UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

Form 10-Q

(Mark One)



þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~March 1, 2015~~February 28, 2016



¨		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 002-90139

_________________

LEVI STRAUSS & CO.

(Exact Name of Registrant as Specified in Its Charter)



DELAWARE		94-0905160
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1155 Battery Street, San Francisco, California 94111

(Address of Principal Executive Offices) (Zip Code)

(415) 501-6000

(Registrant’s Telephone Number, Including Area Code)

None

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

_________________

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 ¨ No þ

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§(��232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See definition of “Large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ

The Company is privately held. Nearly all of its common equity is owned by descendants of the family of the Company’s founder, Levi Strauss, and their relatives. There is no trading in the common equity and therefore an aggregate market value based on sales or bid and asked prices is not determinable.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock $.01 par value — ~~37,419,788~~37,452,319 shares outstanding on April ~~9, 2015~~7, 2016

Table of Contents

LEVI STRAUSS & CO. AND SUBSIDIARIES

INDEX TO FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016



		Page Number
PART I — FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (unaudited):
	Consolidated Balance Sheets as of ~~March 1, 2015,~~February 28, 2016, and November ~~30, 2014~~29, 2015	3
	Consolidated Statements of Income for the Three Months Ended February 28, 2016, and March 1, 2015 ~~and February 23, 2014~~	4
	Consolidated Statements of Comprehensive Income for the Three Months Ended February 28, 2016, and March 1, 2015 ~~and February 23, 2014~~	5
	Consolidated Statements of Cash Flows for the Three Months Ended February 28, 2016, and March 1, 2015 ~~and February 23, 2014~~	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1819
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	2928
Item 4.	Mine Safety Disclosures	2928
Item 5.	Other Information	2928
Item 6.	Exhibits	29
SIGNATURE		30

Table of Contents

PART I — FINANCIAL INFORMATION



Item 1.	CONSOLIDATED FINANCIAL STATEMENTS

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	(Unaudited)						(Unaudited)
	March 1, 2015			November 30, 2014			February 28, 2016			November 29, 2015
	(Dollars in thousands)						(Dollars in thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	202,730		$	298,255		$	271,101		$	318,571
Trade receivables, net of allowance for doubtful accounts of $11,533 and $12,704	368,808			481,981
Trade receivables, net of allowance for doubtful accounts of $11,043 and $11,025							388,620			498,196
Inventories:
Raw materials	4,053			4,501			3,382			3,368
Work-in-process	4,076			5,056			3,696			3,031
Finished goods	585,481			591,359			733,213			600,460
Total inventories	593,610			600,916			740,291			606,859
Deferred tax assets, net	166,645			178,015
Other current assets	119,294			99,347			109,410			104,523
Total current assets	1,451,087			1,658,514			1,509,422			1,528,149
Property, plant and equipment, net of accumulated depreciation of $792,643 and $784,493	372,452			392,062
Property, plant and equipment, net of accumulated depreciation of $825,536 and $811,013							386,272			390,829
Goodwill	236,090			238,921			235,541			235,041
Other intangible assets, net	45,053			45,898			43,170			43,350
Non-current deferred tax assets, net	486,560			488,398			569,936			580,640
Other non-current assets	99,860			100,280			93,890			106,386
Total assets	$	2,691,102		$	2,924,073		$	2,838,231		$	2,884,395

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term debt	$	33,847		$	131,524		$	40,779		$	114,978
Current maturities of long-term debt							35,394			32,625
Accounts payable	197,290			234,892			267,033			238,309
Accrued salaries, wages and employee benefits	139,149			178,470			133,269			182,430
Restructuring liabilities	42,596			57,817			15,736			20,141
Accrued interest payable	25,028			5,679			21,004			5,510
Accrued income taxes	10,051			9,432			17,190			6,567
Other accrued liabilities	260,619			263,182			296,516			245,607
Total current liabilities	708,580			880,996			826,921			846,167
Long-term debt	1,091,622			1,092,478			1,005,243			1,004,938
Long-term capital leases	11,423			11,619			12,466			12,320
Postretirement medical benefits	116,377			122,213			102,071			105,240
Pension liability	386,446			406,398			348,921			358,443
Long-term employee related benefits	69,434			80,066			59,938			73,342
Long-term income tax liabilities	34,473			35,821			27,359			26,312
Other long-term liabilities	55,890			62,363			57,140			56,987
Total liabilities	2,474,245			2,691,954			2,440,059			2,483,749
Commitments and contingencies
Temporary equity	79,921			77,664			76,538			68,783

Stockholders’ Equity:
Levi Strauss & Co. stockholders’ equity
Common stock — $.01 par value; 270,000,000 shares authorized; 37,437,470 shares and 37,430,283 shares issued and outstanding	374			374
Common stock — $.01 par value; 270,000,000 shares authorized; 37,460,145 shares and 37,460,145 shares issued and outstanding							375			375
Additional paid-in capital	—			—			—			3,291
Retained earnings	518,020			528,209			705,985			705,668
Accumulated other comprehensive loss	(382,537		)	(375,340		)	(386,995		)	(379,066		)
Total Levi Strauss & Co. stockholders’ equity	135,857			153,243			319,365			330,268
Noncontrolling interest	1,079			1,212			2,269			1,595
Total stockholders’ equity	136,936			154,455			321,634			331,863
Total liabilities, temporary equity and stockholders’ equity	$	2,691,102		$	2,924,073		$	2,838,231		$	2,884,395

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

Table of Contents

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME


	Three Months Ended						Three Months Ended
	March 1, 2015			February 23, 2014			February 28, 2016			March 1, 2015
	(Dollars in thousands) (Unaudited)						(Dollars in thousands) (Unaudited)
Net revenues	$	1,055,075		$	1,129,990		$	1,056,500		$	1,055,075
Cost of goods sold	518,010			553,637			496,902			518,010
Gross profit	537,065			576,353			559,598			537,065
Selling, general and administrative expenses	425,282			424,762			441,163			425,282
Restructuring, net	4,338			57,935			1,848			4,338
Operating income	107,445			93,656			116,587			107,445
Interest expense	(23,312		)	(31,829		)	(14,902		)	(23,312		)
Other income (expense), net	(26,028		)	4,183
Other expense, net							(2,219		)	(26,028		)
Income before income taxes	58,105			66,010			99,466			58,105
Income tax expense	19,822			16,387			33,175			19,822
Net income	38,283			49,623			66,291			38,283
Net loss attributable to noncontrolling interest	109			348
Net (income) loss attributable to noncontrolling interest							(455		)	109
Net income attributable to Levi Strauss & Co.	$	38,392		$	49,971		$	65,836		$	38,392

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

Table of Contents

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended
March 1,
2015 February 23,
2014

(Dollars in thousands)
(Unaudited)
Net income $ 38,283
$ 49,623
Other comprehensive loss, net of related income taxes:
Pension and postretirement benefits 4,099
2,302
Net investment hedge gains (losses) 87
(4,228 )
Foreign currency translation losses (11,476 ) (4,114 )
Unrealized gain on marketable securities 70
39
Total other comprehensive loss (7,220 ) (6,001 )
Comprehensive income 31,063
43,622
Comprehensive loss attributable to noncontrolling interest 132
389
Comprehensive income attributable to Levi Strauss & Co. $ 31,195
$ 44,011



	Three Months Ended
	February 28, 2016			March 1, 2015
	(Dollars in thousands) (Unaudited)
Net income	$	66,291		$	38,283
Other comprehensive income (loss), before related income taxes:
Pension and postretirement benefits	3,582			4,607
Net investment hedge (losses) gains	(664		)	141
Foreign currency translation losses	(7,575		)	(10,532		)
Unrealized (losses) gains on marketable securities	(1,829		)	113
Total other comprehensive loss, before related income taxes	(6,486		)	(5,671		)
Income tax expense related to items of other comprehensive income	(1,224		)	(1,549		)
Comprehensive income, net of income taxes	58,581			31,063
Comprehensive (income) loss attributable to noncontrolling interest	(674		)	132
Comprehensive income attributable to Levi Strauss & Co.	$	57,907		$	31,195

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

Table of Contents

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended						Three Months Ended
	March 1, 2015			February 23, 2014			February 28, 2016			March 1, 2015
	(Dollars in thousands) (Unaudited)						(Dollars in thousands) (Unaudited)
Cash Flows from Operating Activities:
Net income	$	38,283		$	49,623		$	66,291		$	38,283
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	26,475			26,945			25,111			26,475
Asset impairments	184			234			459			184
Loss on disposal of assets	26			3
Unrealized foreign exchange losses (gains)	7,489			(3,785		)
Realized loss (gain) on settlement of forward foreign exchange contracts not designated for hedge accounting	3,960			(5,915		)
(Gain) loss on disposal of assets							(12		)	26
Unrealized foreign exchange losses							8,348			7,489
Realized (gain) loss on settlement of forward foreign exchange contracts not designated for hedge accounting							(12,967		)	3,960
Employee benefit plans’ amortization from accumulated other comprehensive loss	4,272			3,692			3,734			4,272
Noncash restructuring charges	335			957			—			335
Amortization of deferred debt issuance costs	926			1,099
Amortization of premium, discount and debt issuance costs							620			557
Stock-based compensation	3,600			2,314			(1,053		)	3,600
Allowance for doubtful accounts	519			703			498			519
Change in operating assets and liabilities:
Trade receivables	129,587			63,555			104,777			129,587
Inventories	30,939			(55,739		)	(134,923		)	30,939
Other current assets	(12,647		)	(8,749		)	(2,758		)	(12,647		)
Other non-current assets	(2,048		)	168			(1,425		)	746
Accounts payable and other accrued liabilities	(106,432		)	(45,417		)	49,462			(106,432		)
Restructuring liabilities	(16,009		)	56,978			(5,614		)	(16,009		)
Income tax liabilities	3,203			3,020			23,654			409
Accrued salaries, wages and employee benefits and long-term employee related benefits	(74,484		)	(53,302		)	(78,302		)	(74,484		)
Other long-term liabilities	(201		)	(326		)	178			(201		)
Other, net	(348		)	(384		)	—			21
Net cash provided by operating activities	37,629			35,674			46,078			37,629
Cash Flows from Investing Activities:
Purchases of property, plant and equipment	(21,152		)	(20,434		)	(30,746		)	(21,152		)
Proceeds from sale of assets	11			47
(Payments) proceeds on settlement of forward foreign exchange contracts not designated for hedge accounting	(3,960		)	5,915
Acquisitions, net of cash acquired	—			(75		)
Proceeds from sales of assets							21			11
Proceeds (payments) on settlement of forward foreign exchange contracts not designated for hedge accounting							12,967			(3,960		)
Net cash used for investing activities	(25,101		)	(14,547		)	(17,758		)	(25,101		)
Cash Flows from Financing Activities:
Repayments of long-term debt and capital leases	(741		)	(1,029		)
Repayments of capital leases							(781		)	(741		)
Proceeds from senior revolving credit facility	35,000			—			75,000			35,000
Repayments of senior revolving credit facility	(135,000		)	—			(154,000		)	(135,000		)
Proceeds from short-term credit facilities	7,753			3,088			9,208			7,753
Repayments of short-term credit facilities	(5,045		)	(2,423		)	(6,763		)	(5,045		)
Other short-term borrowings, net	689			(7,179		)	3,102			689
Restricted cash	736			560
Change in restricted cash, net							663			736
Excess tax benefits from stock-based compensation	75			29			—			75
Net cash used for financing activities	(96,533		)	(6,954		)	(73,571		)	(96,533		)
Effect of exchange rate changes on cash and cash equivalents	(11,520		)	(601		)	(2,219		)	(11,520		)
Net (decrease) increase in cash and cash equivalents	(95,525		)	13,572
Net decrease in cash and cash equivalents							(47,470		)	(95,525		)
Beginning cash and cash equivalents	298,255			489,258			318,571			298,255
Ending cash and cash equivalents	$	202,730		$	502,830		$	271,101		$	202,730

Noncash Investing Activity:
Purchases of property, plant and equipment not yet paid at end of period	$	9,993		$	5,209		$	14,244		$	9,993

Supplemental disclosure of cash flow information:
Cash paid for interest during the period	$	2,020		$	2,490		$	1,176		$	2,020
Cash paid for income taxes during the period, net of refunds	18,049			13,441			11,164			18,049

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

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Levi Strauss & Co. (the “Company”) is one of the world’s largest brand-name apparel companies. The Company designs, markets and sells – directly or through third parties and licensees – products that include jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear and related accessories for men, women and children around the world under the Levi’s^®, Dockers^®, Signature by Levi Strauss & Co.™ and Denizen^® brands. The Company operates its business through three geographic regions: Americas, Europe and Asia.

Basis of Presentation and Principles of Consolidation

The unaudited consolidated financial statements of the Company and its wholly-owned and majority-owned foreign and domestic subsidiaries are prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information. In the opinion of management, all adjustments necessary for a fair statement of the financial position and the results of operations for the periods presented have been included. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended November ~~30, 2014~~29, 2015, included in the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (“SEC”) on February ~~12, 2015.~~11, 2016.

The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions have been eliminated. Management believes the disclosures are adequate to make the information presented herein not misleading. The results of operations for the three months ended ~~March 1, 2015~~February 28, 2016, may not be indicative of the results to be expected for any other interim period or the year ending November ~~29, 2015~~27, 2016.

The Company’s fiscal year ends on the last Sunday of November in each year, although the fiscal years of certain foreign subsidiaries end on November 30. Each quarter of both fiscal years ~~2015~~2016 and ~~2014~~2015 consists of 13 ~~weeks, with the exception of the fourth quarter of 2014, which consisted of 14~~ weeks. All references to years relate to fiscal years rather than calendar years.

Subsequent events have been evaluated through the issuance date of these financial statements.

The Company's consolidated statements of comprehensive income has been reclassified to present the components of other comprehensive income before related income tax effects with one amount shown for aggregate income tax expense related to the total of other comprehensive income items. Amounts were previously presented net of related income tax effects. There was no change to total comprehensive income, net of income taxes, and the change was immaterial to the financial statements taken as a whole.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the related notes to the consolidated financial statements. Estimates are based upon historical factors, current circumstances and the experience and judgment of the Company’s management. Management evaluates its estimates and assumptions on an ongoing basis and may employ outside experts to assist in its evaluations. Changes in such estimates, based on more accurate future information, or different assumptions or conditions, may affect amounts reported in future periods.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2016

Recently Issued Accounting Standards

There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s consolidated financial statements and footnote disclosures, from those disclosed in the Company’s ~~2014~~2015 Annual Report on Form 10-K, except for the following, which ~~will become~~have been grouped by their effective dates for the ~~Company in the first quarter~~Company:

First Quarter of ~~2017:~~2018

In ~~April 2015,~~March 2016, the FASB issued Accounting Standards Update No. ~~2015-03,~~2016-06, ~~"Simplifying~~Derivatives and Hedging (Topic 815) – Contingent Put and Call Options in Debt Instruments (“ASU 2016-06”), which will reduce diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the ~~Presentation~~nature of ~~Debt Issuance Costs,"~~ ~~("ASU 2015-03"). ASU 2015-03 requires that~~an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt ~~issuance costs related to a recognized debt liability be presented in the balance sheet~~instrument and accounted for separately as a ~~direct deduction from the carrying amount of that debt liability, consistent with debt discounts.~~derivative. The Company is currently assessing the impact that adopting this new accounting ~~guidance~~standard will have on its consolidated financial statements and ~~footnotes~~footnote disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation (Topic 718) (“ASU 2016-09”). ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

First Quarter of 2019

In March 2016, the FASB issued Accounting Standards Update No. 2016-04, Liabilities – Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products (“ASU 2016-04”). ASU 2016-04 aligns recognition of the financial liabilities related to prepaid stored-value products (for example, prepaid gift cards), with Topic 606, Revenues from Contracts with Customers, for non-financial liabilities. In general, certain or these liabilities may be extinguished proportionally in earnings as redemptions occur, or when redemption is remote if issuers are not entitled to the unredeemed stored value. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”). ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

First Quarter of 2020

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires the identification of arrangements that should be accounted for as leases by lessees. In general, for lease arrangements exceeding a twelve month term, these arrangements must now be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. In addition, ASU 2016-02 requires the use of the modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016

NOTE 2: FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the Company’s financial instruments that are carried at fair value:


	March 1, 2015						November 30, 2014						February 28, 2016						November 29, 2015
			Fair Value Estimated Using						Fair Value Estimated Using						Fair Value Estimated Using						Fair Value Estimated Using
	Fair Value		Level 1 Inputs⁽¹⁾		Level 2 Inputs⁽²⁾		Fair Value		Level 1 Inputs⁽¹⁾		Level 2 Inputs⁽²⁾		Fair Value		Level 1 Inputs⁽¹⁾		Level 2 Inputs⁽²⁾		Fair Value		Level 1 Inputs⁽¹⁾		Level 2 Inputs⁽²⁾
	(Dollars in thousands)												(Dollars in thousands)
Financial assets carried at fair value
Rabbi trust assets	$	26,444	$	26,444	$	—	$	25,891	$	25,891	$	—	$	24,892	$	24,892	$	—	$	26,013	$	26,013	$	—
Forward foreign exchange contracts, net⁽³⁾	22,886		—		22,886		10,511		—		10,511		19,741		—		19,741		27,131		—		27,131
Total	$	49,330	$	26,444	$	22,886	$	36,402	$	25,891	$	10,511	$	44,633	$	24,892	$	19,741	$	53,144	$	26,013	$	27,131
Financial liabilities carried at fair value
Forward foreign exchange contracts, net⁽³⁾	$	9,671	$	—	$	9,671	$	10,353	$	—	$	10,353	$	9,373	$	—	$	9,373	$	7,809	$	—	$	7,809

_____________


(1)	Fair values estimated using Level 1 inputs are inputs which consist of quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Rabbi trust assets consist of a diversified portfolio of equity, fixed income and other securities.

(2)

Fair values estimated using Level 2 inputs are inputs, other than quoted prices, that are observable for the asset or liability, either directly or indirectly and include among other things, quoted prices for similar assets or liabilities in markets that are active or inactive as well as inputs other than quoted prices that are observable. For forward foreign exchange contracts, inputs include foreign currency exchange and interest rates and, where applicable, credit default swap prices.


(3)	The Company’s over-the-counter forward foreign exchange contracts are subject to International Swaps and Derivatives Association, Inc. master agreements. These agreements permit the ~~net-settlement~~net settlement of these contracts on a per-institution basis.

The following table presents the carrying value – including related accrued interest – and estimated fair value of the Company’s financial instruments that are carried at adjusted historical cost:


	March 1, 2015				November 30, 2014				February 28, 2016				November 29, 2015
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(Dollars in thousands)								(Dollars in thousands)
Financial liabilities carried at adjusted historical cost
Senior revolving credit facility	$	—	$	—	$	100,098	$	100,098	$	20,031	$	20,031	$	99,020	$	99,020
4.25% Yen-denominated Eurobonds due 2016⁽¹⁾	33,983		35,198		34,108		35,383		35,861		36,480		32,736		33,593
7.625% senior notes due 2020⁽¹⁾	536,898		565,117		526,779		556,967
6.875% senior notes due 2022⁽¹⁾	545,256		600,567		536,501		583,848		536,519		575,871		527,715		570,355
5.00% senior notes due 2025⁽¹⁾									488,749		486,347		482,145		480,945
Short-term borrowings	33,923		33,923		31,742		31,742		20,806		20,806		15,996		15,996
Total	$	1,150,060	$	1,234,805	$	1,229,228	$	1,308,038	$	1,101,966	$	1,139,535	$	1,157,612	$	1,199,909

_____________


(1)	Fair values are estimated using Level 1 inputs and incorporate mid-market price quotes. Level 1 inputs are inputs which consist of quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016

NOTE 3: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

As of ~~March 1, 2015~~February 28, 2016, the Company had forward foreign exchange contracts to buy ~~$544.4~~$725.7 million and to sell ~~$292.5~~$271.0 million against various foreign currencies. These contracts are at various exchange rates and expire at various dates through ~~August 2016.~~November 2017.

The table below provides data about the carrying values of derivative instruments and non-derivative instruments:


	March 1, 2015									November 30, 2014										February 28, 2016								November 29, 2015
	Assets		(Liabilities)			Derivative Net Carrying Value				Assets			(Liabilities)				Derivative Net Carrying Value			Assets		(Liabilities)			Derivative Net Carrying Value			Assets			(Liabilities)				Derivative Net Carrying Value
	Carrying Value		Carrying Value						Carrying Value			Carrying Value				Carrying Value					Carrying Value			Carrying Value				Carrying Value							Derivative Net Carrying Value
	(Dollars in thousands)																			(Dollars in thousands)
Derivatives not designated as hedging instruments						Derivative Net Carrying Value											Derivative Net Carrying Value
Forward foreign exchange contracts⁽¹⁾	$	25,338	$	(2,452	)	$	22,886			$	15,587		$	(5,076	)		$	10,511		$	25,123	$	(5,382	)	Derivative Net Carrying Value	$	19,741		$	31,808		$	(4,677	)		$	27,131
Forward foreign exchange contracts⁽²⁾	2,125		(11,796		)	(9,671		)		1,833			(12,186		)		(10,353		)	1,668		(11,041		)	(9,373		)	253			(8,062		)		(7,809		)
Total	$	27,463	$	(14,248	)					$	17,420		$	(17,262	)					$	26,791	$	(16,423	)				$	32,061		$	(12,739	)
Non-derivatives designated as hedging instruments
Yen-denominated Eurobonds	$	—	$	(9,714	)					$	—		$	(10,195	)					$	—	$	(8,496	)				$	—		$	(7,832	)

_____________


(1)	Included in “Other current assets” or “Other non-current assets” on the Company’s consolidated balance sheets.


(2)	Included in “Other accrued liabilities” on the Company’s consolidated balance sheets.

The Company's over-the-counter forward foreign exchange contracts are subject to International Swaps and Derivatives Association, Inc. master agreements. These agreements permit the net settlement of these contracts on a per-institution basis. The table below presents, by type of financial instrument, the gross amounts of the Company's derivative instruments, amounts offset due to master netting arrangements with the Company's various counterparties, and the net amounts recognized on the Company's consolidated balance sheets:


	March 1, 2015									November 30, 2014										February 28, 2016												November 29, 2015
	Gross Amounts of Recognized Assets / (Liabilities)			Gross Amounts Offset in the Statement of Financial Position			Net Amounts of Assets / (Liabilities) Presented in the Statement of Financial Position			Gross Amounts of Recognized Assets / (Liabilities)			Gross Amounts Offset in the Statement of Financial Position				Net Amounts of Assets / (Liabilities) Presented in the Statement of Financial Position			Gross Amounts of Recognized Assets / (Liabilities)				Gross Amounts Offset in the Statement of Financial Position				Net Amounts of Assets / (Liabilities) Presented in the Statement of Financial Position				Gross Amounts of Recognized Assets / (Liabilities)				Gross Amounts Offset in the Statement of Financial Position				Net Amounts of Assets / (Liabilities) Presented in the Statement of Financial Position
	Gross Amounts of Recognized Assets / (Liabilities)			Gross Amounts Offset in the Statement of Financial Position						Gross Amounts of Recognized Assets / (Liabilities)										Gross Amounts of Recognized Assets / (Liabilities)				Gross Amounts Offset in the Statement of Financial Position								Gross Amounts of Recognized Assets / (Liabilities)				Gross Amounts Offset in the Statement of Financial Position
	(Dollars in thousands)																			(Dollars in thousands)
Over-the-counter forward foreign exchange contracts
Financial assets	$	26,417		$	(4,577	)	$	21,840		$	15,555		Gross Amounts Offset in the Statement of Financial Position		$	(6,908	)		$	8,647		$	26,211			$	(7,050	)		$	19,161			$	30,837			$	(4,930	)		$	25,907
Financial liabilities	(6,038		)	4,577			(1,461		)	(9,587		)	6,908				(2,679		)	(9,690		)		7,050				(2,640		)		(7,599		)		4,930				(2,669		)
Total							$	20,379									$	5,968										$	16,521											$	23,238
Embedded derivative contracts
Financial assets	$	1,046		$	—		$	1,046		$	1,865		$	—			$	1,865		$	580			$	—			$	580			$	1,224			$	—			$	1,224
Financial liabilities	(8,210		)	—			(8,210		)	(7,675		)	—				(7,675		)	(6,733		)		—				(6,733		)		(5,140		)		—				(5,140		)
Total							$	(7,164	)								$	(5,810	)									$	(6,153	)										$	(3,916	)

910

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016

The table below provides data about the amount of gains and losses related to derivative instruments and non-derivative instruments designated as net investment hedges included in “Accumulated other comprehensive loss” (“AOCI”) on the Company’s consolidated balance sheets, and in “Other ~~income (expense),~~expense, net” in the Company’s consolidated statements of income:


	Gain or (Loss) Recognized in AOCI (Effective Portion)						Gain or (Loss) Recognized in Other Income (Expense), net (Ineffective Portion and Amount Excluded from Effectiveness Testing)				Gain or (Loss) Recognized in AOCI (Effective Portion)						Gain or (Loss) Recognized in Other expense, net (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	As of			As of			Three Months Ended				As of			As of			Three Months Ended
	March 1, 2015			November 30, 2014			March 1, 2015		February 23, 2014		February 28, 2016			November 29, 2015			February 28, 2016			March 1, 2015
	(Dollars in thousands)										(Dollars in thousands)
Forward foreign exchange contracts	$	4,637		$	4,637						$	4,637		$	4,637
Yen-denominated Eurobonds	(19,226		)	(19,367		)	$	346	$	217	(19,646		)	(18,982		)	$	(2,103	)	$	346
Euro senior notes	(15,751		)	(15,751		)	—		—		(15,751		)	(15,751		)	—			—
Cumulative income taxes	8,706			8,760							12,104			11,849
Total	$	(21,634	)	$	(21,721	)					$	(18,656	)	$	(18,247	)

The table below provides data about the amount of gains and losses related to derivatives not designated as hedging instruments included in “Other ~~income (expense),~~expense, net” in the Company’s consolidated statements of income:

Gain or (Loss)
Three Months Ended
March 1,
2015 February 23,
2014
(Dollars in thousands)
Forward foreign exchange contracts:
Realized $ (3,960 ) $ 5,915
Unrealized 11,868
(1,479 )
Total $ 7,908
$ 4,436

~~LEVI STRAUSS & CO. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)~~

~~FOR THE QUARTERLY PERIOD ENDED MARCH 1, 2015~~

~~NOTE~~ 4~~: DEBT~~

March 1,
2015 November 30,
2014
(Dollars in thousands)

Long-term debt
Unsecured:
4.25% Yen-denominated Eurobonds due 2016 $ 33,498
$ 33,985
7.625% senior notes due 2020 525,000
525,000
6.875% senior notes due 2022 533,124
533,493
Total unsecured 1,091,622
1,092,478
Total long-term debt $ 1,091,622
$ 1,092,478
Short-term debt
Secured:
Senior revolving credit facility $ —
$ 100,000
Unsecured:
Short-term borrowings 33,847
31,524
Total short-term debt $ 33,847
$ 131,524
Total long-term and short-term debt $ 1,125,469
$ 1,224,002

~~Senior Revolving Credit Facility~~

~~The Company’s unused availability under its senior secured revolving credit facility was~~ ~~$717.0 million~~ at ~~March 1, 2015, as the Company’s total availability of~~ ~~$776.2 million~~ ~~was reduced by~~ ~~$59.2 million~~ ~~of letters of credit and other credit usage allocated under the credit facility.~~

~~Subsequent to the end of the first quarter, the Company borrowed approximately $50 million under its senior secured revolving credit facility.~~

~~Interest Rates on Borrowings~~

~~The Company’s weighted-average interest rate on average borrowings outstanding during the three months ended~~ ~~March 1, 2015, was 7.55% as compared to 7.91% in the same period of~~ ~~2014~~.



	Gain or (Loss)
	Three Months Ended
	February 28, 2016			March 1, 2015
	(Dollars in thousands)
Forward foreign exchange contracts:
Realized	$	12,967		$	(3,960	)
Unrealized	(9,231		)	11,868
Total	$	3,736		$	7,908

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016

NOTE 4: DEBT



	February 28, 2016		November 29, 2015
	(Dollars in thousands)
Long-term debt
Unsecured:
6.875% senior notes due 2022	524,689		524,807
5.00% senior notes due 2025	480,554		480,131
Total unsecured long-term debt	$	1,005,243	$	1,004,938
Short-term debt and current maturities of long-term debt
Secured:
Senior revolving credit facility	$	20,000	$	99,000
Unsecured:
Current maturities of 4.25% Yen-denominated Eurobonds due 2016	35,394		32,625
Short-term borrowings	20,779		15,978
Total short-term debt and current maturities of long-term debt	$	76,173	$	147,603
Total debt	$	1,081,416	$	1,152,541

Senior Revolving Credit Facility

The Company’s unused availability under its senior secured revolving credit facility was $739.7 million at February 28, 2016, as the Company’s total availability of $798.2 million was reduced by $58.5 million of letters of credit and other credit usage allocated under the credit facility.

Interest Rates on Borrowings

The Company’s weighted-average interest rate on average borrowings outstanding during the three months ended February 28, 2016, was 6.26% as compared to 7.65% in the same period of 2015.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2016

NOTE 5: EMPLOYEE BENEFIT PLANS

The following table summarizes the components of net periodic benefit cost and the changes recognized in “Accumulated other comprehensive loss” for the Company’s defined benefit pension plans and postretirement benefit plans:


	Pension Benefits						Postretirement Benefits						Pension Benefits						Postretirement Benefits
	Three Months Ended						Three Months Ended						Three Months Ended						Three Months Ended
	March 1, 2015			February 23, 2014			March 1, 2015			February 23, 2014			February 28, 2016			March 1, 2015			February 28, 2016			March 1, 2015
	(Dollars in thousands)												(Dollars in thousands)
Net periodic benefit cost:
Service cost	$	2,128		$	2,159		$	63		$	68		$	2,058		$	2,128		$	50		$	63
Interest cost(1)	11,840			13,761			1,147			1,338			9,472			11,840			806			1,147
Expected return on plan assets	(12,717		)	(13,843		)	—			—			(12,134		)	(12,717		)	—			—
Amortization of prior service benefit	(16		)	(17		)	—			(1		)	(15		)	(16		)	—			—
Amortization of actuarial loss	3,160			2,696			1,128			989			3,007			3,160			742			1,128
Curtailment loss	335			232			—			700			—			335			—			—
Net settlement loss	—			60			—			—
Net periodic benefit cost	4,730			5,048			2,338			3,094			2,388			4,730			1,598			2,338
Changes in accumulated other comprehensive loss:
Actuarial loss													152			—			—			—
Amortization of prior service benefit	16			17			—			1			15			16			—			—
Amortization of actuarial loss	(3,160		)	(2,696		)	(1,128		)	(989		)	(3,007		)	(3,160		)	(742		)	(1,128		)
Curtailment loss	(335		)	—			—			—			—			(335		)	—			—
Net settlement loss	—			(25		)	—			—
Total recognized in accumulated other comprehensive loss	(3,479		)	(2,704		)	(1,128		)	(988		)	(2,840		)	(3,479		)	(742		)	(1,128		)
Total recognized in net periodic benefit cost and accumulated other comprehensive loss	$	1,251		$	2,344		$	1,210		$	2,106		$	(452	)	$	1,251		$	856		$	1,210

_____________


(1)	The decrease in interest cost is primarily due to the election made at the end of 2015 to adopt the spot-rate approach to determine the interest cost component of pension and postretirement expense.

1213

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016

NOTE 6: RESTRUCTURING

In 2014, the Company announced and began to implement a global productivity initiative designed to streamline operations and fuel long-term profitable growth. The Company expects that the majority of the actions related to the global productivity initiative will ~~continue to~~ be implemented through the end of ~~2015,~~2016, with a focus on redesigning business processes and identifying opportunities to reduce costs, increase efficiencies and further streamline processes in supporting functions, supply chain and planning.

For the three months ended ~~March 1, 2015, and~~ February ~~23, 2014,~~28, 2016, the Company recognized restructuring charges, net, of $1.8 million, as compared to $4.3 million ~~and $57.9 million, respectively, which~~for the same period in 2015. These restructuring charges were recorded in "Restructuring, net" in the Company's consolidated statements of income. Related charges of ~~$8.0 million and $6.4~~$1.5 million for the three months ended ~~March 1,~~February 28, 2016, as compared to $8.0 million for the same period in 2015, ~~and February 23, 2014, respectively,~~ consist primarily of consulting fees for the Company's centrally-led cost-savings and productivity projects, as well as transition costs associated with the Company's decision to outsource certain global business service activities. These related charges represent costs incurred associated with ongoing operations which ~~will~~are expected to benefit future periods and thus were recorded in "Selling, general and administrative expenses" in the Company's consolidated statements of income. Cash payments for charges recognized to date are expected to continue through ~~the first half of 2016.~~2017.

The table below summarizes the components of charges included in “Restructuring, net” in the Company’s consolidated statements of income:


	Three Months Ended					Three Months Ended
	March 1, 2015			February 23, 2014		February 28, 2016		March 1, 2015
	(Dollars in thousands)					(Dollars in thousands)
Restructuring, net:
Severance and employee-related benefits⁽¹⁾	$	5,320		$	51,321	$	1,445	$	5,320
Adjustments to severance and employee-related benefits	(1,249		)	—		279		(1,249		)
Lease and other contract termination costs	—			—		—		—
Other⁽²⁾	414			5,657		124		414
Adjustments to other	(482		)	—		—		(482		)
Noncash pension and postretirement curtailment losses, net⁽³⁾	335			957		—		335
Total	$	4,338		$	57,935	$	1,848	$	4,338

_____________


(1)	Severance and employee-related benefits relate to items such as severance, based on separation benefits provided by Company policy or statutory benefit plans, out-placement services and career counseling for employees affected by the global productivity initiative.


(2)	Other restructuring costs are expensed as incurred and primarily relate to consulting fees and legal expenses associated with the execution of the restructuring initiative.


(3)	Noncash pension and postretirement curtailment gains or losses resulting from the global productivity initiative are included in restructuring charges, with the associated liabilities included in "Pension liability" and "Postretirement medical benefits" inon the Company's consolidated balance sheets.

The Company is unable at this time to make a good faith determination of cost estimates, or ranges of cost estimates, for additional actions associated with the global productivity initiative. ~~Final estimates for headcount, timing and charges in certain areas of the international business are subject to completion of applicable local works council and other consultative processes.~~

1314

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016

The following table summarizes the activities associated with restructuring liabilities for the three months ended February 28, 2016, and March 1, ~~2015.~~2015. In the table below, "Charges" represents the initial charge related to the restructuring activity. "Adjustments" includes revisions of estimates related to severance, employee-related benefits, lease and other contract termination costs, and other restructuring costs. "Payments" consists of cash payments for severance, employee-related benefits, lease and other contract termination costs, and other restructuring costs.

Three Months Ended March 1, 2015
Liabilities Adjustments Foreign Currency Fluctuation Liabilities
November 30, 2014 Charges Payments March 1, 2015
(Dollars in thousands)

Severance and employee-related benefits $ 56,963
$ 5,320
$ (1,249 ) $ (13,681 ) $ (3,738 ) $ 43,615
Lease and other contract termination costs —
—
—
—
—
—
Other 6,400
414
(482 ) (6,331 ) —
1
Total $ 63,363
$ 5,734
$ (1,731 ) $ (20,012 ) $ (3,738 ) $ 43,616

Current portion $ 57,817
$ 42,596
Long-term portion 5,546
1,020
Total $ 63,363
$ 43,616


	Three Months Ended February 23, 2014
	Liabilities				Adjustments					Foreign Currency Fluctuation			Liabilities			Three Months Ended February 28, 2016
	November 24, 2013		Charges				Payments					February 23, 2014			Liabilities					Adjustments								Foreign Currency Fluctuation				Liabilities
	(Dollars in thousands)															November 29, 2015		Charges							Payments								February 28, 2016
																	(Dollars in thousands)
Severance and employee-related benefits	$	—	$	51,321	$	—		$	—	$	—		$	51,321		$	20,774	$	1,445		$	279			$	(7,339	)		$	515			$	15,674
Lease and other contract termination costs	—		—		—			—		—			—			—		—			—				—				—				—
Other	—		5,657		—			—		—			5,657			964		124			—				(124		)		—				964
Total	$	—	$	56,978	$	—		$	—	$	—		$	56,978		$	21,738	$	1,569		$	279			$	(7,463	)		$	515			$	16,638

Current portion	$	—											$	56,978		$	20,141																$	15,736
Long-term portion	—												—			1,597																	902
Total	$	—											$	56,978		$	21,738																$	16,638

																Three Months Ended March 1, 2015
																Liabilities					Adjustments								Foreign Currency Fluctuation				Liabilities
																November 30, 2014		Charges						Payments								March 1, 2015
																(Dollars in thousands)
Severance and employee-related benefits																$	56,963	$	5,320			$	(1,249	)		$	(13,681	)		$	(3,738	)		$	43,615
Lease and other contract termination costs																—		—			—				—				—				—
Other																6,400		414			(482		)		(6,331		)		—				1
Total																$	63,363	$	5,734		$	(1,731	)		$	(20,012	)		$	(3,738	)		$	43,616

Current portion																$	57,817																$	42,596
Long-term portion																5,546																	1,020
Total																$	63,363																$	43,616

1415

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016

NOTE 7: COMMITMENTS AND CONTINGENCIES

Forward Foreign Exchange Contracts

The Company uses over-the-counter derivative instruments to manage its exposure to foreign currencies. The Company is exposed to credit loss in the event of nonperformance by the counterparties to the forward foreign exchange contracts. However, the Company believes that its exposures are appropriately diversified across counterparties and that these counterparties are creditworthy financial institutions. Please see Note 3 for additional information.

Other Contingencies

Litigation. There have been no material developments with respect to the information previously reported in the Company’s ~~2014~~2015 Annual Report on Form 10-K related to legal proceedings.

In the ordinary course of business, the Company has various pending cases involving contractual matters, facility and employee-related matters, distribution matters, product liability claims, trademark infringement and other matters. The Company does not believe any of these pending legal proceedings will have a material impact on its financial condition, results of operations or cash flows.

NOTE 8: DIVIDEND

The Company's Board of Directors (the “Board”) declared a cash dividend of ~~$50.0~~$60.0 million in the first quarter of ~~2015~~2016, payable in the second quarter of ~~2015~~2016 to stockholders of record at the close of business on February 19, ~~2015.~~2016. Dividend payable is included in "Other accrued liabilities" on the Company's consolidated balance sheets. Subsequent to the Company's quarter-end, on April ~~2, 2015,~~7, 2016, the Company paid the cash dividend.

The Company does not have an established annual dividend policy. The Company will continue to review its ability to pay cash dividends at least annually, and dividends may be declared at the discretion of the Board depending upon, among other factors, the Company's financial condition and compliance with the terms of the Company's debt agreements.

NOTE 9: ACCUMULATED OTHER COMPREHENSIVE LOSS

The following is a summary of the components of “Accumulated other comprehensive loss,” net of related income taxes:


	March 1, 2015			November 30, 2014			February 28, 2016			November 29, 2015
	(Dollars in thousands)						(Dollars in thousands)
Pension and postretirement benefits	$	(257,355	)	$	(261,454	)	$	(234,166	)	$	(236,340	)
Net investment hedge losses	(21,634		)	(21,721		)	(18,656		)	(18,247		)
Foreign currency translation losses	(96,838		)	(85,362		)	(125,743		)	(117,394		)
Unrealized gain on marketable securities	2,304			2,234
Unrealized gains on marketable securities							754			1,880
Accumulated other comprehensive loss	(373,523		)	(366,303		)	(377,811		)	(370,101		)
Accumulated other comprehensive income attributable to noncontrolling interest	9,014			9,037			9,184			8,965
Accumulated other comprehensive loss attributable to Levi Strauss & Co.	$	(382,537	)	$	(375,340	)	$	(386,995	)	$	(379,066	)

No material amounts were reclassified out of "Accumulated other comprehensive loss" into net income other than those that pertain to the Company's pension and postretirement benefit plans. Please see Note 5 for additional information. These amounts are included in "Selling, general and administrative expenses" in the Company's consolidated statements of income.

1516

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016

NOTE 10: OTHER ~~INCOME (EXPENSE),~~EXPENSE, NET

The following table summarizes significant components of “Other ~~income (expense),~~expense, net”:


	Three Months Ended						Three Months Ended
	March 1, 2015			February 23, 2014			February 28, 2016			March 1, 2015
	(Dollars in thousands)						(Dollars in thousands)
Foreign exchange management gains⁽¹⁾	$	7,908		$	4,436		$	3,736		$	7,908
Foreign currency transaction losses⁽²⁾	(35,959		)	(2,238		)	(8,203		)	(35,959		)
Interest income	460			627			209			460
Investment income	439			307			708			439
Other	1,124			1,051			1,331			1,124
Total other income (expense), net	$	(26,028	)	$	4,183
Total other expense, net							$	(2,219	)	$	(26,028	)

_____________

(1)

Gains and losses on forward foreign exchange contracts primarily result from currency fluctuations relative to negotiated contract rates. Gains in 2016 and 2015 were primarily due to favorable currency fluctuations relative to negotiated ~~contracts~~contract rates on positions to sell the Mexican ~~Peso.~~Peso, partially offset in 2016 by unfavorable currency fluctuations relative to negotiated contract rates on positions to sell the Euro.


(2)	Foreign currency transaction gains and losses reflect the impact of foreign currency fluctuation on the Company's foreign currency denominated balances. Losses in 2016 were primarily due to the weakening of various currencies against the Euro. Losses in 2015 were primarily due to the weakening of various foreign currencies, particularly the Euro, against the U.S. Dollar.

NOTE 11: INCOME TAXES

The effective income tax rate was ~~34.1%~~33.4% for the three months ended ~~March 1, 2015~~February 28, 2016, compared to ~~24.8%~~34.1% for the same period ended ~~February 23, 2014~~March 1, 2015.

The effective tax rate in the first quarter of 2014 included a tax benefit that the Company recorded as a result of reversing a deferred tax liability associated with the change in assertion during the quarter to indefinitely reinvest certain undistributed foreign earnings. The effective tax rate in 2015 reflected an increase in state income taxes due to higher projected domestic income in 2015.

NOTE 12: RELATED PARTIES

Robert D. Haas, Chairman Emeritus of the Company, Charles V. Bergh, President and Chief Executive Officer, Peter E. Haas Jr., a director of the Company, and Kelly McGinnis, Senior Vice President of Corporate Affairs and Chief Communications Officer, are board members of the Levi Strauss Foundation, which is not a consolidated entity of the Company. Seth R. Jaffe, Senior Vice President and General Counsel, is Vice President of the Levi Strauss Foundation. During the three-month period ended ~~March 1, 2015~~February 28, 2016, the Company donated ~~$5.9~~$0.3 million to the Levi Strauss Foundation as compared to ~~$5.2~~$5.9 million for the same prior-year period.

1617

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~MARCH 1, 2015~~FEBRUARY 28, 2016

NOTE 13: BUSINESS SEGMENT INFORMATION

The Company manages its business according to three regional segments: the Americas, Europe and Asia. The Company considers its chief executive officer to be the Company’s chief operating decision maker. The Company’s chief operating decision maker manages business operations, evaluates performance and allocates resources based on the regional segments’ net revenues and operating income.

Effective as of the beginning of 2015, the Company's regional licensing revenue, previously recorded centrally in the Company's Americas region, was revised to be recorded in the Company's respective regions. Regional licensing revenues are not significant to any of the Company's regional segments individually in any of the periods presented herein, and accordingly, business segment information for the prior-year period has not been revised.

Business segment information for the Company is as follows:


	Three Months Ended						Three Months Ended
	March 1, 2015			February 23, 2014			February 28, 2016			March 1, 2015
	(Dollars in thousands)						(Dollars in thousands)
Net revenues:
Americas	$	574,087		$	626,836		$	571,185		$	574,087
Europe	277,488			300,426			276,486			277,488
Asia	203,500			202,728			208,829			203,500
Total net revenues	$	1,055,075		$	1,129,990		$	1,056,500		$	1,055,075
Operating income:
Americas	$	102,292		$	111,052		$	81,749		$	102,292
Europe	58,189			71,406			61,709			58,189
Asia	47,340			46,902			46,605			47,340
Regional operating income	207,821			229,360			190,063			207,821
Corporate:
Restructuring, net	4,338			57,935			1,848			4,338
Restructuring-related charges	8,007			6,441			1,497			8,007
Other corporate staff costs and expenses	88,031			71,328			70,131			88,031
Corporate expenses	100,376			135,704			73,476			100,376
Total operating income	107,445			93,656			116,587			107,445
Interest expense	(23,312		)	(31,829		)	(14,902		)	(23,312		)
Other income (expense), net	(26,028		)	4,183
Other expense, net							(2,219		)	(26,028		)
Income before income taxes	$	58,105		$	66,010		$	99,466		$	58,105

1718

Table of Contents



Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We design, market and sell – directly or through third parties and licensees – products that include jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear and related accessories for men, women and children around the world under our Levi’s^®, Dockers^®, Signature by Levi Strauss & Co.™ (“Signature”) and Denizen^® brands.

Our business is operated through three geographic regions: Americas, Europe and Asia. Our products are sold in approximately 50,000 retail locations in more than 110 countries. We support our brands through a global infrastructure, developing, sourcing and marketing our products around the world. We distribute our Levi’s^® and Dockers^® products primarily through chain retailers and department stores in the United States and primarily through department stores, specialty retailers and approximately 2,100 franchised or other brand-dedicated stores and shop-in-shops outside of the United States. We also distribute our Levi’s^® and Dockers^® products through ~~569~~655 company-operated stores located in 3231 countries, including the United States, and through the ecommerce sites we operate. Our company-operated stores and ecommerce sites generated approximately ~~28%~~31% of our net revenues in the first three months of ~~2015~~2016, as compared to ~~27%~~28% in the same period in ~~2014~~2015, with our ecommerce sites representing approximately ~~14%~~15% of this revenue in ~~2015~~2016, as compared to ~~13%~~14% in the same period in ~~2014~~2015. In addition, we distribute our Levi’s^® and Dockers^® products through ecommerce sites operated by certain of our key wholesale customers and other third parties. We distribute products under our Signature and Denizen^® brands primarily through mass channel retailers in the Americas.

Our Europe and Asia businesses, collectively, contributed approximately 46% of our net revenues and ~~51%~~57% of our regional operating income in the first three months of ~~2015~~2016, as compared to ~~45% and 52%~~46% of our net revenues and 51% of our regional operating income ~~respectively,~~ in the same period in ~~2014.~~2015. Sales of Levi’s^® brand products represented approximately 87% of our total net sales in each of the first three-month ~~period~~periods in ~~2015, as compared to 86% of our total net sales for the same period~~2016 and in ~~2014.~~2015.

~~Global Productivity Initiative~~

In 2014, we announced and began to implement a global productivity initiative designed to streamline operations and fuel long-term profitable growth. The global productivity initiative will continue to be implemented through the end of 2015, with a focus on redesigning business processes and identifying opportunities to reduce costs, increase efficiencies and further streamline processes in supporting functions, supply chain and planning. We expect that this initiative, when completed, will generate net annualized cost savings of $175 – $200 million, relative to the cost structure of the Company and foreign currency exchange rates prior to the commencement of this initiative.

For the three months ended March 1, 2015, and February 23, 2014, we recognized restructuring charges, net, of $4.3 million and $57.9 million, respectively, for the global productivity initiative, which consist primarily of severance benefits, consulting fees and noncash pension and postretirement curtailment gains or losses. Related charges of $8.0 million and $6.4 million for the three months ended March 1, 2015, and February 23, 2014, respectively, consist primarily of consulting fees for our centrally-led cost-savings and productivity projects, as well as transition costs associated with our decision to outsource certain global business service activities. These related charges represent costs incurred associated with ongoing operations which will benefit future periods and thus were recorded in selling, general and administrative expenses ("SG&A"). Cash payments for charges are expected to continue through the first half of 2016. Actions taken to date for the global productivity initiative are expected to deliver approximately $125 – $150 million in net annualized savings, relative to the cost structure of the Company and foreign currency exchange rates prior to the commencement of this initiative.

We are unable at this time to make a good faith determination of cost estimates, or ranges of cost estimates, for additional actions associated with the global productivity initiative. Final estimates for headcount, timing and charges in certain areas of the international business are subject to completion of applicable local works council and other consultative processes. We expect additional savings in future periods to come from streamlining our planning and go-to-market strategies, implementing efficiencies across our retail, supply chain and distribution network, and continuing to pursue improved procurement practices. Additional restructuring charges will be recorded for these efforts as they become estimable and probable.

Trends Affecting Our Business

Our key long-term objectives are to strengthen our brands globally in order to deliver sustainable profitable growth, generate strong cash flow and reduce our debt. Critical strategies to achieve these objectives include driving our profitable core business; expanding the reach of our global brands and building a more balanced product portfolio; elevating the performance of our retail channel, including ecommerce; and leveraging our global scale to improve our cost structure.

~~Table of Contents~~

Consumer discretionary spending, which remains mixed globally, continues to result in a challenging retail environment for us and our customers, characterized by ~~inconsistent~~declining traffic patterns and contributing to a generally promotional environment. Slow real wage growth in developed economies and a shift in consumer spending to interest-rate sensitive durable goods and other non-apparel categories also continue to pressure global discretionary spending. Both our wholesale and retail channels continue to face competition from vertically-integrated specialty stores, fast-fashion retailers, and, increasingly, ecommerce shopping enabled by the proliferation of online technologies, which constitutes an increasing proportion of global apparel sales, particularly around the key holiday selling season. Our domestic and multi-national competitors also continue to expand their global footprints in both brick-and-mortar retail and online. Given consumers’ increasing focus on value pricing amid the slowly recovering economy, the off-price retail channel remains strong, partially to the detriment of traditional broadline retailers, particularly at the mid-tier. Both our wholesale and retail channels continue to face competition from ecommerce shopping enabled by the proliferation of online technologies, which constitutes an increasing proportion of global apparel sales, particularly around key selling seasons. Our domestic and multi-national competitors also continue to expand their global footprints in both brick-and-mortar retail and online. While currency values are in constant flux, the ~~recent~~ appreciation of the U.S. Dollar against various foreign currencies, particularly the Euro, ~~has impacted the global retail environment and~~ will continue to impact our financial results, affecting translation, margins, as well as traffic in ~~the near-term.~~stores located in or near major domestic tourist attractions.

Our First Quarter ~~2015~~2016 Results

Net revenues. Compared to the first quarter of ~~2014,~~2015, consolidated net revenues ~~decreased~~was flat on a reported basis ~~by 7% and decreased~~but increased on a constant-currency basis by 1%5%, primarily reflecting ~~lower sales at wholesale~~higher retail revenues due to improved performance and ~~retail in the Americas, partially offset by increased sales from~~expansion of our retail network in Europe and Asia.

Operating income. Compared to the first quarter of ~~2014,~~2015, consolidated operating income increased by ~~15%~~approximately 9% and operating margin improved to ~~10%~~11%, primarily reflecting ~~lower restructuring charges~~an improvement in ~~2015,~~our gross margin and higher constant-currency revenues, partially offset by ~~higher SG&A as a percentage of lower revenues~~increased investments in retail and advertising and the effects of currency.

Cash flows. Cash flows provided by operating activities were approximately ~~$38~~$46 million for the three-month period in ~~2015~~2016 as compared to ~~$36~~$38 million for the same period in ~~2014.~~2015; the increase reflected higher trade receivable collections and lower payments to vendors, partially offset by higher inventory levels.

Table of Contents

Financial Information Presentation

Fiscal year. Our fiscal year ends on the last Sunday of November in each year, although the fiscal years of certain foreign subsidiaries end on November 30. Each quarter of fiscal years ~~2015~~2016 and ~~2014~~2015 consists of 13 ~~weeks, with the exception of the fourth quarter of 2014, which consisted of 14~~ weeks. Due to our fiscal calendar, the first quarter of fiscal year 2014 included the last calendar week of November 2013, while the first quarter of fiscal year 2015 included the last calendar week of February 2015.

Segments. We manage our business according to three regional segments: the Americas, Europe and Asia. Effective as of the beginning of 2015, our regional licensing revenue, previously recorded centrally in our Americas region, was revised to be recorded in our respective regions. Regional licensing revenues are not significant to any of our regional segments individually in any of the periods presented herein, and accordingly, business segment information for the prior-year period has not been revised.

Classification. Our classification of certain significant revenues and expenses reflects the following:

Net revenues is primarily comprised of sales of products to wholesale customers, including franchised stores, and direct sales to consumers at our company-operated ecommerce sites and ~~ecommerce~~ stores and at our company-operated shop-in-shops located within department stores. It includes discounts, allowances for estimated returns and incentives. Net revenues also includes royalties earned from the use of our trademarks by third-party licensees in connection with the manufacturing, advertising and distribution of trademarked products.

Cost of goods sold is primarily comprised of product costs, labor and related overhead, sourcing costs, inbound freight, internal transfers, and the cost of operating our remaining manufacturing facilities, including the related depreciation expense.

Selling costs include, among other things, all occupancy costs and depreciation associated with our company-operated stores and commissions associated with our company-operated shop-in-shops, as well as costs associated with our ecommerce operations.

We reflect substantially all distribution costs in selling, general and administrative expenses, including costs related to receiving and inspection at distribution centers, warehousing, shipping to our customers, handling, and certain other activities associated with our distribution network.

Gross margins may not be comparable to those of other companies in our industry since some companies may include costs related to their distribution network and occupancy costs associated with company-operated stores in cost of goods sold.

Constant currency. Constant-currency comparisons are based on translating local currency amounts in the prior-year period at actual foreign exchange rates for the current year. We routinely evaluate our financial performance on a constant-currency basis in order to facilitate period-to-period comparisons without regard to the impact of changing foreign currency exchange rates.

~~Table of Contents~~

Results of Operations for Three Months Ended ~~March 1, 2015~~February 28, 2016, as Compared to Same Period in ~~2014~~2015

The following table summarizes, for the periods indicated, our consolidated statements of income, the changes in these items from period to period and these items expressed as a percentage of net revenues:


	Three Months Ended														Three Months Ended
	March 1, 2015			February 23, 2014			% Increase (Decrease)			March 1, 2015			February 23, 2014		February 28, 2016			March 1, 2015				% Increase (Decrease)			February 28, 2016			March 1, 2015
	March 1, 2015			February 23, 2014					% of Net Revenues			% of Net Revenues						March 1, 2015			% of Net Revenues				% of Net Revenues
	(Dollars in millions)														February 28, 2016	(Dollars in millions)
Net revenues	$	1,055.1		$	1,130.0		% Increase (Decrease)	(6.6	)%		100.0	%		100.0	%	$	1,056.5		$	1,055.1		% Increase (Decrease)		0.1	%		100.0	%		100.0	%
Cost of goods sold	518.0			553.6			(6.4	)%		49.1	%		49.0	%	496.9			518.0				(4.1	)%		47.0	%		49.1	%
Gross profit	537.1			576.4			(6.8	)%		50.9	%		51.0	%	559.6			537.1				4.2	%		53.0	%		50.9	%
Selling, general and administrative expenses	425.4			424.8			0.1	%		40.3	%		37.6	%	441.2			425.4				3.7	%		41.8	%		40.3	%
Restructuring, net	4.3			57.9			(92.5	)%		0.4	%		5.1	%	1.8			4.3				(57.4	)%		0.2	%		0.4	%
Operating income	107.4			93.7			14.7	%		10.2	%		8.3	%	116.6			107.4				8.5	%		11.0	%		10.2	%
Interest expense	(23.3		)	(31.9		)	(26.8	)%		(2.2	)%		(2.8	)%	(14.9		)	(23.3		)		(36.1	)%		(1.4	)%		(2.2	)%
Other income (expense), net	(26.0		)	4.2			(722.2	)%		(2.5	)%		0.4	%
Other expense, net															(2.2		)	(26.0		)		(91.5	)%		(0.2	)%		(2.5	)%
Income before income taxes	58.1			66.0			(12.0	)%		5.5	%		5.8	%	99.5			58.1				71.2	%		9.4	%		5.5	%
Income tax expense	19.8			16.4			21.0	%		1.9	%		1.5	%	33.2			19.8				67.4	%		3.1	%		1.9	%
Net income	38.3			49.6			(22.9	)%		3.6	%		4.4	%	66.3			38.3				73.2	%		6.3	%		3.6	%
Net loss attributable to noncontrolling interest	0.1			0.4			(68.7	)%		—			—
Net (income) loss attributable to noncontrolling interest															(0.5		)	0.1				(517.4	)%		—			—
Net income attributable to Levi Strauss & Co.	$	38.4		$	50.0		(23.2	)%		3.6	%		4.4	%	$	65.8		$	38.4			71.5	%		6.2	%		3.6	%

Table of Contents

Net revenues

The following table presents net revenues by reporting segment for the periods indicated and the changes in net revenues by reporting segment on both reported and constant-currency bases from period to period.


	Three Months Ended								Three Months Ended
					% Increase (Decrease)								% Increase (Decrease)
	March 1, 2015		February 23, 2014		As Reported		Constant Currency		February 28, 2016		March 1, 2015		As Reported		Constant Currency
	(Dollars in millions)								(Dollars in millions)
Net revenues:
Americas	$	574.1	$	626.9	(8.4	)%	(7.3	)%	$	571.2	$	574.1	(0.5	)%	1.5	%
Europe	277.5		300.4		(7.6	)%	9.1	%	276.5		277.5		(0.4	)%	8.1	%
Asia	203.5		202.7		0.4	%	4.5	%	208.8		203.5		2.6	%	9.7	%
Total net revenues	$	1,055.1	$	1,130.0	(6.6	)%	(1.3	)%	$	1,056.5	$	1,055.1	0.1	%	4.7	%

Total net revenues ~~decreased~~increased on both reported and constant-currency bases for the three-month period ended ~~March 1, 2015~~February 28, 2016, as compared to the same prior-year period.

Americas. Net revenues in our Americas region decreased on ~~both~~a reported basis and increased on a constant-currency ~~bases~~basis for the three-month period ended ~~March 1, 2015~~February 28, 2016, with currency affecting net revenues unfavorably by approximately ~~$7 million~~.$11 million.

~~Net~~Constant-currency net revenues increased at wholesale ~~decreased~~and retail, primarily due to our performance in Mexico. In the ~~timing of our fiscal calendar, as well as our decision~~United States, net revenues declined slightly, primarily at wholesale due to ~~license~~a decline in the Dockers^® brand ~~women's business; our results~~ in ~~the first quarter~~anticipation of ~~2014 included wholesale revenues for the Dockers~~^®brand women's business. Lower sales at retail in the first quarter of 2015 reflected the timing of the Black Friday sales weeks, which were included the first and fourth quarters of 2014, based on our fiscal calendar.product transitions.

Europe. Net revenues in Europe decreased on a reported basis and increased on a constant-currency basis for the three-month period ended ~~March 1, 2015~~February 28, 2016, with currency affecting net revenues unfavorably by approximately ~~$46 million~~.$22 million.

Constant-currency net revenues increased ~~from~~as a result of the improved performance and expansion of our company-operated retail network, ~~particularly in the Spain, U.K. and Russia markets.~~including ecommerce.

Asia. Net revenues in Asia increased on both reported and constant-currency bases for the three-month period ended ~~March 1, 2015~~February 28, 2016, with currency affecting net revenues unfavorably by approximately ~~$8 million~~.$13 million.

The increase in net revenues ~~for the~~ ~~three-month period~~ was primarily due to the expansion of our company-operated retail network, particularly in China, and ~~increased promotional activity, particularly during the Chinese New Year sales season.~~improved wholesale performance in Japan.

Table of Contents

Gross profit

The following table shows consolidated gross profit and gross margin for the periods indicated and the changes in these items from period to period:


	Three Months Ended								Three Months Ended
	March 1, 2015			February 23, 2014			% Increase (Decrease)		February 28, 2016			March 1, 2015			% Increase (Decrease)
	(Dollars in millions)								(Dollars in millions)
Net revenues	$	1,055.1		$	1,130.0		(6.6	)%	$	1,056.5		$	1,055.1		0.1	%
Cost of goods sold	518.0			553.6			(6.4	)%	496.9			518.0			(4.1	)%
Gross profit	$	537.1		$	576.4		(6.8	)%	$	559.6		$	537.1		4.2	%
Gross margin	50.9		%	51.0		%			53.0		%	50.9		%

Currency translation unfavorably impacted gross profit by approximately ~~$35~~$24 million ~~and gross margin by approximately 40 basis points~~ for the three-month period ended ~~March 1, 2015. Excluding the currency translation effect, gross~~February 28, 2016. Gross margin improved primarily due to lower negotiated product costs and streamlined supply chain ~~operations. Higher margins of our international businesses were also impacted~~operations, partially offset by the unfavorable transactional impact of currency. Gross margin also benefited from our international retail growth.

Selling, general and administrative expenses

The following table shows our selling, general and administrative expenses (“SG&A”) for the periods indicated, the changes in these items from period to period and these items expressed as a percentage of net revenues:


	Three Months Ended												Three Months Ended
	March 1, 2015		February 23, 2014		% Increase (Decrease)			March 1, 2015			February 23, 2014		February 28, 2016			March 1, 2015				% Increase (Decrease)			February 28, 2016			March 1, 2015
	March 1, 2015		February 23, 2014				% of Net Revenues			% of Net Revenues						March 1, 2015			% of Net Revenues				% of Net Revenues
	(Dollars in millions)												February 28, 2016	(Dollars in millions)
Selling	$	181.0	$	183.2	% Increase (Decrease)	(1.2	)%		17.2	%		16.2	%	$	189.4		$	181.0		% Increase (Decrease)		4.7	%		17.9	%		17.2	%
Advertising and promotion	50.2		31.6		59.0	%		4.8	%		2.8	%	57.5			50.2				14.5	%		5.4	%		4.8	%
Administration	83.7		86.9		(3.8	)%		7.9	%		7.7	%	84.4			83.7				1.0	%		8.0	%		7.9	%
Other	102.5		116.7		(12.2	)%		9.7	%		10.3	%	108.4			102.5				5.7	%		10.3	%		9.7	%
Restructuring-related charges	8.0		6.4		24.3	%		0.8	%		0.6	%	1.5			8.0				(81.3	)%		0.1	%		0.8	%
Total SG&A	$	425.4	$	424.8	0.1	%		40.3	%		37.6	%	$	441.2		$	425.4			3.7	%		41.8	%		40.3	%

Currency impacted SG&A favorably by approximately ~~$22~~$15 million for the three-month period ended ~~March 1, 2015, as compared to the same prior-year period.~~February 28, 2016.

Selling. Currency impacted selling expenses favorably by approximately ~~$13~~$9 million for the three-month period ended ~~March 1, 2015, as compared to the same prior-year period. Excluding the currency impact, higher~~February 28, 2016. Higher selling expenses ~~of $11 million~~primarily reflected costs associated with the expansion of our company-operated store network and investment in our ecommerce business. We had 3286 more company-operated stores at the end of the first quarter of ~~2015~~2016 than we did at the end of the first quarter of ~~2014.~~2015.

Advertising and promotion. ~~The increase in~~Currency did not have a significant impact on advertising and promotion expenses for the three-month period ended ~~March 1, 2015,~~February 28, 2016. The increase in advertising and promotion expenses primarily reflected a difference in the timing of ~~production and media spend for~~ our ~~campaigns.~~campaigns as well as increased investment in strengthening our brands through advertising.

Administration. Administration expenses include functional administrative and organization costs. Currency impacted administration expenses favorably by approximately $4$2 million for the three-month period ended March 1, 2015, as compared to the same prior-year period. Administration expenses primarily reflected higher expenses associated with our stock-based incentive compensation plans, resulting from an increase in the fair value of our common stock, partially offset by savings in the current year resulting from our global productivity initiative.February 28, 2016.

Other. Other SG&A includes distribution, information resources, and marketing organization costs. Currency impacted other SG&A expenses favorably by approximately $4$3 million for the three-month period ended ~~March 1, 2015, as compared to the same prior-year period. Lower~~February 28, 2016. Higher other SG&A costs primarily reflected ~~marketing organization and information resources savings resulting from our global productivity initiative.~~increased distribution expenses.

~~Table of Contents~~

Restructuring-related charges. Restructuring-related charges consist primarily of consulting fees incurred for our centrally-led cost-savings and productivity projects, as well as transition costs associated with our decision to outsource certain global business service activities. These related charges represent costs incurred associated with ongoing operations which ~~will~~are expected to benefit future periods and thus were recorded in SG&A in the Company's consolidated statements of income.

Table of Contents

Operating income

The following table shows operating income by reporting segment and corporate expenses for the periods indicated, the changes in these items from period to period and these items expressed as a percentage of net revenues:


	Three Months Ended															Three Months Ended
	March 1, 2015			February 23, 2014			% Increase (Decrease)			March 1, 2015			February 23, 2014			February 28, 2016			March 1, 2015				% Increase (Decrease)		February 28, 2016			March 1, 2015
	March 1, 2015			February 23, 2014					% of Net Revenues			% of Net Revenues							March 1, 2015			% of Net Revenues			% of Net Revenues
	(Dollars in millions)															February 28, 2016	(Dollars in millions)
Operating income:							% Increase (Decrease)																% Increase (Decrease)
Americas	$	102.3		$	111.1		(7.9	)%		17.8	%		17.7	%		$	81.8		$	102.3			(20.1	)%	14.3	%		17.8	%
Europe	58.2			71.4			(18.5	)%		21.0	%		23.8	%		61.7			58.2				6.0	%	22.3	%		21.0	%
Asia	47.3			46.9			0.9	%		23.3	%		23.1	%		46.6			47.3				(1.6	)%	22.3	%		23.3	%
Total regional operating income	207.8			229.4			(9.4	)%		19.7	%	*	20.3	%	*	190.1			207.8				(8.5	)%	18.0	%	*	19.7	%	*

Corporate:
Restructuring, net	4.3			57.9			(92.5	)%		0.4	%	*	5.1	%	*	1.8			4.3				(57.4	)%	0.2	%	*	0.4	%	*
Restructuring-related charges	8.0			6.4			24.3	%		0.8	%	*	0.6	%	*	1.5			8.0				(81.3	)%	0.1	%	*	0.8	%	*
Other corporate staff costs and expenses	88.1			71.4			23.4	%		8.3	%	*	6.3	%	*	70.2			88.1				(20.3	)%	6.6	%	*	8.3	%	*
Corporate expenses	100.4			135.7			(26.0	)%		9.5	%	*	12.0	%	*	73.5			100.4				(26.8	)%	7.0	%	*	9.5	%	*
Total operating income	$	107.4		$	93.7		14.7	%		10.2	%	*	8.3	%	*	$	116.6		$	107.4			8.5	%	11.0	%	*	10.2	%	*
Operating margin	10.2		%	8.3		%										11.0		%	10.2		%

______________

* Percentage of consolidated net revenues

Currency translation unfavorably affected total operating income by approximately ~~$13~~$9 million for the three-month period ended ~~March 1, 2015~~February 28, 2016.

Regional operating income.

Americas. For the three-month period ended March 1, 2015, the decline in operating income reflected increased investment in advertising and lower net revenues in the region, partially offset by an improvement in the region's gross margin. Currency ~~had no significant impact on the region's operating income for the three-month period.~~

~~Europe. Currency~~translation unfavorably affected operating income in the region by approximately ~~$12~~$2 million for the three-month period ended ~~March 1, 2015. Operating~~February 28, 2016. Lower operating income primarily reflected higher SG&A in the region, primarily advertising.

Europe. Currency translation unfavorably affected operating income in the region by approximately $4 million for the three-month period ended February 28, 2016. Excluding the effect of currency, operating income and operating margin ~~decreased primarily~~increased due to the region's ~~lower~~higher net revenues and an improvement in the region's gross ~~margin, which was driven by higher sourcing costs for the region.~~margin.

Asia. ~~The increase in~~Currency translation unfavorably affected operating income ~~and~~in the region by approximately $4 million for the three-month period ended February 28, 2016. Excluding the effect of currency, operating ~~margin primarily reflected~~income increased due to the region's higher net revenues. ~~Currency had no significant impact on the region's operating income for the three-month period.~~

Corporate. Corporate expenses ~~include SG&A~~represent costs that are not attributed to any of our regional operating segments. Included in corporate expenses are restructuring charges, the consulting fees incurred for our centrally-led cost-savings and productivity projects, and other corporate staff costs. Currency translation did not have a significant impact on corporate expenses for the three-month period ended February 28, 2016. As compared to the same prior-year period, ~~lower~~ corporate expenses ~~in the three-month period ended March 1, 2015,~~primarily reflected lower global sourcing organization costs as well as lower restructuring ~~charges in the current year~~ and ~~savings in the current year resulting from our global productivity initiative. These lower costs were partially offset by the higher stock-based incentive compensation expense in the current year.~~restructuring-related charges.

~~Table of Contents~~

Interest expense

Interest expense was ~~$23.3~~$14.9 million for the three-month period ended ~~March 1, 2015~~February 28, 2016, as compared to ~~$31.9~~$23.3 million for the same period in ~~2014~~2015. The decrease in interest expense was ~~primarily~~ due to lower average borrowing rates in 2016, resulting from our debt ~~balances~~refinancing activities in ~~2015.~~2015, and lower interest expense on our deferred compensation plans.

The weighted-average interest rate on average borrowings outstanding for the three-month period ended ~~March 1, 2015~~February 28, 2016, was ~~7.55%~~6.26% as compared to ~~7.91%~~7.65% for the same period in ~~2014~~2015. ~~The weighted-average interest rate decreased for the three-month period as a result~~

Table of ~~our debt reduction activities in 2014.~~Contents

Other ~~income (expense),~~expense, net

Other ~~income (expense),~~expense, net, primarily consists of foreign exchange management activities and transactions. For the three-month period ended ~~March 1, 2015~~February 28, 2016, we recorded net expense of ~~$26.0~~$2.2 million, as compared to ~~income of $4.2~~$26.0 million for the same prior-year period. The net expense in ~~2015~~2016 primarily reflected net losses on our foreign currency denominated ~~balances.~~balances, partially offset by net gains on our foreign exchange derivatives. The net expense in 2015 primarily reflected net losses on our foreign currency denominated balances due to the weakening of various foreign currencies, particularly the Euro, against the U.S. Dollar.

Income tax expense

The effective income tax rate was ~~34.1%~~33.4% for the three months ended~~March 1, 2015~~, February 28, 2016, compared to ~~24.8%~~34.1% for the same period ended ~~February 23, 2014~~.

The effective tax rate in the first quarter of 2014 included a tax benefit that we recorded as a result of reversing a deferred tax liability associated with the change in assertion during the quarter to indefinitely reinvest certain undistributed foreign earnings. The effective tax rate in 2015 reflected an increase in state income taxes due to higher projected domestic income inMarch 1, 2015.

Liquidity and Capital Resources

Liquidity outlook

We believe we will have adequate liquidity over the next twelve months to operate our business and to meet our cash requirements.

Cash sources

We are a privately-held corporation. We have historically relied primarily on cash flows from operations, borrowings under credit facilities, issuances of notes and other forms of debt financing. We regularly explore financing and debt reduction alternatives, including new credit agreements, unsecured and secured note issuances, equity financing, equipment and real estate financing, securitizations and asset sales. ~~Key sources of cash include earnings from operations and borrowing availability under our revolving credit facility.~~

We are borrowers under a senior secured revolving credit facility. The facility is an asset-based facility, in which the borrowing availability is primarily based on the value of our U.S. Levi’s^® trademarks and the levels of accounts receivable and inventory in the United States and Canada. The maximum availability under the facility is $850 million, of which $800 million is available to us for revolving loans in U.S. Dollars and $50 million is available to us for revolving loans either in U.S. Dollars or Canadian Dollars.

As of ~~March 1, 2015~~February 28, 2016, we had no borrowings of $20.0 million under the credit facility, ~~and unused~~all of which is classified as short-term debt. Unused availability under the credit facility was $~~717.0~~739.7 million, as our total availability of $~~776.2~~798.2 million, based on collateral levels as defined by the agreement, was reduced by $~~59.2~~58.5 million of other credit-related instruments.

~~Subsequent to the end of the first quarter, we borrowed approximately $50 million under our senior secured revolving credit facility.~~

As of ~~March 1, 2015~~February 28, 2016, we had cash and cash equivalents totaling approximately $~~202.7~~271.1 million, resulting in a total liquidity position (unused availability and cash and cash equivalents) of approximately $~~919.7 million~~1.0 billion.

Cash uses

Our principal cash requirements include working capital, capital expenditures, payments of principal and interest on our debt, payments of taxes, contributions to our pension plans and payments for postretirement health benefit plans, settlement of shares issued under our 2006 Equity Incentive Plan, as amended to date ("EIP"), and, if market conditions warrant, occasional investments in, or acquisitions of, business ventures in our line of business. In addition, we regularly evaluate our ability to pay dividends or repurchase stock, all consistent with the terms of our debt agreements.

~~Table of Contents~~

There have been no material changes to our estimated cash requirements for ~~2015~~2016 from those disclosed in our ~~2014~~2015 Annual Report on Form 10-K, except that potential payments in ~~2015~~2016 under the terms of the EIP are now estimated to be insignificant.

Table of Contents

Cash flows

The following table summarizes, for the periods indicated, selected items in our consolidated statements of cash flows:

Three Months Ended
March 1,
2015 February 23,
2014
(Dollars in millions)
Cash provided by operating activities $ 37.6
$ 35.7

Cash used for investing activities (25.1 ) (14.5 )
Cash used for financing activities (96.5 ) (7.0 )
Cash and cash equivalents 202.7
502.8



	Three Months Ended
	February 28, 2016			March 1, 2015
	(Dollars in millions)
Cash provided by operating activities	$	46.1		$	37.6
Cash used for investing activities	(17.8		)	(25.1		)
Cash used for financing activities	(73.6		)	(96.5		)
Cash and cash equivalents	271.1			202.7

Cash flows from operating activities

Cash provided by operating activities was ~~$37.6~~$46.1 million for the three-month period in ~~2015~~,2016, as compared to ~~$35.7~~$37.6 million for the same period in ~~2014.~~2015. Cash provided by operating activities increased compared to the prior year primarily due to ~~a decrease in cash used for inventory, reflecting our lower inventory levels, and~~ an increase in cash received from customers, reflecting our higher beginning accounts receivable balance ~~partially offset by~~and higher constant-currency revenues, as well as lower ~~net revenues. Cash provided by operating activities in 2015 also reflected~~payments to vendors due to timing and lower cash payments for our global productivity ~~initiative~~initiative. The increase in cash provided by operating activities was partially offset by an increase in cash used for inventory, reflecting our higher inventory levels due to earlier timing of inventory receipts and ~~increased pension contributions.~~lower-than-anticipated sales, particularly in the Americas.

Cash flows from investing activities

Cash used for investing activities was $~~25.1~~17.8 million for the three-month period in ~~2015~~2016, as compared to $~~14.5~~25.1 million for the same period in ~~2014~~2015. The ~~increase~~decrease in cash used for investing activities as compared to the prior year primarily reflected realized ~~losses~~gains on the settlement of our forward foreign exchange ~~contracts.~~contracts, partially offset by increased investment in information technology systems and distribution.

Cash flows from financing activities

Cash used for financing activities was $~~96.5~~73.6 million for the three-month period in ~~2015~~2016, as compared to $~~7.0~~96.5 million for the same period in ~~2014~~2015. ~~The increase in cash~~Cash used in 2016 and 2015 primarily reflected ~~repayment~~the utilization of our senior revolving credit facility.

Indebtedness

The borrower of substantially all of our debt is Levi Strauss & Co., the parent and U.S. operating company. ~~Substantially all of~~Of our total debt of $1.1 billion as of ~~March 1, 2015~~February 28, 2016, ~~was~~we had fixed-rate ~~debt.~~debt of $1.1 billion (98% of total debt), net of capitalized debt issuance costs, and variable-rate debt of $26.4 million (2% of total debt). As of ~~March 1, 2015~~February 28, 2016, our required aggregate debt principal payments on our unsecured long-term debt were ~~$33.5 million~~ ~~in 2016 and the remaining $1.1~~$1.0 billion in ~~2020~~years after 2021. Current maturities of our 4.25% Yen-denominated Eurobonds due 2016 will be paid in 2016. Short-term debt of $20.0 million borrowed under our senior secured revolving credit facility was expected to be repaid over the next twelve months, and ~~years after. Short-term~~short-term borrowings of ~~$33.8~~$20.8 million at various foreign subsidiaries were expected to be either paid over the next ~~nine~~twelve months or refinanced at the end of their applicable terms.

Our long-term debt agreements contain customary covenants restricting our activities as well as those of our subsidiaries. ~~Currently, we are~~We were in compliance with all of these ~~covenants.~~covenants as of February 28, 2016.

Off-Balance Sheet Arrangements, Guarantees and Other Contingent Obligations

There have been no significant changes to our off-balance sheet arrangements or contractual commitments from those disclosed in our ~~2014~~2015 Annual Report on Form 10-K.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the related notes. There have been no significant changes to our critical accounting policies from those disclosed in our ~~2014~~2015 Annual Report on Form 10-K.

Recently Issued Accounting Standards

See Note 1 to our unaudited consolidated financial statements included in this report for recently issued accounting standards, including the expected dates of adoption and estimated effects on our consolidated financial statements.

Table of Contents

FORWARD-LOOKING STATEMENTS

Certain matters discussed in this report, including (without limitation) statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contain forward-looking statements. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected.

These forward-looking statements include statements relating to our anticipated financial performance and business prospects, including profitable growth, strong cash flow, debt reduction, currency values and financial impact, the benefits and timing of our global productivity initiative, the impact of pending legal proceedings, and/or statements preceded by, followed by or that include the words “believe”, "will", "so we can", "when", “anticipate”, “intend”, “estimate”, “expect”, “project”, “could”, “plans”, “seeks” and similar expressions. These forward-looking statements speak only as of the date stated, and we do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these expectations may not prove to be correct or we may not achieve the financial results, savings or other benefits anticipated in the forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which may be beyond our control. These risks and uncertainties, including those disclosed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended November ~~30, 2014~~29, 2015, ~~and this report on Form 10-Q for the fiscal quarter ended March 1, 2015,~~ and our other filings with the Securities and Exchange Commission, could cause actual results to differ materially from those suggested by the forward-looking statements and include, without limitation:

changes in general economic and financial conditions, and the resulting impact on the level of discretionary consumer spending for apparel and pricing trends ~~and currency~~ fluctuations, and our ability to plan for and respond to the impact of those ~~changes in the global retail environment in which we operate our business;~~changes;

our ability to timely and effectively implement our global productivity initiative as planned, which is intended to increase productivity and efficiency in our global operations, take advantage of lower-cost ~~service delivery~~service-delivery models in our distribution network and streamline our procurement practices to maximize efficiency in our global operations, without business disruption or mitigation to such disruptions;

consequences of impacts to the businesses of our wholesale customers, including a ~~sudden~~significant decline in a wholesale customer's financial condition, leading to restructuring actions, bankruptcies, liquidations or other unfavorable events for our wholesale customers, caused by factors such as inability to secure financing, decreased discretionary consumer spending, inconsistent traffic patterns and an increase in promotional activity as a result of decreased traffic, pricing fluctuations, general economic and financial conditions and changing consumer preferences;

our and our wholesale customers' decisions to modify strategies and adjust product mix and pricing, and our ability to manage any resulting product transition costs, including liquidating inventory or increasing promotional activity;

our ability to purchase products through our independent contract manufacturers that are made with quality raw materials and our ability to mitigate the variability of costs related to manufacturing, sourcing, and raw materials supply and to manage consumer response to such mitigating actions;

our ability to gauge and adapt to changing U.S. and international retail environments and fashion trends and changing consumer preferences in product, price-points, as well as in-store and ~~online~~digital shopping experiences;

our ability to respond to price, innovation and other competitive pressures in the global apparel industry, on and from our key customers and in our key markets;

our ability to increase the number of dedicated stores for our products, including through opening and profitably operating company-operated stores;

consequences of foreign currency exchange and interest rate fluctuations;

our ability to successfully prevent or mitigate the impacts of data security breaches;

our ability to attract and retain key executives and other key employees;

our ability to protect our trademarks and other intellectual property;

the impact of the variables that affect the net periodic benefit cost and future funding requirements of our postretirement benefits and pension plans;

our dependence on key distribution channels, customers and suppliers;

our ability to utilize our tax credits and net operating loss carryforwards;

Table of Contents

ongoing or future litigation matters and disputes and regulatory developments;

changes in or application of trade and tax laws; and

political, social and economic instability, or natural disasters, in countries where we ~~and~~or our customers do business.

~~Table of Contents~~

Our actual results might differ materially from historical performance or current expectations. We do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.



Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our primary market risk exposures or how those exposures are managed from the information disclosed in our ~~2014~~2015 Annual Report on Form 10-K.



Item 4.	CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934) that are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit to the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

We have evaluated, under the supervision and with the participation of management, including our chief executive officer and our chief financial officer, the effectiveness of the design and operation of our disclosure controls and procedures as of ~~March 1, 2015~~February 28, 2016. Based on that evaluation, our chief executive officer and our chief financial officer concluded that as of ~~March 1, 2015~~February 28, 2016, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Controls

We maintain a system of internal control over financial reporting that is designed to provide reasonable assurance that our books and records accurately reflect our transactions and that our established policies and procedures are followed. We continued the transition of certain global business service activities to our outsourced service provider during our last fiscal quarter, and this resulted in a change to our processes and control environment. There were no other changes to our internal control over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II — OTHER INFORMATION



Item 1.	LEGAL PROCEEDINGS

Litigation. There have been no material developments with respect to the information previously reported in our ~~2014~~2015 Annual Report on Form 10-K related to legal proceedings.

In the ordinary course of business, we have various pending cases involving contractual matters, facility and employee-related matters, distribution matters, product liability claims, trademark infringement and other matters. We do not believe any of these pending legal proceedings will have a material impact on our financial condition, results of operations or cash flows.



Item 1A.	RISK FACTORS

There have been no material changes in our risk factors from those disclosed in our ~~2014~~2015 Annual Report on Form 10-K.



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

On February 4, 2015, our Board of Directors (the “Board”) approved the award of restricted stock units (“RSUs”) representing an aggregate of 1,262 shares of our common stock to Jenny Ming in connection with her appointment to the Company's Board. The RSUs were granted as a part of the standard annual compensation provided to our non-employee directors, and represent a pro-rated grant for the period of time since Ms. Ming joined our Board. This award was made under our 2006 Equity Incentive Plan, as amended and restated (the “Plan”).

RSUs are units, representing beneficial ownership interests, corresponding in number and value to a specified number of underlying shares of stock. The RSUs vest in three equal installments after 13, 24 and 36 months following the grant date. However, if the recipient's continuous service terminates for any reason other than for cause after the first vesting installment, but prior to full vesting, then the remaining unvested portion of the award becomes fully vested as of the date of such termination. Each recipient's initial grant of RSUs is subject to a mandatory deferral feature, by which the RSU will be converted to a share of common stock six months after discontinuation of service with the Company for each fully vested RSU held at that date. For subsequent grants, recipients of the RSUs have the opportunity to make deferral elections regarding when shares of our common stock are to be delivered in settlement of vested RSUs. If the recipient does not elect to defer the receipt of common stock, then the RSUs are immediately converted into shares upon vesting. The RSUs additionally have “dividend equivalent rights”, of which dividends paid by the Company on its common stock are credited by the equivalent addition of RSUs.

~~Also on February 4, 2015,~~9, 2016, our Board approved the award of stock appreciation rights (“SARs”) representing an aggregate of ~~768,527~~871,153 shares of our common stock to certain of our executives. These awards were made under our ~~Plan.~~2006 Equity Incentive Plan (the “Plan”).

SARs are granted with an exercise price equal to the fair market value of our common stock, as determined under the Plan, on the date of grant. The SARs were granted in two groups and are identical except as described below:

~~461,117~~522,694 of the SARs, referred to as service-vested SARs, were granted with the following vesting schedule: 25% percent of the SAR grant vests on the one-year anniversary of the date of grant, with the remaining 75% balance vesting monthly over 36 months commencing on the month following such ~~anniversary, at a rate of 2.08% per month;~~anniversary; and

~~307,410~~348,459 of the SARs, referred to as performance-based SARs, were granted with the following vesting schedule: 50% of the performance-based SARs will vest to the extent that the Company has achieved certain goals based on the Company's (i) average earnings before interest and taxes margin percentage and (ii) the compound annual growth rate of the Company's net revenues, each over fiscal years ~~2015,~~ 2016, 2017 and ~~2017~~2018 and the remaining 50% of the performance-based SARs will vest based on the Company's performance against a three-year market-related relative total shareholder return goal. Our Board will determine the extent to which the goals under the performance-based SARs have been satisfied on or before March 1, ~~2018.~~2019.

Upon the exercise of a SAR, the recipient will be entitled to receive common stock with an aggregate fair market value equal to the excess of the per share fair market value of the Company's common stock on the date of exercise over the exercise price, multiplied by the number of SARs exercised.

~~Table of Contents~~

We will not receive any proceeds from the issuance or vesting of ~~RSUs or~~ SARs. The ~~RSUs and~~ SARs were granted under Section 4(a)(2) of the Securities Act of 1933, as amended. Section 4(a)(2) generally provides an exemption from registration for transactions by an issuer not involving any public offering.

We are a privately-held corporation; there is no public trading of our common stock. As of April ~~9, 2015,~~7, 2016, we had ~~37,419,788~~37,452,319 shares outstanding.



Item 3.	DEFAULTS UPON SENIOR SECURITIES

None.



Item 4.	MINE SAFETY DISCLOSURES

Not applicable.



Item 5.	OTHER INFORMATION

~~The Company intends to use the Investors portion~~None.

Table of its website to make available a variety of information for investors, analysts and media. The Company's goal is to maintain the Investors portion of its website as the authoritative portal through which visitors can easily find information, including:Contents

the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after that material is electronically filed or furnished to the SEC;

~~information on business strategies, financial results, and key performance indicators, as applicable;~~

~~announcements of analyst conferences, speeches, and events at which the Company's executives talk about our business;~~

~~results of quarterly earnings, other financial information and announcements that we may post from time to time that analysts might find useful or interesting; and~~

~~opportunities to sign up for email alerts to have information, including quarterly earnings announcements, pushed in real time.~~



Item 6.	EXHIBITS



~~10.1~~		First Amendment to Stockholders' Agreement, dated December 22, 2014. Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed with the Commission on December 23, 2014.

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.

101.INS		XBRL Instance Document. Filed herewith.

101.SCH		XBRL Taxonomy Extension Schema Document. Filed herewith.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document. Filed herewith.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document. Filed herewith.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document. Filed herewith.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document. Filed herewith.

Table of Contents

SIGNATURE

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.



Date:	April ~~14, 2015~~12, 2016		LEVI STRAUSS & Co.
			(Registrant)


		By:	/s/ WADE W. WEBSTER
			Wade W. Webster Senior Vice President and Controller (Principal Accounting Officer)

Table of Contents

EXHIBIT INDEX



~~10.1~~		First Amendment to Stockholders' Agreement, dated December 22, 2014. Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed with the Commission on December 23, 2014.

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.

101.INS		XBRL Instance Document. Filed herewith.

101.SCH		XBRL Taxonomy Extension Schema Document. Filed herewith.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document. Filed herewith.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document. Filed herewith.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document. Filed herewith.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document. Filed herewith.

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer þ

Smaller reporting company ¨

(Do not check if a smaller reporting company)