particularly at Duracell and Personal Care.

Total  selling,  general and  administrative  expenses  amounted to 35.1% of net
sales for the first nine months of 2004,  compared with 36.6% in the  comparable
period of 2003. Within selling, general and administrative expenses, advertising
expenses  increased  42% to 11.0% of net sales,  from 8.6% of net sales in 2003.
Sales promotion as a percentage of net sales declined  slightly as compared with
2003. Other selling,  general and administrative expenses decreased 5%, and were
down as a percentage  of sales,  to 20.6% from 24.1% in the first nine months of
2003,   reflecting  cost  reduction  efforts  and  lower  Functional  Excellence
expenses.  Functional  Excellence  expenses  were $40 million for the first nine
months of 2004 versus $103 million for the same period in 2003.

Profit  from  operations  was $1.86  billion  in the first  nine  months of 2004
representing  25.2% of net sales,  compared with $1.49 billion in the comparable
period of 2003,  or 22.5% of net sales.  The 25% profit  increase  was driven by
favorable mix to higher-margin premium products,  manufacturing productivity and
overhead cost-saving programs, partially offset by higher advertising expenses.

Within nonoperating charges/income, net interest expense amounted to $27 million
in the first nine months of 2004, as compared to $35 million in 2003, reflecting
lower average long-term debt levels. Net foreign  transactional  exchange impact
in the first  nine  months  of 2004 and 2003 was $20  million  (expense)  and $2
million  (income),  respectively.  The 2004  result  was  mainly  driven  by the
reclassification of a non-cash loss to the Consolidated Statement of Income from
the accumulated  other  comprehensive  loss section of the Consolidated  Balance
Sheet related to the liquidation of certain international subsidiaries.

The  effective  income tax rate was 29% for the nine months ended  September 30,
2004,  compared with 30% for the same period of 2003.  The reduction in the 2004
effective  income tax rate was primarily due to a favorable change in the mix of
earnings to countries  taxed at rates lower than the U.S.  statutory  rate.  The
effective  income tax rate is expected to remain in line with the current  level
for the remainder of 2004.

Net income was $1.28 billion in the first nine months of 2004 representing 17.3%
of net sales, compared with $1.02 billion in the first nine months of 2003 which
represented  15.3% of net sales,  or an increase  of 26%.  Net income per common
share, diluted, was $1.26, compared with $0.99 in the first nine months of 2003,
representing  growth of 27%. The 2004 percentage growth in net income per common
share,  diluted,  which  outpaced  the  percentage  growth  in net  income,  was
favorably impacted by share repurchase program activity.
<PAGE>
                                     PAGE 17
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Operating Segments
------------------
<TABLE>
Third Quarter 2004 versus 2003
------------------------------

The following table  summarizes the key operating  metrics for the third quarter
of 2004  versus  the  third  quarter  of 2003  for  each of the  Company's  five
operating segments.
 <CAPTION>

                                       Blades &                  Oral               Personal    Corporate/     Total
Three Months Ended September 30,        Razors      Duracell     Care      Braun      Care        Other      Company
---------------------------------------------------------------------------------------------------------------------
(millions, except percentages)
<S>                                   <C>           <C>         <C>       <C>       <C>        <C>        <C>
Net Sales:
     Net sales, 2004                    $1,108        $592       $418      $320       $253       $  -         $2,691
     Net sales, 2003                     1,034         514        328       293        236          -          2,405
     % Incr/(Decr) vs. 2003                  7          15         27         9          7                        12
          Impact of exchange                 4           3          5         6          5                         4
          Impact of volume/mix               1          11         24         6          4                         8
          Impact of pricing                  2           1         (2)       (3)        (2)                        -

Profit from operations (PFO)
     PFO, 2004                          $  434        $161       $ 62      $ 22       $ 34       $(24)        $  689
     PFO, 2003                             413         106         64        22         26        (27)           604
     % Incr/(Decr) vs. 2003                  5          52         (3)        -         31                        14
     PFO as % of net sales, 2004          39.2        27.1       14.7       6.8       13.3                      25.6
     PFO as % of net sales, 2003          40.0        20.6       19.3       7.3       11.1                      25.1
</TABLE>
Blades and Razors
-----------------
Net sales of $1.11  billion in the third quarter of 2004 were 7% higher than the
comparable period of 2003, including a 4% favorable foreign exchange impact. Net
sales growth was driven by new premium  offerings  including  M3Power in the UK,
Germany and Japan  during the quarter  and  trade-up to premium  products in the
AMEE and Latin America markets. Sales in North America were lower than last year
due  primarily  to the  timing of  product  launches  in 2004 and the  unmatched
introduction of MACH3Turbo Champion in the third quarter, 2003.

Profit from operations of $434 million was up 5% from the third quarter of 2003,
and profit  margin  decreased  from 40.0% to 39.2%.  Profit from  operations  is
impacted by higher sales from new products,  price  increases and lower overhead
costs,  which were  partially  offset by a double-digit  percentage  increase in
advertising and costs associated with the manufacturing, packaging and warehouse
operations realignment program throughout Europe and Russia.

Duracell
--------
Duracell net sales of $592  million  increased  15% versus the third  quarter of
2003,  including a 3% favorable  foreign exchange  impact.  Net sales gains were
driven by  increased  sales due to  hurricane  activity  in North  America,  the
acquisition  of the Nanfu  battery  business in August 2003,  and strong  market
growth in the AMEE region.

The Company's  dollar  market share in North  America was slightly  lower in the
third  quarter  of 2004 as  compared  to the  prior  quarter  due to  heightened
promotional  activity by the competition in the alkaline  segment and aggressive
promotional  activity  and  increased  distribution  behind the low  price,  low
performance zinc carbon segment.

In the third quarter of 2004,  profit from operations of $161 million  increased
52%, and profit margin grew by 6.5  percentage  points,  compared with the third
quarter of 2003. This increase was due to higher sales and significant  benefits
from cost-savings and overhead  reduction  programs,  partially offset by higher
brand-building advertising expenses.
<PAGE>
                                     PAGE 18
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Oral Care
---------
Oral Care net sales in the third quarter of 2004 of $418 million were 27% higher
than the  third  quarter  of 2003,  of which 5%  represented  favorable  foreign
exchange.  Sales increased in line with the Company's strategy to grow net sales
in the core brushing  category as well as in related  categories.  Unprecedented
new product activity included two new premium power toothbrushes and a new entry
into the manual toothbrush category all contributing  significantly to net sales
growth in the quarter. Acquisitions added 4% to net sales for the period.

In the third quarter of 2004, profit from operations of $62 million was slightly
below 2003.  The decrease in profit from  operations  was driven  primarily by a
double-digit percentage increase in advertising,  and expenses primarily related
to the redesign and rework of two entry-level power toothbrushes.

Braun
-----
Braun net sales of $320 million in the third  quarter of 2004  increased 9% over
the third quarter of 2003.  Favorable  foreign exchange  accounted for 6% of the
growth.  Sales growth was driven by strong  performance  in female  epilators in
AMEE,  household  appliance  gains in Russia and Turkey,  male shaver  growth in
China, the first shipments of the top-of-the-line  Activator in the U.S. and the
new youth CruZer  shaver in the UK,  offset  partially  by male shaver  category
softness in North America and Europe.

Profit from  operations  in the third  quarter of 2004 was flat versus the third
quarter of 2003 as the higher sales and lower overhead costs offset the currency
related   increases  in   European-based   manufacturing   costs  and  increased
advertising expenses.

Personal Care
-------------
In the third quarter of 2004,  Personal  Care net sales  increased 7% versus the
third  quarter of 2003,  with foreign  exchange  contributing  5% of the growth.
Sales  growth  was paced by  double-digit  percentage  gains in Europe and AMEE,
driven by strong  trade-up  from foam shave  preparations  to premium  gel-based
shave preparations.

Profit from operations  increased to $34 million in the third quarter of 2004 as
compared to $26 million in the third quarter of 2003.  Profit  improvement  came
from growth in new products,  manufacturing  and procurement  cost savings,  and
lower overhead costs, which more than offset a double-digit  percentage increase
in advertising.
<PAGE>
                                     PAGE 19
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Nine Months Ended September 30, 2004 versus 2003
------------------------------------------------
The following  table  summarizes  the key operating  metrics for the nine months
ended  September 30, 2004 versus 2003 for each of the Company's  five  operating
segments.
<TABLE>
<CAPTION>

                                       Blades &                  Oral               Personal     Corporate/       Total
Nine Months Ended September 30,         Razors      Duracell     Care      Braun      Care          Other        Company
----------------------------------------------------------------------------------------------------------------------------
(millions, except percentages)
<S>                                   <C>           <C>         <C>       <C>       <C>          <C>          <C>
Net Sales:
     Net sales, 2004                        $3,243      $1,462    $1,091      $874        $699       $  -        $7,369
     Net sales, 2003                         2,930       1,330       939       792         639          -         6,630
     % Incr/(Decr) vs. 2003                     11          10        16        10           9                       11
          Impact of exchange                     5           4         5         6           4                        5
          Impact of volume/mix                   4           6        13         6           7                        6
          Impact of pricing                      2           -        (2)       (2)         (2)                       -

Profit from operations (PFO)
     PFO, 2004                              $1,271      $  324      $185      $ 66         $71       $(62)       $1,855
     PFO, 2003                               1,121         199       166        43          50        (90)        1,489
     % Incr/(Decr) vs. 2003                     13          63        11        53          42                       25
     PFO as % of net sales, 2004              39.2        22.2      17.0       7.6        10.1                     25.2
     PFO as % of net sales, 2003              38.3        15.0      17.6       5.4         7.9                     22.5
</TABLE>
Blades and Razors
-----------------
Net sales of $3.24 billion in the nine months ended  September 30, 2004 were 11%
higher than in the comparable  period of 2003,  including a 5% favorable foreign
exchange   impact.   Volume/mix  and  pricing  were  favorable  by  4%  and  2%,
respectively.  Sales growth was driven by successful  new product  introductions
such as M3Power,  Venus  Divine and  Sensor3  System,  and  ongoing  trade-up to
premium products such as Mach3Turbo, and price increases.

Profit from operations of $1.27 billion was up 13% from the first nine months of
2003, and profit margin increased 0.9 percentage  points to 39.2%. The impact of
higher sales, favorable product mix and higher prices was offset partially by an
increase  in  advertising  spending  and  costs  associated  with  the  European
manufacturing realignment.

Duracell
--------
Duracell net sales of $1.46  billion  increased 10% versus the first nine months
of 2003,  including a 4% favorable foreign exchange impact. Net sales gains were
driven by increased  hurricane activity in North America and the addition of the
Nanfu battery business in China.

In the first  nine  months  of 2004,  profit  from  operations  of $324  million
increased  63%, and profit margin grew by 7.2 percentage  points,  compared with
the  first  nine  months of 2003.  This  increase  was due to  higher  sales and
significant   benefits  from  cost-savings  and  overhead  reduction   programs,
partially offset by higher advertising expenses.

Oral Care
---------
Oral Care net sales in the nine month period ended  September  30, 2004 of $1.09
billion  were 16% higher  than the  comparable  period of 2003,  with  favorable
foreign  exchange  contributing 5%. Net sales gains were driven by new products,
the acquisition of Rembrandt and Zooth, Inc. and strength in most regions behind
manual toothbrushes.

In the first  nine  months  of 2004,  profit  from  operations  of $185  million
increased  11%.  The  increase  in profits  was driven by higher  sales from new
products  and  improved  product  mix and  partially  offset  by a  double-digit
percentage increase in advertising and other launch related expenses.
<PAGE>
                                     PAGE 20
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Braun
-----
Braun net sales of $874  million in the nine  months  ended  September  30, 2004
increased  10% versus the  comparable  period of 2003,  with  favorable  foreign
exchange  representing  6%  of  the  increase.   Growth  was  driven  by  strong
performance  in the AMEE region,  particularly  in Russia and Turkey,  partially
offset by comparisons with the unmatched 2003  SARS-related  spike in demand for
Thermoscan products in both Asia and North America.

Profit from operations in the first nine months of 2004 of $66 million  compared
with $43 million in the first nine months of 2003. Profit improvement was driven
by  the  higher  sales,  a  favorable  mix  towards   higher  margin   products,
particularly  male shavers and female  epilators,  tempered by  currency-related
increases in European-based manufacturing costs.

Personal Care
-------------
In the nine months ended  September 30, 2004,  Personal Care net sales increased
9% versus the first nine months of 2003, with foreign  exchange  contributing 4%
of the growth. Net sales grew due to strong demand for new products and trade-up
in shave  preparations,  particularly  in Europe  and North  America.  Net sales
growth was also driven by new products,  including Gillette Complete Skincare in
North America,  and the new side-activated  Right Guard Cool Spray in the United
Kingdom.

Profit from  operations  increased  to $71  million  for the nine  months  ended
September  30, 2004 as compared  with $50  million in the  comparable  period of
2003.  Profit  improvement came from growth in new products,  manufacturing  and
procurement  cost savings,  and lower overhead  costs,  which more than offset a
double-digit percentage increase in advertising.
<PAGE>
                                     PAGE 21
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


FINANCIAL CONDITION
-------------------

Cash Flow
---------
Cash provided by operations is the Company's  primary source of funds to finance
operations,  capital expenditures,  share repurchases,  and dividends. Free cash
flow,  defined as net cash provided by operating  activities net of additions to
and  disposals of  property,  plant and  equipment,  is used by the Company as a
measure of its  liquidity,  as well as its ability to fund future  growth and to
provide  a return  to  shareholders.  Free  cash  flow is not a  measure  of the
residual cash flow that is available for discretionary  expenditures,  since the
Company has certain  non-discretionary  obligations,  such as debt service, that
are not deducted  from the measure.  A  reconciliation  of free cash flow to the
increase in cash and cash  equivalents  in accordance  with  Generally  Accepted
Accounting Principles (GAAP) follows.
<TABLE>

                                                                     2004               2003
                                                              ---------------------------------------
                                                              Free      GAAP      Free     GAAP
                                                              Cash      Cash      Cash     Cash
Nine Months Ended September 30                                Flow      Flow      Flow     Flow
-----------------------------------------------------------------------------------------------------
(millions)
<S>                                                         <C>         <C>      <C>     <C>
Net income                                                               $1,277             $1,017
Depreciation and amortization                                               448                430
Deferred income taxes and other                                              63                 73
(Increase) / Decrease in accounts receivable                                (97)                 5
Increase in inventories                                                    (369)              (179)
Net change in other sssets and liabilities                                  309                356
                                                               ------    ------    ------   ------
Net cash provided by operating activities                      $1,631    $1,631    $1,702   $1,702
  Additions to property, plant and equipment (A)                 (379)               (218)
  Disposals of property, plant and equipment (B)                   44                  28
                                                               ------              ------
Free cash flow                                                 $1,296              $1,512
                                                               ------              ------

Net cash used in investing activities (C*)                                $(450)           $  (348)
Net cash used in financing activities                                      (969)            (1,315)
Effect of exchange rate changes on cash                                      (2)                 5
                                                                         ------            -------
Increase in cash and cash equivalents                                     $ 210            $    44
                                                                         ------            -------
</TABLE>

*C is the sum of A, B and $(115) million and $(158) million
in other investing activities, including acquisitions net of
cash acquired, in the nine months ended September 30, 2004
and 2003, respectively.

Free cash flow for the nine months ended  September 30, 2004, was $1.30 billion,
representing 18% of net sales, as compared with $1.51 billion in the nine months
ended September 30, 2003. The impacts of higher net income were offset by higher
accounts  receivables,  higher inventories and additions to property,  plant and
equipment.  Inventory  levels  reflect the support of new product  activity  for
Braun and Oral Care and the  planned  build up of safety  stock  related  to the
blade and razor manufacturing,  packaging and warehouse  operations  realignment
program throughout Europe and Russia. Capital expenditures in 2004 are primarily
for future new product  programs  and the  realignment  of our Blades and Razors
manufacturing and distribution in Europe and Russia.
<PAGE>
                                     PAGE 22
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Net  cash  used in  investing  activities  for the  first  nine  months  of 2004
increased as compared  with the prior year,  primarily due to the funding of two
acquisitions,  the Rembrandt brand of at-home and  professional  teeth-whitening
products  and Zooth,  Inc.,  a leader in  licensed  manual and power  children's
toothbrushes, totaling $117 million and higher capital expenditures. In addition
to funding the acquisitions,  the Company used its free cash flow to finance the
repurchase  of 19.3 million  shares of Company stock for $775 million and to pay
dividends of $490 million.  In February 2004, the Company  received $103 million
upon settlement of a currency swap that hedged a maturing Euro-denominated bond.
Net cash used in  financing  activities  for the first  nine  months of 2004 was
below last year mainly due to lower share repurchases.

Debt
----
Total debt increased by $20 million  during the nine months ended  September 30,
2004,  to $3.33 billion at September 30, 2004 from $3.31 billion at December 31,
2003.  This  increase was  principally  due to an increase in  short-term  loans
payable of $94 million,  partially offset by a net decrease in long-term debt of
$74 million.  Cash and cash  equivalents  increased by $210 million for the same
period.  Cash  equivalents are invested in highly liquid deposits and marketable
securities of institutions with high credit quality.

The Company's  investment  grade long-term credit ratings of AA- from Standard &
Poor's and Aa3 from Moody's and commercial  paper ratings of A1+ from Standard &
Poor's and P1 from  Moody's  provide a high degree of  flexibility  in obtaining
funds.  The Company has the ability to issue up to $1.62  billion in  commercial
paper in the U.S. and Euro markets.  The Company's  commercial  paper program is
supported  by its  revolving  credit  facility and other  sources of  liquidity,
primarily the Company's cash flow from operations.  At September 30, 2004, there
was $121 million  outstanding  under the  Company's  commercial  paper  program,
compared with $55 million at December 31, 2003. On October 12, 2004, the Company
entered into a 364-day  basis  revolving  bank credit  facility in the amount of
$930 million,  expiring October 2005.  Liquidity is enhanced through a provision
in the  364-day  facility  that  gives the  Company  the  option to enter into a
one-year  term loan in an amount up to $930  million.  On October 14, 2003,  the
Company  entered into a revolving bank credit  facility in which $288 million is
available for five years,  expiring  October 2008.  The Company  believes it has
sufficient  alternative  sources of funding  available to replace its commercial
paper program, if necessary.

During 2002, two shelf  registration  statements were filed allowing the Company
to issue up to $2.80  billion in debt  securities  in the U.S.  It is  currently
anticipated that the proceeds from the sale of any debt securities  issued under
these shelf  registrations will be used to repay commercial paper borrowings and
replace other  maturing  debt,  although the proceeds may also be used for other
corporate purposes, including repurchase of the Company's common stock.

During the  nine-months  ended  September  30, 2004,  $346 million was issued in
public offerings under these shelf registration  statements,  consisting of $300
million 3.80% notes, due September 2009, and $46 million in floating rate notes,
due April 2043. The $46 million floating rate notes are redeemable at the option
of the holder at various  prices on a yearly basis from April 2005 to April 2014
and each third anniversary  thereafter to maturity.  The floating rate notes are
also  redeemable  at the Company's  option at various  prices from April 2033 to
maturity.

At September  30, 2004,  $1.88  billion,  at face value,  was issued under these
shelf  registrations,  and a total of $918 million was available for future debt
issuance. All proceeds from these issuances were used to reduce commercial paper
borrowings.

With its strong brands,  leading market shares,  strong financial  condition and
substantial  cash-generating capability, the Company expects to continue to have
funds  available  for growth  through both  internally  generated  cash flow and
significant credit resources. The Company has substantial unused lines of credit
and access to worldwide  financial markets,  enabling the Company to raise funds
at favorable interest rates.
<PAGE>
                                     PAGE 23
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Market Risk
-----------
The Company is subject to market risks,  such as changes in foreign currency and
interest rates that arise from normal business operations. The Company regularly
assesses these risks and has established  business strategies to provide natural
offsets, supplemented by the use of derivative financial instruments, to protect
against the adverse effects of these and other market risks.

The Company  uses  foreign-denominated  debt and forward  contracts to hedge the
impact of foreign currency changes on its net foreign  investments,  normally in
currencies with low interest rates. Most of the Company's transactional exchange
exposure is managed through centralized cash management.  The Company hedges net
residual  transactional  exchange exposures primarily through forward contracts.

The Company uses  primarily  floating rate debt in order to match interest costs
to the impact of inflation on earnings. The Company manages its mix of fixed and
floating-rate  debt by  entering  into  interest  rate  swaps and  forward  rate
agreements.

More detailed information about the strategies,  policies, and use of derivative
financial  instruments  is  provided in the  Company's  2003 Form 10-K under the
Financial   Instruments  and  Risk  Management   Activities  note  in  Notes  to
Consolidated  Financial  Statements.   The  Company  has  established  policies,
procedures,  and internal  controls  governing the use of  derivative  financial
instruments and does not use them for trading,  investment, or other speculative
purposes. In addition,  the Company's use of derivative  instruments is reviewed
by  the  Finance  Committee  of  the  Board  of  Directors  annually.  Financial
instrument positions are monitored using a value-at-risk model. Value at risk is
estimated for each instrument based on historical volatility of market rates and
a 95% confidence level.

Based on the Company's overall  evaluation of its market risk exposures from all
of its financial instruments at September 30, 2004, a near-term change in market
rates would not materially affect the consolidated  financial position,  results
of operations, or cash flows of the Company.


FUNCTIONAL EXCELLENCE AND 2003 MANUFACTURING REALIGNMENT PROGRAM

Functional Excellence
---------------------
In the second  quarter of 2002,  the Company began actions  associated  with its
Functional  Excellence  initiative,  which is described in Notes to Consolidated
Financial  Statements.  During the three and nine month periods ended  September
30, 2004 and 2003, the Company  recorded the following  expenses related to this
initiative:
<TABLE>
<CAPTION>
                                                 Three Months Ended         Nine Months Ended
                                                     September 30              September 30
                                                 -------------------       -------------------
(millions)                                        2004          2003        2004          2003
----------                                       -----          ----       -----          ----
<S>                                              <C>           <C>        <C>           <C>
Functional Excellence expense recorded in:
Cost of goods sold                                $10           $ 2         $14          $ 15
Selling, general and administrative expense        11            15          26            88
                                                  ---           ---         ---           ---
Total functional excellence expense               $21           $17         $40          $103
                                                  ===           ===         ===           ===
</TABLE>

2003 Manufacturing Realignment Program
--------------------------------------
During 2003, the Company  announced a blade and razor  manufacturing,  packaging
and warehouse  operations  realignment program throughout Europe and Russia. The
program will  significantly  reduce costs,  improve  operating  efficiency,  and
streamline operations.  The program began in December 2003 and will be completed
during  2007.  This  program  is  further  described  in Notes  to  Consolidated
Financial Statements.

During the three and nine months ended September 30, 2004, the Company  recorded
charges of $8 million and $24 million,  respectively,  to cost of goods sold for
this program,  related mainly to  accelerated  depreciation  of certain  assets,
severance  accruals and costs  related to the  relocation  of equipment  between
impacted locations.
<PAGE>
                                     PAGE 24
                       DISCLOSURE CONTROLS AND PROCEDURES


Item 4. Controls and Procedures

Our management,  under the supervision and with the  participation  of our Chief
Executive Officer ("CEO") and Chief Financial Officer ("CFO"), has evaluated the
effectiveness of our disclosure controls and procedures as defined in Securities
and  Exchange  Commission  ("SEC")  Rule  13a-15(e)  as of the end of the period
covered by this report.  Based upon that  evaluation,  management  has concluded
that our  disclosure  controls  and  procedures  are  effective  to ensure  that
information  we are required to disclose in reports that we file or submit under
the  Securities  Exchange Act is  accumulated  and  communicated  to management,
including the CEO and CFO, as  appropriate to allow timely  decisions  regarding
required disclosure and is recorded,  processed,  summarized and reported within
the time periods specified in the SEC's rules and forms.

Further,  during the fiscal quarter  covered by this report,  there have been no
changes in  internal  control  over  financial  reporting  that have  materially
affected,  or are reasonably likely to materially  affect,  our internal control
over financial reporting.
<PAGE>
                                     PAGE 25
                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings

We are subject,  from time to time, to legal  proceedings and claims arising out
of our business,  which cover a wide range of matters,  including  antitrust and
trade  regulation,  advertising,  product  liability,  contracts,  environmental
issues,  patent and trademark  matters and taxes.  Management,  after review and
consultation with legal counsel,  considers that any liability from all of these
legal  proceedings  and claims  would not  materially  affect  our  consolidated
financial position, results of operations or liquidity.
<TABLE>
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
<S>                         <C>              <C>           <C>                 <C>
                                                           Total Number
                                                             of Shares          Maximum Number
                                                         Purchased as Part        of Shares
                         Total Number       Average        of Publicly         that May Yet Be
                           of Shares       Price Paid    Announced Plans     Purchased Under the
Period                     Purchased (3)   per Share      or Programs(1)      Plans or Programs
------                   -----------       ----------   -----------------    -------------------
07/01/04 - 07/31/04         675,000         $39.01            675,000             41,325,000
08/01/04 - 08/31/04       8,305,918         $40.60          8,298,600             33,026,400
09/01/04 - 09/30/04       1,328,424         $42.65          1,326,400             31,700,000
  Total Third Quarter    10,309,342 (2)     $40.76         10,300,000             31,700,000

</TABLE>
(1)  The share  repurchase  program was announced on 9/16/03 and  authorizes the
     purchase of up to 50 million shares of the Company's common stock. There is
     no expiration date specified for this program.

(2)  Includes  9,342  shares  which  were   repurchased  by  the  Company  under
     equity-based programs.

(3)  All share  repurchases  were  effected in  accordance  with the safe harbor
     provisions of Rule 10b-18 of the Securities Exchange Act.

<PAGE>
                                     PAGE 26
                           PART II. OTHER INFORMATION

Cautionary Statement
--------------------
Certain  statements  that we may make  from time to time,  including  statements
contained  in this report,  constitute  "forward-looking  statements"  under the
federal securities laws.  Forward-looking  statements may be identified by words
such as "plans," "expects," "believes," "anticipates,"  "estimates," "projects,"
"will" and other words of similar meaning used in conjunction  with, among other
things,  discussions  of  future  operations,   acquisitions  and  divestitures,
financial  performance,  our strategy for growth,  product  development  and new
product launches, market position, and expenditures.

Forward-looking  statements are based on current  expectations of future events,
but actual results could vary materially from our  expectations and projections.
Investors  are  cautioned  not to place undue  reliance  on any  forward-looking
statements. We assume no obligation to update any forward-looking statements. We
caution that  historical  results  should not be relied upon as  indications  of
future performance.

Factors  that  could  cause  actual  results  to differ  materially  from  those
expressed in any forward-looking  statement include the following, some of which
are described in greater detail below:

- the pattern of our sales, including variations in sales volume within periods;

- consumer demands and preferences, including the acceptance by our customers
  and consumers of new products and line extensions;

- the mix of products sold;

- our ability to control and reduce our internal costs and the cost of raw
  materials;

- competitive factors, including prices, promotional incentives, and trade terms
  for our products, and our response, as well as those of our customers and
  competitors, to changes in these terms;

- product introductions and innovations by us and our competitors;

- technological advances by us and our competitors;

- new patents granted to us and our competitors;

- changes in exchange rates in one or more of our geographic markets;

- changes in laws and regulations, including trade regulations, accounting
  standards and tax laws, governmental actions affecting the manufacturing and
  sale of our products, unstable governments and legal systems, and
  nationalization of industries;

- changes in accounting policies;

- acquisition, divestitures and similar transactions by us, our competitors,
  or customers; and

- the impact of general political and economic conditions or hostilities in the
  United States and in other parts of the world.
<PAGE>
                                     PAGE 27
                           PART II. OTHER INFORMATION


Competitive Environment
-----------------------
We experience intense competition for sales of our products in most markets. Our
products compete with widely advertised,  well-known,  branded products, as well
as private label products,  which typically are sold at lower prices. In most of
our  markets,  we have  major  competitors,  some of which are  larger  and more
diversified than we are. Aggressive  competition within our markets to preserve,
gain, or regain market share can affect our results in any given period.


Changes in Technology and New Product Introductions
---------------------------------------------------
In  most  product   categories  in  which  we  compete,   there  are  continuous
technological  changes  and  frequent  introductions  of new  products  and line
extensions.  Our  ability to  introduce  new  products  and/or  extend  lines of
established  products  successfully  will  depend on,  among other  things,  our
ability  to  identify   changing   consumer   tastes  and  needs,   develop  new
technologies,  differentiate  our  products,  and gain market  acceptance of new
products. We cannot be certain that we will successfully achieve these goals.

With respect  specifically to primary alkaline batteries,  category growth could
be adversely affected by the following additional factors:

- technological or design changes in portable electronic and other devices that
  use batteries as a power source;
- continued improvement in the service life of primary batteries;
- improvements in rechargeable battery technology; or
- the development of new battery technologies.


Intellectual Property
---------------------
We rely upon patent,  copyright,  trademark, and trade secret laws in the United
States and in other countries to establish and maintain our  proprietary  rights
in technology,  products,  and our brands.  Our  intellectual  property  rights,
however, could be challenged,  invalidated,  or circumvented.  We do not believe
that our products infringe the intellectual  property rights of others,  but any
such claims,  if they were successful,  could result in material  liabilities or
loss of business.


Cost-Savings Strategy
---------------------
We have implemented and approved a number of programs  designed to reduce costs.
Such  programs  will  require,   among  other  things,   the  consolidation  and
integration of facilities,  functions,  systems,  and  procedures,  all of which
present significant management  challenges.  There can be no assurance that such
actions will be  accomplished  as rapidly as anticipated or that the full extent
of expected cost reductions will be achieved.
<PAGE>
                                     PAGE 28
                           PART II. OTHER INFORMATION


Sales and Operations Outside of the United States
-------------------------------------------------
Sales  outside of the  United  States  represent  a  substantial  portion of our
business.  In  addition,  we  have a  number  of  manufacturing  facilities  and
suppliers  located  outside of the United  States.  Accordingly,  the  following
factors could adversely affect operating results in any reporting period:

- changes in political or economic conditions;
- trade protection measures;
- import or export licensing requirements;
- changes in the mix of earnings taxed at varying rates;
- changes in regulatory requirements or tax laws; and
- longer payment cycles in certain countries.

We are also exposed to foreign  currency  exchange rate risk with respect to our
sales, profits, and assets and liabilities  denominated in currencies other than
the U.S.  dollar.  Although we use instruments to hedge certain foreign currency
risks (through foreign currency forward, swap, and option contracts and non-U.S.
dollar  denominated  financings) and we are partially hedged through our foreign
manufacturing  operations,  there  can be no  assurance  that we  will be  fully
protected  against foreign currency  fluctuations and our reported earnings will
be affected by changes in exchange rates.


Retail Environment
------------------
With  the  growing  trend  toward  retail  trade  consolidation,  especially  in
developed  markets  such as the United  States and Europe,  we are  increasingly
dependent upon key retailers whose bargaining strength is growing.  Accordingly,
we face greater pressure from significant retail trade customers to provide more
favorable trade terms.

We can be  negatively  affected by changes in the  policies of our retail  trade
customers,  such as trade  inventory  levels,  access to shelf space,  and other
conditions.  Many of our customers,  particularly  our high-volume  retail trade
customers,  have engaged in accelerated  efforts to reduce  inventory levels and
shrinkage and to change inventory delivery systems. While we expect the level of
trade inventory of our products to decline over time, the speed and magnitude of
such reductions and/or our inability to develop satisfactory  inventory delivery
systems could adversely affect operating results in any reporting period.


Effect of Potential Military Action or War
------------------------------------------
Recent  military  hostilities and the threat of future  hostilities,  as well as
attendant political activity, have created an atmosphere of economic uncertainty
throughout the world. A disruption in our supply chain, an increase in import or
export  costs,  and/or other  macroeconomic  events  resulting  from military or
political  events could  adversely  affect  operating  results in any  reporting
period.
<PAGE>
                                     PAGE 29
                           PART II. OTHER INFORMATION


Item 6 Exhibits.

The following exhibits are included herewith:

12   Statement Regarding Computation of Ratio of Earnings to Fixed Charges.

31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a).

31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a).

32.1 Certification  of Chief  Executive  Officer  Pursuant to 18 U.S.C.
     Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification  of Chief  Financial  Officer  Pursuant to 18 U.S.C.
     Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.
<PAGE>
                                     PAGE 30
                                    SIGNATURE

SIGNATURES

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


THE GILLETTE COMPANY
(Registrant)




/s/ Joseph J. Schena
--------------------------------
Joseph J. Schena
Vice President, Controller
and Principal Accounting Officer

October 28, 2004
<PAGE>
EXHIBIT INDEX


Exhibit Number and Description

Exhibit 12    Statement Regarding Computation of Ratio of Earnings to
              Fixed Charges.

Exhibit 31.1  Certification of Chief Executive Officer Pursuant to
              Rule 13a-14(a).

Exhibit 31.2  Certification of Chief Financial Officer Pursuant to
              Rule 13a-14(a).

Exhibit 32.1  Certification of Chief Executive Officer Pursuant to 18 U.S.C.
              Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act
              of 2002.

Exhibit 32.2  Certification of Chief Financial Officer Pursuant to 18 U.S.C.
              Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act
              of 2002.

<PAGE>