UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
(Mark one)

[ X ]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                  For the Quarterly Period Ended March 31, 2006


                                       OR

[   ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from ____ to _____


                          Commission file number 1-434


                          THE PROCTER & GAMBLE COMPANY
             (Exact name of registrant as specified in its charter)


             Ohio                                     31-0411980
   (State of incorporation)              (I.R.S. Employer Identification No.)


  One Procter & Gamble Plaza, Cincinnati, Ohio                       45202
    (Address of principal executive offices)                       (Zip Code)


        Registrant's telephone number, including area code (513) 983-1100


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.            Yes [ X ]  No [   ]

Indicate by check mark whether the registrant is a large accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).   Yes [ X ]  No [   ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).              Yes [   ]  No [ X ]

There were 3,281,470,012 shares of Common Stock outstanding as of March 31,
2006.





PART I.       FINANCIAL INFORMATION

Item 1.  Financial Statements

The Consolidated Statements of Earnings of The Procter & Gamble Company and
subsidiaries (the "Company", "we" or "our") for the three and nine months ended
March 31, 2006 and 2005, the Consolidated Balance Sheets as of March 31, 2006
and June 30, 2005, and the Consolidated Statements of Cash Flows for the nine
months ended March 31, 2006 and 2005 follow. In the opinion of management, these
unaudited consolidated financial statements contain all adjustments necessary to
present fairly the financial position, results of operations and cash flows for
the interim periods reported. However, such financial statements may not
necessarily be indicative of annual results.



                                   THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF EARNINGS

                                    Amounts in millions except per share amounts

                                                  Three Months Ended                       Nine Months Ended
                                                       March 31                                 March 31
                                       -------------------------------------    -------------------------------------
                                             2006                 2005                2006                 2005
                                       ----------------     ----------------    ----------------     ----------------
                                                                                            
NET SALES                                  $   17,250           $   14,287          $   50,380           $   42,483
      Cost of products sold                     8,340                7,055              24,231               20,563
      Selling, general and
      administrative expense                    5,559                4,690              15,849               13,607
                                           ----------           ----------          ----------           ----------

OPERATING INCOME                                3,351                2,542              10,300                8,313
      Interest expense                            301                  222                 819                  603
      Other non-operating income, net              79                   60                 221                  297
                                           ----------           ----------          ----------           ----------

EARNINGS BEFORE INCOME TAXES                    3,129                2,380               9,702                8,007
      Income taxes                                918                  766               2,916                2,476
                                           ----------           ----------          ----------           ----------

NET EARNINGS                               $    2,211           $    1,614          $    6,786           $    5,531
                                           ==========           ==========          ==========           ==========

PER COMMON SHARE:
      Basic net earnings                   $     0.67           $     0.63          $     2.22           $     2.15
      Diluted net earnings                 $     0.63           $     0.59          $     2.10           $     2.01
      Dividends                            $     0.28           $     0.25          $     0.84           $     0.75

DILUTED WEIGHTED AVERAGE
      COMMON SHARES OUTSTANDING               3,510.5              2,730.3             3,235.4              2,749.4


See accompanying Notes to Consolidated Financial Statements





                       THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
                                CONSOLIDATED BALANCE SHEETS

Amounts in Millions                                              March 31         June 30
   ASSETS                                                          2006             2005
                                                                -----------      -----------
                                                                           
CURRENT ASSETS
       Cash and cash equivalents                                $    8,675       $    6,389
       Investment securities                                         1,524            1,744
       Accounts receivable                                           5,404            4,185
       Inventories
             Materials and supplies                                  1,675            1,424
             Work in process                                           656              350
             Finished goods                                          4,401            3,232
                                                                -----------      -----------
       Total inventories                                             6,732            5,006
       Deferred income taxes                                         1,544            1,081
       Prepaid expenses and other current assets                     2,736            1,924
                                                                -----------      -----------

TOTAL CURRENT ASSETS                                                26,615           20,329

PROPERTY, PLANT AND EQUIPMENT
       Buildings                                                     5,906            5,292
       Machinery and equipment                                      24,714           20,397
       Land                                                            866              636
                                                                -----------      -----------
                                                                    31,486           26,325
       Accumulated depreciation                                    (13,013)         (11,993)
                                                                -----------      -----------

NET PROPERTY, PLANT AND EQUIPMENT                                   18,473           14,332

GOODWILL AND OTHER INTANGIBLE ASSETS
       Goodwill                                                     54,693           19,816
       Trademarks and other intangible assets, net                  33,164            4,347
                                                                -----------      -----------

NET GOODWILL AND OTHER INTANGIBLE ASSETS                            87,857           24,163

OTHER NON-CURRENT ASSETS                                             3,277            2,703
                                                                -----------      -----------

TOTAL ASSETS                                                    $  136,222       $   61,527
                                                                ===========      ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
       Accounts payable                                         $    4,063       $    3,802
       Accrued and other liabilities                                 9,219            7,531
       Taxes payable                                                 2,924            2,265
       Debt due within one year                                      3,837           11,441
                                                                -----------      -----------

TOTAL CURRENT LIABILITIES                                           20,043           25,039

LONG-TERM DEBT                                                      33,916           12,887

DEFERRED INCOME TAXES                                               12,739            1,896

OTHER NON-CURRENT LIABILITIES                                        4,500            3,230
                                                                -----------      -----------

TOTAL LIABILITIES                                                   71,198           43,052

SHAREHOLDERS' EQUITY
       Preferred stock                                               1,460            1,483
       Common stock - shares issued - Mar 31   3,973.0               3,973
                                      June 30  2,976.6                                2,977
       Additional paid-in capital                                   57,558            3,030
       Reserve for ESOP debt retirement                             (1,284)          (1,259)
       Accumulated other comprehensive income                       (1,234)          (1,566)
       Treasury stock                                              (30,302)         (17,194)
       Retained earnings                                            34,853           31,004
                                                                -----------      -----------

TOTAL SHAREHOLDERS' EQUITY                                          65,024           18,475
                                                                -----------      -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                      $  136,222       $   61,527
                                                                ===========      ===========

See accompanying Notes to Consolidated Financial Statements





                  THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                               Nine Months Ended
Amounts in millions                                                 March 31
                                                           --------------------------
                                                               2006          2005
                                                           ------------  ------------

                                                                     
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD               $  6,389      $  4,232

OPERATING ACTIVITIES
        Net earnings                                            6,786         5,531
        Depreciation and amortization                           1,891         1,403
        Share-based compensation expense                          400           370
        Deferred income taxes                                     116           445
        Changes in:
             Accounts receivable                                 (250)         (197)
             Inventories                                         (161)         (778)
             Accounts payable, accrued and other liabilities     (582)         (115)
             Other operating assets and liabilities               (81)         (221)
        Other                                                      66           151
                                                           ------------  ------------

TOTAL OPERATING ACTIVITIES                                      8,185         6,589
                                                           ------------  ------------

INVESTING ACTIVITIES
        Capital expenditures                                   (1,666)       (1,386)
        Proceeds from asset sales                                 352           368
        Acquisitions                                              216          (528)
        Change in investment securities                           491           (56)
                                                           ------------  ------------

TOTAL INVESTING ACTIVITIES                                       (607)       (1,602)
                                                           ------------  ------------

FINANCING ACTIVITIES
        Dividends to shareholders                              (2,645)       (1,998)
        Change in short-term debt                              (6,009)        1,317
        Additions to long-term debt                            17,136         3,048
        Reductions of long-term debt                           (4,367)       (1,583)
        Impact of stock options and other                       1,119           406
        Treasury purchases                                    (10,596)       (3,580)
                                                           ------------  ------------

TOTAL FINANCING ACTIVITIES                                     (5,362)       (2,390)
                                                           ------------  ------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH
        AND CASH EQUIVALENTS                                       70           243

CHANGE IN CASH AND CASH EQUIVALENTS                             2,286         2,840
                                                           ------------  ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                     $  8,675      $  7,072
                                                           ============  ============


See accompanying Notes to Consolidated Financial Statements




                  THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   These statements should be read in conjunction with the Company's Annual
     Report on Form 10-K for the fiscal year ended June 30, 2005 and Form 8-Ks
     filed on September 23, 2005 and November 2, 2005 reflecting the Company's
     historical results as conformed for the adoption of SFAS 123 (Revised
     2004), "Share-Based Payment" (SFAS 123(R)) and the change in our method of
     accounting for Treasury Stock. The results of operations for the
     three-month and nine-month periods ended March 31, 2006 are not necessarily
     indicative of annual results.

2.   Comprehensive Income - Total comprehensive income is composed primarily of
     net earnings, net currency translation gains and losses, impacts of net
     investment and cash flow hedges and net unrealized gains and losses on
     securities. Total comprehensive income for the three months ended March 31,
     2006 and 2005 was $ 2,534 million and $1,142 million, respectively. For the
     nine months ended March 31, 2006 and 2005, total comprehensive income was
     $7,118 million and $6,238 million, respectively.

3.   Segment Information - Following is a summary of segment results. As noted
     in Note 4, the Company acquired The Gillette Company on October 1, 2005.
     Accordingly, results of the acquired Gillette businesses are only included
     in segment results for the six months ended March 31, 2006.



                               SEGMENT INFORMATION

Amounts in millions
                                               Three Months Ended March 31                      Nine Months Ended March 31
                                        ------------------------------------------     --------------------------------------------
                                                    Earnings Before                                 Earnings Before
                                         Net Sales  Income Taxes     Net Earnings       Net Sales   Income Taxes      Net Earnings
                                        ------------------------------------------     --------------------------------------------
                                                                                                   
Beauty                            2006    $  5,155       $  1,041       $    738         $ 15,514        $  3,285       $  2,369
                                  2005       4,876            969            668           14,553           3,091          2,136
                                --------------------------------------------------     --------------------------------------------

    Health Care                   2006       2,427            446            298            7,149           1,582          1,061
                                  2005       2,000            347            233            5,887           1,165            780

    Baby Care & Family Care       2006       3,031            530            326            9,066           1,561            976
                                  2005       3,048            505            320            8,876           1,565            976
                                        ------------------------------------------     --------------------------------------------
Family Health                     2006       5,458            976            624           16,215           3,143          2,037
                                  2005       5,048            852            553           14,763           2,730          1,756
                                --------------------------------------------------     --------------------------------------------

    Fabric Care & Home Care       2006       4,080            814            545           12,376           2,665          1,779
                                  2005       3,819            723            481           11,413           2,414          1,616

    Snacks & Coffee               2006         796            177            109            2,429             429            277
                                  2005         767            156             97            2,353             459            295
                                        ------------------------------------------     --------------------------------------------
Household Care                    2006       4,876            991            654           14,805           3,094          2,056
                                  2005       4,586            879            578           13,766           2,873          1,911
                                --------------------------------------------------     --------------------------------------------

    Blades & Razors               2006       1,187            361            265            2,340             736            537
                                  2005           -              -              -                -               -              -

    Duracell & Braun              2006         763             76             54            2,042             319            219
                                  2005           -              -              -                -               -              -
                                        ------------------------------------------     --------------------------------------------
Gillette Business Unit            2006       1,950            437            319            4,382           1,055            756
                                  2005           -              -              -                -               -              -
                                --------------------------------------------------     --------------------------------------------

Corporate                         2006        (189)          (316)          (124)            (536)           (875)          (432)
                                  2005        (223)          (320)          (185)            (599)           (687)          (272)
                                --------------------------------------------------     --------------------------------------------
Total                             2006    $ 17,250       $  3,129       $  2,211         $ 50,380        $  9,702       $  6,786
                                  2005      14,287          2,380          1,614           42,483           8,007          5,531
                                --------------------------------------------------     --------------------------------------------



     On April 17, 2006, we announced a number of changes to certain of our key
     leadership positions, which also involved changes to our organizational
     structure. These changes will impact our segment reporting. Specifically,
     Pet Health & Nutrition, which is part of our Health Care reporting segment,
     will become part of our Snacks & Coffee reporting segment. In addition, our
     commercial products organization, which sells primarily cleaning products
     directly to commercial end users, will be moved from Snacks & Coffee to our
     Fabric Care & Home Care segment. Our segment reporting will be revised to
     reflect these changes during the upcoming quarter ended June 30, 2006, at
     which time we will also revise our historical financial statements to
     reflect these changes.

4.   On October 1, 2005, we completed our acquisition of The Gillette Company.
     Pursuant to the acquisition agreement which provided for the exchange of
     0.975 shares of The Procter & Gamble Company common stock, on a tax-free
     basis, for each share of The Gillette Company, we issued 962 million shares
     of The Procter & Gamble Company common stock. The value of these shares was
     determined using the average of Company stock prices beginning two days
     before and ending two days after January 28, 2005, the date the acquisition
     was announced. We also issued 79 million stock options in exchange for
     Gillette's outstanding stock options. Under the purchase method of
     accounting, the total consideration was approximately $53.5 billion
     including common stock, the fair value of vested stock options and
     acquisition costs. The acquisition is reflected in our consolidated
     financial statements beginning in the quarter ended December 31, 2005.

     The Gillette Company is a market leader in several global product
     categories including blades and razors, oral care and batteries. Total
     sales for Gillette during its most recent year ended December 31, 2004 were
     $10.5 billion.

     In order to obtain regulatory approval of the transaction, we were required
     to divest certain overlapping businesses. We have completed the
     divestitures of the Spinbrush toothbrush business and Rembrandt, a Gillette
     oral care product line. We completed the divestiture of Right Guard, a
     Gillette deodorant, along with several other Gillette deodorant brands on
     April 28, 2006.

     In connection with the Gillette acquisition, we also announced a share
     buyback plan under which we planned to acquire $18 to $22 billion of
     Company common stock in the open market or from private transactions. We
     have since narrowed the anticipated total repurchase to about $20 billion
     of Company common stock. Through March 31, 2006, we repurchased $13.6
     billion under this plan. These repurchases were financed by borrowings
     under a $24 billion three-year credit facility with a syndicate of banks.
     An additional $2.2 billion of repurchases of Company common stock has been
     recorded under a forward purchase agreement, which settled in April 2006.
     The $24 billion facility was entered into on July 27, 2005 and replaced a
     $3.4 billion bridge credit facility. Proceeds will be used for general
     corporate purposes with the expectation that the majority of the funds will
     be used as part of the share repurchase program. This facility is initially
     secured by a pledge of certain of the Company shares acquired under the
     share buyback plan. This credit facility carries a variable interest rate.

     We are in the process of obtaining independent appraisals to assist
     management in allocating the purchase price to the individual assets
     acquired and liabilities assumed. This will result in potential adjustments
     to the carrying value of Gillette's recorded assets and liabilities, the
     establishment of certain additional intangible assets, revisions of the
     useful lives of intangible assets, some of which will have indefinite lives
     not subject to amortization, and the determination of any residual amount
     that will be allocated to goodwill. The preliminary allocation of the
     purchase price included in the current period balance sheet is based on the
     best estimates of management and is subject to revision based on final
     determination of asset fair values and useful lives. The related
     depreciation and amortization expense from the acquired assets is also
     subject to such revisions.

     We are also in the process of completing our analysis of integration plans,
     pursuant to which the Company will incur costs primarily related to the
     elimination of selling, general and administrative overlap between the two
     companies in areas like Global Business Services, corporate staff, and
     go-to-market support, as well as redundant manufacturing capacity. Our
     preliminary estimate of the exit costs for these activities that have been
     recognized as an assumed liability is $1.03 billion.

     The following table presents the preliminary allocation of purchase price
     related to the Gillette business as of the date of acquisition (amounts in
     millions).

          Current assets                                    $    5,145
          Property, plant and equipment                          3,834
          Goodwill                                              34,767
          Intangible assets                                     29,038
          Other non-current assets                                 796
        ----------------------------------------------------------------
          Total assets acquired                                 73,580
        ----------------------------------------------------------------

          Current liabilities                                    5,027
          Non-current liabilities                               15,096
        ----------------------------------------------------------------
          Total liabilities assumed                             20,123
        ----------------------------------------------------------------
          Net assets acquired                                   53,457
        ----------------------------------------------------------------

     The majority of the goodwill has been allocated to the segments comprising
     the Gillette businesses (Blades & Razors, Duracell & Braun, Health Care and
     Beauty). A portion of the goodwill has been preliminarily allocated to the
     other businesses on the basis that certain cost synergies will benefit
     these businesses. See Note 5 for the preliminary allocation of goodwill to
     the segments.

     We have preliminarily estimated the fair value of Gillette's identifiable
     intangible assets as $29.038 billion. The preliminary allocation of these
     identifiable intangible assets included in these financial statements is as
     follows:

                                                                    Estimated
                                                                     Average
          Amounts in millions                         Estimated     Remaining
                                                      Fair Value    Useful Life
                                                     --------------------------
          Asset class:
          Brand Intangibles -- indefinite lived       $  23,432     Indefinite
          Brand Intangibles -- definite lived             1,592      20 years
          Technology                                      2,681      17 years
          Customer Relationships                          1,333      25 years
                                                     ----------
                                                      $  29,038
                                                     ==========

     The majority of this intangible valuation relates to brand intangibles. Our
     preliminary assessment as to brand intangibles that have an indefinite life
     and those that have a definite life was based on a number of factors,
     including competitive environment, market share, brand history, product
     life cycles, operating plan and the macroeconomic environment of the
     countries in which the brands are sold. The indefinite-lived brand
     intangibles include Gillette, Venus, Duracell, Oral B and Braun. The
     definite-lived brand intangibles are comprised of certain global brand
     sub-names such as Mach 3 and Sensor in the blades and razors business and
     other regional or local brands. The definite-lived brand intangibles have
     asset lives ranging from 5 to 40 years. The technology intangibles are
     concentrated in the blades and razors and oral care businesses. We estimate
     that the customer relationships intangibles have asset lives ranging from
     20 to 40 years based on the very low historical and projected customer
     attrition rates among major retailers and distributors.

     The following table provides pro forma results of operations for the nine
     months ended March 31, 2006 and 2005 and for the three months ended March
     31, 2005 as if Gillette has been acquired as of the beginning of each
     fiscal year presented. The pro forma results include certain purchase
     accounting adjustments such as the estimated changes in depreciation and
     amortization expense on acquired tangible and intangible assets. However,
     pro forma results do not include any anticipated cost savings or other
     effects of the planned integration of Gillette. Accordingly, such amounts
     are not necessarily indicative of the results that would have occurred if
     the acquisition had occurred on the dates indicated or that may result in
     the future.

                                                                        Three
                                                                       Months
                                                   Nine Months Ended    Ended
          Amounts in millions                           March 31       March 31
                                                     2006      2005      2005
                                                --------------------------------

          Net Sales                               $ 53,163  $ 50,892  $ 16,897
          Net Earnings                               6,974     6,693     2,004
          Diluted Net Earnings per Common Share   $   1.96  $   1.79  $   0.54


5.   Goodwill and Other Intangible Assets - Goodwill as of March 31, 2006 is
     allocated by reportable segment and global business unit as follows
     (amounts in millions):

                                                     Nine Months Ended
                                                      March 31, 2006
                                                     -----------------
      Total Beauty Care, beginning of year              $    14,580
                    Acquistions & divestiture                 3,085
                    Translation & other                          70
      Goodwill, March 31, 2006                               17,735

          Health Care, beginning of year                      3,378
                    Acquistions & divestiture                 4,042
                    Translation & other                          11
      Goodwill, March 31, 2006                                7,431

          Baby Care & Family Care, beginning of year            955
                    Acquistions & divestiture                 1,051
                    Translation & other                          13
      Goodwill, March 31, 2006                                2,019

      Total Family Health, beginning of year                  4,333
                    Acquistions & divestiture                 5,093
                    Translation & other                          24
      Goodwill, March 31, 2006                                9,450

          Fabric Care & Home Care, beginning of year            644
                    Acquistions & divestiture                 1,378
                    Translation & other                           5
      Goodwill, March 31, 2006                                2,027

          Snacks & Coffee, beginning of year                    259
                    Acquistions & divestiture                   284
                    Translation & other                           1
      Goodwill, March 31, 2006                                  544

      Total Household Care, beginning of year                   903
                    Acquistions & divestiture                 1,662
                    Translation & other                           6
      Goodwill, March 31, 2006                                2,571

                Blades & Razors, beginning of year             --
                    Acquistions & divestiture                19,918
                    Translation & other                          48
      Goodwill, March 31, 2006                               19,966

                Duracell & Braun, beginning of year            --
                    Acquistions & divestiture                 4,959
                    Translation & other                          12
      Goodwill, March 31, 2006                                4,971

      Total Gillette, beginning of year                        --
                    Acquistions & divestiture                24,877
                    Translation & other                          60
      Goodwill, March 31, 2006                               24,937

      Goodwill, Net, beginning of year                       19,816
                    Acquistions & divestiture                34,717
                    Translation & other                         160
      Goodwill, March 31, 2006                          $    54,693


     The increase in goodwill from June 30, 2005 is primarily due to the
     preliminary allocation of the purchase price relating to the acquisition of
     The Gillette Company.

     Identifiable intangible assets as of March 31, 2006 are comprised of
     (amounts in millions):

                                              Gross Carrying    Accumulated
                                                      Amount   Amortization
                                              -------------------------------
     Amortizable intangible assets
       with determinable lives                   $     8,022     $     1,086
     Intangible assets with indefinite lives          26,228               -
                                              -------------------------------
     Total identifiable intangible assets        $    34,250     $     1,086
                                              -------------------------------

     Amortizable intangible assets consist principally of patents, technology
     and trademarks. The non-amortizable intangible assets consist primarily of
     trademarks.

     The amortization expense of intangible assets for the three months and nine
     months ended March 31, 2006 was $161 million and $397 million,
     respectively.

6.   In December 2004, the Financial Accounting Standards Board (FASB) issued
     SFAS 123(R). This Statement revises SFAS No. 123 by eliminating the
     election to account for employee stock options under APB No. 25 and
     requires companies to recognize the cost of employee services received in
     exchange for awards of equity instruments based on the grant-date fair
     value of those awards (the "fair-value-based" method). We adopted SFAS
     123(R) effective July 1, 2005 using the modified retrospective method. All
     prior periods were retrospectively adjusted to give effect to the
     fair-value-based method of accounting for awards granted in fiscal years
     beginning on or after July 1, 1995. We provided revised Consolidated
     Financial Statements for the years ended June 30, 2005, 2004 and 2003
     reflecting the adoption of SFAS 123(R) under the modified retrospective
     method in a Form 8-K dated November 2, 2005. The impact to the Company's
     net earnings of adopting SFAS 123(R) is consistent with the pro forma
     disclosures provided in previous financial statements.

     Total share-based compensation for the three months and nine months ended
     March 31, 2006 and 2005 can be found in the following table (amounts in
     millions):

                                         Three Months Ended    Nine Months Ended
                                               March 31             March 31
                                         ------------------    -----------------
                                           2006      2005        2006     2005
                                         --------  --------    -------- --------
      Share-Based Compensation
         Stock Options                    $  178    $  145      $  355   $  315
         Other Share-Based Awards             14         7          45       55
                                         --------  --------    -------- --------
         Total Share-Based Compensation   $  192    $  152      $  400   $  370
                                         --------  --------    -------- --------

     These amounts are reflected in Cost of Products Sold and Selling, General
     and Administrative Expense and have been allocated to the reportable
     segments.

     The fair value of each grant issued since January 1, 2005 was estimated
     using a binomial lattice-based model. The fair value of options granted
     prior to January 1, 2005 was estimated using the Black-Scholes
     option-pricing model. The utilization of the binomial lattice-based model
     did not have a significant impact on the valuation of stock options as
     compared to the Black-Scholes model. Assumptions utilized in the model are
     evaluated and revised, as necessary, to reflect market conditions and
     experience.

7.   Postretirement Benefits - The Company offers various postretirement
     benefits to its employees.

      The components of net periodic benefit cost are as follows:



Amounts in millions
                                                                Pension Benefits                      Other Retiree Benefits
                                                        ----------------------------------      -----------------------------------
                                                               Three Months Ended                       Three Months Ended
                                                                    March 31                                 March 31
                                                        ----------------------------------      -----------------------------------
                                                            2006                 2005               2006                  2005
                                                        -------------        -------------      -------------         -------------

                                                                                                           
     Service Cost                                        $       76           $       42         $       25            $       17
     Interest Cost                                              106                   62                 46                    37
     Expected Return on Plan Assets                            (102)                 (47)               (94)                  (83)
     Amortization of Prior Service Cost and
        Prior Transition Amount                                   2                    1                 (5)                   (6)
     Recognized Net Actuarial Loss                               19                    8                  1                     -
                                                        -------------        -------------      -------------         -------------

     Gross Benefit Cost                                         101                   66                (27)                  (35)

     Dividends on ESOP Preferred Stock                            -                    -                (19)                  (18)
                                                        -------------        -------------      -------------         -------------

     Net Periodic Benefit Cost                           $      101           $       66         $      (46)           $      (53)
                                                        =============        =============      =============         =============


     Amounts in millions
                                                                Pension Benefits                      Other Retiree Benefits
                                                        ----------------------------------      -----------------------------------
                                                                Nine Months Ended                       Nine Months Ended
                                                                    March 31                                 March 31
                                                        ----------------------------------      -----------------------------------
                                                            2006                 2005               2006                  2005
                                                        -------------        -------------      -------------         -------------

     Service Cost                                        $      196           $      120         $       73            $       51
     Interest Cost                                              273                  180                131                   110
     Expected Return on Plan Assets                            (250)                (136)              (278)                 (250)
     Amortization of Prior Service Cost and
       Prior Transition Amount                                    6                    4                (14)                  (17)
     Recognized Net Actuarial Loss                               56                   24                  2                     -
                                                        -------------        -------------      -------------         -------------

     Gross Benefit Cost                                         281                  192                (86)                 (106)

     Dividends on ESOP Preferred Stock                            -                    -                (57)                  (54)
                                                        -------------        -------------      -------------         -------------

     Net Periodic Benefit Cost                           $      281           $      192         $    (143)            $     (160)
                                                        =============        =============      =============         =============


     In 2006, the expected return on plan assets is 7.3% and 9.3% for defined
     benefit and other retiree benefit plans, respectively.


Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) is organized in the following sections:

   o  Overview
   o  Results of Operations - Three Months Ended March 31, 2006
   o  Results of Operations - Nine Months Ended March 31, 2006
   o  Business Segment Discussion (three and nine months ended March 31, 2006)
   o  Financial Condition

Throughout MD&A, we refer to several measures used by management to evaluate
performance including unit volume growth, net sales and after-tax profit. We
also refer to organic sales growth (net sales excluding the impacts of
acquisitions, divestitures and foreign exchange), free cash flow and free cash
flow productivity, which are not defined under accounting principles generally
accepted in the United States of America (U.S. GAAP). The explanation of these
measures at the end of MD&A provides more details.

Effective July 1, 2005, Procter & Gamble adopted SFAS 123(R) which requires that
all stock-based compensation, including grants of employee stock options, be
accounted for using a fair value-based method. We have elected to adopt SFAS
123(R) using the modified retrospective method. As a result, we have revised our
historical results to include the effect of stock-based compensation. Therefore,
all financial data provided in this Form 10-Q filing, including prior year data,
have been revised to include the impact of all stock-based compensation expense.

OVERVIEW
--------

Our business is focused on providing branded products of superior quality and
value to improve the lives of the world's consumers. We believe this will lead
to leadership sales, profits and value creation, allowing employees,
shareholders and the communities in which we operate to prosper.

On October 1, 2005, we completed the acquisition of The Gillette Company
("Gillette"), a leading consumer products company that had $10.5 billion of
sales in its most recent year ended December 31, 2004. The results of Gillette
are included in the Financial Statements and Management's Discussion and
Analysis as of October 1, 2005. In order to provide our investors with more
insight into the results of the Blades and Razors and Duracell and Braun
reporting segments, we have previously provided supplemental pro forma net sales
and earnings data for these segments for each of the four quarters in the year
ended June 30, 2005 (as presented in our Form 8-K released October 4, 2005).
Management's discussion of the current quarter results of these two reporting
segments is in relation to such comparable prior year pro forma net sales and
earnings data.

Procter & Gamble markets approximately 300 consumer products in more than 160
countries. Our products are sold primarily through mass merchandisers, grocery
stores, membership club stores and drug stores. We compete in multiple product
categories and have four global business units: P&G Beauty, P&G Family Health,
P&G Household Care and Gillette. Under U.S. Generally Accepted Accounting
Principles, we have seven reportable segments: Beauty, Health Care, Baby Care &
Family Care, Fabric Care & Home Care, Snacks & Coffee, Blades & Razors and
Duracell & Braun. We have operations in over 80 countries through our Market
Development Organization, which leads country business teams to build our brands
in local markets and is organized along seven geographic areas: North America,
Western Europe, Northeast Asia, Latin America, Central and Eastern Europe/Middle
East/Africa, Greater China and ASEAN/Australasia/India.

On April 17, 2006, we announced a number of changes to certain of our key
leadership positions, which also involved changes to our organization structure.
These changes will impact our segment reporting. Specifically, Pet Health &
Nutrition, which is part of our Health Care reporting segment, will become part
of our Snacks & Coffee reporting segment. In addition, our commercial products
organization, which primarily sells cleaning products directly to commercial end
users, will be moved from Snacks & Coffee to our Fabric Care & Home Care
segment. Our segment reporting will be revised to reflect these changes during
the upcoming quarter ended June 30, 2006, at which time we will also revise our
historical financial statements to reflect these changes. The accompanying
financial statements and management discussion of operating results reflect the
management and organization structure that existed prior to the changes
described herein.

The following table provides the percentage of net sales and net earnings by
business segment for the nine months ended March 31, 2006 (excludes net sales
and net earnings in Corporate):

                                   NET SALES               NET EARNINGS
BEAUTY                                30%                       33%

FAMILY HEALTH:                        32%                       28%
    Health Care                       14%                       15%
    Baby Care and Family Care         18%                       13%

HOUSEHOLD CARE:                       29%                       29%
    Fabric Care and Home Care         24%                       25%
    Snacks and Coffee                  5%                        4%

GILLETTE BUSINESS UNIT:                9%                       10%
    Blades and Razors                  5%                        7%
    Duracell and Braun                 4%                        3%
                                     ----                      ----

TOTAL                                100%                      100%

NOTE: CALCULATIONS ABOVE INCLUDE 6 MONTHS OF GILLETTE RESULTS
      (OCTOBER 1, 2005 - MARCH 31, 2006)

The following table provides the percentage of net sales and net earnings by
business segment for the three months ended March 31, 2006 (excludes net sales
and net earnings in Corporate):

                                   NET SALES               NET EARNINGS
BEAUTY                                30%                       32%

FAMILY HEALTH:                        31%                       27%
    Health Care                       14%                       13%
    Baby Care and Family Care         17%                       14%

HOUSEHOLD CARE:                       28%                       28%
    Fabric and Home Care              23%                       23%
    Snacks and Coffee                  5%                        5%

GILLETTE BUSINESS UNIT:               11%                       13%
    Blades and Razors                  7%                       11%
    Duracell and Braun                 4%                        2%
                                     ----                      ----

TOTAL                                100%                      100%


SUMMARY OF RESULTS. Following are highlights of results for the nine months
ended March 31, 2006:

     o    Unit volume increased 18 percent fiscal year to date. Organic volume,
          which excludes the impacts of acquisitions and divestitures, increased
          six percent. Growth was broad-based with every segment delivering
          volume growth, except Snacks and Coffee which was impacted by business
          disruptions due to Hurricane Katrina. Every region delivered organic
          volume growth, with double digit growth in developing regions.
     o    Net sales increased 19 percent to $50.38 billion fiscal year to date,
          including Gillette results since October 1, 2005. Organic sales, which
          exclude the impact of acquisitions, divestitures and foreign exchange,
          increased seven percent.
     o    Net earnings increased 23 percent to $6.79 billion fiscal year to
          date. Net earnings increased behind the addition of Gillette and sales
          growth on our base business.
     o    Diluted net earnings per share were $2.10 through the first nine
          months of the fiscal year, an increase of four percent versus the
          comparable prior year period, including $0.15 - $0.17 of dilution from
          Gillette.
     o    Operating cash flow was $8.19 billion, an increase of 24 percent
          versus the prior year period. Free cash flow productivity fiscal year
          to date was 96 percent.

FORWARD LOOKING STATEMENTS. The markets in which the Company sells its products
are highly competitive and comprised of both global and local competitors. Going
forward, business and market uncertainties may affect results. Among the key
factors that could impact results and must be managed by the Company are:

     (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)  the ability to successfully execute, manage and integrate key
          acquisitions and mergers, including (i) the Company's acquisition of
          The Gillette Company, including the ability to achieve the cost and
          growth synergies in accordance with the stated goals of the
          transaction and (ii), the Domination and Profit Transfer Agreement
          with Wella;

     (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
          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
          plan to repurchase shares of the Company's stock), 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 competitive factors, including
          prices, promotional incentives and trade terms for products;

     (10) the ability to obtain patents and respond to technological advances
          attained by competitors and patents granted to competitors;

     (11) the ability to successfully manage increases in the prices of raw
          materials used to make the Company's products;

     (12) the ability to stay close to consumers in an era of increased media
          fragmentation; and

     (13) the ability to stay on the leading edge of innovation.

If the Company's assumptions and estimates are incorrect or do not come to
fruition, or if the Company does not achieve all of these key factors, then the
Company's actual results could vary materially from the forward-looking
statements made herein, as that term is defined in the Private Securities
Litigation Reform Act of 1995.

RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2006

The following discussion provides a review of results for the three months ended
March 31, 2006 versus the three months ended March 31, 2005.



                       THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
                       (AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
                             Consolidated Earnings Information

                                                             THREE MONTHS ENDED
                                                                  MARCH 31
                                              -----------------------------------------------
                                                     2006               2005          % CHG
                                              -----------------------------------------------
                                                                              
NET SALES                                       $   17,250         $   14,287          21 %
COST OF PRODUCTS SOLD                                8,340              7,055          18 %
                                              -----------------------------------------------
GROSS MARGIN                                         8,910              7,232          23 %
 SELLING, GENERAL & ADMINISTRATIVE EXPENSE           5,559              4,690          19 %
                                              -----------------------------------------------
OPERATING INCOME                                     3,351              2,542          32 %
 TOTAL INTEREST EXPENSE                                301                222
 OTHER NON-OPERATING INCOME, NET                        79                 60
                                              -----------------------------------------------
EARNINGS BEFORE INCOME TAXES                         3,129              2,380          31 %
 INCOME TAXES                                          918                766
                                              -----------------------------------------------

NET EARNINGS                                         2,211              1,614          37 %
                                              ===============================================

EFFECTIVE TAX RATE                                  29.3 %              32.2%

PER COMMON SHARE:
 BASIC NET EARNINGS                                   0.67               0.63           6 %
 DILUTED NET EARNINGS                                 0.63               0.59           7 %
 DIVIDENDS                                            0.28               0.25
AVERAGE DILUTED SHARES OUTSTANDING                 3,510.5            2,730.3


COMPARISONS AS A % OF NET SALES
-------------------------------                                                 Basis Pt Chg
 COST OF PRODUCTS SOLD                              48.3 %            49.4 %
 GROSS MARGIN                                       51.7 %            50.6 %          110
 SELLING, GENERAL & ADMINISTRATIVE EXPENSE          32.2 %            32.8 %          (60)
 OPERATING MARGIN                                   19.4 %            17.8 %          160
 EARNINGS BEFORE INCOME TAXES                       18.1 %            16.7 %          140
 NET EARNINGS                                       12.8 %            11.3 %          150



Unit volume increased 22 percent during the March quarter driven by the addition
of the Gillette business and organic volume growth. Organic volume, which
excludes the impacts of acquisitions and divestitures, increased five percent,
largely behind product innovations that drove broad-based market share growth.

Net sales for the quarter increased 21 percent to $17.25 billion. Organic sales,
which exclude the impact of acquisitions, divestitures and foreign exchange,
grew six percent. Sales growth was broad-based across both developed and
developing regions. Developing markets led sales growth, driven by increases in
Central and Eastern Europe/Middle East/Africa behind market share improvements
and new initiative introductions. China sales growth moderated versus prior
periods' growth rates, but was still up mid to high-single digits excluding the
impact of Gillette. Foreign exchange trends had a negative three percent impact
on the Company's sales growth due primarily to the strengthening of the US
dollar versus the euro, the British pound and the Japanese yen. Pricing and mix
each had a positive one percent impact on sales growth.



                                                        Volume                                 Net Sales
                                           -------------------------------    --------------------------------------------
                                                 With          Without
                                             Acquisitions   Acquisitions                                          Total
                                                   &              &                             Mix/    Total     Impact
                                             Divestitures   Divestitures         FX     Price   Other   Impact    Ex-FX
                                           -------------------------------    ---------------------------------------------
                                                                                               
BEAUTY                                            8%             4%             -3%       0%      1%       6%       9%

FAMILY HEALTH
    HEALTH CARE                                  18%            -1%             -1%       1%      3%      21%      22%
    BABY CARE AND FAMILY CARE                     2%             3%             -3%       2%     -2%      -1%       2%

HOUSEHOLD CARE
   FABRIC CARE AND HOME CARE                      7%             7%             -2%       2%      0%       7%       9%
    SNACKS AND COFFEE                             3%             3%             -2%       3%      0%       4%       6%

GILLETTE BUSINESS UNIT
   BLADES AND RAZORS                              N/A            N/A            N/A      N/A     N/A      N/A      N/A
    DURACELL AND BRAUN                            N/A            N/A            N/A      N/A     N/A      N/A      N/A

TOTAL COMPANY                                    22%             5%             -3%       1%      1%      21%      24%

NOTE:  Sales percentage changes are approximations based on quantitative formulas that are consistently applied



Gross margin expanded by 110 basis points in the quarter to 51.7%. Commodity
cost increases had a negative impact on gross margin of approximately 100 basis
points. Scale leverage from volume growth, along with pricing and cost savings
projects, offset the majority of the commodity cost increases. The mix benefit
of adding the Gillette business drove approximately 125 basis points of gross
margin expansion due to above company average margins in the Blades and Razors
segment.

Total selling, general and administrative expenses (SG&A) increased 19%, or $869
million, during the quarter versus the prior year period. The increase was
driven by the addition of Gillette, which added approximately $900 million to
SG&A in the period, including approximately $150 million of acquisition-related
expenses. The acquisition-related expenses included $108 million of increased
intangible asset amortization resulting from revaluing intangible assets in the
opening balance sheet of the acquired Gillette business. The balance of the
acquisition-related expenses was due to incremental integration and overhead
expenses such as legal and consulting fees. Marketing spending on our base
business (total Company excluding Gillette) increased behind investments in
Fabric Care and Home Care and in Beauty to support initiative activity, but was
down as a percentage of sales versus the comparable prior year period. Overhead
spending on our base business also decreased as a percentage of sales driven
largely by reduced Wella integration costs versus the base period. Overall, SG&A
decreased as a percentage of sales by 60 basis points as sales growth, overhead
cost control and the mix benefits of adding the Gillette business more than
offset the increase in SG&A expense.

Interest expense for the quarter increased by $79 million versus the prior year
period driven by the financing cost of the previously announced share repurchase
program associated with the Gillette acquisition. We repurchased $3.7 billion of
P&G stock during the quarter as part of this program, including $2.2 billion of
shares repurchased under a forward purchase agreement that settled in April
2006. This brings the cumulative value of shares repurchased under the program
to $15.8 billion since January 2005. We expect to repurchase about $20 billion
in total under the program and to complete the program by mid-calendar 2006.

Net earnings increased 37 percent to $2.21 billion behind organic sales growth,
the addition of Gillette, improvement in gross margin and SG&A as a percentage
of sales and a reduced tax rate versus the comparable base period. The
contribution from Gillette was net of increased interest expense, higher costs
from revaluing Gillette's intangible assets to fair value as of the acquisition
date and one-time integration costs. Net earnings also benefited from a lower
effective tax rate in the quarter. The Company's effective tax rate in the
quarter was 29.3% compared to a rate of 32.2% in the comparable prior year
period. The comparable prior year tax rate was negatively impacted by a
provision for tax costs on anticipated dividends originating from foreign
subsidiaries. The tax rate in the current quarter benefited from the favorable
settlement of a tax audit in a foreign jurisdiction.

Diluted net earnings per share were $0.63, up seven percent versus the prior
year, including an estimated $0.07-$0.08 per share of dilution from the Gillette
acquisition. Net earnings per share benefited by about $0.01 per share due to
the favorable tax settlement.

RESULTS OF OPERATIONS - NINE MONTHS ENDED MARCH 31, 2006
--------------------------------------------------------

The following discussion provides a review of results for the nine months ended
March 31, 2006 versus the nine months ended March 31, 2005.




                       THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
                       (AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
                             Consolidated Earnings Information

                                                               NINE MONTHS ENDED
                                                                   MARCH 31
                                              -----------------------------------------------
                                                     2006               2005          % CHG
                                              -----------------------------------------------
                                                                              
NET SALES                                       $   50,380         $   42,483          19 %
 COST OF PRODUCTS SOLD                              24,231             20,563          18 %
                                              -----------------------------------------------
GROSS MARGIN                                        26,149             21,920          19 %
 SELLING, GENERAL & ADMINISTRATIVE EXPENSE          15,849             13,607          16 %
                                              -----------------------------------------------
OPERATING INCOME                                    10,300              8,313          24 %
 TOTAL INTEREST EXPENSE                                819                603
 OTHER NON-OPERATING INCOME, NET                       221                297
                                              -----------------------------------------------
EARNINGS BEFORE INCOME TAXES                         9,702              8,007          21 %
 INCOME TAXES                                        2,916              2,476

NET EARNINGS                                         6,786              5,531          23 %
                                              ===============================================

EFFECTIVE TAX RATE                                  30.1 %             30.9 %


PER COMMON SHARE:
  BASIC NET EARNINGS                                  2.22               2.15           3 %
  DILUTED NET EARNINGS                                2.10               2.01           4 %
  DIVIDENDS                                           0.84               0.75
AVERAGE DILUTED SHARES OUTSTANDING                 3,235.4            2,749.4

COMPARISONS AS A % OF NET SALES
-------------------------------                                                 Basis Pt Chg
COST OF PRODUCTS SOLD                               48.1 %             48.4 %           (30)
 GROSS MARGIN                                       51.9 %             51.6 %            30
 SELLING, GENERAL & ADMINISTRATIVE EXPENSE          31.5 %             32.0 %           (50)
 OPERATING MARGIN                                   20.4 %             19.6 %            80
 EARNINGS BEFORE INCOME TAXES                       19.3 %             18.8 %            50
 NET EARNINGS                                       13.5 %             13.0 %            50



Fiscal year to date, unit volume increased 18 percent. Organic volume, which
excludes the impact of acquisitions and divestitures, increased six percent
behind broad-based growth across segments and geographies. Every business
segment except Snacks and Coffee, which was impacted by Hurricane Katrina,
delivered mid-single digit or higher organic volume growth. In addition, each of
the Company's regions delivered organic volume growth, led by double digit
growth in developing regions.

Net sales increased 19 percent to $50.38 billion in the first nine months of the
fiscal year driven by the addition of the Gillette business in October, 2005, as
well as growth on the base P&G businesses. Organic sales, which exclude the
impact of acquisitions, divestitures and foreign exchange, increased seven
percent during the period. Favorable product mix, resulting from the addition of
the Gillette business which has a unit selling price that is higher than the
Company average, along with more favorable product mix in Beauty and in Health
Care, added one percent to sales growth. Pricing increases, taken across most
segments, also had a positive one percent impact on sales growth, but were
offset by a negative one percent unfavorable foreign exchange trend.




                                                        Volume                                 Net Sales
                                           -------------------------------    --------------------------------------------
                                                 With          Without
                                             Acquisitions   Acquisitions                                          Total
                                                   &              &                             Mix/    Total     Impact
                                             Divestitures   Divestitures         FX     Price   Other   Impact    Ex-FX
                                           -------------------------------    ---------------------------------------------
                                                                                               
BEAUTY                                            8%             5%             -2%       0%      1%      7%        9%

FAMILY HEALTH
     HEALTH CARE                                 20%             6%             -1%       1%      1%     21%       22%
     BABY CARE AND FAMILY CARE                    4%             5%             -1%       1%     -2%      2%        3%

HOUSEHOLD CARE
     FABRIC CARE AND HOME CARE                    7%             7%             -1%       2%      0%      8%        9%
     SNACKS AND COFFEE                            0%             0%             -1%       6%     -2%      3%        4%

GILLETTE BUSINESS UNIT
     BLADES AND RAZORS                           N/A            N/A             N/A      N/A     N/A     N/A       N/A
     DURACELL AND BRAUN                          N/A            N/A             N/A      N/A     N/A     N/A       N/A

TOTAL COMPANY*                                   18%             6%             -1%       1%      1%     19%       20%

NOTE:  Sales percentage changes are approximations based on quantitative formulas that are consistently applied.

* Figures include only six months of Gillette results (October 1, 2005 - March 31, 2006)



Gross margin was 51.9 percent fiscal year to date, an increase of 30 basis
points versus the comparable base period. Adding the Gillette business added
approximately 70 basis points to gross margin due to higher margins in the
Blades and Razors segment, net of approximately 15 basis points due to increased
product costs from revaluing Gillette's opening inventory balances to fair value
as of the acquisition date. Gross margin on the Company's base businesses
declined approximately 40 basis points during the period. Higher commodity
costs, which negatively impacted gross margin by about 120 basis points, were
partially offset by the scale benefit from sales growth and cost savings
programs.

Total selling, general and administrative expenses (SG&A) increased 16 percent,
or $2.2 billion fiscal year to date versus the prior year period. The addition
of Gillette drove approximately $2.0 billion of the total increase in the
period, including approximately $350 million of acquisition-related expenses.
The acquisition-related expenses included $243 million of increased intangible
asset amortization resulting from revaluing intangible assets in the opening
balance sheet of the acquired Gillette business. The balance of the
acquisition-related expenses was due to incremental integration and overhead
expenses such as legal and consulting fees. Marketing spending on our base
business (total Company excluding Gillette) increased behind investments in
Fabric Care and Home Care and in Beauty to support initiative activity, but was
down as a percentage of sales versus the comparable prior year period. Overhead
spending on our base business also decreased as a percentage of sales driven
largely by reduced Wella integration costs versus the base period. Overall, SG&A
decreased as a percentage of sales by 50 basis points as sales growth, overhead
cost control and the mix benefits of adding the Gillette businesses more than
offset the increase in SG&A expense.

Interest expense increased fiscal year to date by $216 million versus the prior
year period driven by the financing cost of the previously announced share
repurchase program associated with the Gillette acquisition. The Company
repurchased $12.8 billion of P&G stock fiscal year to date under this program,
including $2.2 billion of shares repurchased under a forward purchase agreement
that settled in April 2006. This brings the cumulative value of shares
repurchased under the program to $15.8 billion since January 2005. We expect to
repurchase about $20 billion in total under the program and to complete the
program by mid-calendar 2006.

Net earnings increased 23 percent to $6.79 billion fiscal year to date behind
the impact of adding the Gillette business, organic sales growth and improved
SG&A as a percentage of sales, partially offset by increased commodity costs.
Net earnings also benefited from a lower fiscal year to date effective tax rate
as a result of a favorable resolution of a tax audit in a foreign jurisdiction
during the current March quarter, coupled with a tax provision in the comparable
base period related to a planned repatriation of dividends from foreign
subsidiaries. Diluted net earnings per share increased four percent to $2.10
during the period, including $0.15 - $0.17 of Gillette dilution.

BUSINESS SEGMENT DISCUSSION
---------------------------

The following discussion provides a review of results by business segment. An
analysis of the results for the three and nine months ended March 31, 2006 is
provided compared to the same three and nine month periods ended March 31, 2005.
The primary financial measures used to evaluate segment performance are net
sales and net earnings. The table below provides supplemental information on net
sales and net earnings by business segment for the three and nine months ended
March 31, 2006 versus the comparable prior year period:



                                                                 Three Months Ended March 31, 2006
                                              --------------------------------------------------------------------------
                                                                        Earnings
                                                            % Change      Before     % Change                 % Change
                                                   Net        Versus      Income       Versus        Net        Versus
                                                 Sales      Year Ago       Taxes     Year Ago   Earnings      Year Ago
                                              ---------------------------------------------------------------------------

                                                                                                 
BEAUTY                                         $ 5,155            6%     $ 1,041           7%    $   738           10%

     HEALTH CARE                                 2,427           21%         446          29%        298           28%
     BABY CARE AND FAMILY CARE                   3,031           -1%         530           5%        326            2%
                                              ---------------------------------------------------------------------------
FAMILY HEALTH                                    5,458            8%         976          15%        624           13%

     FABRIC CARE AND HOME CARE                   4,080            7%         814          13%        545           13%
     SNACKS AND COFFEE                             796            4%         177          13%        109           12%
                                              ---------------------------------------------------------------------------
HOUSEHOLD CARE                                   4,876            6%         991          13%        654           13%

     BLADES AND RAZORS                           1,187           N/A         361          N/A        265           N/A
     DURACELL AND BRAUN                            763           N/A          76          N/A         54           N/A
                                              ---------------------------------------------------------------------------
GILLETTE BUSINESS UNIT                           1,950           N/A         437          N/A        319           N/A

TOTAL BUSINESS SEGMENT                          17,439           20%       3,445          28%      2,335           30%
CORPORATE                                        (189)           N/A        (316)         N/A       (124)          N/A
                                              ---------------------------------------------------------------------------
TOTAL COMPANY                                   17,250           21%       3,129          31%      2,211           37%




                                                               Nine Months Ended March 31, 2006*
                                              --------------------------------------------------------------------------
                                                                        Earnings
                                                            % Change      Before     % Change                 % Change
                                                   Net        Versus      Income       Versus        Net        Versus
                                                 Sales      Year Ago       Taxes     Year Ago   Earnings      Year Ago
                                              ---------------------------------------------------------------------------
BEAUTY                                         $15,514            7%     $ 3,285           6%    $ 2,369           11%

   HEALTH CARE                                   7,149           21%       1,582          36%      1,061           36%
   BABY CARE AND FAMILY CARE                     9,066            2%       1,561           0%        976            0%
                                              ---------------------------------------------------------------------------
FAMILY HEALTH                                   16,215           10%       3,143          15%      2,037           16%

   FABRIC CARE AND HOME CARE                    12,376            8%       2,665          10%      1,779           10%
   SNACKS AND COFFEE                             2,429            3%         429          -7%        277           -6%
                                              ---------------------------------------------------------------------------
HOUSEHOLD CARE                                  14,805            8%       3,094           8%      2,056            8%

   BLADES AND RAZORS                             2,340           N/A         736          N/A        537           N/A
   DURACELL AND BRAUN                            2,042           N/A         319          N/A        219           N/A
                                              ---------------------------------------------------------------------------
GILLETTE                                         4,382           N/A       1,055          N/A        756           N/A

TOTAL BUSINESS SEGMENT                          50,916           18%      10,577          22%      7,218           24%
CORPORATE                                        (536)           N/A        (875)         N/A       (432)          N/A
                                              ---------------------------------------------------------------------------
TOTAL COMPANY                                   50,380           19%       9,702          21%      6,786           23%

* Figures shown include six months of Gillette results only (October 1, 2005 - March 31, 2006)



BEAUTY
-------
Beauty volume increased eight percent during the quarter behind organic volume
growth and the addition of Gillette Personal Care. Organic volume, which
excludes the impact of acquisitions and divestitures, increased four percent
with growth across multiple categories and double digit developing region
growth. Skin Care volume increased double digits behind growth on Olay.
Cosmetics volume decreased versus last year due to declines on Max Factor in
North America resulting from reduced distribution. Retail Hair Care volume
increased mid-single digits behind Head & Shoulders, Pantene and Rejoice. Beauty
net sales increased six percent to $5.16 billion driven by volume growth and a
favorable one percent product mix impact resulting from higher sales of premium
Hair Care and Feminine Care products, partially offset by three percent of
unfavorable foreign exchange trends. Net earnings in Beauty increased 10 percent
to $738 million behind the addition of Gillette Personal Care, organic sales
growth, reduced Wella integration costs and a more profitable product mix. These
were partially offset by higher commodity costs and an increase in marketing
investments behind initiative activity, primarily in developing regions.

Beauty volume increased eight percent fiscal year to date, including six months
of Gillette Personal Care results. Organic volume increased five percent, led by
double digit growth in developing regions. Volume growth was driven by
initiative activity across categories and brands including Pantene, Head &
Shoulders, Rejoice, Olay, Always and Naturella. Net sales increased seven
percent to $15.51 billion including a negative two percent foreign exchange
impact. Net earnings increased 11 percent to $2.37 billion. Sales growth and
lower Wella integration costs were partially offset by higher commodity costs
and increased marketing investments behind initiative activity, primarily in
developing regions.

FAMILY HEALTH
-------------
Health Care delivered 18 percent volume growth in the quarter, including the
addition of the Gillette business. Organic volume, which excludes the impact of
acquisitions and divestitures, declined one percent despite market share
increases across most businesses and regions. Year-on-year comparisons were
negatively impacted by a base period in which volume grew 14 percent behind the
rebuild of Prilosec OTC trade inventory following an allocation period. The
prior year also benefited from a late flu season in North America and Western
Europe. Despite volume declines, market shares grew in Oral Care, Respiratory
and on Prilosec OTC. Net sales in Health Care grew 21 percent to $2.43 billion
due primarily to the addition of Gillette Oral Care. Favorable product mix in
Pharmaceuticals and Personal Health and within the base Oral Care business
increased sales by three percent. In addition, previously announced price
increases on Actonel and Prilosec OTC added one percent to sales growth, but
were offset by one percent from unfavorable foreign exchange trends. Health Care
net earnings increased 28 percent to $298 million primarily behind the addition
of the Gillette Oral Care business and a 100 basis point operating margin
expansion. Operating margin increased as a result of adding Gillette Oral Care
coupled with pricing activity and lower marketing expenses as a percentage of
sales.

Fiscal year to date, Health Care volume increased 20 percent, including six
months of Gillette Oral Care results. Organic volume increased six percent
behind upper-single digit growth in Pharmaceuticals and Personal Health and
mid-single digit growth in Oral Care. Additionally, volume increased due to a
suppressed July-December base period when Prilosec OTC was on shipment
allocations. Net sales increased 21 percent to $7.15 billion including a
negative one percent foreign exchange impact. Pricing on Actonel and Prilosec
OTC had a positive one percent impact on sales. Favorable product mix due to
disproportionate growth in Pharmaceuticals and Personal Health added an
additional one percent to sales. Net earnings increased 36 percent to $1.06
billion behind organic volume growth, the addition of Gillette Oral Care and
margin expansion on the base P&G business. Operating margin in Health Care
expanded by 220 basis points versus the comparable prior year period primarily
due to scale benefits of sales growth, favorable product mix and a reduction in
marketing expenses as percentage of sales versus the base period.

Baby Care and Family Care volume increased two percent during the quarter, with
organic volume up three percent. Baby Care volume increased in the low-single
digits with developing regions up double digits behind market share growth in
China and in Central and Eastern Europe. In developed regions, market share on
Pampers in North America was in-line with the prior year period while continued
pricing pressure from private label competitors drove share softness on the Luvs
brand. Family Care organic volume grew in the mid-single digits, largely behind
growth on Bounty and on the Charmin Basic initiative. Net sales in the Baby Care
and Family Care segment were $3.03 billion, down one percent versus the prior
year including a negative three percent foreign exchange impact. Previously
announced price increases in North America Baby Care, coupled with a late
January increase in North America Family Care, added two percent to sales.
Disproportionate growth in mid-tier products and in developing regions, where
average unit selling price is below the segment average, resulted in a negative
two percent mix impact. Baby Care and Family Care net earnings increased two
percent to $326 million. Operating margin increased 90 basis points as cost
savings projects and lower marketing expenses as a percentage of sales offset
higher commodity and energy costs.

Baby Care and Family Care volume increased four percent fiscal year to date.
Organic volume increased five percent behind product initiatives and double
digit growth in developing regions. Net sales increased two percent to $9.07
billion, including a negative one percent foreign exchange impact. Pricing had a
positive one percent impact on sales. Product mix and higher growth rates in
developing markets reduced sales by two percent. Net earnings were unchanged at
$976 million as volume growth and price increases in the second and third
quarter were offset by increased energy costs and unfavorable product mix.

HOUSEHOLD CARE
--------------
Fabric Care and Home Care volume grew seven percent during the quarter. Growth
was broad-based across regions and across both Fabric Care and Home Care. Volume
was driven by innovations such as Tide with Febreze, Febreze Noticeables, Gain
Joyful Expressions, Bounce with Febreze and Bold Liquid Tabs. Net sales
increased seven percent to $4.08 billion, including a negative two percent
foreign exchange impact. Pricing activity, primarily in Latin America Fabric
Care and North America Dish Care, added two percent to sales growth. Net
earnings increased thirteen percent to $545 million behind sales growth and
margin expansion. Operating margin expanded by 100 basis points as volume
growth, cost savings initiatives and pricing activity offset commodity cost
increases and increased marketing investments behind initiative activity.

Fiscal year to date, Fabric Care and Home Care volume increased seven percent
driven by initiative activity across the segment. Net sales increased eight
percent to $12.38 billion, including a negative one percent foreign exchange
impact. Pricing activity added two percent to sales growth. Net earnings
increased 10 percent to $1.78 billion. Volume growth, pricing and cost savings
programs more than offset increased commodity costs and increased marketing
spending behind initiative activity.

Snacks and Coffee volume grew three percent in the quarter. Coffee volume
increased mid-single digits as Folgers market share, which was impacted by
disruptions related to Hurricane Katrina, returned to pre-hurricane levels
during the quarter. Snacks volume was flat versus the prior year. Net sales for
the segment were $796 million, an increase of four percent including a negative
two percent impact from unfavorable foreign exchange trends. Previously
announced price increases in Coffee added three percent to sales growth.
Earnings were up 12 percent to $109 million driven by sales growth and an
insurance recovery from Hurricane Katrina, which more than offset current
quarter hurricane-related costs.

Fiscal year to date, Snacks and Coffee volume was flat, primarily due to Coffee
shipment disruptions following Hurricane Katrina. Coffee volume was down double
digits while Snacks volume was up in the low-single digits during the period.
Net sales increased three percent to $2.43 billion, including a negative one
percent foreign exchange impact. Pricing in Coffee added six percent to sales
while the mix effect of lower Coffee shipments had a negative two percent impact
on sales. Earnings declined six percent to $277 million as sales growth was
offset by increased costs related to Hurricane Katrina (net of the insurance
recovery), negative product mix and higher green coffee prices.

ACQUIRED GILLETTE REPORTED SEGMENTS
-----------------------------------
As disclosed in Note 4 to the consolidated financial statements, we completed
the acquisition of The Gillette Company on October 1, 2005. This acquisition
resulted in two new reportable segments for the Company: Blades and Razors and
Duracell and Braun. The Gillette Oral Care and Personal Care businesses were
subsumed within the Health Care and Beauty reportable segments, respectively.
Because the acquisition was completed during the current fiscal year period,
there are no results for these segments in our prior year period.

In order to provide our investors with more insight into the results of the
Blades and Razors and Duracell and Braun reporting segments, we have previously
provided supplemental pro forma net sales and earnings data for these segments
for each of the quarters in the Gillette Company's year ended June 30, 2005 (as
presented in our Form 8-K released October 4, 2005). Management's discussion of
the current quarter results of these two segments is in relation to such
comparable prior year pro forma net sales and earnings data. With respect to the
earnings data, this analysis is based on Earnings before Income Taxes. The
previously disclosed Blades and Razors and Duracell and Braun pro forma
information reconciled "Profit from Operations," the measure used by Gillette in
its historical filings, to Earnings before Income Taxes, the comparable measure
used by the Company. Gillette did not allocate income tax expense to its
reporting segments.

Blades and Razors sales increased one percent during the quarter to $1.19
billion versus prior year pro forma results, including a negative two percent
foreign exchange impact. The launch of Fusion in North America led to an
increase in sales in the region but was partially offset by a decline in Western
Europe. In Western Europe, sales were down versus the prior year period despite
market share growth. This was due to a base period in which sales grew in the
mid-teens behind the launch of M3Power and Venus Disposables. Sales in the
current quarter were also negatively impacted by a reduction in distributor
inventory levels in several developing countries in Asia where the Gillette
business was integrated into existing P&G distributors. Sales in Latin America
increased behind continued growth on Mach3 Turbo and Prestobarba Excel. Overall,
volume/mix increased sales by two percent and previously announced pricing
activity added one percent to sales growth. Earnings before income taxes were
$361 million, down 17 percent versus the published prior year pro forma results
due primarily to $87 million of acquisition-related charges that negatively
impacted earnings by 20 percent. The acquisition-related charges primarily
represented increased amortization charges from revaluing intangible assets in
the opening balance sheet. Earnings benefited from sales growth in North America
and synergy savings from overhead cost reductions, largely offset by increased
marketing investment behind the Fusion launch and the sales declines in Western
Europe and Asia. Net earnings for the segment were $265 million in the quarter.

Sales for Blades and Razors since the acquisition closed on October 1, 2005 have
increased 4% to $2.34 billion versus the comparable prior year period pro forma
results, including negative two percent of unfavorable foreign exchange trends.
Sales grew behind the launch of Fusion in North America and growth in Latin
America and Central and Eastern Europe/Middle East/Africa, but were partially
offset by a decline in Western Europe due to a base period that included the
launch of M3Power and Venus Disposables. Sales were also impacted by a reduction
in distributor inventory levels in several developing Asian countries where the
Gillette business was integrated into existing P&G distributors. Earnings before
income tax declined by 5 percent to $736 million, including $203 million of
acquisition-related charges that negatively impacted earnings by 26 percent
during the period. The acquisition-related charges primarily represented
increased amortization charges as a result of revaluing Gillette's opening
balance sheet to fair market value and increased product costs from revaluing
opening inventory balances at fair value. Earnings were also impacted by an
increase in the current year marketing investment behind the launch of Fusion
offset by synergy savings from overhead cost reductions and base period charges
for severance and other exit charges associated with Gillette's Functional
Excellence program, the European Manufacturing Realignment program and other
asset write downs. Fiscal year to date, net earnings were $537 million (since
the acquisition closed on October 1, 2005).

Duracell and Braun sales were $763 million in the quarter, down one percent
versus the prior year pro forma results including three percent of unfavorable
foreign exchange impact. In the Duracell business, market share growth and price
increases taken in North America to compensate for rising commodity costs were
more than offset by unfavorable foreign exchange trends, competitive activity in
Western Europe and unfavorable mix due to a trend toward larger pack sizes.
Braun sales increased in North America behind Tassimo, but were partially offset
by competitive activity in Germany and unfavorable foreign exchange trends.
Overall, volume/mix and pricing each contributed one percent to segment sales
growth, but were offset by negative three percent of unfavorable foreign
exchange trends. Earnings before income taxes increased one percent to $76
million, including acquisition-related charges of $10 million that negatively
impacted earnings by 13 percent. The acquisition-related charges primarily
represented increased amortization charges for revaluing intangible assets in
the opening balance sheet. Earnings grew ahead of sales primarily because of
base period charges for the shutdown of a manufacturing facility and synergy
savings from overhead cost reductions. In addition, current period cost savings
resulting largely from the Gillette Functional Excellence program more than
offset the effect of increased commodity costs. Net earnings for the segment
were $54 million in the quarter.

Sales for Duracell and Braun since the acquisition closed on October 1, 2005
have increased one percent to $2.04 billion versus the comparable prior year
period pro forma results, including negative two percent of unfavorable foreign
exchange trends. Market share growth and pricing activity on Duracell, coupled
with successful growth on Braun behind initiative launches, were largely offset
by unfavorable foreign exchange trends and declines in Western Europe due to
competitive activity. Earnings before income tax increased 32 percent to $319
million, including acquisition-related charges of $53 million that negatively
impacted earnings by 23 percent in the period. The acquisition-related charges
primarily represented increased amortization charges as a result of revaluing
Gillette's opening balance sheet to fair market value and increased product
costs for revaluing opening inventory balances at fair value. Earnings growth
was favorably impacted by base period charges for severance and other exit costs
associated with Gillette's Functional Excellence program, including charges
related to the shutdown of a manufacturing facility, as well as current-year
synergy savings from overhead cost reductions. Fiscal year to date, net earnings
were $219 million (since the acquisition closed on October 1, 2005).

CORPORATE
---------
Corporate includes certain operating and non-operating activities not allocated
to specific business units. These include: the incidental businesses managed at
the corporate level, financing and investing activities, certain restructuring
charges, other general corporate items and the historical results of certain
divested categories, including the Juice business that was divested in August of
2004 and any Gillette brands that were divested as required by the Gillette
acquisition. Corporate also includes reconciling items to adjust the accounting
policies used in the segments to U.S. GAAP. The most significant reconciling
items include income taxes (to adjust from statutory rates that are reflected in
the segments to the overall Company effective tax rate), adjustments for
unconsolidated entities (to eliminate sales, cost of products sold and SG&A for
entities that are consolidated in the segments but accounted for using the
equity method for U.S. GAAP) and minority interest adjustments for subsidiaries
where we do not have 100% ownership. Because both unconsolidated entities and
less than 100 percent owned subsidiaries are managed as integral parts of the
Company, they are accounted for similar to a wholly-owned subsidiary for
management and segment purposes. This means our segment results recognize 100
percent of each income statement component through before-tax earnings in the
segments, with eliminations in Corporate. In determining segment net earnings,
we apply the statutory tax rates (with adjustments to arrive at the Company's
effective tax rate in Corporate) and eliminate the share of earnings applicable
to other ownership interests, in a manner similar to minority interest.

Net losses in the Corporate segment improved from -$185 million to -$124 million
in the quarter due primarily to lower income taxes and a favorable legal
settlement reached during the quarter. Income taxes benefited from the favorable
resolution of a foreign tax audit in the current quarter, coupled with a
provision taken in the comparable prior year period for tax costs on anticipated
dividends originating from foreign subsidiaries. These benefits were partially
offset by an increase in net interest expense due to the financing cost of the
share repurchase program announced in connection with the Gillette acquisition.

Fiscal year to date earnings in the Corporate segment declined by $160 million
primarily due to impact of the base period gain on the sale of the Juice
business and a current period increase in net interest expense, partially offset
by the favorable tax settlement in the current quarter.

FINANCIAL CONDITION
-------------------

Operating Activities
--------------------
Cash generated from operating activities for the nine months ended March 31,
2006 was $8.19 billion versus $6.59 billion in the comparable prior year period,
an increase of $1.60 billion. Cash increased behind earnings adjusted for
non-cash items (primarily depreciation, amortization, share based compensation
and deferred income taxes), partially offset by working capital items. Changes
in accounts payable, accrued and other liabilities used $582 million of cash due
primarily to spending against Gillette accruals. Inventory and accounts
receivable increases in support of business growth were both net uses of cash.
Both inventory and receivable days on hand were roughly flat over the fiscal
year to date period, excluding the impact of Gillette.

Investing Activities
--------------------
Investing activities in the current year decreased cash by $607 million,
compared to the prior year period when investing activities reduced cash by
$1.60 billion. Acquisitions provided a net source of cash. A cash balance of
$1.60 billion received in the Gillette acquisition, representing Gillette's cash
balances at the acquisition date, was partially offset by cash used for other
acquisitions, including settlement of a major portion of the Wella domination
liability. Capital expenditures as a percentage of sales were 3.3 percent,
in-line with the comparable prior year period.

Financing Activities
--------------------
Total cash used by financing activities was $5.36 billion versus $2.39 billion
in the comparable base period. Our net debt position increased by $6.76 billion,
primarily to fund the share repurchase program associated with the acquisition
of Gillette. This was offset by $10.60 billion of treasury purchases during the
period.

NON-GAAP MEASURES
-----------------

Our discussion of financial results includes several measures not defined by
U.S. GAAP. We believe these measures provide our investors with additional
information about the underlying results and trends of the Company, as well as
insight to some of the metrics used to evaluate management. When used in MD&A,
we have provided the comparable GAAP measure in the discussion.

ORGANIC SALES GROWTH. Organic sales growth is a non-GAAP measure of sales growth
excluding the impacts of acquisitions, divestitures and foreign exchange from
year-over-year comparisons. We believe this provides investors with a more
complete understanding of underlying sales trends by providing sales growth on a
consistent basis. The reconciliation of reported sales growth to organic sales
for the January - March 2006 quarter and for the fiscal year to date:

                                                  Jan-March   Fiscal Year
                                                     2006       to Date
                                                  ---------   ------------
Total Sales Growth                                   21 %           19 %
Foreign Exchange Impact                               3 %            1 %
Acquisition/Divestiture Impact                      (18)%          (13)%
                                                  -------       --------
Organic Sales Growth                                  6 %            7 %


FREE CASH FLOW. Free cash flow is defined as operating cash flow less capital
spending. We view free cash flow as an important measure because it is one
factor in determining the amount of cash available for dividends and
discretionary investment. Free cash flow is also one of the measures used to
evaluate senior management and is a factor in determining their at-risk
compensation.

FREE CASH FLOW PRODUCTIVITY. Free cash flow productivity is defined as the ratio
of free cash flow to net earnings. The Company's long-term target is to generate
free cash at or above 90 percent of net earnings. Free cash flow is also one of
the measures used to evaluate senior management. The reconciliation of free cash
flow and free cash flow productivity is provided below:

                 Operating    Capital    Free Cash    Net        Free Cash Flow
                 Cash Flow    Spending   Flow         Earnings   Productivity
--------------------------------------------------------------------------------
Jan - Mar '06    $ 3,439      $  (637)   $ 2,802      $ 2,211       127%
Jul - Mar '06    $ 8,185      $(1,666)   $ 6,519      $ 6,786        96%
Jul - Mar '05    $ 6,589      $(1,386)   $ 5,203      $ 5,531        94%



Item 3.  Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in the Company's exposure to market risk
since June 30, 2005. See Item 7A in the Company's Annual Report on Form 10-K for
the year ended June 30, 2005.

Item 4.  Controls and Procedures

The Company's Chairman of the Board, President and Chief Executive Officer, A.
G. Lafley, and the Company's Chief Financial Officer, Clayton Daley, Jr., are
responsible for evaluating the effectiveness of our disclosure controls systems.
Messrs. Lafley and Daley have evaluated and concluded that the Company's
disclosure controls systems are functioning effectively to provide reasonable
assurance that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commissions Rules and Forms. The Company's disclosure controls system
is based upon a global chain of financial, staff and general business reporting
lines that converge in the world-wide headquarters of the Company in Cincinnati,
Ohio.

On October 1, 2005, the Company completed its acquisition of The Gillette
Company ("Gillette"), at which time Gillette became a subsidiary of the Company.
The Company considers the transaction material to the results of its operations,
financial position, and cash flows from the date of the acquisition through
March 31, 2006, and believes that the internal controls and procedures of
Gillette have a material effect on the Company's internal control over financial
reporting. See Note 4 to our Consolidated Financial Statements included in Item
1 for discussion of the acquisition and related financial data.

The Company is now in the process of integrating the Gillette operations. The
Company has extended its Section 404 compliance program under the Sarbanes-Oxley
Act of 2002 and the applicable rules and regulations under such Act to include
Gillette. The Company will report on its assessment of its combined operations
within the time period provided by the Act and the applicable Securities
Exchange Commission rules and regulations concerning business combinations.
Except for the Gillette acquisition, Messrs. Lafley and Daley have concluded
that there has been no change in the Company's internal control over financial
reporting for the quarter ended March 31, 2006 that has materially affected, or
is reasonably likely to materially affect, the Company's internal control over
financial reporting.




PART II. OTHER INFORMATION

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds



                                           ISSUER PURCHASES OF EQUITY SECURITIES

                                                                                                          Approximate dollar
                                                                                  Total Number of         value of shares that
                                                                                Shares Purchased as       may yet be purchased
                             Total Number of         Average Price Paid          Part of Publicly           under our share
       Period               Shares Purchased (1)          per Share (2)         Announced Plans or        repurchase program
                                                                                    Programs (3)(4)        ($ in Billions)(4)
   -------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
----------------------------------------------------------------------------------------------------------------------------------
    1/1/06-1/31/06             19,607,436                  $58.36                  19,526,456                     6.8
----------------------------------------------------------------------------------------------------------------------------------
    2/1/06-2/28/06              6,857,743                  $59.86                   6,797,950                     6.4
----------------------------------------------------------------------------------------------------------------------------------
    3/1/06-3/31/06                  3,330                  $61.80                       0                         6.4
----------------------------------------------------------------------------------------------------------------------------------


(1)   This category includes 144,103 shares acquired by the Company under
      various compensation and benefit plans, including The Procter & Gamble
      2001 Stock and Incentive Compensation Plan and The Gillette Company 1971
      Stock Option Plan. The Company administers cashless exercises through an
      independent, third party broker and does not repurchase stock in
      connection with cashless exercise.
(2)   Average price paid per share is calculated on a settlement basis and
      excludes commission.
(3)   On January 28, 2005, the Company announced a share buyback plan in
      connection with its acquisition of The Gillette Company. Pursuant to the
      plan, the Board of Directors authorized the Company and its subsidiaries
      to acquire in open market and/or private transactions $18 to $22 billion
      of shares of Company common stock to be financed by issuing a combination
      of long-term and short-term debt. We have since narrowed the anticipated
      total repurchase pursuant to this authority to about $20 billion of
      Company common stock. The share repurchases under this program are
      expected to be completed by mid-calendar year 2006.
(4)   The Company entered into a forward purchase agreement during the quarter
      to repurchase an additional 36,838,164 shares, at an average price of
      $59.45 per share that settled in April 2006 and has therefore not been
      reflected in the table above.




Item 6.  Exhibits

        Exhibits

(3-1)   Amended Articles of Incorporation (Incorporated by reference to Exhibit
        (3-1) of the Company's Form 10-Q for the quarter ended September 30,
        2005).

(3-2)   Regulations (Incorporated by reference to Exhibit (3-2) of the Company's
        Form 10-Q for the quarter ended September 30, 2005).

(10-1)  The Procter & Gamble 2001 Stock and Incentive Compensation Plan (as
        amended on February 14, 2006) which was adopted by shareholders at the
        annual meeting on October 9, 2001.*

(10-2)  Related correspondence and terms and conditions to The Procter & Gamble
        2001 Stock and Incentive Compensation Plan (as amended on February 14,
        2006) which was adopted by shareholders at the annual meeting on
        October 9, 2001.*

(11)    Computation of Earnings per Share.

(12)    Computation of Ratio of Earnings to Fixed Charges.

(31)    Rule 13a-14(a)/15d-14(a) Certifications.

(32)    Section 1350 Certifications.


* Compensatory plan or arrangement





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


THE PROCTER & GAMBLE COMPANY


/S/VALARIE L. SHEPPARD
------------------------------------
(Valarie L. Sheppard)
Vice President and Comptroller

May 4, 2006
------------------------------------
Date




                                  EXHIBIT INDEX
Exhibit No.

(3-1)   Amended Articles of Incorporation (Incorporated by reference to Exhibit
        (3-1) of the Company's Form 10-Q for the quarter ended September 30,
        2005).

(3-2)   Regulations (Incorporated by reference to Exhibit (3-2) of the Company's
        Form 10-Q for the quarter ended September 30, 2005).

(10-1)  The Procter & Gamble 2001 Stock and Incentive Compensation Plan (as
        amended on February 14, 2006) which was adopted by shareholders at the
        annual meeting on October 9, 2001.

(10-2)  Related correspondence and terms and conditions to The Procter & Gamble
        2001 Stock and Incentive Compensation Plan (as amended on February 14,
        2006) which was adopted by shareholders at the annual meeting on
        October 9, 2001.

(11)    Computation of Earnings per Share.

(12)    Computation of Ratio of Earnings to Fixed Charges.

(31)    Rule 13a-14(a)/15d-14(a) Certifications.

(32)    Section 1350 Certifications.