##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the quarterly period endedJune 27, 2008
 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
 The Timberland Company
  Delaware
    
    02-0312554(State or Other Jurisdiction of
Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)200 Domain Drive, Stratham, New Hampshire
    
    03885(Address of Principal Executive Offices)
    
    (Zip Code)
 (603) 772-9500
  þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
  o þ




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##### 



Form 10-QPage 2 THE TIMBERLAND COMPANY
 FORM 10-Q
 TABLE OF CONTENTS
  
 Page(s)Part I Financial Information (unaudited)Item 1. Financial StatementsUnaudited Condensed Consolidated Balance Sheets -
June 27, 2008, December 31, 2007 and June 29, 2007
    
    
    3Unaudited Condensed Consolidated Statements of Operations -
For the Quarter and Six Months Ended June 27, 2008 and
June 29, 2007
    
    
    4Unaudited Condensed Consolidated Statements of Cash Flows -
For the Six Months Ended June 27, 2008 and June 29, 2007
    
    
    5Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    6-13Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    13-22Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    22Part II Other InformationItem 1A. Risk Factors
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    
    24Item 6. Exhibits
    
    
    25Signatures
    
    
    26Exhibit Index
    
    
    27Exhibits
    
    
    28-31Ex-31.1 Principal Executive Officer CertificationEx-31.2 Principal Financial Officer CertificationEx-32.1 Chief Executive Officer Certification Pursuant to Section 1350Ex-32.2 Chief Financial Officer Certification Pursuant to Section 1350




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##### Table of Contents



Form 10-QPage 3 
 PART I FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 THE TIMBERLAND COMPANY
 
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
  June 27,
    
    
    December 31,
    
    
    June 29,2008
    
    
    2007
    
    
    2007AssetsCurrent assetsCash and equivalents
    
    $
    152,764
    
    
    $
    143,274
    
    
    $
    97,530Accounts receivable, net of allowance for doubtful accounts of $16,810
at June 27, 2008, $14,762 at December 31, 2007 and $10,898 at June 29,
2007
    
    
    121,482
    
    
    
    188,091
    
    
    
    134,776Inventory, net
    
    
    195,015
    
    
    
    201,932
    
    
    
    215,881Prepaid expense
    
    
    44,011
    
    
    
    41,572
    
    
    
    53,205Prepaid income taxes
    
    
    20,776
    
    
    
    17,361
    
    
    
    28,015Deferred income taxes
    
    
    21,822
    
    
    
    24,927
    
    
    
    15,431Derivative assets
    
    
    
    
    
    
    
    
    
    
    153Total current assets
    
    
    555,870
    
    
    
    617,157
    
    
    
    544,991Property, plant and equipment, net
    
    
    84,553
    
    
    
    87,919
    
    
    
    91,961Deferred income taxes
    
    
    19,178
    
    
    
    19,451
    
    
    
    21,674Goodwill
    
    
    44,840
    
    
    
    44,840
    
    
    
    45,021Intangible assets, net
    
    
    52,815
    
    
    
    54,382
    
    
    
    54,777Other assets, net
    
    
    10,586
    
    
    
    12,596
    
    
    
    12,816Total assets
    
    $
    767,842
    
    
    $
    836,345
    
    
    $
    771,240Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    74,734
    
    
    $
    86,101
    
    
    $
    80,604Accrued expensePayroll and related
    
    
    27,605
    
    
    
    29,752
    
    
    
    31,030Other
    
    
    53,702
    
    
    
    79,151
    
    
    
    58,446Income taxes payable
    
    
    2,528
    
    
    
    19,215
    
    
    
    884Derivative liabilities
    
    
    6,594
    
    
    
    3,816
    
    
    
    2,890Total current liabilities
    
    
    165,163
    
    
    
    218,035
    
    
    
    173,854Other long-term liabilities
    
    
    41,474
    
    
    
    41,150
    
    
    
    41,413Commitments and contingenciesStockholders equityPreferred Stock, $.01 par value; 2,000,000 shares authorized; none issued
    
    
    
    
    
    
    
    
    
    
    Class A Common Stock, $.01 par value (1 vote per share); 120,000,000
shares authorized; 73,715,661 shares issued at June 27, 2008, 73,393,951
shares issued at December 31, 2007 and 73,282,538 shares issued at June
29, 2007
    
    
    737
    
    
    
    734
    
    
    
    733Class 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; 11,529,160 shares issued and outstanding at June 27, 2008,
and 11,743,660 shares issued and outstanding at December 31, 2007 and
June 29, 2007
    
    
    115
    
    
    
    117
    
    
    
    117Additional paid-in capital
    
    
    255,903
    
    
    
    251,063
    
    
    
    245,159Retained earnings
    
    
    874,243
    
    
    
    875,133
    
    
    
    825,161Accumulated other comprehensive income
    
    
    24,837
    
    
    
    20,106
    
    
    
    17,600Treasury Stock at cost; 26,542,340 Class A shares at June 27, 2008,
25,024,194 Class A shares at December 31, 2007 and 23,007,907 Class A
shares at June 29, 2007
    
    
    (594,630
    )
    
    
    (569,993
    )
    
    
    (532,797
    )Total stockholders equity
    
    
    561,205
    
    
    
    577,160
    
    
    
    555,973Total liabilities and stockholders equity
    
    $
    767,842
    
    
    $
    836,345
    
    
    $
    771,240
 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.




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##### Table of Contents



Form 10-QPage 4 THE TIMBERLAND COMPANY
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  For the Quarter Ended
    
    
    For the Six Months EndedJune 27,
    
    
    June 29,
    
    
    June 27,
    
    
    June 29,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenue
    
    $
    209,916
    
    
    $
    224,126
    
    
    $
    550,318
    
    
    $
    560,455Cost of goods sold
    
    
    117,716
    
    
    
    124,959
    
    
    
    300,514
    
    
    
    299,709Gross profit
    
    
    92,200
    
    
    
    99,167
    
    
    
    249,804
    
    
    
    260,746Operating expenseSelling
    
    
    95,317
    
    
    
    99,547
    
    
    
    201,439
    
    
    
    209,630General and administrative
    
    
    26,539
    
    
    
    30,091
    
    
    
    54,227
    
    
    
    61,442Restructuring and related costs
    
    
    317
    
    
    
    988
    
    
    
    869
    
    
    
    7,514Total operating expense
    
    
    122,173
    
    
    
    130,626
    
    
    
    256,535
    
    
    
    278,586Operating loss
    
    
    (29,973
    )
    
    
    (31,459
    )
    
    
    (6,731
    )
    
    
    (17,840
    )Other incomeInterest income, net
    
    
    776
    
    
    
    666
    
    
    
    1,344
    
    
    
    1,796Other income/(expense), net
    
    
    (379
    )
    
    
    1,441
    
    
    
    5,383
    
    
    
    818Total other income, net
    
    
    397
    
    
    
    2,107
    
    
    
    6,727
    
    
    
    2,614Loss before income taxes
    
    
    (29,576
    )
    
    
    (29,352
    )
    
    
    (4
    )
    
    
    (15,226
    )Income tax (benefit)/provision
    
    
    (10,647
    )
    
    
    (10,126
    )
    
    
    886
    
    
    
    (  5,253
    )Net loss
    
    $
    (18,929
    )
    
    $
    (19,226
    )
    
    $
    (890
    )
    
    $
    ( 9,973
    )Loss per shareBasic
    
    $
    (.32
    )
    
    $
    (.31
    )
    
    $
    (.02
    )
    
    $
    (.16
    )Diluted
    
    $
    (.32
    )
    
    $
    (.31
    )
    
    $
    (.02
    )
    
    $
    (.16
    )Weighted-average shares outstandingBasic
    
    
    58,932
    
    
    
    61,473
    
    
    
    59,269
    
    
    
    61,288Diluted
    
    
    58,932
    
    
    
    61,473
    
    
    
    59,269
    
    
    
    61,288
 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.




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##### Table of Contents



Form 10-QPage 5 THE TIMBERLAND COMPANY
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  For the Six Months EndedJune 27,
    
    
    June 29,2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (890
    )
    
    $
    (9,973
    )Adjustments to reconcile net loss to net cash provided/(used)
by operating activities:Deferred income taxes
    
    
    3,377
    
    
    
    3,080Share-based compensation
    
    
    4,218
    
    
    
    4,458Depreciation and other amortization
    
    
    16,124
    
    
    
    15,634Provision for losses on accounts receivable
    
    
    1,974
    
    
    
    386Tax (expense)/benefit from share-based compensation, net of
excess benefit
    
    
    (335
    )
    
    
    608Unrealized (gain)/loss on derivatives
    
    
    16
    
    
    
    (12
    )Other non-cash charges/(credits), net
    
    
    1,992
    
    
    
    (2,696
    )Increase/(decrease) in cash from changes in working capital:Accounts receivable
    
    
    69,457
    
    
    
    70,619Inventory
    
    
    8,420
    
    
    
    (28,512
    )Prepaid expense
    
    
    72
    
    
    
    (10,069
    )Accounts payable
    
    
    (12,007
    )
    
    
    (29,520
    )Accrued expense
    
    
    (32,056
    )
    
    
    (33,032
    )Income taxes prepaid and payable, net
    
    
    (18,483
    )
    
    
    (39,389
    )Other liabilities
    
    
    (1,973
    )
    
    
    1,001Net cash provided/(used) by operating activities
    
    
    39,906
    
    
    
    (57,417
    )Cash flows from investing activities:Acquisition of business, net of cash acquired
    
    
    
    
    
    
    (12,813
    )Additions to property, plant and equipment
    
    
    (10,332
    )
    
    
    (11,601
    )Other
    
    
    2,909
    
    
    
    (1,303
    )Net cash used by investing activities
    
    
    (7,423
    )
    
    
    (25,717
    )Cash flows from financing activities:Common stock repurchases
    
    
    (24,983
    )
    
    
    (13,527
    )Issuance of common stock
    
    
    823
    
    
    
    11,693Excess tax benefit from share-based compensation
    
    
    179
    
    
    
    1,071Net cash used by financing activities
    
    
    (23,981
    )
    
    
    (763
    )Effect of exchange rate changes on cash and equivalents
    
    
    988
    
    
    
    (271
    )Net increase/(decrease) in cash and equivalents
    
    
    9,490
    
    
    
    (84,168
    )Cash and equivalents at beginning of period
    
    
    143,274
    
    
    
    181,698Cash and equivalents at end of period
    
    $
    152,764
    
    
    $
    97,530Supplemental disclosures of cash flow information:Interest paid
    
    $
    153
    
    
    $
    168Income taxes paid
    
    $
    12,412
    
    
    $
    31,960
 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.




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##### Table of Contents



Form 10-QPage 6 THE TIMBERLAND COMPANY
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  Note 1. Summary of Significant Accounting Policies
 Basis of Presentation
    New Accounting Pronouncements
   Note 2. Fair Value Measurements




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##### Table of Contents



Form 10-QPage 7  Description
    
    Level 1
    
    Level 2
    
    Level 3
    
    Impact of Netting
    
    June 27, 2008Assets:Derivative contracts
    
    $
    
    
    
    $
    283
    
    
    $
    
    
    
    $
    (283
    )
    
    $
    Total
    
    $
    
    
    
    $
    283
    
    
    $
    
    
    
    $
    (283
    )
    
    $
    Liabilities:Derivative contracts
    
    $
    
    
    
    $
    6,877
    
    
    $
    
    
    
    $
    (283
    )
    
    $
    6,594Total
    
    $
    
    
    
    $
    6,877
    
    
    $
    
    
    
    $
    (283
    )
    
    $
    6,594
   Note 3. Derivatives
 Cash Flow Hedges
   Other Derivative Contracts




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##### Table of Contents



Form 10-QPage 8  Note 4. Share-Based Compensation
  For the Quarter EndedJune 27, 2008
    
    
    June 29, 2007Cost of goods sold
    
    $
    424
    
    
    $
    467Selling expense
    
    
    1,434
    
    
    
    1,448General and administrative expense
    
    
    821
    
    
    
    839Total share-based compensation
    
    $
    2,679
    
    
    $
    2,754
 For the Six Months EndedJune 27, 2008
    
    
    June 29, 2007Cost of goods sold
    
    $
    626
    
    
    $
    772Selling expense
    
    
    2,293
    
    
    
    2,157General and administrative expense
    
    
    1,299
    
    
    
    1,728Restructuring and related costs
    
    
    
    
    
    
    (199
    )Total share-based compensation
    
    $
    4,218
    
    
    $
    4,458
  Stock Options
  For the Quarter Ended
    
    For the Six Months EndedJune 27, 2008
    
    June 29, 2007
    

June 27, 2008
    
    June 29, 2007Expected volatility
    
    
    33.1
    %
    
    
    30.0
    %
    
    
    32.3
    %
    
    
    29.5
    %Risk-free interest rate
    
    
    3.9
    %
    
    
    4.8
    %
    
    
    3.0
    %
    
    
    4.7
    %Expected life (in years)
    
    
    9.9
    
    
    
    8.0
    
    
    
    6.5
    
    
    
    4.9Expected dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    




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##### Table of Contents



Form 10-QPage 9  Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding at January 1, 2008
    
    
    4,614,603
    
    
    $
    27.31Granted
    
    
    532,975
    
    
    
    15.49Exercised
    
    
    (80,000
    )
    
    
    10.29Expired or forfeited
    
    
    (556,130
    )
    
    
    27.42Outstanding at June 27, 2008
    
    
    4,511,448
    
    
    $
    26.20
    
    
    
    6.1
    
    
    $
    1,877Vested or expected to vest at
June 27, 2008
    
    
    4,307,436
    
    
    $
    26.37
    
    
    
    6.0
    
    
    $
    1,733Exercisable at June 27, 2008
    
    
    3,335,376
    
    
    $
    27.34
    
    
    
    5.1
    
    
    $
    1,139
  Nonvested Shares
  Weighted-AverageGrant DateShares
    
    
    Fair ValueNonvested at January 1, 2008
    
    
    380,022
    
    
    $
    28.82Awarded
    
    
    200,000
    
    
    
    14.73Vested
    
    
    (57,319
    )
    
    
    31.29Forfeited
    
    
    (15,581
    )
    
    
    14.70Nonvested at June 27, 2008
    
    
    507,122
    
    
    $
    23.42
   Note 5. Loss Per Share




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##### Table of Contents



Form 10-QPage 10  For the Quarter Ended
    
    For the Six Months EndedJune 27, 2008
    
    June 29, 2007
    
    June 27, 2008
    
    June 29, 2007Anti-dilutive securities
    
    
    4,958
    
    
    
    4,290
    
    
    
    4,947
    
    
    
    4,305
 Note 6. Comprehensive Income/(Loss)
  For the Quarter Ended
    
    
    For the Six Months EndedJune 27, 2008
    
    
    June 29, 2007
    
    
    June 27, 2008
    
    

June 29, 2007Net loss
    
    $
    (18,929
    )
    
    $
    (19,226
    )
    
    $
    (890
    )
    
    $
    (9,973
    )Change in cumulative translation adjustment
    
    
    (2,536
    )
    
    
    1,160
    
    
    
    7,356
    
    
    
    2,270Change in fair value of cash flow hedges,
net of taxes
    
    
    2,565
    
    
    
    
    
    
    
    (2,625
    )
    
    
    Comprehensive income/(loss)
    
    $
    (18,900
    )
    
    $
    (18,066
    )
    
    $
    3,841
    
    
    $
    (7,703
    )
   June 27,
    
    
    December 31,
    
    
    June 29,2008
    
    
    2007
    
    
    2007Cumulative translation adjustment
    
    $
    31,087
    
    
    $
    23,731
    
    
    $
    17,600Fair value of cash flow hedges, net of taxes of $344
at June 27, 2008 and $191 at December 31, 2007
    
    
    (6,250
    )
    
    
    (3,625
    )
    
    
    Total
    
    $
    24,837
    
    
    $
    20,106
    
    
    $
    17,600
 Note 7. Business Segments and Geographic Information




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##### Table of Contents



Form 10-QPage 11   For the Quarter Ended June 27, 2008 and June 29, 2007
 UnallocatedNorth America
    
    Europe
    
    Asia
    
    Corporate
    
    Consolidated2008Revenue
    
    $
    99,556
    
    
    $
    78,760
    
    
    $
    31,600
    
    
    $
    
    
    
    $
    209,916Operating income/(loss)
    
    
    9,534
    
    
    
    (8,205
    )
    
    
    (1,405
    )
    
    
    (29,897
    )
    
    
    (29,973
    )Income/(loss) before income taxes
    
    
    9,534
    
    
    
    (8,205
    )
    
    
    (1,405
    )
    
    
    (29,500
    )
    
    
    (29,576
    )Total assets
    
    
    244,031
    
    
    
    280,189
    
    
    
    76,342
    
    
    
    167,280
    
    
    
    767,842Goodwill
    
    
    37,846
    
    
    
    6,994
    
    
    
    
    
    
    
    
    
    
    
    44,8402007Revenue
    
    $
    114,964
    
    
    $
    79,819
    
    
    $
    29,343
    
    
    $
    
    
    
    $
    224,126Operating income/(loss)
    
    
    8,927
    
    
    
    (3,667
    )
    
    
    (1,763
    )
    
    
    (34,956
    )
    
    
    (31,459
    )Income/(loss) before income taxes
    
    
    8,927
    
    
    
    (3,667
    )
    
    
    (1,763
    )
    
    
    (32,849
    )
    
    
    (29,352
    )Total assets
    
    
    282,768
    
    
    
    264,686
    
    
    
    67,141
    
    
    
    156,645
    
    
    
    771,240Goodwill
    
    
    38,027
    
    
    
    6,994
    
    
    
    
    
    
    
    
    
    
    
    45,021
 For the Six Months Ended June 27, 2008 and June 29, 2007
 UnallocatedNorth America
    
    Europe
    
    Asia
    
    Corporate
    
    Consolidated2008Revenue
    
    $
    237,286
    
    
    $
    243,511
    
    
    $
    69,521
    
    
    $
    
    
    
    $
    550,318Operating income/(loss)
    
    
    30,886
    
    
    
    24,916
    
    
    
    (709
    )
    
    
    (61,824
    )
    
    
    (6,731
    )Income/(loss) before income taxes
    
    
    30,886
    
    
    
    24,916
    
    
    
    (709
    )
    
    
    (55,097
    )
    
    
    (4
    )2007Revenue
    
    $
    259,502
    
    
    $
    233,955
    
    
    $
    66,998
    
    
    $
    
    
    
    $
    560,455Operating income/(loss)
    
    
    27,667
    
    
    
    30,825
    
    
    
    (450
    )
    
    
    (75,882
    )
    
    
    (17,840
    )Income/(loss) before income taxes
    
    
    27,667
    
    
    
    30,825
    
    
    
    (450
    )
    
    
    (73,268
    )
    
    
    (15,226
    )




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##### Table of Contents



Form 10-QPage 12  For the Quarter Ended
    
    
    For the Six Months EndedJune 27,
 2008
    
    
    June 29, 
2007
    
    
    June 27, 
2008
    
    
    June 29, 
2007Footwear
    
    $
    142,935
    
    
    $
    154,511
    
    
    $
    379,551
    
    
    $
    390,148Apparel and accessories
    
    
    62,635
    
    
    
    66,503
    
    
    
    160,558
    
    
    
    161,909Royalty and other
    
    
    4,346
    
    
    
    3,112
    
    
    
    10,209
    
    
    
    8,398$
    209,916
    
    
    $
    224,126
    
    
    $
    550,318
    
    
    $
    560,455
 Note 8. Inventory, net
  June 27, 2008
    
    
    December 31, 2007
    
    
    June 29, 2007Materials
    
    $
    8,457
    
    
    $
    5,581
    
    
    $
    5,713Work-in-process
    
    
    989
    
    
    
    933
    
    
    
    1,699Finished goods
    
    
    185,569
    
    
    
    195,418
    
    
    
    208,469Total
    
    $
    195,015
    
    
    $
    201,932
    
    
    $
    215,881
 Note 9. Restructuring and Related Costs
  Liability at
    
    
    
    
    
    
    
    
    
    
    Liability atDecember 31,
    
    
    
    
    
    
    Cash
    
    
    June 27,2007
    
    
    Net Charges
    
    
    Payments
    
    
    2008Global Efficiency Review
    
    $
    5,638
    
    
    $
    152
    
    
    $
    3,764
    
    
    $
    2,026Global Retail Portfolio Review (a)
    
    
    2,470
    
    
    
    880
    
    
    
    1,853
    
    
    
    1,497North American Apparel Licensing
    
    
    1,171
    
    
    
    (11
    )
    
    
    734
    
    
    
    426Global Reorganization
    
    
    33
    
    
    
    
    
    
    
    33
    
    
    
    Puerto Rico Manufacturing Facility
    
    
    160
    
    
    
    (152
    )
    
    
    8
    
    
    
    Total
    
    $
    9,472
    
    
    $
    869
    
    
    $
    6,392
    
    
    $
    3,949
 
 (a)
    
    The Company estimates that charges of approximately $3,000, primarily related to lease
termination costs, remain to be recorded related to this restructuring program, of which
approximately $1,000 to $2,000 is estimated to be recorded in the
third quarter of 2008. Note 10. Share Repurchase




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##### Table of Contents



Form 10-QPage 13 Note 11. Litigation
  
 Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Critical Accounting Policies




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##### Table of Contents



Form 10-QPage 14  Overview
 â
   
    
    Second quarter revenue decreased 6.3%, or 10.2% on a constant dollar basis, to $209.9
million.
    
    Gross margin decreased from 44.2% to 43.9%.
    
    Operating expenses were $122.2 million, down 6.5% from $130.6 million in the prior year
period.
    
    We recorded an operating loss of $30.0 million in the second quarter of 2008, compared
to an operating loss of $31.5 million in the prior year period.
    
    Net loss was $18.9 million in the second quarter of 2008, compared to $19.2 million in
the second quarter of 2007.
    
    Loss per share increased from $(.31) in the second quarter of 2007 to $(.32) in the
second quarter of 2008. Excluding restructuring and related costs in both periods, loss
per share increased from $(.30) to $(.32).
    
    Cash at the end of the quarter was $152.8 million with no debt outstanding.
    Results of Operations for the Quarter Ended June 27, 2008 as Compared to the Quarter Ended June 29, 2007
 Revenue
 ® ® ®




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##### Table of Contents



Form 10-QPage 15 Segments Review
  ® ® ®
   Products
 ® ® ® ®
 Channels
 ®




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##### Table of Contents



Form 10-QPage 16 Gross Profit
  
 Operating Expense
       ®
 Operating Income/(Loss)




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##### Table of Contents



Form 10-QPage 17    Other Income/(Expense) and Taxes
    Results of Operations for the Six Months Ended June 27, 2008 as Compared to the Six Months
Ended June 29, 2007
 Revenue
 ® ® ®
 Segments Review
 ® ® ®




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##### Table of Contents



Form 10-QPage 18   Products
 ®
 Channels
 ®
  Gross Profit
   Operating Expense




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##### Table of Contents



®
 Operating Income/(Loss)
      Other Income/(Expense) and Taxes




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##### Table of Contents



Reconciliation of Total Company, Europe and Asia Revenue Increases/(Decreases) To Constant
Dollar Revenue Increases/(Decreases)
  For the Quarter
    
    For the Six MonthsEnded June 27, 2008
    
    Ended June 27, 2008$ Millions
    
    
    
    
    
    $ MillionsChange
    
    % Change
    
    Change
    
    % ChangeRevenue decrease (GAAP)
    
    $
    (14.2
    )
    
    
    -6.3
    %
    
    $
    (10.1
    )
    
    
    -1.8
    %Increase due to foreign exchange rate changes
    
    
    8.8
    
    
    
    3.9
    %
    
    
    25.1
    
    
    
    4.5
    %Revenue decrease in constant dollars
    
    $
    (23.0
    )
    
    
    -10.2
    %
    
    $
    (35.2
    )
    
    
    -6.3
    %
  For the Quarter
    
    For the Six MonthsEnded June 27, 2008
    
    Ended June 27, 2008$ Millions
    
    
    
    
    
    $ MillionsChange
    
    % Change
    
    Change
    
    % ChangeRevenue (decrease)/increase (GAAP)
    
    $
    (1.1
    )
    
    
    -1.3
    %
    
    $
    9.6
    
    
    
    4.1
    %Increase due to foreign exchange rate changes
    
    
    5.6
    
    
    
    7.0
    %
    
    
    18.7
    
    
    
    8.0
    %Revenue decrease in constant dollars
    
    $
    (6.7
    )
    
    
    -8.3
    %
    
    $
    (9.1
    )
    
    
    -3.9
    %
  For the Quarter
    
    For the Six MonthsEnded June 27, 2008
    
    Ended June 27, 2008$ Millions
    
    
    
    
    
    $ MillionsChange
    
    % Change
    
    Change
    
    % ChangeRevenue increase (GAAP)
    
    $
    2.3
    
    
    
    7.7
    %
    
    $
    2.5
    
    
    
    3.8
    %Increase due to foreign exchange rate changes
    
    
    2.9
    
    
    
    9.9
    %
    
    
    5.5
    
    
    
    8.3
    %Revenue decrease in constant dollars
    
    $
    (0.6
    )
    
    
    -2.2
    %
    
    $
    (3.0
    )
    
    
    -4.5
    %
  Reconciliation
of Diluted Loss Per Share to Diluted Loss Per Share Excluding Restructuring and Related Costs
 For the Quarter
    
    For the Six MonthsEnded
    
    EndedJune 27,
    
    June 29,
    
    June 27,
    
    June 29,2008
    
    2007
    
    2008
    
    2007Diluted loss per share, as reported
    
    $
    (.32
    )
    
    $
    (.31
    )
    
    $
    (.02
    )
    
    $
    (.16
    )Per share impact of restructuring and related costs
    
    
    
    
    
    
    .01
    
    
    
    .01
    
    
    
    .08Diluted loss per share excluding restructuring and related costs
    
    $
    (.32
    )
    
    $
    (.30
    )
    
    $
    (.01
    )
    
    $
    (.08
    )




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##### Table of Contents



Accounts Receivable and Inventory
  .
 Liquidity and Capital Resources




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##### Table of Contents



Off-Balance Sheet Arrangements
   New Accounting Pronouncements
  
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     
 Item 4. CONTROLS AND PROCEDURES




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##### Table of Contents



Part II OTHER INFORMATION
 
 Item 1A. RISK FACTORS
  
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 ISSUER PURCHASES OF EQUITY SECURITIES(1)
 For the Three Fiscal Months Ended June 27, 2008Total Number
    
    
    Maximum Numberof Shares
    
    
    of SharesPurchased as Part
    
    
    That May YetTotal Number
    
    
    
    
    
    
    of Publicly
    
    
    be Purchasedof Shares
    
    
    Average Price
    
    
    Announced
    
    
    Under the PlansPeriod*
    
    Purchased **
    
    
    Paid per Share
    
    
    Plans or Programs
    
    
    or ProgramsMarch 29  April 25
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    6,613,502April 26  May 23
    
    
    329,650
    
    
    
    17.48
    
    
    
    329,650
    
    
    
    6,283,852May 24  June 27
    
    
    516,995
    
    
    
    17.85
    
    
    
    516,995
    
    
    
    5,766,857Q2 Total
    
    
    846,645
    
    
    $
    17.70
    
    
    
    846,645
 Footnote (1)
 ApprovedAnnouncement
    
    Program
    
    ExpirationDate
    
    Size (Shares)
    
    DateProgram 1
    
    
    02/09/2006
    
    
    
    6,000,000
    
    
    NoneProgram 2
    
    
    03/10/2008
    
    
    
    6,000,000
    
    
    None
  
 *
    
    Fiscal month**
    
    Based on trade date  not settlement date




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##### Table of Contents



Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 (a)
    
    We held our Annual Meeting of Stockholders on May 15, 2008 (the Annual Meeting).(b)
    
    At the Annual Meeting, proxies were solicited pursuant to Regulation 14A of the Securities
Exchange Act of 1934 and all nominees for director were elected as indicated by the following
schedule of votes cast for each director. The holders of Class A Common Stock elected the
following directors:
 Total Votes for
    
    Total Votes WithheldNominee
    
    Each Director
    
    from Each DirectorIan W. Diery
    
    
    43,192,860
    
    
    
    901,397Irene M. Esteves
    
    
    40,683,839
    
    
    
    3,410,418John A. Fitzsimmons
    
    
    42,056,413
    
    
    
    2,037,844
  Total Votes for
    
    Total Votes WithheldNominee
    
    Each Director
    
    from Each DirectorSidney W. Swartz
    
    
    160,608,719
    
    
    
    922,138Jeffrey B. Swartz
    
    
    160,607,040
    
    
    
    923,817Virginia H. Kent
    
    
    160,674,769
    
    
    
    856,088Kenneth T. Lombard
    
    
    159,537,241
    
    
    
    1,993,616Edward W. Moneypenny
    
    
    159,539,614
    
    
    
    1,991,243Peter R. Moore
    
    
    159,540,316
    
    
    
    1,990,541Bill Shore
    
    
    158,832,528
    
    
    
    2,698,329Terdema L. Ussery, II
    
    
    160,611,577
    
    
    
    919,280




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##### Table of Contents



Item 6. EXHIBITS
  Exhibit 31.1
    
    
    
    Principal Executive Officer Certification Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, filed herewith.Exhibit 31.2
    
    
    
    Principal Financial Officer Certification Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, filed herewith.Exhibit 32.1
    
    
    
    Chief Executive Officer 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, furnished herewith.Exhibit 32.2
    
    
    
    Chief Financial Officer 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, furnished herewith.




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##### Table of Contents



SIGNATURES
  THE TIMBERLAND COMPANY(Registrant)Date: August 6, 2008
    
    By:
    
    /s/ JEFFREY B. SWARTZJeffrey B. SwartzChief Executive OfficerDate: August 6, 2008
    
    By:
    
    /s/ JOHN CRIMMINSJohn CrimminsChief Financial Officer




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##### Table of Contents



EXHIBIT INDEX
 Exhibit
    
    DescriptionExhibit 31.1
    
    Principal Executive Officer Certification Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, filed herewith.Exhibit 31.2
    
    Principal Financial Officer Certification Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, filed herewith.Exhibit 32.1
    
    Chief Executive Officer 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,
furnished herewith.Exhibit 32.2
    
    Chief Financial Officer 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,
furnished herewith.