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, 2001           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 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 31, 2001  . . . . . . . . . . . . . . . 1,055,329,549
<PAGE>
<TABLE>
                                     PAGE 1
                          PART I. FINANCIAL INFORMATION
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                        CONSOLIDATED STATEMENT OF INCOME
                      (Millions, except per share amounts)
                                   (Unaudited)

<CAPTION>
                                                       Three Months Ended        Nine Months Ended
                                                          September 30              September 30
                                                       ------------------        ----------------
                                                          2001       2000         2001       2000
                                                          ----       ----         ----       ----
<S>                                                  <C>       <C>            <C>       <C>
Net Sales ..........................................   $ 2,362    $ 2,308      $ 6,243    $ 6,419
Cost of Sales ......................................       922        871        2,317      2,407
                                                       -------    -------      -------    -------
  Gross Profit .....................................     1,440      1,437        3,926      4,012


Selling, General and Administrative Expenses .......       967        862        2,759      2,496
                                                       -------    -------      -------    -------
  Profit from Operations ...........................       473        575        1,167      1,516

Nonoperating Charges (Income):
  Interest income ..................................        (1)        (2)          (3)        (5)
  Interest expense .................................        34         61          119        166
  Exchange .........................................         6         (9)          13         (5)
  Other charges - net ..............................         5          1            9          3
                                                       -------    -------      -------    -------
                                                            44         51          138        159
                                                       -------    -------      -------    -------
Income from Continuing Operations before Income Taxes      429        524        1,029      1,357

Income Taxes .......................................       133        174          319        451
                                                       -------     ------      -------    -------
Income from Continuing Operations ..................       296        350          710        906

Loss from Discontinued Operations, net of tax               -           -            -       (429)
                                                       -------    -------      -------    -------
  Net Income .......................................   $   296    $   350      $   710    $   477
                                                       =======    =======      =======    =======

Net Income (Loss) per Common Share, basic
  Continuing Operations ............................   $   .28    $   .33      $   .67    $   .86

  Discontinued Operations ..........................         -          -            -       (.41)
                                                       -------    -------      -------    -------
  Net Income .......................................   $   .28    $   .33      $   .67    $   .45
                                                       =======    =======      =======    =======
Net Income (Loss) per Common Share,
assuming full dilution

  Continuing Operations ............................   $   .28    $   .33      $   .67    $   .85

  Discontinued Operations ..........................         -          -            -       (.40)
                                                       -------    -------      -------    -------
  Net Income .......................................   $   .28    $   .33      $   .67    $   .45
                                                       =======    =======      =======    =======

Dividends per Common Share
  Declared .........................................   $ .1625    $ .1625      $ .3250    $ .3250
  Paid .............................................   $ .1625    $ .1625      $ .4875    $ .4725

Weighted average number of common shares outstanding
  Basic ............................................     1,055      1,053        1,055      1,054
  Assuming full dilution ...........................     1,058      1,058        1,058      1,064
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
                                     PAGE 2
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                                     ASSETS
                                   (Millions)

<CAPTION>


                                                     September 30,  December 31,  September 30,
                                                         2001           2000          2000
                                                     ------------   ------------  ------------
                                                      (Unaudited)                  (Unaudited)
<S>                                                    <C>            <C>         <C>
Current Assets:
  Cash and cash equivalents ..........................   $    68      $    62       $    84
  Trade receivables, less allowances 2001, $62;
    Dec. 2000, $81; September 2000, $55 ..............     1,499        2,128         1,781
  Other receivables ..................................       304          378           303
  Inventories:
     Raw materials and supplies ......................       145          153           153
     Work in process .................................       215          194           246
     Finished goods ..................................       954          815           992
                                                         -------      -------       -------
       Total Inventories .............................     1,314        1,162         1,391
                                                         -------      -------       -------

  Deferred income taxes ..............................       578          566           382
  Other current assets ...............................       200          197           353
  Net assets of discontinued operations...............        28          189           781
                                                         -------      -------       -------
       Total Current Assets ..........................     3,991        4,682         5,075
                                                         -------      -------       -------

Property, Plant and Equipment, at cost ...............     5,991        5,866         5,903
Less accumulated depreciation ........................     2,454        2,316         2,399
                                                         -------      -------       -------
       Net Property, Plant and Equipment .............     3,537        3,550         3,504
                                                         -------      -------       -------

Intangible Assets, less accumulated amortization .....     1,531        1,574         1,821

Other Assets .........................................       618          596           669
                                                         -------      -------       -------

                                                         $ 9,677      $10,402       $11,069
                                                         =======      =======       =======
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
                                     PAGE 3
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      (Millions, except per share amount)

<CAPTION>

                                                     September 30,  December 31,  September 30,
                                                         2001          2000           2000
                                                     ------------   ------------  ------------
                                                      (Unaudited)                 (Unaudited)
<S>                                                <C>                <C>         <C>
Current Liabilities:
  Loans payable ....................................   $  1,808       $  2,195      $  1,653
  Current portion of long-term debt ................        565            631           560
  Accounts payable .................................        353            402           350
  Accrued liabilities ..............................      1,306          1,773         1,420
  Dividends payable ................................          -            171             -
  Income taxes .....................................        416            299           296
                                                       --------       --------      --------
     Total Current Liabilities .....................      4,448          5,471         4,279
                                                       --------       --------      --------

Long-Term Debt .....................................      1,669          1,650         3,031
Deferred Income Taxes ..............................        449            450           461
Other Long-Term Liabilities ........................        715            767           760
Minority Interest ..................................         44             41            40

Contingent Redemption Value of Common Stock
  Put Options ......................................         99             99           123

Stockholders' Equity:
  Common stock, par value $1.00 per share:
    Authorized 2,320 shares
    Issued: 2001, 1,367 shares; September and
      Dec. 2000, 1,365 shares ......................      1,367          1,365         1,365
  Additional paid-in capital .......................      1,013            973           928
  Earnings reinvested in the business ..............      6,220          5,853         6,281
  Accumulated other comprehensive income ...........     (1,382)        (1,314)       (1,246)
  Treasury stock, at cost: 2001, 312 shares;
    September and Dec. 2000, 312 shares ............     (4,965)        (4,953)       (4,953)
                                                       --------       --------      --------
          Total Stockholders' Equity ...............      2,253          1,924         2,375
                                                       --------       --------      --------
                                                       $  9,677       $ 10,402      $ 11,069
                                                       ========       ========      ========
</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
                                                            ------------------
                                                            2001         2000
                                                            ----         ----
<S>                                                     <C>         <C>
Operating Activities

    Income from continuing operations                      $ 710        $ 906
    Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization ................         359          355
      Other ........................................          (9)           -
      Changes in assets and  liabilities,  excluding
      effects of acquisitions and divestitures:
        Accounts receivable ........................         637          299
        Inventories ................................        (183)         (54)
        Accounts payable and accrued liabilities ...        (235)        (386)
        Other working capital items ................         (39)          34
        Other noncurrent assets and liabilities ....         (60)        (115)
                                                           -----        -----
          Net cash provided by operating activities        1,180        1,039
                                                           -----        -----
Investing Activities

    Additions to property, plant and equipment .....        (449)        (563)
    Disposals of property, plant and equipment .....          84           65
    Other ..........................................           1           15
                                                           -----        -----
          Net cash used in investing activities ....        (364)        (483)
                                                           -----        -----
Financing Activities

    Purchase of treasury stock .....................         (12)        (944)
    Proceeds from sale of put options ..............           8           17
    Proceeds from exercise of stock option and
         purchase plans ............................          33           21
    Proceeds from long-term debt ...................         200          492
    Repayment of long-term debt ....................        (256)         (56)
    Increase (Decrease) in loans payable ...........        (372)         210
    Dividends paid .................................        (514)        (500)
    Settlements of debt-related derivative contracts           6          138
                                                           -----        -----
          Net cash used in financing activities ....        (907)        (622)
                                                           -----        -----
Effect of Exchange Rate Changes on Cash ............          (2)          (5)
Net Cash Provided by Discontinued Operations........          99           75
                                                           -----        -----
Increase in Cash and Cash Equivalents ..............           6            4
Cash and Cash Equivalents at Beginning of Year .....          62           80
                                                           -----        -----
Cash and Cash Equivalents at End of Quarter ........       $  68        $  84
                                                           =====        =====
Supplemental disclosure of cash paid for:

    Interest .......................................       $ 135        $ 190
    Income taxes ...................................       $ 153        $ 351

</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

<PAGE>

                                     PAGE 5
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                   (Millions)
                                   (Unaudited)


                                         Three Months Ended    Nine Months Ended
                                            September 30         September 30
                                         ------------------    ----------------
                                           2001        2000      2001      2000
                                           ----        ----      ----      ----

Net Income                                $ 296       $ 350     $ 710     $ 477

  Other Comprehensive Income (Loss),
    net of tax:
  Foreign Currency Translation               21         (61)      (58)     (185)
  Cash Flow Hedges                           (3)          -       (10)        -
                                           ----        ----      ----      ----

Comprehensive Income                      $ 314       $ 289     $ 642     $ 292
                                           ====        ====      ====      ====


Foreign currency  translation is after favorable  (unfavorable)  tax effects for
three  months of $22 million and $(62)  million in 2001 and 2000,  respectively,
and for nine  months  of $(60)  million  and  $(94)  million  in 2001 and  2000,
respectively.

Accumulated Other Comprehensive Income

--------------------------------------
The accumulated balances for the components of Other Comprehensive Income are:

<TABLE>
                                                                      Accumulated
                              Foreign                                    Other
                              Currency      Pension     Cash Flow    Comprehensive
                             Translation   Adjustment     Hedges        Income
                             -----------   ----------   -----------  -------------
<S>                         <C>           <C>          <C>           <C>

Balance December 31, 1999     $(1,031)       $ (30)       $   -        $(1,061)
Change in period                 ( 13)           -            -            (13)
                                ------       ------       ------        -------
Balance March 31, 2000        $(1,044)       $ (30)       $   -        $(1,074)
Change in period                 (111)           -            -           (111)
                                ------       ------       ------        -------
Balance June 30, 2000         $(1,155)       $ (30)       $   -        $(1,185)
Change in period                  (61)           -            -            (61)
                                ------       ------       ------        -------
Balance September 30, 2000    $(1,216)       $ (30)       $   -        $(1,246)
                                ======       ======       ======        =======

Balance December 31, 2000     $(1,280)       $ (34)       $   -        $(1,314)
Change in period                  (43)           -           (5)           (48)
                                ------       ------       ------        -------
Balance March 31, 2001        $(1,323)       $ (34)       $  (5)       $(1,362)
Change in period                  (36)           -           (2)           (38)
                                ------       ------       ------        -------
Balance June 30, 2001         $(1,359)       $ (34)       $  (7)       $(1,400)
Change in period                   21            -           (3)            18
                                ------       ------       ------        -------
Balance September 30, 2001    $(1,338)       $ (34)       $ (10)       $(1,382)
                                ======       ======       ======        =======

See Accompanying Notes to Consolidated Financial Statements.

</TABLE>

<PAGE>

                                     PAGE 6
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Accounting Comments
-------------------
Reference is made to the registrant's 2000 Annual Report to stockholders,  which
contains, at pages 24 through 45, financial statements and the notes thereto, of
the  registrant's  Annual  Report on Form 10-K for the year ended  December  31,
2000.

On December 29, 2000,  the sale of the  Stationery  Products  business to Newell
Rubbermaid,  Inc.  was  finalized,  and  the  segment  is  accounted  for  as  a
discontinued  operation.  Accordingly,  its net assets and liabilities have been
segregated from continuing  operations in the accompanying  consolidated balance
sheet,  and its operating  results are segregated  and reported as  discontinued
operations in the accompanying consolidated statements of income and cash flows,
and related notes.

Shipping and  handling  costs of $44 million in 2001 and $40 million in 2000 for
the quarter  ended  September  30, and $117  million in 2001 and $114 million in
2000 for the nine months ended  September  30, are included in selling,  general
and administrative expenses, consistent with ongoing practice.

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.

Prior-year financial  statements  have been  reclassified to conform to the 2001
presentations.

Accounting Pronouncements
-------------------------
In May 2000, the Financial  Accounting  Standards  Board's  Emerging Issues Task
Force (EITF)  reached a consensus on Issue No.  00-14,  "Accounting  for Certain
Sales Incentives." This issue addresses the recognition,  measurement and income
statement  classification  for  various  types  of sales  incentives,  including
discounts, coupons, rebates and free products. The Company adopted the consensus
in the first  quarter  of 2001.  The  adoption  of EITF  00-14  resulted  in the
following  reclassifications  in the third  quarter 2000 income  statement:  net
sales were reduced by $13 million;  cost of sales was  increased by $10 million;
and selling,  general and administrative expenses were decreased by $23 million.
For the nine  months in 2000,  net sales were  reduced by $58  million;  cost of
sales was  increased by $32 million;  and  selling,  general and  administrative
expenses were decreased by $90 million. The  reclassifications  had no impact on
profit from operations, net income or earnings per share.

In January 2001, the EITF reached a consensus on Issue No.00-22, "Accounting for
Points and Certain Other  Time-Based or Volume-Based  Sales Incentive Offers and
Offers for Free  Products or Services to be Delivered in the Future." This issue
requires that certain  volume  rebates to customers be classified as a reduction
of revenue.  The consensus was effective for the first quarter of 2001,  and its
impact on the consolidated financial statements was not material.

In April 2001,  the EITF reached a consensus on Issue No. 00-25,  "Vendor Income
Statement  Characterization  of  Consideration  to a Purchaser  of the  Vendor's
Products or Services." This issue addresses the income statement  classification
of  slotting  fees,  cooperative  advertising  arrangements  and  buydowns.  The
consensus  will require  that certain  customer  promotional  payments  that are
currently  classified  as  marketing  expenses be  classified  as a reduction of
revenue.  Although  the  impact  of EITF  00-25  on the  consolidated  financial
statements is still being  evaluated,  its adoption will result in a significant
reclassification  between net sales and sales promotion expense. The adoption of
EITF 00-25 will have no impact on profit from operations, net income or earnings
per share. The Company will adopt EITF 00-25 no later than January 1, 2002.
<PAGE>
                                     PAGE 7
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


In July 2001,  Statement  of  Financial  Accounting  Standards  (SFAS) No.  142,
"Goodwill and Other Intangible  Assets," was issued.  The Company is required to
adopt the  provisions  of SFAS 142  effective  January  1,  2002.  SFAS 142 will
require  that  goodwill  no longer  be  amortized,  but  instead  be tested  for
impairment,  at least annually,  in accordance  with the new impairment  testing
provisions of SFAS 142.  Unamortized  goodwill at September  30, 2001,  was $865
million. Annual amortization expense related to goodwill was $29 million in 2000
and is estimated  at  approximately  $28 million for 2001.  The Company is still
evaluating  whether any  transitional  impairment  losses will be required to be
recognized as the cumulative effect of a change in accounting principle.

Derivatives and Hedging Activities
-----------------------------------
Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standard  (SFAS) No. 133,  "Accounting  for Derivative  Instruments  and Hedging
Activities,"  as amended,  which  requires that all  derivative  instruments  be
reported on the balance sheet at fair value.  The cumulative  effect of adopting
SFAS 133 as of January 1, 2001,  was not material to the Company's  consolidated
financial statements.

The Company is subject to market risks, such as changes in 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 has
established clear policies,  procedures and internal controls  governing the use
of  derivatives  and  does  not  use  them  for  trading,  investment  or  other
speculative purposes.

The Company uses derivative  contracts to efficiently  structure its debt in the
desired  currencies  and  mix of  fixed  to  floating  interest  rates.  Forward
contracts  effectively  convert U.S.  dollar  commercial  paper  borrowings into
non-U.S.  dollar  obligations,  primarily in currencies with low interest rates.
These forward contracts,  along with certain direct non-U.S.  dollar borrowings,
are  designated as hedges of the currency  changes on the Company's  foreign net
investments.  Currency  effects of the net investment  hedges are reflected as a
component of foreign  currency  translation  adjustments  in  accumulated  other
comprehensive  income and produced a $14 million aftertax loss and a $47 million
aftertax  gain for the  quarter  and  nine  months  ended  September  30,  2001,
respectively. Interest effects of these hedges are reported in interest expense.

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 to
floating  rate debt by  entering  into  interest  rate  swaps and  forward  rate
agreements.  The  interest  rate  swaps are  designated  as fair  value  hedges,
effectively converting certain fixed rate debt into variable rate debt. The fair
values of both the swaps and the debt are recorded as equal and offsetting gains
and losses in interest expense. As these hedges are 100% effective,  there is no
current impact on earnings due to hedge ineffectiveness.

The forward rate  agreements  are  designated  as cash flow hedges,  effectively
fixing certain variable interest payments. Aftertax net losses of $3 million and
$7  million  ($5  million  and $11  million  pretax),  were  deferred  in  other
comprehensive  income  during the quarter and nine months  ended  September  30,
2001,  respectively.  All deferred  amounts will be  reclassified  into interest
expense over the next 15 months in the period  during which the hedged  variable
interest payments are recognized.  Ineffective amounts had no impact on earnings
for the quarter and nine months ended September 30, 2001.

<PAGE>
                                     PAGE 8
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The  Company  also  enters  into  commodity  swaps to fix the  price of  certain
forecasted  purchases of raw material used in the manufacturing  process.  These
swaps are designated as cash flow hedges. Changes in fair values are included in
other comprehensive  income to the extent effective,  and reclassified into cost
of sales in the period  during which the hedged  transaction  affects  earnings.
Total aftertax losses deferred in other comprehensive  income during the quarter
and nine months ended September 30, 2001, including the cumulative effect change
in accounting principle upon adoption of SFAS 133, was $1 million and $5 million
($2 million and $8 million pretax),  respectively.  All deferred amounts will be
reclassified into earnings over the next 18 months.  Ineffective  amounts had no
impact on earnings for the quarter and nine months ended September 30, 2001.

Most  of the  Company's  transactional  exchange  exposure  is  managed  through
centralized  cash  management.  The Company  hedges net  residual  transactional
exchange exposures, principally intercompany balances, through forward contracts
that are recorded at fair value on the balance sheet.  Changes in fair value are
recorded in nonoperating  charges and offset gains and losses resulting from the
underlying exposures.

The Company also uses derivatives to hedge equity-linked  employee compensation.
The Company fixes the cost of certain employee  compensation  expenses linked to
its stock  price by  entering  into  equity  swap and  option  contracts.  These
contracts are recorded at fair value on the balance sheet. Changes in fair value
are  recorded in profit from  operations  and offset the changes in the value of
the underlying liabilities.

Advertising
-----------
The  advertising  expense  detailed  below is included  in selling,  general and
administrative expenses.  Third-quarter and nine-month 2000 advertising has been
reduced by $13 million and $56 million, respectively,  compared with the figures
reported  last year, as a result of EITF 00-14,  as explained in the  Accounting
Pronouncements note.
<TABLE>
<CAPTION>
                              Three Months Ended      Nine Months Ended
                                 September 30            September 30
                              ------------------      ------------------
                                2001       2000         2001       2000
                               ------     ------       ------     ------
<S>                          <C>       <C>           <C>       <C>

Net Sales ................      $2,362    $2,308      $6,243     $6,419
Advertising ..............         160       146         422        360
   % of Net Sales ........         6.7%      6.3%        6.8%       5.6%
</TABLE>
<PAGE>
                                     PAGE 9
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Restructuring and Asset Impairment
----------------------------------
On December 18, 2000, the Company announced a restructuring program and impaired
certain  intangible  assets. In accordance with EITF 94-3, SFAS 121 and SAB 100,
the  Company  recorded  in the  fourth  quarter  of 2000 a charge  to  operating
expenses of $572 million ($430  million  after taxes,  or $.41 in net income per
common share, fully diluted).  The charge for the impaired intangible assets was
$212 million and was recorded in the fourth  quarter of 2000. The charge for the
restructuring  program was $360  million,  and  activity  under the program will
continue throughout 2001. The restructuring  program will significantly  improve
the  Company's  operating  efficiency,  streamline  the supply chain and further
decrease costs.  Specific program  activities include  consolidating  management
functions; reducing factory locations, in part through outsourcing production of
low-volume  noncore  products;  streamlining  the  supply  chain  via  warehouse
consolidation  and other  actions;  and downsizing  and  centralizing  corporate
functions.  The program  will result in the  closure of eight  factories  and 13
distribution centers,  affecting all business segments, and in the net reduction
of approximately 2,700 employees across all business functions,  operating units
and geographies.  The reduction will consist of 1,430 variable manufacturing and
distribution  employees and 1,270  executive,  professional  and  administrative
staff. All employee reductions are planned for 2001, and pretax cash outlays are
estimated  at  approximately  $235  million.  The program was  announced  to all
employees on December 18, 2000, via the Company's  internal website and bulletin
boards.  The severance  programs  being used follow the Company's  long-standing
severance formulas and vary on a  country-by-country  basis,  depending on local
requirements.

The restructuring program included a write-down of approximately $125 million to
the carrying  amount of factories,  as well as the  write-off of  manufacturing,
distribution and office equipment  assets.  Until the affected  facilities cease
operations,  revenue-generating activities will continue. Thus, these assets are
considered  assets to be held and used under SFAS 121.  Asset  disposals will be
completed during 2001. Buildings that are owned will be sold, and equipment will
be disposed of through sale or abandonment. The value of the impaired assets was
determined  based on discounted  cash flow analyses for the operating  period up
until closure and included an estimate of residual value.

Details of the restructuring  program charge follow.  The other benefits portion
of   employee-related   expenses,   shown  below,   includes  fringe   benefits,
outplacement fees and special termination benefits related to pensions.
<TABLE>
<CAPTION>
                                                                   Plan
                                         Activity    Current     Inception
                             Initial      Through    Quarter      Through
(Millions)                  Provision   Dec.31,2000  Activity   Sept.30,2001   Balance
---------------------       ---------   -----------  --------   ------------   -------
<S>                        <C>        <C>          <C>        <C>           <C>
Employee-related expenses
  Severance payments          $146        $  -         $ 34         $ 49        $ 97
  Other benefits                67           -            7            9          58
Asset impairments
  Prop., plant, & equip.       120         120            -          120           -
Contractual obligations
  and other                     27           -            -            -          27
                              ----        ----         ----         ----        ----
Total                         $360        $120         $ 41         $178        $182
                              ====        ====         ====         ====        ====
</TABLE>
<PAGE>
                                     PAGE 10
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Details of the facility closures and employee reductions follow.
<TABLE>
<CAPTION>
                                                                  Plan
                                              Current           Inception
                                Initial       Quarter            Through
                                 Plan        Activity       September 30, 2001
                                -------      --------       ------------------
<S>                          <C>           <C>            <C>
  Facility Closures
      Factories                      8             2                   2

      Distribution Centers          13             7                   7

  Employee reductions            2,700           769               1,288

</TABLE>
Share Repurchase Program
------------------------
The Company has a share repurchase program that authorizes the purchase of up to
125 million shares in the open market or in privately  negotiated  transactions,
depending on market  conditions  and other  factors.  From the  inception of the
program through December 31, 2000, the Company  repurchased 94 million shares in
the open market for $4,084  million.  There were no repurchases in the first six
months of 2001.  In the third  quarter  of 2001,  the  Company  repurchased  400
thousand shares for $12 million.

In 2001,  the Company  continued to sell equity put options as an enhancement to
the  repurchase  program  and  collected  $3 million  and $8 million in premiums
during the three months and nine months ended September 30, 2001,  respectively.
These options  provide the Company with an additional  opportunity to supplement
open-market  purchases of its common stock if the options  expire "in the money"
(the option strike price is greater than the closing  price for Gillette  common
stock on the expiration  date). In addition,  the premiums received are a source
of funding for share purchases. The options are exercisable only on the last day
of their term. The Company, at its discretion, may elect to settle by paying net
cash or by purchasing the shares.

The put option prices were based on the market value of the  Company's  stock at
the date of issuance.  The redemption  value of the outstanding  options,  which
represents the options'  price  multiplied by the number of shares under option,
is presented  in the  accompanying  consolidated  balance  sheet as  "Contingent
Redemption  Value of  Common  Stock Put  Options."  All of the  outstanding  put
options mature in the fourth quarter.

At September 30, 2001, the  outstanding put options had strike prices which were
greater than the closing price for Gillette  common stock on September 30, 2001.
Those  options  were  therefore  "in the  money."  Although  the options are not
excercisable until a future date, the "in the money" obligation at September 30,
2001, was $9 million.
 <PAGE>

                                     PAGE 11
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Financial Information by Business Segment
-----------------------------------------
Net sales,  profit from operations and assets for each of the Company's business
segments  are set forth  below.  There are no  material  intersegment  revenues.
Effective  January 1, 2001, a new "Oral Care"  segment has replaced the previous
"Oral-B  Products"  segment.  Oral Care  contains all manual oral care  products
previously  included  under Oral-B  Products,  plus Braun Oral-B power oral care
products  previously  included in the  "Braun"  segment.  The new Braun  segment
contains all remaining Braun products:  male and female hair removal;  household
and hair  care  appliances;  and  personal  diagnostic  devices,  including  ear
thermometers and blood pressure monitors.  Prior-year figures have been adjusted
to reflect the change.
<TABLE>
<CAPTION>
                                                     Net Sales
                                    --------------------------------------------
                                     Three Months Ended      Nine Months Ended
                                        September 30            September 30
                                    -------------------      -------------------
(Millions)                            2001        2000         2001        2000
                                     ------      ------       ------      ------
<S>                               <C>         <C>
Blades & Razors                      $  915      $  855       $2,498      $2,452
Toiletries                              237         251          643         712
Duracell                                622         613        1,538       1,659
Oral Care                               328         306          879         835
Braun                                   260         283          685         761
                                     ------      ------       ------      ------
   Total                             $2,362      $2,308       $6,243      $6,419
                                     ======      ======       ======      ======

<CAPTION>
                                               Profit from Operations
                                    --------------------------------------------
                                    Three Months Ended        Nine Months Ended
                                       September 30              September 30
                                    -------------------      -------------------
(Millions)                             2001        2000         2001        2000
                                     ------      ------       ------      ------
<S>                               <C>         <C>
Blades & Razors                      $  332      $  343       $  835      $  927
Toiletries                               28          30           48          89
Duracell                                 56         124          134         296
Oral Care                                68          65          163         164
Braun                                    25          26           65          71
                                     ------      ------       ------      ------
Subtotal Reportable Segments            509         588        1,245       1,547
All Other                               (36)        (13)         (78)        (31)
                                     ------      ------       ------      ------
   Total                             $  473      $  575       $1,167      $1,516
                                     ======      ======       ======      ======
</TABLE>
<PAGE>
<TABLE>

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



<CAPTION>
                                                       Identifiable Assets
                                 ---------------------------------------------------------------
                                 Sept 30,   June 30,   Dec 31,    Sept 30,   June 30,   Dec 31,
(Millions)                         2001       2001       2000       2000       2000       1999
                                 -------    -------    -------    -------    -------    -------
<S>                             <C>        <C>        <C>          <C>     <C>          <C>
Blades & Razors                 $ 3,120    $ 3,182    $ 3,740    $ 3,563    $ 3,596    $ 3,532

Toiletries                          520        530        538        639        647        696

Duracell                          3,102      2,988      3,304      3,145      3,212      3,310

Oral Care                           948        938        901        896        927      1,075

Braun                             1,032      1,010      1,078      1,239      1,248      1,190
                                -------    --------   -------    -------    -------     ------
Subtotal Reportable Segments      8,722      8,648      9,561      9,482      9,630      9,803

All Other                           927        943        652        806        688        809

Discontinued Operations              28         44        189        781        843      1,174
                                -------    -------    -------    -------    -------    -------

  Total                         $ 9,677    $ 9,635    $10,402    $11,069    $11,161    $11,786
                                =======    =======    =======    =======    =======    =======
</TABLE>

<PAGE>
<TABLE>

                                     PAGE 13
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

        COMPUTATION OF INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE
                      (Millions, except per share amounts)
                                   (Unaudited)

<CAPTION>

                                             Three Months Ended        Nine Months Ended
                                                September 30              September 30
                                             ------------------       ------------------
                                                2001      2000           2001      2000
                                                ----      ----           ----      ----
<S>                                           <C>       <C>            <C>       <C>
Income from Continuing Operations.......      $  296    $  350         $  710    $  906
Less:  Preferred stock dividends .......           -         -              -         1
                                              ------    ------         ------    ------
Income from Continuing Operations, basic      $  296    $  350         $  710    $  905
Effect of dilutive securities:
    Convertible preferred stock ........           -         -              -         2
                                              ------    ------         ------    ------
Income from Continuing Operations,
    assuming full dilution .............      $  296    $  350         $  710    $  907
                                              ======    ======         ======    ======


Common shares, basic ...................       1,055     1,053          1,055     1,054
Effect of dilutive securities:
    Convertible preferred stock ........           -         -              -         4
    Stock options ......................           3         5              3         6
                                              ------    ------         ------    ------
Common shares, assuming full dilution          1,058     1,058          1,058     1,064
                                              ======    ======         ======    ======

Income from Continuing Operations
    per Common Share:

  Basic ................................      $  .28    $  .33         $  .67    $  .86
                                              ======    ======         ======    ======

  Assuming full dilution ...............      $  .28    $  .33         $  .67    $  .85
                                              ======    ======         ======    ======

At September 30, 2001 and 2000, 47 million and 45 million shares of common stock
issuable under stock options, respectively, were not included in the calculation
of fully  diluted  earnings  per share  because they were "out of the money" and
their effects would have been antidilutive.

</TABLE>
<PAGE>
                                     PAGE 14
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Results of Operations
---------------------
Results  for any  interim  period,  such as  those  described  in the  following
analysis, are not necessarily indicative of results for the entire year.

Third Quarter 2001 versus 2000
------------------------------
Total  Company:  Sales for the quarter  ended  September  30,  2001,  were $2.36
billion,  an  increase  of 2%  versus  the  same  quarter  of  the  prior  year.
Unfavorable  foreign  exchange,  most notably in Latin America and Asia-Pacific,
reduced  net sales by 3%.  Excluding  the  adverse  effects of  exchange,  sales
increased 5%, attributable to favorable volume/mix of 4% and pricing of 1%.

Blades and Razors:  Sales of blades and razors  increased 7%, while profits were
down 4%,  compared  with the third  quarter of last year.  Without  the  adverse
effect of  exchange,  sales grew 10%.  Strong  shipments of the new Gillette for
Women Venus  shaving  system and the Mach3 system  offset the lower volumes that
resulted  from the program to reduce trade  inventory  of blades.  Significantly
increased   marketing   support   and  higher   administrative   costs   reduced
third-quarter profits.

Toiletries:  Toiletries  sales were 5% below those of 2000, due to a combination
of adverse  exchange,  which  accounted for 2%, weakness in U.S. shave preps and
poor  performance in female  deodorants in the U.K. and U.S.  Toiletries  profit
from operations declined 6%, due to the lower volumes.

Duracell:  Sales of Duracell for the quarter increased 1% versus those of a year
ago.  Excluding the effects of exchange,  sales were 3% higher than in the prior
year. The sales gain was largely  attributable to the strong  performance of the
new CopperTop  battery,  which replaced the former Copper & Black design and was
introduced  in the U.S.  in June.  Increased  marketing  investment  and  higher
overhead costs resulted in profit from operations 55% below that of a year ago.

Oral Care:  Effective  January 1, 2001,  the Oral Care and Braun  segments  were
redefined,  as described in the Business Segment Note.  Prior-year  figures have
been reclassified to reflect the change.  Oral Care sales were 7% above those of
2000,  but would have been 10% above last  year's  level  without  the impact of
unfavorable exchange, due to strong gains in power oral care products, including
the rollout of the new battery-powered toothbrush in the U.S. and Europe. Profit
from operations was 6% above that of a year ago, following sales.

Braun:  Sales of Braun  were 8% below  those  of the  previous  year.  Excluding
exchange,  Braun  sales were 5% below  those of the prior  year.  Other  factors
affecting  sales were lower sales in noncore  categories,  as well as  unmatched
pipeline  sales  for  the  Braun  Syncro   electric  shaver  in  the  U.S.  from
third-quarter 2000. Lower sales promotion and overhead expense spending resulted
in a slight  profit  margin  improvement,  from 9.3% to 9.8%,  and  profit  from
operations 3% lower than the prior year.
<PAGE>
                                     PAGE 15
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Nine Months 2001 versus 2000
------------------------------
Total Company:  Sales for the nine months ended  September 30, 2001,  were $6.24
billion, a decline of 3% versus the same period last year.  Unfavorable  foreign
exchange,  most  notably in Europe and  Asia-Pacific,  reduced  net sales by 4%.
Excluding the adverse effect of exchange,  sales  increased 1%,  attributable to
favorable pricing.  Volume/mix had no impact on nine-month results,  despite the
ongoing program to destock trade inventory.

Blades and Razors:  Sales of blades and razors  increased 2%, while profits were
down 10%, compared with the first nine months of last year.  Without the adverse
effect of  exchange,  sales grew 6%.  Strong  shipments  of the new Gillette for
Women Venus  shaving  system and the Mach3 system  offset the lower volumes that
resulted from the program to reduce trade inventories.  Significantly  increased
marketing support and higher administrative costs reduced profits.

Toiletries:  Toiletries  sales were 10% below those of 2000, but would have been
4% below last year's level  without the effect of  unfavorable  exchange and the
divestiture of White Rain hair care  products.  Sales declines were primarily in
shave preps.  Toiletries  profit from operations  declined 46%, due to the lower
volumes and higher advertising.

Duracell:  Sales of Duracell  for the nine months  decreased  7% from those of a
year ago. Excluding the adverse effect of exchange,  sales were 5% lower than in
the prior year.  Sales were curbed by corrections to trade inventory  levels and
some share declines.  The revenue decline also reflected a change in mix, as the
proportion  of CopperTop  battery  sales  increased  versus those of the premium
Duracell Ultra.  The new CopperTop  battery,  which replaces the former Copper &
Black  design,  was  introduced in the U.S. in June,  backed by a  comprehensive
advertising and promotional  campaign.  The lower sales, together with increased
marketing  investment,  resulted in profit from  operations  55% below that of a
year ago.

Oral Care:  Oral Care sales were 5% above those of 2000, but would have been 10%
above last year's level without the impact of unfavorable exchange. Strong gains
in power oral care products  were somewhat  offset by lower sales of manual oral
care products. The new battery-powered toothbrush has started its rollout in the
U.S. and Europe,  and initial trade and consumer  response has been encouraging.
Profit from operations was in line with that of the prior year, due to increased
advertising support and higher overhead expenses.

Braun: Sales of Braun were 10% below those of the previous year. The unfavorable
impact of exchange  was  significant:  excluding  exchange,  Braun sales were 5%
below  those of the prior year.  These  results  reflected  the  unmatched  2000
pipeline  shipments of the Braun Syncro system,  which was launched last year in
key  European   geographies,   as  well  as  reduced  product  offerings  within
non-shaving categories. The lower sales resulted in an 8% decline in profit from
operations versus the prior year.
<PAGE>
                                     PAGE 16
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS



Costs and Expenses, Third Quarter 2001 versus 2000
--------------------------------------------------
Gross profit for the quarter ended September 30, 2001, was $1.44 billion,  level
with 2000. Gross profit as a percentage of sales was 61.0%,  compared with 62.3%
in 2000.  Blades and razors  showed  lower gross  profit  margin due to a higher
percentage  of lower  margin  razor  sales  versus  blades  as a  result  of the
successful  launch of Venus and Cool Blue Mach3.  Duracell  gross profit  margin
declined, due to a higher proportion of lower margin CopperTop battery sales.

Selling,  general and administrative expenses increased by $105 million, or 12%,
reflecting higher  administrative and marketing expenses.  Advertising and sales
promotion   expenses  each  grew  9%  versus  last  year.  Other  marketing  and
administrative expenses were 15% above those of the prior year.

Profit from  operations was $473 million,  down 18%,  versus $575 million a year
earlier.

Net  interest  expense  was  lower,  due to lower  interest  rates  and  reduced
borrowing,  and net exchange  losses were  higher.  The  effective  tax rate was
lower.

Income from continuing operations of $296 million was 16% below the $350 million
in 2000. Diluted net income per common share from continuing  operations of $.28
was 15% below the $.33 of 2000.


Costs and Expenses, Nine Months 2001 versus 2000
--------------------------------------------------
Gross profit for the nine months ended September 30, 2001, was $3.93 billion,  a
decrease of 2% versus 2000.  Gross  profit as a  percentage  of sales was 62.9%,
compared with 62.5% in 2000.  Braun and Oral Care showed  improved  gross profit
margin,  reflecting  manufacturing   efficiencies  and  favorable  product  mix.
Duracell gross profit margin  declined,  due to lower  production  volumes and a
higher proportion of lower margin CopperTop battery sales.

Selling,  general and administrative expenses increased by $263 million, or 11%,
reflecting higher  administrative and marketing expenses.  Combined  advertising
and  sales  promotion  expenses  grew  8%,  with  advertising  up 17% and  sales
promotion up 3% versus last year.  Other  marketing  and  administrative
expenses were 13% above those of the prior year.

Profit from operations was $1.17 billion,  down 23%, versus $1.52 billion a year
earlier.

Net  interest  expense  was  lower,  due to lower  interest  rates  and  reduced
borrowing,  and net exchange losses were higher, due to the Turkish devaluation.
The effective tax rate was lower.

Income from continuing operations of $710 million was 22% below the $906 million
in 2000. Diluted net income per common share from continuing  operations of $.67
was 21% below the $.85 of 2000.
 <PAGE>
                                     PAGE 17
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Restructuring and Asset Impairments
-----------------------------------
On December 18, 2000, the Company announced a restructuring program and impaired
certain  intangible  assets.  This  resulted  in  a  fourth-quarter   charge  to
operations of $572 million ($430 million after taxes,  or $.41 in net income per
common share, fully diluted).  The charge for the impaired intangible assets was
$212 million and was recorded in the fourth  quarter of 2000. The charge for the
restructuring  program was $360  million,  and  activity  under the program will
continue throughout 2001.

The worldwide  restructuring of operations is expected to significantly  improve
the  Company's  operating  efficiency,  streamline  the supply chain and further
decrease  costs.  The program will result in a net  reduction  of  approximately
2,700 employees across all business functions, operating units and geographies.

Pretax cash outlays are estimated at approximately $235 million.  Cash severance
payments may extend beyond 2001, due to the severance  payment  deferral options
available to terminated employees.  When the program is fully implemented by the
end of 2001, the annual pretax savings will approximate $125 million.

Specific program activities include consolidating management functions; reducing
factory locations,  in part through outsourcing production of low-volume noncore
products;  streamlining the supply chain via warehouse  consolidation  and other
actions; and downsizing and centralizing corporate functions. Certain aspects of
the program are being reassessed.  This analysis will be completed in the fourth
quarter  and  may  result  in  changes  to  the  plan.  The  net  impact  on the
restructuring program is anticipated to be immaterial

The amount of fixed  asset  impairment  is  approximately  $125  million for the
restructuring and closure of factories and distribution  centers, as well as the
write-off of manufacturing,  distribution and office equipment assets. Until the
affected  facilities  cease  operations,   revenue-generating   activities  will
continue.  Buildings  that are owned will be sold,  and equipment will be either
sold or disposed of. The extent of the impairment  was based on discounted  cash
flow analyses for the operating period up until closure and included an estimate
of  residual  value.  Through  October  31,  2001,  three  factories  and  eight
distribution centers have closed.

Additional  details  are  provided  in  the  Notes  to  Consolidated   Financial
Statements.

<PAGE>

                                     PAGE 18
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Financial Condition
-------------------
Net cash provided by operating  activities  for the nine months ended  September
30, 2001,  amounted to $1.18  billion,  compared  with $1.04 billion in the same
period last year.  Accounts  receivable were a significant  source of cash and a
greater source than in 2000, due to lower days sales outstanding,  compared with
the prior year.  Inventories were higher than year-end 2000, as expected,  given
the  seasonality  of the Company's  product lines,  but were 6% below  September
2000.  Movement in accounts payable and accrued  liabilities  compared favorably
with the same nine month period of the prior year.

Net debt (loans  payable,  current portion of long-term debt and long-term debt,
net of associated  swaps, less cash and cash equivalents) at September 30, 2001,
amounted to $3.92  billion,  compared with $4.45 billion at year-end  2000.  Net
debt was  decreased by the net cash  provided  from  operating  activities.  The
Company's  current  ratio at September 30, 2001,  was .90,  compared with .86 at
December 31, 2000, reflecting the decreased debt.

The change in foreign  currency  translation  adjustment  through  September 30,
2001, was a loss of $58 million, with Brazil being the largest component. Losses
for the nine months ended September 30, 2000, were $185 million, with the United
Kingdom accounting for $106 million of the loss.

On September 26, 2001, the Company issued a $200 million U.S.  denominated 5.25%
Euro note due December 2006. The Company subsequently repurchased $75 million of
the Euro note on October 12, 2001 and on October 18, 2001 reissued a $75 million
floating  rate Euro  note due  January  2003.  The  repurchase  had no impact on
earnings.  The proceeds from the debt issuances  were used to reduce  commercial
paper borrowing.

On October 16, 2001, the Company entered into a $1.65 billion, 364-day revolving
bank credit  agreement  that  replaces  the $1.4 billion  revolving  bank credit
agreement  that expired in October  2001,  and the $550 million  revolving  bank
credit agreement that was due to expire December 2001.
<PAGE>

                                     PAGE 19
                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings

The  Company is  subject,  from time to time,  to legal  proceedings  and claims
arising  out of its  business  that  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 counsel,  considers that any liability from all of
these legal  proceedings and claims would not materially affect the consolidated
financial position, results of operations or liquidity of the Company.

Item 5. Other Information

Cautionary Statement
--------------------
Certain  statements  that the  Company  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, the Company's 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 the Company's  expectations  and
projections.  Investors  are  cautioned  not  to  place  undue  reliance  on any
forward-looking  statements.  The Company  assumes no  obligation  to update any
forward-looking  statements. The Company cautions 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  made by, or on behalf of, the  Company  include  the
following, some of which are described in greater detail below:

- the pattern of the  Company's  sales,  including  variations  in sales  volume
  within periods;
- the  acceptance by the  Company's  customers and consumers of new products and
  line extensions;
- the mix of products sold;
- the  Company's  ability  to  control  its  internal  costs and the cost of raw
  materials;
- the prices of the  Company's  products and the  response of the  Company,  its
  customers and competitors to changes in prices;
- technological   advances  by  the  Company  and/or  its competitors;
- new patents  granted to the Company  and/or its  competitors;
- changes in exchange rates in one or more of the Company's  geographic markets;
- the ability of  the Company to successfully harmonize  pricing in  Europe with
  the introduction of the Euro;
- changes in accounting policies;
- the impact of general  economic  conditions  in the United States and in other
  countries in which the Company currently does business; or
- the Company's ability to limit trade inventory to reasonable levels consistent
  with consumer consumption.

Competitive Environment
-----------------------
The Company  experiences  intense  competition for sales of its products in most
markets.  The Company's  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 its markets, the Company has major competitors, some of
which are larger and more diversified than the Company.  Aggressive  competition
within the Company's markets to preserve, gain or regain market share can affect
the Company's results in any given period.
<PAGE>
                                     PAGE 20
                           PART II. OTHER INFORMATION


Changes in Technology and New Product Introductions
---------------------------------------------------
In most product  categories in which the Company competes,  there are continuous
technological  changes  and  frequent  introductions  of new  products  and line
extensions.  The Company's ability to successfully introduce new products and/or
extend  lines of existing  products  will depend on,  among  other  things,  the
Company's ability to identify  changing  consumer tastes and needs,  develop new
technology,  differentiate  its  products  and  gain  market  acceptance  of new
products.  The Company cannot be certain that it will successfully achieve these
goals.  In  addition,  the  introduction  of new  technology  by  the  Company's
competitors could substantially impact the Company's competitive position.  With
respect to primary  alkaline  batteries  specifically,  category growth could be
adversely affected by the following 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;  and
- the development of new battery technologies.

Intellectual Property
---------------------
The Company  relies upon patent,  copyright,  trademark and trade secret laws in
the  United  States  and in  other  countries  to  establish  and  maintain  its
proprietary  rights  in  technology,  products  and the  Company's  brands.  The
Company's   intellectual   property  rights,   however,   could  be  challenged,
invalidated  or  circumvented.  The Company  does not believe  that its products
infringe the intellectual  property rights of others,  but such claims,  if they
are established,  can result in material  liabilities or loss of business.

Cost Savings Strategy
---------------------
The Company has implemented 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.

Sales and Operations  Outside of the United  States
---------------------------------------------------
Sales  outside of the  United  States  represent  a  substantial  portion of the
Company's  business.  In  addition,  the Company  has 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;
- the overlap of different tax structures;
- unexpected changes in regulatory  requirements  or tax laws;  or
- longer  payment  cycles in certain  countries.

The Company also is exposed to foreign currency exchange rate risk to its sales,
profits,  and assets and  liabilities  denominated in currencies  other than the
U.S.  dollar.  Although the Company uses  instruments  to hedge certain  foreign
currency risks (through foreign currency forward,  swap and option contracts and
non-U.S.  dollar  denominated  financings),  there can be no assurance  that the
Company will be fully protected against foreign currency fluctuations.

<PAGE>
                                     PAGE 21
                           PART II. OTHER INFORMATION


Retail Environment
------------------
With the  growing  trend  towards  retail  trade  consolidation,  especially  in
developed  markets  such  as the  United  States  and  Europe,  the  Company  is
increasingly dependent upon key retailers whose bargaining strength and share of
the  Company's  business is growing.  Accordingly,  the  Company  faces  greater
pressure from retail trade customers to provide more favorable trade terms.  The
Company  can be  negatively  affected  by changes in the  policies of its retail
trade customers,  such as inventory  destocking,  limitations on access to shelf
space and other conditions.  Many of the Company's  customers,  particularly the
Company's  high-volume  retail  trade  customers,  have  engaged in  accelerated
efforts to reduce inventory levels and change inventory delivery systems.  While
the Company expects the level of trade inventory of its products to decline over
time,  the speed and  magnitude of such  reductions  and/or the inability of the
Company to develop  satisfactory  inventory  delivery  systems  could  adversely
affect operating results in any reporting period.

Effect of Terrorist Acts on our Business
----------------------------------------
The terrorist acts of September 11, 2001, the military response,  the actual and
perceived  threat of further  terrorist  acts and future  possible  military and
political  actions have created an  atmosphere  of economic  uncertainty  in the
United  States and in foreign  markets  and our  results  may be impacted by the
adverse  macroeconomic  effects of those events,  especially  if the  conditions
persist.  Further,  direct  attacks or threats on or against our  personnel  and
facilities around the world, our suppliers,  customers and other elements of our
supply chain and the  infrastructures  in which our facilities are located could
significantly  disrupt our  business  and its  prospects,  at least in the short
term. While we have taken all prudent precautions  against foreseeable  threats,
recent events have proven that the object of terrorist  activities is inherently
uncertain.  Any of these  occurrences may have a material  adverse effect on our
financial position, cash flow or profit from operations in any reporting period.
<PAGE>

                                     PAGE 22
                           PART II. OTHER INFORMATION



Item 6(a)  Exhibits

Exhibit 3

(a) The Bylaws of The  Gillette  Company,  as amended  October 18,  2001,  filed
    herewith.

Exhibit 10   Material Contracts

(a) Employment  Agreement,  dated January 19, 2001, between The Gillette Company
    and James M. Kilts, as amended, filed herewith.

(b) Termination  Settlement  Agreement  and General  Release,  dated  August 27,
    2001, between The Gillette Company and Jorgen Wedel, filed herewith.



Item 6(b)  Reports on Form 8-K

The Company  filed a current  report on Form 8K dated July 23, 2001,  containing
three exhibits: the Underwriting Agreement,  the Form of Terms Agreement and the
Company's announcement, related to the resale to the public of 40,895,000 shares
of Gillette common stock owned by  partnerships  associated with Kohlberg Kravis
Roberts & Co., L.P.

<PAGE>

                                     PAGE 23
                                    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/ Claudio E. Ruben
Claudio E. Ruben
Vice President, Controller
and Principal Accounting Officer

November 6, 2001