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

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FORM 10-Q

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

For the quarterly period ended March 29, 2002

or

|/ / | 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(IRS 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 /x/    No / /

On
April 26, 2002, 29,914,012 shares of the registrant's Class A Common Stock were outstanding and 7,911,185 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 
March 29, 2002 and December 31, 2001                                   |        
|                                         | Condensed Consolidated Statements of Income 
For the three months ended March 29, 2002
and March 30, 2001     |        
|                                         | Condensed Consolidated Statements of Cash Flows 
For the three months ended March 29, 2002 and
March 30, 2001 |        
|                                         | Notes to Condensed Consolidated Financial Statements                                                           |        
|                                         | Management's Discussion and Analysis of Financial
Condition and Results of Operations                          |        
|Part II Other Information                |                                                                                                                | 12     

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Part I Financial Information

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

|                                                           |                                                                                                                         | March 29,
2002                    |         | December 31,
2001 |        
|---------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------- | ----------------- | -------
|Current assets                                             |                                                                                                                         |                                   |         |                   |        
|                                                           | Cash and equivalents                                                                                                    |                                   | $       | 69,396            |        
|                                                           | Accounts receivable, net of allowance for doubtful accounts of $5,797 at March 29, 2002 and $5,934 at December 31, 2001 |                                   |         | 122,774           |        
|                                                           | Inventory                                                                                                               |                                   |         | 150,061           |        
|                                                           | Prepaid expense                                                                                                         |                                   |         | 18,641            |        
|                                                           | Deferred income taxes                                                                                                   |                                   |         | 18,209            |        
|                                                           | Other assets                                                                                                            |                                   |         | 3,372             |        
|                                                           |                                                                                                                         |                                   |         |                   |        
|                                                           |                                                                                                                         | Total current assets              |         |                   | 382,453
|                                                           |                                                                                                                         |                                   |         |                   |        
|Property, plant and equipment                              |                                                                                                                         |                                   | 165,402 |                   |        
|                                                           | Less accumulated depreciation and amortization                                                                          |                                   |         | (91,655           | )      
|                                                           |                                                                                                                         |                                   |         |                   |        
|                                                           |                                                                                                                         | Net property, plant and equipment |         |                   | 73,747 
|Excess of cost over fair value of net assets acquired, net |                                                                                                                         |                                   | 14,163  |                   |        
|Other assets, net                                          |                                                                                                                         |                                   | 8,859   |                   |        
|                                                           |                                                                                                                         |                                   |         |                   |        
|Total assets                                               |                                                                                                                         | $                                 | 479,222 |                   | $      
|                                                           |                                                                                                                         |                                   |         |                   |        

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)

|                                                       |                                                                                                                                                                                                                                 | March 29,
2002      |                            | December 31,
2001 |       
|------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------- | -------------------------- | ----------------- | ------
|Current liabilities                                    |                                                                                                                                                                                                                                 |                     |                            |                   |       
|                                                       | Accounts payable                                                                                                                                                                                                                |                     | $                          | 35,968            |       
|                                                       | Accrued expense                                                                                                                                                                                                                 |                     |                            |                   |       
|                                                       |                                                                                                                                                                                                                                 | Payroll and related |                            |                   | 21,465
|                                                       |                                                                                                                                                                                                                                 | Other and interest  |                            |                   | 44,377
|                                                       | Income taxes payable                                                                                                                                                                                                            |                     |                            | 6,700             |       
|                                                       |                                                                                                                                                                                                                                 |                     |                            |                   |       
|                                                       |                                                                                                                                                                                                                                 |                     | Total current liabilities  |                   |       
|                                                       |                                                                                                                                                                                                                                 |                     |                            |                   |       
|Deferred compensation                                  |                                                                                                                                                                                                                                 |                     | 3,287                      |                   |       
|Deferred income taxes                                  |                                                                                                                                                                                                                                 |                     | 10,359                     |                   |       
|Excess of fair value of acquired 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; 40,679,847 shares issued
    at March 29, 2002 and 40,487,893 shares at December 31, 2001                                           |                     |                            | 407               |       
|                                                       | 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; 7,911,185 shares issued at
    March 29, 2002 and at December 31, 2001 |                     |                            | 79                |       
|                                                       | Additional paid-in capital                                                                                                                                                                                                      |                     |                            | 129,913           |       
|                                                       | Deferred compensation                                                                                                                                                                                                           |                     |                            | (3,222            | )     
|                                                       | Retained earnings                                                                                                                                                                                                               |                     |                            | 524,606           |       
|                                                       | Accumulated other comprehensive loss                                                                                                                                                                                            |                     |                            | (10,041           | )     
|                                                       | Less treasury stock at cost; 10,634,923 Class A shares
    at March 29, 2002 and 10,064,847 Class A shares at
    December 31, 2001                                                                                             |                     |                            | (284,676          | )     
|                                                       |                                                                                                                                                                                                                                 |                     |                            |                   |       
|                                                       |                                                                                                                                                                                                                                 |                     | Total stockholders' equity |                   |       
|                                                       |                                                                                                                                                                                                                                 |                     |                            |                   |       
|Total liabilities and stockholders' equity             |                                                                                                                                                                                                                                 | $                   | 479,222                    |                   | $     
|                                                       |                                                                                                                                                                                                                                 |                     |                            |                   |       

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 |        
|----------------------------------------------------------------------------- | --------------------------------- | -------------------------- | -------
|
|Revenue                                                                       |                                   | $                          | 225,697
|Cost of goods sold                                                            |                                   |                            | 125,934
|                                                                              |                                   |                            |        
|                                                                              | Gross profit                      |                            |        
|                                                                              |                                   |                            |        
|Operating expense                                                             |                                   |                            |        
|                                                                              | Selling                           |                            |        
|                                                                              | General and administrative        |                            |        
|                                                                              | Amortization of goodwill          |                            |        
|                                                                              |                                   |                            |        
|                                                                              | Total operating expense           |                            |        
|                                                                              |                                   |                            |        
|Operating income                                                              |                                   |                            | 13,896 
|                                                                              |                                   |                            |        
|Other expense (income)                                                        |                                   |                            |        
|                                                                              | Interest expense                  |                            |        
|                                                                              | Other, net                        |                            |        
|                                                                              |                                   |                            |        
|                                                                              | Total other expense (income), net |                            |        
|                                                                              |                                   |                            |        
|Income before income taxes                                                    |                                   |                            | 13,923 
|                                                                              |                                   |                            |        
|Provision for income taxes                                                    |                                   |                            | 4,943  
|                                                                              |                                   |                            |        
|Net income before cumulative effect of change in accounting principle         |                                   | $                          | 8,980  
|                                                                              |                                   |                            |        
|Cumulative effect of change in accounting principle                           |                                   |                            | 4,913  
|                                                                              |                                   |                            |        
|Net income                                                                    |                                   | $                          | 13,893 
|                                                                              |                                   |                            |        
|Earnings per share before cumulative effect of change in accounting principle |                                   |                            |        
|                                                                              | Basic                             |                            | $      
|                                                                              |                                   |                            |        
|                                                                              | Diluted                           |                            | $      
|                                                                              |                                   |                            |        
|Earnings per share after cumulative effect of change in accounting principle  |                                   |                            |        
|                                                                              | Basic                             |                            | $      
|                                                                              |                                   |                            |        
|                                                                              | Diluted                           |                            | $      
|                                                                              |                                   |                            |        
|Weighted-average shares outstanding                                           |                                   |                            |        
|                                                                              | Basic                             |                            |        
|                                                                              |                                   |                            |        
|                                                                              | Diluted                           |                            |        
|                                                                              |                                   |                            |        

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
Three 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:             |                                                                               |                                                                    |                    
|                                                  | Common stock repurchases                                                      |                                                                    |                    
|                                                  | Issuance of common stock                                                      |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|Effect of exchange rate changes on cash           |                                                                               |                                                                    | (390               
|                                                  |                                                                               |                                                                    |                    
|Net decrease in cash and equivalents              |                                                                               |                                                                    | (36,262            
|Cash and equivalents at beginning of period       |                                                                               |                                                                    | 105,658            
|                                                  |                                                                               |                                                                    |                    
|Cash and equivalents at end of period             |                                                                               | $                                                                  | 69,396             
|                                                  |                                                                               |                                                                    |                    
|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  (Amounts in Thousands, Except Share and Per Share Data)  (Unaudited)

5

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For the
Three Months EndedMarch 29,
2002

March 30,
2001Reported net income

$
13,893

$
17,511Add: goodwill amortization, net of tax





179Adjusted net income

$
13,893

$
17,690Reported diluted earnings per share

$
0.36

$
0.43Add: goodwill amortization, net of tax





Adjusted diluted earnings per share

$
0.36

$
0.43Reported basic earnings per share

$
0.37

$
0.44Add: goodwill amortization, net of tax





0.01Adjusted basic earnings per share

$
0.37

$
0.45


There
were no changes in the carrying amount of goodwill for the quarter ended March 29, 2002.

Information
regarding the Company's other intangible assets follows:

| |  |                                 |  | As of March 29, 2002 |       | As of March 30, 2001
| |  | ------------------------------- |  | -------------------- | ----- | --------------------
|
| |  | Trademarks and related expenses |  | $                    | 6,197 |                     



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| |  | 2002                              |  | U.S.
Wholesale |         | U.S.
Consumer
Direct |   | International |   | Unallocated
Corporate |         | Consolidated
| |  | --------------------------------- |  | -------------- | ------- | -------------------- | - | ------------- | - | --------------------- | ------- | ------------
| |  | Revenue                           |  | $              | 90,264  |                      | $ | 34,386        |   | $                     | 101,047 |             
| |  | Income (loss) before income taxes |  |                | 23,145  |                      |   | 1,572         |   |                       | 17,890  |             
| |  | Total assets                      |  |                | 154,356 |                      |   | 27,053        |   |                       | 167,712 |             
| |  | Goodwill                          |  |                | 6,804   |                      |   | 794           |   |                       | 6,565   |             
|
| |  | Revenue                           |  | $              | 119,756 |                      | $ | 34,763        |   | $                     | 90,910  |             
| |  | Income (loss) before income taxes |  |                | 35,516  |                      |   | (95           | ) |                       | 14,043  |             
| |  | Total assets                      |  |                | 174,209 |                      |   | 33,713        |   |                       | 153,101 |             
| |  | Goodwill                          |  |                | 7,562   |                      |   | 883           |   |                       | 6,982   |             



| |  |                                                                        |  | March 29,
2002 |        | March 30,
2001 |  
| |  | ---------------------------------------------------------------------- |  | -------------- | ------ | -------------- | -
| |  | Net income                                                             |  | $              | 13,893 |                | $
| |  | Change in cumulative translation adjustment                            |  |                | (865   | )              |  
| |  | Fair value of derivative financial instruments at January 1, 2001      |  |                |       |                |  
| |  | Change in fair value of derivative financial instruments, net of taxes |  |                | 196    |                |  
| |  |                                                                        |  |                |        |                |  
| |  | Comprehensive income                                                   |  | $              | 13,224 |                | $
| |  |                                                                        |  |                |        |                |  

| |  |                 |  | March 29,
2002 |         | December 31,
2001
| |  | --------------- |  | -------------- | ------- | -----------------
| |  | Raw materials   |  | $              | 3,866   |                  
| |  | Work-in-process |  |                | 1,591   |                  
| |  | Finished goods  |  |                | 144,604 |                  
| |  |                 |  |                |         |                  
| |  |                 |  | $              | 150,061 |                  
| |  |                 |  |                |         |                  

7

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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 made by the
Company are related to reserves for sales returns and allowances, excess and obsolete inventory and allowance for doubtful accounts receivable.

RESULTS OF OPERATIONS

FIRST QUARTER 2002 COMPARED WITH FIRST QUARTER 2001

Revenue for the first quarter of 2002 was $225.7 million, a decrease of $19.7 million, or 8.0%, compared with the $245.4 million reported for
the first quarter of 2001.

Domestic
revenue, comprised of the U.S. Wholesale and U.S. Consumer Direct segments (see Note 7), for the first quarter of 2002 was $124.7 million, a decrease of
$29.9 million, or 19.3%, compared with the same period in 2001. Domestic revenue represented 55.2% of total revenue for the first quarter of 2002, compared with 63.0% for the first quarter of
2001. The U.S. Wholesale segment revenue decreased 24.6%, compared with the same period in 2001, due to a reduction in footwear unit sales.
The Company expects continued sales pressure in 2002, principally in its domestic footwear business, reflecting comparisons to strong prior year first half results, a continued softness in U.S. market
conditions and a negative impact from a disciplined approach to management of the U.S. Boot business. The U.S. Consumer Direct segment revenue decreased 1.1%, compared with the same period in 2001,
primarily due to a reduction in apparel and accessories unit sales and, to a lesser degree, a reduction in average selling prices related to mix of merchandise sold. These decreases were partially
offset by increased footwear unit sales. Comparable domestic retail and factory store sales decreased 4.0%. In the current economic environment, the Company has remained focused on disciplined
inventory management and has moderated its U.S. retail store expansion plans.

International
segment revenue for the first quarter of 2002 was $101.0 million, an increase of $10.1 million, or 11.1%, compared with the same period in 2001. International
revenue comprised 44.8% of total revenue for the first quarter of 2002, compared with 37.0% for the first quarter of 2001. The improvement over the prior year was primarily due to European footwear
and, to a lesser degree, apparel and accessories unit sales, primarily in the wholesale channel, and to the overall expansion of the Company's Asian business. These increases were partially offset by
the impact of foreign exchange. On a constant dollar basis, international revenue increased 16.1%, compared with the same period in 2001.

Footwear
revenue for the first quarter of 2002 was $162.6 million, a decrease of $21.2 million, or 11.5%, compared with the same period in 2001. The decrease was
attributable to a reduction in unit sales in the U.S. Wholesale segment. By category, the decrease was primarily attributable to Boots and, to a lesser degree, Kids' and Outdoor Performance. These
decreases were partially offset by improvements in Women's casual and the Timberland Pro series. In total, footwear unit sales

8

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decreased 11.2% over the same period last year. As discussed previously, the Company expects continued sales pressure in 2002 in its domestic footwear business.

Apparel
and accessories revenue for the first quarter of 2002 was $59.7 million, an increase of $1.2 million, or 2.1%, compared with the same period in 2001. The increase
was primarily due to increased European unit sales and, to a lesser degree, unit sales in the U.S. Wholesale segment. Worldwide, wholesale apparel and accessories revenue experienced double-digit
constant dollar sales gains, with a 17.5% increase in U.S. Wholesale apparel revenue over the same period last year. These increases were partially offset by a decline in U.S. Consumer Direct unit
sales and the impact of foreign exchange. In total, apparel and accessories unit sales increased 4.4% over the same period last year.

Worldwide
wholesale revenue for the first quarter of 2002 was $168.4 million, a decrease of $21.4 million, or 11.3%, compared with the same period in 2001. The decrease in
revenue was primarily due to a reduction in U.S. Wholesale footwear unit sales, partially offset by increases in European wholesale footwear and, to a lesser degree, worldwide wholesale apparel and
accessories unit sales.

Worldwide
revenue from Company-owned retail and factory stores, along with the Company's e-commerce business, for the first quarter of 2002 was $57.3 million, an
increase of $1.7 million, or 3.1%, compared with the same period in 2001. The increase in revenue was primarily due to increased footwear unit sales, worldwide, and, to a lesser degree,
increased apparel and accessories unit sales internationally. These increases were partially offset by the impact of foreign exchange and a reduction in U.S. Consumer Direct apparel and accessories
revenue, as discussed previously. During the first quarter of 2002, the Company opened 5 retail stores and closed 5 stores, worldwide.

Gross
profit as a percentage of revenue for the first quarter of 2002 and 2001 was 44.2%. Favorable business mix impacts (including the greater mix of international business which has a
higher proportion of high margin retail revenue), improved product design, reduced costs and reduced discounting at retail offset unfavorable impacts from foreign exchange (1.1 percentage
points), higher leather costs (0.4 percentage points) and other costs related to the continued soft U.S. market conditions, including sales returns and allowances trending at the higher end of
historical averages. Under current conditions, the Company anticipates that the impact from leather prices will begin to improve in the near term but that foreign exchange and other gross margin
pressures will continue throughout 2002, partially offset by the Company's cost saving initiatives across the supply chain.

Operating
expense was $85.9 million for the first quarter of 2002, up $2.7 million, or 3.2%, from the $83.2 million reported for the first quarter of 2001. Operating
expense as a percentage of revenue for the first quarter of 2002 increased to 38.0%, from the 33.9% reported for the first quarter of 2001. The dollar increase reflects growth in international
operations, primarily selling costs, as well as continued support of long-term growth strategies. 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.

Interest
expense for the first quarter of 2002 and 2001 was $0.2 million and $0.1 million, respectively. Other, net was $0.2 million of income in the first quarter
of 2002, compared with $1.2 million of income in the first quarter of 2001. Other, net includes interest income of $0.3 million in the first quarter of 2002 and $0.7 million in
the first quarter of 2001. The decrease in interest income reflects a reduction in interest rates, as average cash balances were higher in the first quarter of 2002 than in the first quarter of 2001.
The remaining decrease was primarily due to less favorable intercompany foreign currency exchange impacts.

Income
before income taxes for the first quarter of 2002 decreased compared with the prior year due to the results of the U.S. Wholesale and Unallocated Corporate segments. The decrease
in the U.S. Wholesale segment income was primarily due to the gross margin dollar impact from lower

9

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footwear revenue, as discussed previously. In the U.S. Consumer Direct segment, the increase in income was primarily due to the impact of supply chain cost improvements, less promotional activity and
the mix of merchandise sold. Internationally, the increase was driven by a 16.1% constant dollar revenue increase, reflecting double-digit sales gains in Europe and the continued expansion of the
Company's Asian business. The increase in the Unallocated Corporate loss was primarily due to costs incurred in support of company-wide activities. In the near term, the Company expects
continued
pressure on its operating margin, reflecting comparisons to strong prior year levels and negative business mix impacts related to the anticipated declines in the higher margin U.S. Boot business.

The
effective tax rate for the three months ended March 29, 2002 and March 30, 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 federal tax law changes, which reduced the tax benefits associated with the Company's Puerto
Rico operations, and U.S. federal tax exempt Puerto Rico income comprising a lower percentage of consolidated income.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used by operations for the first quarter of 2002 was $16.2 million, compared with $56.1 million used during the same period in 2001. Cash
used during the first quarter of 2002 was primarily due to normal seasonal spending on inventory, and payment of taxes, consistent with the prior year. Higher working capital at year-end
2001, compared with year-end 2000, was the principal cause of the decrease in cash used by operations in the first quarter of 2002, compared with 2001. For the 2002 first quarter, compared
with 2001, inventory levels decreased 6.6% and accounts receivable decreased 5.0%, both comparable with the Company's revenue decrease. Quarterly inventory turns decreased to 3.3 times for the first
quarter of 2002, compared with 3.5 times for the first quarter of 2001. On a 12 month rolling basis, inventory turns improved from 3.9 times for the first quarter of 2001 to 4.1 times for the
first quarter of 2002. Days sales outstanding at March 29, 2002 were 49 days, compared with 47 days at March 30, 2001. Wholesale days sales outstanding increased to
56 days at March 29, 2002, from 50 days at March 30, 2001. Other working capital items were comparable to the prior year with the exception of accounts payable which
decreased in 2002, compared with 2001, due to timing of receipts and payment of inventory.

Net
cash used by investing activities amounted to $2.4 million for the first quarter of 2002 and $5.3 million for the first quarter of 2001. Capital expenditures for the
first quarter of 2002 were $2.7 million, compared with $4.2 million for the same period in 2001 (depreciation expense for the first quarter of 2002 and 2001 was $4.7 million and
$4.2 million, respectively). The reduction in capital expenditures was primarily due to lower spending on retail expansion and timing of spending in manufacturing. Net cash used by financing
activities was $17.3 million for the first quarter of 2002, compared with $16.5 million for the first quarter of 2001, reflecting stock repurchases of $20.2 million in both
quarters.

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 March 29, 2002, December 31, 2001 and March 30, 2001.

As
of March 29, 2002, December 31, 2001 and March 30, 2001, the Company had letters of credit outstanding of $13.0 million, $39.0 million and
$30.0 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

10

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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 has
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 March 29, 2002, the Company had no short-term or 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 $13.0 million, compared with $10.0 million at March 30, 2001. The increase at March 29, 2002 is primarily due to the amount of foreign
currency forward contracts held at March 29, 2002, compared to March 30, 2001 (see Note 6).

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 6. Exhibits and Reports on Form 8-K



Exhibit

DescriptionNone




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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 9, 2002 | /s/BRIAN P. MCKEONBrian P. McKeon Senior Vice President and Chief Financial Officer                           
|Date: May 9, 2002 | /s/DENNIS W. HAGELEDennis W. Hagele Vice President-Finance and Corporate Controller (Chief Accounting
Officer)

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