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, 2002                  Commission File Number 1-922


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


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



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

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


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

                                             Yes   X          No______


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

Title of each class


Common Stock, $1.00 par value

Shares Outstanding July 31, 2002  . . . . . . . . . . . . . . . . .1,057,747,501
<PAGE>
<TABLE>
                                     PAGE 1
                          PART I. FINANCIAL INFORMATION
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                        CONSOLIDATED STATEMENT OF INCOME
                      (Millions, except per share amounts)
                                   (Unaudited)


<CAPTION>
                                                       Three Months Ended        Six Months Ended
                                                             June 30                 June 30
                                                       ------------------        ----------------
                                                          2002       2001         2002       2001
                                                          ----       ----         ----       ----
<S>                                                  <C>       <C>            <C>       <C>
Net Sales ..........................................   $ 2,024    $ 1,922      $ 3,756     $ 3,543
Cost of Sales ......................................       798        772        1,492       1,395
                                                       -------    -------      -------     -------
  Gross Profit .....................................     1,226      1,150        2,264       2,148

Selling, General and Administrative Expenses .......       807        775        1,517       1,454
Restructuring - Gain on Sale of Vaniqa .............       (30)         -          (30)          -
                                                       -------    -------      -------     -------
  Profit from Operations ...........................       449        375          777         694

Nonoperating Charges (Income):
  Interest income ..................................        (6)        (1)         (11)         (2)
  Interest expense .................................        24         40           44          85
  Exchange .........................................        (2)        (6)          (8)          7
  Other charges - net ..............................         8          6            4           4
                                                       -------    -------      -------     -------
                                                            24         39           29          94
                                                       -------    -------      -------     -------
Income before Income Taxes .........................       425        336          748         600

Income Taxes .......................................       132        104          232         186
                                                       -------    -------      -------     -------
  Net Income .......................................   $   293    $   232      $   516     $   414
                                                       =======    =======      =======     =======
  Adjusted Net Income, assuming the adoption
  of SFAS 142 for 2001 .............................   $   293    $   237      $   516     $   425
                                                       =======    =======      =======     =======


Net Income per Common Share:
  Basic ............................................   $   .28    $   .22      $   .49     $   .39
                                                       =======    =======      =======     =======
  Assuming Full Dilution ...........................   $   .28    $   .22      $   .49     $   .39
                                                       =======    =======      =======     =======
Adjusted Net Income per Common Share:
  Basic ............................................   $   .28    $   .22      $   .49     $   .40
                                                       =======    =======      =======     =======
  Assuming Full Dilution ...........................   $   .28    $   .22      $   .49     $   .40
                                                       =======    =======      =======     =======


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

Weighted average number of common shares outstanding
  Basic ............................................     1,057      1,055        1,056       1,054
  Assuming full dilution ...........................     1,062      1,057        1,061       1,058
</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,
                                                          2002         2001             2001
                                                     ------------   ------------   ------------
                                                      (Unaudited)                   (Unaudited)
<S>                                                    <C>            <C>          <C>
Current Assets:
  Cash and cash equivalents ..........................   $   980      $   947        $    55
  Trade receivables, less allowances, June 2002, $61;
    December 2001, $69; June 2001, $67 ...............     1,210        1,473          1,381
  Other receivables ..................................       296          313            342
  Inventories
     Raw materials and supplies ......................       133          130            136
     Work in process .................................       277          183            240
     Finished goods ..................................       800          698          1,000
                                                         -------      -------        -------
       Total Inventories .............................     1,210        1,011          1,376
                                                         -------      -------        -------

  Deferred income taxes ..............................       507          481            587
  Other current assets ...............................       294          207            220
  Net assets of discontinued operations...............         -           23             44
                                                         -------      -------        -------
       Total Current Assets ..........................     4,497        4,455          4,005
                                                         -------      -------        -------

Property, Plant and Equipment, at cost ...............     6,303        6,005          5,824
Less accumulated depreciation ........................    (2,756)      (2,457)        (2,343)
                                                         -------      -------        -------
       Net Property, Plant and Equipment .............     3,547        3,548          3,481
                                                         -------      -------        -------

Goodwill .............................................       954          935          1,053
Intangible Assets, less accumulated amortization .....       409          418            462
Other Assets .........................................       814          613            634
                                                         -------      -------        -------

                                                         $10,221      $ 9,969        $ 9,635
                                                         =======      =======        =======
</TABLE>

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

<CAPTION>

                                                        June 30,    December 31,      June 30,
                                                          2002         2001             2001
                                                     ------------   ------------   ------------
                                                      (Unaudited)                   (Unaudited)
<S>                                                <C>                <C>          <C>
Current Liabilities:
  Loans payable ....................................   $  1,903       $  2,235       $  2,039
  Current portion of long-term debt ................        606            428            724
  Accounts payable .................................        532            401            362
  Accrued liabilities ..............................      1,188          1,307          1,349
  Dividends payable ................................        172            172              -
  Income taxes .....................................        392            295            407
                                                       --------       --------       --------
     Total Current Liabilities .....................      4,793          4,838          4,881
                                                       --------       --------       --------

Long-Term Debt .....................................      1,724          1,654          1,367
Deferred Income Taxes ..............................        571            459            423
Other Long-Term Liabilities ........................        713            805            707
Minority Interest ..................................         42             42             44

Contingent Redemption Value of Common Stock
  Put Options ......................................          -             34             99

Stockholders' Equity:
  Common stock, par value $1.00 per share:
    Authorized 2,320 shares
    Issued: June 2002, 1,370 shares;
            Dec. 2001, 1,368 shares;
            June 2001, 1,367 shares ................      1,370          1,368          1,367
  Additional paid-in capital .......................      1,151          1,094          1,004
  Earnings reinvested in the business ..............      6,250          6,077          6,095
  Accumulated other comprehensive loss .............     (1,428)        (1,437)        (1,400)
  Treasury stock, at cost: June 2002,
    Dec. and June 2001, 312 shares .................     (4,965)        (4,965)        (4,952)
                                                       --------       --------       --------
          Total Stockholders' Equity ...............      2,378          2,137          2,114
                                                       --------       --------       --------
                                                       $ 10,221       $  9,969       $  9,635
                                                       ========       ========       ========
</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
                                                            ------------------
                                                            2002         2001
                                                            ----         ----
<S>                                                     <C>         <C>
Operating Activities

    Net income .....................................       $ 516        $ 414
    Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization ................         244          240
      Other ........................................           7           (8)
      Changes in assets and  liabilities,  excluding
      effects of acquisitions and divestitures:
        Accounts receivable ........................         334          679
        Inventories ................................        (160)        (269)
        Accounts payable and accrued liabilities ...          25         (208)
        Other working capital items ................        (180)         (86)
        Other noncurrent assets and liabilities ....         (86)         (90)
                                                           -----        -----
          Net cash provided by operating activities          700          672
                                                           -----        -----
Investing Activities

    Additions to property, plant and equipment .....        (175)        (319)
    Disposals of property, plant and equipment .....          21           61
                                                           -----        -----
          Net cash used in investing activities ....        (154)        (258)
                                                           -----        -----
Financing Activities

    Proceeds from sale of put options ..............           -            5
    Proceeds from exercise of stock option and
         purchase plans ............................          23           22
    Proceeds from long-term debt ...................         350            -
    Repayment of long-term debt ....................        (197)         (56)
    Decrease in loans payable ......................        (333)        (143)
    Dividends paid .................................        (343)        (342)
    Settlements of debt-related derivative contracts           9            3
                                                           -----        -----
          Net cash used in financing activities ....        (491)        (511)
                                                           -----        -----
Effect of Exchange Rate Changes on Cash ............           -           (1)
Net Cash Provided (Used) by Discontinued Operations.         (22)          91
                                                           -----        -----
Increase (decrease) in Cash and Cash Equivalents ...          33           (7)
Cash and Cash Equivalents at Beginning of Period ...         947           62
                                                           -----        -----
Cash and Cash Equivalents at End of Period .........       $ 980        $  55
                                                           =====        =====
Supplemental disclosure of cash paid for:

    Interest .......................................       $  50        $  92
    Income taxes ...................................       $ 149        $ 136

</TABLE>

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


                                         Three Months Ended    Six Months Ended
                                               June 30             June 30
                                         ------------------    ----------------
                                           2002        2001      2002      2001
                                           ----        ----      ----      ----
Net Income, as reported                   $ 293       $ 232     $ 516     $ 414

  Other Comprehensive Income (Loss),
    net of tax:
  Foreign Currency Translation               47         (36)        7       (79)
  Cash Flow Hedges                           (1)         (2)        2        (7)
                                          -----       -----     -----     -----
Comprehensive Income                      $ 339       $ 194     $ 525     $ 328
                                          =====       =====     =====     =====

Adjusted Comprehensive Income,
  assuming the adoption of SFAS 142
  for 2001                                $ 339       $ 199     $ 525     $ 339
                                          =====       =====     =====     =====


Accumulated Other Comprehensive Loss
------------------------------------
The accumulated balances for the components of 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, 2000         $(1,280)       $ (34)       $   -        $(1,314)
Change in period                        19            -           (7)            12
Income tax benefit (expense)           (62)           -            2            (60)
                                    ------        ------       ------        -------
Balance  March 31, 2001            $(1,323)       $ (34)       $  (5)       $(1,362)
Change in period                       (16)           -           (4)           (20)
Income tax benefit (expense)           (20)           -            2            (18)
                                    ------        ------       ------        -------
Balance June 30, 2001              $(1,359)       $ (34)       $  (7)       $(1,400)
                                    ======        ======       ======        =======

Balance December 31, 2001          $(1,373)       $ (56)       $  (8)       $(1,437)
Change in period                       (46)           -            5            (41)
Income tax benefit (expense)             6            -           (2)             4
                                     ------       ------       ------        -------
Balance March 31, 2002             $(1,413)       $ (56)       $  (5)       $(1,474)
Change in period                       172            -           (2)           170
Income tax benefit (expense)          (125)           -            1           (124)
                                     ------       ------       ------        -------
Balance June 30, 2002              $(1,366)       $ (56)       $  (6)       $(1,428)
                                     ======       ======       ======        =======

The  change in  accumulated  foreign  currency  translation  adjustment  for the
quarter ended June 30, 2002, was a gain, net of tax, of $47 million,  with gains
in Europe  largely  offset by losses in Latin  America.  Losses for the  quarter
ended June 30, 2001, were $36 million, with Europe being the largest component.

See Accompanying Notes to Consolidated Financial Statements.



</TABLE>
<PAGE>
                                     PAGE 6
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Accounting Comments
-------------------
Reference is made to the registrant's 2001 Annual Report to Stockholders,  which
contains, at pages 26 through 50, 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, 2001.

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.

Financial  statements  of  subsidiaries  outside  the  U.S.,  other  than  those
operating in highly  inflationary  environments,  are  measured  using the local
currency  as  the  functional  currency.   Adjustments  from  translating  these
financial  statements into U.S. dollars are accumulated in the equity section of
the balance sheet under the caption  "Accumulated  Other  Comprehensive  Gain or
Loss."

For subsidiaries operating in highly inflationary economies,  the U.S. dollar is
the  functional  currency.  Therefore,  exchange  gains  and  losses  for  these
subsidiaries are included with all other transactional exchange gains and losses
in the Consolidated Statement of Income under the caption "Exchange."

Prior-year  financial  statements have been  reclassified to conform to the 2002
presentations.

Accounting Pronouncements
-------------------------

In April 2001,  the EITF reached a consensus on Issue No. 00-25,  "Vendor Income
Statement  Characterization  of  Consideration  to a Purchaser  of the  Vendor's
Products or Services." In November 2001, the issues discussed in EITF 00-25 were
codified with related issues into EITF 01-9, "Accounting for Consideration Given
By a Vendor To a Customer (Including a Reseller of the Vendor's Products)." This
issue  addresses  the  income   statement   classification   of  slotting  fees,
cooperative  advertising  arrangements and buydowns. The consensus requires that
certain  customer  promotional  payments  that  were  previously  classified  as
marketing expenses be classified as a reduction of revenue.  The Company adopted
the  consensus on January 1, 2002.  The  adoption of EITF 00-25  resulted in the
following  reclassifications  in the three  months  ended June 30,  2001  income
statement:  net sales,  gross  profit and  selling,  general and  administrative
expenses  were reduced by $196 million.  The adoption of EITF 00-25  resulted in
the  following  reclassifications  in the six months  ended June 30, 2001 income
statement:  net sales,  gross  profit and  selling,  general and  administrative
expenses were reduced by $338 million.  The adoption of EITF 00-25 had no impact
on profit from operations, net income or earnings per share.
<PAGE>
                                     PAGE 7
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


In July 2001,  Statement  of  Financial  Accounting  Standards  (SFAS) No.  142,
"Goodwill  and Other  Intangible  Assets," was issued.  The Company  adopted the
provisions  of SFAS 142 on January 1, 2002.  SFAS 142 requires that goodwill and
other  intangible  assets  with  indefinite  lives no longer be  amortized,  but
instead be tested for impairment,  at least annually, in accordance with the new
impairment  testing  provisions  of SFAS 142.  Statement  142 also requires that
intangible assets with estimable useful lives be amortized over their respective
useful lives to their estimated  residual values, and reviewed for impairment in
accordance  with  SFAS  144,  "Accounting  for the  Impairment  or  Disposal  of
Long-Lived Assets."

During the first quarter of 2002,  the Company  completed its  evaluation of the
carrying amounts of goodwill and other intangible assets, and noted that certain
goodwill and indefinite-lived intangible assets were inadvertently excluded from
the Company's disclosures of goodwill and indefinite-lived  intangible assets in
the "Effect of Recent  Accounting  Pronouncements"  footnote in the consolidated
financial statements for the year ended December 31, 2001.  Unamortized goodwill
at December 31, 2001, was $935 million. Unamortized other intangible assets with
indefinite lives at December 31, 2001, was $313 million.

The net impact of the adoption of SFAS 142 is a reduction of annual amortization
expense of $34 million.  No impairment  losses were recognized due to the change
in accounting principle.
<TABLE>
Intangible Assets (Millions)
----------------------------
<CAPTION>
                              Weighted
                              Average         June 30, 2002         December 31, 2001            June 30, 2001
                           Amortization  ----------------------   ----------------------   ----------------------
                               Period    Carrying  Accumulated    Carrying  Accumulated    Carrying  Accumulated
                               (Years)    Amount   Amortization    Amount   Amortization    Amount   Amortization
                           ------------  --------  ------------   --------  ------------   --------  ------------
<S>                        <C>         <C>         <C>           <C>        <C>            <C>        <C>
Amortized Intangible Assets
  Patents                           6       $ 103      $  46        $ 103        $  38        $ 152      $  45
  Trademarks                        6          11          2           11            1           11          1
  Software                          5          16          8           16            7           16          6
  Other                            23          12          3           12            3           12          2
                                            -----      -----        -----        -----        -----      -----
Total                               7       $ 142      $  59        $ 142        $  49        $ 191      $  54
                                            =====      =====        =====        =====        =====      =====
Unamortized Intangible Assets
  Trademarks                                $ 314                   $ 313                     $ 319
  Pension                                      12                      12                         6

Aggregate Amortization Expense:
  For the Three Months ended
    June 30, 2002               $  5
    June 30, 2001               $ 14
  For the Six Months ended
    June 30, 2002               $ 10
    June 30, 2001               $ 28

Estimated Amortization Expense:
  For the Years ended
    December 31, 2002           $ 20
                 2003           $ 19
                 2004           $ 18
                 2005           $  5
                 2006           $  5
                 2007           $  2
</TABLE>
<PAGE>
                                     PAGE 8
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>

Total Goodwill by segment follows.
<CAPTION>
                            June 30,       Dec. 31,        June 30,
Net Carrying Amount           2002            2001           2001
                            ---------       --------       ---------
<S>                        <C>             <C>            <C>
Blades & Razors             $  142           $ 140         $  141
Personal Care                    -               -              -
Duracell                       563             550            664
Oral Care                      172             172            176
Braun                           77              73             72
                            ------           -----         ------
  Total                     $  954           $ 935         $1,053
                            ======           =====         ======

The change  between the December  31, 2001 and June 30, 2002  balances is due to
the impact of foreign currency translation.
 </TABLE>
<PAGE>


                                     PAGE 9
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>

The following tables present a reconciliation of net income,  earnings per share
and  comprehensive  income,  as reported,  to adjusted amounts which include the
impact of the adoption of SFAS 142 for all periods presented.

Goodwill and Intangible Assets - Adoption of SFAS 142
           (millions, except per share amounts)
-----------------------------------------------------
<CAPTION>

                                                 Three Months Ended        Six Months Ended
                                                      June 30                 June 30
                                                -------------------      -------------------
                                                   2002        2001         2002        2001
                                                 ------      ------       ------      ------
<S>                                            <C>          <C>           <C>         <C>
Net Income
----------
Net income, as reported                          $ 293       $ 232        $ 516       $ 414

  Add:  Goodwill amortization, net of tax                        5                       11
  Add:  Trademark amortization, net of tax                       2                        4
  Less: Amortization from change in useful                      (2)                      (4)
        lives, net of tax
                                                 -----       -----        -----       -----
Adjusted net income                              $ 293       $ 237        $ 516       $ 425
                                                 =====       =====        =====       =====


Net Income Per Common Share
---------------------------
Basic, as reported                               $ .28       $ .22        $ .49       $ .39

  Add:  Goodwill amortization, net of tax                        -                      .01
  Add:  Trademark amortization, net of tax                       -                        -
  Less: Amortization from change in useful                       -                        -
        lives, net of tax
                                                 -----       -----        -----       -----
Basic, adjusted                                  $ .28       $ .22        $ .49       $ .40
                                                 =====       =====        =====       =====


Assuming full dilution, as reported              $ .28       $ .22        $ .49       $ .39

  Add:  Goodwill amortization, net of tax                        -                      .01
  Add:  Trademark amortization, net of tax                       -                        -
  Less: Amortization from change in useful                       -                        -
        lives, net of tax
                                                 -----       -----        -----       -----
Assuming full dilution, adjusted                 $ .28       $ .22        $ .49       $ .40
                                                 =====       =====        =====       =====


Comprehensive Income
--------------------
Comprehensive income, as reported                $ 339       $ 194        $ 525       $ 328

  Add:  Goodwill amortization, net of tax                        5                       11
  Add:  Trademark amortization, net of tax                       2                        4
  Less: Amortization from change in useful                      (2)                      (4)
        lives, net of tax
                                                 -----       -----        -----       -----
Adjusted comprehensive income                    $ 339       $ 199        $ 525       $ 339
                                                 =====       =====        =====       =====
</TABLE>
<PAGE>

                                     PAGE 10
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


In June 2001, SFAS No. 143,  "Accounting for Asset Retirement  Obligations," was
issued.  SFAS 143 addresses  financial  accounting and reporting for obligations
associated with the retirement of tangible  long-lived assets and the associated
asset  retirement  costs.  It requires that the fair value of a liability for an
asset retirement  obligation be recognized in the period in which it is incurred
if a reasonable  estimate of fair value can be made.  The Company plans to adopt
the  provisions of SFAS 143 on January 1, 2003, and does not expect the adoption
to have a material impact on its financial statements.

In August 2001,  SFAS No. 144,  "Accounting  for the  Impairment  or Disposal of
Long-Lived  Assets,"  was issued.  It provides new  guidance  that  modifies the
existing  guidance in SFAS 121 and in APB Opinion No. 30. Goodwill will still be
evaluated for impairment under SFAS 142. The Company adopted SFAS 144 on January
1,  2002.  Its  adoption  did not have any  impact  on the  Company's  financial
statements.

In April 2002,  SFAS No. 145,  "Rescission of FASB  Statements No. 4, 44 and 64,
Amendment of FASB Statement No. 13, and Technical Corrections," was issued. SFAS
145 rescinds SFAS 4 and SFAS 64 related to classification of gains and losses on
debt extinguishment such that most debt extinguishment  gains and losses will no
longer be classified as extraordinary. SFAS 145 also amends SFAS 13 with respect
to sales-leaseback transactions.  The Company adopted the provisions of SFAS 145
effective  April 1,  2002,  and the  adoption  had no  impact  on the  Company's
reported results of operations or financial position.

Advertising
-----------
The  advertising  expense  detailed  below is included  in selling,  general and
administrative expenses.
<TABLE>
<CAPTION>
                              Three Months Ended        Six Months Ended
                                    June 30                 June 30
                              ------------------        ----------------
                                 2002       2001         2002       2001
                                 ----       ----         ----       ----
<S>                         <C>       <C>            <C>       <C>
Net Sales                    $ 2,024     $ 1,922      $ 3,756    $ 3,543

Advertising                      159         145          296        263

  % Net Sales                    7.9%        7.5%         7.9%       7.4%



</TABLE>
<PAGE>
                                     PAGE 11
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Restructuring and Asset Impairments
-----------------------------------
On December 18, 2000, the Company announced a restructuring program and impaired
certain  intangible assets. In accordance with EITF Issue No. 94-3, SFAS 121 and
SAB 100,  the  Company  recorded,  in the fourth  quarter  of 2000,  a charge to
operating  expenses of $572 million ($430  million  after taxes,  or $.41 in net
income per common share, fully diluted).

The charge for the  restructuring  program was $360 million,  and activity under
the program is virtually complete.  The majority of the remaining balance is due
to the timing of severance and other benefit  payments.  The charge for impaired
intangible  assets  was $212  million to write  down $157  million  of  acquired
goodwill relating to the Thermoscan personal  diagnostic  appliance brand in the
Braun segment and $55 million of acquired  goodwill and identifiable  intangible
assets for certain national battery brands in the Duracell segment.

Details of the  activity in the 2000  restructuring  program  follow.  The other
benefits  portion of  employee-related  expenses,  shown below,  include  fringe
benefits,   outplacement  fees  and  special  termination  benefits  related  to
pensions.
<PAGE>
                                     PAGE 12
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
2000 Restructuring Program
--------------------------
                                                      Year to        Plan
                                         Activity       Date       Inception
                             Initial      Through       2002        Through           Balance
(Millions)                  Provision       2001      Activity    June 30, 2002    June 30, 2002
---------------------       ---------   -----------   --------   --------------   --------------
<S>                        <C>        <C>          <C>           <C>             <C>
Employee-related expenses
  Severance payments          $146        $ 90         $ 33          $123             $ 23
  Other benefits                67          47            9            56               11
Asset impairments
  Prop., plant, & equip.       120         120            -           120                -
Contractual obligations
  and other                     27          24            2            26                1
                              ----        ----         ----          ----             ----
Total                         $360        $281         $ 44          $325             $ 35
                              ====        ====         ====          ====             ====

Employee Reductions          2,700       2,620           80         2,700                -

During the fourth quarter of 2001, the Company  recorded a charge of $63 million
associated with the withdrawal  from several noncore  businesses and the closing
of one factory in the Duracell  segment.  The factory closure,  based on a study
that  revealed  excess  worldwide  capacity,  resulted in the  reduction  of 170
employees. The factory closure and the employee reductions have been completed.

In June 2002,  the Company  recorded a $30 million  pre-tax  gain on the sale of
Gillette's  rights in the  Vaniqa  business.  Vaniqa  was a joint  venture  with
Bristol-Myers  Squibb for a prescription cream that slows the growth of unwanted
facial  hair in women.  This gain  included  a  recovery  of $8  million  to the
restructuring  reserve.  Proceeds  from the sale  were  received  in June  2002.
Details of the activity in the 2001 restructuring program follow.

<CAPTION>
2001 Restructuring Program
--------------------------
                                                      Year to        Plan
                                         Activity       Date       Inception
                             Initial     Through        2002        Through           Balance
(Millions)                  Provision      2001       Activity    June 30, 2002    June 30, 2002
---------------------       ---------   -----------   --------    -------------   -------------
<S>                        <C>        <C>          <C>           <C>               <C>
Employee-related expenses
  Severance payments          $  3        $  -         $  2          $  2             $  1
Prop., plant, & equipment       23          23            -            23                -
Contractual obligations
  and other                     37           7           20*           27*              10
                              ----        ----         ----          ----             ----
Total                         $ 63        $ 30         $ 22          $ 52             $ 11
                              ====        ====         ====          ====             ====

Employee Reductions            170           -          164           164                6

* Includes recovery of $8 million in June 2002.
</TABLE>
 <PAGE>
                                     PAGE 13
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
Financial Information by Business Segment
-----------------------------------------
Net sales, profit (loss) from operations, adjusted profit (loss) from operations
for 2001  assuming  adoption  of SFAS 142 at January 1, 2001,  and  identifiable
assets for each of the Company's  business  segments are set forth below.  There
are no material intersegment revenues.
<CAPTION>
                                                     Net Sales
                                    --------------------------------------------
                                     Three Months Ended        Six Months Ended
                                          June 30                 June 30
                                    -------------------      -------------------
(Millions)                            2002        2001         2002        2001
                                     ------      ------       ------      ------
<S>                               <C>         <C>           <C>         <C>
Blades & Razors                      $  884      $  806       $1,654     $1,486
Personal Care                           204         202          382        372
Duracell                                428         438          760        781
Oral Care                               275         254          540        499
Braun                                   233         222          420        405
                                     ------      ------       ------     ------
   Total                             $2,024      $1,922       $3,756     $3,543
                                     ======      ======       ======     ======

<CAPTION>
                               Profit/(Loss) from Operations
                               ------------------------------
                                     Three Months Ended
                                           June 30
                                    -----------------------
(Millions)                            2002         2001          Amortization        2001
                                                As Reported       Adjustment      As Adjusted
                                     ------     -----------      ------------     -----------
<S>                               <C>         <C>                <C>             <C>
Blades & Razors                      $  324      $  272            $    -          $  272
Personal Care                             5          12                 -              12
Duracell                                 46          40                 8              48
Oral Care                                50          45                 1              46
Braun                                    22          24                 -              24
                                     ------      ------            ------          ------
 Subtotal Reportable Segments           447         393                 9             402
 All Other (1)                            2         (18)                -             (18)
                                     ------      ------            ------          ------
   Total                             $  449      $  375            $    9          $  384
                                     ======      ======            ======          ======

<CAPTION>
                               Profit/(Loss) from Operations
                               ------------------------------
                                      Six Months Ended
                                           June 30
                                    -----------------------
(Millions)                            2002         2001          Amortization        2001
                                                As Reported       Adjustment      As Adjusted
                                     ------     -----------      ------------     -----------
<S>                               <C>         <C>                <C>             <C>
Blades & Razors                      $ 612       $  503            $    -          $  503
Personal Care                           16           20                 -              20
Duracell                                45           78                16              94
Oral Care                              103           95                 2              97
Braun                                   25           40                 -              40
                                     ------       ------           ------          ------
 Subtotal Reportable Segments          801          736                18             754
 All Other                             (24)         (42)                -             (42)
                                     ------      ------            ------          ------
   Total                             $ 777       $  694            $   18          $  712
                                     ======      ======            ======          ======

(1) Second Quarter 2002 All Other includes the $30 million gain on the sale of Vaniqa.
</TABLE>
<PAGE>
<TABLE>
                                     PAGE 14
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<CAPTION>
                                        Identifiable Assets
                                  -------------------------------
                                  June 30,   Dec. 31,    June 30,
(Millions)                          2002       2001        2001
                                  -------    -------     -------
<S>                             <C>        <C>        <C>
Blades & Razors                  $ 3,258     $ 3,195     $ 3,182

Personal Care                        535         515         530

Duracell                           2,782       2,932       2,988

Oral Care                          1,057         976         938

Braun                              1,014         963       1,010
                                 -------     -------     -------
Subtotal Reportable Segments       8,646       8,581       8,648

All Other                          1,575       1,365         943

Discontinued Operations                -          23          44

                                 -------     -------     -------
  Total                          $10,221     $ 9,969     $ 9,635
                                 =======     =======     =======
</TABLE>
<PAGE>
<TABLE>
                                     PAGE 15
                  THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Computation of net income per common share
(Millions, except per share amounts)
------------------------------------------
<CAPTION>
                                             Three Months Ended        Six Months Ended
                                                   June 30                  June 30
                                             ------------------       ------------------
                                                2002      2001           2002      2001
                                                ----      ----           ----      ----
<S>                                           <C>       <C>           <C>      <C>
Net Income, as reported.................      $  293    $  232         $  516    $  414
                                              ======    ======         ======    ======
Adjusted net income, assuming the
  adoption of SFAS 142 for 2001 ........      $  293    $  237         $  516    $  425
                                              ======    ======         ======    ======


Common shares, basic ...................       1,057     1,055          1,056     1,054
Effect of dilutive securities:
    Stock options ......................           5         2              5         4
                                              ------    ------         ------    ------
Common shares, assuming full dilution          1,062     1,057          1,061     1,058
                                              ======    ======         ======    ======


Net Income per Common Share:

  Basic ................................      $  .28    $  .22         $  .49    $  .39
                                              ======    ======         ======    ======
  Assuming full dilution ........             $  .28    $  .22         $  .49    $  .39
                                              ======    ======         ======    ======


Adjusted Net Income per Common Share:

  Basic                                       $  .28    $  .22         $  .49    $  .40
                                              ======    ======         ======    ======
  Assuming full dilution                      $  .28    $  .22         $  .49    $  .40
                                              ======    ======         ======    ======
</TABLE>
As of June 30, 2002 and 2001,  43.7  million and 48.1  million  shares of common
stock  issuable  under stock  options,  respectively,  were not  included in the
calculation  of fully  diluted  earnings per share  because the option  exercise
price was above the  market  price.  Therefore,  the effect of  including  these
options in the calculation would have been anti-dilutive.
<PAGE>
                                     PAGE 16
                 THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


SFAS 123 Stock Options
----------------------

The Company  applies APB 25 and related  interpretations  in accounting  for its
stock option plans. In accordance with SFAS 123, the Company provides,  on a pro
forma basis,  the effect on the  Company's  net income and net income per common
share had the Company  recorded an expense for the fair value of options granted
consistent  with  SFAS  123.  For the  years  1997  through  2001,  the  Company
calculated  the fair  value of the  options  granted  under the plan  based on a
one-year vesting period, even though the stock option plan was amended effective
April 16, 1997, to provide for vesting in one-third increments over a three-year
period.  The following tables present the pro forma  information as reported and
as adjusted.
<TABLE>

<CAPTION>
Years ended December 31,
(millions, except per share amounts)    2001     2000     1999      1998      1997
------------------------------------    ----     ----     ----      ----      ----
<S>                                   <C>       <C>      <C>      <C>       <C>
As Reported
-----------

Net income
  As reported                           $910     $392    $1,260    $1,081    $1,427
  Pro forma                              792      311     1,114       981     1,339
Net income per common share
Basic
  As reported                           $.86     $.37    $ 1.15       .96      1.27
  Pro forma                              .75      .29      1.02       .87      1.19
Assuming full dilution
  As reported                            .86      .37      1.14       .95      1.24
  Pro forma                              .75      .29      1.01       .86      1.16


As Adjusted
-----------

Net income
  As reported                           $910     $392    $1,260    $1,081    $1,427
  Pro forma                              801      282     1,179     1,031     1,410
Net income per common share
Basic
  As reported                           $.86     $.37    $ 1.15       .96      1.27
  Pro forma                              .76      .27      1.08       .92      1.24
Assuming full dilution
  As reported                            .86      .37      1.14       .95      1.24
  Pro forma                              .76      .27      1.06       .90      1.21
</TABLE>
<PAGE>
                                     PAGE 17
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Results of Operations
---------------------

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

As explained in the  "Accounting  Pronouncements"  section of this document,  on
January  1, 2002,  the  Company  adopted  EITF 00-25  "Vendor  Income  Statement
Characterization  of  Consideration  to a Purchaser  of a Vendor's  Products and
Services," and SFAS 142, "Goodwill and Other Intangible Assets."

The effect of EITF 00-25  resulted  in the  following  reclassifications  in the
second  quarter  2001 income  statement:  net sales,  gross  profit and selling,
general and administrative  expenses were reduced by $196 million. The impact to
the income  statement  for the six months ended June 30,  2001,  was: net sales,
gross profit and selling,  general and  administrative  expenses were reduced by
$338  million.  The  adoption  of  EITF  00-25  had no  impact  on  profit  from
operations, net income or earnings per share.

SFAS 142 requires that goodwill and intangible  assets with indefinite  lives no
longer be amortized, but instead be tested for impairment, at least annually, in
accordance with the new impairment testing provisions of SFAS 142. Statement 142
also requires that  intangible  assets with estimable  useful lives be amortized
over their  respective  useful lives to their  estimated  residual  values,  and
reviewed for impairment in accordance  with FASB Statement 144,  "Accounting for
the  Impairment  or Disposal of Long-Lived  Assets".  The Company  realized a $9
million  and $18  million  reduction  in  selling,  general  and  administrative
expenses in the second quarter and six months ended June 30, 2002, respectively,
due to the implementation of SFAS 142.

Second Quarter 2002 versus 2001
-------------------------------
Total Company: Sales for the quarter ended June 30, 2002, were $2.02 billion, an
increase of 5% versus the same quarter of the prior year. The impact of exchange
was less than 1% on reported  sales for the  quarter.  The impact of  volume/mix
increased  sales by 7%, while  unfavorable  pricing  reduced  sales by 2%,due to
higher year-over-year sales promotion spending at Duracell and Oral Care.

Blades  and  Razors:  Sales of  blades  and  razors  increased  10% and  profits
increased  19%,  compared  with  the  second  quarter  of last  year.  Excluding
unmatched  blade  destocking  activity  in 2001,  sales were up 7%. The  ongoing
worldwide success of our premium systems  business--Mach3 and Venus--drove sales
gains in North America,  Europe and the AMEE markets. In addition, the new Mach3
Turbo drove strong sales gains in North America.  Profit and margin increased in
the  quarter,  due  mainly to  product  mix shift  towards  the Mach3  franchise
globally,  favorable  blade  versus  razor mix, and strong sales growth that was
able to  leverage  the flat  overheads.  These  gains  more than  offset  higher
advertising behind our new and established products.

Personal Care: Sales for the quarter  increased by 1%,as compared with the prior
year.  The  North  America,  Europe  and AMEE  markets  drove  growth.  This was
partially offset by lower sales in Latin America,  where the struggling  economy
in Argentina and increased competitive pressures in Colombia continued to affect
volumes and pricing in this region. In North America,  there was strong consumer
acceptance of our new  PowerStripe  deodorants and  antiperspirants,  as well as
Gillette  Series shave preps and the re-staged  Satin Care line.  Profit for the
quarter  fell 55%,  due to a  substantial  increase in  advertising  expenses to
support new product launches and brand franchise-building activities.
<PAGE>
                                     PAGE 18
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Duracell:  Sales of Duracell for the quarter decreased 2% versus those of a year
ago.  Unit  volume  gains in most  regions  were  more  than  offset  by  higher
year-on-year  promotional  expenditures,  the ongoing  shift in product mix from
Ultra to  CopperTop,  an adverse  shift in pack size mix,  and a retail  channel
shift in sales  towards mass  merchandisers  and club stores.  Despite the sales
decline,  profit  from  operations  grew by 12%  versus a year  ago,  reflecting
manufacturing cost-savings initiatives and overhead containment activities.

Oral Care: Oral Care sales were 8% above those of 2001, driven by growth in both
the manual and power  toothbrush  segments.  New product  introductions in North
America, the Oral-B Stages line of children's manual toothbrushes, and sustained
gains of the 3D Excel  rechargeable  power  toothbrush,  drove sales growth.  In
addition,  strong growth was realized in Asia, due to strong rechargeable gains,
and in AMEE markets,  particularly  Russia, from the entry-level Exceed,  Vision
and Classic manual  toothbrushes.  Profit from  operations  grew 11% from a year
ago, at a higher pace than sales,  reflecting lower manufacturing  costs, offset
partially by increased marketing spending to support the new product launches.


Braun:  Sales of Braun  rose 5% above  those of the  previous  year.  Sales were
helped by favorable European currency,  but strong electric shaver  performances
from the  mid-priced  Flex400 CC shaver  launch in North America and the Flex XP
and Syncro shavers in Japan were the main drivers.  In Europe and AMEE, sales of
household  appliances  continued  to benefit  from the  bankruptcy  and  related
product line rationalization of a competitor in these regions. Favorable product
mix and cost-savings initiatives were offset by significantly higher advertising
spending  behind new  products and by the impact of the Yen on margins in Japan,
resulting in a decrease in profits of 8% versus prior year.

Six Months 2002 versus 2001
---------------------------

Total Company: Sales for the six months ended June 30, 2002, were $3.76 billion,
an increase of 6% versus the same period last year. Unfavorable foreign exchange
reduced net sales by 1%.  Excluding the effect of exchange,  sales increased 7%,
attributable to 8% favorable volume/mix and unfavorable pricing of 1%.

Blades and  Razors:  Sales of blades  and  razors  increased  11%,  and  profits
increased  22%  compared  with the first six  months of last year.  Without  the
unfavorable  effect of  exchange,  sales  increased  13%.  Sales growth in North
America,  Europe  and the AMEE  markets  was  driven by the  success  of premium
shaving  systems.  In North America,  blade and razor sales posted strong gains,
reflecting  the excellent  performance of the new  Mach3Turbo.  Sales growth was
also due to favorable  comparisons with 2001, when sales were below  consumption
due to our destocking  activities.  Profit grew at a higher pace than sales, due
to  favorable  product mix and flat  overheads,  which more than  offset  higher
advertising expenses.

Personal  Care:  Personal  Care  sales  increased  3% over  those of  2001.  The
successes of the new PowerStripe  deodorants and  antiperspirants,  new Gillette
Series shave preps and the Satin Care line were partially  offset by lower sales
in Latin  America.  Profit  from  operations  decreased  17%,  due to  increased
marketing  related  to new  product  launches  associated  with  rebuilding  the
franchise, which more than offset savings from cost-reduction initiatives.
<PAGE>
                                     PAGE 19
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Duracell:  Sales of Duracell  for the six months  decreased 3% versus those of a
year ago. Excluding  exchange,  sales were 2% lower.  Higher unit shipments were
offset by increased promotional  spending,  the adverse shift in mix from higher
margin Ultra to CopperTop,  an adverse shift in pack size mix and retail channel
shift in sales towards mass  merchandisers  and club stores.  The  first-quarter
costs  of  withdrawing  selected  hearing  aid  batteries,   along  with  higher
promotional  spending and  unfavorable  mix shift,  contributed  to a decline in
profit from operations of 43%, as compared with the prior year.

Oral Care:  Oral Care sales were 8% above those of 2001,  but would have been 9%
above  without the impact of exchange.  Sales  growth was largely  driven by the
success of new product  introductions.  In addition,  strong  growth in Asia and
AMEE, particularly in Russia,  contributed to the increase in sales. Profit from
operations  was 9% above  that of the prior  year,  primarily  reflecting  sales
performance.

Braun:  Sales of Braun increased 4% over those of the prior year, with no impact
from exchange.  Strong electric shaver  performance  drove sales growth.  Profit
from  operations  declined 38%, as compared  with the prior year,  due to higher
advertising expenses and the impact of the Yen on margin in Japan.

Costs and Expenses
------------------

Second Quarter 2002 versus 2001
-------------------------------

Gross profit for the three months ended June 30,  2002,  was $1.22  million,  an
increase of 7% versus  2001.  Gross  profit as a  percentage  of sales was 60.6%
compared  with 59.8% in 2001.  This  improvement  reflects cost savings from the
December 2000 restructuring and our Strategic Sourcing Initiative, and favorable
product  mix in the  blade  and  razor  business,  partially  offset  by  higher
promotional spending and unfavorable product mix at Duracell.

Selling,  general and administrative  expenses increased by $32 million,  or 4%,
versus the prior year.  Advertising  and sales promotion  combined  increased 6%
over the  prior  year,  with  advertising  increasing  10% and  sales  promotion
decreasing  slightly as a  percentage  of sales due to  unmatched  Venus  launch
activity in 2001. Other selling,  general and administrative  expenses increased
by 3% over the prior  year,  mainly due to $31 million in  incremental  expenses
related to our Functional Excellence  initiative.  This initiative is focused on
reducing overhead costs, while upgrading  capabilities,  by improving  processes
and eliminating duplication across functions.  The total cost of this project is
estimated  at  $350-$400  million,  of which  approximately  $80 million will be
expensed in 2002,  with the balance to be expensed  from  2003-2005.  Annualized
savings are  expected to be $300-$350  million by 2006.  The exact flow of costs
and benefits is still being determined, but we estimate that costs will outweigh
benefits  until  sometime in 2004.  The  expenses  generated by this program are
being, and will continue to be, treated as part of operating expenses.

Profit from operations was $449 million, an increase of 20% from $375 million in
2001. Excluding the gain on the sale of Vaniqa,  profit from operations was $419
million, an increase of 12% versus the prior year.

Net interest expense decreased,  due to significantly lower rates year-over-year
and our strong cash flow.  Exchange and other charges were  comparable  with the
year before.

The effective tax rate was unchanged at 31%.

Net income of $293  million  was 26% above the $232  million in the prior  year.
Diluted  net  income  per  common  share of $.28 was 27% above the $.22 of 2001.
Excluding  the gain on the sale of Vaniqa,  net income of $272  million  was 18%
above the  previous  year,  and  diluted  net income  per  common  share of $.26
increased 18% over the prior year.
<PAGE>
                                     PAGE 20
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Six Months Ended June 30, 2002 versus 2001
------------------------------------------

Gross  profit for the six months  ended June 30,  2002,  was $2.26  billion,  an
increase of 5% versus 2001.  Gross  profit as a  percentage  of sales was 60.3%,
compared with 60.6% in 2001, as  manufacturing  efficiencies and cost reductions
were more than offset by Duracell's higher  year-over-year  promotional spending
and unfavorable mix.

Selling,  general and administrative  expenses increased by $63 million,  or 4%,
reflecting  higher  advertising  and sales promotion  expenses which,  combined,
increased by 10%, with  advertising up 13% and sales promotion up 6% versus last
year. Other selling,  general and administrative expenses were 2% above those of
the prior year.  These expenses  included a charge of $31 million related to our
Functional Excellence initiative, which was primarily severance related.

Profit from  operations  was $777  million,  up 12%,  versus $694 million a year
earlier.  Excluding the gain on the sale of Vaniqa,  profit from  operations was
$747 million, up 8% from 2001.

Net interest expense was lower, due to significantly lower rates and strong cash
flow. The net effect of exchange was favorable,  versus unfavorable in the prior
year, due to first-quarter  transactional  gains in dollar-based  assets held by
countries whose  currencies  deteriorated.  In addition,  the exchange losses in
2001 as a result of Turkish devaluation were unmatched in 2002.

The effective tax rate was unchanged at 31%.

Net income of $516 million was 25% above the $414  million in 2001.  Diluted net
income per common  share of $.49 was 26% above the $.39 of 2001.  Excluding  the
gain on the sale of Vaniqa,  net income of $495  million was 20% above the prior
year,  and diluted net income per common  share of $.47  increased  21% over the
prior year.
<PAGE>
                                     PAGE 21
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Financial Condition
-------------------

Cash provided by operations is the Company's  primary source of funds to finance
operating  needs,  capital  expenditures and dividend  payments.  During the six
months  ended June 30,  2002,  the Company  generated  $700 million in cash from
operations,  compared  with $672  million in the same  period  last year,  a $28
million improvement,  despite unmatched pension funding of $196 million in 2002.
Continued  focus on  working  capital  management  and  lower  capital  spending
resulted in a net debt  reduction of $160  million for the six months.  Net debt
(total debt net of associated swaps,  less cash and cash  equivalents)  ended at
$3.16 billion at June 30, 2002,  compared with the December 31, 2001, balance of
$3.32 billion.

The  Company's  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's  commercial  paper  program is supported by a $1.65  billion,  364-day
revolving bank credit agreement  expiring on October 15, 2002, and other sources
of liquidity.  The revolving bank credit agreement  includes various  covenants,
including a covenant that requires an  earnings-to-interest-expense  ratio above
6.5X at each quarter end for the four quarters then ended. At June 30, 2002, the
interest  coverage  ratio was 15.3X.  The  Company  believes  it has  sufficient
alternative  sources of higher cost funding  available to replace its commercial
paper  program,  if  necessary.  At June  30,  2002,  there  was  $1.76  billion
outstanding  under the Company's  commercial paper program,  compared with $1.97
billion at the end of 2001.

On March 6, 2002, the Company issued $350 million U.S.  dollar-denominated  4.0%
notes,  due June 2005.  The proceeds  from the debt issuance were used to reduce
commercial  paper  borrowings.  The Company's  $1.5 billion  shelf  registration
statement,  which was filed with the Securities  and Exchange  Commission in the
second  quarter of 2002,  was declared  effective  on July 10,  2002.  The shelf
registration  may be used to issue debt securities from time to time,  depending
on prevailing market conditions.  It is currently  anticipated that the proceeds
from the sale of any debt securities under the shelf registration statement will
be used to repay  commercial  paper  borrowings and replace other maturing debt,
although the proceeds may also be used for other corporate purposes.
<PAGE>
                                     PAGE 22
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Restructuring and Asset Impairments
-----------------------------------

On December  18, 2000,  the Company  announced a  restructuring  program and the
impairment  of certain  intangible  assets.  This  resulted in a  fourth-quarter
charge to operations  of $572 million ($430 million after taxes,  or $.41 in net
income  per  common  share,  fully  diluted).  The  worldwide  restructuring  of
operations improved the Company's operating  efficiency,  streamlined the supply
chain and further  decreased  costs.  The program  budgeted a net  reduction  of
approximately 2,700 employees across all business functions, operating units and
geographies. The charge for impaired intangible assets was $212 million to write
down $157  million of  acquired  goodwill  relating to the  Thermoscan  personal
diagnostic  appliance  brand in the Braun  segment  and $55  million of acquired
goodwill and identifiable  intangible assets for certain national battery brands
in the Duracell segment.

The charge for the  restructuring  program was $360 million,  and payments under
the program continued throughout the first six months of 2002.

Pretax  cash  outlays  for  the   restructuring   program   were   estimated  at
approximately  $240 million.  Cash severance payments will continue in 2002, due
to the severance payment deferral options available to terminated employees.  At
June 30,  2002,  remaining  cash  outlays  were $35  million,  which  will occur
primarily  this year.  Pretax  savings  from the program were $31 million in the
second  quarter of 2002 and $56 million for the six months  ended June 30, 2002.
Savings will be approximately $135 million for the year.

During the fourth quarter of 2001, the Company  recorded a charge of $63 million
associated  with planned new actions;  the withdrawal from several minor noncore
businesses  and the  cessation  of  operations  in one  factory in the  Duracell
segment.  The factory  closure,  based on a study that showed  excess  worldwide
capacity,  resulted in the reduction of 170  employees.  Pretax savings from the
program were $2 million in the second quarter of 2002 and $3 million for the six
months ended June 30, 2002.  Savings  will be  approximately  $6 million for the
year 2002.
<PAGE>
                                     PAGE 23
                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings

The  Company is  subject,  from time to time,  to legal  proceedings  and claims
arising  out of its  business  that  cover a wide  range of  matters,  including
antitrust  and trade  regulation,  advertising,  product  liability,  contracts,
environmental issues, patent and trademark matters and taxes. Management,  after
review and consultation  with counsel,  considers that any liability from all of
these legal  proceedings and claims would not materially affect the consolidated
financial position, results of operations or liquidity of the Company.


Item 4.  Vote of Security Holders

At its Annual Meeting on May 16, 2002, the  stockholders of The Gillette Company
took the following actions:

1.   Elected the following four directors for terms to expire at the 2005 Annual
     Meeting of Stockholders,  with votes as indicated  opposite each director's
     name:
<TABLE>
<CAPTION>
                                   For         Total %       Withheld      Total %
                               -----------     -------      ----------     -------
<S>                     <C>             <C>           <C>           <C>
     Warren E. Buffett         910,486,722      98.142      17,234,090      1.858
     Michael B. Gifford        906,992,507      97.766      20,728,305      2.234
     Ray J. Groves             911,631,621      98.266      16,089,191      1.734
     Marjorie M. Yang          907,174,332      97.785      20,546,480      2.215
</TABLE>


     The  directors  whose term  of office as a  director  continued  after  the
     meeting  are  Edward F.  DeGraan,  Wilbur H.  Gantz,  Dennis F.  Hightower,
     Herbert H. Jacobi,  Nancy J. Karch,  James M. Kilts, Jorge Paulo Lemann and
     Richard R. Pivirotto.

2.   Approved the stockholder proposal to declassify the Board of Directors. The
     vote was 427,729,484 for the proposal,  340,089,081  against with 9,107,796
     abstentions, and 150,794,451 broker nonvotes.


Item 5. Other Information

Cautionary Statement
--------------------
Certain  statements  that  Gillette  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,  Gillette's strategy for growth,  product
development and new product launches, market position and expenditures.
<PAGE>
                                     PAGE 24
                           PART II. OTHER INFORMATION


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

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

- the pattern of Gillette's sales,  including  variations in sales volume within
  periods;
- consumer  demands and  preferences, including  the  acceptance  by  Gillette's
  customers and consumers of new products and line extensions;
- the mix of products sold;
- Gillette's  ability to control  its internal costs and  the cost of  materials
  and services;
- competitive  factors, including the prices,  promotional  incentives and trade
  terms of Gillette's products and the response of its customers and competitors
  to changes in these factors;
- technological  advances by  Gillette  and/or its  competitors;
- new patents granted to Gillette and/or its competitors;
- changes in exchange rates in one or more of Gillette's geographic markets;
- changes in accounting policies;
- acquisition and divestiture activities; or
- the impact of general  economic  conditions  in the United States and in other
  countries in which Gillette currently does business.


Competitive Environment
-----------------------
Gillette  experiences  intense  competition  for sales of its  products  in most
markets. Gillette's products compete with widely advertised, well-known, branded
products,  as well as private label products,  which typically are sold at lower
prices. In most of its markets,  Gillette has major  competitors,  some of which
are larger and more  diversified  than  Gillette.  Competitive  activity  within
Gillette's markets,  including advertising,  pricing,  promotion and new product
introductions,  and new  entrants  into these  markets,  can  affect  Gillette's
results in any given period.


Changes in Technology and New Product Introductions
---------------------------------------------------
In most product  categories in which  Gillette  competes,  there are  continuous
technological  changes  and  frequent  introductions  of new  products  and line
extensions.  Gillette's  ability to  successfully  introduce new products and/or
extend lines of existing products will depend on, among other things, Gillette's
ability to identify changing consumer tastes and needs,  develop new technology,
differentiate its products and gain market acceptance of new products.  Gillette
cannot be certain that it 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; and
- the development of new battery technologies.
<PAGE>
                                     PAGE 25
                           PART II. OTHER INFORMATION


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

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

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

- changes in political or economic  conditions;
- trade protection  measures;
- import  or  export  licensing  requirements;
- the  overlap  of  different  tax structures;
- unexpected  changes in regulatory  requirements or tax laws; or
- longer payment cycles in certain countries.

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

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

Gillette  can be  negatively  affected by changes in the  policies of its retail
trade customers,  such as inventory  destocking,  limitations on access to shelf
space  and  other  conditions.   Many  of  Gillette's  customers,   particularly
Gillette's  high-volume  retail trade  customers,  have  engaged in  accelerated
efforts to reduce inventory  levels and shrinkage and change inventory  delivery
systems.  While Gillette expects the level of trade inventory of its products to
decline  over  time,  the speed and  magnitude  of such  reductions, and/or  the
inability of Gillette to develop  satisfactory inventory delivery systems, could
adversely affect operating results in any reporting period.
<PAGE>
                                     PAGE 26
                           PART II. OTHER INFORMATION



Item 6(a)  Exhibits


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

Exhibit 99.1  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

Exhibit 99.2  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

Item 6(b)  Reports on Form 8-K

None.

<PAGE>

                                     PAGE 27
                                    SIGNATURE

SIGNATURES

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

         THE GILLETTE COMPANY
             (Registrant)




/s/ Claudio E. Ruben

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

August 5, 2002