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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 June 28, 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

On
July 26, 2002, 29,797,885 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) |                                                                                                                  |        
|                                         | Condensed Consolidated Balance Sheets 
June 28, 2002 and December 31, 2001                                      |        
|                                         | Condensed Consolidated Statements of Income 
For the three and six months ended June 28, 2002
and June 29, 2001 |        
|                                         | Condensed Consolidated Statements of Cash Flows 
For the six months ended June 28, 2002 and
June 29, 2001       |        
|                                         | Notes to Condensed Consolidated Financial Statements                                                             |        
|                                         | Management's Discussion and Analysis of Financial
Condition and Results of Operations                            |        
|Part II Other Information                |                                                                                                                  | 14-16  

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Part I Financial Information

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

|                                                           |                                                                                                                            | June 28,
2002                     |         | December 31,
2001 |        
|---------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------- | ----------------- | -------
|Current assets                                             |                                                                                                                            |                                   |         |                   |        
|                                                           | Cash and equivalents                                                                                                       |                                   | $       | 72,276            |        
|                                                           | Accounts receivable, net of allowance for doubtful accounts of $7,531
    at June 28, 2002 and $5,934 at December 31, 2001 |                                   |         | 113,032           |        
|                                                           | Inventory                                                                                                                  |                                   |         | 160,259           |        
|                                                           | Prepaid expense                                                                                                            |                                   |         | 17,413            |        
|                                                           | Deferred income taxes                                                                                                      |                                   |         | 24,955            |        
|                                                           | Other assets                                                                                                               |                                   |         |                  |        
|                                                           |                                                                                                                            |                                   |         |                   |        
|                                                           |                                                                                                                            | Total current assets              |         |                   | 387,935
|                                                           |                                                                                                                            |                                   |         |                   |        
|Property, plant and equipment                              |                                                                                                                            |                                   | 171,331 |                   |        
|Less accumulated depreciation and amortization             |                                                                                                                            |                                   | (97,965 | )                 |        
|                                                           |                                                                                                                            |                                   |         |                   |        
|                                                           |                                                                                                                            | Net property, plant and equipment |         |                   | 73,366 
|Excess of cost over fair value of net assets acquired, net |                                                                                                                            |                                   | 14,163  |                   |        
|Other assets, net                                          |                                                                                                                            |                                   | 9,243   |                   |        
|                                                           |                                                                                                                            |                                   |         |                   |        
|Total assets                                               |                                                                                                                            | $                                 | 484,707 |                   | $      
|                                                           |                                                                                                                            |                                   |         |                   |        

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)

|                                                           |                                                                                                                                                                                                                                                                                            | June 28,
2002       |                            | December 31,
2001 |       
|---------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------- | -------------------------- | ----------------- | ------
|Current liabilities                                        |                                                                                                                                                                                                                                                                                            |                     |                            |                   |       
|                                                           | Accounts payable                                                                                                                                                                                                                                                                           |                     | $                          | 42,684            |       
|                                                           | Accrued expense                                                                                                                                                                                                                                                                            |                     |                            |                   |       
|                                                           |                                                                                                                                                                                                                                                                                            | Payroll and related |                            |                   | 21,520
|                                                           |                                                                                                                                                                                                                                                                                            | Other               |                            |                   | 43,248
|                                                           | Income taxes payable                                                                                                                                                                                                                                                                       |                     |                            | 6,894             |       
|                                                           | Other liabilities                                                                                                                                                                                                                                                                          |                     |                            | 13,687            |       
|                                                           |                                                                                                                                                                                                                                                                                            |                     |                            |                   |       
|                                                           |                                                                                                                                                                                                                                                                                            |                     | Total current liabilities  |                   |       
|                                                           |                                                                                                                                                                                                                                                                                            |                     |                            |                   |       
|Deferred compensation                                      |                                                                                                                                                                                                                                                                                            |                     | 3,059                      |                   |       
|Deferred income taxes                                      |                                                                                                                                                                                                                                                                                            |                     | 10,249                     |                   |       
|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                                                                                                                                                                                                              |                     |                            |                  |       
|                                                           | Class A Common Stock, $.01 par value (1 vote per share);
    120,000,000 shares authorized; 41,068,227 shares issued
    at June 28, 2002 and 40,487,893 shares at December 31, 2001                                                                                                       |                     |                            | 411               |       
|                                                           | 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 June 28, 2002 and 7,911,185 shares
    issued and outstanding at December 31, 2001 |                     |                            | 77                |       
|                                                           | Additional paid-in capital                                                                                                                                                                                                                                                                 |                     |                            | 136,679           |       
|                                                           | Deferred compensation                                                                                                                                                                                                                                                                      |                     |                            | (2,958            | )     
|                                                           | Retained earnings                                                                                                                                                                                                                                                                          |                     |                            | 529,529           |       
|                                                           | Accumulated other comprehensive loss                                                                                                                                                                                                                                                       |                     |                            | (14,238           | )     
|                                                           | Less treasury stock at cost, 11,157,912 Class A shares at
    June 28, 2002 and 10,064,847 Class A shares at
    December 31, 2001                                                                                                                                                         |                     |                            | (306,134          | )     
|                                                           |                                                                                                                                                                                                                                                                                            |                     |                            |                   |       
|                                                           |                                                                                                                                                                                                                                                                                            |                     | Total stockholders' equity |                   |       
|                                                           |                                                                                                                                                                                                                                                                                            |                     |                            |                   |       
|Total liabilities and stockholders' equity                 |                                                                                                                                                                                                                                                                                            | $                   | 484,707                    |                   | $     
|                                                           |                                                                                                                                                                                                                                                                                            |                     |                            |                   |       

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
Six Months Ended |       
|--------------------------------------------------------------------------------- | -------------------------- | ---------------------------- | ------- | ------------------------ | ------
|
|Revenue                                                                           |                            | $                            | 191,529 |                          | $     
|Cost of goods sold                                                                |                            |                              | 105,521 |                          |       
|                                                                                  |                            |                              |         |                          |       
|                                                                                  | Gross profit               |                              |         | 86,008                   |       
|                                                                                  |                            |                              |         |                          |       
|Operating expense                                                                 |                            |                              |         |                          |       
|                                                                                  | Selling                    |                              |         | 63,537                   |       
|                                                                                  | General and administrative |                              |         | 16,499                   |       
|                                                                                  | Amortization of goodwill   |                              |         |                         |       
|                                                                                  |                            |                              |         |                          |       
|                                                                                  |                            | Total operating expense      |         |                          | 80,036
|                                                                                  |                            |                              |         |                          |       
|Operating income                                                                  |                            |                              | 5,972   |                          |       
|                                                                                  |                            |                              |         |                          |       
|Other expense (income)                                                            |                            |                              |         |                          |       
|                                                                                  | Interest expense           |                              |         | 189                      |       
|                                                                                  | Other, net                 |                              |         | (1,849                   | )     
|                                                                                  |                            |                              |         |                          |       
|                                                                                  |                            | Total other expense (income) |         |                          | (1,660
|                                                                                  |                            |                              |         |                          |       
|Income before income taxes                                                        |                            |                              | 7,632   |                          |       
|                                                                                  |                            |                              |         |                          |       
|Provision for income taxes                                                        |                            |                              | 2,709   |                          |       
|                                                                                  |                            |                              |         |                          |       
|Net income before cumulative effect of change in
    accounting principle         |                            | $                            | 4,923   |                          | $     
|                                                                                  |                            |                              |         |                          |       
|Cumulative effect of change in accounting principle                               |                            |                              |        |                          |       
|                                                                                  |                            |                              |         |                          |       
|Net income                                                                        |                            | $                            | 4,923   |                          | $     
|                                                                                  |                            |                              |         |                          |       
|Earnings per share before cumulative effect of change
    in accounting principle |                            |                              |         |                          |       
|                                                                                  |                            | Basic                        |         | $                        | 0.13  
|                                                                                  |                            |                              |         |                          |       
|                                                                                  |                            | Diluted                      |         | $                        | 0.13  
|                                                                                  |                            |                              |         |                          |       
|Earnings per share after cumulative effect of change
    in accounting principle  |                            |                              |         |                          |       
|                                                                                  |                            | Basic                        |         | $                        | 0.13  
|                                                                                  |                            |                              |         |                          |       
|                                                                                  |                            | Diluted                      |         | $                        | 0.13  
|                                                                                  |                            |                              |         |                          |       
|Weighted-average shares outstanding                                               |                            |                              |         |                          |       
|                                                                                  |                            | Basic                        |         |                          | 37,710
|                                                                                  |                            |                              |         |                          |       
|                                                                                  |                            | Diluted                      |         |                          | 38,652
|                                                                                  |                            |                              |         |                          |       

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
Six 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           |                                                                                   |                                                                    | 1,649              
|                                                  |                                                                                   |                                                                    |                    
|Net decrease in cash and equivalents              |                                                                                   |                                                                    | (33,382            
|Cash and equivalents at beginning of period       |                                                                                   |                                                                    | 105,658            
|                                                  |                                                                                   |                                                                    |                    
|Cash and equivalents at end of period             |                                                                                   | $                                                                  | 72,276             
|                                                  |                                                                                   |                                                                    |                    
|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)

5

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| |  |                                        |  | For the
Three Months Ended |       | For the
Six Months Ended
| |  | -------------------------------------- |  | -------------------------- | ----- | ------------------------
|
| |  | Reported net income                    |  | $                          | 4,923 |                         
| |  | Add: goodwill amortization, net of tax |  |                            |      |                         
| |  |                                        |  |                            |       |                         
| |  | Adjusted net income                    |  | $                          | 4,923 |                         
| |  | Reported diluted earnings per share    |  | $                          | 0.13  |                         
| |  | Add: goodwill amortization, net of tax |  |                            |      |                         
| |  |                                        |  |                            |       |                         
| |  | Adjusted diluted earnings per share    |  | $                          | 0.13  |                         
| |  | Reported basic earnings per share      |  | $                          | 0.13  |                         
| |  | Add: goodwill amortization, net of tax |  |                            |      |                         
| |  |                                        |  |                            |       |                         
| |  | Adjusted basic earnings per share      |  | $                          | 0.13  |                         



Information
regarding the Company's other intangible assets follows:

| |  |                                 |  | As of June 28, 2002 |       | As of June 29, 2001
| |  | ------------------------------- |  | ------------------- | ----- | -------------------
|
| |  | Trademarks and related expenses |  | $                   | 6,456 |                    



6

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| |  | 2002                                  |  | U.S.
Wholesale |         | U.S.
Consumer
Direct |   | International |  | Unallocated
Corporate |         | Consolidated
| |  | ------------------------------------- |  | -------------- | ------- | -------------------- | - | ------------- |  | --------------------- | ------- | ------------
| |  | Revenue                               |  | $              | 93,266  |                      | $ | 32,613        |  | $                     | 65,650  |             
| |  | Income (loss) before income
    taxes |  |                | 22,807  |                      |   | 2,796         |  |                       | 5,735   |             
| |  | Total assets                          |  |                | 172,686 |                      |   | 28,402        |  |                       | 144,594 |             
| |  | Goodwill                              |  |                | 6,804   |                      |   | 794           |  |                       | 6,565   |             
|
| |  | Revenue                               |  | $              | 105,279 |                      | $ | 36,271        |  | $                     | 59,301  |             
| |  | Income (loss) before income
    taxes |  |                | 29,781  |                      |   | 821           |  |                       | 5,111   |             
| |  | Total assets                          |  |                | 220,656 |                      |   | 32,963        |  |                       | 121,393 |             
| |  | Goodwill                              |  |                | 6,943   |                      |   | 810           |  |                       | 7,253   |             



| |  | 2002                                  |  | U.S.
Wholesale |         | U.S.
Consumer
Direct |   | International |  | Unallocated
Corporate |         | Consolidated
| |  | ------------------------------------- |  | -------------- | ------- | -------------------- | - | ------------- |  | --------------------- | ------- | ------------
| |  | Revenue                               |  | $              | 183,531 |                      | $ | 66,999        |  | $                     | 166,697 |             
| |  | Income (loss) before income
    taxes |  |                | 45,952  |                      |   | 4,368         |  |                       | 23,625  |             
|
| |  | Revenue                               |  | $              | 225,035 |                      | $ | 71,034        |  | $                     | 150,211 |             
| |  | Income (loss) before income
    taxes |  |                | 65,393  |                      |   | 629           |  |                       | 19,154  |             



| |  |                                                                            |  | For the
Three Months Ended |         | For the
Six Months Ended |  
| |  | -------------------------------------------------------------------------- |  | -------------------------- | ------- | ------------------------ | -
|
| |  | Net income                                                                 |  | $                          | 4,923   |                          | $
| |  | Change in cumulative translation adjustment                                |  |                            | 6,333   |                          |  
| |  | Fair value of derivative financial instruments at
    January 1, 2001      |  |                            |        |                          |  
| |  | Change in fair value of derivative financial
    instruments, net of taxes |  |                            | (10,530 | )                        |  
| |  |                                                                            |  |                            |         |                          |  
| |  | Comprehensive income                                                       |  | $                          | 726     |                          | $
| |  |                                                                            |  |                            |         |                          |  

7

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| |  |                 |  | June 28,
2002 |         | December 31,
2001
| |  | --------------- |  | ------------- | ------- | -----------------
| |  | Raw materials   |  | $             | 3,798   |                  
| |  | Work-in-process |  |               | 2,491   |                  
| |  | Finished goods  |  |               | 153,970 |                  
| |  |                 |  |               |         |                  
| |  |                 |  | $             | 160,259 |                  
| |  |                 |  |               |         |                  

8

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THE TIMBERLAND COMPANY  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

SECOND QUARTER 2002 COMPARED WITH SECOND QUARTER 2001

Revenue for the second quarter of 2002 was $191.5 million, a decrease of $9.3 million, or 4.6%, compared with the $200.9 million in revenue
reported for the second quarter of 2001.

Domestic
revenue for the second quarter of 2002 was $125.9 million, a decrease of $15.7 million, or 11.1%, compared with the same period in 2001. Domestic revenue
represented 65.7% of total revenue for the second quarter of 2002, compared with 70.5% for the second quarter of 2001. The U.S. Wholesale segment revenue decreased 11.4% in the second quarter of 2002,
compared with the same
period in 2001, primarily due to declines in U.S. Boot sales, partially offset by increased footwear off-price sales. Overall, U.S. Wholesale footwear unit sales were comparable to the
prior year. Sales results also reflected a reduction in apparel off-price sales, as the Company sees benefits from its efforts to improve the apparel forecasting and inventory management
process. Overall, decreased U.S. Wholesale apparel off-price unit sales were partially offset by improved first quality unit sales. The Company expects that its efforts to strengthen trade
profits and enhance brand equity, in part by restricting supply of boots, will limit the growth potential for the Company's U.S. Boot business in 2002, which will, in turn, pressure domestic revenue.
The U.S. Consumer Direct segment revenue decreased 10.1%, compared with the same period in 2001, primarily due to a decrease in footwear and apparel unit sales, partially offset by an improvement in
footwear average selling prices. These results reflect the Company's focus on reducing discounting in its retail operations. Comparable domestic retail and factory store sales decreased 13.2%. The
Company will remain focused on disciplined inventory management, reducing discounting and pursuing the rollout of higher return new store formats.

International
segment revenue for the second quarter of 2002 was $65.7 million, an increase of $6.3 million, or 10.7%, compared with the second quarter of 2001.
International revenue comprised 34.3% of total revenue for the second quarter of 2002, compared with 29.5% for the second quarter of 2001. The increase in revenue over the prior year was driven by
double-digit revenue growth in Europe, primarily due to an increase in wholesale footwear and apparel and accessories unit sales and, to a lesser degree, the favorable impact of foreign exchange. In
Asia, revenue declined primarily due to comparisons to the strong prior year sell-in of the Mountain Athletics by Timberland sub-brand products. On a constant dollar basis,
International revenue increased 8.5%, compared with the same period in 2001.

Footwear
revenue for the second quarter of 2002 was $145.4 million, a decrease of $9.6 million, or 6.2%, compared with the same period in 2001. The decrease was primarily
attributable to a reduction in U.S. Boot sales and, to a lesser degree, a decrease in U.S. Consumer Direct unit sales, both

9

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previously discussed. These decreases were partially offset by increases in European wholesale unit sales and U.S. Wholesale off-price sales and, to a lesser degree, the impact of foreign
exchange. By category, the decrease was primarily attributable to Boots and, to a lesser degree, Outdoor Performance, partially offset by gains in Women's Casual and Kids' products. In total, footwear
average selling prices decreased 5.0%, primarily due to changes in the mix of merchandise sold and to increased off-price sales, and unit sales decreased 1.2%, compared with the same
period last year. As previously discussed, the Company expects limited growth potential for the Company's U.S. Boot business in 2002, which will, in turn, pressure footwear revenue.

Apparel
and accessories revenue for the second quarter of 2002 was $43.3 million, a decrease of $0.1 million, or 0.1%, compared with the same period in 2001. The decrease
was primarily due to a reduction in U.S. Consumer Direct unit sales and, to a lesser degree, lower U.S. Wholesale off-price unit sales. These decreases were partially offset by unit sales
increases internationally and in U.S. Wholesale first quality apparel, both of which the Company expects to continue into the second half of 2002. In total, apparel and accessories unit sales
decreased 4.1% over the same period last year.

Worldwide
wholesale revenue for the second quarter of 2002 was $134.9 million, a decrease of $7.1 million, or 5.0%, compared with the same period in 2001. The decrease in
revenue was primarily due to the reduction in U.S. Wholesale footwear revenue, as previously discussed, partially offset by increases in International footwear and apparel and accessories unit sales,
the increase in U.S. Wholesale apparel and accessories first quality unit sales and, to a lesser degree, the impact of foreign exchange.

Worldwide
revenue from Company-owned retail and factory stores, along with the Company's e-commerce business, for the second quarter of 2002 was $56.6 million, a
decrease of $2.2 million, or 3.7%, compared with the same period in 2001. The decrease was primarily due to a reduction in U.S. Consumer Direct footwear and apparel unit sales, partially offset
by improvements in average selling prices, and, to a lesser degree, increases in European retail revenue. As previously discussed, the U.S. Consumer Direct performance reflects the Company's focus on
reducing discounting in its retail operations. During the second quarter of 2002, the Company opened 3 retail stores and closed 2 retail stores, worldwide.

Gross
profit as a percentage of revenue for the second quarter of 2002 was 44.9%, a decrease of 0.8 percentage points from the 45.7% reported for the second quarter of 2001. The
decrease in gross profit percentage was primarily due to pressure on U.S. Wholesale footwear margins, in part reflecting increased footwear off-price sales as part of ongoing inventory
management efforts and, to a lesser degree, the impact of foreign currency. This was partially offset by improvements in leather prices and reduced U.S. Wholesale apparel off-price sales,
along with improved product design, reduced discounting at retail and other cost saving initiatives across the supply chain. Under current conditions, the Company anticipates that the improvements in
leather prices will continue in the second half of 2002 and that the unfavorable impact of foreign exchange and other gross margin pressures will continue throughout 2002.

Operating
expense was $80.0 million for the second quarter of 2002, up $4.1 million, or 5.4%, from the $75.9 million reported for the second quarter of 2001.
Operating expense as a percentage of revenue for the second quarter of 2002 increased to 41.8%, from 37.8% for the second quarter of 2001. The dollar increase was primarily due to growth in
international operations, which have a higher expense structure, and continued support of sales, marketing and product initiatives. 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 $1.8 million of income in the second quarter of 2002, compared with $0.2 million of income in the second quarter of 2001. The increase was primarily due to
the impact of the strengthening foreign exchange rates, versus the dollar, on the translation of intercompany balances.

10

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Other, net includes interest income of $0.3 million in the second quarter of 2002 and $0.2 million in the second quarter of 2001. The increase in interest income reflects the impact of
higher average cash balances in the second quarter of 2002, compared with the second quarter of 2001, partially offset by a reduction in interest rates. Interest expense for the second quarter of 2002
and 2001 was $0.2 million,
comprised primarily of fees related to the establishment and maintenance of the Company's revolving credit facility.

Income
before income taxes for the second quarter of 2002, compared with the prior year, decreased in the U.S. Wholesale segment. The decrease was primarily due to lower footwear
revenue, as previously discussed, on reduced gross margin rates and higher expense rates. The reduced gross margin rates were primarily due to increased off-price sales. The increased
operating expenses were incurred in support of sales, marketing and product initiatives. The U.S. Consumer Direct segment increase in income was primarily due to improved gross margin rates,
offsetting the reduction in revenue, as previously discussed. This income improvement reflects benefits from proactive strategies to improve margins through reduced discounting and lower product
costs. Internationally, an 8.5% constant dollar revenue increase, with gains in both footwear and apparel and accessories, and double-digit gains in Europe, along with improved gross margin and
expense rates, resulted in improved income. The increase in Unallocated Corporate was primarily due to costs incurred in support of company-wide activities. In the near term, the Company
targets sustained operating margins despite continued pressure from negative business mix impacts, primarily related to the expected sales pressure on the higher margin U.S. Boot business, as
previously discussed.

The
effective tax rate for the three and six months ended June 28, 2002 and June 29, 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.

SIX MONTHS ENDED JUNE 28, 2002 COMPARED WITH SIX MONTHS ENDED JUNE 29, 2001

Revenue for the first six months of 2002 was $417.2 million, a decrease of $29.1 million, or 6.5%, from the $446.3 million reported for the
comparable period in 2001. The U.S. Wholesale segment revenue decreased 18.4%, or $41.5 million, compared with the prior year. This decrease was primarily due to lower footwear unit sales and,
to a lesser degree, lower footwear average selling prices, as previously discussed. The U.S. Consumer Direct segment decreased $4.0 million, or 5.7%, compared with the prior year primarily due
to decreases in apparel and accessories unit sales and, to a lesser degree, footwear unit sales, partially offset by increased footwear average selling prices. Internationally, revenue increased
$16.5 million, or 11.0%, 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, European
retail unit sales, partially offset by the impact of foreign exchange. On a constant dollar basis, International segment revenue increased 13.1% over the comparable period in 2001.

Gross
profit as a percentage of revenue for the first six months of 2002 was 44.5%, compared with 44.9% for the comparable period in 2001. This decline in gross profit was primarily
attributable to the impact of foreign exchange and increased U.S. Wholesale off-price sales in the second quarter, partially offset by the Company's cost saving initiatives, as previously
discussed.

Operating
expense for the first six months of 2002 was $165.9 million, up $6.8 million, or 4.2%, from the $159.1 million reported for the comparable period in 2001.
Operating expense, as a percentage of revenue, was 39.8% for the first six months of 2002, compared with 35.7% for the same period in 2001. The dollar increase was primarily due to the same reasons
cited in the second quarter discussion.

Income
before income taxes for the first six months of 2002, compared with the prior year, declined in the U.S. Wholesale segment primarily due to a 19.6% decline in footwear revenue,

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primarily unit sales, on improved gross margin rates 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,
offsetting the reduction in revenue, reflecting benefits from proactive strategies to improve margins through reduced discounting and lower product costs, as previously discussed. The improvement in
the International segment's income was primarily due to improved European gross margin rates on a 16.1% constant dollar revenue increase and, to a lesser degree, improved expense rates, partially
offset by the impact of foreign exchange. The increase in Unallocated Corporate was primarily due to the same reasons cited in the second quarter discussion.

Other,
net was $2.1 million of income for the first six months of 2002, compared with $1.5 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 $0.6 million for the first six
months of 2002 and $1.0 million for the same period in 2001. The decrease in interest income in the first six months of 2002, compared with the first six months of 2001, reflects the impact of
a reduction in interest rates, partially offset by higher average cash balances. Interest expense for the first six months of 2002 and 2001 was $0.4 million and $0.3 million,
respectively, comprised primarily of fees related to the establishment and maintenance of the Company's revolving credit facility.

The
effective tax rate for the six months ended June 28, 2002 and June 29, 2001 was 35.5% and 34%, respectively. The change in the effective tax rate is due to the same
reasons cited in the second quarter discussion.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operations for the first six months of 2002 was $4.8 million, compared with $59.9 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, a lower receivables balance and lower payroll related
accruals at year-end 2001 were the principal causes of the increase in cash from operations, compared with 2001. Cash used during the first six months of 2002 was primarily due to normal
seasonal spending on inventory, and payment of taxes, consistent with the prior year. At June 28, 2002, compared with June 29, 2001, inventory levels decreased 11% and accounts
receivable decreased 7% (consistent with the Company's revenue decrease). Quarterly inventory turns improved to
2.7 times for the second quarter of 2002, compared with 2.6 times for the second quarter of 2001. On a 12 month rolling basis, inventory turns improved from 3.8 times for the second quarter of
2001 to 4.0 times for the second quarter of 2002. Days sales outstanding at June 28, 2002 were 53 days, compared with 54 days at June 29, 2001. Wholesale days sales
outstanding increased to 66 days at June 28, 2002, from 65 days at June 29, 2001.

Net
cash used by investing activities amounted to $5.6 million for the first six months of 2002 and $12.8 million for the first six months of 2001. Capital expenditures for
the first six months of 2002 were $6.4 million, compared with $10.7 million for the same period in 2001 (depreciation expense for the first six months of 2002 and 2001 was
$9.5 million and $8.8 million, respectively). The reduction in capital expenditures was primarily due to lower spending on retail expansion and other facility improvements. Net cash used
by financing activities was $34.2 million for the first six months of 2002, compared with $25.6 million for the first six months of 2001, reflecting stock repurchases of
$42.4 million in the first six months of 2002 and $40.3 million in the first six 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 and committed lines of credit as sources of financing for its seasonal and other working capital requirements. The Company had no debt
outstanding at June 28, 2002 and December 31, 2001. The Company had $7.7 million in notes payable outstanding at June 29, 2001.

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As
of June 28, 2002, December 31, 2001 and June 29, 2001, the Company had letters of credit outstanding of $36.0 million, $39.0 million and
$59.0 million, respectively.

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.

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 June 28, 2002, the Company had no short-term or long-term debt outstanding. At June 29, 2001, the Company had $7.7 million of
short-term debt 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 $23.0 million, compared with
$7.5 million at June 29, 2001. The increase at June 28, 2002 is due to the amount of foreign currency forward contracts held at June 28, 2002, compared with June 29,
2001 (see Notes 6 and 12).

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 events of September 11, 2001 and
uncertainties related to the ongoing conflict; (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 SEC 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.

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Part II Other Information

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



Nominee

Total Votes for Each
Director

Total Votes Withheld
from Each DirectorRobert M. Agate

25,848,433

140,513John F. Brennan

25,847,733

141,213Abraham Zaleznik

25,847,548

141,398


The
holders of Class A Common Stock and the holders of Class B Common Stock voting together as a single class elected the following directors:

Nominee

Total Votes for Each
Director

Total Votes Withheld
from Each DirectorSidney W. Swartz

104,960,483

140,313Jeffrey B. Swartz

104,959,638

141,158John E. Beard

104,867,780

233,016Ian W. Diery

104,960,483

140,313John A. Fitzsimmons

104,960,483

140,313Virginia H. Kent

104,960,483

140,313Bill Shore

104,959,638

141,158


There
were no abstentions or broker non-votes with respect to the election of the director nominees.

The
holders of Class A Common Stock and the holders of Class B Common Stock, voting together as a single class, approved a proposal to approve the material terms of the
performance goals for the Company's 1997 Incentive Plan, as amended. A total of 102,804,013 votes were cast in favor, 2,264,356 votes were cast against, and 32,426 votes were abstentions. There was 1
broker non-vote with respect to this proposal.

Item 5. Other Information

Accompanying this Form 10Q are the certificates of the Chief Executive Officer and the Chief Financial Officer required by Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, copies of which are furnished as exhibits to this report.

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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: August 12, 2002 | /s/BRIAN P. MCKEONBrian P. McKeon Executive Vice President-Finance and Administration, Chief Financial
Officer
|Date: August 12, 2002 | /s/DENNIS W. HAGELEDennis W. Hagele Vice President-Finance, Corporate Controller and
Chief Accounting Officer 

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