Filed Pursuant to Rule 425
                                     Filing Person: The Procter & Gamble Company
                                           Subject Company: The Gillette Company
                                                      Commission File No.: 1-922

                            PROCTER & GAMBLE COMPANY

                            Moderator: Clayton Daley
                                January 28, 2005
                                  6:00 a.m. CT

Clayton Daley:    Good morning. I want to begin with an apology for the last
                  minute notice, and for asking you to join us so early in the
                  morning, but we really appreciate the efforts that you've made
                  to be with us here today.

                  Welcome to the meeting to announce the agreement by Procter &
                  Gamble to purchase the Gillette Company. Joining me today are
                  A.G. Lafley, our Chief Executive; and Jim Kilts, Gillette's
                  Chief Executive Officer.

                  In terms of the agenda for today's meeting. I will first
                  provide a very brief update on P&G's earnings and recent
                  business results, including the guidance update. Then, Jim
                  will offer his perspective on the health of Gillette's
                  business, and the reason why they approached P&G. Then I'll
                  outline the deal structure and top line economics.

                  A.G. will lay out the strategic rationale and why this deal
                  makes sense for P&G shareholders. I will then take you through
                  the financial details including the synergy plan. This will be
                  followed by A.G. and Jim discussing the integration, plan, and
                  A.G. will wrap it up. We'll, of course, be available for Q&A.

                  As always, I want to thank you. Our wonderful lawyers did
                  that. I want to remind you that the presentation this morning
                  will include a number of forward-looking statements. If you'll
                  refer to our most recent 10-K and 8-K reports, including the
                  8-K that we will file today. You'll see a discussion of
                  factors that could cause the company's actual results to
                  differ materially from these projections.

                  Also, as required by Regulation G, we need to make you aware
                  that earnings presentation ((inaudible)) P&G's momentum
                  continues to be strong. We delivered another quarter of sales
                  and earnings growth above our long-term objectives.

                  Sales grew nine percent, and EPS grew 14 percent behind
                  continued, strong, organic volume growth and solid operating
                  margin performance up 50 basis points. The strength of our
                  innovation program, and the breadth of our portfolio has
                  helped overcome both continued pressure from higher commodity
                  prices, and increased competitive spending in a number of

                  Diluted net earnings per share were 74 cents, up 14 percent
                  versus year ago, and two cents ahead of the consensus
                  estimate. This was the result of better than expected
                  operating margin expansion. The strong performance was driven
                  by beauty care and baby and family care. Every global business
                  unit and all regions are delivering strong top line growth.

                  Beauty care, and baby and family care are leading bottom line
                  growth. Beauty care is investing behind numerous initiatives
                  to sustain strong profitable top line growth with good
                  progress so far. Baby and family care also delivered excellent
                  results, behind strong volume growth and pricing to recover
                  commodity related cost increases.

                  Fabric and homecare results were inline with year ago. We
                  continue to invest in a strong fabric and homecare initiative
                  program and continued geographic expansion in major markets

                  China and Russia. At the same time, we are absorbing the
                  impact of escalating commodity costs, and expenses related to
                  the addition of liquid detergent capacity in North America.

                  We expect margin pressure to persist. Commodity costs will
                  remain at higher levels for the foreseeable future, although
                  we clearly expect to recover them via pricing and mix over
                  time. Snacks and coffee profits were down for the quarter.

                  However, the recently announced price increase on coffee was
                  followed by all key competitors, and should largely offset
                  higher green coffee costs. We expect solid earnings growth for
                  the balance of the fiscal year. Finally, healthcare was down
                  slightly as expected, due to a tough based period where
                  earnings grew more 30 percent.

                  Recall we over delivered last year's December quarter, due to
                  the early and severe cough/cold season. And in addition, the
                  base period included the launch of Crest Premium Whitestrips.
                  Again, we expect solid earnings growth for the healthcare
                  segment, during the balance of the fiscal year.

                  The portfolio of billion brands is expanding volume double
                  digits, with 15 of 16 brands growing. We are continuing volume
                  growth in nine of our 10 top customers. All top 16 countries
                  accounting for about 80 percent of our sales are growing
                  volume at or above long-term targets.

                  As discussed in our December analyst meeting, winning with
                  more of the world's consumers is part of our top line growth
                  strategy. We are making good progress against this substantial
                  opportunity. In developing markets, we delivered six
                  consecutive quarters of mid teens or better volume growth with
                  China continuing to set the pace.

                  Last quarter, we again, grew in the high teens. Importantly,
                  our developing market business delivered returns above the
                  company's average in the past three years. This is an
                  indicator that 

                  we are executing a sustainable business model that will reward
                  shareholders for the additional risks inherent in these

                  In summary, we are pleased with our results in the quarter. We
                  continue to leverage the breadth of our portfolio. Our strong
                  innovation program is continuing to deliver growth even though
                  we're going through a challenging cost and operating
                  environment. Now despite these challenges, and the difficult
                  base period comps, we delivered another quarter of results
                  ahead of long-term objectives.

                  Now let me move on to guidance. As you're aware, over the past
                  12 months, a number of P&G's key competitors have lowered the
                  bar with regard to earnings growth commitment's in order to
                  better compete with P&G's initiative program.

                  So far, this has not impacted our ability to delivery strong
                  top line growth behind consumer meaningful innovation and
                  strong in market execution. However, we are not taking the
                  success for granted. Instead, we remain focused on sustaining
                  P&G's momentum, behind our initiative pipeline, which is
                  particularly robust in the second half of the fiscal year.

                  Foreign exchange is also expected to contribute a slightly
                  higher rate on sale of about two percent. With these two
                  factors together, FX and the strength of our initiative
                  pipeline, it gives us the confidence to raise our top line
                  growth expectation for the March quarter, and the fiscal year
                  to the high single digits. Despite continued margin pressure
                  from commodities we are also raising our fiscal year EPS
                  guidance by three cents, to a range of 2.61 to 2.64.

                  In summary, we're encouraged by our ability to delivery
                  earnings per share growth of 13 to 14 percent, in a year
                  that's been characterized by challenging cost, and competitive
                  environments, while restructuring, of course, is now funded

                  Now that concludes the business update. I've condensed this,
                  of course, significantly in order to provide significant time
                  to discuss the topic for which we have brought you together at
                  this early hour. The transformational acquisition of Gillette
                  company by Procter & Gamble. We'll start by Jim giving you and
                  update on Gillette's recent results, and the rationale for
                  their decision to approach us. Jim.

James Kilts:      Thanks, Clayt. And good morning everybody. It's great to be
                  here on this historic day. And I look upon this union of
                  Gillette and Procter & Gamble is more than a great opportunity
                  for growth and value creation for shareholders. I believe it's
                  a unique and historic event in business and certainly in the
                  consumer product industry.

                  There are no two consumer products companies in the world with
                  a better alignment of brands, markets, and philosophies. The
                  combination will create the best consumer products company in
                  the world. That's good news for consumers, for customers, for
                  shareholders, and for employees. Clearly, for Gillette
                  shareholders both the timing and the terms of the transaction
                  are attractive.

                  Four years ago, we were an underperforming and drifting
                  company, but we've turned the company around. We've rebuilt
                  the business, and our current share price reflects our
                  progress. Our share price appreciated more than 20 percent
                  last year. And the terms of our agreement provide a further
                  premium to our investors. From a Gillette perspective, our
                  business has never been stronger, more vibrant, and better
                  positioned for continued growth.

                  While I can't talk about our full year performance since we
                  are still a week away from releasing our numbers, you know
                  from our nine month results that 2004 has been an outstanding
                  year for Gillette. For the nine months, sales were up 11
                  percent. Net income increased 26 percent. Profit from
                  operations grew 25 percent. And earnings per share rose by 27
                  percent. And the quality behind our numbers is unmatched.

                  We had a record setting pace for successful new product
                  introductions, for continued growth in our core categories,
                  for trade up growth, to premium products, and for growth in
                  developing markets. And the strength was evidence across the
                  power. Our M3Power the first battery powered wet shaving
                  system for men met all of its targets and is well on its way
                  to becoming a half billion dollar brand at retail.

                  In batteries, Duracell built brand equity with our very
                  successful trusted everywhere advertising campaign. They also
                  developed new revenue sources, cut costs, and countered
                  rampant price promotion. In a very tough market, Duracell
                  achieved record profitability, more than doubling its pricing
                  of three years ago.

                  In oral care, we've increased sales by 16 percent with our
                  most aggressive product effort ever, including the CrossAction
                  Vitalizer manual toothbrush, the ProfessionalCare 7000 and
                  8000 premium rechargeable toothbrushes, and the Sonic
                  Complete, our first entry in to the Sonic rechargeable

                  And we entered whole new areas with our Hummingbird battery
                  powered flossers and Brush-Ups, disposable teeth wipes. In
                  personal care, we've cut costs. Introduced new improved
                  products, increased advertising and profitably grew sales. And
                  at Braun, we've cut costs, doubled our add spending, invested
                  in filling out the brand portfolio, and significantly improve

                  The progress across all of our businesses reflect a
                  re-energized marketing company. Our marketing commitment and
                  effectiveness are clear in two numbers. Our advertising
                  spending as a percent of sales has risen about 400 basis
                  points in the past three years, while our trade and consumer
                  promotion spending has gone down nearly 200 basis points. We
                  are now earning market share increases and not buying them.

                  At the same time, we grow operating margins behind a 450 basis
                  reduction in cost of goods. So when we look across the
                  consumer product landscape, it's been pretty clear that we're
                  performing well. But at the same time, there would be clear
                  benefits in combining Gillette with another industry leader.

                  A combined company would provide a stronger leadership
                  position that would make us more innovative for consumers, and
                  more responsive for our customers. We could also use our
                  combined scale to generate synergies that create the
                  affordability to both reinvest and generate value for our

                  Procter & Gamble is a home run in every one of those
                  dimensions. From its brands and its operating performance, to
                  the interface, with customers and the terrific synergies we
                  have ahead of us. There isn't a weakness in this combination.
                  That's why we approached Procter & Gamble several months ago,
                  to explore a potential deal. After a period of discussion we
                  couldn't agree on terms. Subsequently, Procter & Gamble
                  reopened the dialogue and fortunately, we were able to reach
                  an agreement.

                  Our Board, obviously, had to be comfortable with the value of
                  the Procter & Gamble stock we are receiving in this deal. And
                  I will tell you, they are and I am. Inherent in that value is
                  what we bring, what Procter & Gamble brings, and what we can
                  create by this great combination. In short, we like what we

                  With that, I'd like to hand it back to Clayt, who will get in
                  to detail on the deal and its impact. Clayt.

Clayton Daley:    All right. Thanks, Jim. Our respective boards have agreed to a
                  stock transaction with an exchange ratio of 0.975 P&G shares
                  for each Gillette share. Concurrently P&G will begin a share
                  repurchase program in the range of 18 to $22 billion to be
                  completed over the next 12 to 18 

                  months. When the buyback is complete, this will represent the
                  equivalent of about a 60 percent equity, 40 percent cash deal.

                  Now based on yesterday's closing prices, the acquisition
                  premium is about 18 percent or approximately 14 times EBITDA
                  when the cost synergies are included. This is a fair price,
                  for a stable of category leading, global billion dollar brands
                  with strong growth momentum.

                  This is also comparable to multiples paid for other world
                  class properties, such as (Buyersdorff) which was acquired
                  (Chebo, Mondavi) which was bought by Constellation brands, and
                  Gatorade which was acquired by Pepsi through the Quaker
                  acquisition. These are all world class properties, which
                  justify significant acquisition premiums, because they offer
                  the acquirer significant growth and cost synergies.

                  Gillette's razors and blades business is the crown jewel of
                  the consumer products industry. Therefore, it is no surprise
                  that the deal multiples fall into established ranges for top
                  end transactions. Now let's turn over to the overview of the
                  value potential that is being created by this deal.

                  We expect this deal to generate 14 to $16 billion of
                  incremental shareholder value. Ten to $11 billion will come
                  from cost synergies. Gross synergies should contribute an
                  additional four to five billion. All other factors, such as
                  transaction costs, option leakage, benefits from tax, cap ex
                  and working capital efficiencies are expected to wash out on a
                  valuation basis.

                  Probably most of you have already done the math, roughly
                  eight-and-a-half billion of the incremental value should
                  accrue to the current Gillette shareholders. This is below the
                  low end of the range of cost synergies. Five-and-a-half to
                  seven-and-a-half billion will go to P&G shareholders. This is
                  a combination of the growth synergies, as well as the upside
                  on the cost synergies.

                  Now the key milestones to complete this transaction are as
                  follows. The 18 to $22 billion share repurchase program starts
                  today. We expect to mail out the proxy solicitation and S4
                  registration in mid April. The proxy vote is tentatively
                  scheduled for P&G and Gillette shareholder meetings in mid

                  And assuming all goes well with regulatory and governmental
                  approvals, we would expect to close the deal in the fall. Now
                  this provides an overview of the deal structure. A.G. will now
                  walk you though the rationale for this deal, and why it
                  provides upside to our sustainable growth model.

A.G. Lafley:      Thanks a lot, Clayt. Good morning. Last December, we outlined
                  P&G's strategy for sustainable growth. We also discussed
                  long-term goals for sales, earnings per share, and for free
                  cash flow. Today's announcement of our intention to acquire
                  Gillette is full consistent with these strategies, and will
                  provide upside to our combined future growth potential.

                  There are four reasons why this acquisition makes sense
                  strategically. We're combining two of the leading consumer
                  products companies in the world, a combination that leverages
                  the structural characteristics of our industry. We are
                  accelerating the evolution of P&G's portfolio, towards faster
                  growing, higher margin, more asset efficient businesses.

                  We are strengthening already strong relationships with retail
                  customers. We are leveraging both company's core strengths in
                  branding, in innovation, in global scale, and in go to market
                  capability to accelerate growth. So let's look at each of
                  these benefits more closely. Together, Gillette and P&G can
                  grow at levels neither company could achieve or sustain on its

                  The key reason is that consumer products is in the end a scale
                  business. Scale drives margin growth and the opportunity to
                  reinvest. The more scale a company can create and leverage,

                  more opportunities there are to keep growing margins, and to
                  keep reinvesting in brands and innovation. The more we can
                  reinvest in branding and innovation that really delights
                  consumers, the more we can grow. The more we grow, the greater
                  the margin, the greater the scale.

                  And importantly, scale is not just about size. The way we
                  think about scale is much broader. We have industry leading
                  scale in our breadth, and depth of consumer understanding in
                  our go to market capabilities with retailers, in distribution,
                  in innovation, commercialization, in marketing investments, in
                  research and development exchanges and in business services.

                  All of this scale translate in the end to leadership. And this
                  is an industry that rewards leadership. We're bringing
                  together the two strongest leaders at a time when both
                  companies' performance is the strongest it's been in a decade.

                  Second, the addition of Gillette's brands accelerates the
                  evolution of P&G's portfolio in the faster growing higher
                  margin, and more asset efficient, health, personal care and
                  beauty businesses. With the exception of batteries and small
                  appliances, all Gillette business segments fall in the health,
                  personal or beauty care, which will now represent a full 50
                  percent of P&G's portfolio.

                  This combined company will have an unmatched portfolio of 21
                  brands with sales of $1 billion to $5 billion each. Combined,
                  we are the market leader in categories that represent
                  two-thirds of total company sales. We are increasing the
                  diversification and the balance of P&G's portfolio and the
                  flexibility we need to deliver sustainable growth over the
                  long term.

                  The third reason this acquisition makes sense is that it
                  enables us to strengthen our relationships with winning retail
                  customers around the world. We will bring an even stronger
                  innovation pipeline across a more diverse and profitable mix
                  of categories and brands, and even larger portfolio of leading
                  brands. And we'll also bring greater shopper knowledge and
                  broader and deeper expertise in both men's and women's

                  The fourth reason the acquisition make sense is that we can
                  leverage Gillette's and P&G's core strengths. Core strengths
                  of creating and building brands, of innovation and technology,
                  up global scale and of the way we go to market. There are many

                  One of Gillette's core strengths is it's ability to trade up
                  consumers, with premium products that perform better, products
                  like M3Power and Oral-B power brushes. Multiplying their
                  capability with P&G's marketing and go to market strength
                  opens significant opportunities for accelerated growth in
                  developing and developed markets.

                  In short, this acquisition of Gillette is a perfect fit with
                  P&G's long-term sustainable growth strategy, and the logical
                  next step in the evolution of P&G's business portfolio. Now
                  strategic fit is necessary, but not sufficient. There must
                  also be opportunities to create additional consumer and
                  additional shareholder value over the long-term, more value
                  than either company could create on its own. The Gillette
                  acquisition passes this test and provides considerable upside
                  to P&G's sustainable growth model.

                  Recall, this is how we get to our long term four to six
                  percent sales growth target. The combination of P&G and
                  Gillette creates upside in virtually every element of the top
                  line model. First, we'll benefit from Gillette's portfolio,
                  which is more concentrated in faster growing markets, such as
                  razors and blades oral care, and personal care.

                  Going forward, market growth should contribute three percent
                  for the combined businesses, versus only a bit ore than two
                  percent for P&G alone today. We'll also be even better
                  positioned to deliver additional organic growth from
                  innovation and technology, which drives share growth, new
                  business creation and enables geographic white space
                  expansion. Both P&G and Gillette have an outstanding track
                  record of innovation leadership.

                  P&G has generated roughly $5 billion in retail sales in
                  categories we did not even play in just four years ago.
                  Gillette has created almost $5 billion in new retail sales
                  from products launched over the past five years. In fact,
                  together, P&G and Gillette brought to market, half of the most
                  successful consumer branded product initiatives for the past
                  three years.

                  What's important here is that our innovative capabilities, our
                  consumer knowledge, and our go to market strengths are
                  complimentary. On the one hand, we can connect and develop
                  across common innovation and technology areas in oral care,
                  and personal care. This will enable us to continue setting the
                  pace of innovation in core Gillette and P&G businesses.

                  At the same time, we can leverage complementary consumer
                  understanding. P&G knows a fair amount about women, how to
                  innovate for them, and market to them. Gillette's expertise is
                  an innovation and marketing to men. It's a simple, but we
                  believe potent combination.

                  I'll give you just one example, women's hair removal. Today
                  it's a $10 billion market, projected to grow eight personally
                  annually over the next five years. Today, there are consumers
                  who are not fully satisfied with current solutions. We believe
                  we can combine Gillette and P&G technology with Gillette and
                  P&G expertise in marketing. We believe we will be able to
                  market to women and leverage strong Gillette and P&G brands to
                  deliver this continuous innovation that will truly delight

                  In addition, we can leverage P&G's strong customer business
                  development approach with Gillette's out standing execution at
                  store level. Along with P&G's leadership presence in key
                  developing markets, we can expand innovation in areas like
                  hair removal, faster than Gillette could accomplish on its

                  Developing markets are a significant opportunity. With market
                  growth projected at five to six percent over the next five
                  years. We believe we can help Gillette brands take fuller
                  advantage of

                  this growth by achieving deeper market penetration and
                  critical markets like China, and Russia, Mexico and Turkey.

                  Over the past decade, we've built a strong market position in
                  a number of these fast growing developing markets. Our go to
                  market capabilities are reasonably well developed. And our
                  scale in developing markets is about five times that of
                  Gillette today.

                  Equally important, we've been successfully expanding our brand
                  portfolio to better serve lower income consumers. Our growing
                  expertise, and low cost, low capital innovation, and our down
                  to the trade customer penetration can also enable Gillette
                  brands to profitably serve more of the world's consumers.

                  In summary, P&G and Gillette, have been delivering at the top
                  end of their organic growth targets over the past three years.
                  And we're confident, that by combining these two industry
                  leading companies, we can create even more upside potential
                  for top line growth.

                  There's also considerable upside for the bottom line. Both P&G
                  and Gillette have robust standalone margin expansion plans
                  currently in place. We can apply P&G's global scale to
                  Gillette's current cost structure in many areas, including
                  purchasing and the way we go to market together. We've
                  identified substantial costs and growth synergies, which Clayt
                  will take you through in a moment.

                  It's clear that this should generate substantial and
                  sustainable margin and earnings improvements. Importantly,
                  both companies have a track record, and strong credibility to
                  delivery productivity improvement. We're confident that the
                  combined companies can deliver further margin gains, based on
                  identified synergy opportunities, and additional scale

                  In summary, we remain confident that P&G can sustain growth at
                  our target levels, the ones we've committed to without the
                  acquisition of Gillette. But with the acquisition of Gillette,
                  our sustainable growth model becomes even stronger for the
                  longer term.

                  We'll have an even stronger portfolio, and more attractive
                  industries, greater opportunities to set the pace of
                  innovation. And we'll have the ability to get more out
                  Gillette's strong innovation program, by leveraging P&G's go
                  to market capabilities around the world. As a result, we are
                  increasing our long term sales target by one full percentage
                  point from four to six to five to seven percent.

                  Based on the synergy plan, we expect that the combined entity
                  will generate 24 to 25 percent operating margins by the end of
                  this decade, versus the 19 to 20 percent, P&G delivers today.
                  This should provide P&G shareholders with additional upside,
                  to our double digit earnings per share growth target.

                  In short, this acquisition makes sense. It makes sense
                  strategically, financially and operationally. It's a unique
                  opportunity to make two industry leaders even stronger, and
                  even better positioned for sustained long-term growth. Now I'm
                  going to hand the presentation back to Clayt.

Clayton Daley:    Thanks, A.G. Here are the building blocks of how this
                  transaction generates the 14 to $16 billion of incremental
                  shareholder value. As I said before, we expect 10 to $11
                  billion to come from cost synergies. Gross synergies should
                  contribute an additional four to five billion. So let me first
                  turn to the plans on cost synergies.

                  We anticipate more than $1 billion of synergies to be achieved
                  by year three. We see opportunities in purchasing,
                  manufacturing, and logistics, through increased sale, improved
                  asset utilization and coordinated procurement. We see
                  opportunities to substantially reduce our combined
                  administrative costs.

                  We aim to achieve this through elimination of SG&A overlap
                  between the two companies, the delivery of key support
                  functions through P&G's global businesses services group,
                  which delivers best in class cost. And the integration of
                  Gillette's brands with minimal additional staff, in corporate,
                  market development, and global business service organizations.

                  As a result, we anticipate a reduction of about 6,000
                  positions. And this is roughly four percent of the combined
                  enrollment of the two companies of 140,000 employees. Of
                  course, we are committed to fielding the best team. Gillette's
                  current management will have an equal opportunity in the new
                  company. And we expect a certain amount of the headcount
                  reduction to come from the P&G side.

                  Finally, we see economies of scale, and retail selling and
                  marketing, including media buying. Savings and material
                  purchasing, media buying and business support activities are
                  expected to be realized fairly quickly after the closing.
                  Synergies and other areas will take a little longer.

                  Now to put the cost synergies in perspective, we've analyzed
                  them versus our (Tam) brands, Clairol and Wella commitments.
                  As you can see, relative to the actual (Tam) brands and
                  Clairol synergies, the projected - and the projected Wella
                  synergies, the Gillette estimates are clearly reasonable.
                  Importantly on (Tam) brands and Clairol, we delivered the
                  synergies ahead of schedule. The Wella synergies are on track.
                  And we are confident the synergies we've identified for
                  Gillette are doable.

                  Second, we anticipate to create four to five billion of value
                  through the one point acceleration in top line sales growth,
                  as A.G. already talked you through this, and the key drivers
                  which provide the growth upside. The biggest contribution will
                  come from leveraging our developing market infrastructure to
                  capture more value from Gillette's brands, and innovation
                  programs in those geographies.

                  Now on to the deal's impact on P&G's earnings per share
                  progression. The deal is expected to be accretive in year
                  three, and is only slightly dilutive in year two, including a
                  significantly amount of non cash charges. Year one dilution is
                  accentuated by one time impacts, and by the fact that many
                  synergies are tied to system integration, which will take some
                  investment and some time to complete.

                  As you can see, we have acquired about 50 cents in earnings
                  per share, which are expected to grow at a double digit rate.
                  The dilution impact from the share exchange is partially
                  offset by the announced share repurchase program. The outline
                  growth and cost synergies are building up over a three year

                  The dilution from net new intangibles amortization is expected
                  to be five to seven cents a share. And finally, the one time
                  impacts include non qualifying acquisition costs among other
                  items. We have provided for restructuring costs on the P&G
                  side, because as I mentioned earlier, it is our objective to
                  field the best team from the combined P&G and Gillette talent

                  Now let's walk briefly through the valuation. As I mentioned
                  at the beginning, we are paying an 18 percent premium on the
                  agreed basis of share exchange. It provides Gillette's
                  shareholders with a post yield valuation of about $54 per
                  share, based on yesterday's closing price. This represents a
                  full but fair price for this world class property.

                  In terms of value creation, the premiums of the Gillette
                  shareholders is more than justified by the low end of the cost
                  synergy range. P&G shareholders will capture the growth
                  opportunities provided by the deal as well as the potential
                  upside to the cost synergies. This translates to about
                  five-and-a-half to $7-and-a-half billion. Now let me hand it
                  back to A.G. and Jim who will talk about the integration and
                  wrap up the presentation.

A.G. Lafley:      We're confident we can manage the integration of the two
                  companies while staying sharply focused on the health of both
                  Gillette's and P&G's established businesses. There are three
                  reasons for this confidence. First, we have complimentary
                  organization structures, and SAP systems, which are designed
                  to enable fast, and efficient integration of new businesses
                  with minimal disruption.

                  Secondly, both companies are coming from positions of
                  strength, with healthy business momentum and strong cash flow.
                  Third, we have a strong cadre of leaders running these
                  operating businesses. We've done it before. And the combined
                  Gillette and P&G leadership teams is committed to do it again.
                  Jim will lead this integration for us, and here are a few more
                  thoughts from him, Jim.

James Kilts:      Thanks, A.G. When we started to evaluate this combination, we
                  saw many obvious synergies. At the core, they are driven by
                  having two companies with infrastructures that overlap and
                  products and geographies that are complimentary.

                  At the core, they are driven by having two companies with
                  infrastructures that overlap and products and geographies that
                  are complimentary. The level of synergies that Clayt detailed
                  are ones that I know that we can get. In the process, we will
                  make the business even more capable of driving growth. And I
                  am committed to working with A.G. to do just that.

                  If you'll look at the level of synergies, they're big. At the
                  same time, they are very reasonable. The cost synergies are
                  consistent with levels that Procter & Gamble has attained in
                  the past. They are also synergies that I know how to get. We
                  will utilize both internal and external resources to identify
                  the specific opportunities.

                  We will set specific targets for each area of our opportunity.
                  We will establish teams to pursue these targets. I'll oversee
                  that entire process along with other senior managers at
                  Gillette and Procter & Gamble. We will reach these targets,
                  and accelerate our growth.

                  On the revenue side, we'll create new benefits and better
                  value for our consumers, and make it easier for our customers
                  to deal with us, and to make our company even more important
                  to them in building their business. These revenue improvements
                  are going to happen. To achieve these results, I've agreed to
                  stay on for at least a year to work with the new company, and
                  lead the integration efforts.

                  And just in case, I haven't convinced you that I'm a believer,
                  I have also agreed to roll over all of my Gillette options,
                  and shares in to Procter & Gamble stock, and hold it for at
                  least two years. And this is what Gillette's largest investor
                  thinks of the deal.

Warren Buffett:   I'm Warrant Buffett, I'm Chairman of Berkshire Hathaway. And
                  back in 1989 Berkshire bought what's now the equivalent of 96
                  million shares of Gillette. During that entire period, we've
                  never bought or sold a share. I've been happy with the

                  But I have to tell you I'm a lot happier today. This merger is
                  going to create the greatest consumer products company in the
                  world, a company with a market cap of close 200 billion
                  combining two companies that already had out standing records,
                  out standing managements, out standing products, it's a dream

                  And to quantify that, description, I intend and will purchase
                  enough shares or either Procter & Gamble or of Gillette, so
                  that by the time the deal ends or is made, we will have 100
                  million shares of Procter & Gamble stock. That makes the math
                  a little easier, but that's not the reason I'm doing it. I'm
                  doing it because I like this deal.

James Kilts:      The key point you should take away from all of this is P&G's
                  acquisition of Gillette, makes sense for our consumer. It
                  makes sense for our retail customers. It makes sense for
                  employees. And it makes sense for shareholders. It's a unique
                  opportunity that we're in a strong position to capture and

                  I'm confident P&G is well placed to execute this acquisition
                  with excellence and deliver the consistent, reliable,
                  sustained growth shareholders expect, and deserve. Now we'd be
                  happy to take any of your questions. Thank you.

(Amy):            Can you talk about - can you hear me? Hello? It's working now.
                  Thanks. Two questions, first is just on the accelerated
                  growth, I understand the cost synergies, that seems pretty
                  straight forward, but on the top line synergies, Gillette,
                  obviously I thought those were going to happen with Duracell
                  and I think they didn't. This is a very different deal.

                  And there were some specific issues with Duracell, but can you
                  talk a little bit more about what drives the acceleration in
                  the top line growth? Because the numbers are substantially
                  higher than either Gillette or P&G's numbers alone?

                  And then my second question, A.G. is really on the GBU
                  structure. My understanding was that the deals you've done so
                  far, you've sort of plopped in to your existing GBU structure.
                  Are you going to create a new GBU for Gillette? Are you going
                  to create three new GBUs for all of Gillette's businesses, can
                  you talk a little bit about that.

A.G. Lafley:      OK. First one first, and Jim should join in here because we've
                  talked an awful lot about how we drive growth. I mean this
                  obviously isn't worth doing just to get the cost efficiency
                  and additional productivity. The simple way to think about is
                  we need to add one point of growth. If you project a growth
                  rate to the end of the decade, this company will be about $75
                  billion in size. We need another $750 million a year, OK.

                  We believe at least half of that is going to come from
                  developing markets by simply plugging in and playing with
                  broader distribution, deeper penetration, the Gillette brands
                  that will be combined with the P&G brands. And we think that's
                  pretty dog gone conservative if you look at the growth rates
                  in those markets, and you look at where we are in terms of
                  distribution and penetration today in places like China,
                  Central and Eastern Europe, Mexico, Turkey, et cetera.

                  The second chunk comes from combining two, you know, at least
                  in our industry, world class go to market organizations. We
                  both run without our top retail customers around the world on
                  what we call customer business development teams or multi
                  functional teams.

                  Gillette has a fantastic in store presence and retail
                  capability. You know, nobody in the world gets more in store
                  point of purchase displays than Gillette. And we're pretty
                  sure, as we look at the opportunities just in the top 10
                  customers, that together we're going to grow faster.

                  And then, the last piece is what do we do with the brands, and
                  the technologies that we have together. And the three areas
                  we're going to be poking around pretty fast are oral care,
                  which is a relative no-brainer. They're world class and

                  And on the brush side, we're contenders certainly on the
                  (dentifrice) side. And there are lots of opportunities to work
                  together on the innovation that we have in hand, and the
                  technologies we have in hand. And there are an awful lot of
                  opportunities for us to go to market, and build these brands,
                  and build consumption and market share in this area.

                  The other two opportunities we talked a bit about women's hair
                  removal. Gillette is off to a terrific start with Venus. I
                  think, as you know, women's hair removal is about shaving, but
                  it's also about a lot more. And again, we've got technologies
                  on both sides that we think can get after this $10 billion
                  market. And there's really nobody else that's single mindedly
                  focused on it.

                  The last piece is Gillette's male grooming and personal care
                  brand. In their portfolio, understandably given the other
                  priorities it maybe hasn't had, you know, the full attention
                  and the full priority. Frankly, it was that way at P&G five or
                  six years ago. We've learned a lot about personal care.

                  We've learned a lot about beauty care. We have a lot of
                  technology, you know, in market, and we have a lot of
                  technology in the cupboard. And we think we'll be able to
                  create a leading men's personal care brand in the world. So
                  that's where the growth synergies are going to come from.

                  On your second question, (Amy), you know, from a - we have an
                  organization structure right now, that we can basically plug
                  in and play. But Jim, and I and his leadership team, and my
                  leadership team have obviously got to sit down together, and
                  figure out, you know, where, you know, what's the right way to
                  get organized.

                  But I will say this some of the Gillette businesses are
                  obviously going to be free standing businesses, you know,
                  obviously. They're different industries. Gillette is the
                  leader in the industry. It would make absolutely no sense for
                  us to change any of that.

                  On the back room side, because we're both on SAP, because
                  there are tremendous commonalities in what we do our supply
                  bases are similar, our retail customer basis are virtually
                  identical, there's a tremendous opportunity for merging and

                  And then, we'll sort through the corporate staff, and we've
                  got a lot of work to do in the next six to nine months while
                  the deal closes. But as Jim said, you know, there's a lot of
                  opportunities for synergies. And there are an awful lot of
                  cost synergy. And there are an awful lot of opportunities to
                  improve on the productivity together.

James Kilts:      I guess I'll give my example just to add to that. When I made
                  the calls to my business unit heads last night, I told them
                  what was happening, there was excitement because the one
                  comment from one of our business units lads, this opens a
                  whole new world of opportunity. Can you imagine what we can do
                  in markets like China and Eastern Europe. We're already doing
                  well in, and what we can do on top of that with a combination
                  of the two companies.

                  From an organization standpoint, I think, it's pretty easy as
                  A.G. said, there's some free standing things. We're going to
                  enlist the management teams, get them together, but we've got
                  a clear vision of how it's going to come together, but we
                  don't want to get in front of our organizations. We want them
                  to participate in how we're thinking about it, and clearly,
                  we'll let you know. But it's the - organizational issue, I
                  think, is a very easy issue, and one that we can get done
                  fairly quickly.

A.G. Lafley:      Yes, (Bill).

(Bill):           Two questions. The first one is when you were looking at
                  Gillette before this acceleration of that one point you're
                  talking. What did you view as Gillette's sustainable long-term
                  profit growth rate? Because Gillette's been executing great
                  cost savings programs, and growing strong in markets like
                  Russia and Turkey?

                  That's the first question in terms of the standalones
                  sustainable growth rate. And the second question is any needs
                  for divesting in areas of overlap be it deodorants or
                  toothbrush in certain markets, that you see a need for?

A.G. Lafley:      Yes. Jim, why don't you take the first question, and I'll take
                  the second question.

James Kilts:      Well sustainable growth we've always said at Gillette is three
                  to five percent on a constant dollar basis. And with
                  opportunities, and, you know, when we did better than that, a
                  couple of 

                  people said you said three to five percent, and I said well we
                  like to give what I call piece dividends, when things go well,
                  we give more. And things have been going very well.

                  We've got terrific momentum. And I said if we get great new
                  products, we'll do even better. And we've got the portfolio of
                  great new products coming down the line. So I'm very
                  optimistic, but three to five is what we've said publicly.
                  When we finish the deal A.G. will be able to make his
                  judgments on what he wants to say to you, but still as a part
                  of Gillette, we want to stick to the three to five right now.

A.G. Lafley:      Yes, and a Bill, we're comfortable to the five to seven going
                  forward. I mean if you just look at, you know, the slightly -
                  the one additional point of market growth that you get given
                  the mix of industries that Gillette's in. And if you look at
                  our migration over time and the more health personal care and
                  beauty care, with higher growth rates in those industries.

                  Frankly, you can pick up the whole point on market growth
                  alone. On your second question, you know, there are some
                  overlaps, a few. There are some issues. We have worked with
                  the DOJ or FTC, whichever regulatory agency will review this
                  combination a number of times.

                  I mean just in the last seven years or so, with the
                  acquisition of (Tam) brands, with Clairol, with Wella, et
                  cetera, they're relatively modest, frankly, for a transaction
                  of this size, and we'll work through it. We'll work through it
                  with them. We're confident that we're going to retain as many
                  of the assets as possible. Yes, (John - Anne).

(Anne):           Good morning. Two questions. First, does the scale you're
                  creating now with this combination free you up to take a
                  harder look at some of your slower growth businesses in your
                  portfolios for potential disposals or...

A.G. Lafley:      That one's directed at me, Jim.

(Anne):           Not just batteries, A.G.

A.G. Lafley:      No, I said I think that one's directed at me.

(Anne):           And then, secondly, a softer question. You're both credited
                  for really keeping your two organizations focused on growth.
                  What are you doing incrementally, today, forward, to keep that
                  focus going in the combined company.

A.G. Lafley:      OK. We'll both take a stab at the - I guess we'll both comment
                  on the slower growth businesses, and then we'll both comment
                  on the other one.

                  (Anne), we're always looking at our businesses to see how they
                  perform, versus our operating TSR, cash flow ROI metrics, OK.
                  And, they each one has goals. We set the goals versus the best
                  in class performance in the industry in which they're in.

                  And we set the goals, versus, sort of what's required to stay
                  on the P&G team for the long term. And I think, you've seen us
                  over the last several years, you know, exit the cooking and
                  oils business, you know, exit the peanut better business, exit
                  the low end of the household cleaner's business, exit the
                  juice drinks business. And we did that, because the growth
                  wasn't there.

                  OK. So we're obviously - that's an ongoing process. So, you
                  know, you have to weed the garden every spring, and, you know,
                  we don't wait for the spring. It's a continuous look. And, you
                  know, there will be some changes over the next five years. I
                  can't tell you exactly which ones, you know, there will be.
                  Jim, you may want to comment on the battery business, you know
                  more about it than I do.

James Kilts:      Yes, no, the battery business is a tough business as I've said
                  for many years, but it's a business I like. It's not too many
                  categories that have unit growth in the four to
                  four-and-a-half percent range. It kind of comes
                  year-after-year. We've got market shares in the two top
                  companies and the 70 percent range. Margins are aiming in to
                  the 20s now.

                  (Amy) used to ask me what can the margins be in batteries, and
                  I said well 15, and I think we're up in to the 20s now. So
                  we've done a pretty good job on that business. We've got a
                  terrific management team. It's a growth business. We can
                  expand it internationally and continue to grow it. We've
                  entered the China market with the leading alkaline battery.

                  And it's mostly a zinc market, so you're going to get
                  conversion from zinc to alkaline in that market. And I think,
                  the infrastructure that we're going to get in the combination
                  of the companies is going to open up a lot of opportunities
                  for us. But I've been a big believer that at Gillette our
                  portfolio is terrific. I was very comfortable with it. You
                  know, A.G. is going to look at it as part of the Procter &
                  Gamble combination with Gillette.

A.G. Lafley:      (Anne), you had a second question, and it was?

(Anne):           Sorry, incrementally from here forward, what will you both do
                  to keep both organizations...

A.G. Lafley:      Yes, keep the focus on the growth? OK. I think, this is
                  sometimes hard to understand, but our structure is, I think,
                  ideally, suited for our industry with global business units,
                  which in effect, Gillette has, and which P&G has had now for
                  five years.

                  Each one of those global businesses is very focused on their
                  industry. They're spending 100 percent of their time and
                  energy and commitment to become leaders in those industries.
                  And to generate as much growth as they possibly can over the
                  mid and long term in those industries.

                  So if you think about this combination, there's really very
                  little distraction to the operating businesses. There are only
                  a couple of businesses, where there's some commonality. In
                  oral care, we're going to have to think about how we put a
                  great brush business together with a great (dentifrice)

                  We'll have to sort through, you know, how we're going to
                  manage personal care, but, you know, most of our GBUs are
                  still going to be single mindedly focused on becoming the
                  leader, you know, in their industry. And I think that really

James Kilts:      I couldn't agree more. The marketing teams are going to stay
                  focused. You know, blades and razors teams are going to worry
                  about their innovation, and driving their innovation. And the
                  way we're structured, you really think of it. We -across the
                  one side of the matrix is the business units.

                  They're focused on their businesses. Then, we have the
                  infrastructure that supports the business units. A lot of the
                  activity and the savings that we're looking for will come
                  across that infrastructure, and we know how to go about that,
                  because we're organized very similarly.

A.G. Lafley:      Yes, sir.

Male:             I just wanted to go in to the cost savings for a second. The
                  billion to billion, 10 to 12 percent of Gillette sales,
                  compares to your old - to your previous acquisitions.
                  Although, I should point out, that you A.G. have come out of a
                  pretty successful five year restructuring program, and are
                  much leaner than you were. And Jim, obviously has done a great
                  job as well of cutting overhead at Gillette. How comfortable
                  are you that you'll be able to get that billion to
                  1,200,000,000 over the next few years.

A.G. Lafley:      I'm very comfortable with it. You know, there are three -
                  there's obviously going to be a lot of duplication in what the
                  two companies do at corporate, and we're going to sort through
                  that with the leaders. We're finding there's tremendous
                  efficiency and productivity in what we call our global
                  business shared services operation.

                  I think we were one of the first companies in our industry, if
                  not the first to move to that structure, five years ago. We
                  then, have enhanced the structure with a network partnerships
                  with the likes of Hewlett-Packard and IBM. And we're already,
                  as we reported before, running ahead of our cost savings goal,
                  ahead of our service quality levels.

                  And we're turning out more and more innovation on the IT side.
                  So we've got a very robust worldwide backroom operation. We've
                  also been able to integrate each acquisition, we've been able
                  to integrate faster, because as long as they're on SAP, even
                  if it's regional SAP, versus the global SAP we're on, we can
                  move very quickly. So that's a big advantage.

                  And I think the third piece is we both have very strong
                  operations in - that work with customers, and that work in the
                  countries. And we're going to take really hard look at that,
                  and I think the focus there will be on productivity. And I
                  think there are tremendous opportunities for productivity,

James Kilts:      I couldn't agree more. I think, as I look at the synergies,
                  you can imagine, when we were looking at the synergies
                  together, and negotiating price, I'm even more bullish than he
                  is. But I think these are very reasonable numbers. And, you
                  know, if we get those numbers, it will be a great acquisition.
                  My job is to make it even better, working with A.G. and his

A.G. Lafley:      I mean if you think about what Clayt said, you know, the low
                  end of the - actually below the low end of the cost synergies
                  side is sort of the minimums. And we think, you know, we've
                  had a track record at Gillette, and we've had a track record
                  at P&G that commitments are commitments, 

                  and then we try to beat them, OK. And I think that's true for
                  the cost synergies. And I think you'll see that that's true
                  for the growth synergies.

Male:             One follow up question if I could, I apologize if I missed
                  this, is there a caller?

A.G. Lafley:      Clayt, is there a caller? We've only got one microphone. This
                  is a high end ...

Clayton Daley:    We've got two.

A.G. Lafley:      We have two microphone. We splurged.

James Kilts:      I think we can shout too.

A.G. Lafley:      It is, the synergies are going up already.

Male:             Jim, quick question. You know, I got - the question I have is
                  sort of why? Particularly why you approached Procter & Gamble
                  in this regard. I think, I may be more bullish than most, but
                  I can come up with a scenario where your stock is at $54 in
                  not that long a period of time. So can you walk us through the

James Kilts:      Yes, I think the rationale is real easy for me. Strength plus
                  strength equals success. Both companies have come from
                  turnaround periods. We've got great momentum. And the
                  infrastructure combination that we can create is going to
                  leverage our revenue scale and our cost scale as a combined
                  company and provide a lot of opportunities for employees as we
                  go ahead.

                  I'm a great believer in scale. I firmly believe the consumer
                  products industry needs to consolidate. And I'd rather lead
                  that consolidation for the long term health of our employees,
                  our brands, and our business, than get stuck with the
                  leftovers at the end.

                  So I want to lead it, and do it with the best company in the
                  world, Procter & Gamble. The company I was looking at is my
                  company competitive to be the best consumer products company
                  in the world. By coming together we've created the best
                  consumer products company in the world, that's why.

A.G. Lafley:      If I could just quick footnote on that. You know, scale is not
                  just about cost. It's not just about purchasing power or
                  bargaining leverage. In fact, the most important thing about
                  scale is it creates the ability to reinvest. And that's been
                  Gillette's model, and that's been P&G's model. And when the
                  company's are running well, that scale creates higher margins,
                  part of the margin is reinvested in the innovations.

                  So if you are an innovation and technology company in our
                  industry, which both of us are, if you can generate more scale
                  to enable the reinvestment, we keep reinvesting and creating
                  and building brands that create bonds with consumers for life.
                  And we keep reinvesting in innovation, so we stay in the lead
                  on the innovation side to delight the consumers we serve.

James Kilts:      I think that just says what it's all about. Our operating
                  philosophies is companies are the same. We believe that we can
                  bring these things together and build a juggernaut.

A.G. Lafley:      Yes, sir.

Male:             Yes, it's a question for both A.G. and for Jim. Could you
                  detail a little more some of the opportunities in emerging
                  markets for lower end systems and disposables? What type of
                  scale advantage and distribution there, does P&G bring
                  Gillette? And is there a price point that, you know, is
                  enabled by it?

James Kilts:      The answer is yes. I mean - what I'd like to do is, you know,
                  spend about 20 minutes talking about this at some analyst
                  presentation, because that's where I think we've got huge
                  opportunities. We've come up and filled out our portfolio with
                  lower price systems entries to trade development countries,
                  consumers, up from double edge. We've got a nice ladder of

                  But what we get with the combination of the two companies is
                  an infrastructure that allows us instead of worrying about
                  infrastructure in these companies, Procter & Gamble has got
                  the be infrastructure already. They've got the scale. And
                  we're - you know, we've got terrific growth prospects with
                  great margins, but we didn't even have the scale in these

                  We put our infrastructure in to their infrastructure. And, all
                  of a sudden, we're touching distribution, focused on growing
                  the business instead of worrying about trying to create an
                  infrastructure. We're going to just step up the growth we've
                  got in developing countries. And right now, we're growing
                  about 18 percent in our developing countries. I can't tell you
                  how optimistic I am about the growth we've got ahead of us. So
                  I think that you've hit the strategy right on the head.

                  And I've got to tell you I talked to Peter Hoffman who runs
                  our blade and razor business last night, and he's just pumped
                  up because I've been after him. How are we going to get the
                  developing countries going? You know, we can only do so much.
                  We only have so much infrastructure. If we do this right,
                  we're going to be able accelerate the terrific growth we have
                  already. And I intend to do it right.

A.G. Lafley:      Just one very simple comment here. We went in to China on
                  August 8th, 1988. And without going into the details, you
                  know, our distribution, breadth, and depth, and our
                  penetration in China is second to none, in one of the two
                  fastest growing developing markets in the world. And likely,
                  eventually the second, and maybe the first largest economy in
                  the world.

                  The same thing happened in Central and Eastern Europe when the
                  wall came down in Berlin, we were first in. And again, we
                  have, you know, deeper and broader retail distribution and
                  penetration. And it's just an incredible opportunity to take
                  these Gillette brands and - which are in those markets, and
                  doing well, and enable consumers to afford them and try them
                  and delighted by them in two of the fastest growing developing
                  areas in the world. (John).

(John):           A.G.

A.G. Lafley:      Yes.

(John):           P&G obviously does many things very, very, well. And one of
                  the - and I'm not worried about the cost synergies, but the
                  revenue synergies have been fairly dubious in the last handful
                  of acquisitions with the exception of Iams, so you can go back
                  as far as Maxell and think, you know, you've sort of fallen
                  short on the revenue synergies. So why is it different this
                  time, as opposed to, you know, the numerous other deals that
                  we've seen?

A.G. Lafley:      World class assets with growth momentum right now. leading
                  brands, leading innovators. If you think about it - I mean
                  here's the simple way I think about it. We've actually got
                  cosmetics and fine fragrances growing. It took us too long,
                  OK. And now we're actually doing quit well. We - with Wella,
                  we are the leading, believe it or not, fine fragrance company
                  in the world.

                  So that one, just took to long, same with Tampax. You know, I
                  wish we had had Tampax Pearl three years ago, that's when we
                  should have had it, OK. Clairol, I think, is quite clear the
                  cupboard was bare, and the innovation program had been milked.
                  So basically, what we bought brands that are shells. And we
                  will now bring technology there, because over the long-term we
                  want to be in that business.

                  Actually, the Herbal Essences brand, which we bought, which is
                  struggling a bit in the U.S. is doing phenomenally well
                  overseas. So - and we didn't even factor that in initially in
                  to the acquisition economics. Wella will see, you know,
                  fragrances off to a good start.

                  Hair salons we've got to learn the business, frankly, watch
                  them, you know, grow the business. This one is a relative
                  no-brainer, because you've got big leading brands, innovation
                  leaders, and they already have tremendous growth momentum. So
                  all we're going to do is try to help them go a little bit

James Kilts:      We've got growth momentum and very full portfolios of
                  innovation that we can build on in the future. So we're loaded
                  up right now. And the biggest issue I had at Gillette was
                  figuring out how to sequence my innovations. So that's still
                  going to be the issue, but with the power of this
                  infrastructure together, the upside is tremendous.

A.G. Lafley:      Yes, (Connie). (Connie's) been sitting here caressing this

(Connie):         Back to the question on geographic strength, could you talk a
                  little bit about what the new breakdown of sales is going to
                  be between emerging markets, and developed markets? And in
                  terms of geographic white space, are there countries where
                  Gillette has strengths to give to P&G, and vice versa?

A.G. Lafley:      The second one is for sure. Gillette will help us in India.
                  Gillette will help us in Brazil. Gillette will help us in
                  other markets, that Jim will fill in that are not on the top
                  of my head.

James Kilts:      And we've got the other way, Japan and China.

A.G. Lafley:      Yes. And we'll obviously help in Japan and China. And I think
                  we're both reasonably strong in Central and Eastern Europe and
                  Turkey. And we're pretty strong in Mexico, so I think that's
                  pretty complimentary. I'm sorry, (Connie), and the other
                  question was...

(Connie):         Does anybody have the geographic breakdown now of what 

A.G. Lafley:      Yes, I think, isn't Gillette about 28 percent.

James Kilts:      Yes, I think we've got it. We break up the geographies a
                  little different. Somebody did the numbers, so I don't want to
                  give it to you off our head. We define developing markets a
                  little differently. So somebody, I'm sure in investor
                  relations can give it to you.

A.G. Lafley:      (Connie), I think the simple way to think about it is, you
                  know, we're sort of low 20s now. And without Gillette, we
                  thought we'd be 26 to 30 by the end of the decade, which is
                  sort of the numbers we talked about, you know, at the December
                  conference, and with Gillette that should accelerate.

(Connie):         And one final question, does this take a little pressure off
                  of the shave business to always have the next new product
                  ready to go in two yeas?

James Kilts:      You see this great shave I've got? I've got the next new
                  product already. I mean, I'm ready.

A.G. Lafley:      There's - no you can never take the pressure off innovation
                  leadership. I mean Gillette's business, and our businesses,
                  one of the reasons why two thirds of the brands of are leaders
                  in their industries is because they're innovation leaders.

                  So - now we put the pressure on ourselves. And our best
                  competitors put the pressure on us. This is an innovation, you
                  know, innovation is the life blood in this industry. That's
                  what keeps fueling the brand. Yes, sir.

Male:             A question for A.G. Looking specifically at the Wella
                  integration right now, I know you've pushed off the cost
                  savings towards the back end of the three year program, I mean
                  now that the deal will probably close in the fall, are you
                  going to try and step that up ahead of time?

A.G. Lafley:      Believe me, we did not push off the cost savings. We had a few
                  legal challenges and other challenges in the first year. I
                  think, as you know, the domination agreement was filed, and we
                  essentially, you know, closed the first stage of the
                  transaction in June. We actually began the real integration in
                  July, OK, of last year. We will complete the integration on
                  the retail hair care side, by the spring of this year. So
                  that's a total fold in.

                  We decided to run - the two fastest growing fine fragrance
                  businesses, and best performing fine fragrance businesses
                  happen to be Wella's and P&G's, we're merging them, OK. So we
                  keep the best of both. And then, frankly, we're learning and
                  we'll invest when appropriate in the hair salon business,
                  where Wella is number two in the world to L'Oreal.

                  In terms of the cost savings, we're still holding ourselves to
                  the commitment by the end of year three. What's happened,
                  obviously was the first year of legal and other issues, that's
                  what delayed, you know, the cost savings. We're not holding
                  back. As soon as we could operate, we're in there operating,
                  and we're in there trying to drive the cost synergies.

Male:             Good morning, I have a two questions for Clayton. Clayton,
                  first one, this morning S&P put your ratings on the review for
                  downgrade of no more than one notch. How comfortable are you
                  that you will be able to convince them to maintain your double
                  A minus rating? And then, secondly,

                  aside from cash on hand, and very strong cash flow, how do you
                  plan to finance this share repurchase program? Thank you

Clayton Daley:    We met with both S&P and Moody's this week. And basically
                  shared with them our initial projections, very initial on cash
                  flow and rations. And therefore, the announcements are totally
                  expected. What we'll be doing in the next couple of weeks is
                  getting in to that with them in much more detail.

                  And then, they will have to make own judgments, of course, as
                  to what ratings they'll assign to our debt in the short term
                  because the ratios do come backing double A line, in about 10
                  years. So the real question at the end of the day is whether
                  they will look through that, or whether they'll choose to
                  downgrade us, and that's of course, their call.

                  From a financing standpoint, this company obviously has plenty
                  of financing capacity to initiate the share repurchase program
                  that we discuss today. And so, you know, we'll be financing
                  our business as we always have with a blend of short term
                  debt, and then various maturities of long-term debt to keep
                  our debt portfolio in balance. And the dilution numbers that I
                  shared earlier, of course, do project interest rates will go
                  up over a period of years, and that's already baked in to
                  those numbers.

Male:             Hi. I was wondering if you could talk about how important is
                  integration, and I guess, idea sharing in the R&D and
                  marketing side, towards getting your revenue synergies? And
                  how do you foster that? Or I mean should we think of
                  developing market synergies for Gillette as (building) sort of
                  a lion's share of the revenue synergies.

A.G. Lafley:      Yes, I think you have to divide them in to two pieces. And the
                  developing market, and putting our customer business
                  development and operating, you know, country operating

                  organizations together. You know, those are pretty much, take
                  what you have plug them in the infrastructure, as Jim said,
                  and play stronger, all right.

                  In the areas of oral care, personal care, you know, women's
                  hair removal, of course, it's going to require a lot of
                  collaboration, a lot of what we call connect and develop. The
                  thing I feel great about is we worked real hard over the last
                  five years to change the culture at P&G in the R&D community.
                  And I'll, you know, oversimplified 10 years ago, P&G was an
                  invent from within company, strong R&D but we invented for

                  What we've tried to do over the last five years is become much
                  more of a connect and develop to accelerate on the innovation.
                  It's not about the headcount side. We've actually increased,
                  you know, maintained the headcount. It's about, you know,
                  getting more innovation productivity commercializing more of
                  your innovation, you know, from the same group of scientists
                  and researchers.

                  And I think, it's pretty clear we'll work with anybody
                  virtually all of our drugs are partnered. We're working with
                  at least two or three direct competitors, not in the areas
                  where we compete, but we work with (Unicharm) in Japan, we
                  compete like crazy with them in the disposable paper
                  businesses. We work together with them on certain
                  technologies, one of which we used in Swiffer. One of which -
                  one of ours which they're using in their home care products.

                  We compete with Clorox, on the other hand, if you saw the "New
                  York Times" article, you know, the (Flex Wraps) and the (Flex
                  Bags), those are our inventions, our patents. We take, what is
                  it Clayt, a 20 percent - we take a 20 percent minority share
                  of the joint venture.

                  We have 50-50 joint ventures in Italy and Spain and disposable
                  paper. We compete with the other party in some businesses, but
                  we ally with them, and it's all about innovation. It's all
                  about innovation, because you can never have enough

                  So I'm very hopeful. I mean Gillette's got a very
                  collaborative culture, as I understand, and I think Jim has
                  encouraged that. And I'm very hopeful of that. I think
                  everybody is excited to get together and compare ideas. And
                  that will happen on the marketing side, too. Yes, sir.

Male:             Many of the global food behemoths that have consolidated over
                  the last few years have found that increased scope and scale
                  have not produced the leverage with retailers that they had
                  hoped. And I'm wondering what your thoughts are about how
                  you're going to see that from this merger?

A.G. Lafley:      You know, fundamentally you have to ask yourself whether
                  you're inherently a commodity business, or inherently an
                  innovation business. And I hope we've - I hope you've seen at
                  Gillette, I think we've seen, and Jim has helped create an
                  innovation engine, that's creates brands that are well
                  differentiated and command premium value.

                  We've tried to do the same. So it's just a different business
                  model. I think the food business model is different. And if
                  you just look at how private labels have developed over the
                  last 25 years, private label penetration in virtually every
                  major market is much higher, much higher in the food
                  businesses, than it is in the personal care, healthcare,
                  beauty care, and even household businesses.

                  Lastly, one of the reasons why we've been migrating from sort
                  of 30 percent plus of P&G's business in household and food, to
                  half of our business in health, personal care, and beauty care
                  is because we like the structural attractiveness of health
                  personal care and beauty care. And one of the drivers of those
                  industries is innovation. So I think it's fundamentally
                  innovation. You know, are you driven by innovation? Or do you
                  become more like a commodity over time.

Female:           Hi, A.G., I guess, I understand how in the future there's this
                  convergence going on between personal care and healthcare. But
                  I guess, when I think of personal care, and healthcare, I
                  think of them as separate things.

                  So I wonder if this is a subtle strategy change for you
                  long-term? And what does this mean for your drug business? And
                  will that still be very important as this convergence
                  continues? Or is it going to be (minimalized) with your

A.G. Lafley:      Well you have to remember, I mean our entire pharmaceutical
                  business is two billion plus, and a company of 55 billion
                  plus. So it's a business that we made an investment in. We've
                  had - we have the leader in its segment in Asacol. We the
                  number two brand growing fast in Actonel, but it's clearly,
                  you know, been a development business for P&G.

                  Second point, I've talked several times about the way we think
                  about healthcare. We don't think about healthcare as just
                  regulated drugs, so we don't just think about it as
                  pharmaceutical drugs or even over the counter drugs. We think
                  about what we call consumer healthcare, which is unregulated.

                  ThermaCare is probably the best example of that. And the last
                  thing I will say is if you talk to consumers, especially
                  women, there's clearly an overlap and a merging going on
                  between beauty care, personal care, and healthcare.

                  Last thing I want to say, I'm really looking forward to
                  working with Jim. We are both committed to meeting or beating
                  the commitments that we made to you today, and we're both
                  looking forward with real excitement to putting these two
                  world class leadership teams together, world class brands
                  together. And the sky is the limit.

James Kilts:      Great to be part of the best consumer products company in the 

A.G. Lafley:      Terrific, thank you very much.


                   Additional Information and Where to Find it

In connection with the proposed merger, The Procter & Gamble Company ("P&G") and
The Gillette Company ("Gillette") will file a joint proxy statement/prospectus
with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE
may obtain a free copy of the joint proxy statement/prospectus (when available)
and other documents filed by P&G and Gillette with the Commission at the
Commission's web site at Free copies of the joint proxy
statement/prospectus, once available, and each company's other filings with the
Commission may also be obtained from the respective companies. Free copies of
P&G's filings may be obtained by directing a request to The Procter & Gamble
Company, Investor Relations, P.O. Box 599, Cincinnati, Ohio 45201-0599. Free
copies of Gillette's filings may be obtained by directing a request to The
Gillette Company, Investor Relations, Prudential Tower, Boston, Massachusetts,

This communication shall not constitute an offer to sell or the solicitation of
an offer to buy securities, nor shall there by any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.

Participants in the Solicitation

P&G, Gillette and their respective directors, executive officers and other
members of their management and employees may be soliciting proxies from their
respective stockholders in favor of the merger. Information concerning persons
who may be considered participants in the solicitation of P&G's stockholders
under the rules of the Commission is set forth in the Proxy Statement filed by
P&G with the Commission on August 27, 2004, and information concerning persons
who may be considered participants in the solicitation of Gillette's
stockholders under the rules of the Commission is set forth in the Proxy
Statement filed by Gillette with the Commission on April 12, 2004.

Forward-Looking Statements

      All statements, other than statements of historical fact included in this
release, are forward-looking statements, as that term is defined in the Private
Securities Litigation Reform Act of 1995. In addition to the risks and
uncertainties noted in this release, there are certain factors that could cause
actual results to differ materially from those anticipated by some of the
statements made. These include: (1) the ability to achieve business plans,
including with respect to lower income consumers and growing existing sales and
volume profitably despite high levels of competitive activity, especially with
respect to the product categories and geographical markets (including developing
markets) in which the Company has chosen to 

focus; (2) successfully executing, managing and integrating key acquisitions,
including (i) the Domination and Profit Transfer Agreement with Wella, and (ii)
the Company's agreement to acquire The Gillette Company, including obtaining the
related required shareholder and regulatory approvals; (3) the ability to manage
and maintain key customer relationships; (4) the ability to maintain key
manufacturing and supply sources (including sole supplier and plant
manufacturing sources); (5) the ability to successfully manage regulatory, tax
and legal matters (including product liability, patent, and other intellectual
property matters), and to resolve pending matters within current estimates; (6)
the ability to successfully implement, achieve and sustain cost improvement
plans in manufacturing and overhead areas, including the success of the
Company's outsourcing projects; (7) the ability to successfully manage currency
(including currency issues in volatile countries), debt (including debt related
to the Company's announced plan to repurchase shares of the Company's stock in
connection with the Company's pending acquisition of The Gillette Company),
interest rate and certain commodity cost exposures; (8) the ability to manage
the continued global political and/or economic uncertainty and disruptions,
especially in the Company's significant geographical markets, as well as any
political and/or economic uncertainty and disruptions due to terrorist
activities; (9) the ability to successfully manage increases in the prices of
raw materials used to make the Company's products; (10) the ability to stay
close to consumers in an era of increased media fragmentation; and (11) the
ability to stay on the leading edge of innovation. For additional information
concerning factors that could cause actual results to materially differ from
those projected herein, please refer to our most recent 10-K, 10-Q and 8-K