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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 March 31, 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 April 26, 2004 . . . . . . . . . . . . . . . . 1,003,464,842


PAGE 1
PART I. FINANCIAL INFORMATION
THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
(Millions, except per share amounts)
(Unaudited)


Three Months Ended
March 31
------------------
2004 2003
---- ----


Net Sales .......................................... $ 2,235 $ 1,971
Cost of Sales ...................................... 878 818
------- -------
Gross Profit ..................................... 1,357 1,153

Selling, General and Administrative Expenses ....... 801 773
------- -------
Profit from Operations ........................... 556 380

Nonoperating Charges (Income):
Interest income .................................. (3) (3)
Interest expense ................................. 12 14
Exchange ......................................... 20 2
Other charges - net .............................. (3) (9)
------- -------
26 4
------- -------
Income before Income Taxes ......................... 530 376

Income Taxes ....................................... 154 113
------- -------
Net Income ....................................... $ 376 $ 263
======= =======

Net Income per Common Share:
Basic ............................................ $ .37 $ .25
======= =======
Assuming full dilution ........................... $ .37 $ .25
======= =======


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

Weighted average number of common shares outstanding
Basic ............................................ 1,005 1,035
Assuming full dilution ........................... 1,012 1,037


See Accompanying Notes to Consolidated Financial Statements.


PAGE 2
THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
ASSETS
(Millions)


March 31, December 31, March 31,
2004 2003 2003
------------ ------------ -----------
(Unaudited) (Unaudited)

Current Assets:
Cash and cash equivalents .............................. $ 645 $ 681 $ 510
Trade receivables, less allowances, March 2004, $49;
December 2003, $53; March 2003, $75 .................. 850 920 1,036
Other receivables ...................................... 356 351 291
Inventories
Raw materials and supplies .......................... 117 114 104
Work in process ..................................... 242 196 208
Finished goods ...................................... 907 784 754
------- ------- -------
Total Inventories ................................. 1,266 1,094 1,066
------- ------- -------

Deferred income taxes .................................. 281 322 356
Other current assets ................................... 194 282 231
------- ------- -------
Total Current Assets .............................. 3,592 3,650 3,490
------- ------- -------

Property, Plant and Equipment, at cost ................... 7,082 7,085 6,458
Less accumulated depreciation ............................ (3,523) (3,443) (2,985)
------- ------- -------
Net Property, Plant and Equipment ................. 3,559 3,642 3,473
------- ------- -------

Goodwill ................................................. 1,023 1,023 961
Intangible Assets, less accumulated amortization ......... 490 496 395
Other Assets ............................................. 1,078 1,144 1,128
------- ------- -------

$ 9,742 $ 9,955 $ 9,447
======= ======= =======

See Accompanying Notes to Consolidated Financial Statements.


PAGE 3
THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
(Millions, except per share amount)



March 31, December 31, March 31,
2004 2003 2003
------------ ------------ ------------
(Unaudited) (Unaudited)

Current Liabilities:
Loans payable .................................... $ 234 $ 117 $ 824
Current portion of long-term debt ................ 363 742 153
Accounts payable ................................. 499 574 523
Accrued liabilities .............................. 1,800 1,769 1,454
Dividends payable ................................ 163 163 -
Income taxes ..................................... 337 293 315
-------- -------- --------
Total Current Liabilities ..................... 3,396 3,658 3,269
-------- -------- --------

Long-Term Debt ..................................... 2,453 2,453 2,753
Deferred Income Taxes .............................. 609 626 595
Other Long-Term Liabilities ........................ 913 929 863
Minority Interest .................................. 69 65 48

Stockholders' Equity:
Common stock, par value $1.00 per share:
Authorized 2,320 shares
Issued: March 2004, 1,375 shares;
Dec. 2003, 1,374 shares;
March 2003, 1,371 shares ............... 1,375 1,374 1,371
Additional paid-in capital ....................... 1,313 1,273 1,206
Earnings reinvested in the business .............. 7,546 7,333 6,871
Accumulated other comprehensive loss ............. (1,077) (1,088) (1,430)
Treasury stock, at cost: March 2004, 372 shares;
Dec. 2003, 367 shares; and March 2003, 350 shares (6,853) (6,665) (6,099)
Deferred stock-based compensation ................ (2) (3) -
-------- -------- --------
Total Stockholders' Equity ............... 2,302 2,224 1,919
-------- -------- --------
$ 9,742 $ 9,955 $ 9,447
======== ======== ========

See Accompanying Notes to Consolidated Financial Statements.


PAGE 4
THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)
(Unaudited)


Three Months Ended
March 31
------------------
2004 2003
---- ----

Operating Activities
Net income ....................................... $ 376 $ 263
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization .................. 146 138
Deferred income taxes .......................... 15 6
Other .......................................... 4 10
Changes in assets and liabilities, excluding
effects of acquisitions and divestitures:
Trade and other accounts receivable .......... 51 200
Inventories .................................. (183) (129)
Accounts payable and accrued liabilities ..... (26) 81
Other working capital items .................. 53 32
Other noncurrent assets and liabilities ...... 80 (66)
----- -----
Net cash provided by operating activities 516 535
----- -----
Investing Activities

Additions to property, plant and equipment ....... (91) (48)
Disposals of property, plant and equipment ....... 7 11
Other ............................................ 1 -
----- -----
Net cash used in investing activities ...... (83) (37)
----- -----
Financing Activities

Purchase of treasury stock ....................... (188) (706)
Proceeds from exercise of stock option and
purchase plans .............................. 41 10
Proceeds from long-term debt ..................... - 301
Repayment of long-term debt ...................... (374) (382)
Increase in loans payable ........................ 117 152
Dividends paid ................................... (163) (170)
Net settlements, debt-related derivative contracts 99 5
----- -----
Net cash used in financing activities ...... (468) (790)
----- -----
Effect of Exchange Rate Changes on Cash .............. (1) 1
----- -----
Decrease in Cash and Cash Equivalents ................ (36) (291)
Cash and Cash Equivalents at Beginning of Period ..... 681 801
----- -----
Cash and Cash Equivalents at End of Period ........... $ 645 $ 510
===== =====
Supplemental disclosure of cash paid for:

Interest ......................................... $ 13 $ 20
Income taxes ..................................... $ 53 $ 28


See Accompanying Notes to Consolidated Financial Statements.

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



Three Months Ended
March 31
------------------
2004 2003
---- ----

Net Income, as reported $ 376 $ 263
Other Comprehensive Income,
net of tax:
Foreign Currency Translation 11 91
Cash Flow Hedges - 2
----- -----
Comprehensive Income $ 387 $ 356
===== =====


Accumulated Other Comprehensive Loss
- ------------------------------------
The balances for the components of Accumulated Other Comprehensive Loss are:

Accumulated
Foreign Other
Currency Pension Cash Flow Comprehensive
Translation Adjustment Hedges Loss
----------- ---------- ----------- -------------

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)
------ ------ ------ ------

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

See Accompanying Notes to Consolidated Financial Statements.


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 first quarter, 2003
Consolidated Statement of Income: increased cost of sales and reduced gross
profit and selling, general and administrative expenses by $40 million; and
reduced gross profit as a percentage of sales from 60.5% to 58.5%. 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 plan 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 plan had an exercise price equal to the market value
of the underlying common stock. 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.


Three Months
Ended March 31,
----------------
(Millions, except per share amounts) 2004 2003
- ------------------------------------ ---- ----

Net income, as reported $ 376 $ 263
Less: Compensation expense for option
awards determined by the fair-
value-based method, net of
related tax effects (25) (26)
------ ------
Pro forma net income $ 351 $ 237
====== ======

Net income per common share
Basic
As reported $ .37 $ .25
Pro forma .35 .23
Assuming full dilution
As reported $ .37 $ .25
Pro forma .35 .23





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


Accounting Comments (Continued)
- -------------------
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.

Stock Appreciation Rights (SARs) were awarded to the Chairman/President/Chief
Executive Officer (CEO) under an August 2003 amendment to his employment
agreement and represented the right to the appreciation in 1 million shares of
the Company's common stock for the period June 19, 2003, through January 2,
2004. By its terms, the SARs were automatically converted into approximately
108,480 stock units valued at the fair market value of the Company's common
stock on January 2, 2004, ($36.32) for a total value of $4 million. Of this, $1
million was earned and recorded as compensation cost in the Company's financial
statements in the year ended December 31, 2003, and $0.5 million was recorded as
compensation cost in the three months ended March 31, 2004. The stock units earn
dividend equivalent units and are subject to market risk until paid. Subject to
contingencies, the stock units vest on January 19, 2005, and would be forfeited
if the CEO does not remain with the Company through the vesting date. The stock
units are payable in cash, based upon the fair market value of the Company's
common stock on their payment date, one year from the CEO's retirement.

Certain amounts in the financial statements for the first quarter of 2003 have
been reclassified to conform to the 2004 presentation.

Accounting Pronouncements
- -------------------------
In January 2004, the FASB issued FASB Staff Position (FSP) No. FAS 106-1,
"Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003." The staff position allows
companies to either recognize or defer recognizing the effects of the
prescription-drug provisions of the new Medicare Act in their financial
statements as the specific authoritative guidance on accounting for the effects
of the Act is pending. The guidance, when issued later this year, could require
the Company to change previously reported information. Based on its preliminary
analysis, the Company expects that its current retiree medical plans will
qualify for beneficial treatment under the Act. The Company plans to continue to
study the effects of the Act on the retiree medical plans that it sponsors in
the U.S. and evaluate its options in coordinating benefits with the Medicare
program. 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 effects of the Act on the
Company's plans.

PAGE 8
THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Goodwill and Intangible Assets
- ------------------------------

Total goodwill by segment follows.


Net Carrying Amount March 31, December 31, March 31,
(Millions) 2004 2003 2003
------------ ------------ ------------

Blades & Razors $ 140 $ 140 $ 140
Duracell 632 632 571
Oral Care 191 191 190
Braun 60 60 60
Personal Care - - -
----- ----- -----
Total $1,023 $1,023 $ 961
===== ===== =====

The difference between the December 31, 2003 balance versus the March 31, 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.

The detail of intangible assets follows.

Weighted
Average March 31, 2004 December 31, 2003 March 31, 2003
Amortization ---------------------- ---------------------- ----------------------
Period Carrying Accumulated Carrying Accumulated Carrying Accumulated
(Millions) (Years) Amount Amortization Amount Amortization Amount Amortization
------------ -------- ------------ -------- ------------ -------- ------------

Amortized Intangible Assets
Patents 7 $ 83 $ 54 $ 101 $ 69 $ 101 $ 57
Trademarks 9 15 9 16 9 13 5
Software 5 14 12 14 12 13 10
Endorsements - 61 61 61 61 61 61
Other 19 24 5 23 3 11 3
---- ---- ----- ----- ----- -----
Total $ 197 $ 141 $ 215 $ 154 $ 199 $ 136
---- ---- ----- ----- ----- -----
Unamortized Intangible Assets
Trademarks $ 422 $ 423 $ 317
Pension 12 12 15
---- ----- -----
Total $ 434 $ 435 $ 332
---- ----- -----
Intangible Assets, net $ 490 $ 496 $ 395
==== ===== =====
Aggregate Amortization Expense:
For the three months ended
March 31, 2004 $ 6
March 31, 2003 $ 6

Estimated Amortization Expense:
For the Years ending
December 31, 2004 $ 21
2005 $ 9
2006 $ 5
2007 $ 5
2008 $ 5
2009 $ 3


PAGE 9
THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Advertising
- -----------
The advertising expense detailed below is included in selling, general and
administrative expenses.


Three Months Ended
(Millions) March 31
------------------
2004 2003
---- ----

Net Sales $ 2,235 $ 1,971

Advertising 236 167

% Net Sales 10.6% 8.5%


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


Share Repurchase Program
- ------------------------
In the three months ended March 31, 2004, the Company repurchased five million
shares for $188 million. As of March 31, 2004, there are 46 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.


Net Sales
------------------
Three Months Ended
March 31
-------------------
(Millions) 2004 2003
------ ------

Blades & Razors $1,037 $ 893
Duracell 414 384
Oral Care 315 295
Braun 259 214
Personal Care 210 185
------ ------
Total $2,235 $1,971
====== ======



Profit/(Loss) from Operations
----------------------------
Three Months Ended
March 31
---------------------------
(Millions) 2004 2003
------ ------

Blades & Razors $ 417 $ 331
Duracell 74 39
Oral Care 55 49
Braun 21 (6)
Personal Care 13 -
------ ------
Subtotal Reportable Segments 580 413
All Other (24) (33)
------ ------
Total $ 556 $ 380
====== ======



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


Identifiable Assets
-------------------------------
March 31, Dec. 31, March 31,
(Millions) 2004 2003 2003
--------- ------- ---------


Blades & Razors $ 3,211 $ 3,099 $ 3,188

Duracell 2,655 2,754 2,546

Oral Care 1,251 1,269 1,172

Braun 1,253 1,224 1,056

Personal Care 458 470 516
------- ------- -------
Subtotal Reportable Segments 8,828 8,816 8,478

All Other 914 1,139 969

------- ------- -------
Total $ 9,742 $ 9,955 $ 9,447
======= ======= =======



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


Computation of net income per common share
(Millions, except per share amounts)
- ------------------------------------------

Three Months Ended
March 31
------------------
2004 2003
---- ----

Net Income ............................. $ 376 $ 263
====== ======

Common shares, basic .................. 1,005 1,035
Effect of dilutive securities:
Stock options ...................... 7 2
------ ------
Common shares, assuming full dilution 1,012 1,037
====== ======
Net Income per Common Share:

Basic ................................ $ .37 $ .25
====== ======
Assuming full dilution ........ $ .37 $ .25
====== ======


As of March 31, 2004 and 2003, 27.2 million and 55.6 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 average market price for the quarter.


Pensions and Other Retiree Benefits
- -----------------------------------
(Millions)
Other
Pension Benefits Retiree Benefits
------------------ ------------------
Three Months Ended Three Months Ended
March 31, March 31,
------------------ ------------------
2004 2003 2004 2003
---- ---- ---- ----

Components of Net Defined Benefit Expense
Service cost-benefits earned $20 $17 $ 1 $ 1
Interest cost on benefit obligation 40 37 7 7
Estimated return on assets (45) (40) (1) (1)
Net amortization and other 21 22 1 -
--- --- --- ---
Net defined benefit expense $36 $36 $ 8 $ 7
=== === === ===


The Company contributed $8 million to its pension plans in the first quarter of
2004. The Company expects to contribute an additional $27 million to its pension
plans and does not expect to contribute to its other postretirement benefit
plans in 2004.

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 $7 million and $44 million
for the three months ended March 31, 2004 and 2003, respectively. In both
quarters, nearly all of these charges were recorded to selling, general and
administrative expenses. 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 is expected to be completed by 2007.

The Company recorded, in the first quarter of 2004, approximately $6 million to
cost of sales related to project expenses and accelerated depreciation on the
Isleworth, U.K. facility which will cease to be used after 2007. 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 March 31, 2004, at
current service levels and pay rates. Severance payments will span through 2007,
when the Isleworth facility will be completely closed.





PAGE 14
THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Functional Excellence and 2003
Manufacturing Realignment Program
- ---------------------------------

Charges Charges
Provisions Provisions and Uses and Uses Charges
through First through First and Uses Balance
December 31, Quarter Provisions December 31, Quarter Since March 31,
(Millions) 2003 2004 Total 2003 2004 Inception 2004
---------- --------- ---------- ------------ -------- --------- --------

Functional Excellence:
Employee-related expenses $226 $ 3 $229 $(143) $ (22) $(165) $ 64
Other 32 4 36 (28) (4) (32) 4
---- ---- ---- ----- ----- ----- ----
Total Functional Excellence Program $258 $ 7 $265 $(171) $ (26) $(197) $ 68
---- ---- ---- ----- ----- ----- ----

2003 Manufacturing Realignment Program:
Employee-related expenses
Severance payments 32 1 33 - - - 33
Other benefits 6 - 6 - - - 6
Asset-related expenses:
Asset write-offs 5 - 5 (5) - (5) -
Loss on sales of assets 4 - 4 - - - 4
Contractual obligations and other 3 5 8 - (5) (5) 3
---- ---- ---- ---- ----- ----- ----
Total 2003 Realignment Program 50 6 56 (5) (5) (10) 46
---- ---- ---- ----- ----- ----- ----
Total $308 $ 13 $321 $(176) $ (31) $(207) $114
==== ==== ==== ===== ===== ===== ====


Subsequent Event
- ----------------
In April 2004, the Company finalized the acquisition of assets associated with
the Rembrandt brand of at-home and professional teeth-whitening products from
Den-Mat Corporation of Santa Maria, California. Results from this operation will
be reported within the Oral Care business segment.


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 first-quarter net sales, profit from
operations, net income and net income per common share, diluted, in the first
quarter of 2004. The increase in net sales was driven by strong sell-in of new
products, the ongoing strength of existing products and the impact of favorable
foreign currency. Net sales growth, enhanced by solid performance in the
international markets, was supported by a double-digit percentage increase in
advertising. Profit from operations grew at a faster pace than sales due to a
favorable mix towards premium products, cost savings and overhead cost
reductions, offset in part by higher advertising spending. Net income per common
share, diluted, increased at a slightly higher pace due to the above factors, a
lower effective income tax rate and share repurchase activity.

Blades and Razors net sales and profit from operations for the first quarter of
2004 increased significantly versus the comparable period in 2003, driven by new
product launches and an ongoing shift in mix to premium products. Duracell's net
sales increased as compared with the first quarter of 2003 due to category
growth in international markets and the addition of the Nanfu battery company in
China. In the U.S., Duracell's market share remained stable during the first
quarter of 2004 partially due to stepped-up advertising levels and despite
significant promotional activity by the low-price and private-label brands.
Profit from operations nearly doubled reflecting cost and expense reduction
activities. Oral Care net sales increased due to foreign exchange, as an overall
improvement in market share was offset by unmatched new product activity in the
first quarter of 2003. Profit from operations increased due to the higher sales
and favorable mix, partially offset by higher advertising expenses. Braun posted
a significant increase in net sales and profit from operations due to strong
performance in the Africa, Middle East and Eastern Europe (AMEE) region and a
favorable mix towards higher-margin male shavers and higher-priced household
appliances. Personal Care increased net sales, profit from operations and market
share in the quarter driven by new product launches and cost reduction
activities.

The Company's various cost-savings programs, including Functional Excellence and
the Strategic Sourcing Initiative, contributed to improvements in profit and
margin. Compared with the first quarter of 2003, profit from operations rose 46%
in the first quarter of 2004, and operating profit margin increased by 5.6
percentage points. Lower net interest expense and a decrease in the tax rate of
1% were offset by higher foreign exchange expenses in the period. Net income
climbed 43% in the first quarter of 2004 as compared with the same period in
2003. Net income per common share, diluted, increased 48%, outpacing the
percentage increase in net income due to share repurchase activity. The Company
delivered strong free cash flow (as defined in Financial Condition) of $432
million in the first quarter of 2004.
PAGE 16
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS
- ---------------------
Selected statement of income data is presented below.


% of % of %
Net Net Increase/
Three Months Ended March 31, 2004 Sales 2003 Sales (Decrease)
- ---------------------------------------------------------------------------------------------------------
(millions, except per share amounts and percentages)

Net sales $2,235 $1,971 13
Gross profit $1,357 60.7 $1,153 58.5 18
Advertising $ 236 10.6 $ 167 8.5 41
Sales promotion $ 73 3.3 $ 75 3.8 (3)
Other selling, general and administrative (SG&A) expense $ 492 22.0 $ 531 26.9 (7)
------ ------
Total SG&A expense $ 801 35.8 $ 773 39.2 4
------ ------

Profit from operations $ 556 24.9 $ 380 19.3 46
Other (income) and expense
Net interest expense 9 11 (18)
Foreign exchange 20 2 >100
Other (3) (9) (67)
---- ----
Total other income and expnse 26 1.2 4 .2 >100
---- ----
Income taxes 154 6.9 113 5.7 36
Net income $ 376 16.8 $ 263 13.3 43
Net income per common share, diluted $ .37 $ .25 48



Total Company
- -------------
Net sales for the first quarter of 2004 were $2.24 billion, an increase of 13%
versus $1.97 billion in the first quarter of 2003, of which 7% resulted from a
favorable foreign exchange impact. The volume/mix increase was 5% and pricing
contributed 1%. Sales increased due to the ongoing strength of established
products and new product introductions. Net sales also benefited from improved
economic conditions in Latin America and AMEE.

Gross profit was $1.36 billion in the first quarter of 2004, compared with $1.15
billion in the first quarter of 2003. As a percent of net sales, gross profit
was 60.7% in the first quarter of 2004, compared with 58.5% in the first quarter
of 2003. The improvement in gross profit was due mainly to favorable product mix
towards higher margin, premium products within the Blades and Razors, Oral Care
and Braun segments. Manufacturing cost savings, including lower procurement
costs particularly in Duracell and Personal Care also contributed to improvement
in gross profit for the quarter.

Total selling, general and administrative expenses amounted to 35.8% of first
quarter 2004 net sales, compared with 39.2% in the comparable period of 2003.
Within selling, general and administrative expenses, advertising expenses
increased 41% to 10.6% of net sales, from 8.5% of net sales in the first quarter
of 2003. Double-digit percentage increases in advertising were realized in each
operating segment. The Company expects to maintain this level of advertising
support throughout 2004. Sales promotion declined slightly as compared with the
first quarter of 2003. Other selling, general and administrative expenses
decreased 7%, and were down as a percentage of sales, to 22.0% from 26.9% in the
first quarter of 2003, reflecting cost reduction efforts and lower Functional
Excellence expenses.

Profit from operations was $556 million in the first quarter of 2004 (24.9% of
net sales), compared with $380 million in the comparable period of 2003 (19.3%
of net sales). The profit increase was driven by favorable mix to higher-margin
premium products across all major product lines, manufacturing productivity and
overhead cost-saving programs, partially offset by higher advertising expenses.

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


Within nonoperating charges/income, net interest expense amounted to $9 million
in the first quarter of 2004, as compared to $11 million in the first quarter of
2003. Net foreign exchange expense in the first quarters of 2004 and 2003 were
$20 million and $2 million, respectively. The 2004 variance was driven by a $16
million non-cash loss for the write-off of translation adjustment balances
related to the liquidation of certain international subsidiaries.

The effective tax rate was 29% in the first quarter of 2004, compared with 30%
for the same period of 2003. The reduction in the 2004 effective 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 tax rate is expected to
remain close to the current level for the balance of 2004.

Net income was $376 million in the first quarter of 2004 (16.8% of net sales),
compared with $263 million in the first quarter of 2003 (13.3% of net sales),
representing growth of 43%. Net income per common share, diluted, was $.37,
compared with $.25 in the first quarter of 2003, representing growth of 48%. 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.


Operating Segments
- ------------------
The following table summarizes the key operating metrics for the first quarter
of 2004 versus the first quarter of 2003 for each of the Company's five
operating segments.


Blades & Oral Personal Corporate/ Total
Three Months Ended March 31, Razors Duracell Care Braun Care Other Company
- ----------------------------------------------------------------------------------------------------------------------
(millions, except percentages)

Net Sales:
Net sales, 2004 $1,037 $414 $315 $259 $210 $2,235
Net sales, 2003 893 384 295 214 185 1,971
% Incr/(Decr) vs. 2003 16 8 7 21 14 13
Impact of exchange 8 6 7 10 7 7
Impact of volume/mix 6 2 - 12 6 5
Impact of pricing 2 - - (1) 1 1

Profit from operations (PFO):
PFO, 2004 $ 417 $ 74 $ 55 $ 21 $ 13 $(24) $ 556
PFO, 2003 331 39 49 (6) - (33) 380
% Incr/(Decr) vs. 2003 26 90 12 >100 >100 46
PFO as % of net sales, 2004 40.2 17.9 17.6 8.0 6.0 24.9
PFO as % of net sales, 2003 37.1 10.1 16.5 (2.9) .2 19.3


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


Blades and Razors
- -----------------
Net sales of $1.04 billion in the first quarter of 2004 were 16% higher than the
comparable period of 2003, of which 8% represents favorable foreign exchange
impact. Sales growth was driven by the strength of premium shaving systems and
disposables, as well as several new product rollouts, including Venus Divine,
the latest innovation in female shaving, in North America; the Sensor3 shaving
system, a superior three-bladed system for current users of the two-bladed
Sensor; Prestobarba Excel, a new top-of-the-line disposable for the Latin
American market; and in India, Vector Plus, the latest line extension for
entry-level systems in developing markets. Sales growth was strong in all
regions.

Despite competitive activity during the quarter, the Company's most recent
global dollar share was unchanged at 72.8 percent. Global razor volume increased
5%, with both the Mach3 and Venus franchises growing 10%.

Profit from operations of $417 million was up 26% from the first quarter of
2003, and profit margin increased 3.1 percentage points to 40.2%. 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 $414 million increased 8% versus the first quarter of
2003, of which 6% represents favorable impact of foreign exchange. Net sales
gains were driven by year-over-year category growth in Europe, Latin America and
AMEE. The addition of the Nanfu battery business in China also contributed to
net sales growth. 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 expects that 2004 will continue to be challenging, due to the
ongoing, intense competitive environment. The Company held its dollar share of
the market in the first quarter of 2004 partially through stepped-up advertising
and improved marketing programs, despite heightened competition and promotional
activity from low-price brands and private label and expanded distribution of
carbon zinc products. The Company is guarded about its ability to sustain dollar
share at the current price gaps versus low-price brands and private labels, and
will continue to make tactical adjustments on an account by account basis as
needed.

In the first quarter of 2004, profit from operations of $74 million increased
90%, and profit margin grew by 7.8 percentage points, compared with the first
quarter of 2003. This increase was due to higher sales, significant benefits
from cost-savings programs, and lower promotional and free-cell activity versus
the prior year, partially offset by higher advertising expenses.

Oral Care
- ---------
Oral Care net sales in the first quarter of 2004 of $315 million were 7% higher
than the first quarter of 2003, due to favorable foreign exchange. Dollar share
increased in all regions except Latin America. Net sales was affected by strong
demand for manual brushes globally, including Cross Action Vitalizer, Advantage
and Exceed products, offset by unmatched 2003 new product activity related to
the CrossAction Vitalizer manual brush and CrossAction Power battery brush in
North America.

The Company extended its number one global dollar share position in the total
brushing category for the latest 52-week share by 1.3 percentage points to
34.2%, the highest share point gain among all global competitors.

In the first quarter of 2004, profit from operations of $55 million increased
12%, and profit margin increased by 1.1 percentage points compared to the first
quarter of 2003. The increase in profits was driven by higher sales and improved
product mix, both within the manual segment, and overall due to a lower
proportion of battery products and a larger percentage of power toothbrush
refills in the sales mix. This was offset partially by a double-digit percentage
increase in advertising.

PAGE 19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS


Braun
- -----
Braun net sales of $259 million in the first quarter of 2004 climbed 21% over
the first quarter of 2003, with favorable foreign exchange representing 10% of
the increase. Growth was driven by strong performance in the AMEE region,
particularly in Russia and Turkey, and improved year-over-year performance in
the European dry shaver market. Braun shavers continued to gain dollar share in
certain key markets, despite price discounting by competitors.

Profit from operations in the first quarter of 2004 was $21 million compared
with a $6 million loss in the first quarter of 2003. Profit improvement was
driven by a favorable mix towards higher margin male shavers and higher priced
household appliances, tempered by currency-related increases in
European-based manufacturing costs.

Personal Care
- -------------
In the first quarter of 2004, Personal Care net sales increased 14% versus the
first quarter of 2003, with foreign exchange contributing 7% 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 product launches, including the Gillette Complete skin
care line launched in North America, the new side-activated Right Guard "Cool
Spray" in Europe and the relaunch of Soft & Dri.

Profit from operations increased to $13 million in the first quarter of 2004 as
compared with a break-even level in the first 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 behind new products.

PAGE 20
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.



2004 2003
----------------------------------------
Free GAAP Free GAAP
Cash Cash Cash Cash
Three months ended March 31, Flow Flow Flow Flow
- ---------------------------- ----------------------------------------

(millions)
Net income $ 376 $ 263
Depreciation and amortization 146 138
Deferred income taxes and other 19 16
Decrease in accounts receivable 51 200
Increase in inventories (183) (129)
Net change in other assets and liabilities 107 47
---- ---- ---- -----
Net cash provided by operating activities $516 $ 516 $535 $ 535
---- ----- ---- -----
Additions to property, plant and equipment (A) (91) (48)
Disposals of property, plant and equipment (B) 7 11
---- ----
Free cash flow $432 $498
---- ----
Net cash used in investing activities (C)* $ (83) $ (37)
Net cash used in financing activities $(468) $(790)
Effect of exchange rate changes on cash (1) 1
----- -----
Decrease in cash and cash equivalents $ (36) $(291)
===== =====


*C is the sum of A, B, and other totaling $1 million and $0 in the three months
ended March 31, 2004 and 2003, respectively. See Consolidated Statement of Cash
Flows.

Free cash flow for the three months ended March 31, 2004, was $432 million
driven by a strong increase of net income and lower accounts receivable
balances, partially offset by higher inventory balances and additions to
property, plant and equipment. Inventory increased in anticipation of new
product launches and a planned build up of safety stock related to the blade and
razor manufacturing, packaging and warehouse operations realignment program
throughout Europe and Russia. Compared to the first quarter of last year the
increase in net income was slightly more than offset by the changes in working
capital and increased capital expenditures.

The Company used its Free Cash Flow to finance the repurchase of 5 million
shares of Company stock for $188 million, to pay dividends of $163 million and
to reduce its debt by $262 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
quarter of 2004 decreased versus the comparable period of 2003 mainly due to
lower share repurchases.

PAGE 21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS


Debt
- ----
Total debt decreased by $262 million during the three months ended March 31,
2004, from $3.31 billion at December 31, 2003, to $3.05 billion at March 31,
2004. This decrease was principally due to repayments of long-term debt of $374
million, partially offset by an increase in short-term loans payable of $117
million. Cash and cash equivalents decreased by $36 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 March 31, 2004, there was
$174 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 $2.8 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 March
31, 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.

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


Market Risk
- ------------
The Company is subject to market risks, such as changes in foreign currency and
interest rates that arise from normal business operations. The Company regularly
assesses these risks and has established business strategies to provide natural
offsets, supplemented by the use of derivative financial instruments, to protect
against the adverse effects of these and other market risks. The Company uses
foreign-denominated debt and forward contracts to hedge the impact of foreign
currency changes on its net foreign investments, normally in currencies with low
interest rates. Most of the Company's transactional exchange exposure is managed
through centralized cash management. The Company hedges net residual
transactional exchange exposures primarily through forward contracts.

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

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

Based on the Company's overall evaluation of its market risk exposures from all
of its financial instruments at March 31, 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.

Subsequent Events
- -----------------
In April 2004, the Company finalized the acquisition of assets associated with
the Rembrandt brand of at-home and professional teeth-whitening products from
Den-Mat Corporation of Santa Maria, California. Business results related to this
acquisition will be reported within the Oral Care segment for financial
reporting purposes beginning in the second quarter of 2004.


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 first quarters of 2004 and 2003, the Company
recorded the following expenses related to this initiative:

Three Months Ended March 31, 2004 2003
- --------------------------------------------------------------------
(millions)

Functional excellence expense recorded in:
Cost of goods sold $ - $ 3
Selling, general and administrative expense $ 7 $41
--- ---
Total functional excellence expense $ 7 $44
=== ===

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 first quarter of 2004, the Company recorded a charge of $6 million to
cost of goods sold for this program, related mainly to accelerated depreciation
of certain assets and incremental severance accruals.

PAGE 23
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 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.

During the fiscal quarter covered by this report, there have been no significant
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 24
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.

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity
Securities.


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 per Share or Programs(1) Plans or Programs
- ------ ----------- ---------- ----------------- -------------------
01/01/04 - 01/31/04 - $ - - 51,000,000
02/01/04 - 02/29/04 3,020,000 $ 37.06 3,020,000 47,980,000
03/01/04 - 03/27/04 1,980,000 $ 38.54 1,980,000 46,000,000
Total First Quarter 5,000,000 (2) $ 37.65 5,000,000 46,000,000


(1) During the first quarter of 2004, the Company repurchased shares under two
repurchase programs. The first was announced on 9/18/97 authorizing the
purchase of up to 25 million shares of the Company's common stock and was
subsequently amended to authorize the purchase of up to 150 million shares.
The Company repurchased the remaining shares under this program in the
first quarter of 2004. The second 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) All share repurchases were effected in accordance with the safe harbor
provisions of Rule 10b-18 of the Securities Exchange Act.


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.

PAGE 25
PART II. OTHER INFORMATION


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 26
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 27
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 28
PART II. OTHER INFORMATION


Item 6(a) Exhibits

The following exhibits are included herewith:

3(ii) Bylaws of The Gillette Company, as amended March 25, 2004.

10.1 Employment Agreement, dated January 19, 2001, between The Gillette Company
and James M. Kilts, as amended on March 24, 2004.

10.2 Form of Agreement Relating to Terms of Employment between The Gillette
Company and its named Executive Officers other than Messrs. Kilts and
DeGraan.

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 January 29, 2004, a current report on Form 8-K
containing one exhibit: a press release announcing the Company's financial
results for the three months and year ended December 31, 2003.

(b) The Company furnished on March 25, 2004, a current report on Form 8-K
containing two exhibits: an amendment to the employment agreement between
the Company and James M. Kilts, and a press release announcing that James
M. Kilts, Chairman and Chief Executive Officer, had extended his employment
agreement for one year.

PAGE 29
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

April 28, 2004

EXHIBIT INDEX


Exhibit Number and Description

Exhibit 3(ii) Bylaws of The Gillette Company, as amended March 25, 2004

Exhibit 10.1 Employment Agreement, dated January 19, 2001, between The Gillette
Company and James M. Kilts, as amended on March 24, 2004.

Exhibit 10.2 Form of Agreement Relating to Terms of Employment between The
Gillette Company and its named Executive Officers other than Messrs. Kilts and
DeGraan.

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.