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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 27, 2002

or

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number 1-9548

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The Timberland Company

(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

02-0312554(I.R.S. Employer Identification Number)200 Domain Drive, Stratham,
New Hampshire(Address of principal executive offices)

03885(Zip Code)


(603) 772-9500Registrant's telephone number, including area code:

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

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). Yes ý    No o

On
October 25, 2002, 29,137,948 shares of the registrant's Class A Common Stock were outstanding and 7,711,185 shares of the registrant's Class B
Common Stock were outstanding.

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THE TIMBERLAND COMPANY  FORM 10-Q  TABLE OF CONTENTS

|                                         |                                                                                                                             | Page(s)
|---------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | -------
|Part I Financial Information (unaudited) |                                                                                                                             |        
|                                         | Item 1. Financial Statements                                                                                                |        
|                                         | Condensed Consolidated Balance Sheets 
As of September 27, 2002 and December 31, 2001                                      |        
|                                         | Condensed Consolidated Statements of Income 
For the three and nine months ended September 27, 2002
and September 28, 2001 |        
|                                         | Condensed Consolidated Statements of Cash Flows 
For the nine months ended September 27, 2002 and
September 28, 2001       |        
|                                         | Notes to Condensed Consolidated Financial Statements                                                                        |        
|                                         | Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations                               |        
|                                         | Item 3. Quantitative and Qualitative Disclosures
About Market Risk                                                          |        
|                                         | Item 4. Controls and Procedures                                                                                             |        
|Part II Other Information                |                                                                                                                             |        
|                                         | Item 5. Other Information                                                                                                   |        
|                                         | Item 6. Exhibits and Reports on Form 8-K                                                                                    |        
|                                         | Signatures                                                                                                                  |        
|                                         | Section 302 Certifications                                                                                                  |        
|                                         | Exhibits                                                                                                                    |        

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Part I Financial Information

Item 1. Financial Statements

THE TIMBERLAND COMPANY  CONDENSED CONSOLIDATED BALANCE SHEETS  ASSETS  (Dollars in Thousands)  (Unaudited)

|                                                           |                                                                                                                             | September 27,
2002                |          | December 31,
2001 |        
|---------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | -------- | ----------------- | -------
|Current assets                                             |                                                                                                                             |                                   |          |                   |        
|                                                           | Cash and equivalents                                                                                                        |                                   | $        | 20,003            |        
|                                                           | Accounts receivable, net of allowance for doubtful accounts of $8,715 at September 27, 2002 and $5,934 at December 31, 2001 |                                   |          | 251,803           |        
|                                                           | Inventory                                                                                                                   |                                   |          | 171,167           |        
|                                                           | Prepaid expense                                                                                                             |                                   |          | 18,374            |        
|                                                           | Deferred income taxes                                                                                                       |                                   |          | 21,962            |        
|                                                           | Other assets                                                                                                                |                                   |          |                  |        
|                                                           |                                                                                                                             |                                   |          |                   |        
|                                                           |                                                                                                                             | Total current assets              |          |                   | 483,309
|                                                           |                                                                                                                             |                                   |          |                   |        
|Property, plant and equipment                              |                                                                                                                             |                                   | 173,866  |                   |        
|Less accumulated depreciation and amortization             |                                                                                                                             |                                   | (100,066 | )                 |        
|                                                           |                                                                                                                             |                                   |          |                   |        
|                                                           |                                                                                                                             | Net property, plant and equipment |          |                   | 73,800 
|                                                           |                                                                                                                             |                                   |          |                   |        
|Excess of cost over fair value of net assets acquired, net |                                                                                                                             |                                   | 14,163   |                   |        
|Other assets, net                                          |                                                                                                                             |                                   | 8,883    |                   |        
|                                                           |                                                                                                                             |                                   |          |                   |        
|Total assets                                               |                                                                                                                             | $                                 | 580,155  |                   | $      
|                                                           |                                                                                                                             |                                   |          |                   |        

See
accompanying notes to condensed consolidated financial statements.

1

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THE TIMBERLAND COMPANY  CONDENSED CONSOLIDATED BALANCE SHEETS  LIABILITIES AND STOCKHOLDERS' EQUITY  (Dollars in Thousands, Except Per Share Data)  (Unaudited)

|                                                           |                                                                                                                                                                                                                                                                                 | September 27,
2002  |                            | December 31,
2001 |       
|---------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------- | -------------------------- | ----------------- | ------
|Current liabilities                                        |                                                                                                                                                                                                                                                                                 |                     |                            |                   |       
|                                                           | Accounts payable                                                                                                                                                                                                                                                                |                     | $                          | 61,824            |       
|                                                           | Accrued expense                                                                                                                                                                                                                                                                 |                     |                            |                   |       
|                                                           |                                                                                                                                                                                                                                                                                 | Payroll and related |                            |                   | 33,901
|                                                           |                                                                                                                                                                                                                                                                                 | Other               |                            |                   | 65,340
|                                                           | Income taxes payable                                                                                                                                                                                                                                                            |                     |                            | 29,615            |       
|                                                           | Other liabilities                                                                                                                                                                                                                                                               |                     |                            | 5,486             |       
|                                                           |                                                                                                                                                                                                                                                                                 |                     |                            |                   |       
|                                                           |                                                                                                                                                                                                                                                                                 |                     | Total current liabilities  |                   |       
|                                                           |                                                                                                                                                                                                                                                                                 |                     |                            |                   |       
|Deferred compensation                                      |                                                                                                                                                                                                                                                                                 |                     | 2,812                      |                   |       
|Deferred income taxes                                      |                                                                                                                                                                                                                                                                                 |                     | 11,268                     |                   |       
|Excess of fair value of acquired net assets over cost, net |                                                                                                                                                                                                                                                                                 |                     |                           |                   |       
|Stockholders' equity                                       |                                                                                                                                                                                                                                                                                 |                     |                            |                   |       
|                                                           | Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding                                                                                                                                                                                       |                     |                            |                  |       
|                                                           | Class A Common Stock, $.01 par value (1 vote per share); 120,000,000 shares authorized; 41,176,607 shares issued at September 27, 2002 and 40,487,893 shares at December 31, 2001                                                                                               |                     |                            | 412               |       
|                                                           | Class B Common Stock, $.01 par value (10 votes per share); convertible into Class A shares on a one-for-one basis; 20,000,000 shares authorized; 7,711,185 shares issued and outstanding at September 27, 2002 and 7,911,185 shares issued and outstanding
at December 31, 2001 |                     |                            | 77                |       
|                                                           | Additional paid-in capital                                                                                                                                                                                                                                                      |                     |                            | 138,951           |       
|                                                           | Deferred compensation                                                                                                                                                                                                                                                           |                     |                            | (2,694            | )     
|                                                           | Retained earnings                                                                                                                                                                                                                                                               |                     |                            | 578,695           |       
|                                                           | Accumulated other comprehensive loss                                                                                                                                                                                                                                            |                     |                            | (9,396            | )     
|                                                           | Less treasury stock at cost, 11,985,412 Class A shares at September 27, 2002 and 10,064,847 Class A shares at December 31, 2001                                                                                                                                                 |                     |                            | (336,136          | )     
|                                                           |                                                                                                                                                                                                                                                                                 |                     |                            |                   |       
|                                                           |                                                                                                                                                                                                                                                                                 |                     | Total stockholders' equity |                   |       
|                                                           |                                                                                                                                                                                                                                                                                 |                     |                            |                   |       
|Total liabilities and stockholders' equity                 |                                                                                                                                                                                                                                                                                 | $                   | 580,155                    |                   | $     
|                                                           |                                                                                                                                                                                                                                                                                 |                     |                            |                   |       

See
accompanying notes to condensed consolidated financial statements.

2

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THE TIMBERLAND COMPANY  CONDENSED CONSOLIDATED STATEMENTS OF INCOME  (Amounts in Thousands, Except Per Share Data)  (Unaudited)

|                                                                              |                            | For the
Three Months Ended   |         | For the
Nine Months Ended |        
|----------------------------------------------------------------------------- | -------------------------- | ---------------------------- | ------- | ------------------------- | -------
|
|Revenue                                                                       |                            | $                            | 416,641 |                           | $      
|Cost of goods sold                                                            |                            |                              | 233,801 |                           |        
|                                                                              |                            |                              |         |                           |        
|                                                                              | Gross profit               |                              |         | 182,840                   |        
|                                                                              |                            |                              |         |                           |        
|Operating expense                                                             |                            |                              |         |                           |        
|                                                                              | Selling                    |                              |         | 86,099                    |        
|                                                                              | General and administrative |                              |         | 19,761                    |        
|                                                                              | Amortization of goodwill   |                              |         |                          |        
|                                                                              |                            |                              |         |                           |        
|                                                                              |                            | Total operating expense      |         |                           | 105,860
|                                                                              |                            |                              |         |                           |        
|Operating income                                                              |                            |                              | 76,980  |                           |        
|                                                                              |                            |                              |         |                           |        
|Other expense (income)                                                        |                            |                              |         |                           |        
|                                                                              | Interest expense           |                              |         | 263                       |        
|                                                                              | Other, net                 |                              |         | 491                       |        
|                                                                              |                            |                              |         |                           |        
|                                                                              |                            | Total other expense (income) |         |                           | 754    
|                                                                              |                            |                              |         |                           |        
|Income before income taxes                                                    |                            |                              | 76,226  |                           |        
|                                                                              |                            |                              |         |                           |        
|Provision for income taxes                                                    |                            |                              | 27,060  |                           |        
|                                                                              |                            |                              |         |                           |        
|Net income before cumulative effect of change in accounting principle         |                            | $                            | 49,166  |                           | $      
|                                                                              |                            |                              |         |                           |        
|Cumulative effect of change in accounting principle                           |                            |                              |        |                           |        
|                                                                              |                            |                              |         |                           |        
|Net income                                                                    |                            | $                            | 49,166  |                           | $      
|                                                                              |                            |                              |         |                           |        
|Earnings per share before cumulative effect of change in accounting principle |                            |                              |         |                           |        
|                                                                              | Basic                      |                              | $       | 1.33                      |        
|                                                                              |                            |                              |         |                           |        
|                                                                              | Diluted                    |                              | $       | 1.30                      |        
|                                                                              |                            |                              |         |                           |        
|Earnings per share after cumulative effect of change in accounting principle  |                            |                              |         |                           |        
|                                                                              | Basic                      |                              | $       | 1.33                      |        
|                                                                              |                            |                              |         |                           |        
|                                                                              | Diluted                    |                              | $       | 1.30                      |        
|                                                                              |                            |                              |         |                           |        
|Weighted-average shares outstanding                                           |                            |                              |         |                           |        
|                                                                              | Basic                      |                              |         | 37,099                    |        
|                                                                              |                            |                              |         |                           |        
|                                                                              | Diluted                    |                              |         | 37,838                    |        
|                                                                              |                            |                              |         |                           |        

See
accompanying notes to condensed consolidated financial statements.

3

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THE TIMBERLAND COMPANY  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (Dollars in Thousands)  (Unaudited)

|                                                  |                                                                               | For the
Nine Months Ended                                          |                    
|------------------------------------------------- | ----------------------------------------------------------------------------- | ------------------------------------------------------------------ | -------------------
|
|Cash flows from operating activities:             |                                                                               |                                                                    |                    
|                                                  | Net income                                                                    |                                                                    | $                  
|                                                  | Adjustments to reconcile net income to net cash used by operating activities: |                                                                    |                    
|                                                  |                                                                               | Deferred income taxes                                              |                    
|                                                  |                                                                               | Depreciation and amortization                                      |                    
|                                                  |                                                                               | Cumulative effect of change in accounting principle                |                    
|                                                  |                                                                               | Tax benefit from stock option plans                                |                    
|                                                  |                                                                               | Increase (decrease) in cash from changes in working capital items: |                    
|                                                  |                                                                               |                                                                    | Accounts receivable
|                                                  |                                                                               |                                                                    | Inventory          
|                                                  |                                                                               |                                                                    | Prepaid expense    
|                                                  |                                                                               |                                                                    | Accounts payable   
|                                                  |                                                                               |                                                                    | Accrued expense    
|                                                  |                                                                               |                                                                    | Income taxes       
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|Cash flows from investing activities:             |                                                                               |                                                                    |                    
|                                                  | Additions to property, plant and equipment, net                               |                                                                    |                    
|                                                  | Other, net                                                                    |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|Cash flows from financing activities:             |                                                                               |                                                                    |                    
|                                                  | Net borrowings under short-term credit facilities                             |                                                                    |                    
|                                                  | Common stock repurchases                                                      |                                                                    |                    
|                                                  | Issuance of common stock                                                      |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|Effect of exchange rate changes on cash           |                                                                               |                                                                    | 1,587              
|                                                  |                                                                               |                                                                    |                    
|Net decrease in cash and equivalents              |                                                                               |                                                                    | (85,655            
|Cash and equivalents at beginning of period       |                                                                               |                                                                    | 105,658            
|                                                  |                                                                               |                                                                    |                    
|Cash and equivalents at end of period             |                                                                               | $                                                                  | 20,003             
|                                                  |                                                                               |                                                                    |                    
|Supplemental disclosure of cash flow information: |                                                                               |                                                                    |                    
|                                                  | Interest paid                                                                 |                                                                    | $                  
|                                                  | Income taxes paid                                                             |                                                                    | $                  

See
accompanying notes to condensed consolidated financial statements.

4

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THE TIMBERLAND COMPANY  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Dollars in Thousands, Except Per Share Data)  (Unaudited)



| |  |                                 |  | As of September 27, 2002 |       | As of September 28, 2001
| |  | ------------------------------- |  | ------------------------ | ----- | ------------------------
|
| |  | Trademarks and related expenses |  | $                        | 6,878 |                         

5

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| |  | 2002                              |  | U.S.
Wholesale |         | U.S.
Consumer
Direct |   | International |  | Unallocated
Corporate |         | Consolidated
| |  | --------------------------------- |  | -------------- | ------- | -------------------- | - | ------------- |  | --------------------- | ------- | ------------
| |  | Revenue                           |  | $              | 227,695 |                      | $ | 45,419        |  | $                     | 143,527 |             
| |  | Income (loss) before income taxes |  |                | 76,606  |                      |   | 5,468         |  |                       | 30,302  |             
| |  | Total assets                      |  |                | 257,780 |                      |   | 30,968        |  |                       | 206,104 |             
| |  | Goodwill                          |  |                | 6,804   |                      |   | 794           |  |                       | 6,565   |             
|
| |  | Revenue                           |  | $              | 226,132 |                      | $ | 52,448        |  | $                     | 117,639 |             
| |  | Income (loss) before income taxes |  |                | 81,053  |                      |   | 7,036         |  |                       | 21,993  |             
| |  | Total assets                      |  |                | 300,239 |                      |   | 34,689        |  |                       | 176,288 |             
| |  | Goodwill                          |  |                | 6,873   |                      |   | 802           |  |                       | 6,909   |             

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| |  | 2002                              |  | U.S.
Wholesale |         | U.S.
Consumer
Direct |   | International |  | Unallocated
Corporate |         | Consolidated
| |  | --------------------------------- |  | -------------- | ------- | -------------------- | - | ------------- |  | --------------------- | ------- | ------------
| |  | Revenue                           |  | $              | 411,226 |                      | $ | 112,418       |  | $                     | 310,224 |             
| |  | Income (loss) before income taxes |  |                | 122,558 |                      |   | 9,836         |  |                       | 53,927  |             
|
| |  | Revenue                           |  | $              | 451,167 |                      | $ | 123,482       |  | $                     | 267,850 |             
| |  | Income (loss) before income taxes |  |                | 146,446 |                      |   | 7,665         |  |                       | 41,147  |             



| |  |                                                                        |  | For the
Three Months Ended |        | For the
Nine Months Ended |  
| |  | ---------------------------------------------------------------------- |  | -------------------------- | ------ | ------------------------- | -
|
| |  | Net income                                                             |  | $                          | 49,166 |                           | $
| |  | Change in cumulative translation adjustment                            |  |                            | (247   | )                         |  
| |  | Fair value of derivative financial instruments at January 1, 2001      |  |                            |       |                           |  
| |  | Change in fair value of derivative financial instruments, net of taxes |  |                            | 5,085  |                           |  
| |  |                                                                        |  |                            |        |                           |  
| |  | Comprehensive income                                                   |  | $                          | 54,004 |                           | $
| |  |                                                                        |  |                            |        |                           |  



| |  |                 |  | September 27,
2002 |         | December 31,
2001
| |  | --------------- |  | ------------------ | ------- | -----------------
| |  | Raw materials   |  | $                  | 5,015   |                  
| |  | Work-in-process |  |                    | 1,978   |                  
| |  | Finished goods  |  |                    | 164,174 |                  
| |  |                 |  |                    |         |                  
| |  |                 |  | $                  | 171,167 |                  
| |  |                 |  |                    |         |                  

7

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8

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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS  (Unaudited)

The following discusses the Company's results of operations and liquidity and capital resources. The discussion, including known trends and uncertainties
identified by management, should be read in conjunction with the condensed consolidated financial statements and related notes.

The
preparation of financial statements in accordance with generally accepted accounting principles requires assumptions and estimates that affect the reported amounts of assets and
liabilities, disclosures in the financial statements and related notes and the reporting of revenue and expenses. Actual results could differ from these estimates. The accompanying management
discussion is based upon a consistent application of accounting policies and methodology in developing assumptions and estimates. Some of the more important assumptions and estimates, which are
consistently applied through the Company's internal accounting policies and procedures, are related to reserves for sales returns and allowances, excess and obsolete inventory and allowance for
doubtful accounts receivable.

RESULTS OF OPERATIONS

THIRD QUARTER 2002 COMPARED WITH THIRD QUARTER 2001

Revenue for the third quarter of 2002 was $416.6 million, an increase of $20.4 million, or 5.2%, compared with the $396.2 million in revenue
reported for the third quarter of 2001.

Domestic
revenue for the third quarter of 2002 was $273.1 million, a decrease of $5.5 million, or 2.0%, compared with the same period in 2001. Domestic revenue represented
65.6% of total revenue for the third quarter of 2002, compared with 70.3% for the third quarter of 2001. The U.S. Wholesale segment revenue increased 1.0% in the third quarter of 2002, compared with
the same period in 2001, primarily due to increased footwear unit sales and, to a lesser degree, apparel and accessories unit sales, partially offset by a reduction in footwear average selling prices.
The decrease in footwear average selling prices was primarily due to mix of merchandise sold and, to a lesser degree, an increase in off-price sales in a difficult market. The Company
expects that current economic conditions, as well as proactive strategies to control the supply of boot products, will continue to pressure domestic wholesale revenue growth in the fourth quarter of
2002. The U.S. Consumer Direct segment revenue decreased 13.4%, compared with the same period in 2001, primarily due to a decrease in both footwear and apparel and accessories unit sales and average
selling prices. On a comparable basis, domestic retail and factory store sales decreased 12.3%. These decreases reflect weak back to school mall traffic, aggressive competitive promotions and overall
weakness in the U.S. retail climate. Given current economic conditions, the Company will limit new U.S. store additions in the near-term and focus on enhancing returns at current
locations.

International
segment revenue for the third quarter of 2002 was $143.5 million, an increase of $25.9 million, or 22.0%, compared with the third quarter of 2001.
International revenue comprised 34.4% of total revenue for the third quarter of 2002, compared with 29.7% for the third quarter of 2001. The increase in revenue over the prior year was driven by an
increase in European wholesale footwear and apparel unit sales, the impact of foreign exchange and, to a lesser degree, retail unit sales. Geographically, revenue increases were driven by double-digit
gains in Italy, Spain and Germany. Asia had modest growth for the quarter. On a constant dollar basis, International revenue increased 13.7%, compared with the same period in 2001.

Footwear
revenue for the third quarter of 2002 was $315.3 million, an increase of $10.3 million, or 3.4%, compared with the same period in 2001. The increase was primarily
attributable to an increase in U.S. Wholesale unit sales and, to a lesser degree, European unit sales and the impact of foreign

9

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exchange. These increases were partially offset by a decrease in U.S. Wholesale average selling prices, as discussed previously. In total, unit sales increased 11.9% and footwear average selling
prices decreased 7.7%, compared with the same period last year. By category, worldwide increases in Kids', Timberland PRO and Men's and Women's Casual were partially offset by reductions in the U.S.
boot business, as previously discussed, and, to a lesser degree, Outdoor Performance.

Apparel
and accessories revenue for the third quarter of 2002 was $95.9 million, an increase of $9.0 million, or 10.4%, compared with the same period in 2001. The increase
was primarily due to double-digit revenue gains in the Company's International and U.S. Wholesale businesses. These gains were driven by an increase in unit sales and, to a lesser degree, the impact
of foreign exchange. In total, apparel and accessories unit sales increased 7.4% and average selling prices increased 2.9% over the same period last year.

Worldwide
wholesale revenue for the third quarter of 2002 was $343.7 million, an increase of $23.2 million, or 7.3%, compared with the same period in 2001. The increase in
revenue was primarily due to U.S. footwear unit sales and, to a lesser degree, European footwear unit sales, worldwide apparel and accessories unit sales and the impact of foreign exchange. These
increases were partially offset by a decline in U.S. footwear average selling prices, as previously discussed.

Worldwide
revenue from Company-owned retail and factory stores, along with the Company's e-commerce business, for the third quarter of 2002 was $73.0 million, a
decrease of $2.8 million, or 3.7%, compared with the same period in 2001. The decrease was primarily due to a decline in U.S. Consumer Direct unit sales and average selling prices, as discussed
previously, partially offset by increased International revenue and, to a lesser degree, the impact of foreign exchange. During the third quarter of 2002, the Company opened 13 retail stores and
closed 1 retail store, worldwide. As previously discussed, given current economic conditions, the Company will limit new U.S. store additions in the near-term and focus on enhancing
returns at current locations.

The
Company is currently experiencing, and expects to experience, impacts related to the recent closure of West Coast ports, due to a work stoppage. The majority of the product the
Company sells in the U.S. moves through these ports. Due to the transportation backlog in the ports, the Company expects to incur increased costs to secure alternative delivery methods for the holiday
season. The Company also expects delivery delays which may result in lost revenue potential. Since the labor issues leading to the port closures have not yet been resolved, it is unclear when the
current backlog will be eliminated and the ports will return to normal operation. The Company will continue to seek alternative methods of delivery as part of its contingency planning.

The
Company expects that the combined impacts of the work stoppage, soft U.S. market conditions and proactive strategies to control U.S. boot supply will limit overall revenue growth and
pressure operating margins in the fourth quarter of 2002.

Gross
profit as a percentage of revenue for the third quarter of 2002 was 43.9%, a decrease of 0.2 percentage points from the 44.1% reported for the third quarter of 2001. The
decrease in gross profit percentage was primarily due to higher levels of U.S. Wholesale footwear off-price sales and the year over year impact of foreign currency hedging, partially
offset by cost savings initiatives across the supply chain and a 60 basis point benefit from lower leather costs. Under current conditions, the Company expects that the unfavorable impact of foreign
currency hedging and other gross margin pressures, including the aforementioned work stoppage in West Coast ports, will continue throughout 2002.

Operating
expense was $105.9 million for the third quarter of 2002, up $6.6 million, or 6.6%, from the $99.3 million reported for the third quarter of 2001.
Operating expense as a percentage of revenue for the third quarter of 2002 increased to 25.4%, from 25.1% for the third quarter of 2001. The dollar increase was primarily due to continued support of
strategic growth initiatives and to growth in

10

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International operations, which have had significant revenue growth and maintain higher operating expense structures. Going forward, the Company expects that growth in the International and U.S.
Wholesale apparel businesses, as well as support for the Company's lifestyle brand initiatives, will continue to drive expense increases, which will likely pressure operating margins.

Other,
net was $0.5 million of expense in the third quarter of 2002, compared with $0.9 million of expense in the third quarter of 2001. The improvement was primarily due
to lower foreign currency related charges. Other, net includes interest income of $0.2 million and $0.1 million in the third quarter of 2002 and 2001, respectively. Interest expense,
which is comprised of fees related to the establishment and maintenance of the Company's revolving credit facility and to interest paid on short term borrowings, was $0.3 million in the third
quarter of 2002, compared with $0.8 million for the prior year. The reduction in charges in the third quarter of 2002 was due to lower average borrowings at lower interest rates.

Income
before income taxes for the third quarter of 2002, compared with the prior year, decreased in the U.S. Wholesale segment. Although revenue improved by 0.7% and operating expense
rates were comparable to the prior year, reduced gross margin rates, resulting primarily from higher off-price sales, generated the decrease. The U.S. Consumer Direct segment decrease in
income was primarily due to the 13.4% revenue decline, as discussed previously. Internationally, the 13.7% constant dollar revenue increase, with gains in both footwear and apparel and accessories,
drove the improvement in income. Additionally, Europe had improved gross margin and expense rates, which were partially offset by the year over year impact of foreign currency hedging. Unallocated
Corporate remained nearly equal to last year. The Company expects business mix impacts, primarily related to the expected sales pressure on the higher margin U.S. boot business, and foreign currency
hedging to continue to have a negative effect on income before income taxes in the fourth quarter of 2002, along with the aforementioned impact of the work stoppage in the West Coast ports.

The
effective tax rate for the three and nine months ended September 27, 2002 and September 28, 2001 was 35.5% and 34%, respectively. The increase in the rate (2002 is
based upon the estimated rate for the year-ended December 2002) is primarily due to a combination of a federal tax law change, which reduced the tax benefits associated with the
Company's Puerto Rico operations and to U.S. federal tax exempt Puerto Rico income comprising a lower percentage of consolidated income.

NINE MONTHS ENDED SEPTEMBER 27, 2002 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 28, 2001

Revenue for the first nine months of 2002 was $833.9 million, a decrease of $8.6 million, or 1.0%, from the $842.5 million reported for the
comparable period in 2001. The U.S. Wholesale segment revenue decreased 8.9%, or $39.9 million, compared with the prior year. This decrease was primarily due to a reduction in boot sales, which
also reduced average selling prices. The U.S. Consumer Direct segment revenue decreased $11.1 million, or 9.0%, compared with the prior year primarily due to decreases in
apparel and accessories unit sales and, to a lesser degree, footwear unit sales. Internationally, revenue increased $42.4 million, or 15.8%, compared with the prior year. This increase was
primarily due to European wholesale footwear and apparel and accessories unit sales and, to a lesser degree, International retail unit sales and the impact of foreign exchange. On a constant dollar
basis, International segment revenue increased 13.4% over the comparable period in 2001.

Gross
profit as a percentage of revenue for the first nine months of 2002 was 44.2%, compared with 44.5% for the comparable period in 2001. This decline in gross profit was primarily
attributable to the year over year impact of foreign currency hedging and increased U.S. Wholesale footwear off-price sales. These decreases were partially offset by the Company's cost
savings initiatives and a 30 basis point reduction in leather costs, compared with the prior year.

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Operating
expense for the first nine months of 2002 was $271.8 million, up $13.3 million, or 5.2%, from the $258.4 million reported for the comparable period in
2001. Operating expense, as a percentage of revenue, was 32.6% for the first nine months of 2002, compared with 30.7% for the same period in 2001. The dollar increase was primarily due to the same
reasons cited in the third quarter discussion.

Income
before income taxes for the first nine months of 2002, compared with the prior year, declined in the U.S. Wholesale segment primarily due to a 10.1% decline in footwear revenue,
largely in boots, on reduced gross margin rates, primarily related to increased off-price sales, and an increase in operating expense. The increase in income in the U.S. Consumer Direct
segment was primarily due to improved gross margin rates, reflecting benefits from proactive strategies to improve margins through reduced discounting, and lower product costs. This improvement was
partially offset by the reduction in revenue and higher expenses. The improvement in the International segment's income was primarily due to improved European gross margin rates on a 16.3% constant
dollar revenue increase and improved expense rates, partially offset by the year over year impact of foreign currency hedging. The increase in Unallocated Corporate was primarily due to costs incurred
in support of company-wide activities.

Other,
net was $1.6 million of income for the first nine months of 2002, compared with $0.5 million of income for the same period in 2001. The increase was primarily due to
the impact of the strengthening foreign exchange rates, versus the dollar, on the translation of intercompany balances. Other, net includes interest income of $0.8 million for the first nine
months of 2002 and $1.1 million for the same period in 2001. The decrease in interest income in the first nine months of 2002, compared with the first nine months of 2001, reflects the impact
of a reduction in interest rates, partially offset by higher average cash balances. Interest expense for the first nine months of 2002 and 2001 was $0.6 million and $1.1 million,
respectively. The reduction in charges in 2002 was due to lower average borrowings at lower interest rates.

The
effective tax rate for the nine months ended September 27, 2002 and September 28, 2001 was 35.5% and 34%, respectively. The change in the effective tax rate is due to
the same reasons cited in the third quarter discussion.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used by operations for the first nine months of 2002 was $12.9 million, compared with $92.6 million used during the same period in 2001.
Higher working capital at year-end 2001, compared with year-end 2000, along with disciplined inventory management and a lower receivables balance were the principal causes for
the decrease in cash used by operations. The increase in cash from accruals was primarily related to operating expense growth, lower payroll related accruals at year-end 2001 and accrued
hedging contract losses whose trades had not yet settled. The increase in cash from accounts payable was primarily related to inventory purchases, some of which are now on open account compared with
letter of credit last year, and the timing of inventory receipt and payments. On an absolute basis, cash used during the first nine months of 2002 was primarily related to normal seasonal spending on
inventory and increased receivables related to the sales volume in the Company's third quarter, partially offset by the aforementioned benefits from increases in accruals and accounts payable.

At
September 27, 2002, compared with September 28, 2001, inventory levels decreased 7.1% and accounts receivable decreased 2.4%. Quarterly inventory turns improved to 5.3
times for the third quarter of 2002, compared with 4.5 times for the third quarter of 2001. On a 12 month rolling basis, inventory turns improved from 3.9 times for the third quarter of 2001 to
4.2 times for the third quarter of 2002. Days sales outstanding at September 27, 2002 were 54 days, compared with 59 days at September 28, 2001. Wholesale days sales
outstanding decreased to 60 days at September 27, 2002, from 66 days at September 28, 2001.

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Net
cash used by investing activities amounted to $11.4 million for the first nine months of 2002 and $18.0 million for the first nine months of 2001. Capital expenditures
for the first nine months of 2002 were $11.7 million, compared with $16.2 million for the same period in 2001 (depreciation expense for the first nine months of 2002 and 2001 was
$14.3 million and $12.9 million, respectively). The reduction in capital expenditures was primarily due to lower spending on retail expansion, facility improvements and information
services. Net cash used by financing activities was $62.9 million for the first nine months of 2002, compared with $12.5 million provided for the first nine months of 2001. The year over
year decline is primarily due to the fact that, at September 28, 2001, the Company had $65.0 million in notes payable while at September 27, 2002, the Company had no notes
payable. Additionally, cash flows from investing activities reflect stock repurchases of $72.4 million in the first nine months of 2002 and $60.3 million in the first nine months of
2001. In the second quarter of 2002, the Company's Board of Directors approved an additional repurchase of up to 4,000,000 shares of the Company's Class A Common Stock (see Note 13).

The
Company has available unsecured revolving, committed and uncommitted lines of credit as sources of financing for its seasonal and other working capital requirements. The Company had
no debt outstanding at September 27, 2002 and December 31, 2001. The Company had $65.0 million in notes payable outstanding at September 28, 2001.

As
of September 27, 2002, December 31, 2001 and September 28, 2001, the Company had letters of credit outstanding of $22.0 million, $39.0 million and
$60.0 million, respectively. The reduction in letters of credit was primarily due to the transitioning of numerous inventory vendors to open account.

Management
believes that the Company's capital needs for 2002 will be met through its current cash balances, cash flows from operations and its existing credit facilities, without the
need for additional permanent financing. However, as discussed in an exhibit to the Company's Form 10-K for the year-ended December 31, 2001, entitled "Cautionary
Statements for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995," several risks and uncertainties could cause the Company to need to raise additional
capital through equity and/or debt financing. The availability and terms of any such financing would be subject to prevailing market conditions and other factors at that time.

NEW ACCOUNTING PRONOUNCEMENTS

The Company adopted SFAS No. 141 and No. 142 in the first quarter of 2002. The impact of the adoption of those statements is discussed in Notes 4
and 5 to the Company's condensed consolidated financial statements.

SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" became effective for the Company in the first quarter of 2002. SFAS No. 144 had
no impact on the Company's financial statements.

In
June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." This statement supercedes EITF Issue
No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS
No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under EITF No. 94-3, a liability is
recognized at the date an entity commits to an exit plan. SFAS No. 146 also establishes that the liability should initially be measured and recorded at fair value. The provisions of SFAS
No. 146 will be effective for any exit or disposal activities initiated after December 31, 2002.

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FORWARD-LOOKING INFORMATION

The statements contained in this report, which are not historical facts, including, without limitation, statements that relate to future performance and/or
statements regarding the Company's anticipated results or business level for 2002 or any other future period, may be deemed to constitute forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on current expectations only and actual future results may differ materially from those expressed
or implied by such forward-looking statements due to certain factors. Such factors include, but are not limited to, the Company's ability to: (i) successfully market and sell its products in
view of changing consumer trends, consumer acceptance of products, and economic and other factors affecting retail market conditions, including the global economic and political uncertainties
resulting from the continuing war on terrorism and uncertainties related to the unresolved issues that resulted in the recent work stoppage in West Coast ports; (ii) manage its foreign exchange
rate risks; (iii) obtain adequate raw materials at competitive prices; and (iv) other factors, including those detailed from time to time in the Company's Securities and Exchange
Commission reports, including its Annual Report on Form 10-K filed on March 28, 2002. The Company undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events, or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's current policies and business practices regarding derivative instruments are consistent with its fiscal year-end 2001 Annual Report
disclosure. At September 27, 2002 and December 31, 2001, the Company had no short-term or long-term debt outstanding. At September 28, 2001, the Company
had $65.0 million of short-term debt outstanding and no long-term debt outstanding. The Company's foreign currency exposure is generated primarily from its European and
Asian operating subsidiaries. Based upon sensitivity analysis, a 10% change in foreign exchange rates would cause the fair value of the Company's financial instruments to increase/decrease by
approximately $23.6 million, compared with $12.0 million at September 28, 2001. The increase at September 27, 2002 is due to the amount of foreign currency forward
contracts held at September 27, 2002, compared with September 28, 2001 (see Notes 6 and 12).

ITEM 4. CONTROLS AND PROCEDURES

Based on their evaluation as of a date within 90 days of the filing date of this interim report on Form 10-Q, the Company's principal
executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures, as defined in Rules 13a-14(c) and 15d-14(c) under
the Securities Exchange Act of 1934 (the "Exchange Act"), are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act 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 the Company's
internal controls or in other factors which could significantly affect internal controls subsequent to the date of their evaluation.

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PART II OTHER INFORMATION

ITEM 5. OTHER INFORMATION



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



Exhibit 99.1
CEO certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.Exhibit 99.2
CFO certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.






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SIGNATURES

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

|                       | THE TIMBERLAND COMPANY(Registrant)                                                                            
|---------------------- | --------------------------------------------------------------------------------------------------------------
|Date: November 8, 2002 | /s/BRIAN P. MCKEONBrian P. McKeon Executive Vice PresidentFinance and Administration, Chief
Financial Officer
|Date: November 8, 2002 | /s/JOHN D. CRIMMINSJohn D. Crimmins Corporate Controller and Chief Accounting Officer                         

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CERTIFICATIONS

I, Jeffrey B. Swartz, Chief Executive Officer, certify that:





|Date: November 8, 2002 | /s/JEFFREY B. SWARTZJeffrey B. Swartz Chief Executive Officer
|---------------------- | -------------------------------------------------------------

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CERTIFICATIONS

I, Brian P. McKeon, Chief Financial Officer, certify that:





|Date: November 8, 2002 | /s/BRIAN P. MCKEONBrian P. McKeon Chief
Financial Officer
|---------------------- | ---------------------------------------------------------

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