EXHIBIT 99-1

                     MANAGEMENT DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


BABY AND FAMILY CARE
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Baby and family care delivered strong earnings progress driven by volume growth
and extensive cost reductions. Strong volume results across both baby and family
care drove a 5% increase in unit volume. Net sales for the year were essentially
flat at $9.23 billion. Excluding a 2% negative impact of exchange rates, net
sales increased 2%, as commodity driven price declines and pricing adjustments
on Luvs and Western European diapers partially offset volume growth.

Net earnings were $738 million, up 12% behind an ongoing program of product and
overhead cost reductions, including benefits from restructuring activities that
have streamlined manufacturing operations.

Family care volume grew 7% behind strength in the North America Bounty and
Charmin businesses. Net sales increased 1%, as commodity pricing actions largely
offset volume growth.

Baby care volume increased 4% behind Pampers growth in North America and Western
Europe driven by the Baby Stages of Development product launch. Net sales
declined 1% as foreign exchange and targeted pricing adjustments more than
offset volume growth.

In 2001, baby and family care segment unit volume grew 3%, driven by solid
results in both family and baby care. Net sales grew 1% to $9.22 billion,
compared to $9.12 billion in 2000. Excluding a 4% negative impact of exchange
rates, net sales increased 5%. Net earnings decreased 6%, to $658 million,
despite progress in family care.

BEAUTY CARE
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Beauty care delivered strong results behind the Clairol acquisition, which was
completed in the second quarter, delivering unit volume growth of 13% and net
sales of $10.72 billion, up 7%. Excluding a 2% negative foreign exchange impact,
net sales grew 9%. Excluding the impacts of the Clairol acquisition, fiscal year
unit volume grew 2%, primarily behind strength in the base hair care business
and solid growth in fine fragrances and cosmetics. Net earnings were $1.61
billion, up 18%, driven by marketing support efficiencies behind growing
businesses and a continued focus on cost reductions.

The Clairol integration went according to plan during the year with North
America, the largest region, being completed in May. The Clairol acquisition
provides a strong presence in the high-margin colorants business and rounds out
the Company's hair care offerings.

Feminine care volume declined 3%, stabilizing in the second half, and net sales
declined 5%. Nevertheless, net earnings improved mainly due to cost
efficiencies.

In 2001, beauty care unit volume declined 1%. Net sales were $10.03 billion,
down 3%, versus $10.31 billion in 2000. Excluding a 4% impact of unfavorable
exchange rates, primarily in Western Europe and Asia, net sales grew 1%. Net
earnings were $1.36 billion, an 8% improvement behind the successful expansion
of high-performance, premium-priced products.






SNACKS & BEVERAGES
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Snacks and beverages delivered solid earnings growth despite top-line
challenges. Unit volume declined 2%. Volume declines, commodity-related pricing
actions in coffee and negative foreign exchange impacts drove a 6% decrease in
net sales, to $3.25 billion. Net earnings grew 25%, to $303 million, as
broad-based cost reductions more than offset declining volumes.

In 2001, snacks and beverages unit volume declined 10%. Unit volume was
negatively affected by reduced trade merchandising and the impact of snacks
pricing actions in North America and Western Europe. Net sales were $3.46
billion, down 10%. Excluding a 2% impact of unfavorable exchange rates, net
sales declined 8%. Net earnings were $242 million, down 13% versus 2000.

CORPORATE
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The corporate segment includes both operating and non-operating elements such as
financing and investing activities, certain benefit costs, restructuring
charges, segment eliminations and other general corporate items. Corporate
includes adjustments from management reporting conventions to conform with
accounting principles generally accepted in the United States of America. These
primarily affect the treatment of entities over which the Company exerts
significant influence but does not control, and income taxes, which are
reflected in the business segments using estimated local statutory tax rates.

The results for the elements of the former food and beverage segment that have
been divested or spun-off (i.e., Jif, Crisco and commercial shortening and oils)
are now reflected in Corporate. The Jif and Crisco spin-off occurred in the
fourth quarter of 2002 and the divestiture of the commercial shortening and oils
business occurred in the third quarter of 2001.

Corporate results reflect a decrease in one-time gains from the Company's
non-strategic divestiture program. Moreover, reduced corporate hedging gains
versus 2001 were partially offset by decreased restructuring costs, lower
interest expense and the discontinuation of amortizing goodwill and certain
indefinite-lived intangibles.

In 2001, corporate results reflect increased restructuring costs, higher benefit
costs and certain tax impacts not reflected in the businesses. These were
partially offset by one-time gains from the Company's divestiture program,
reduced overhead spending and corporate hedging gains.