10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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 July 1, 2005
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                    to

Commission File Number 1-9548

The Timberland Company

(Exact Name of Registrant as Specified in Its Charter)

Delaware	02-0312554
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)
200 Domain Drive, Stratham, New Hampshire	03885
(Address of Principal Executive Offices)	(Zip Code)
Registrant’s Telephone Number, Including Area Code: (603) 772-9500

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 July 29, 2005, 54,794,025 shares of the registrant’s Class A Common Stock were outstanding and 11,743,660 shares of the registrant’s Class B Common Stock were outstanding.

THE TIMBERLAND COMPANY

FORM 10-Q

TABLE OF CONTENTS

	Page(s)
Part I Financial Information (unaudited)
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets - July 1, 2005, July 2, 2004 and December 31, 2004	3
Unaudited Condensed Consolidated Statements of Income - For the three and six months ended July 1, 2005 and July 2, 2004	4
Unaudited Condensed Consolidated Statements of Cash Flows - For the six months ended July 1, 2005 and July 2, 2004	5
Notes to Unaudited Condensed Consolidated Financial Statements	6-12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13-22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
Item 4. Controls and Procedures	23
Part II Other Information
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 4. Submission of Matters to a Vote of Security Holders	25
Item 6. Exhibits	26
Signatures	27
Exhibit Index	28
Exhibits	29-32

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PART I FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

THE TIMBERLAND COMPANY

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

	July 1, 2005			July 2, 2004			Dec. 31, 2004
Assets
Current assets
Cash and equivalents	$	189,831		$	163,631		$	309,116
Accounts receivable, net of allowance for doubtful accounts of $7,777 at July 1, 2005, $7,881 at July 2, 2004 and $8,927 at December 31, 2004	130,638			131,926			155,024
Inventory	216,483			170,931			128,311
Prepaid expense	29,075			25,618			27,659
Deferred income taxes	14,545			19,236			28,937
Derivative assets	6,360			—			—
Total current assets	586,932			511,342			649,047
Property, plant and equipment, net	76,718			75,947			78,979
Goodwill	14,163			14,163			14,163
Intangible assets	5,122			3,809			5,381
Other assets, net	10,061			9,768			9,940
Total assets	$	692,996		$	615,029		$	757,510
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	89,242		$	40,657		$	52,370
Accrued expense
Payroll and related	27,339			27,942			55,459
Other	45,523			37,569			68,579
Income taxes payable	8,158			2,422			34,737
Derivative liabilities	—			9,212			15,047
Total current liabilities	170,262			117,802			226,192
Deferred compensation and other liabilities	14,394			11,299			12,543
Deferred income taxes	5,814			8,419			7,268
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; 71,427,238 shares issued at July 1, 2005, 89,543,524 shares issued at July 2, 2004 and 90,718,018 shares issued at December 31, 2004	714			895			907
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; 11,743,660 shares issued and outstanding at July 1, 2005,  July 2, 2004 and December 31, 2004	117			117			117
Additional paid-in capital	215,878			208,129			238,829
Deferred compensation	(34,307		)	(17,401		)	(22,584		)
Retained earnings	622,973			762,212			875,887
Accumulated other comprehensive income	12,080			4,534			10,228
Treasury Stock at cost; 16,308,732 Class A shares at July 1, 2005, 30,379,274 Class A shares at July 2, 2004 and 34,098,914 Class A shares at December 31, 2004	(314,929		)	(480,977		)	(591,877		)
Total stockholders’ equity	502,526			477,509			511,507
Total liabilities and stockholders’ equity	$	692,996		$	615,029		$	757,510

Shares have been restated to reflect the 2-for-1 stock split in May 2005.

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

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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					For the Six Months Ended
	July 1, 2005		July 2, 2004			July 1, 2005		July 2, 2004
Revenue	$	240,269	$	230,210		$	594,480	$	551,987
Cost of goods sold	122,289		115,713			289,339		271,039
Gross profit	117,980		114,497			305,141		280,948
Operating expense
Selling	85,238		81,316			185,977		176,668
General and administrative	24,340		21,101			48,842		44,442
Total operating expense	109,578		102,417			234,819		221,110
Operating income	8,402		12,080			70,322		59,838
Other income/(expense)
Interest income, net	1,063		206			2,164		440
Other, net	148		(87		)	1,138		206
Total other income/(expense)	1,211		119			3,302		646
Income before provision for income taxes	9,613		12,199			73,624		60,484
Provision for income taxes	3,268		4,331			25,032		21,472
Net income	$	6,345	$	7,868		$	48,592	$	39,012
Earnings per share
Basic	$	.09	$	.11		$	.72	$	.56
Diluted	$	.09	$	.11		$	.71	$	.54
Weighted-average shares outstanding
Basic	66,913		70,197			67,250		69,992
Diluted	68,376		72,102			68,698		71,892

Earnings per share and weighted-average shares have been restated to reflect the 2-for-1 stock split in May 2005.

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

4

THE TIMBERLAND COMPANY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

	For the Six Months Ended
	July 1, 2005			July 2, 2004
Cash flows from operating activities:
Net income	$	48,592		$	39,012
Adjustments to reconcile net income to net cash used by operating activities:
Deferred income taxes	6,265			6,752
Amortization of deferred compensation	1,323			1,493
Depreciation and other amortization	12,451			11,237
Loss on disposal of property, plant and equipment	71			60
Tax benefit from stock option plans	4,880			9,174
Increase/(decrease) in cash from changes in working capital:
Accounts receivable	17,110			(7,581		)
Inventory	(89,945		)	(51,451		)
Prepaid expense	(2,993		)	251
Accounts payable	38,809			3,631
Accrued expense	(48,649		)	(49,893		)
Income taxes payable	(26,602		)	(25,047		)
Other liabilities	1,170			—
Net cash used by operating activities	(37,518		)	(62,362		)
Cash flows from investing activities:
Additions to property, plant and equipment	(9,528		)	(10,696		)
Other, net	(458		)	(1,110		)
Net cash used by investing activities	(9,986		)	(11,806		)
Cash flows from financing activities:
Common stock repurchases	(80,349		)	(20,145		)
Issuance of common stock	13,546			16,285
Net cash used by financing activities	(66,803		)	(3,860		)
Effect of exchange rate changes on cash and equivalents	(4,978		)	(144		)
Net decrease in cash and equivalents	(119,285		)	(78,172		)
Cash and equivalents at beginning of period	309,116			241,803
Cash and equivalents at end of period	$	189,831		$	163,631
Supplemental disclosures of cash flow information:
Interest paid	$	205		$	274
Income taxes paid	$	39,980		$	30,607

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

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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, as amended by Amendments No. 1 and No. 2 on Form 10-K/A for the year ended December 31, 2004.

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, “Accounting for Shipping and Handling Fees and Costs,” in the second quarter and the first six months of 2005 we recorded $733 and $1,928 of reimbursed shipping expenses within revenues and the related shipping costs within selling expense, respectively. In the second quarter and the first six months of 2004 we recorded $976 and $2,184 of reimbursed shipping expenses within revenues and the related shipping costs within selling expense, respectively. Shipping costs included in selling expense were $4,529 and $2,800 for the second quarters of 2005 and 2004, and $9,011 and $7,200 for the first six months of 2005 and 2004, 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 and six months ended July 1, 2005 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 Split

On March 3, 2005, the Company announced that its Board of Directors approved a 2-for-1 split of its Class A and Class B Common Stock. The additional shares were distributed on May 2, 2005, to shareholders of record on April 14, 2005. In addition, the Board of Directors approved the retirement of 10.0 million Class A Treasury shares, on a pre-split basis. Additionally, the Board also approved a 100% increase in shares remaining under its previously announced repurchase program as of the April 14, 2005 record date to reflect the impact of the stock split. The increase was effective immediately after the May 2, 2005 distribution date. The shares presented in the unaudited condensed consolidated balance sheets as of July 1, 2005, July 2, 2004 and December 31, 2004, the number of shares used in the computation of earnings per share in the unaudited condensed consolidated statements of income for the three and six months ended July 1, 2005 and July 2, 2004 and the shares and earnings per share in the notes to the unaudited condensed consolidated financial statements were based on the number of shares outstanding after giving effect to the stock split, except as otherwise noted.

Note 4.  Stock-based Compensation

We apply Accounting Principle Board (“APB”) Opinion No. 25 and related interpretations in accounting for our stock plans,  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.

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In our unaudited condensed consolidated statements of income, no compensation cost has been recognized for stock option grants issued under any of our stock option plans; however, the Company has recognized compensation cost for restricted stock awards. Had compensation cost for stock option grants issued been determined under the fair value method of SFAS No. 123, our net income and diluted earnings per share for the three and six months ended July 1, 2005 and July 2, 2004 would have been:

	For the Three Months Ended				For the Six Months Ended
	July 1, 2005		July 2, 2004		July 1, 2005		July 2, 2004
Net income as reported	$	6,345	$	7,868	$	48,592	$	39,012
Add: Stock-based employee compensation expense included in reported net income, net of related tax effect	437		557		873		963
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effect	2,318		2,690		4,763		5,191
Pro forma net income	$	4,464	$	5,735	$	44,702	$	34,784
Basic earnings per share, as reported	$	.09	$	.11	$	.72	$	.56
Pro forma basic earnings per share	$	.07	$	.08	$	.66	$	.50
Diluted earnings per share, as reported	$	.09	$	.11	$	.71	$	.54
Pro forma diluted earnings per share	$	.07	$	.08	$	.65	$	.48

The fair value of each stock option granted for the three and six months ended July 1, 2005 and July 2, 2004 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 our plans for the three and six months ended July 1, 2005 and July 2, 2004, respectively:

	For the Three Months Ended				For the Six Months Ended
	July 1, 2005		July 2, 2004		July 1, 2005		July 2, 2004
Expected volatility	29.0	%	35.7	%	29.6	%	36.5	%
Risk-free interest rate	4.1	%	3.1	%	3.6	%	1.8	%
Expected lives (years)	9.0		6.2		5.2		4.6
Dividend payments	—		—		—		—

The weighted-average fair values per share of stock options granted, for which exercise price equals market value at the date of grant, were $16.76 and $12.35 for the three months ended July 1, 2005 and July 2, 2004, respectively, and $11.66 and $10.34 for the six months ended July 1, 2005 and July 2, 2004, respectively.

Note 5.  Earnings Per Share

Basic earnings per share (“EPS”) excludes common stock equivalents 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 potentially dilutive securities such as stock options were exercised. Dilutive securities included in the calculation of diluted weighted-average shares were 1,463,577 and 1,904,796 for the three months ended July 1, 2005 and July 2, 2004, respectively, and 1,448,292 and 1,899,978 for the six months of 2005 and 2004, respectively. Anti-dilutive securities excluded from the calculation of diluted weighted-average shares were 3,706 and 16,393 for the second quarters of 2005 and 2004, respectively, and 66,071 and 769,761 for the first six months of 2005 and 2004, respectively.

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Note 6.  Goodwill and Other Intangible Assets

We perform our annual impairment tests at the end of our second fiscal quarter and determined that no impairment of reported goodwill had occurred in 2005.

Information regarding our other intangible assets, which consist of trademarks and patents, follows:

July 1, 2005							July 2, 2004							December 31, 2004
Carrying Amount		Accumulated Amortization			Net		Carrying Amount		Accumulated Amortization			Net		Carrying Amount		Accumulated Amortization			Net
$	9,906	$	(4,784	)	$	5,122	$	8,035	$	(4,226	)	$	3,809	$	10,579	$	(5,198	)	$	5,381

Amortization expense of intangible assets with definite lives was $418 and $351 for the second quarters of 2005 and 2004, respectively, and $884 and $690 for the first six months of 2005 and 2004, respectively. The estimated amortization for existing intangible assets as of July 1, 2005, for each of the five succeeding fiscal years is as follows: 2005: $1,793; 2006: $1,555; 2007: $1,226; 2008: $921; 2009: $511. The amortization period for other intangible assets and related expenses is five years.

Note 7.  Derivatives

All derivatives entered into by the Company are designated as either cash flow or fair value hedges. Cash flow hedges are derivative contracts hedging forecasted transactions. Fair value hedges are derivatives hedging existing foreign currency assets or liabilities. The change in value of cash flow hedges is recorded in other comprehensive income until the hedged transaction affects earnings, at which point the other comprehensive income is reclassified to earnings. The change in value of fair value 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 in 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 July 1, 2005, we had forward contracts maturing at various dates through April 2006 to sell the equivalent of $180,752 in foreign currencies at contracted rates and to buy the equivalent of $40,207 in foreign currencies at contracted rates.  As of July 2, 2004, we had forward contracts maturing at various dates through July 2005 to sell the equivalent of $172,114 in foreign currencies at contracted rates and to buy the equivalent of $8,166 in foreign currencies at contracted rates.

On July 1, 2005, July 2, 2004 and December 31, 2004, we had derivative assets of $6,360 and derivative liabilities of $9,212 and $15,047, respectively. Those amounts reflect the fair value of our cash flow hedges. The $6,360 derivative assets at July 1, 2005 represent hedges in place through the first quarter of 2006.

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Note 8.  Comprehensive Income

Comprehensive income for the three and six months ended July 1, 2005 and July 2, 2004 follows:

	For the Three Months Ended						For the Six Months Ended
	July 1, 2005			July 2, 2004			July 1, 2005			July 2, 2004
Net income	$	6,345		$	7,868		$	48,592		$	39,012
Change in cumulative translation adjustment	(8,846		)	346			(13,369		)	(946		)
Change in fair value of derivative financial instruments, net of taxes	10,203			(290		)	15,221			4,174
Comprehensive income	$	7,702		$	7,924		$	50,444		$	42,240

For the three months ended July 1, 2005 and July 2, 2004, the after tax hedging gains/(losses) reclassified to earnings were $367 and $(881), respectively, and for the six months ended July 1, 2005 and July 2, 2004, the after tax hedging losses reclassified to earnings were $(1,060) and $(3,267) respectively. For the three months ended July 1, 2005, actual rates were below hedge contract rates, contributing to the hedging gain. During 2005 actual rates have been closer to hedge contract rates leading to a lower hedging loss for the six months ended July 1, 2005 compared to July 2, 2004.

Note 9.  Business Segments and Geographic Information

We manage our business in three reportable segments, each sharing similar product, distribution and marketing. 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. This segment now includes some marketing expenses and value added services previously in Unallocated Corporate. 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, apparel and accessories), independent distributors and licensees.

The Unallocated Corporate component of segment reporting consists primarily of corporate finance, information services, legal and administrative expenses, United States distribution expenses, a majority of United States marketing expenses, worldwide product development and other costs incurred in support of Company-wide activities. Unallocated Corporate also includes total other income/(expense), which is primarily interest income, net, and other miscellaneous income/(expense), net. Such income/(expense) is 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.

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For the Three Months Ended July 1, 2005 and July 2, 2004

	U.S. Wholesale		U.S. Consumer Direct		International		Unallocated Corporate			Consolidated
2005
Revenue	$	100,524	$	34,985	$	104,760	$	—		$	240,269
Operating income/(loss)	28,962		2,768		9,096		(32,424		)	8,402
Income/(loss) before income taxes	28,962		2,768		9,096		(31,213		)	9,613
Total assets	197,646		30,727		271,961		192,662			692,996
Goodwill	6,804		794		6,565		—			14,163
2004
Revenue	$	104,432	$	34,590	$	91,188	$	—		$	230,210
Operating income/(loss)	31,959		2,555		7,730		(30,164		)	12,080
Income/(loss) before income taxes	31,959		2,555		7,730		(30,045		)	12,199
Total assets	176,434		28,678		195,001		214,916			615,029
Goodwill	6,804		794		6,565		—			14,163

For the Six Months Ended July 1, 2005 and July 2, 2004

	U.S. Wholesale		U.S. Consumer Direct		International		Unallocated Corporate			Consolidated
2005
Revenue	$	217,342	$	73,304	$	303,834	$	—		$	594,480
Operating income/(loss)	65,384		7,234		64,296		(66,592		)	70,322
Income/(loss) before income taxes	65,384		7,234		64,296		(63,290		)	73,624
2004
Revenue	$	215,780	$	72,367	$	263,840	$	—		$	551,987
Operating income/(loss)	69,164		5,951		47,870		(63,147		)	59,838
Income/(loss) before income taxes	69,164		5,951		47,870		(62,501		)	60,484

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Note 10.  Inventory

Inventory consists of the following:

	July 1, 2005		July 2, 2004		December 31, 2004
Materials	$	3,368	$	3,843	$	3,752
Work-in-process	1,612		1,563		1,364
Finished goods	211,503		165,525		123,195
Total	$	216,483	$	170,931	$	128,311

In the fourth quarter of 2004, we established a Hong Kong procurement company and international treasury center in Switzerland. Related to the implementation of the new organizational structure, we modified certain sourcing arrangements, which resulted in earlier transfer of title for a portion of the Company’s third party sourced product in 2005. Earlier transfer of title resulted in offsetting higher quarter end inventory and accounts payable balances, as we recognized an inventory asset and related payable roughly two weeks earlier than in the prior-year period. Had similar sourcing arrangements been in effect in the second quarter of 2004, we estimate that inventory and accounts payable balances would have increased by approximately $32.8 million. Adjusting for this change, on a comparable basis, inventory rose 6.3%.

Note 11.  Restricted Stock Awards and Other

In 2004, our Board of Directors approved future awards of restricted share grants of Class A Common Stock under the Company’s 1997 Incentive Plan, as amended, and a cash incentive award. The award of these restricted share grants and the cash incentive award is based on achieving certain performance targets for the periods occurring between January 1, 2004 through December 31, 2006. Based on the achievement of 2004 performance targets, 275,117 of restricted shares were awarded on July 5, 2005. The value of these shares at July 1, 2005 was $10,873. These shares will vest equally over three years from the award date. An additional grant of 200,000 restricted shares with a fair market value of $7,754 at July 1, 2005, based on the achievement of a separate performance target, were also awarded on July 5, 2005. These shares will vest two years after the award date. These shares will be subject to restrictions on sale and transferability, a risk of forfeiture and certain other terms and conditions. Accordingly, we recorded deferred compensation on our balance sheet to reflect these future awards. For the period January 1, 2005 through December 31, 2006, grants of $9,185 and $9,509 will be made in 2006 and 2007, respectively, if certain targeted performance goals are achieved. The award amount will vary based upon the degree to which these performance goals are attained. The number of shares to be awarded will be determined by the share price at that date. Additionally, the cash incentive award of up to $3,000 is based on achievement of a performance target over a three year measurement period from January 1, 2004 to December 31, 2006, and may be awarded in 2007.

In March 2005, our Board of Directors approved a cash incentive award.  This cash incentive award of up to $1,250 is based on achievement of a performance target over a one year measurement period from January 1, 2005 to December 31, 2005, and may be awarded in 2007.

Note 12.  Income Taxes

The effective tax rate for the three and six months ended July 1, 2005 and July 2, 2004 was 34.0% and 35.5%, respectively. We established a Hong Kong procurement company and international treasury center in Switzerland in the fourth quarter of 2004, which better aligns our organizational structure with our expanding global presence and reduces our estimated taxes on foreign earnings.

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Note 13.  Share Repurchase

On September 23, 2003, our Board of Directors approved an additional repurchase of 4,000,000 shares of our Class A Common Stock. On March 3, 2005, our Board of Directors approved a 100% increase in shares remaining under its previously announced repurchase program as of April 14, 2005, the record date of the 2-for-1 stock split. The increase was effective immediately after the May 2, 2005 distribution date. As of July 1, 2005, on a post split basis, 2,583,065 shares remained under this authorization. Shares repurchased on a post split basis totaled 1,012,039 during the quarter ended July 1, 2005. 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 14.  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 15.  Subsequent Event

On July 6, 2005, the Company announced plans to consolidate Caribbean manufacturing operations. We will close our manufacturing facility in Isabela, Puerto Rico at the end of 2005 and expand manufacturing volume in our facility based in the Dominican Republic. We will incur one-time pre-tax restructuring costs of approximately $2.5 million in the third quarter of 2005, $3.0 million in the fourth quarter of 2005 and $0.5 million in the first quarter of 2006 to cover severance, retirement enhancements, outplacement services and asset disposal costs associated with implementation of this consolidation. The efficiencies of the consolidated operations are anticipated to yield cost savings of approximately $4.0 million in 2006, with benefits weighted toward the second half of the year, and annual cost savings of approximately $5.0 million in subsequent years. The Company’s tax benefit from its Puerto Rico operations under Section 30A of the Internal Revenue Code, approximating $4.0 million annually, expires at the end of 2005. We do not anticipate an increase in our overall effective tax rate of 34.0% in 2006, however, due to expected benefits from global tax initiatives.

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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 unaudited condensed 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. We provide constant dollar revenue growth for total Company and International results because we use the measure to understand revenue growth excluding any impact from foreign exchange rate changes.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed 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, incentive compensation accruals 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 Annual Report on Form 10-K for the year ended December 31, 2004. Our estimates, assumptions and judgments involved in applying the critical accounting policies are described in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the year ended December 31, 2004.

Overview

Our principal strategic goal is to become the authentic outdoor brand of choice globally. We continue to develop a diverse portfolio of footwear, apparel and accessories that reinforces the functional performance, benefits and classic styling that consumers have come to expect from our brand. We sell our products to consumers who embrace an outdoor-inspired lifestyle through high-quality distribution channels, including our own retail stores, which reinforce the premium positioning of the Timberland^â brand.

To deliver against our long-term goals, we are focused on driving progress on key strategic fronts. These include enhancing our leadership position in our core footwear business, capturing the opportunity that we see for outdoor-inspired apparel, extending brand reach through development of the Timberland PRO^â series and brand building licensing arrangements, expanding geographically, driving operational and financial excellence while setting the standard for commitment to the community and striving to be a global employer of choice.

Highlights of our second quarter of 2005 financial performance, compared to the second quarter of 2004, include the following:

•Revenues increased 4.4% to $240.3 million, driven by 14.9% growth in our International operations.

•Operating profit decreased 30.4% to $8.4 million, reflecting anticipated sales and profit pressures in the U.S. business.

•Operating margin decreased 170 basis points to 3.5%.

•Gross margin declined 60 basis points driven by higher off-price sales and product mix impacts in the U.S. business.

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•Operating expense as a percent of sales increased 110 basis points reflecting impacts from U.S. revenue declines and increased investments in the international business.

•Net income decreased 19.4% to $6.3 million.

•Diluted earnings per share decreased 18.2% from $0.11 to $0.09.

•Cash at the end of the quarter was $189.8 million with no debt outstanding.

Results of Operations for the Three Months Ended July 1, 2005 and July 2, 2004

Revenue

Consolidated revenue growth of 4.4% in the second quarter of 2005 reflected double-digit constant dollar gains in international markets which offset moderate declines in the U.S. International revenues were $104.8 million, 14.9% ahead of the second quarter of 2004, or 10.8% in constant dollars. International gains reflected strong growth in Northern Europe and Asia. U.S. business revenue totaled $135.5 million in the second quarter of 2005, down 2.5% from the prior-year period, reflecting anticipated decreases in footwear sales impacted by retailer caution following soft prior year sell-through results. U.S. revenues were supported by higher levels of off-price sales linked to inventory control efforts, which added approximately 3.0% to overall revenue growth. Global revenue results were pressured by an earlier phasing of customer orders in the first half of 2005, driven in part by an earlier Easter timing this year, which benefited first quarter results. Changes in currency exchange rates were responsible for 1.6% of consolidated revenue growth. We anticipate that negative impacts from foreign exchange rate trends will pressure revenue growth for the balance of this year.

Segments Review

We have three reportable business segments (see Note 9): U.S. Wholesale, U.S. Consumer Direct and International.

Revenues for our U.S. Wholesale business decreased 3.7% to $100.5 million, driven by lower sales of boots, women’s casual and kids’ product. These decreases offset double-digit growth in Timberland brand apparel, Timberland PRO^â footwear and outdoor performance footwear sales – and solid gains in men’s casual wholesale footwear revenues.

Timberland’s U.S. Consumer Direct business expanded 1.1% to $35.0 million, benefiting from comparable store sales gains of 1.3% and continued growth in Timberland’s e-commerce business. During the second quarter, we opened two new outlet stores and are targeting additional openings in the range of five stores later this year.

International revenues for the first quarter of 2005 expanded 14.9%, or 10.8% in constant dollars, to $104.8 million. International growth was balanced across major product categories, reflecting strong gains in both footwear and apparel and accessory sales. Overall, International revenues increased to 43.6% of total consolidated revenues.

European revenues were $73.4 million, up 13.9% compared to the prior-year period, with an increase of 9.2% in constant dollars. Revenue growth was driven by continued strong growth in the UK and gains in key expansion markets such as Spain and Scandinavia. European growth continues to be driven by strong footwear growth, supported by double-digit gains in kids’ and boots sales. Apparel revenues were also up solidly, in part reflecting gains in “at-once” sales as customers order relatively closer to need. Apparel sales results continue to benefit from investments in store refurbishments over the past several months. In the second quarter, we continued to expand our integrated presence at retail, adding two specialty stores in London.

In Asia, second quarter of 2005 revenues grew 18.5%, or 16.1% in constant dollars, to $27.7 million, driven by gains in key regions including double-digit growth in Hong Kong, Taiwan, Singapore and Malaysia and solid growth in Japan.  Growth was driven by strong gains in boots, outdoor performance footwear and apparel.

Products

Worldwide footwear revenue was $177.6 million in the second quarter of 2005, up $4.2 million or 2.4% from the prior-year period. Excluding the benefit of foreign exchange, footwear revenues increased 1.2%. Growth was driven by global gains in

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outdoor performance, kids’, Timberland PRO^â series, and men’s casual footwear. Worldwide footwear unit sales were up 5.8%, while the average price decreased by 3.2%, reflecting higher levels of off-price sales in the U.S. and impacts from product and channel mix, offset by foreign exchange rate benefits.

Worldwide apparel and accessories revenue for the second quarter of 2005 grew by 9.0% to $59.6 million. Excluding the benefit of foreign exchange, apparel and accessories revenue increased 7.1%. Apparel and accessories unit sales increased 5.3% while average selling prices increased 3.5%, reflecting favorable foreign currency impacts and product mix benefits.

Channels

Revenue growth in the second quarter of 2005 was balanced across channels, with wholesale revenues up 4.4% to $168.8 million and retail revenues also up 4.4% to $71.5 million. Worldwide comparable store sales increased 0.7%. Globally, we opened ten retail locations and closed two in the second quarter of 2005.

Gross Profit

Gross profit as a percentage of sales, or gross margin, was 49.1% for the second quarter of 2005, 60 basis points lower than second quarter 2004 gross margin. The decrease in gross margin reflected lower U.S. gross margins, impacted by higher levels of off-price and discounted sales, and product mix. These impacts were partially offset by favorable international business growth and product mix benefits.

We include the costs of procuring inventory (inbound freight and duty, overhead and other similar costs) in cost of goods sold. These costs amounted to $21.8 million and $22.2 million for the second quarters of 2005 and 2004, respectively.

Operating Expense

Operating expense for the second quarter of 2005 was $109.6 million, 7.0% higher than the $102.4 million reported in the 2004 second quarter. As a percentage of revenue, operating expense increased 110 basis points to 45.6%. The operating expense increase was driven by a $3.9 million increase in selling expenses and a $3.2 million increase in general and administrative expenses. Foreign exchange rate changes added $1.4 million, or 1.4%, to overall operating expense growth. We intend to continue to invest behind strategic initiatives, including our global brand building efforts and expect operating expense to outpace revenue growth for the balance of this year. We also will incur one-time pre-tax restructuring costs of approximately $5.5 million in the second half of 2005 related to the closure of our Puerto Rico manufacturing facility (see Note 15).

Selling expense for the second quarter of 2005 was $85.2 million, $3.9 million, or 4.8%, higher than in the second quarter of 2004. The increase was driven by $1.8 million in distribution costs, $1.3 million of costs related to international retail expansion and $0.7 million in product development costs offset by decreases of approximately $0.9 million in marketing expenditures and $0.3 million in incentive compensation programs. Foreign exchange rate changes added $1.3 million, or 1.5%, to overall selling expense growth.

We include the costs of physically managing inventory (warehousing and handling costs) in selling expense. These costs totaled $8.6 million and $7.5 million in the second quarters of 2005 and 2004, respectively.

Advertising expense, which is also included in selling expense, was $4.1 million and $6.3 million in the second quarters of 2005 and 2004, respectively. The decrease primarily reflected reductions in U.S. cooperative advertising costs. Advertising costs are expensed at the time the advertising is used, predominantly in the season that the advertising costs are paid. On both July 1, 2005 and July 2, 2004, we had $0.9 million of prepaid advertising recorded on our consolidated balance sheets.

General and administrative expense for the second quarter of 2005 was $24.3 million, $3.2 million, or 15.3%, higher than the prior-year period. As a percentage of revenue, general and administrative expense increased by 100 basis points, compared with the prior-year period. The increase reflected investments in organizational capability in the international business, enhanced global support services and increased legal and compliance costs. Foreign exchange rate changes also added approximately $0.1 million, or 0.7%, to overall general and administrative expense growth.

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Operating Income

Operating income for the second quarter of 2005 was $8.4 million, $3.7 million, or 30.4% lower than second quarter 2004.  Operating income as a percentage of revenue decreased 170 basis points to 3.5%.

Operating income for our U.S. Wholesale segment was $29.0 million, $3.0 million, or 9.4% lower than the prior-year period. The revenue decrease of 3.7% and gross margin decline of 270 basis points were offset by a 90 basis point improvement in operating expense as a percentage of revenue.  These results reflected retailer caution following soft prior year sell-through results and impacts from higher levels of off-price sales related to inventory control efforts. We anticipate these factors will continue to pressure U.S. results for the balance of 2005.

Our U.S. Consumer Direct segment’s operating income for the 2005 second quarter increased to $2.8 million, or 8.3% higher than the prior-year period. Revenue growth of 1.1% was complemented by a 30 basis point increase in gross margin, as well as cost efficiencies, reflecting our focus on enhancing returns at our retail locations.

Operating income for our International segment grew by 17.7% to $9.1 million, driven by revenue growth of 14.9% and an 80 basis point improvement in operating expense as a percentage of sales. Both benefited from favorable foreign exchange rates. The expansion in gross margin also reflected favorable product mix reflecting strong footwear sales.

Our Unallocated Corporate expenses, which include central support and administrative costs, not allocated to our business segments, increased 7.5% to $32.4 million. Unallocated Corporate expenses as a percentage of total revenue increased 40 basis points to 13.5% of total revenue.

Other Income and Taxes

Interest income, net, which is comprised of interest income offset by fees related to the establishment and maintenance of our revolving credit facility and interest paid on short-term borrowings, was $1.1 million and $0.2 million for the second quarters of 2005 and 2004, respectively. Higher interest rates and higher cash balances supported the increase in net interest income. While we expect continued benefits from relatively higher interest rates this year, we expect the year over year gains in interest income will narrow in future quarters reflecting the seasonality of our cash flow.

Other, net included $0.8 million of foreign exchange losses resulting from the timing of settlement of local currency denominated receivables and payables. These losses were driven by the volatility of exchange rates within the second quarter of 2005, and should not be considered indicative of expected future results.

The effective income tax rate was 34.0% in the second quarter of 2005, compared to 35.5% in the second quarter of 2004. We established a Hong Kong procurement company and international treasury center in Switzerland in the fourth quarter of 2004, which better aligns our organizational structure with our expanding global presence and reduces our estimated taxes on foreign earnings.

Results of Operations for the Six Months Ended July 1, 2005 and July 2, 2004

Revenue

Consolidated revenue growth of 7.7% in the first half of 2005 reflected double-digit constant dollar gains in our International business and modest gains in our U.S. business. U.S. business revenue totaled $290.6 million in the first half of 2005, up 0.9% over the prior-year period. International revenues were $303.8 million, 15.2% ahead of the first half of 2004, or 10.9% in constant dollars. Overall, changes in currency exchange rates were responsible for 2.0% of consolidated revenue growth.

Segments Review

Revenues for our U.S. Wholesale business increased 0.7% to $217.3 million, driven by double-digit growth in Timberland PRO^â  footwear, men’s casual footwear, apparel and accessories, and outdoor performance footwear. These gains were offset by declines in women’s casual footwear, impacted by comparisons to a very strong prior year sell-in of select programs such as the Metroslim line, and modest declines in boots and kids’ footwear. Overall, U.S. Wholesale business growth was supported by higher levels of off-price sales related to inventory control efforts.

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U.S. Consumer Direct posted solid performance in the first half with comparable store sales gains of 2.6%, supported by solid footwear growth, which benefited from first quarter winter weather conditions. Our e-commerce business also posted strong revenue gains. Sales gains were driven by growth in boots and kids’, offset by modest declines in women’s casual footwear, and apparel. U.S. Consumer Direct revenues for the first half expanded $0.9 million, or 1.3%, to $73.3 million, with overall growth impacted by a decrease in U.S. store count over the past year.

International revenues for the first half of 2005 increased 15.2% to $303.8 million, benefiting from strong growth in our kids’ and boots footwear categories, foreign exchange rate benefits and solid growth from apparel and outdoor performance footwear. Overall, International revenues increased to 51.1% of total consolidated revenues.

European revenues were $235.7 million, up 15.8% compared to the prior-year period, with an increase of 11.1% on a constant dollar basis. Revenues were driven by growth in key European markets such as the UK, Scandinavia, Benelux, Spain, France, and Italy. European footwear sales gains were driven by double-digit constant dollar gains in kids’ and boots. Apparel sales were also up moderately, reflecting benefits from our enhanced focus on Timberland’s core heritage consumer.

In Asia, first half 2005 revenues grew 14.4%, or 11.9% in constant dollars, to $59.3 million, reflecting strong gains in key regions, including double-digit gains in important Southeast Asia markets such as Taiwan and Hong Kong and solid growth in Japan. Growth was driven by strong gains in apparel and key footwear categories such as boots and outdoor performance.

Products

Worldwide footwear revenue was $443.6 million in the first half of 2005, up $30.9 million or 7.5% from the prior-year period. Excluding the benefit of foreign exchange, footwear revenues increased 5.7%. Growth was driven by global gains in kids’, boots, outdoor performance, men’s casual, and Timberland PRO^â series footwear. Worldwide footwear unit sales were up 9.4%, while the average price decreased by 1.8%, reflecting higher levels of off-price sales and impacts of product mix, offset by foreign exchange rate benefits.

Worldwide apparel and accessories revenue for the first half of 2005 grew by 7.6% to $144.2 million. Excluding the benefit of foreign exchange, apparel and accessories revenue increased 5.4%. Apparel and accessories unit sales increased 5.3% while average selling prices increased 2.2%, reflecting favorable foreign currency impacts.

Channels

Revenue growth in the first half of 2005 reflected strong global gains in the wholesale channel and solid gains in the consumer direct channels. Global wholesale revenues grew 8.7% to $444.4 million while global consumer direct revenues increased 4.8% to $150.1 million. Worldwide comparable store sales increased 3.1%. Globally, we opened sixteen retail locations and closed thirteen in the first half of 2005.

Gross Profit

Gross profit as a percentage of sales, or gross margin, was 51.3% for the first half of 2005, 40 basis points higher than first half 2004 gross margin. Foreign exchange rate trends, benefits from favorable hedge rate changes and lower product related costs drove the improvement, offset by impacts from higher levels of off-price and discounted sales.

We include the costs of procuring inventory (inbound freight and duty, overhead and other similar costs) in cost of goods sold. These costs amounted to $43.1 million and $42.3 million for the first halves of 2005 and 2004, respectively.

Operating Expense

Operating expense for the first half of 2005 was $234.8 million, 6.2% higher than the $221.1 million reported in the 2004 first half. As a percentage of revenue, operating expense decreased 60 basis points to 39.5%. The operating expense increase was driven by a $9.3 million increase in selling expenses and a $4.4 million increase in general and administrative expenses. Foreign exchange rate changes added $3.3 million, or 1.5%, to overall operating expense growth.

Selling expense for the first half of 2005 was $186.0 million, $9.3 million, or 5.3% higher than in the first half of 2004. The

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increase was driven by $3.1 million of costs related to international retail expansion, $3.0 million in distribution costs and $1.1 million in product development costs offset by a decrease of $1.5 million in incentive compensation programs. Foreign exchange rate changes added $3.0 million, or 1.7%, to overall selling expense growth.

We include the costs of physically managing inventory (warehousing and handling costs) in selling expense. These costs totaled $17.6 million and $15.8 million in the first half of 2005 and 2004, respectively.

Advertising expense, which is also included in selling expense, was $11.3 million and $13.7 million in the first halves of 2005 and 2004, respectively. The decrease primarily reflected reductions in U.S. cooperative advertising costs. Advertising costs are expensed at the time the advertising is used, predominantly in the season that the advertising costs are paid.

General and administrative expense for the first half of 2005 was $48.8 million, $4.4 million, or 9.9% higher than the prior-year period. As a percentage of revenue, general and administrative expense increased by 10 basis points, compared with the prior-year period. The increase reflected enhanced global support services, increased legal and compliance costs, investments in organizational capability in the international business and increased costs associated with our incentive compensation programs.  Foreign exchange rate changes also added approximately $0.3 million, or 0.7%, to overall general and administrative expense growth.

Operating Income

Operating income for the first half of 2005 was $70.3 million, $10.5 million, or 17.5% higher than the first half of 2004.  Operating income as a percentage of revenue expanded 100 basis points to 11.8%.

Operating income for our U.S. Wholesale segment was $65.4 million, $3.8 million, or 5.5% lower than the prior-year period. Revenue growth of 0.7% was offset by a 300 basis point decline in gross margin. The decrease in margin was driven by higher levels of off-price sales related to inventory control efforts and product mix impacts.

Our U.S. Consumer Direct segment’s operating income for the 2005 first half increased to $7.2 million, or 21.6% higher than the prior period. The increase was driven by 1.3% revenue growth and a 170 basis point decrease in operating expense as a percentage of sales reflecting leveraged variable store expenses and real estate portfolio management.

Operating income for our International segment grew by 34.3% to $64.3 million for the first half. Revenue growth of 15.2% and a 240 basis point gross margin improvement drove much of the increase. Both benefited from favorable foreign exchange rate changes. The expansion in gross margin also reflected favorable product mix reflecting strong footwear sales and lower product costs resulting from enhanced supply chain execution offset by relatively higher markdowns related to inventory control efforts. Operating expense rates for our International segment decreased 70 basis points.

Our Unallocated Corporate expenses, which include central support and administrative costs, not allocated to our business segments, increased 5.5% to $66.6 million, below the rate of revenue growth. Unallocated Corporate expenses as a percentage of total revenue fell 20 basis points to 11.2% of total revenue.

Other Income and Taxes

Interest income, net, which is comprised of interest income offset by fees related to the establishment and maintenance of our revolving credit facility and interest paid on short-term borrowings, was $2.2 million and $0.4 million for the first halves of 2005 and 2004, respectively. Higher interest rates and higher cash balances supported the increase in net interest income. While we expect continued benefits from relatively higher interest rates this year, we expect the year over year gains in interest income will narrow in future quarters reflecting the seasonality of our cash flow.

Other, net included $0.2 million of foreign exchange gains resulting from the timing of settlement of local currency denominated receivables and payables. These gains were driven by the volatility of exchange rates within the first half of 2005, and should not be considered indicative of expected future results.

The effective income tax rate was 34.0% in the first half of 2005, compared to 35.5% in the first half of 2004. We established a Hong Kong procurement company and international treasury center in Switzerland in the fourth quarter of 2004, which better aligns our organizational structure with our expanding global presence and reduces our estimated taxes on foreign earnings.

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Reconciliation of Total and International Revenue Increases To Constant Dollar Revenue Increases

Total Company Revenue Reconciliation:

	For the Three Months Ended July 1, 2005			For the Six Months Ended July 1, 2005
	$ Millions Change		% Change	$ Millions Change		% Change
Revenue increase (GAAP)	$	10.1	4.4	$	42.5	7.7
Increase due to foreign exchange rate changes	3.7		1.6	11.1		2.0
Revenue increase in constant dollars	6.4		2.8	31.4		5.7

International Revenue Reconciliation:

	For the Three Months Ended July 1, 2005			For the Six Months Ended July 1, 2005
	$ Millions Change		% Change	$ Millions Change		% Change
Revenue increase (GAAP)	$	13.6	14.9	$	40.0	15.2
Increase due to foreign exchange rate changes	3.7		4.1	11.1		4.3
Revenue increase in constant dollars	9.9		10.8	28.9		10.9

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

Accounts Receivable and Inventory

Accounts receivable decreased 1.0% to $130.6 million at July 1, 2005, compared with $131.9 million reported at July 2, 2004. Days sales outstanding decreased three days to 49 days reflecting improved collection performance offset by a shift in revenue to later in the quarter. Wholesale days outstanding decreased two days from 61 to 59 days for the second quarters ended July 2, 2004 and July 1, 2005, respectively.

Inventory increased 26.6% to $216.5 million at July 1, 2005 from $170.9 million at July 2, 2004. In the fourth quarter of 2004, we established a Hong Kong procurement company and international treasury center in Switzerland to better align our organizational structure with our expanding global presence and provide enhanced support to our global sourcing operations and International business. Related to the implementation of the new organizational structure, we modified certain sourcing arrangements, which resulted in earlier transfer of title for a portion of the Company’s third party sourced product in 2005. Earlier transfer of title resulted in offsetting higher quarter end inventory and accounts payable balances, as we recognized an inventory asset and related payable roughly two weeks earlier than in the prior-year period. Had similar sourcing arrangements been in effect in the second quarter of 2004, we estimate that inventory and accounts payable balances would have increased by approximately $32.8 million. Adjusting for this change, on a comparable basis, inventory rose 6.3%. Had the new sourcing arrangements been in place in the past, we estimate our annual inventory turns would have been approximately 4.0 times for the second quarter of 2005, compared to 3.9 times for the second quarter of 2004, reflecting continued improvement in our inventory control efforts. The earlier transfer of title has no impact on profit or cash flow.

Liquidity and Capital Resources

Net cash used by operations for the first half of 2005 was $37.5 million, compared with $62.4 million for the first half of 2004. The reduction in use of cash in the first half of 2005 compared with 2004 was primarily due to an increase in accounts payable, strong collection performance and higher net income offset by an increase in inventory.

Net cash used for investing activities amounted to $10.0 million in the first half of 2005, compared with $11.8 million in the first half of 2004. Capital expenditures in 2005 were $9.5 million versus $10.7 million in 2004, primarily driven by International investments.

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Net cash used for financing activities was $66.8 million in the first half of 2005, compared with $3.9 million in the first half of 2004. Cash flows from financing activities reflected share repurchases of $80.3 million in the first six months of 2005, compared with $20.1 million in the first six months of 2004. We received cash inflows of $13.5 million in the first half of 2005 from the issuance of common stock related to the exercise of employee stock options, compared with $16.3 million in the first half of 2004.

We have an unsecured committed revolving credit agreement with a group of banks, which matures on April 30, 2007 (“Agreement”), unless prior to April 30, 2006, we elect to extend the final maturity date to April 30, 2008. The Agreement provides for $200 million of committed borrowings, of which up to $125 million may be used for letters of credit. Under certain circumstances, we may increase the committed borrowing limit by $50 million for a total commitment of $250 million. Under the terms of the Agreement, we may borrow at interest rates based on eurodollar rates (approximately 3.3% at July 1, 2005), plus an applicable margin based on a fixed-charge coverage grid of between 50 and 100 basis points that is adjusted quarterly. At July 1, 2005, 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. At July 1, 2005, 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.

We had uncommitted lines of credit available from certain banks totaling $50 million at July 1, 2005. Any borrowings under these lines would be at prevailing money market rates (approximately 3.8% at July 1, 2005). Further, we had an uncommitted letter of credit facility of $75 million to support inventory purchases. These arrangements may be terminated at any time at the option of the banks or the Company.

Management believes that our capital needs for 2005 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 Annual Report on Form 10-K entitled “Cautionary Statements for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995” and in “Forward-looking Information” below, 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 July 1, 2005 and July 2, 2004, we had letters of credit outstanding of $32.4 million and $32.8 million, respectively. These letters of credit were issued predominantly for the purchase of inventory. As of July 1, 2005, the Company had $221.0 million in hedging contracts outstanding, all of which are due to settle within the next 10 months (see Note 7).

We have the following off balance sheet arrangements:

(Dollars in Millions)

July 1, 2005	Total Amounts Committed
Lines of credit	$	—
Letters of credit	32.4
Hedging contracts	221.0
Total	$	253.4

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

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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 2005 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.

New Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123R, “Share-Based Payment.” This statement is a revision of SFAS No. 123 and supersedes APB Opinion No. 25 and its related implementation guidance. SFAS No. 123R focuses primarily on accounting for transactions in which an entity obtains employee services in exchange for share-based payment transactions. The Statement requires entities to recognize stock compensation expense for awards of equity instruments to employees based on the grant-date fair value of those awards (with limited exceptions). In April 2005, the Securities and Exchange Commission announced the adoption of a new rule that amends the compliance dates for SFAS No. 123R. The Commission’s new rule allows implementation of SFAS No. 123R at the beginning of a company’s next fiscal year instead of the first interim or annual reporting period that begins after June 15, 2005. We will adopt the statement on January 1, 2006. Our adoption of SFAS No. 123R will increase stock-based compensation expense and decrease net income. In addition, SFAS No. 123R requires that the excess tax benefits related to stock-based compensation be reported as a cash inflow from financing activities rather than a reduction of taxes paid in cash from operations.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections–A Replacement of APB Opinion No. 20 and FASB Statement No. 3.”  SFAS No. 154 applies to all voluntary changes in accounting principle and requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable.  SFAS No. 154 requires that a change in depreciation, amortization or depletion method for long-lived, nonfinancial assets be accounted for as a change of estimate affected by a change in accounting principle.  SFAS No. 154 also carries forward without change the guidance in APB Opinion No. 20 with respect to accounting for changes in accounting estimates, changes in the reporting unit and correction of an error in previously issued financial statements.  The Company is required to adopt SFAS No. 154 for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.  The adoption of SFAS No. 154 is not expected to have a material effect on the Company’s consolidated financial position or results of operations.

In June 2005, the FASB’s Emerging Issues Task Force reached a consensus on Issue No. 05-6, “Determining the Amortization Period for Leasehold Improvements” (“EITF 05-6”).  The guidance requires that leasehold improvements acquired in a business combination or purchased subsequent to the inception of a lease be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date of the business combination or purchase.  The guidance is effective for periods beginning after June 29, 2005. The adoption of EITF 05-6 is not expected to have a material effect on the Company’s consolidated financial position or results of operations.

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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 Annual Report on Form 10-K for the year ended December 31, 2004, investors should be aware of certain risks, uncertainties and assumptions 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 may differ materially from those expressed or implied by such forward-looking statements due to certain risks, uncertainties and assumptions. These risks, uncertainties and assumptions include, but are not limited to:

•Our ability to successfully market and sell our products in a highly competitive industry and in view of changing consumer trends, consumer acceptance of products, and other factors affecting retail market conditions, including the current U.S. economic environment and the global economic and political uncertainties resulting from the continuing war on terrorism;

•Our ability to locate and retain independent manufacturers to produce lower cost, high-quality products with rapid turnaround times;

•Our ability to manage our foreign exchange rate risks;

•Our reliance on a limited number of key suppliers;

•Our ability to obtain adequate materials at competitive prices;

•Our ability to successfully invest in our infrastructure and product based upon advance sales forecasts;

•Our ability to recover our investment in, and expenditures of, our retail organization through adequate sales at such retail locations;

•Our ability to respond to actions of our competitors, some of whom have substantially greater resources than ours;

•Our ability to manage the impact of import and export duties including anti-dumping duties that could be imposed by the European Union.

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

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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 interest rate movements on borrowings and investments and currency rate movements on non-U.S. dollar denominated assets, liabilities and income. 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.

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 less than 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 July 1, 2005 and July 2, 2004, we had no short-term or long-term debt outstanding.

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 10 months or less. Based upon sensitivity analysis as of July 1, 2005, a 10% change in foreign exchange rates would cause the fair value of our financial instruments to increase/decrease by approximately $13.3 million, compared with $17.4 million at July 2, 2004.

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 Act 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 July 1, 2005, 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 July 1, 2005, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Part II OTHER INFORMATION

Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES(1)

For the Three Fiscal Months Ended July 1, 2005

Period*	Total Number of Shares Purchased **	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs
April 2 – April 29	342,942	$	36.23	342,942	3,252,162
April 30 – May 27	348,291	35.88		348,291	2,903,871
May 28 – July 1	320,806	38.32		320,806	2,583,065
Q2 Total	1,012,039	$	36.77	1,012,039

Footnote (1)

	Announcement Date	Approved Program Size (Shares)	Expiration Date
Program 1	10/16/2003	8,000,000	None

No existing programs expired or were terminated during the reporting period. See Note 13 to our unaudited consolidated financial statements in this Form 10-Q for additional information.

Share and price per share information is adjusted to reflect the Company’s 2-for-1 stock split. The Board approved a 100% increase in shares remaining under its previously announced repurchase program as of the April 14, 2005 record date to reflect the impact of the stock split. The increase was effective immediately after the May 2, 2005 distribution date.

* Fiscal month

**  Based on trade date - not settlement date

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Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a)We held our Annual Meeting of Stockholders on May 19, 2005 (the “Annual Meeting”).

(b)At the Annual Meeting, proxies were solicited pursuant to Regulation 14A of the Securities Exchange Act of 1934 and all nominees for director were elected as indicated by the following schedule of votes cast for each director. The holders of Class A Common Stock elected the following directors:

Nominee	Total Votes for Each Director	Total Votes Withheld from Each Director
Ian W. Diery	23,494,699	1,666,501
Irene M. Esteves	22,457,994	2,703,206
John A. Fitzsimmons	23,494,463	1,666,501

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

Nominee	Total Votes for Each Director	Total Votes Withheld from Each Director
Sidney W. Swartz	82,260,328	1,619,172
Jeffrey B. Swartz	82,630,774	1,248,726
Virginia H. Kent	82,642,490	1,237,010
Kenneth T. Lombard	82,641,765	1,237,735
Edward W. Moneypenny	82,641,343	1,238,157
Peter R. Moore	82,641,515	1,237,985
Bill Shore	82,249,934	1,629,566
Terdema L. Ussery, II	82,640,755	1,238,745

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

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Item 6.  EXHIBITS

(a)Exhibits.

Exhibit 31.1 – Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

Exhibit 31.2 – Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

Exhibit 32.1 – Chief Executive Officer Certification Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

Exhibit 32.2 – Chief Financial Officer Certification Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

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SIGNATURES

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

	THE TIMBERLAND COMPANY
	(Registrant)
Date: August 10, 2005	By:	/S/ BRIAN P. MCKEON
		Brian P. McKeon
		Executive Vice President-Finance and Administration, Chief Financial Officer
Date: August 10, 2005	By:	/S/ JOHN CRIMMINS
		John 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, furnished herewith.
Exhibit 32.2	Chief Financial Officer Certification Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

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EX-31.1

Exhibit 31.1

RULE 13a-14(a) CERTIFICATION IN

ACCORDANCE WITH SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

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

1.I have reviewed this report on Form 10-Q of The Timberland Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 10, 2005	/S/ JEFFREY B. SWARTZ
	Jeffrey B. Swartz
	Chief Executive Officer

1

EX-31.2

Exhibit 31.2

RULE 13a-14(a) CERTIFICATION IN

ACCORDANCE WITH SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

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

1.             I have reviewed this report on Form 10-Q of The Timberland Company;

2.             Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.             Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.             The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)             Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)            Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)             Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)            Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.             The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)             All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)            Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 10, 2005	/S/ BRIAN P. MCKEON
	Brian P. McKeon
	Chief Financial Officer

1

EX-32.1

Exhibit 32.1

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

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, the undersigned, as Chief Executive Officer of The Timberland Company (the “Company”), does hereby certify that to the undersigned’s knowledge:

1.             The Company’s Quarterly Report on Form 10-Q for the period ending July 1, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.             The information contained in the Company’s Quarterly Report on Form 10-Q for the period ending July 1, 2005 fairly presents, in all material respects, the financial condition and results of operations of the Company.

  /S/ JEFFREY B. SWARTZ

Jeffrey B. Swartz

Chief Executive Officer

Date: August 10, 2005

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.

A signed original of this written statement, required by Section 906, has been provided to The Timberland Company and will be retained by The Timberland Company and furnished to the Securities and Exchange Commission or its staff upon request.

1

EX-32.2

Exhibit 32.2

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

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, the undersigned, as Chief Financial Officer of The Timberland Company (the “Company”), does hereby certify that to the undersigned’s knowledge:

1.             The Company’s Quarterly Report on Form 10-Q for the period ending July 1, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.             The information contained in the Company’s Quarterly Report on Form 10-Q for the period ending July 1, 2005 fairly presents, in all material respects, the financial condition and results of operations of the Company.

  /S/ BRIAN P. MCKEON

Brian P. McKeon

Chief Financial Officer

Date: August 10, 2005

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.

A signed original of this written statement, required by Section 906, has been provided to The Timberland Company and will be retained by The Timberland Company and furnished to the Securities and Exchange Commission or its staff upon request.

1