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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549



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FORM 10-Q



(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2003



OR



 ̈TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF
1934



Commission file number 1-12147



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DELTIC TIMBER CORPORATION

(Exact name of registrant as specified in its charter)



|Delaware                                                       |  | 71-0795870                             
|-------------------------------------------------------------- |  | ---------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)



|210 East Elm Street, P. O. Box 7200, El Dorado, Arkansas |  | 71731-7200
|-------------------------------------------------------- |  | ----------
|(Address of principal executive offices)                 |  | (Zip Code)



Registrants telephone number, including area code: (870) 881-9400



Securities registered pursuant to Section 12(b) of the Act:



|Title of each class                                               |  | Name of each exchange on which registered
|----------------------------------------------------------------- |  | -----------------------------------------
|Common Stock, $.01 Par Value                                      |  | New York Stock Exchange, Inc.            
|                                                                 
|Series A Participating Cumulative Preferred Stock Purchase Rights |  | New York Stock Exchange, Inc.            



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, and (2) has been subject to such filing requirements for the past 90 days. Yes xNo  ̈.



Indicate by check mark whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Securities Exchange Act of 1934). Yes xNo
 ̈.



Number of shares of Common Stock, $.01 Par Value, outstanding at April 30,
2003, was 11,899,797.



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##### Table of Contents

TABLE OF CONTENTSFIRST QUARTER 2003 FORM 10-Q REPORT



|                               |  |                                                                                       |  | Page Number
|------------------------------ |  | ------------------------------------------------------------------------------------- |  | -----------
|PART I  Financial
Information
|                              
|Item 1.                        |  | Financial Statements                                                                  |  | 3          
|                              
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 14         
|                              
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 18         
|                              
|Item 4.                        |  | Controls and Procedures                                                               |  | 18         
|                              
|PART II  Other
Information   
|                              
|Item 1.                        |  | Legal Proceedings                                                                     |  | 19         
|                              
|Item 2.                        |  | Changes in Securities and Use of Proceeds                                             |  | 19         
|                              
|Item 3.                        |  | Defaults Upon Senior Securities                                                       |  | 19         
|                              
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                   |  | 19         
|                              
|Item 5.                        |  | Other Information                                                                     |  | 19         
|                              
|Item 6.                        |  | Exhibits and Reports on Form 8-K                                                      |  | 19         
|                              
|Signatures                     |  | 20                                                                                   
|                              
|Certifications                 |  | 21                                                                                   





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PART IFINANCIAL
INFORMATION



Item 1. Financial Statements



DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Consolidated Balance Sheets

(Thousands of
dollars)



|                                                                                      |  | March 31, 2003 |         |   | Dec. 31, 2002 |        
|------------------------------------------------------------------------------------- |  | -------------- | ------- | - | ------------- | -------
|                                                                                      |  | (unaudited)    |         |   |               |        
|Assets                                                                                |  |                |         |   |               |        
|Current assets                                                                        |  |                |         |   |               |        
|Cash and cash equivalents                                                             |  | $              | 837     |   |               | 1,057  
|Trade accounts receivablenet                                                         |  |                | 4,941   |   |               | 3,230  
|Other receivables                                                                     |  |                | 2,279   |   |               | 2,321  
|Inventories                                                                           |  |                | 5,890   |   |               | 6,257  
|Prepaid expenses and other current assets                                             |  |                | 1,451   |   |               | 1,607  
|                                                                                      |  |                |         |   |               |        
|Total current assets                                                                  |  |                | 15,398  |   |               | 14,472 
|                                                                                     
|Investment in real estate held for development and sale                               |  |                | 40,930  |   |               | 42,551 
|Other investments and noncurrent receivables                                          |  |                | 2,573   |   |               | 2,558  
|Timber and timberlandsnet                                                            |  |                | 218,751 |   |               | 209,317
|Property, plant, and equipmentnet                                                    |  |                | 38,505  |   |               | 39,572 
|Deferred charges and other assets                                                     |  |                | 1,772   |   |               | 2,076  
|                                                                                      |  |                |         |   |               |        
|Total assets                                                                          |  | $              | 317,929 |   |               | 310,546
|                                                                                      |  |                |         |   |               |        
|Liabilities and Stockholders Equity                                                  |  |                |         |   |               |        
|Current liabilities                                                                   |  |                |         |   |               |        
|Current maturities of long-term debt                                                  |  | $              | 64      |   |               | 70     
|Notes payable                                                                         |  |                | 122     |   |               |       
|Trade accounts payable                                                                |  |                | 1,691   |   |               | 3,316  
|Accrued taxes other than income taxes                                                 |  |                | 1,506   |   |               | 1,194  
|Bank overdraft                                                                        |  |                | 609     |   |               | 913    
|Income taxes payable                                                                  |  |                | 771     |   |               |       
|Deferred revenues and other accrued liabilities                                       |  |                | 6,573   |   |               | 6,854  
|                                                                                      |  |                |         |   |               |        
|Total current liabilities                                                             |  |                | 11,336  |   |               | 12,347 
|                                                                                     
|Long-term debt                                                                        |  |                | 124,104 |   |               | 116,120
|Deferred tax liabilitiesnet                                                          |  |                | 11,857  |   |               | 11,955 
|Other noncurrent liabilities                                                          |  |                | 7,548   |   |               | 7,162  
|Stockholders equity                                                                  |  |                |         |   |               |        
|Cumulative preferred stock$.01 par, authorized 20,000,000 shares, zero shares
issued |  |                |        |   |               |       
|Common stock$.01 par, authorized 50,000,000 shares, 12,813,879 shares
issued         |  |                | 128     |   |               | 128    
|Capital in excess of par value                                                        |  |                | 69,075  |   |               | 69,075 
|Retained earnings                                                                     |  |                | 114,635 |   |               | 114,165
|Unamortized restricted stock awards                                                   |  |                | (104    | ) |               | (133   
|Treasury stock                                                                        |  |                | (20,650 | ) |               | (20,273
|                                                                                      |  |                |         |   |               |        
|Total stockholders equity                                                            |  |                | 163,084 |   |               | 162,962
|                                                                                      |  |                |         |   |               |        
|Total liabilities and stockholders equity                                            |  | $              | 317,929 |   |               | 310,546
|                                                                                      |  |                |         |   |               |        



See accompanying notes to consolidated financial statements.





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DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

Three Months Ended March 31,

(Thousands of dollars, except per share amounts)



|                                                             |  | 2003 |        |   | 2002 |       
|------------------------------------------------------------ |  | ---- | ------ | - | ---- | ------
|Net sales                                                    |  | $    | 32,429 |   |      | 27,095
|                                                             |  |      |        |   |      |       
|Costs and expenses                                           |  |      |        |   |      |       
|Cost of sales                                                |  |      | 21,558 |   |      | 15,047
|Depreciation, amortization, and cost of fee timber harvested |  |      | 3,532  |   |      | 5,264 
|General and administrative expenses                          |  |      | 1,900  |   |      | 2,047 
|                                                             |  |      |        |   |      |       
|Total costs and expenses                                     |  |      | 26,990 |   |      | 22,358
|                                                             |  |      |        |   |      |       
|Operating income                                             |  |      | 5,439  |   |      | 4,737 
|                                                            
|Equity in Del-Tin Fiber                                      |  |      | (1,845 | ) |      | (2,393
|Interest income                                              |  |      | 28     |   |      | 36    
|Interest and other debt expense                              |  |      | (1,623 | ) |      | (1,148
|Other income/(expense)                                       |  |      | 45     |   |      | 144   
|                                                             |  |      |        |   |      |       
|Income before income taxes                                   |  |      | 2,044  |   |      | 1,376 
|                                                            
|Income taxes                                                 |  |      | (830   | ) |      | (555  
|                                                             |  |      |        |   |      |       
|Net income                                                   |  | $    | 1,214  |   |      | 821   
|                                                             |  |      |        |   |      |       
|Earnings per common share                                    |  |      |        |   |      |       
|Basic                                                        |  | $    | .10    |   |      | .02   
|Assuming dilution                                            |  | $    | .10    |   |      | .02   
|                                                            
|Dividends declared per common share                          |  | $    | .0625  |   |      | .0625 
|                                                             |  |      |        |   |      |       
|Average common shares outstanding (thousands)                |  |      | 11,907 |   |      | 11,897
|                                                             |  |      |        |   |      |       



See accompanying notes to consolidated financial statements.



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DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended March 31,

(Thousands of dollars)



|                                                                                            |  | 2003 |         |   | 2002 |       
|------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | ------
|Operating activities                                                                        |  |      |         |   |      |       
|Net income                                                                                  |  | $    | 1,214   |   |      | 821   
|Adjustments to reconcile net income to net cash provided/(required) by operating
activities |  |      |         |   |      |       
|Depreciation, amortization, and cost of fee timber harvested                                |  |      | 3,532   |   |      | 5,264 
|Deferred income taxes                                                                       |  |      | (98     | ) |      | 292   
|Real estate costs recovered upon sale                                                       |  |      | 2,605   |   |      | 870   
|Timberland costs recovered upon sale                                                        |  |      | 330     |   |      | 104   
|Equity in Del-Tin Fiber                                                                     |  |      | 1,845   |   |      | 2,393 
|Net increase/(decrease) in provisions for pension and other postretirement
benefits         |  |      | 493     |   |      | 304   
|(Increase)/decrease in operating working capital other than cash and cash
equivalents       |  |      | (1,674  | ) |      | 253   
|Othernet                                                                                   |  |      | 18      |   |      | 339   
|                                                                                            |  |      |         |   |      |       
|Net cash provided/(required) by operating activities                                        |  |      | 8,265   |   |      | 10,640
|                                                                                            |  |      |         |   |      |       
|Investing activities                                                                        |  |      |         |   |      |       
|Capital expenditures requiring cash                                                         |  |      | (12,725 | ) |      | (4,071
|Net change in purchased stumpage inventory                                                  |  |      | (840    | ) |      | (611  
|Advances to Del-Tin Fiber                                                                   |  |      | (1,845  | ) |      | (2,749
|(Increase)/decrease in funds held by trustee                                                |  |      | (29     | ) |      | (107  
|Othernet                                                                                   |  |      | 279     |   |      | 246   
|                                                                                            |  |      |         |   |      |       
|Net cash provided/(required) by investing activities                                        |  |      | (15,160 | ) |      | (7,292
|                                                                                            |  |      |         |   |      |       
|Financing activities                                                                        |  |      |         |   |      |       
|Proceeds from borrowings                                                                    |  |      | 11,324  |   |      |      
|Repayments of notes payable and long-term debt                                              |  |      | (3,224  | ) |      | (6,026
|Treasury stock purchases                                                                    |  |      | (377    | ) |      |      
|Increase/(decrease) in bank overdraft                                                       |  |      | (304    | ) |      |      
|Preferred stock dividends paid                                                              |  |      |        |   |      | (566  
|Common stock dividends paid                                                                 |  |      | (744    | ) |      | (744  
|Othernet                                                                                   |  |      |        |   |      | 331   
|                                                                                            |  |      |         |   |      |       
|Net cash provided/(required) by financing activities                                        |  |      | 6,675   |   |      | (7,005
|                                                                                            |  |      |         |   |      |       
|Net increase/(decrease) in cash and cash equivalents                                        |  |      | (220    | ) |      | (3,657
|Cash and cash equivalents at January 1                                                      |  |      | 1,057   |   |      | 6,122 
|                                                                                            |  |      |         |   |      |       
|Cash and cash equivalents at March 31                                                       |  | $    | 837     |   |      | 2,465 
|                                                                                            |  |      |         |   |      |       



See accompanying notes to consolidated financial statements.



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DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Consolidated Statements of Stockholders Equity (Unaudited)

Three Months Ended March
31,

(Thousands of dollars)



|                                                                                                                                               |  | 2003 |         |   | 2002 |        
|---------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -------
|Cumulative preferred stock$.01 par, authorized20,000,000 shares, zero and 600,000 shares
issued asredeemable preferred stock in 2003 and 2002 |  | $    |        |   |      |       
|                                                                                                                                               |  |      |         |   |      |        
|Common stock$.01 par, authorized 50,000,000 shares,12,813,879 shares issued in 2002 and
2001                                                  |  |      | 128     |   |      | 128    
|                                                                                                                                               |  |      |         |   |      |        
|Capital in excess of par value                                                                                                                 |  |      |         |   |      |        
|Balance at beginning of year                                                                                                                   |  |      | 69,075  |   |      | 68,766 
|Exercise of stock options                                                                                                                      |  |      |        |   |      | 58     
|Tax benefits on stock options                                                                                                                  |  |      |        |   |      | 34     
|                                                                                                                                               |  |      |         |   |      |        
|Balance at end of period                                                                                                                       |  |      | 69,075  |   |      | 68,858 
|                                                                                                                                               |  |      |         |   |      |        
|Retained earnings                                                                                                                              |  |      |         |   |      |        
|Balance at beginning of year                                                                                                                   |  |      | 114,165 |   |      | 133,034
|Net income                                                                                                                                     |  |      | 1,214   |   |      | 821    
|Preferred stock dividends                                                                                                                      |  |      |        |   |      | (566   
|Common stock dividends                                                                                                                         |  |      | (744    | ) |      | (744   
|                                                                                                                                               |  |      |         |   |      |        
|Balance at end of period                                                                                                                       |  |      | 114,635 |   |      | 132,545
|                                                                                                                                               |  |      |         |   |      |        
|Unamortized restricted stock awards                                                                                                            |  |      |         |   |      |        
|Balance at beginning of year                                                                                                                   |  |      | (133    | ) |      | (264   
|Stock awards                                                                                                                                   |  |      |        |   |      |       
|Amortization to expense                                                                                                                        |  |      | 29      |   |      | 45     
|                                                                                                                                               |  |      |         |   |      |        
|Balance at end of period                                                                                                                       |  |      | (104    | ) |      | (219   
|                                                                                                                                               |  |      |         |   |      |        
|Treasury stock                                                                                                                                 |  |      |         |   |      |        
|Balance at beginning of year898,175 and 925,725 shares, respectively                                                                          |  |      | (20,273 | ) |      | (20,865
|Shares purchased15,907 shares in 2003                                                                                                         |  |      | (377    | ) |      |       
|Shares issued for incentive plans21,175 shares in 2002                                                                                        |  |      |        |   |      | 477    
|                                                                                                                                               |  |      |         |   |      |        
|Balance at end of period914,082 and 904,550 shares, respectively                                                                              |  |      | (20,650 | ) |      | (20,388
|                                                                                                                                               |  |      |         |   |      |        
|Total stockholders equity                                                                                                                     |  | $    | 163,084 |   |      | 180,924
|                                                                                                                                               |  |      |         |   |      |        



See accompanying notes to consolidated financial statements.



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DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31,
2003

(Unaudited, except for December 31, 2002)



Note 1  Interim Financial Statements



The interim financial information included herein is unaudited; however, such information reflects all adjustments
which are, in the opinion of management, necessary for a fair presentation of the Companys financial position, results of operations, and cash flows for the interim periods. All such adjustments are of a normal, recurring nature. The results
of operations for the first three months of the year are not necessarily indicative of the results of operations which might be expected for the entire year.



The financial statements in Deltics 2002 annual report on Form 10-K include a summary of significant accounting policies of the Company and
should be read in conjunction with this Form 10-Q. Certain prior period amounts have been reclassified to conform with 2003 presentation format.



Note 2  Earnings per Common Share



The amounts used in computing earnings per share consisted of the following:



|                                                                                                           |  | Three Months Ended March 31, |       
|---------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------
|(Thousands, except per share amounts)                                                                      |  | 2003                         |       
|Income from continuing operations                                                                          |  | $                            | 1,214 
|Less preferred dividends                                                                                   |  |                              |      
|                                                                                                           |  |                              |       
|Income available to common shareholders                                                                    |  | $                            | 1,214 
|                                                                                                           |  |                              |       
|                                                                                                          
|Weighted average number of common shares used in basic EPS                                                 |  |                              | 11,907
|Effect of dilutive stock options                                                                           |  |                              | 19    
|                                                                                                           |  |                              |       
|Weighted average number of common shares and dilutive potential common stock used in EPS assuming
dilution |  |                              | 11,926
|                                                                                                           |  |                              |       
|Earnings per common share                                                                                  |  |                              |       
|Basic                                                                                                      |  | $                            | .10   
|Assuming dilution                                                                                          |  | $                            | .10   



Note 3  Stock-Based
Compensation



Deltic has a stock-based compensation
plan for which the Company applies the recognition and measurement principles of APB 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for those plans. Stock-based employee compensation expense is accrued for
the intrinsic value, if any, of stock options or restricted stock granted over the applicable vesting periods using the straight-line method. Options granted by the Company have an exercise price equal to the market value of the underlying common
stock on the date of grant.



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DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31,
2003

(Unaudited, except for December 31, 2002)





Note 3  Stock-Based
Compensation (cont.)



The effect on net income/(loss)
and earnings per share if the Company had applied the fair value recognition provisions of the Financial Accounting Standards Boards Statement of Financial Accounting Standards (SFAS) 123, Accounting for Stock-Based Compensation,
consisted of the following:



|                                                                                                                                                                            |  | Three Months Ended March 31, |      
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | -----
|(Thousands of dollars, except per share amounts)                                                                                                                            |  | 2003                         |      
|Net income/(loss), as reported                                                                                                                                              |  | $                            | 1,214
|Plus total stock-based compensation expense determined under the intrinsic value method for
awards, net of related tax effects, included in the determination of net income |  |                              | 70   
|Less pro forma total stock-based compensation expense determined under the fair value method for
all awards, net of related tax effects                                     |  |                              | (218 
|                                                                                                                                                                            |  |                              |      
|Pro forma net income/(loss)                                                                                                                                                 |  | $                            | 1,066
|                                                                                                                                                                            |  |                              |      
|                                                                                                                                                                           
|Basic earnings per share                                                                                                                                                    |  |                              |      
|As reported                                                                                                                                                                 |  | $                            | .10  
|Pro forma                                                                                                                                                                   |  |                              | .09  
|                                                                                                                                                                           
|Dilutive earnings per share                                                                                                                                                 |  |                              |      
|As reported                                                                                                                                                                 |  | $                            | .10  
|Pro forma                                                                                                                                                                   |  |                              | .09  



For the pro forma
net income calculation in the preceding table, the fair value of each option on the date of grant was estimated using the Black-Scholes option-pricing model and the following assumptions for awards in 2003 and 2002, respectively: dividend yields of
1.02 percent and 1.06 percent; expected volatilty of 32.69 percent and 31.19 percent; risk-free interest rates of 2.86 percent and 4.37 percent; and expected lives of five years. Using these assumptions, the weighted average grant-date fair value
per share of options granted in 2003 and 2002 was $7.35 and $9.26, respectively.



Note 4  Inventories



Inventories at the balance sheet dates consisted of the following:



|(Thousands of dollars) |  | Mar. 31, 2003 |       | Dec. 31, 2002
|---------------------- |  | ------------- | ----- | -------------
|Logs                   |  | $             | 1,032 |              
|Lumber                 |  |               | 4,551 |              
|Materials and supplies |  |               | 307   |              
|                       |  |               |       |              
|                       |  | $             | 5,890 |              
|                       |  |               |       |              



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DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31,
2003

(Unaudited, except for December 31, 2002)





Note 5  Investment in
Del-Tin Fiber



Deltic owns 50 percent of the
membership interest of Del-Tin Fiber, which completed construction and commenced production operations of a medium density fiberboard (MDF) plant near El Dorado, Arkansas, during 1998. On April 25, 2002, Deltic announced that Banc One
Capital Markets, Inc. had been retained as financial advisor to assist in the evaluation of strategic alternatives for the Companys investment in Del-Tin Fiber. In January 2003, Deltic announced in its fourth quarter earnings news release that
following a review of these strategic alternatives, it was determined that the MDF business did not represent a growth area for the Company. Consequently, the Company intends to exit this business upon the earliest, reasonable opportunity provided
by the market. As a result of this decision, the Companys evaluation of possible impairment of the carrying value of its investment in the equity method investee, as required by APB 18, resulted in a determination that the Companys
investment was impaired as of December 31, 2002, and the carrying amount of such investment was written off, to zero, in the fourth quarter of 2002. The write-off amounted to $18,723,000. In performing this impairment evaluation, the Companys
management made a number of estimates and assumptions related to the timing of the sale of its ownership interest, the expected selling price for its interest, future operating results for Del-Tin Fiber, and the ability to refinance the
joint-ventures long-term debt. It is reasonably possible that a change in these estimates and assumptions might occur, which could have a material impact on the Companys future financial statements. Due to the Companys commitment
to fund its share of any of the facilitys operating working capital needs until the facility is able to consistently generate sufficient funds to meet its cash requirements or Deltics ownership interest in the facility is sold, the
Company will continue to recognize losses related to Del-Tin Fiber to the extent of these advances. As a result of the Companys determination that the investment carrying value was impaired and the subsequent write-off of such carrying value,
to the extent no recoverable value is determined to be warranted, the Company is expensing, as equity in Del-Tin Fiber, all cash advances, in excess of the sinking fund requirement for 2003, made to the facility since December 31, 2002. A liability
representing the Companys share of this sinking fund requirement, in the amount of $4,478,000, was accrued as of December 31, 2002. Therefore, the amount of Equity in Del-Tin Fiber reported on the Companys Consolidated Statements of
Income is not equal to 50 percent of the facilitys reported operating results for the period. Based on the operating results of Del-Tin Fiber, the amount of the Companys equity loss would have been $1,570,000 for the first three months
of 2003 versus the $1,845,000 actually reported. The management of Del-Tin Fiber has performed evaluations of possible impairment of the long-lived assets of the plant in accordance with SFAS 121 and/or 144, as applicable. To-date, these analyses
have indicated that no impairment exists at the Del-Tin Fiber level.



The maximum potential amount of future payments that could be required of the Company under current contractual guarantees is limited to $17,500,000 committed under the contingent equity agreement. However, with the Company currently
funding its share of Del-Tin Fibers sinking fund contribution on a voluntary basis, potential future payments are estimated at approximately $36,568,000 if the Company is not able to refinance the facilitys long-term debt and has not
sold its ownership interest by the end of 2005.



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DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31,
2003

(Unaudited, except for December 31, 2002)





Note 5  Investment in
Del-Tin Fiber (cont.)



The financial position for
Del-Tin Fiber as of the balance sheet dates and results of operations for the three months ended March 31 consisted of the following:



|(Thousands of dollars)                           |  | Mar. 31,2003                |         |   | Dec. 31,2002 |        
|------------------------------------------------ |  | --------------------------- | ------- | - | ------------ | -------
|                                                
|Condensed Balance Sheet Information              |  |                             |         |   |              |        
|Current assets                                   |  | $                           | 6,753   |   |              | 5,874  
|Debt service reserve funds                       |  |                             | 3,494   |   |              | 3,485  
|Bond sinking funds                               |  |                             | 16,141  |   |              | 13,950 
|Property, plant, and equipmentnet               |  |                             | 97,700  |   |              | 98,230 
|Other noncurrent assets                          |  |                             | 675     |   |              | 736    
|                                                 |  |                             |         |   |              |        
|Total assets                                     |  | $                           | 124,763 |   |              | 122,275
|                                                 |  |                             |         |   |              |        
|Current liabilities                              |  | $                           | 3,924   |   |              | 4,407  
|Long-term debt                                   |  |                             | 89,000  |   |              | 89,000 
|Other noncurrent liabilities                     |  |                             | 15      |   |              | 3      
|Members capital/(deficit)                       |  |                             | 31,824  |   |              | 28,865 
|                                                 |  |                             |         |   |              |        
|Total liabilities and members capital/(deficit) |  | $                           | 124,763 |   |              | 122,275
|                                                 |  |                             |         |   |              |        
|                                                
|                                                 |  | Three Months EndedMarch 31, |        
|(Thousands of dollars)                           |  | 2003                        |         |   | 2002         |        
|                                                
|Condensed Income Statement Information           |  |                             |         |   |              |        
|Net sales                                        |  | $                           | 10,255  |   |              | 7,825  
|                                                 |  |                             |         |   |              |        
|Costs and expenses                               |  |                             |         |   |              |        
|Cost of sales                                    |  |                             | 10,851  |   |              | 9,969  
|Depreciation                                     |  |                             | 1,237   |   |              | 975    
|General and administrative expenses              |  |                             | 506     |   |              | 436    
|                                                 |  |                             |         |   |              |        
|Total costs and expenses                         |  |                             | 12,594  |   |              | 11,380 
|                                                 |  |                             |         |   |              |        
|Operating income/(loss)                          |  |                             | (2,339  | ) |              | (3,555 
|Interest income                                  |  |                             | 31      |   |              | 30     
|Interest and other debt expense                  |  |                             | (832    | ) |              | (1,260 
|                                                 |  |                             |         |   |              |        
|Net income/(loss)                                |  |                             | (3,140  | ) |              | (4,785 
|Other comprehensive income                       |  |                             |        |   |              | 360    
|                                                 |  |                             |         |   |              |        
|Comprehensive income/(loss)                      |  | $                           | (3,140  | ) |              | (4,425 
|                                                 |  |                             |         |   |              |        



10



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##### Table of Contents

DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31,
2003

(Unaudited, except for December 31, 2002)





Note 6  Timber and
Timberlands



Timber and timberlands at the balance
sheet dates consisted of the following:



|(Thousands of dollars)                                                     |  | Mar. 31, 2003 |         |   | Dec. 31, 2002 |        
|-------------------------------------------------------------------------- |  | ------------- | ------- | - | ------------- | -------
|Purchased stumpage inventory                                               |  | $             | 8,328   |   |               | 7,488  
|Timberlands                                                                |  |               | 78,643  |   |               | 76,772 
|Fee timber                                                                 |  |               | 191,380 |   |               | 182,906
|Logging facilities                                                         |  |               | 1,721   |   |               | 1,782  
|                                                                           |  |               |         |   |               |        
|                                                                           |  |               | 280,072 |   |               | 268,948
|                                                                          
|Less accumulated costs of fee timber harvested and facilities depreciation |  |               | (61,321 | ) |               | (59,631
|                                                                           |  |               |         |   |               |        
|                                                                           |  | $             | 218,751 |   |               | 209,317
|                                                                           |  |               |         |   |               |        



Note 7  Property, Plant,
and Equipment



Property, plant, and equipment at the
balance sheet dates consisted of the following:



|(Thousands of dollars)        |  | Mar. 31, 2003 |         |   | Dec. 31, 2002 |        
|----------------------------- |  | ------------- | ------- | - | ------------- | -------
|Land                          |  | $             | 125     |   |               | 125    
|Land improvements             |  |               | 4,070   |   |               | 4,070  
|Buildings and structures      |  |               | 4,810   |   |               | 4,801  
|Machinery and equipment       |  |               | 77,400  |   |               | 76,847 
|                              |  |               |         |   |               |        
|                              |  |               | 86,405  |   |               | 85,843 
|Less accumulated depreciation |  |               | (47,900 | ) |               | (46,271
|                              |  |               |         |   |               |        
|                              |  | $             | 38,505  |   |               | 39,572 
|                              |  |               |         |   |               |        



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##### Table of Contents

DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31,
2003

(Unaudited, except for December 31, 2002)





Note 8  Supplemental Cash
Flow Disclosures



A net income tax refund of $49,000
was received in the 2003 period, while income taxes paid, net of refunds, was $251,000 in the 2002 period. Interest paid, net of amounts capitalized, was $305,000 and $449,000 in the first three months of 2003 and 2002, respectively.



(Increases)/decreases in operating working capital, other than cash and
cash equivalents, for the three months ended March 31 consisted of the following:



|(Thousands of dollars)                          |  | 2003 |        |   | 2002 |       
|----------------------------------------------- |  | ---- | ------ | - | ---- | ------
|Trade accounts receivable                       |  | $    | (1,767 | ) |      | (933  
|Other receivables                               |  |      | 51     |   |      | 37    
|Inventories                                     |  |      | 367    |   |      | 1,385 
|Prepaid expenses and other current assets       |  |      | 157    |   |      | (114  
|Trade accounts payable                          |  |      | (1,433 | ) |      | (1,002
|Deferred revenues and other accrued liabilities |  |      | 951    |   |      | 880   
|                                                |  |      |        |   |      |       
|                                                |  | $    | (1,674 | ) |      | 253   
|                                                |  |      |        |   |      |       



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##### Table of Contents

DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31,
2003

(Unaudited, except for December 31, 2002)





Note 9  Business Segments



Information about the Companys business
segments consisted of the following:



|                                                             |  | Three Months Ended March 31, |       
|------------------------------------------------------------ |  | ---------------------------- | ------
|(Thousands of dollars)                                       |  | 2003                         |       
|Net sales                                                    |  |                              |       
|Woodlands                                                    |  | $                            | 9,095 
|Mills                                                        |  |                              | 19,269
|Real Estate                                                  |  |                              | 7,852 
|Eliminations*                                                |  |                              | (3,787
|                                                             |  |                              |       
|                                                             |  | $                            | 32,429
|                                                             |  |                              |       
|Income before income taxes                                   |  |                              |       
|Operating income                                             |  |                              |       
|Woodlands                                                    |  | $                            | 5,859 
|Mills                                                        |  |                              | (2,286
|Real Estate                                                  |  |                              | 3,422 
|Corporate                                                    |  |                              | (1,635
|Eliminations                                                 |  |                              | 79    
|                                                             |  |                              |       
|Operating income                                             |  |                              | 5,439 
|Equity in Del-Tin Fiber                                      |  |                              | (1,845
|Interest income                                              |  |                              | 28    
|Interest and other debt expense                              |  |                              | (1,623
|Other income/(expense)                                       |  |                              | 45    
|                                                             |  |                              |       
|                                                             |  | $                            | 2,044 
|                                                             |  |                              |       
|Depreciation, amortization, and cost of fee timber harvested |  |                              |       
|Woodlands                                                    |  | $                            | 1,901 
|Mills                                                        |  |                              | 1,483 
|Real Estate                                                  |  |                              | 128   
|Corporate                                                    |  |                              | 20    
|                                                             |  |                              |       
|                                                             |  | $                            | 3,532 
|                                                             |  |                              |       
|Capital expenditures                                         |  |                              |       
|Woodlands                                                    |  | $                            | 10,782
|Mills                                                        |  |                              | 346   
|Real Estate                                                  |  |                              | 1,539 
|Corporate                                                    |  |                              | 58    
|                                                             |  |                              |       
|                                                             |  | $                            | 12,725
|                                                             |  |                              |       



*Intersegment sales of timber from
Woodlands to Mills.



13



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##### Table of Contents



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



Results of Operations



Net income for the first quarter of 2003 was $1.2 million, $.10 a share, compared to first quarter 2002 earnings of $.8 million, $.02 a share after
preferred dividends. Net sales for the current quarter totaled $32.4 million, an increase of $5.3 million when compared to the prior-year quarter. Operating income for the first quarter of 2003 was $5.4 million compared to $4.7 million for the
corresponding quarter of 2002. Net cash provided by operating activities decreased $2.3 million, from $10.6 million in 2002 to $8.3 million for the 2003 period.



Operating income for the first quarter of 2003 increased $.7 million when compared to the first quarter of 2002. The
Woodlands segment decreased $1.4 million due primarily to reduced pine sawtimber sales which resulted from a planned 31 percent decrease in harvest levels. Mills segment operating results decreased $1.1 million from the same period of 2002 as lumber
sales price decreased six percent while the Company managed to lower its lumber production cost per thousand board feet (MBF) by two percent. Operating income for Real Estate segment operations improved $3.2 million from a year ago due
to an increase in commercial development acreage sold, an increase in the number of residential lots sold, and an increase in the average sales price of residential lots due to sales mix.



The Woodlands segment reported net sales of $9.1 million for the current quarter compared to $12.1 million a year ago.
Due to the completion, during 2002, of the Companys three-year harvest plan for previously acquired well-stocked timberland acreage, pine sawtimber harvest levels decreased 31 percent to 178,030 tons. This reduction, combined with a $3 per ton
drop in sales price to $39 per ton, resulted in a decrease in pine sawtimber sales of $3.7 million. Sales of 1,186 acres of timberland produced revenues of $1.3 million in the current period, while sales of 328 acres generated $.5 million in the
prior-year period. Operating income was $5.8 million in the first quarter of 2003, a decrease of $1.4 million when compared to first quarter 2002 operating income of $7.2 million, resulting primarily from the decrease in net sales, partially offset
by a $1.8 million reduction in the cost of fee timber harvested.



Mills operations net sales for the first quarter of 2003 were $19.3 million compared to $17.9 million for 2002s first quarter. Finished lumber sales increased $1.2 million due to a 14 percent increase in sales volume to
56.3 million board feet (MMBF) resulting from improved efficiencies at the Companys mills. Average lumber sales price for the current quarter was $291 per MBF, six percent lower than a year ago. An operating loss of $2.3 million
was reported for the first quarter of 2003, which compares to a loss of $1.2 million for the 2002 period. The increased loss of $1.1 million was due primarily to the increased negative margin of $17/MBF realized on lumber sales as a result of prices
dropping more rapidly than the Company was able to reduce manufacturing cost, combined with the increase in sales volume.



The Real Estate segment recorded net sales of $7.8 million in 2003 compared to $2.6 million in 2002. The 2003 period benefited from commercial
acreage sales of approximately 29 acres for $3.6 million, while there were no commercial sales in the 2002 period. Residential lot sales increased by 21 lots to 47 in the current quarter, while the average sales price increased $9,200 per lot to
$69,200 due to the sales mix. Operating income increased $3.2 million, to $3.4 million, due primarily to the increase in sales activity.



Corporate operating expense was $1.6 million in the first quarter of 2003, which compares to $1.8 million for the same quarter of 2002. The
improvement was primarily the result of lower general and administrative expenses related to the Companys incentive plan. Equity in Del-Tin Fiber recorded by the Company (which following the write-off of the carrying amount of the
Companys investment in the facility based on the determination to exit the business upon the earliest, reasonable opportunity, represents the



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##### Table of Contents

amount of advances to the facility) was $1.8 million compared to its equity share of the plants losses of $2.4
million a year ago. (For additional information about Del-Tin Fibers operations, refer to Note 5 to the consolidated financial statements.) Interest expense was $.5 million higher than 2002s first quarter due to an increase in long-term
debt resulting from redemption of the Companys preferred stock at the end of 2002 and timberland acquisitions made during the first quarter of 2003. Income tax expense was $.8 million, which compares to $.6 million for 2002s first
quarter.



The increase in the Companys earnings per
share from $.02 a share in the first quarter of 2002 to $.10 a share for the current-year quarter is the result of the $.4 million increase in net income combined with the increase in earnings available to common shareholders due to the redemption
of Deltics preferred stock at the end of 2002. The non-deductible carrying cost of the dividends on these preferred shares was 7.54 percent. While a portion of the Companys increase in interest expense is directly related to the
borrowings incurred to accomplish the redemption, the interest rate on this new fixed-interest rate debt of 6.01 percent results in a net decrease in carrying cost. In addition, this interest expense is tax deductible, which represents an additional
net benefit of the debt versus preferred stock.



Financial Condition



Net cash provided by operating activities totaled
$8.3 million during the first quarter of 2003 compared to $10.6 million a year ago. Changes in operating working capital, other than cash and cash equivalents, required cash of $1.7 million for the first three months of 2003, but provided cash of
$.3 million for the corresponding period of 2002.



Capital
expenditures required cash of $12.7 million in the current quarter, of which $10.2 million was for timberland acquisitions, and $4.1 million in the prior year. Capital expenditures requiring cash, by segment, consisted of the following:



|                                    |  | Three Months EndedMarch 31,
|----------------------------------- |  | ---------------------------
|(Thousands of dollars)              |  | 2003                       
|Woodlands                           |  | $                          
|Mills                               |  |                            
|Real Estate                         |  |                            
|Corporate                           |  |                            
|                                    |  |                            
|Capital expenditures requiring cash |  | $                          
|                                    |  |                            



The net change in
purchased stumpage inventory to be utilized in the Companys sawmill operations required cash of $.8 million in 2003 and $.6 million in 2002. The Company advanced Del-Tin Fiber $1.8 million during the current quarter and $2.7 million during the
corresponding quarter of 2002.



The Company borrowed $11.3
million and made repayments of debt of $3.2 million during the first quarter of 2003 compared to debt repayments of $6 million in 2002. During the current year, purchases of treasury stock utilized $.4 million and the decrease in the bank overdraft
was $.3 million. Deltic paid dividends on common stock of $.7 million in both 2003 and 2002. In the prior-year period, the Company paid dividends for preferred stock of $.6 million



These net uses of funds during the first quarter of 2003 resulted in a $.2 million decrease in the Companys cash
and cash equivalents since December 31, 2002.



15



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##### Table of Contents



During December 2000,
the Companys Board of Directors authorized a stock repurchase program of up to $10 million of its common stock. Under this program, the Company can purchase shares through the open market and privately negotiated transactions at prices deemed
appropriate by Deltics management. As of March 31, 2003, the Company had expended $2.1 million under this program, with the purchase of 96,206 shares at an average cost of $22.34 per share, of which 15,907 shares at an average cost of $23.73
were purchased during the first quarter of 2003.



The
Company has agreed to a contingent equity contribution agreement with Del-Tin Fiber and the group of banks from whom Del-Tin Fiber has obtained its $89 million credit facility. Under this agreement, Deltic and the other 50 percent owner of the joint
venture have agreed to fund any deficiency in contributions to either Del-Tin Fibers required sinking fund or debt service reserve, up to a cumulative total of $17.5 million for each owner. In addition, each owner has committed to a production
support agreement, under which each owner has agreed to make support obligation payments to Del-Tin Fiber to provide, on the occurrence of certain events, additional funds for payment of debt service until the plant is able to successfully complete
a minimum production test. Both owners have agreed to fund any operating working capital needs until the facility is able to consistently generate sufficient funds to meet its cash requirements. On January 22, 2003, Deltic announced that it was
writing-off its investment in Del-Tin Fiber as of December 31, 2002, and that it intended to exit the medium density fiberboard business upon the earliest, reasonable opportunity provided by the market. However, the Companys contingent
obligations are not reduced as a result of the write-off. Due to the probable requirement for Deltic to advance to Del-Tin Fiber amounts equal to its share of the facilitys remaining 2003 quarterly sinking fund obligation, based on the
plants 2003 cash flow projections, the Company has a related liability recorded in its accounts, equal to $3,143,000 at March 31, 2003. However, an additional amount could be accrued if the Company is not able to refinance the facilitys
long-term debt and has not sold its ownership interest within the timeframe considered in the current evaluation.



Deltics management believes that cash provided from its operations and the remaining amount available under its credit facility will be
sufficient to meet its expected cash needs and planned expenditures, including those of the Companys continued timberland acquisition and stock repurchase programs, additional advances to Del-Tin Fiber, and capital expenditures, for the
foreseeable future.



Statements included herein that are
not historical in nature are intended to be, and are hereby identified as, forward-looking statements within the meaning of the federal securities laws. Such statements reflect the Companys current expectations and involve risks
and uncertainties. Actual results could differ materially from those included in such forward-looking statements. Factors that could cause such differences include, but are not limited to, the cyclical nature of the industry, changes in interest
rates and general economic conditions, adverse weather, cost and availability of materials used to manufacture the Companys products, and the risk factors described from time to time in the reports and disclosure documents filed by the Company
with the Securities and Exchange Commission.



Critical Accounting
Policies and Estimates



Critical accounting policies
are defined as those that are reflective of significant judgements and uncertainties and potentially result in materially different results under different assumptions and conditions. The Company has prepared its consolidated financial statements in
conformity with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect the reported amounts in these financial statements and accompanying notes. Actual results could
differ from those estimates under different assumptions or conditions. The Company has disclosed its critical accounting policies in its 2002 annual report on Form 10-K, and this disclosure should be read in conjunction with this Form 10-Q. There
have been no changes in these identified critical policies, nor have there been any initially adopted accounting policies having a material impact on reported financial results.



16



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##### Table of Contents



Outlook



Pine sawtimber harvest levels are expected to be 100,000 to 150,000
tons in the second quarter of 2003 and 600,000 to 650,000 tons for the year. The Companys program to consider sales of timberland identified to be non-strategic or have a higher and better use will continue, with sales for the year anticipated
to be 3,000 to 5,000 acres. Finished lumber production and sales volume will continue to be subject to market conditions, and is estimated at 55 to 60 million board feet for the second quarter and 200 to 250 million board feet for the year.
Residential lot sales are projected to be 40 to 50 lots and 175 to 200 lots, respectively. Under the current evaluation parameters, Deltics equity in Del-Tin Fiber will be equal to any cash advances made to the facility in excess of sinking
fund payment requirements for 2003.



Although the lumber
market continues to suffer from oversupply, lumber prices have improved modestly since the beginning of the year. Near-term prices are likely to continue to improve through the spring building season; however, longer-term prospects are more
problematic due to the supply imbalance and Canadian trade issue. The regional market for pine sawtimber weakened slightly in late 2002 in response to lower lumber prices but has recently stabilized. Any significant change in sawtimber prices over
the remainder of the year is unlikely without a corresponding move in the lumber market. MDF prices have strengthened somewhat since early 2003 and are expected to continue to increase through year-end as demand improves and capacity utilization
increases.



Certain statements contained in this report
that are not historical in nature constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends,
plans, estimates, or variations of such words and similar expressions are intended to identify such forward-looking statements. These statements reflect the Companys current expectations and involve certain risks and
uncertainties, including those disclosed elsewhere in this report. Therefore, actual results could differ materially from those included in such forward-looking statements.



17



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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk



The Companys market risk has not changed significantly from that set forth under the caption Quantitative and Qualitative Disclosures About Market Risk, in Item 7A of Part II of its 2002 annual
report on Form 10-K. Those disclosures should be read in conjunction with this Form 10-Q.



Item 4. Controls and Procedures



Within the 90-day period prior to the filing of this report, Deltic Timber Corporation (the Company) carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures.
Such evaluation was under the supervision, and with the participation, of the Companys senior management, including the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO). Based on this evaluation, the
Companys CEO and CFO have concluded that the Companys disclosure controls and procedures are effective in timely alerting them to material information required to be included in any reports that the Company files or submits under the
Securities Exchange Act of 1934, as amended. In addition, such controls have been deemed to be effective in ensuring that the required information is recorded, processed, summarized and reported within the time periods specified in the Securities
and Exchange Commissions rules and forms.



There have
been no significant changes in internal controls or in any other factors that could significantly affect those internal controls subsequent to the date of their last evaluation.





18



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##### Table of Contents



PART IIOTHER
INFORMATION



Item 1. Legal Proceedings



From
time to time, the Company is involved in litigation incidental to its business. Currently, there are no material legal proceedings.



Item 2. Changes in Securities and Use of Proceeds



None.



Item 3. Defaults Upon Senior Securities



None.



Item 4. Submission of Matters to a Vote of Security Holders



None.



Item 5. Other Information



None.



Item 6. Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits
| | --- |  | --------



| | 99.1 |  | Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| | 99.2 |  | Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------



| | Item 5. |  | Other EventsPress release announcing Deltics financial results for the fourth quarter and year of 2002.
| | ------- |  | ---------------------------------------------------------------------------------------------------------



19



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##### Table of Contents



SIGNATURES



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



DELTIC TIMBER CORPORATION



|    |  |                                                        |  | 
|--- |  | ------------------------------------------------------ |  | 
|   
|By: |  | /s/    Ron L.
Pearce                                   |  | 
|    |  | Ron L. Pearce, President (Principal Executive Officer) |  | 

|    |  |                                                                                              |  | 
|--- |  | -------------------------------------------------------------------------------------------- |  | 
|   
|By: |  | /s/    Clefton D.
Vaughan                                                                    |  | 
|    |  | Clefton D. Vaughan, Vice President, Finance and Administration (Principal Financial Officer) |  | 

|    |  |                                                           |  | 
|--- |  | --------------------------------------------------------- |  | 
|   
|By: |  | /s/    Emily R.
Evers                                     |  | 
|    |  | Emily R. Evers, Controller (Principal Accounting Officer) |  | 



20



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##### Table of Contents



CHIEF EXECUTIVE OFFICER CERTIFICATION



I, Ron L.
Pearce, Chief Executive Officer of Deltic Timber Corporation (the Company), certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Deltic Timber Corporation;
| | -- |  | --------------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The Companys Chief Financial Officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14
and 15d-14) for the Company and we have:
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the Companys disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the
Evaluation Date); and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The Companys Chief Financial Officer and I have disclosed, based on our most recent evaluation, to the Companys auditors and the audit committee of Companys
board of directors:
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the Companys ability to record, process, summarize and report
financial data and have identified for the Companys auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal controls; and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | The Companys Chief Financial Officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



/s/Ron L. Pearce



Ron L. Pearce

Chief Executive Officer

May 5, 2003



21



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##### Table of Contents



CHIEF FINANCIAL
OFFICER CERTIFICATION



I, Clefton D. Vaughan, Chief Financial Officer
of Deltic Timber Corporation (the Company), certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Deltic Timber Corporation;
| | -- |  | --------------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The Companys Chief Executive Officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14
and 15d-14) for the Company and we have:
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the Companys disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the
Evaluation Date); and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The Companys Chief Executive Officer and I have disclosed, based on our most recent evaluation, to the Companys auditors and the audit committee of Companys
board of directors:
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the Companys ability to record, process, summarize and report
financial data and have identified for the Companys auditors any material weaknesses in internal controls; and
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| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal controls; and
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| | 6. |  | The Companys Chief Executive Officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
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/s/Clefton D. Vaughan



Clefton D. Vaughan

Chief Financial Officer

May 5, 2003



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