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 April 2, 2004                 
|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)


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

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

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

On May 10, 2004, 29,010,033 shares of the registrant's Class A Common Stock were outstanding and 5,907,632 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 |         |                                                                                                                      
|                             | Item 1. |                                                                                                                       | Financial Statements                                                                  |        
|                             |         | Unaudited Condensed Consolidated Balance SheetsApril 2, 2004, March 28, 2003 and December 31, 2003                   |                                                                                       | 1      
|                             |         | Unaudited Condensed Consolidated Statements of Incomefor the three months ended April 2, 2004 and March 28, 2003     |                                                                                       | 2      
|                             |         | Unaudited Condensed Consolidated Statements of Cash FlowsFor the three months ended April 2, 2004 and March 28, 2003 |                                                                                       | 3      
|                             |         | Notes to Unaudited Condensed Consolidated Financial Statements                                                        |                                                                                       | 4-9    
|                             | Item 2. |                                                                                                                       | Management's Discussion and Analysis of Financial Condition and Results of Operations |        
|                             | Item 3. |                                                                                                                       | Quantitative and Qualitative Disclosures About Market Risk                            |        
|                             | Item 4. |                                                                                                                       | Controls and Procedures                                                               |        
|Part II Other Information    |         |                                                                                                                      
|                             | Item 2. |                                                                                                                       | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities      |        
|                             | Item 6. |                                                                                                                       | Exhibits and Reports on Form 8-K                                                      |        
|Signatures                   |         | 21                                                                                                                   
|Exhibit Index                |         | 22                                                                                                                   
|Exhibits                     |         |                                                                                                                      

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PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

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

|                                            |                                                                                                                                                                                                                                                           | April 2,
2004              |         | March 28,
2003 |         | Dec. 31,
2003 |         
|------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | -------------- | ------- | ------------- | --------
|Assets                                      |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|Current assets                              |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|                                            | Cash and equivalents                                                                                                                                                                                                                                      |                            | $       | 160,624        |         | $             | 91,671  
|                                            | Accounts receivable, net of allowance for doubtful accounts of $7,646 in April 2, 2004, $6,797 in March 28, 2003 and $7,704 in December 31, 2003                                                                                                          |                            |         | 161,195        |         |               | 154,431 
|                                            | Inventory                                                                                                                                                                                                                                                 |                            |         | 142,828        |         |               | 137,831 
|                                            | Prepaid expense                                                                                                                                                                                                                                           |                            |         | 25,295         |         |               | 21,903  
|                                            | Deferred income taxes                                                                                                                                                                                                                                     |                            |         | 20,136         |         |               | 20,334  
|                                            |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|                                            |                                                                                                                                                                                                                                                           | Total current assets       |         |                | 510,078 |               |         
|                                            |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|Property, plant and equipment, net          |                                                                                                                                                                                                                                                           |                            | 74,031  |                |         | 71,204        |         
|Goodwill                                    |                                                                                                                                                                                                                                                           |                            | 14,163  |                |         | 14,163        |         
|Intangible assets                           |                                                                                                                                                                                                                                                           |                            | 3,735   |                |         | 3,520         |         
|Other assets, net                           |                                                                                                                                                                                                                                                           |                            | 9,164   |                |         | 6,774         |         
|                                            |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|Total assets                                |                                                                                                                                                                                                                                                           | $                          | 611,171 |                | $       | 521,831       |         
|                                            |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|Liabilities and Stockholders' Equity        |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|Current liabilities                         |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|                                            | Accounts payable                                                                                                                                                                                                                                          |                            | $       | 31,510         |         | $             | 39,165  
|                                            | Accrued expense                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|                                            |                                                                                                                                                                                                                                                           | Payroll and related        |         |                | 28,987  |               |         
|                                            |                                                                                                                                                                                                                                                           | Other                      |         |                | 54,202  |               |         
|                                            | Income taxes payable                                                                                                                                                                                                                                      |                            |         | 13,808         |         |               | 12,386  
|                                            | Derivative liabilities                                                                                                                                                                                                                                    |                            |         | 8,740          |         |               | 9,116   
|                                            |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|                                            |                                                                                                                                                                                                                                                           | Total current liabilities  |         |                | 137,247 |               |         
|                                            |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|Deferred compensation and other liabilities |                                                                                                                                                                                                                                                           |                            | 11,297  |                |         | 4,688         |         
|Deferred income taxes                       |                                                                                                                                                                                                                                                           |                            | 8,955   |                |         | 6,936         |         
|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 share authorized; 44,377,585 shares issued at April 2, 2004, 41,678,583 shares issued at March 28, 2003 and 43,050,277 shares issued at
December 31, 2003                            |                            |         | 444            |         |               | 417     
|                                            | 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; 5,907,632 at April 2, 2004, 7,561,185 at March 28, 2003 and
6,942,834 shares issued at December 31, 2003 |                            |         | 59             |         |               | 76      
|                                            | Additional paid-in capital                                                                                                                                                                                                                                |                            |         | 183,960        |         |               | 146,733 
|                                            | Deferred compensation                                                                                                                                                                                                                                     |                            |         | (8,447         | )       |               | (4,869  
|                                            | Retained earnings                                                                                                                                                                                                                                         |                            |         | 754,849        |         |               | 625,156 
|                                            | Accumulated other comprehensive income/(loss)                                                                                                                                                                                                             |                            |         | 4,478          |         |               | (7,342  
|                                            | Treasury stock at cost; 15,211,554 Class A shares at April 2, 2004, 13,495,526 Class A shares at March 28, 2003 and 14,972,185 Class A shares at December 31, 2003                                                                                        |                            |         | (481,671       | )       |               | (391,536
|                                            |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|                                            |                                                                                                                                                                                                                                                           | Total stockholders' equity |         |                | 453,672 |               |         
|                                            |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         
|Total liabilities and stockholders' equity  |                                                                                                                                                                                                                                                           | $                          | 611,171 |                | $       | 521,831       |         
|                                            |                                                                                                                                                                                                                                                           |                            |         |                |         |               |         

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

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

|                                         |                            | For the Three Months Ended |        
|---------------------------------------- | -------------------------- | -------------------------- | -------
|
|Revenue                                  |                            | $                          | 321,777
|Cost of goods sold                       |                            |                            | 155,326
|                                         |                            |                            |        
|                                         | Gross profit               |                            |        
|                                         |                            |                            |        
|Operating expense                        |                            |                            |        
|                                         | Selling                    |                            |        
|                                         | General and administrative |                            |        
|                                         |                            |                            |        
|                                         |                            | Total operating expense    |        
|                                         |                            |                            |        
|Operating income                         |                            |                            | 47,758 
|                                         |                            |                            |        
|Other expense/(income)                   |                            |                            |        
|                                         | Interest expense           |                            |        
|                                         | Other, net                 |                            |        
|                                         |                            |                            |        
|                                         |                            | Total other income         |        
|                                         |                            |                            |        
|Income before provision for income taxes |                            |                            | 48,285 
|                                         |                            |                            |        
|Provision for income taxes               |                            |                            | 17,141 
|                                         |                            |                            |        
|Net income                               |                            | $                          | 31,144 
|                                         |                            |                            |        
|Earnings per share                       |                            |                            |        
|                                         | Basic                      |                            | $      
|                                         |                            |                            |        
|                                         | Diluted                    |                            | $      
|                                         |                            |                            |        
|Weighted-average shares outstanding      |                            |                            |        
|                                         | Basic                      |                            |        
|                                         |                            |                            |        
|                                         | Diluted                    |                            |        
|                                         |                            |                            |        

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

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

|                                                   |                                                                                   | For the Three Months Ended                                   |                    
|-------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------------ | -------------------
|
|Cash flows from operating activities:              |                                                                                   |                                                              |                    
|                                                   | Net income                                                                        |                                                              | $                  
|                                                   | Adjustments to reconcile net income to net cash provided by operating activities: |                                                              |                    
|                                                   |                                                                                   | Deferred income taxes                                        |                    
|                                                   |                                                                                   | Depreciation and amortization                                |                    
|                                                   |                                                                                   | Loss on disposal of property, plant and equipment            |                    
|                                                   |                                                                                   | Tax benefit from stock option plans                          |                    
|                                                   |                                                                                   | Increase/(decrease) in cash from changes in working capital: |                    
|                                                   |                                                                                   |                                                              | Accounts receivable
|                                                   |                                                                                   |                                                              | Inventory          
|                                                   |                                                                                   |                                                              | Prepaid expense    
|                                                   |                                                                                   |                                                              | Accounts payable   
|                                                   |                                                                                   |                                                              | Accrued expense    
|                                                   |                                                                                   |                                                              | Income taxes       
|                                                   |                                                                                   |                                                              |                    
|                                                   |                                                                                   |                                                              |                    
|                                                   |                                                                                   |                                                              |                    
|Cash flows from investing activities:              |                                                                                   |                                                              |                    
|                                                   | Additions to property, plant and equipment                                        |                                                              |                    
|                                                   | Other, net                                                                        |                                                              |                    
|                                                   |                                                                                   |                                                              |                    
|                                                   |                                                                                   |                                                              |                    
|                                                   |                                                                                   |                                                              |                    
|Cash flows from financing activities:              |                                                                                   |                                                              |                    
|                                                   | Common stock repurchases                                                          |                                                              |                    
|                                                   | Issuance of common stock                                                          |                                                              |                    
|                                                   |                                                                                   |                                                              |                    
|                                                   |                                                                                   |                                                              |                    
|                                                   |                                                                                   |                                                              |                    
|Effect of exchange rate changes on cash            |                                                                                   |                                                              | (33                
|                                                   |                                                                                   |                                                              |                    
|Net decrease in cash and equivalents               |                                                                                   |                                                              | (81,179            
|Cash and equivalents at beginning of year          |                                                                                   |                                                              | 241,803            
|                                                   |                                                                                   |                                                              |                    
|Cash and equivalents at end of year                |                                                                                   | $                                                            | 160,624            
|                                                   |                                                                                   |                                                              |                    
|                                                   |                                                                                  
|Supplemental disclosures of cash flow information: |                                                                                   |                                                              |                    
|                                                   | Interest paid                                                                     |                                                              | $                  
|                                                   | Income taxes paid                                                                 |                                                              |                    
|                                                   |                                                                                  

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

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THE TIMBERLAND COMPANY        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS        (Amounts in Thousands, Except Share and Per Share Data)

Note 1. Summary of Significant Accounting Policies

In
the opinion of management, the accompanying unaudited condensed consolidated financial statements contain the adjustments necessary to present fairly The Timberland Company's ("we", "our", "us",
"Timberland" or the "Company") financial position, results of operations and changes in cash flows for the interim periods presented. Such adjustments consist of normal recurring items. The unaudited
condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for
the year ended December 31, 2003.

Our
Summary of Significant Accounting Policies, as described in Footnote 1 in Timberland's Annual Report on Form 10-K for the year ended December 31, 2003, includes
disclosure on revenue recognition.

Our
revenue consists of sales to wholesale customers, retail store revenues, license fees and royalties. We record wholesale revenues when title passes and the risks and rewards of ownership have
passed to the customer, based on the terms of sale. Title passes generally upon shipment or upon receipt by the customer, depending on the country of sale and the agreement with the customer. Retail
store revenues are recorded at the time of the sale. License fees and royalties are recognized as earned per the terms of our licensing agreements.

In
accordance with Emerging Issues Task Force ("EITF") Issue No. 00-10, in the first quarter of 2004 we recorded approximately $1,200 of reimbursement of shipping expenses within
revenues and the related shipping costs within selling expense. In the first quarter of 2003, shipping reimbursements of approximately $1,100 were recorded as an offset to selling expenses. Shipping
costs included in selling expense were approximately $4,400 and $3,800 for the first quarters of 2004 and 2003, respectively.

We
maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We estimate potential losses primarily based on our
historical rate of credit losses and our knowledge of the financial condition of our customers.

Note 2. Historical Financial Results

The
results of operations for the three months ended April 2, 2004 are not necessarily indicative of the results to be expected for the full year. Historically, our revenue has been more
heavily weighted to the second half of the year.

Note 3. Stock-based Compensation

We
apply Accounting Principle Board ("APB") Opinion No. 25 and related interpretations in accounting for our stock plans. We follow Statement of Financial Accounting Standards ("SFAS")
No. 123 "Accounting for Stock-Based Compensation" and SFAS No. 148 "Accounting for Stock-Based CompensationTransitional and DisclosureAn Amendment of FASB
Statement No. 123" for disclosure purposes.

In
our consolidated financial statements, no compensation cost has been recognized for stock option grants issued under any of our stock option plans. Had compensation cost for stock option grants

4

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issued
been determined under the fair value method of SFAS No. 123, our net income and diluted earnings per share for the three months ended April 2, 2004 and March 28, 2003 would
have been:

|                                                                                                                                           |  | For the Three Months Ended
|------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------
|
|Net income as reported                                                                                                                     |  | $                         
|Add: Stock-based employee compensation expense included in reported net income, net of related tax effect                                  |  |                           
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effect |  |                           
|                                                                                                                                           |  |                           
|Pro forma net income                                                                                                                       |  | $                         
|                                                                                                                                           |  |                           
|Basic earnings per share, as reported                                                                                                      |  |                           
|Pro forma basic earnings per share                                                                                                         |  |                           
|Diluted earnings per share, as reported                                                                                                    |  |                           
|Pro forma diluted earnings per share                                                                                                       |  |                           

The
fair value of each stock option granted for the three months ended April 2, 2004 and March 28, 2003 under our plans was estimated on the date of grant using the Black-Scholes option
pricing model.
The following weighted-average assumptions were used to value grants issued under the plans: expected volatility of 36.5% and 41.9%; risk-free interest rates of 1.7% and 1.7%; expected
lives of 4.5 and 4.5 years; and no dividend payments. The weighted-average fair values per share of stock options granted, exercise price equals market value, for the three months ending
April 2, 2004 and March 28, 2003 were $20.39 and $14.18, respectively.

Note 4. Earnings Per Share

Basic
earnings per share ("EPS") excludes dilution and is computed by dividing net income by the weighted-average number of common shares outstanding for the periods presented. Diluted EPS reflects
the potential dilution that would occur if securities such as stock options were exercised. Dilutive securities included in the calculation of diluted weighted-average shares were 910,370 and 674,204
for the three months ended April 2, 2004 and March 28, 2003, respectively. Anti-dilutive securities excluded from the calculation of diluted weighted-average shares were
576,443 and 976,284 for the first quarters of 2004 and 2003, respectively.

Note 5. Goodwill and Other Intangible Assets

Our
transitional and annual impairment tests have determined that no impairment of goodwill has occurred.

5

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Information
regarding our other intangible assets follows:

Trademarks and related expenses

|As of April 2, 2004 |       | As of March 28, 2003 |   | As of December 31, 2003
|------------------- | ----- | -------------------- | - | -----------------------
|
|$                   | 7,610 |                      | $ | (3,875                 

Amortization
expense for the first quarters of 2004 and 2003 was $339 and $317, respectively. The estimated amortization for existing intangible assets as of April 2, 2004, for each of the five
succeeding fiscal years is as follows: 2004: $1,365; 2005: $1,137; 2006: $836; 2007: $507; 2008: $202. The amortization period for trademarks and related expenses is five years.

Note 6. Derivatives

All
derivatives entered into by the company are designated as either cash flow or balance sheet hedges. Cash flow hedges are derivative contracts hedging forecasted transactions. Balance sheet hedges
are derivatives hedging existing foreign currency assets or liabilities. The fair value of cash flow hedges is
recorded in other comprehensive income until the hedged transaction affects earnings. The fair value of balance sheet hedges is recorded in earnings and is largely offset by the change in the fair
value of the underlying asset or liability. We are required to measure the effectiveness of our cash flow hedges. If it is determined that a cash flow hedge is not effective, the ineffective portion
of a derivative's change in fair value will be immediately recognized in earnings.

In
the normal course of business, the financial position and results of operations of the Company are routinely subject to currency rate movements on non-U.S. Dollar denominated assets,
liabilities and income as we purchase and sell goods in local currencies. We have established policies and business practices that should result in an appropriate level of protection against the
adverse effect of these exposures. We use derivative instruments, specifically forward contracts, to hedge a portion of our forecasted foreign currency transactions, typically for a period not greater
than 18 months. Those derivative instruments are viewed as risk management tools and are not used for trading or speculative purposes. As of April 2, 2004, we had forward contracts
maturing at various dates through April 2005 to sell the equivalent of $178,241 in foreign currencies at contracted rates and to buy the equivalent of $3,639 in foreign currencies at contracted
rates. As of March 28, 2003, we had forward contracts maturing at various dates through 2004 to sell the equivalent of $140,807 in foreign currencies at contracted rates and to buy the
equivalent of $3,797 in foreign currencies at contracted rates. The increase in the value of the contracts held at April 2, 2004, compared with March 28, 2003, is related to the
depreciation of the U.S. Dollar in relation to the Euro, Pound Sterling and the Japanese Yen during 2003 and to growth in our international business.

On
April 2, 2004, March 28, 2003 and December 31, 2003, we had $8,740, $9,116 and $16,058 in derivative liabilities, respectively. Those amounts reflect the fair value of our cash
flow hedges. The $8,740 derivative liability as of April 2, 2004 represents hedges in place through the first quarter of 2005.

6

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Note 7. Comprehensive Income

Comprehensive
income for the three months ended April 2, 2004 and March 28, 2003 follows:

|                                                                       |  | For the
Three Months Ended
|---------------------------------------------------------------------- |  | --------------------------
|
|Net income                                                             |  | $                         
|Change in cumulative translation adjustment                            |  |                           
|Change in fair value of derivative financial instruments, net of taxes |  |                           
|                                                                       |  |                           
|Comprehensive income                                                   |  | $                         
|                                                                       |  |                           

For
the three months ended April 2, 2004 and March 28, 2003, the after tax hedging losses reclassified to earnings were $(2,386) and $(4,350), respectively.

Note 8. Business Segments and Geographic Information

We
manage our business in three reportable segments, each sharing similar product, distribution, marketing and economic conditions. The reportable segments are U.S. Wholesale, U.S. Consumer Direct and
International. The U.S. Wholesale segment is comprised of the sale of products to wholesale customers in the United States. This segment also includes royalties from licensed products sold in the
United States and the management costs and expenses associated with our worldwide licensing efforts. The U.S. Consumer Direct segment includes the Company-operated specialty and factory outlet stores
in the United States and our e-commerce business. The International segment consists of the marketing, selling and distribution of footwear, apparel and accessories and licensed products
outside of the United States. Products are sold outside of the United States through our subsidiaries (which use wholesale and retail channels to sell footwear and apparel and accessories),
independent distributors and licensees.

The
Unallocated Corporate component of segment reporting consists primarily of the corporate finance, legal, information services and administrative expenses, United States distribution expenses, a
majority of United States marketing expenses and other costs incurred in support of company-wide activities. This segment now includes costs related to worldwide product development, which
were previously included in U.S. Wholesale. In the table below, Corporate Unallocated expenses for 2003 increased by $3,744 to reflect this reclassification. Unallocated Corporate also includes other
expense/(income), which is primarily interest expense, interest income and other miscellaneous expense/(income). Such expenses are not allocated among the reported business segments.

The
accounting policies of the segments are the same as those described in the summary of significant accounting policies. We evaluate segment performance based on operating contribution, which
represents pre-tax income before unallocated corporate expenses, interest and other expenses, net; and on operating cash flow measurements. Total assets are disaggregated to the extent
that assets apply specifically to a single segment. Unallocated Corporate assets primarily consist of cash and equivalents, manufacturing/sourcing assets, computers and related equipment, and United
States transportation and distribution equipment.

7

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For the Three Months Ended April 2, 2004 and March 28, 2003

|     |                                   | U.S.
Wholesale |   | U.S.
Consumer
Direct |  | International |        | Unallocated
Corporate |   | Consolidated
|---- | --------------------------------- | -------------- | - | -------------------- |  | ------------- | ------ | --------------------- | - | ------------
|2004 |                                   |                |   |                      |  |               |        |                       |   |             
|     | Revenue                           |                | $ | 111,348              |  | $             | 37,777 |                       | $ | 172,652     
|     | Operating income/(loss)           |                |   | 37,405               |  |               | 3,396  |                       |   | 40,140      
|     | Income/(loss) before income taxes |                |   | 37,405               |  |               | 3,396  |                       |   | 40,140      
|     | Total assets                      |                |   | 127,416              |  |               | 26,567 |                       |   | 247,387     
|     | Goodwill                          |                |   | 6,804                |  |               | 794    |                       |   | 6,565       
|2003 |                                   |                |   |                      |  |               |        |                       |   |             
|     | Revenue                           |                | $ | 104,002              |  | $             | 32,831 |                       | $ | 134,164     
|     | Operating income/(loss)           |                |   | 32,186               |  |               | 1,600  |                       |   | 22,718      
|     | Income/(loss) before income taxes |                |   | 32,186               |  |               | 1,600  |                       |   | 22,718      
|     | Total assets                      |                |   | 138,649              |  |               | 27,316 |                       |   | 208,706     
|     | Goodwill                          |                |   | 6,804                |  |               | 794    |                       |   | 6,565       

Note 9. Inventory

Inventory
consists of the following:

| |                 | April 2,
2004 |   | March 28,
2003 |  | December 31,
2003
| | --------------- | ------------- | - | -------------- |  | -----------------
| | Materials       |               | $ | 3,859          |  | $                
| | Work-in-process |               |   | 1,612          |  |                  
| | Finished goods  |               |   | 137,357        |  |                  
| |                 |               |   |                |  |                  
| | Total           |               | $ | 142,828        |  | $                
| |                 |               |   |                |  |                  

Note 10. Restricted Stock Awards and Other

On
March 3, 2004 we issued 93,138 restricted shares of Class A Common Stock under the Company's 1997 Incentive Plan, as amended. In July 2003 our Board of Directors approved up to
97,500 shares of Class A Common Stock for performance based programs. The award of these restricted share grants was based on the achievement of specified performance targets for the period
from July 1, 2003 through December 31, 2003. These shares are subject to restrictions on sale and transferability, a risk of forfeiture and certain other terms and conditions. These
restrictions lapse equally three and four years after the award date.

We
accounted for these restricted share grants under the provisions of APB No. 25 and recorded deferred compensation on our balance sheet based upon our achievement of the aforementioned
performance targets and the market value per share of our stock on March 3, 2004.

8

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As
of April 2, 2004, we had an outstanding loan receivable of $524 from an officer of the Company, due for payment in the fourth quarter of 2004. The loan is also described in Footnote 16 of
our Annual Report on Form 10-K for the year ended December 31, 2003.

Note 11. Income Taxes

The effective tax rate for the three months ended April 2, 2004 and March 28, 2003 was 35.5% and 35.0%, respectively.

Note 12. Share Repurchase

On
May 16, 2002, our Board of Directors approved an additional repurchase of up to 4,000,000 shares of our Class A Common Stock. We have repurchased 3,706,275 shares under this
authorization. On September 23, 2003, our Board of Directors approved an additional repurchase of up to 4,000,000 shares of our Class A Common Stock. We may use repurchased shares to
offset future issuances under the Company's stock-based employee incentive plans or for other purposes. From time to time, we use Rule 10b5-1 plans to facilitate share repurchases.

Note 13. Litigation

We
are involved in various litigation and legal matters that have arisen in the ordinary course of business. Management believes that the ultimate resolution of any existing matter will not have a
material adverse effect on our consolidated financial statements.

Note 14. Subsequent Event

On
April 30, 2004, we entered into an amended and restated unsecured committed revolving credit agreement with a group of banks, effective until April 30, 2007 ("Agreement"). Prior to
April 30, 2006, we may elect to extend the final maturity date to April 30, 2008. The new Agreement provides for $200,000 of committed borrowings, of which up to $125,000 may be used for
letters of credit. Upon consent of the bank group, we may increase the committed borrowing limit by $50,000 for a total commitment of $250,000. Under the terms of the Agreement, we may borrow at
interest rates based on eurodollar rates (approximately 1.0% at April 30, 2004), plus an applicable margin based on a fixed-charge coverage grid of between 50 and 100 basis points that is
adjusted quarterly. As of April 30, 2004, the applicable margin under the facility was 60 basis points. We will pay a commitment fee of 12.5 to 25 basis points per annum on the total
commitment, based on a fixed-charge coverage grid that is adjusted quarterly. As of April 30, 2004, the commitment fee was 15 basis points. The Agreement places certain limitations on
additional debt, stock repurchases, acquisitions, amount of dividends we may pay, and certain other financial and non-financial covenants. The primary financial covenants relate to
maintaining a minimum fixed charge coverage of 3:1, a leverage ratio of 1.5:1 and under certain conditions, a minimum level of earnings before income tax, depreciation and amortization. We measure
compliance with the financial and non-financial covenants and ratios as required by the terms of the Agreement on a fiscal quarter basis.

9

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Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discusses The Timberland Company's ("we", "our" "us", "Timberland" or the "Company") 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 consolidated financial statements and related notes. Included is a discussion and
reconciliation of total Company and International revenue growth to constant dollar revenue growth. Constant dollar revenue growth, which excludes the impact of changes in foreign exchange rates, is
not a Generally Accepted Accounting Principle ("GAAP") performance measure. It is used by the Company in its analysis of its financial condition and results of operations.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to
sales returns and allowances, realization of outstanding accounts receivable, the carrying value of inventories, derivatives, other contingencies, impairment of assets and the provision for income
taxes. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Historically, actual results have not been materially different from our estimates.
Because of the uncertainty inherent in these matters, actual results could differ from the estimates used in applying our critical accounting policies. Currently, the Company is not aware of any
reasonably likely events or circumstances that would result in materially different amounts being reported. Our significant accounting policies are described in
Note 1 to the Company's consolidated financial statements of our Form 10-K for the year ended December 31, 2003. Our estimates, assumptions and judgments involved in applying
the critical accounting policies are described in the Management's Discussion and Analysis of Financial Conditions and Results of Operations section of our Annual Report on
Form 10-K for the year ended December 31, 2003.

Overview

Our strategy centers on expanding the penetration of the Timberland® brand among the growing number of consumers who choose to pursue an outdoor-inspired lifestyle.
To achieve this objective we offer an integrated product selection of footwear, apparel and accessories that reinforces the functional performance benefits and classic styling that consumers have come
to expect from the Timberland brand. We sell these products through high quality distribution channels, including our own retail stores.

To
deliver against our long-term goals, we are focused on driving progress on key strategic fronts. These include enhancing our leadership position in footwear, capturing growth
opportunities in outdoor-inspired apparel, extending brand reach through development of the Timberland PRO® series and brand building licensing arrangements, expanding geographically and
driving operational and financial excellence while setting the standard for commitment to the community.

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Highlights
of our first quarter of 2004 financial performance include the following:



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL 2, 2004 AND MARCH 28, 2003

Revenue

Consolidated revenue growth of 18.7% in the first quarter of 2004 reflected strong growth in our international business, benefits from foreign currency exchange rate changes
and solid gains in our U.S. business. Revenue from the U.S. business totaled $149.1 million in the first quarter of 2004, up 9.0% over the prior period. International revenues were
$172.7 million, 28.7% ahead of the first quarter of 2003, or 14.6% in constant dollars. Overall, changes in currency exchange rates were responsible for 7.0% of consolidated revenue growth.



We have three reportable business segments (see Note 8): U.S. Wholesale, U.S. Consumer Direct and International.

Revenues
for our U.S. Wholesale business increased 7.1% to $111.3 million. Growth in our women's casual, kids', boots and outdoor performance footwear categories was partially offset by
declines in Timberland PRO® series footwear, men's casual footwear and apparel categories. U.S. Wholesale business growth reflected gains in independent, athletic, department store and
discount channels, offset by declines in other national accounts.

U.S.
Consumer Direct revenues for the 2004 first quarter expanded $4.9 million, or 15.1%, to $37.8 million, supported by a 6.1% increase in comparable store sales, the addition of three
factory outlet stores in the fourth quarter of 2003 and strong sales growth in our U.S. e-commerce business. U.S. Consumer Direct sales growth also benefited from the addition of six
selling days in the first quarter of 2004, compared to the prior-year period. Sales gains were driven by increases in apparel, boots, accessories, men's casual footwear and outdoor
performance footwear, which offset modest declines in kids' footwear.

International
revenues for the first quarter of 2004 increased 28.7% to $172.7 million, driven by sales gains in Europe and Asia and continued progress in building our business in key markets
such as Canada. Overall, International revenues increased to 53.7% of total consolidated revenues.

European
revenues grew 25.9%, or 10.7% on a constant dollar basis, to $139.2 million, reflecting solid gains across wholesale and retail channels. Sales growth was driven by strong gains in the
U.K. and double-digit growth in key expansion markets, including Germany, Spain and Scandinavia. European

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revenue
growth reflected strong footwear performance, driven by gains in men's casual, boots and kids. Footwear revenue growth offset constant dollar declines in European apparel and accessories
revenue, reflecting mixed reaction to our Spring season product offering and impacts from soft apparel performance at retail in 2003. We are taking several steps to strengthen our international
apparel business, including enhancing our focus on our heritage consumer in product development and increasing our capability to tailor apparel offerings to the European market through the
international design center that we opened in London in June 2003.

In
Asia, first quarter 2004 revenues grew 34.7%, or 26.7% in constant dollars, to $28.4 million, driven by growth in Japan, Hong Kong, Taiwan, Malaysia and Singapore. This growth reflects
continued benefits from our efforts to upgrade Timberland's retail and wholesale distribution throughout the region. Sales growth was driven by strong gains in footwear, apparel and accessories
revenues. Footwear growth reflected gains in men's casual, boots, women's casual and kids' categories, which offset declines in outdoor performance footwear.



Worldwide footwear revenue was $239.4 million in the first quarter 2004, up $45.7 million or 23.6% from the prior-year period. Footwear revenues,
excluding the benefit of foreign exchange, increased 16.8%. Growth was driven by global gains in men's casual, boots, kids', women's casual and outdoor performance categories. These gains offset
moderate declines in Timberland PRO® series footwear. Worldwide footwear unit sales were up 26.8% while the average price decreased by 2.6% reflecting the impact of product mix, offset by
foreign exchange rate benefits.

Worldwide
apparel and accessories revenue for the 2004 first quarter grew by 7.6% to $79.3 million. Excluding the benefit of foreign exchange, apparel and accessories revenue declined 1.4%,
reflecting a 1.8% decline in apparel offset by a modest increase in our accessories business. Apparel and accessories unit sales expanded 0.5% while average selling prices increased 7.1%, due to
favorable foreign currency impact and product mix changes.



Revenue growth in the first quarter of 2004 reflected strong global gains across both our wholesale and consumer direct channels. Global wholesale revenues grew 17.7% to
$247.0 million while global consumer direct revenues increased 22.3% to $74.8 million. Worldwide, we opened 7 stores and shops and closed 9 in the first quarter of 2004 and transferred 7
South Korean shops to our new distributor for that country, Kolon Fashion and Culture.

Gross Profit

Gross profit as a percentage of sales, or gross margin, was 51.7% for the first quarter of 2004, 510 basis points higher than first quarter 2003 gross margin. Gross margin
benefited from continued growth in our International businesswhich drove over 50% of our revenues in the 2004 first
quarter. The growth in International sales also allowed us to benefit from significant foreign exchange rate changes over the past year, which accounted for approximately 290 of the 510 basis point
improvement. The balance of the gain came from favorable product mix, driven by strong footwear sales, and from continued strong supply chain execution, which helped to drive lower product related
costs. We continue to target gross margin improvements, but expect benefits from foreign exchange rate changes and product related cost efficiencies to narrow for the balance of 2004, given
comparisons to strong 2003 performance.

We
include the costs of procuring inventory (sourcing costs, inbound freight and duty, overhead and other similar costs) in cost of goods sold. These costs amounted to $20.1 million and
$20.2 million for the first quarters of 2004 and 2003, respectively.

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Operating Expense

Operating expense for the first quarter of 2004 was $118.7 million, 22.7% higher than the $96.7 million in the 2003 first quarter. As a percent of revenue,
operating expense increased 120 basis points to 36.9%. Operating expense increased due to revenue growth of 18.7%, growth in compensation related accruals ($4.1 million), increased sales and
marketing expenditures related to Timberland's global brand building efforts ($3.6 million) and international retail expansion ($2.3 million). Foreign exchange rate changes also added
$5.9 million, or 6.1%, to overall operating expense growth. The remainder of the increase was driven by higher distribution and other expenses related to Company-wide activities. We
intend to continue to invest behind strategic initiatives, including our global brand building efforts and expect operating expense to outpace revenue growth this year.

Selling
expense for the first quarter of 2004 was $95.4 million, $17.8 million, or 23.0%, higher than the first quarter of 2003. Within this category of expense, approximately
$2.6 million was related to increased incentive compensation costs, $1.5 million to higher distribution costs, primarily freight on increased year-over-year
shipments, $1.7 million to increased store rents and support costs, particularly in our international region, and $1.7 million to higher marketing and advertising expenses. Foreign
exchange rate changes added $5.1 million, or 6.6% to overall selling expense growth. The balance of the increase was comprised of other costs related to Company-wide operations.

We
include the costs of housing inventory (warehousing and handling costs) in selling expense. These costs totaled $8.4 million and $7.3 million in the first quarters of 2004 and 2003,
respectively.

Advertising
expense, which is also included in selling expense, was $7.5 million and $6.9 million in the first quarters 2004 and 2003, respectively. Advertising costs are expensed at the
time the advertising is used, predominantly in the season that the advertising costs are incurred. On April 2, 2004 and March 28, 2003, respectively, we had $0.6 million and
$0.4 million of prepaid advertising recorded on our consolidated balance sheets.

General
and administrative expense for the first quarter of 2004 was $23.3 million, $4.2 million, or 21.9%, higher than the prior-year period. As a percentage of revenue,
general and administrative expense remained relatively flat to the prior year. The dollar increase was driven by a $1.4 million increase in costs associated with the Company's incentive
compensation programs. Foreign exchange rate changes also added $0.8 million, or 4.3%, to overall general and administrative expense growth. The remainder of the increase was due to a variety
of costs to support Company-wide activities.

Operating Income

Operating income for the first quarter of 2004 was $47.8 million, $18.3 million, or 61.7% higher than first quarter 2003 net income. Operating income as a
percentage of revenue expanded 390 basis points to 14.8%.

Operating
income for our U.S. Wholesale segment was $37.4 million, $5.2 million, or 16.2% higher than the prior-year period. Revenue growth of 7.1% was complemented by a 380
basis point improvement in gross margin, partially offset by a 120 basis point increase in operating expense as a percentage of sales. The margin improvement was driven by lower product costs
resulting from enhanced supply chain execution, favorable channel mix and relatively lower markdown rates.

Our
U.S. Consumer Direct segment's operating income for the 2004 first quarter increased by 112.3% to $3.4 million, driven by 15.1% revenue growth, a 90 basis point expansion in gross margin
and cost efficiencies that resulted in a 330 basis point decrease in U.S. Consumer Direct's operating expense rate.

Operating
income for our International segment grew by 76.7% to $40.1 million for the quarter. Revenue growth of 28.7% and a 550 basis point gross margin improvement drove much of the increase.

13

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Both
benefited from favorable foreign exchange rate changes. The expansion in gross margin also reflected lower product costs resulting from enhanced supply chain execution and favorable product mix.
Operating expense rates for our International segment also decreased by 80 basis points as strong revenue growth offset increased investment in retail, new international product development capability
and marketing.

Our
Corporate Unallocated expenses, which include central support and administrative costs not allocated to our business segments, increased to $33.2 million or 10.3% of total revenue, a 30
basis point increase. Increases in incentive compensation across our support functions were partially offset by the efficient execution of our supply chain operations, which produced favorable
variances against our standard costs.

Interest, Other, net and Taxes

Interest expense, which is comprised of fees related to the establishment and maintenance of our revolving credit facility plus interest paid on short-term
borrowings and interest on short-term debt, was $0.2 for the first quarters of 2004 and 2003.

Other,
net includes interest income of $0.5 million in 2004 and $0.4 million in the first quarters of 2004 and 2003. Interest income in 2004 reflects lower interest rates, but higher
average investments than in 2003.

The
effective income tax rate was 35.5% in the first quarter of 2004, compared to 35.0% in the first quarter 2003. Our effective tax rate has increased gradually as the relative benefit from our tax
exempt manufacturing operations in Puerto Rico has diminished (See Note 10 to the consolidated financial statements included in Item 8 of our Form 10-K).

RECONCILIATION OF TOTAL AND INTERNATIONAL REVENUE INCREASES TO CONSTANT DOLLAR REVENUE INCREASES

Total Company Revenue Reconciliation:

|                                                |  | For the Three Months
Ended April 2, 2004
|----------------------------------------------- |  | ----------------------------------------
|
|Revenue increase (GAAP)                         |  | $                                       
|Increase due to foreign exchange rate changes   |  |                                         
|Revenue increase/(decrease) in constant dollars |  |                                         

International Revenue Reconciliation:

|                                              |  | For the Three Months
Ended April 2, 2004
|--------------------------------------------- |  | ----------------------------------------
|
|Revenue increase (GAAP)                       |  | $                                       
|Increase due to foreign exchange rate changes |  |                                         
|Revenue increase in constant dollars          |  |                                         

Management
provides constant dollar revenue growth for total Company and International results because management uses the measure to understand revenue growth excluding any impact from foreign
exchange rate changes.

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LIQUIDITY AND CAPITAL RESOURCES

Accounts Receivable and Inventory

Accounts receivable increased 4.4% to $161.2 million at April 2, 2004, compared with $154.4 million reported at March 28, 2003. The increase in the
first quarter of 2004 compared to the first quarter of 2003 was due to increased revenue offset by strong collection performance and a larger portion of first quarter revenue being shipped, billed and
collected earlier than in the prior year. Days sales outstanding improved to 45 days at April 2, 2004 compared with 51 days at March 28, 2003. Wholesale
days outstanding were 49 days and 57 days for the first quarters ended April 2, 2004 and March 28, 2003, respectively.

Inventory
increased 3.6% to $142.8 million at April 2, 2004 from 137.8 million at March 28, 2003. The twelve month rolling annual inventory turns were 4.9 times for the
first quarter of 2004, compared with 4.7 times in for the first quarter of 2003, reflecting further improvement in our inventory control efforts.

Cash From Operations

Net cash used by operations for the first quarter of 2004 was $64.0 million, compared with $19.4 million for the first quarter of 2003. The use of cash in the
first quarter of 2004, compared with 2003 was primarily due to a higher level of investment in working capital resulting from higher revenue.

Net
cash used for investing activities amounted to $3.6 million in the first quarter of 2004, compared with $2.3 million in the first quarter of 2003. Capital expenditures in 2004 were
$3.4 million versus $2.9 million in 2003. Depreciation expense for the three months ended April 2, 2004 and March 28, 2003 was $5,595 and $5,034, respectively.

Net
cash used for financing activities was $13.6 million in the first quarter of 2004, compared with $27.8 million in the first quarter of 2003. Cash flows from financing activities
reflected share repurchases of $20.1 million in the first quarter of 2004, compared with $29.6 million in the first quarter of 2003. We received cash inflows of $6.6 million in
the first quarter of 2004 from the issuance of common stock related to the exercise of employee stock options, compared with $1.8 million in the first quarter of 2003.

On
April 30, 2004, we entered into an amended and restated unsecured committed revolving credit agreement with a group of banks, effective until April 30, 2007 ("Agreement"). This
Agreement replaced an unsecured committed revolving credit agreement that was effective from May 3, 2001 until May 3, 2004 ("Prior Agreement"). The Prior Agreement provided for $200,000
of committed borrowings, of which up to $125,000 could be used for letters of credit. Under the terms of the Prior Agreement, we were able to borrow at interest rates based on eurodollar rates
(approximately 1.0% at April 2, 2004), plus an applicable margin based on a fixed-charge coverage grid of between 47.5 and 95 basis points that was adjusted quarterly. On April 2, 2004,
the applicable margin under the facility was 75 basis points. We also paid a commitment fee of 15 to 30 basis points per annum on the total commitment, based on a fixed-charge coverage grid that was
adjusted quarterly. On April 2, 2004,the commitment fee was 25 basis points. The Prior Agreement also placed certain limitations on additional debt, stock repurchases, acquisitions, the amount
of dividends we were able to pay and certain other financial and non-financial covenants. The primary financial covenants were to maintain a minimum fixed charge coverage of 3:1, a
leverage ratio of 1.5:1 and a debt to capital ratio of 40%-50%, depending upon the fiscal quarter. We measured compliance with the
financial and non-financial covenants and ratios as required by the terms of the Prior Agreement on a fiscal quarter basis.

We
had uncommitted lines of credit available from certain banks totaling $30,000 at April 2, 2004. Borrowings under these lines were at prevailing money market rates (1.6% at April 2,
2004). Further,

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we
had an uncommitted letter of credit facility of $80,000 to support inventory purchases. These arrangements may be terminated at any time at the option of the banks or the Company.

Our
management believes that our capital needs for 2004 will be met through our current cash balances, our existing credit facilities and cash from operations, without the need for additional
permanent financing. However, as discussed in the exhibit to our Form 10-K 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. From time to time the Company
considers acquisition opportunities which, if pursued, could also result in the need for additional financing. The availability and terms of any such financing would be subject to prevailing market
conditions and other factors at that time.

OFF BALANCE SHEET ARRANGEMENTS

As of April 2, 2004 and March 28, 2003, we had letters of credit outstanding of $11.3 million and $10.3 million, respectively. All of these letters
of credit were issued for the purchase of inventory. As of April 2, 2004, the Company had $181.9 million in hedging contracts outstanding, all of which are due to settle within the next
15 months (see Note 6 to the consolidated financial statements included in Item 8 to our Form 10-K).

We
have the following off-balance sheet arrangements:
(Dollars in Millions)

April 2, 2004

Total Amounts
CommittedLines of credit

$
Letters of credit


11.3Hedging contracts


181.9Total

$
193.2


We
use funds from operations and unsecured committed and uncommitted lines of credit as the primary sources of financing for our seasonal and other working capital requirements. Long-term
debt, if required, is generally used to finance long-term investments. Our principal risks to these sources of financing are the impact on our financial condition from economic downturns,
a decrease in the demand for our products, increases in the prices of materials and a variety of other factors. We anticipate that capital requirements for 2004 will be met through the use of our
current cash balances, through our existing credit facility (which places certain limitations on additional debt, stock repurchases, acquisitions and on the amount of dividends we may pay, and also
contains certain other financial and operating covenants) and through cash flow from operations, without the need for additional permanent financing. However, if the need arises, our ability to obtain
any additional credit facilities will depend upon prevailing market conditions, our financial condition and the terms and conditions of such additional facilities.

Forward-looking Information

As discussed in Exhibit 99.1 entitled "Cautionary Statements for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995," of our
Form 10-K for the year ended December 31, 2003, investors should be aware of factors that could affect our actual results and could cause such results to differ materially
from those contained in forward-looking statements made by or on behalf of us. Such statements are based on current expectations only and actual future results

16

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may
differ materially from those expressed or implied by such forward-looking statements due to certain factors. These factors include, but are not limited to:



We
undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In
the normal course of business, our financial position and results of operations are routinely subject to a variety of risks, including market risk associated with currency rate movements on
non-U.S. dollar denominated assets, liabilities and income and interest rate movements on borrowings and investments. We regularly assess these risks and have established policies and
business practices that should result in an appropriate level of protection against the adverse effect of these and other potential exposures.

Our
foreign currency exposure is generated primarily from our European operating subsidiaries and, to a lesser degree, our Asian and Canadian operating subsidiaries. We seek to minimize the impact of
these foreign currency fluctuations by hedging the related transactions with foreign currency forward contracts. Currently, these foreign currency forward contracts will expire in 15 months or
less. Based upon sensitivity analysis as of April 2, 2004, a 10% change in foreign exchange rates would cause the fair value of our financial instruments to increase/decrease by approximately
$18.4 million, compared with $15.0 million at March 28, 2003. The increase at April 2, 2004 is primarily due to the amount of foreign currency contracts held at
December 31, 2003, compared with December 31, 2002.

We
utilize cash from operations and U.S. dollar denominated borrowings to fund our working capital and investment needs. Short-term debt, if required, is used to meet working capital
requirements and long-term debt, if required, is generally used to finance long-term investments. In addition, we use derivative instruments in our hedging of foreign currency
transactions. These debt instruments and derivative instruments are viewed as risk
management tools and are not used for trading or speculative purposes. Cash balances are invested in high-grade securities with terms under 3 months.

We
have available unsecured committed and uncommitted lines of credit as sources of financing for our working capital requirements. Borrowings under these credit agreements bear interest at variable
rates based on either lenders' cost of funds, plus an applicable spread, or prevailing money market rates. At April 2, 2004 and March 28, 2003 we had no short-term or
long-term debt outstanding.

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Item 4. CONTROLS AND PROCEDURES

We
maintain a system of disclosure controls and procedures which are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange of
1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. These disclosure controls and
procedures include controls and procedures designed to ensure that information required to be disclosed under the federal securities laws is accumulated and communicated to our management on a timely
basis to allow decisions regarding required disclosure.

Based
on their evaluation as of April 2, 2004, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures, as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective.

There
were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the
quarter ended April 2, 2004, that has materially affected, or is reasonably likely to materially effect, our internal control over financial reporting.

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Part II OTHER INFORMATION

Item 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

ISSUER PURCHASES OF EQUITY SECURITIES(1)

|                       |  | For the three fiscal months ended April 2, 2004
|---------------------- |  | -----------------------------------------------
|
|January 1January 30   |  |                                               
|January 31February 27 |  | 297,553                                        
|February 28April 2    |  | 34,954                                         
|                       |  |                                                
|Q1 Total               |  | 332,507                                        

Footnote (1)

|          |  | Announcement Date |  | Approved Program Size (shares) |  | Expiration Date |  | 
|--------- |  | ----------------- |  | ------------------------------ |  | --------------- |  | 
|Program 1 |  | 5/20/2002         |  | 4,000,000                      |  | None            |  | 
|Program 2 |  | 10/16/2003        |  | 4,000,000                      |  | None            |  | 

No
existing programs expired or were terminated during the reporting period. See Note 12 to our Unaudited Consolidated Financial Statements in this Form 10-Q for additional information.

---

Item 6. EXHIBITS AND REPORTS ON FORM 8-K





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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: May 12, 2004 |  | By: | /s/BRIAN P. MCKEONBrian P. McKeon
Executive Vice PresidentFinance and Administration,
Chief Financial Officer
|Date: May 12, 2004 |  | By: | /s/JOHN CRIMMINSJohn Crimmins
Vice President, Corporate Controller and Chief Accounting Officer               

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EXHIBIT INDEX

|Exhibit      |  | Description                                                                                                                                                                                      
|------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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, filed 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, filed herewith.

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