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 June 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 July 26, 2004 . . . . . . . . . . . . . . . . . 1,001,845,362
<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        Six Months Ended
                                                             June 30                 June 30
                                                       ------------------       ------------------
                                                         2004       2003         2004        2003
                                                         ----       ----         ----        ----
<S>                                                  <C>       <C>            <C>       <C>
Net Sales ..........................................   $ 2,443    $ 2,254      $ 4,678     $  4,225
Cost of Sales ......................................       968        915        1,846        1,733
                                                       -------    -------      -------      -------
  Gross Profit .....................................     1,475      1,339        2,832        2,492

Selling, General and Administrative Expenses .......       865        834        1,666        1,607
                                                       -------    -------      -------      -------
  Profit from Operations ...........................       610        505        1,166          885

Nonoperating Charges (Income):
  Interest income ..................................        (3)        (3)          (6)          (6)
  Interest expense .................................        11         16           23           30
  Exchange .........................................        (2)         3           18            5
  Other charges - net ..............................         3          6            -           (3)
                                                       -------    -------      -------      -------
                                                             9         22           35           26
                                                       -------    -------      -------      -------
Income before Income Taxes .........................       601        483        1,131          859

Income Taxes .......................................       175        145          329          258
                                                       -------    -------      -------      -------
  Net Income .......................................   $   426    $   338      $   802      $   601
                                                       =======    =======      =======      =======

Net Income per Common Share:
  Basic ............................................   $   .43    $   .33      $   .80      $   .58
                                                       =======    =======      =======      =======
  Assuming full dilution ...........................   $   .42    $   .33      $   .79      $   .58
                                                       =======    =======      =======      =======

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

Weighted average number of common shares outstanding
  Basic ............................................     1,003      1,021        1,004        1,029
  Assuming full dilution ...........................     1,012      1,023        1,012        1,031
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
                                     PAGE 2
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                                     ASSETS
                                   (Millions)
<CAPTION>
                                                             June 30,     December  31,    June 30,
                                                               2004          2003            2003
                                                           ------------   ------------   ------------
                                                           (Unaudited)                   (Unaudited)
<S>                                                        <C>          <C>            <C>
Current Assets:
  Cash and cash equivalents ..............................   $  644       $   681        $   614
  Trade receivables, less allowances, June 2004, $51;
    December 2003, $53; June 2003, $55  ..................      884           920          1,135
  Other receivables ......................................      332           351            395
  Inventories
     Raw materials and supplies ..........................      122           114            116
     Work in process .....................................      250           196            221
     Finished goods ......................................    1,035           784            822
                                                            -------       -------        -------
       Total Inventories .................................    1,407         1,094          1,159
                                                            -------       -------        -------

  Deferred income taxes ..................................      302           322            314
  Other current assets ...................................      190           282            292
                                                            -------       -------        -------
       Total Current Assets ..............................    3,759         3,650          3,909
                                                            -------       -------        -------

Property, Plant and Equipment, at cost ...................    7,162         7,099          6,696
Less accumulated depreciation ............................   (3,638)       (3,455)        (3,185)
                                                            -------       -------        -------
       Net Property, Plant and Equipment .................    3,524         3,644          3,511
                                                            -------       -------        -------

Goodwill .................................................    1,024         1,023            975
Intangible Assets, less accumulated amortization .........      570           494            390
Other Assets .............................................    1,082         1,144          1,096
                                                            -------       -------        -------

                                                            $ 9,959       $ 9,955        $ 9,881
                                                            =======       =======        =======
</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)
<TABLE>
<CAPTION>
                                                         June 30,     December  31,    June 30,
                                                           2004          2003           2003
                                                       ------------   ------------   ------------
                                                       (Unaudited)                   (Unaudited)
<S>                                                   <C>            <C>           <C>
Current Liabilities:
  Loans payable ....................................   $    345       $    117       $    364
  Current portion of long-term debt ................        717            742            584
  Accounts payable .................................        598            574            549
  Accrued liabilities ..............................      1,705          1,769          1,646
  Dividends payable ................................        163            163            166
  Income taxes .....................................        271            293            232
                                                       --------       --------       --------
     Total Current Liabilities .....................      3,799          3,658          3,541
                                                       --------       --------       --------

Long-Term Debt .....................................      2,050          2,453          2,740
Deferred Income Taxes ..............................        652            626            625
Other Long-Term Liabilities ........................        932            929            887
Minority Interest ..................................         69             65             42

Stockholders' Equity:
  Common stock, par value $1.00 per share:
    Authorized 2,320 shares
    Issued: June 2004, 1,378 shares;
            Dec. 2003, 1,374 shares;
            June 2003, 1,372 shares ................      1,378          1,374          1,372
  Additional paid-in capital .......................      1,375          1,273          1,233
  Earnings reinvested in the business ..............      7,809          7,333          6,877
  Accumulated other comprehensive loss .............     (1,082)        (1,088)        (1,257)
  Treasury stock, at cost: June 2004, 376 shares;
    Dec. 2003, 367 shares; and June 2003, 352 shares     (7,021)        (6,665)        (6,179)
  Deferred stock-based compensation ................         (2)            (3)             -
                                                       --------       --------       --------
          Total Stockholders' Equity ...............      2,457          2,224          2,046
                                                       --------       --------       --------
                                                       $  9,959       $  9,955       $  9,881
                                                       ========       ========       ========
</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>
                                                             Six Months Ended
                                                                 June 30
                                                            ------------------
                                                            2004         2003
                                                            ----         ----
<S>                                                        <C>         <C>
Operating Activities
    Net income .......................................     $ 802        $ 601
    Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization ..................       299          278
      Deferred income taxes ..........................        32           39
      Other ..........................................        14           11
      Changes in assets and  liabilities,  excluding
      effects of acquisitions and divestitures:
        Trade and other accounts receivable ..........        38           59
        Inventories ..................................      (330)        (188)
        Accounts payable and accrued liabilities .....       (21)         227
        Other working capital items ..................        (3)         (68)
        Other noncurrent assets and liabilities ......        90           45
                                                           -----        -----
          Net cash provided by operating activities          921        1,004
                                                           -----        -----
Investing Activities

    Additions to property, plant and equipment .......      (228)        (132)
    Disposals of property, plant and equipment .......        30           23
    Acquisitions, net of cash acquired ...............      (115)           -
    Other ............................................         1            -
                                                           -----        -----
          Net cash used in investing activities ......      (312)        (109)
                                                           -----        -----
Financing Activities

    Purchase of treasury stock .......................      (355)        (786)
    Proceeds from exercise of stock option and
         purchase plans ..............................       100           37
    Proceeds from long-term debt .....................         -          684
    Repayment of long-term debt ......................      (389)        (382)
    Increase (Decrease) in loans payable .............       228         (311)
    Dividends paid ...................................      (327)        (335)
    Net settlements, debt-related derivative contracts       100            7
                                                           -----        -----
          Net cash used in financing activities ......      (643)      (1,086)
                                                           -----        -----
Effect of Exchange Rate Changes on Cash ..............        (3)           4
                                                           -----        -----
Decrease in Cash and Cash Equivalents ................       (37)        (187)
Cash and Cash Equivalents at Beginning of Period .....       681          801
                                                           -----        -----
Cash and Cash Equivalents at End of Period ...........     $ 644        $ 614
                                                           =====        =====
Supplemental disclosure of cash paid for:

    Interest .........................................     $  21        $  29
    Income taxes .....................................     $ 237        $ 212

</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    Six Months Ended
                                               June 30             June 30
                                         ------------------    ----------------
                                           2004        2003      2004      2003
                                           ----        ----      ----      ----
<S>                                       <C>         <C>       <C>       <C>
Net Income, as reported                   $ 426       $ 338     $ 802     $ 601
  Other Comprehensive Income,
    net of tax:
  Foreign Currency Translation               (4)        171         7       262
  Cash Flow Hedges                           (1)          2        (1)        4
                                          -----       -----     -----     -----
Comprehensive Income                      $ 421       $ 511     $ 808     $ 867
                                          =====       =====     =====     =====
</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)
                                    ======        ======       ======         ======

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)
                                    ======        ======       ======         ======

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 second quarter,  2003
and six months ended June 30, 2003, Consolidated Statement of Income:  increased
cost of sales and reduced gross profit and selling,  general and  administrative
expenses by $45 million and $85 million,  respectively; and reduced gross profit
as a  percentage  of net sales  from  61.4% to 59.4%  and from  61.0% to  59.0%,
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           Six Months
                                           Ended June 30,        Ended June 30,
(Millions, except per share amounts)      2004       2003       2004       2003
                                          ----       ----       ----       ----
<S>                                       <C>      <C>          <C>      <C>
Net income, as reported                   $  426    $  338     $  802    $  601
Add:  Compensation expense included in
      reported net income, net of
      related tax effects                     1          -          1         -
Less: Compensation expense for option
      awards determined by the fair-
      value-based method, net of
      related tax effects                    (24)      (25)       (48)      (50)
                                          ------    ------     ------    ------
Pro forma net income                      $  403    $  313     $  755    $  551
                                          ======    ======     ======    ======

Net income per common share
Basic
  As reported                             $  .43   $   .33     $  .80    $  .58
  Pro forma                                  .40       .31        .75       .54
Assuming full dilution
  As reported                             $  .42    $  .33     $  .79    $  .58
  Pro forma                                  .40       .31        .75       .54
</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 June 30,
2004, 25,949,635 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 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 new accounting  requirements are not
effective  until the third quarter 2004. In accordance  with FSP FAS 106-1,  the
Company elected to defer accounting for the economic effects of the new Medicare
Act.  Accordingly,  any  measures  of  the  accumulated  postretirement  benefit
obligation  or  net  periodic  postretirement  benefit  cost  in  the  financial
statements  or  accompanying  notes do not  reflect  the  effect of the  subsidy
because the Company is unable to conclude  whether the benefits  provided by the
plan are actuarially equivalent to Medicare Part D under the Act.
<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         June 30,      December 31,      June 30,
(Millions)                    2004            2003            2003
                          ------------    ------------    ------------
<S>                          <C>             <C>             <C>
Blades & Razors              $ 140          $  140          $  140
Duracell                       633             632             584
Oral Care                      191             191             172
Braun                           60              60              79
Personal Care                    -               -               -
                             -----           -----           -----
  Total                     $1,024          $1,023          $  975
                             =====           =====           =====
</TABLE>
The  difference  between the December 31, 2003 balance versus the June 30, 2003
balance is due to the  acquisition of a majority  interest in the Fujian Nanping
Nanfu  Battery  Co.,  Ltd.  in China in August  2003 and the  impact of  foreign
currency  translation.  The  values  for the Nanfu  intangibles,  as well as the
related  goodwill,  may be  adjusted  in future  periods as the  purchase  price
accounting for the acquisition is not yet final.
<PAGE>
                                     PAGE 9
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

<TABLE>
The detail of intangible assets follows.
<CAPTION>
                              Weighted
                              Average         June 30, 2004         December 31,2003           June 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      $  58        $  101        $  69        $ 101      $  61
  Trademarks                       9         16         10            16            9           14          6
  Endorsements                     -         61         61            61           61           61         61
  Other                           19         23          5            23            3           11          3
                                           ----       ----         -----        -----        -----      -----
Total                                     $ 183      $ 134        $  201        $ 142        $ 187      $ 131
                                           ----       ----         -----        -----        -----      -----
Unamortized Intangible Assets
  Trademarks                              $ 509                   $  423                     $ 319
  Pension                                    12                       12                        15
                                           ----                    -----                     -----
Total                                     $ 521                   $  435                     $ 334
                                           ----                    -----                     -----
Intangible Assets, net                    $ 570                   $  494                     $ 390
                                           ====                    =====                     =====

Aggregate Amortization Expense:
  For the three months ended
    June 30, 2004               $  5
    June 30, 2003               $  5
  For the six months ended:
    June 30, 2004               $ 11
    June 30, 2003               $ 11

Estimated Amortization Expense:
  For the Years ending
    December 31, 2004           $ 21
                 2005           $  8
                 2006           $  5
                 2007           $  4
                 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  childrens'
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 10
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Share Repurchase Program
------------------------
In the three and six months ended June 30, 2004,  the Company  repurchased  four
million and nine million shares for $167 million and $355 million, respectively.
As of June  30,  2004,  there  are 42  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             Six Months Ended
                                           June 30                      June 30
                                    ---------------------        ---------------------
(Millions)                            2004        2003             2004        2003
                                     ------      ------           ------      ------
<S>                                  <C>         <C>              <C>         <C>
Blades & Razors                      $1,099      $1,003           $2,136      $1,896
Duracell                                456         432              870         816
Oral Care                               358         316              673         611
Braun                                   294         284              553         499
Personal Care                           236         219              446         403
                                     ------      ------           ------      ------
   Total                             $2,443      $2,254           $4,678      $4,225
                                     ======      ======           ======      ======

<CAPTION>

                                               Profit/(Loss) from Operations
                                  ----------------------------------------------------
                                     Three Months Ended             Six Months Ended
                                           June 30                      June 30
                                  ---------------------------  -----------------------
(Millions)                            2004        2003             2004        2003
                                     ------      ------           ------      ------
<S>                                  <C>         <C>              <C>         <C>
Blades & Razors                      $  420      $  377           $  837      $  708
Duracell                                 89          54              163          93
Oral Care                                68          53              123         102
Braun                                    24          28               45          21
Personal Care                            24          24               37          24
                                     ------      ------           ------      ------
 Subtotal Reportable Segments           625         536            1,205         948
 All Other                              (15)        (31)             (39)        (63)
                                     ------      ------           ------      ------
   Total                             $  610      $  505           $1,166      $  885
                                     ======      ======           ======      ======
</TABLE>
<PAGE>
                                     PAGE 11
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                        Identifiable Assets
                                  -------------------------------
                                  June 30,     Dec. 31,   June 30,
(Millions)                          2004         2003       2003
                                  ---------   -------    ---------

<S>                              <C>         <C>         <C>
Blades & Razors                  $ 3,175     $ 3,099     $ 3,343

Duracell                           2,656       2,754       2,559

Oral Care                          1,437       1,269       1,230

Braun                              1,299       1,224       1,130

Personal Care                        480         470         539
                                 -------     -------     -------
Subtotal Reportable Segments       9,047       8,816       8,801

All Other                            912       1,139       1,080

                                 -------     -------     -------
  Total                          $ 9,959     $ 9,955     $ 9,881
                                 =======     =======     =======
</TABLE>
<PAGE>
                                     PAGE 12
                  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      Six Months Ended
                                                   June 30                June 30
                                             ------------------     ------------------
                                                2004      2003         2004      2003
                                                ----      ----         ----      ----
<S>                                           <C>       <C>          <C>       <C>
Net Income .............................      $  426    $  338       $  802    $  601
                                              ======    ======       ======    ======
Common shares, basic ..................        1,003     1,021        1,004     1,029
Effect of dilutive securities:
    Stock options ......................           9         2            8         2
                                              ------    ------       ------    ------
Common shares, assuming full dilution          1,012     1,023        1,012     1,031
                                              ======    ======       ======    ======
Net Income per Common Share:

  Basic ................................      $ 0.43    $ 0.33       $ 0.80    $ 0.58
                                              ======    ======       ======    ======
  Assuming full dilution ...............      $ 0.42    $ 0.33       $ 0.79    $ 0.58
                                              ======    ======       ======    ======

</TABLE>
For the  three-month  periods ended June 30, 2004 and 2003,  respectively,  29.9
million and 66.0 million  shares of common stock  issuable  under stock options,
respectively, were not included in the calculation of diluted earnings per share
because the option  exercise  price was above the average  market  price for the
quarter.  For the six-month  periods ended June 30, 2004 and 2003,  28.5 million
and  60.8  million   shares  of  common  stock  issuable  under  stock  options,
respectively, were not included in the calculation of diluted earnings per share
because the option  exercise  price was above the average  market  price 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      Six Months Ended     Six Months Ended
                                               June 30,            June 30,                June 30,             June 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        $40        $34        $ 2        $ 2
  Interest cost on benefit obligation       40         37          7          7         80         74         14         14
  Estimated return on assets               (46)       (40)        (1)        (1)       (91)       (80)        (2)        (2)
  Net amortization and other                21         22          1          2         42         44          2          2
                                           ---        ---        ---        ---        ---        ---        ---        ---
Net defined benefit expense                $35        $36        $ 8        $ 9        $71        $72        $16        $16
                                           ===        ===        ===        ===        ===        ===        ===        ===
</TABLE>

The Company  contributed  $26  million  and $34  million to its  pension  plans,
respectively,  for the three and six months  ended June 30,  2004.  The  Company
expects to contribute an additional $18 million to its pension plans in 2004 for
a total contribution of $52 million. The Company's contribution to other retiree
benefit  plans was $3 million for the three and six months  ended June 30, 2004.
The Company does not expect to make any further  contributions  to other retiree
benefit plans in 2004.  The Company  previously  disclosed  total 2004 estimated
contributions of $35 million to pension and $0 to other  postretirement  benefit
plans.
<PAGE>
                                     PAGE 13
                  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 $12 million and $42 million
for the three  months  ended June 30, 2004 and 2003,  respectively.  For the six
months ended June 30, 2004 and 2003, total pretax charges under the program were
$19 million and $86 million, respectively. Functional excellence charges in 2004
included $0 and $4 million  which were  recorded  to cost of goods sold,  and $7
million  and  $15  million   which  were   recorded  to  selling,   general  and
administrative  expense  in the the three and six month  periods  ended June 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 six  months  ended  June  30,  2004,
approximately $10 million and $16 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 June 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 14
                  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   Second              through   Second    and Uses   Balance
                                         March 31,  Quarter  Total     March 31,  Quarter     Since    June 30,
(Millions)                                  2004     2004   Accruals    2004      2004     Inception    2004
                                          -------   ------  --------   --------   -------  ---------   -------
<S>                                      <C>      <C>       <C>        <C>        <C>        <C>         <C>
Functional Excellence:
Employee-related expenses                  $229     $  7      $236      $(165)    $  (8)     $(173)     $  63
Other                                        36        5        41        (32)       (5)       (37)         4
                                           ----     ----      ----      -----     -----      -----      -----
Total Functional Excellence Program        $265     $ 12      $277      $(197)    $ (13)     $(210)     $  67
                                           ----     ----      ----      -----     -----      -----      -----

2003 Manufacturing Realignment Program:
Employee-related expenses
  Severance payments                         33        2        35          -        (1)        (1)        34
  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             8        8        16         (5)       (8)       (13)         3
                                           ----     ----      ----      -----     -----      -----      -----
Total 2003 Realignment Program               56       10        66        (10)       (9)       (19)        47
                                           ----     ----      ----      -----     -----      -----      -----
     Total                                 $321     $ 22      $343      $(207)    $ (22)     $(229)     $ 114
                                           ====     ====      ====      =====     =====      =====      =====

</TABLE>
<PAGE>
                                     PAGE 15
           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  second-quarter  and first-half net sales,
profit from operations,  net income and net income per common share, diluted, in
the second quarter of 2004 and for the six months ended June 30, 2004.

For the second  quarter of 2004,  net sales  increased 8% as compared with 2003,
driven by strong  sell-in of new  products,  the  ongoing  strength  of existing
products, strong growth in emerging markets, and the impact of favorable foreign
currency,  partially moderated by a lower rate of growth in key Western European
markets.  Net sales growth was supported by a 39% increase in  advertising.  The
Company's various cost-savings  programs,  including  Functional  Excellence and
other manufacturing-related  initiatives,  contributed to improvements in profit
from  operations  and operating  profit margin in the second  quarter of 2004 as
compared  with the prior year.  Profit from  operations  rose 21%, and operating
profit margin increased by 4 percentage points. Profit from operations grew at a
faster pace than sales due to strong growth of new,  premium product  offerings,
cost savings and overhead cost reductions,  offset in part by higher advertising
spending.  Net  interest  expense and foreign  exchange  expenses  were lower as
compared with 2003,  and the Company's  effective  income tax rate was reduced 1
percentage point to 29%. Net income climbed 26% and net income per common share,
diluted, increased 27%, slightly outpacing the percentage increase in net income
due to share repurchase activity.

Blades and Razors net sales for the second quarter of 2004 increased  versus the
comparable  period  in 2003,  driven by new  premium  product  launches  despite
weakness in several  Western  European  markets.  Blades and Razors  profit from
operations  increased  due to  higher  sales of new,  premium  products,  higher
prices,  and lower overhead costs offset partially by an increase in advertising
spending.  Duracell's net sales increased as compared with the second quarter of
2003 due to the  acquisition  in  August,  2003 of the  Nanfu  battery  company,
category growth in emerging  markets and lower trade and consumer  spending.  In
the U.S.,  Duracell's  dollar share remained stable during the second quarter of
2004  partially  due  to  stepped-up  advertising  levels  and  strong  consumer
marketing programs, despite significant promotional activity by value brands and
private-label.  Duracell profit from operations  rose  significantly  reflecting
cost and  expense  reduction  activities,  offset in part by higher  advertising
expenses.  Oral Care net sales increased due to successful new product launches,
the acquisition of the Rembrandt brand of whitening products,  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  increased due to the higher sales,
and cost and expense reduction activities partially offset by higher advertising
expenses.  Braun net sales  increased  in the quarter due to  favorable  foreign
exchange,  strong  performance  in the Africa,  Middle  East and Eastern  Europe
(AMEE) region and Southern  Europe,  and male shaver growth in China,  partially
offset  by  male  shaver   category   softness  in  Europe  and  North  America.
Year-to-year  comparisons were also affected by the unmatched SARS-related spike
in demand for  Thermoscan  products in 2003.  Braun profit from  operations  was
lower as  reductions  in overhead  costs were  offset by higher  exchange-driven
European-based  manufacturing costs and increased advertising expenses. Personal
Care net sales  increased in all regions,  driven by new product  introductions.
Personal Care profit from operations was higher, due to strong new product sales
and cost reduction activities.

For the six month period ended June 30, 2004, net sales  increased  11%,  profit
from  operations  increased  32% and  operating  profit  margin  increased  by 4
percentage  points.  The higher  operating profit margin was driven by favorable
product mix and lower  costs.  Lower net  interest  expense was offset by higher
foreign exchange expense. The effective income tax rate declined by 1 percentage
point to 29%. Net income  climbed 33% and net income per common share,  diluted,
increased  36%,  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 $723 million in the period.
 <PAGE>
                                     PAGE 16
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS
---------------------
<TABLE>
Second Quarter 2004 versus 2003
-------------------------------
Selected statement of income data is presented below.
<CAPTION>
                                             For Three Months Ended June 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                               $2,443          $2,254              8
Gross profit                            $1,475   60.4   $1,339   59.4      10
Advertising                             $  258   10.6   $  186    8.3      39
Sales promotion                         $   93    3.8   $   96    4.3      (3)
Other selling, general and
  administrative (SG&A) expense         $  514   21.0   $  552   24.5      (7)

Total SG&A expense                      $  865   35.4   $  834   37.0       4


Profit from operations                  $  610   25.0   $  505   22.4      21
Other (income) and expense
     Net interest expense                    8              13            (38)
     Foreign exchange                       (2)              3          (>100)
     Other                                   3               6            (50)
                                          ----            ----
Total other income and expense               9    0.4       22    1.0     (59)
                                          ----            ----

Income taxes                            $  175    7.2   $  145    6.4      21
Net income                              $  426   17.4   $  338   15.0      26
Net income per common share, diluted    $ 0.42          $ 0.33             27
</TABLE>

Total Company
-------------
Net sales for the second quarter of 2004 were $2.44  billion,  an increase of 8%
versus $2.25  billion in the second  quarter of 2003,  of which 2% resulted from
the impact of favorable foreign  exchange.  Volume/mix added 6%, 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.  Sales
increased due to strong new product introductions,  including M3 Power in Blades
and Razors and Brush-Ups in the Oral Care segment, strong growth in the emerging
markets of Latin  America  and AMEE,  and the ongoing  strength  of  established
products.  The increase in net sales was further  supported by the August,  2003
acquisition  of the Nanfu battery  business,  as well as the Rembrandt  brand in
June, 2004.  Together,  these businesses added 1% to net sales in the quarter. A
39% increase in advertising in the quarter further supported the increase in net
sales.  Net sales were higher in all regions,  though European sales were not as
strong due to weaker consumer confidence especially in France and Italy, as well
as unfavorable comparisons to the prior year launch of Mach3 Turbo.

Gross  profit was $1.48  billion in the second  quarter of 2004,  compared  with
$1.34 billion in the second  quarter of 2003.  As a percent of net sales,  gross
profit was 60.4%,  compared with 59.4% 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.

<PAGE>
                                     PAGE 17
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Total selling,  general and administrative  expenses amounted to 35.4% of second
quarter 2004 net sales,  compared with 37.0% in the  comparable  period of 2003.
Within  selling,  general  and  administrative  expenses,  advertising  expenses
increased  39% to 10.6% of net sales,  from 8.3% 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 was
lower as a percentage of sales at 3.8% in the second quarter of 2004 versus 4.3%
in the prior year. Other selling,  general and administrative expenses decreased
7%, and were down as a  percentage  of sales,  to 21.0% from 24.5% in the second
quarter  of  2003,  reflecting  cost  reduction  efforts  and  lower  Functional
Excellence expenses due to the timing of programs.

Profit from  operations was $610 million in the second quarter of 2004 (25.0% of
net sales),  compared with $505 million in the comparable  period of 2003 (22.4%
of  net  sales).  The  21%  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 $8 million
in the second  quarter of 2004,  as compared to $13 million in 2003,  reflecting
lower debt levels.  Net foreign exchange in the second quarters of 2004 and 2003
were $2 million (income) and $3 million (expense), respectively.

The effective  income tax rate was 29% in the second  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 close to the current level for the balance
of 2004.

Net income was $426 million in the second  quarter of 2004 (17.4% of net sales),
compared  with $338 million in the second  quarter of 2003 (15.0% of net sales),
representing  growth of 26%.  Net income per common  share,  diluted,  was $.42,
compared with $.33 in the second  quarter 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.

<TABLE>
Six Months Ended June 30, 2004 versus 2003
------------------------------------------
Selected statement of income data is presented below.
<CAPTION>
                                               For Six Months Ended June 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                               $4,678          $4,225            11
Gross profit                            $2,832   60.5   $2,492   59.0     14
Advertising                             $  494   10.6   $  353    8.4     40
Sales promotion                         $  166    3.5   $  171    4.0     (3)
Other selling, general and
  administrative (SG&A) expense         $1,006   21.5   $1,083   25.6     (7)

Total SG&A expense                      $1,666   35.6   $1,607   38.0      4


Profit from operations                  $1,166   24.9   $  885   20.9     32
Other (income) and expense
     Net interest expense                   17              24           (29)
     Foreign exchange                       18               5          >100
     Other                                   -              (3)         >100
                                          ----            ----
Total other income and expense              35    0.7       26    0.6     35
                                          ----            ----

Income taxes                            $  329    7.0   $  258    6.1     28
Net income                              $  802   17.1   $  601   14.2     33
Net income per common share, diluted    $ 0.79          $ 0.58            36
</TABLE>


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


Total Company
-------------
Net sales for the six months ended June 30, 2004 were $4.68 billion, an increase
of 11% versus $4.23 billion in the first six months of 2003.  Favorable  foreign
exchange had a 5% impact,  favorable  volume/mix  added 6% and pricing was flat.
Sales increased due to new product  introductions,  ongoing  trade-up to premium
products,  the  ongoing  strength of  established  products,  favorable  foreign
exchange,  the  acquisition of the Nanfu battery company in the third quarter of
2003 and the acquisition of the Rembrandt brand in the second quarter of 2004.

Gross profit was $2.83  billion in the first six months of 2004,  compared  with
$2.49 billion in the first six months of 2003. As a percent of net sales,  gross
profit  was 60.5% in the first six  months of 2004,  compared  with 59.0% in the
first six  months of 2003.  The  improvement  in gross  profit was due mainly to
favorable product mix towards higher margin,  premium products and manufacturing
cost savings, particularly in Duracell.

Total  selling,  general and  administrative  expenses  amounted to 35.6% of net
sales for the first six months of 2004,  compared  with 38.0% in the  comparable
period of 2003. Within selling, general and administrative expenses, advertising
expenses  increased  40% to 10.6% of net sales,  from 8.4% of net sales in 2003.
Sales promotion declined slightly as compared with 2003. Other selling,  general
and  administrative  expenses  decreased  7%, and were down as a  percentage  of
sales,  to 21.5%  from 25.6% in the first six  months of 2003,  reflecting  cost
reduction  efforts  and  lower  Functional   Excellence   expenses.   Functional
Excellence  expenses were $19 million for the first six months of 2004,  and are
expected to ramp up in the second half of 2004.

Profit from  operations was $1.17 billion in the first six months of 2004 (24.9%
of net  sales),  compared  with $885  million in the  comparable  period of 2003
(20.9% of net sales).  The 32% 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 $17 million
in the first six months of 2004, as compared to $24 million in 2003,  reflecting
lower debt levels.  Net foreign exchange expense in the first six months of 2004
and 2003 was $18  million  and $5  million,  respectively.  The 2004  result was
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 six months  ended June 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 close to the current  level for
the remainder of 2004.

Net income was $802  million  in the first  half of 2004  (17.1% of net  sales),
compared with $601 million in the first six months of 2003 (14.2% of net sales),
representing  growth of 33%.  Net income per common  share,  diluted,  was $.79,
compared with $.58 in the first six months of 2003,  representing growth of 36%.
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 19
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Operating Segments
------------------
Second Quarter 2004 versus 2003
-------------------------------
The following table summarizes the key operating  metrics for the second quarter
of 2004  versus  the  second  quarter  of 2003  for each of the  Company's  five
operating segments.
<TABLE>
<CAPTION>
                                       Blades &                  Oral               Personal    Corporate/      Total
Three Months Ended June 30,             Razors      Duracell     Care      Braun      Care         Other       Company
------------------------------        ---------     --------     ----      -----    --------    ---------      -------
(millions, except percentages)
<S>                                   <C>           <C>         <C>       <C>       <C>          <C>          <C>
Net Sales:
     Net sales, 2004                     $1,099        $456      $358      $294        $236        $  -         $2,443
     Net sales, 2003                      1,003         432       316       284         219           -          2,254
     % Incr/(Decr) vs. 2003                  10           5        14         4           8                          8
          Impact of exchange                  2           2         3         5           3                          2
          Impact of volume/mix                7           3        15         -           8                          6
          Impact of pricing                   1           -        (4)       (1)         (3)                         -

Profit from operations (PFO):
     PFO, 2004                           $  420        $ 89      $ 68      $ 24        $ 24        $(15)        $  610
     PFO, 2003                              377          54        53        28          24         (31)           505
     % Incr/(Decr) vs. 2003                11.3        64.6      28.1     (13.1)        3.0                       21.5
     PFO as % of net sales, 2004           38.2        19.5      19.1       8.1        10.3                       25.0
     PFO as % of net sales, 2003           37.6        12.5      16.9       9.7        10.8


Blades and Razors
-----------------
Net sales of $1.10  billion in the second  quarter of 2004 were 10% higher  than
the comparable period of 2003, including a 2% favorable foreign exchange impact.
Sales  growth was driven by new premium  offerings  including M3 Power and Venus
Divine. Net sales were higher in North America,  and consumption and trade-up in
the AMEE market were strong.  Sales  growth was not as strong in Europe,  due to
reduced consumer spending and the 2003 Mach3 Turbo launch.

The  Company  drove  U.S.  Blade/Razor  market  growth of 14% in June due to the
launch of M3 Power.  The M3 Power razor  reached a 30% dollar share in its first
month at retail and was the top-selling U.S. razor in June.

Profit from  operations  of $420  million was up 11% from the second  quarter of
2003,  and profit margin  increased  from 37.6% to 38.2%.  The impacts of higher
sales from new products, price increases and lower overhead costs were partially
offset by a double-digit percentage increase in advertising.

Duracell
--------
Duracell  net sales of $456 million  increased  5% versus the second  quarter of
2003,  including a 2% favorable  foreign exchange  impact.  Net sales gains were
driven by the August,  2003  acquisition of the Nanfu battery  business,  strong
emerging  market  growth  in the  AMEE  region  and  lower  trade  and  consumer
promotional  spending.  These gains were partially  offset by lower net sales in
North  America  where the business was impacted by steep price  discounting  and
promotional activity from low-price brands and private label.

The Company  held its dollar  share of the market in the second  quarter of 2004
through stepped-up advertising levels and the positive impact of strong consumer
marketing programs,  including  promotional tie-ins with the "Lord of the Rings"
DVD release and NASCAR.  However, 2004 is expected to continue to be challenging
due to the ongoing, intense competitive environment.

In the second quarter of 2004,  profit from operations of $89 million  increased
65%, and profit margin grew by 7.0 percentage  points,  compared with the second
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 20
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Oral Care
---------
Oral Care net  sales in the  second  quarter  of 2004 of $358  million  were 14%
higher  than the  second  quarter  of 2003,  of which 3%  represented  favorable
foreign  exchange.  Sales  increased in all regions  with the  exception of Asia
Pacific,  in line  with the  Company's  strategy  to grow net  sales in the core
brushing  category as well as in related  categories.  New  products,  including
Brush-Ups and the Hummingbird  power flosser,  contributed  significantly to net
sales growth in the quarter,  while the acquisition of the Rembrandt brand added
4% to net sales for the period. In core brushing,  the manual toothbrush segment
was a driver of growth,  particularly in the North America,  Latin America,  and
AMEE regions.

The Company  extended its number one global  dollar share  position in the total
brushing category versus the prior year to 34%, driven by trade up within manual
and the global rollout of CrossAction Power.

In the second quarter of 2004,  profit from operations of $68 million  increased
28%, and profit  margin  increased  by 2.2  percentage  points.  The increase in
profits was driven by higher net sales,  improved product mix and lower overhead
costs, offset partially by a double-digit percentage increase in advertising.

Braun
-----
Braun net sales of $294 million in the second  quarter of 2004 increased 4% over
the  second  quarter  of  2003.  Favorable  foreign  exchange  of 5% was  offset
partially by a 1% negative impact of pricing.  Sales growth was driven by strong
performance in female epilators in AMEE and Southern Europe, household appliance
gains in Russia and Turkey, and male shaver growth in China, offset partially by
male shaver category  softness in Europe and North America and comparisons  with
the unmatched 2003 SARS-related spike in demand for Thermoscan  products.  Braun
shavers continued to gain dollar share in key markets, despite price discounting
by competitors.

Profit from  operations  in the second  quarter of 2004 of $24 million was lower
than the $28  million  in the  second  quarter  of 2003.  Profit was down in the
quarter  as  lower   overhead   costs  were  offset  by  higher   European-based
manufacturing costs and increased advertising expenses.

Personal Care
-------------
In the second quarter of 2004,  Personal Care net sales  increased 8% versus the
second quarter of 2003,  with foreign  exchange  contributing  3% of the growth.
Sales growth,  achieved in all regions,  was driven by the  introduction  of the
Gillette Complete Skincare line in the United States, Soft & Dri antiperspirants
in Latin America and Right Guard Cool Spray in the United Kingdom.

Profit from operations  increased  slightly to $24 million in the second quarter
of 2004 as compared with the second  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 21
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Six Months Ended June 30, 2004 versus 2003
------------------------------------------
The following  table  summarizes  the key  operating  metrics for the six months
ended  June  30,  2004  versus  2003 for each of the  Company's  five  operating
segments.
<CAPTION>
                                       Blades &                  Oral               Personal    Corporate/      Total
Six Months Ended June 30,               Razors      Duracell     Care      Braun      Care         Other       Company
------------------------------        ---------     --------     ----      -----    --------    ---------      -------
(millions, except percentages)
<S>                                   <C>           <C>         <C>       <C>       <C>          <C>          <C>
Net Sales:
     Net sales, 2004                     $2,136        $870      $673      $553        $446        $  -         $4,678
     Net sales, 2003                      1,896         816       611       499         403           -          4,225
     % Incr/(Decr) vs. 2003                  13           7        10        11          10                         11
          Impact of exchange                  5           4         5         7           4                          5
          Impact of volume/mix                6           3         7         5           7                          6
          Impact of pricing                   2           -        (2)       (1)         (1)                         -

Profit from operations (PFO):
     PFO, 2004                           $  837        $163      $123      $ 45        $ 37        $(39)        $1,166
     PFO, 2003                              708          93       102        21          24         (63)           885
     % Incr/(Decr) vs. 2003                18.1        75.8      20.9     109.8        52.9                       32.1
     PFO as % of net sales, 2004           39.2        18.8      18.4       8.1         8.3                       24.9
     PFO as % of net sales, 2003           37.4        11.4      16.7       4.3         6.0                       20.9
</TABLE>


Blades and Razors
-----------------
Net sales of $2.14 billion in the six months ended June 30, 2004 were 13% higher
than in the comparable period of 2003, including a 5% favorable foreign exchange
impact. Volume/mix and pricing were favorable by 6% and 2%, respectively.  Sales
growth was driven by  successful  new  product  introductions  such as M3 Power,
Venus Divine and Sensor Excel 3, ongoing  trade-up to premium  products  such as
Mach3 Turbo, and price increases.

Profit from  operations  of $837 million was up 18% from the first half of 2003,
and profit margin increased 1.8 percentage points to 39.2%. The impact of higher
sales,  favorable product mix and lower overhead costs was partially offset by a
double-digit percentage increase in advertising support.

Duracell
--------
Duracell net sales of $870  million  increased 7% versus the first six months of
2003,  including a 4% favorable  foreign exchange  impact.  Net sales gains were
driven by the  August,  2003  addition of the Nanfu  battery  business in China.
These  gains  were  partially  offset  by lower  sales in North  America  due to
comparisons  against the first quarter 2003,  when demand spiked due to homeland
security concerns and incremental military sales.

The Company held its dollar share of the market in the first six months of 2004,
though  2004 is  expected to  continue  to be  challenging  due to the  ongoing,
intense competitive environment.

In the  first  six  months  of 2004,  profit  from  operations  of $163  million
increased  76%, and profit margin grew by 7.4 percentage  points,  compared with
the  first  six  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.


<PAGE>
                                     PAGE 22
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Oral Care
---------
Oral Care net sales in the six month  period ended June 30, 2004 of $673 million
were 10% higher  than the  comparable  period of 2003,  with  favorable  foreign
exchange  contributing  5%. Sales gains were driven by new  products,  including
Brush-Ups and the  Hummingbird  power flosser,  the acquisition of the Rembrandt
brand and strength in most regions behind manual brushes.

In the  first  six  months  of 2004,  profit  from  operations  of $123  million
increased  21%,  and profit  margin  increased  by 1.7  percentage  points.  The
increase in profits was driven by higher  sales from new  products  and improved
product  mix,  offset  partially  by  a  double-digit   percentage  increase  in
advertising.

Braun
-----
Braun net sales of $553  million in the six months  ended June 30, 2004  climbed
11%  versus the  comparable  period of 2003,  with  favorable  foreign  exchange
representing 7% 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 six months of 2004 of $45 million  compared
with $21 million in the first six months of 2003. Profit  improvement was driven
by 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 six months ended June 30, 2004,  Personal  Care net sales  increased  10%
versus the first six months of 2003,  with foreign  exchange  contributing 4% of
the growth.  Sales growth was  achieved in all regions due to strong  demand and
trade-up in shave  preparations,  particularly in Europe and North America.  Net
sales growth was also driven by new products,  including  the Gillette  Complete
skin care line in North America,  and the new  side-activated  Right Guard Cool
Spray in the United Kingdom.

Profit from  operations  increased  to $37 million for the six months ended June
30, 2004 as compared with $24 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 23
           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>
<CAPTION>
                                                                      2004                 2003
                                                              ----------------------------------------
                                                                Free       GAAP      Free       GAAP
                                                                Cash       Cash      Cash       Cash
Six Months Ended June 30,                                       Flow       Flow      Flow       Flow
-------------------------                                     ----------------------------------------
(millions)
<S>                                                            <C>         <C>      <C>         <C>
Net income                                                                $ 802               $  601
Depreciation and amortization                                               299                  278
Deferred income taxes and other                                              46                   50
Decrease in accounts receivable                                              38                   59
Increase in inventories                                                    (330)                (188)
Net change in other assets and liabilities                                   66                  204
                                                                ----      -----      -----     -----
Net cash provided by operating activities                      $ 921     $  921     $1,004   $ 1,004
                                                                ----      -----      -----     -----
  Additions to property, plant and equipment (A)                (228)                 (132)
  Disposals of property, plant and equipment (B)                  30                    23
                                                                ----                 -----
Free cash flow                                                 $ 723                $  895
                                                                ----                 -----
Net cash used in investing activities (C)*                               $ (312)             $  (109)
Net cash used in financing activities                                    $ (643)             $(1,086)
Effect of exchange rate changes on cash                                      (3)                   4
                                                                          -----                -----
Decrease in cash and cash equivalents                                    $  (37)             $  (187)
                                                                          =====                =====
</TABLE>

*C is the sum of A, B, and $(114) million and $0 in other investing  activities,
including  acquisitions,  net of cash acquired, in the six months ended June 30,
2004 and 2003, respectively.


Free cash flow for the six months  ended June 30,  2004,  was $723  million,  as
compared with $895 million in the six months ended June 30, 2003. Free cash flow
was dampened in 2004 by higher  inventory  balances  and  additions to property,
plant and equipment. Inventory increased in anticipation of new product launches
in Oral  Care and  Braun,  and also due to a 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 new product programs. The Company expects capital expenditures
to average approximately 6% of net sales for the full year of 2004.

<PAGE>
                                     PAGE 24
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


The  Company  used its free cash flow to  finance  the  repurchase  of 9 million
shares of Company stock for $355 million, pay dividends of $327 million,  reduce
debt by $200  million,  and to fund 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 $115 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 six months of 2004 were below last year  mainly due to
lower share repurchases. Net cash used in investing activities for the first six
months of 2004  increased as compared with the prior year due to higher  capital
expenditures and the two acquisitions in the second quarter of 2004.

Debt
----
Total debt  decreased by $200 million during the six months ended June 30, 2004,
from $3.31 billion at December 31, 2003, to $3.11 billion at June 30, 2004. This
decrease was  principally  due to repayments of long-term  debt of $389 million,
partially  offset by an increase in  short-term  loans  payable of $228 million.
Cash and cash  equivalents  decreased by $37 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 $1.53  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 June 30, 2004, there was
$270 million outstanding under the Company's commercial paper program,  compared
with $55 million at December 31, 2003. On October 14, 2003, the Company  entered
into revolving bank credit  facilities in an aggregate  amount of $1.15 billion,
of which $863 million is available on a 364-day  basis,  expiring  October 2004,
and $288 million is available for five years,  expiring October 2008.  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 $863  million.
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. At June
30,  2004,  $1.54  billion,   at  face  value,  was  issued  under  these  shelf
registrations,  and a total of $1.26  billion  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.

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.


<PAGE>
                                     PAGE 25
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


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 June 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 six month periods ended June 30, 2004
and  2003,  the  Company  recorded  the  following   expenses  related  to  this
initiative.

<TABLE>
<CAPTION>
                                                 Three Months Ended          Six Months Ended
                                                        June 30                   June 30
                                                 -------------------       -------------------
(millions)                                        2004          2003        2004          2003
----------                                       -----          ----       -----          ----
<S>                                              <C>           <C>        <C>           <C>
Functional Excellence expense recorded in:
Cost of goods sold                                $ 4           $12         $ 4           $13
Selling, general and administrative expense       $ 8           $30         $15           $73
                                                  ---           ---         ---           ---
Total functional excellence expense               $12           $42         $19           $86
                                                  ===           ===         ===           ===
</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 six months  ended  June 30,  2004,  the  Company  recorded
charges of $10 million and $16 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 26
                       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 27
                           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. Changes in  Securities,  Use of Proceeds and Issuer  Purchases of Equity
        Securities.
<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
------                   -----------       ----------   -----------------    -------------------
04/01/04 - 04/30/04           4,840         $40.80                  -             46,000,000
05/01/04 - 05/31/04       2,694,536         $41.09          2,694,100             43,305,900
06/01/04 - 06/30/04       1,305,989         $43.22          1,305,900             42,000,000
  Total Second Quarter    4,005,365 (2)     $41.78          4,000,000             42,000,000

</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  5,365  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.


PART II

Item 4. Submission of Matters to a Vote of Security Holders

At its Annual Meeting on May 20, 2004, the  shareholders of The Gillette Company
took the following actions:

1. Elected the following  four  directors for terms to expire at the 2007 Annual
Meeting of Shareholders, with votes as indicated opposite each director's name:

                                For            Withheld
                            -----------       ----------
Edward F. DeGraan           649,308,442       232,145,002
Wilbur H. Gantz             649,794,321       231,659,123
James M. Kilts              649,048,302       232,405,143
Jorge Paulo Lemann          649,649,409       231,804,036

The directors whose term of office as a director continued after the meeting are
Roger K.  Deromedi,  Michael B.  Gifford,  Ray J. Groves,  Dennis F.  Hightower,
Herbert H. Jacobi, Nancy J. Karch, Fred H. Langhammer, and Marjorie M. Yang.

2. Approved the  ratification  of the appointment of KPMG LLP as auditor for the
year 2004. The vote was 845,717,159 for the proposal,  34,262,266 against,  with
1,480,336 abstentions.

3. Approved the 2004 Long-Term  Incentive Plan. The vote was 678,986,585 for the
proposal and 66,922,841  against,  with 7,737,562  abstentions  and  127,812,773
broker nonvotes.

4. Approved a shareholder  proposal  recommending  the  declassification  of the
Board of Directors.  The vote was  507,153,817  for the proposal and 237,783,465
against, with 8,687,594 abstentions and 127,834,885 broker nonvotes.

5. Rejected  a  shareholder  proposal  to limit  the  services  provided  by the
auditor. The vote was 84,829,697 for the proposal and 659,809,461 against,  with
9,004,086 abstentions and 127,816,517 broker nonvotes.

6. Rejected a  shareholder  proposal  that  the  Company  establish  a policy of
expensing  stock  options.  The  vote  was  308,916,221  for  the  proposal  and
329,534,532  against,  with  113,772,029   abstentions  and  129,236,979  broker
nonvotes.
<PAGE>
                                     PAGE 28
                           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 29
                           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 30
                           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 31
                           PART II. OTHER INFORMATION


Item 6(a)  Exhibits

The following exhibits are included herewith:

10.1 The Gillette Company Deferred Compensation Plan, filed herewith.

10.2 The Gillette  Company  2004  Long-Term  Incentive  Plan,  as corrected  for
     typographical errors, filed 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.


Item 6(b) Reports on Form 8-K

The  following  reports  on Form 8-K were  filed or  furnished  to the
Commission:

(a)  The Company  furnished,  on April 29, 2004, a current  report on Form 8-K
     containing one exhibit: a press release announcing the Company's  financial
     results for the first quarter of 2004.

<PAGE>
                                     PAGE 32
                                    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

July 29, 2004
<PAGE>
EXHIBIT INDEX


Exhibit Number and Description

Exhibit 10.1 The Gillette Company Deferred Compensation Plan, filed herewith.

Exhibit 10.2 The Gillette  Company 2004 Long-Term  Incentive  Plan, as corrected
for typographical errors, filed herewith.

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>