UNITED STATES SECURITIES AND EXCHANGE COMMISSION



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

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 — 37,452,319 shares outstanding on ~~April 7,~~July 6, 2016

~~Table of Contents~~

LEVI STRAUSS & CO. AND SUBSIDIARIES

INDEX TO FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 2016



		Page Number
PART I — FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (unaudited):
	Consolidated Balance Sheets as of ~~February 28,~~May 29, 2016, and November 29, 2015	3
	Consolidated Statements of Income for the Three and Six Months Ended ~~February 28,~~May 29, 2016, and ~~March 1,~~May 31, 2015	4
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended ~~February 28,~~May 29, 2016, and ~~March 1,~~May 31, 2015	5
	Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~February 28,~~May 29, 2016, and ~~March 1,~~May 31, 2015	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1922
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2732
Item 4.	Controls and Procedures	2733

PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	2834
Item 1A.	Risk Factors	2834
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2834
Item 3.	Defaults Upon Senior Securities	2834
Item 4.	Mine Safety Disclosures	2834
Item 5.	Other Information	2834
Item 6.	Exhibits	2935
SIGNATURE		3036

~~Table of Contents~~

PART I — FINANCIAL INFORMATION



Item 1.	CONSOLIDATED FINANCIAL STATEMENTS

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	(Unaudited)						(Unaudited)
	February 28, 2016			November 29, 2015			May 29, 2016			November 29, 2015
	(Dollars in thousands)						(Dollars in thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	271,101		$	318,571		$	359,540		$	318,571
Trade receivables, net of allowance for doubtful accounts of $11,043 and $11,025	388,620			498,196
Trade receivables, net of allowance for doubtful accounts of $12,598 and $11,025							334,796			498,196
Inventories:
Raw materials	3,382			3,368			3,153			3,368
Work-in-process	3,696			3,031			3,568			3,031
Finished goods	733,213			600,460			783,651			600,460
Total inventories	740,291			606,859			790,372			606,859
Other current assets	109,410			104,523			100,495			104,523
Total current assets	1,509,422			1,528,149			1,585,203			1,528,149
Property, plant and equipment, net of accumulated depreciation of $825,536 and $811,013	386,272			390,829
Property, plant and equipment, net of accumulated depreciation of $826,480 and $811,013							383,260			390,829
Goodwill	235,541			235,041			236,065			235,041
Other intangible assets, net	43,170			43,350			43,104			43,350
Non-current deferred tax assets, net	569,936			580,640			576,490			580,640
Other non-current assets	93,890			106,386			93,450			106,386
Total assets	$	2,838,231		$	2,884,395		$	2,917,572		$	2,884,395

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term debt	$	40,779		$	114,978		$	124,247		$	114,978
Current maturities of long-term debt	35,394			32,625			36,439			32,625
Accounts payable	267,033			238,309			282,165			238,309
Accrued salaries, wages and employee benefits	133,269			182,430			140,005			182,430
Restructuring liabilities	15,736			20,141			10,853			20,141
Accrued interest payable	21,004			5,510			5,701			5,510
Accrued income taxes	17,190			6,567			23,571			6,567
Other accrued liabilities	296,516			245,607			242,886			245,607
Total current liabilities	826,921			846,167			865,867			846,167
Long-term debt	1,005,243			1,004,938			1,005,565			1,004,938
Long-term capital leases	12,466			12,320			12,504			12,320
Postretirement medical benefits	102,071			105,240			99,167			105,240
Pension liability	348,921			358,443			346,770			358,443
Long-term employee related benefits	59,938			73,342			64,609			73,342
Long-term income tax liabilities	27,359			26,312			22,039			26,312
Other long-term liabilities	57,140			56,987			61,542			56,987
Total liabilities	2,440,059			2,483,749			2,478,063			2,483,749
Commitments and contingencies
Temporary equity	76,538			68,783			71,729			68,783

Stockholders’ Equity:
Levi Strauss & Co. stockholders’ equity
Common stock — $.01 par value; 270,000,000 shares authorized; 37,460,145 shares and 37,460,145 shares issued and outstanding	375			375
Common stock — $.01 par value; 270,000,000 shares authorized; 37,452,319 shares and 37,460,145 shares issued and outstanding							375			375
Additional paid-in capital	—			3,291			2,119			3,291
Retained earnings	705,985			705,668			741,217			705,668
Accumulated other comprehensive loss	(386,995		)	(379,066		)	(378,647		)	(379,066		)
Total Levi Strauss & Co. stockholders’ equity	319,365			330,268			365,064			330,268
Noncontrolling interest	2,269			1,595			2,716			1,595
Total stockholders’ equity	321,634			331,863			367,780			331,863
Total liabilities, temporary equity and stockholders’ equity	$	2,838,231		$	2,884,395		$	2,917,572		$	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
February 28,
2016 March 1,
2015

(Dollars in thousands)
(Unaudited)
Net revenues $ 1,056,500
$ 1,055,075
Cost of goods sold 496,902
518,010
Gross profit 559,598
537,065
Selling, general and administrative expenses 441,163
425,282
Restructuring, net 1,848
4,338
Operating income 116,587
107,445
Interest expense (14,902 ) (23,312 )
Other expense, net (2,219 ) (26,028 )
Income before income taxes 99,466
58,105
Income tax expense 33,175
19,822
Net income 66,291
38,283
Net (income) loss attributable to noncontrolling interest (455 ) 109
Net income attributable to Levi Strauss & Co. $ 65,836
$ 38,392



	Three Months Ended						Six Months Ended
	May 29, 2016			May 31, 2015			May 29, 2016			May 31, 2015
	(Dollars in thousands) (Unaudited)
Net revenues	$	1,011,587		$	1,012,180		$	2,068,087		$	2,067,255
Cost of goods sold	494,389			511,949			991,291			1,029,959
Gross profit	517,198			500,231			1,076,796			1,037,296
Selling, general and administrative expenses	459,351			449,662			900,514			874,944
Restructuring, net	(191		)	2,954			1,657			7,292
Operating income	58,038			47,615			174,625			155,060
Interest expense	(20,411		)	(21,913		)	(35,313		)	(45,225		)
Loss on early extinguishment of debt	—			(14,002		)	—			(14,002		)
Other income (expense), net	4,295			7,639			2,076			(18,389		)
Income before income taxes	41,922			19,339			141,388			77,444
Income tax expense	10,862			7,887			44,037			27,709
Net income	31,060			11,452			97,351			49,735
Net (income) loss attributable to noncontrolling interest	(335		)	239			(790		)	348
Net income attributable to Levi Strauss & Co.	$	30,725		$	11,691		$	96,561		$	50,083

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						Three Months Ended					Six Months Ended
	February 28, 2016			March 1, 2015			May 29, 2016			May 31, 2015		May 29, 2016			May 31, 2015
	(Dollars in thousands) (Unaudited)						(Dollars in thousands) (Unaudited)
Net income	$	66,291		$	38,283		$	31,060		$	11,452	$	97,351		$	49,735
Other comprehensive income (loss), before related income taxes:
Pension and postretirement benefits	3,582			4,607			3,735			4,328		7,317			8,935
Net investment hedge (losses) gains	(664		)	141			(250		)	463		(914		)	604
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		)
Foreign currency translation gains (losses)							5,877			1,032		(1,698		)	(9,500		)
Unrealized gains (losses) on marketable securities							1,510			161		(319		)	274
Total other comprehensive income, before related income taxes							10,872			5,984		4,386			313
Income taxes related to items of other comprehensive income							(2,414		)	248		(3,638		)	(1,301		)
Comprehensive income, net of income taxes	58,581			31,063			39,518			17,684		98,099			48,747
Comprehensive (income) loss attributable to noncontrolling interest	(674		)	132			(447		)	297		(1,121		)	429
Comprehensive income attributable to Levi Strauss & Co.	$	57,907		$	31,195		$	39,071		$	17,981	$	96,978		$	49,176

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

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

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 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 29, 2015, included in the Annual Report on Form 10-K filed ~~by the Company~~ with the Securities and Exchange Commission (“SEC”) on February 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 and six months ended ~~February 28,~~May 29, 2016, may not be indicative of the results to be expected for any other interim period or the year ending November 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 2016 and 2015 consists of 13 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~~for all periods presented have been ~~reclassified~~conformed to ~~present the components~~show each component 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~~Each component was 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.

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,~~MAY 29, 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 2015 Annual Report on Form 10-K, except for the following, which have been grouped by their effective dates for the Company:

First Quarter of 2018

In March 2016, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. ("ASU") 2016-06, 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 nature of 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 instrument and accounted for separately as a derivative. 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.~~ASU 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.~~ASU 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~~The FASB has 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 transferredseveral more amendments to the ~~customers.~~ new revenue standard ASU 2014-09, as amended by ASU 2015-14:

March 2016 - ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . 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 customers.

April 2016 - ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. ASU 2016-10 covers two specific topics: performance obligations and licensing. This amendment includes guidance on immaterial promised goods or services, shipping or handling activities, separately identifiable performance obligations, functional or symbolic intellectual property licenses, sales-based and usage-based royalties, license restrictions (time, use, geographical) and licensing renewals.

May 2016 - ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. ASU 2016-12 clarifies certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition and disclosures no longer required if the full retrospective transition method is adopted.

The Company is currently assessing the impact that adopting ~~this~~these new accounting ~~standard~~standards 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 MAY 29, 2016

First Quarter of 2020

In February 2016, the FASB issued ~~Accounting Standards Update No.~~ASU 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.

First Quarter of 2021

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. ASU 2016-13 also applies to employee benefit plan accounting, with an effective date of the first quarter of fiscal 2022. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements, footnote disclosures and employee benefit plans’ accounting.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 2016

NOTE 2: FAIR VALUE OF FINANCIAL INSTRUMENTS

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

Fair Value Estimated

Level 1 Inputs⁽¹⁾

Level 2 Inputs⁽²⁾

Level 1 Inputs⁽¹⁾

Level 2 Inputs⁽²⁾

Level 1 Inputs⁽¹⁾

Level 2 Inputs⁽²⁾

Level 1 Inputs⁽¹⁾

Level 2 Inputs⁽²⁾

Forward foreign exchange contracts, net⁽³⁾

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:

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 2016

NOTE 3: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

As of ~~February 28,~~May 29, 2016, the Company had forward foreign exchange contracts to buy ~~$725.7~~$887.2 million and to sell ~~$271.0~~$405.4 million against various foreign currencies. These contracts are at various exchange rates and expire at various dates through ~~November 2017.~~February 2018.

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

Forward foreign exchange contracts⁽¹⁾

Forward foreign exchange contracts⁽²⁾

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:

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 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 ~~expense,~~income (expense), net” in the Company’s consolidated statements of income:

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

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 2016

Senior Revolving Credit Facility

The Company’s unused availability under its senior secured revolving credit facility was $~~739.7~~610.8 million at ~~February 28,~~May 29, 2016, as the Company’s total availability of $~~798.2~~665.8 million was reduced by $~~58.5~~55.0 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 and six months ended ~~February 28,~~May 29, 2016, was ~~6.26%~~6.41% and 6.33% respectively, as compared to ~~7.65%~~6.91% and 7.22% , respectively, in the same ~~period~~periods of 2015.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 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:

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 2016



	Pension Benefits						Postretirement Benefits
	Six Months Ended						Six Months Ended
	May 29, 2016			May 31, 2015			May 29, 2016			May 31, 2015
	(Dollars in thousands)
Net periodic benefit cost:
Service cost	$	4,130		$	4,218		$	100		$	125
Interest cost⁽¹⁾	18,962			23,630			1,612			2,294
Expected return on plan assets	(24,296		)	(25,433		)	—			—
Amortization of prior service benefit	(31		)	(31		)	—			—
Amortization of actuarial loss	6,035			6,323			1,483			2,256
Curtailment loss	—			387			—			—
Net periodic benefit cost	4,800			9,094			3,195			4,675
Changes in accumulated other comprehensive loss:
Actuarial loss	170			—			—			—
Amortization of prior service benefit	31			31			—			—
Amortization of actuarial loss	(6,035		)	(6,323		)	(1,483		)	(2,256		)
Curtailment loss	—			(387		)	—			—
Total recognized in accumulated other comprehensive loss	(5,834		)	(6,679		)	(1,483		)	(2,256		)
Total recognized in net periodic benefit cost and accumulated other comprehensive loss	$	(1,034	)	$	2,415		$	1,712		$	2,419

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED MAY 29, 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 be implemented through the end of 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 and six months ended ~~February 28,~~May 29, 2016, the Company recognized net restructuring reversals and charges, ~~net,~~ of ~~$1.8~~$0.2 million and $1.7 million, respectively, as compared to ~~$4.3~~net restructuring charges of $3.0 million and $7.3 million, respectively, for the same ~~period~~periods in 2015. These net restructuring reversals and charges were recorded in "Restructuring, net" in the Company's consolidated statements of income. Related charges of ~~$1.5~~$3.0 million and $4.5 million for the three and six months ended ~~February 28,~~May 29, 2016, as compared to ~~$8.0~~$12.4 million and $20.4 million for the same ~~period~~periods in 2015, 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 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 2017.

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

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.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 2016

The following table summarizes the activities associated with restructuring liabilities for the three and six months ended ~~February 28,~~May 29, 2016, and ~~March 1, 2015~~.May 31, 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.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 2016



	Six Months Ended May 29, 2016
	Liabilities				Adjustments						Foreign Currency Fluctuation			Liabilities
	November 29, 2015		Charges		Adjustments			Payments			Foreign Currency Fluctuation			May 29, 2016
	(Dollars in thousands)
Severance and employee-related benefits	$	20,774	$	1,845	$	(404	)	$	(11,168	)	$	721		$	11,768
Other	964		216		—			(1,180		)	—			—
Total	$	21,738	$	2,061	$	(404	)	$	(12,348	)	$	721		$	11,768

Current portion	$	20,141												$	10,853
Long-term portion	1,597													915
Total	$	21,738												$	11,768

	Six Months Ended May 31, 2015
	Liabilities				Adjustments						Foreign Currency Fluctuation			Liabilities
	November 30, 2014		Charges		Adjustments			Payments			Foreign Currency Fluctuation			May 31, 2015
	(Dollars in thousands)
Severance and employee-related benefits	$	56,963	$	7,756	$	(1,763	)	$	(25,473	)	$	(4,356	)	$	33,127
Other	6,400		1,379		(467		)	(7,312		)	—			—
Total	$	63,363	$	9,135	$	(2,230	)	$	(32,785	)	$	(4,356	)	$	33,127

Current portion	$	57,817												$	32,472
Long-term portion	5,546													655
Total	$	63,363												$	33,127

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED MAY 29, 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.

Litigation. There have been no material developments with respect to the information previously reported in the Company’s 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.

The ~~Company's Board of Directors (the “Board”) declared~~Company paid a cash dividend of $60.0 million in the ~~first~~second quarter of 2016, payable in the second quarter of 2016 to stockholders of record at the close of business on February 19, 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 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 Company's Board of Directors 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:

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.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 2016

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

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

Foreign exchange management (losses) gains⁽¹⁾

Foreign currency transaction gains (losses)⁽²⁾

NOTE 11: INCOME TAXES

The effective income tax rate was ~~33.4%~~31.1% for the ~~three~~six months ended ~~February 28,~~May 29, 2016, compared to ~~34.1%~~35.8% for the same period ended ~~March 1,~~May 31, 2015.

The decrease in the effective tax rate in 2016 as compared to 2015 primarily reflected a higher proportion of 2016 earnings in jurisdictions where the Company is subject to lower tax rates.

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~~three- and six-month period ended ~~February 28,~~May 29, 2016,, the Company donated $0.3 million and $0.6 million to the Levi Strauss Foundation as compared to ~~$5.9~~$0.5 million and $6.4 million for the same prior-year period.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY 28,~~MAY 29, 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.

Business segment information for the Company is as follows:



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

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 ~~655~~662 company-operated stores located in 31 countries, including the United States, and through the ecommerce sites we operate. Our company-operated stores and ecommerce sites generated approximately ~~31%~~29% of our net revenues in the first ~~three months~~half of 2016,, as compared to ~~28%~~27% in the same period in 2015,, with our ecommerce sites representing approximately ~~15%~~14% of this revenue in 2016,, as compared to ~~14%~~13% in the same period in ~~2015~~.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%~~44% of our net revenues and ~~57%~~49% of our regional operating income in the first ~~three~~six months of 2016, as compared to ~~46%~~42% of our net revenues and ~~51%~~43% of our regional operating income in the same period in 2015. Sales of Levi’s^® brand products represented approximately ~~87%~~86% of our total net sales in ~~each of~~ the first ~~three-month~~six-month periods in 2016, ~~and~~as compared to 84% in the same period in 2015.

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.

Consumer discretionary spending, which remains mixed globally, continues to result in a challenging retail environment for us and our customers, characterized by declining traffic patterns and contributing to a generally promotional environment. ~~Slow~~In developed economies, 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. 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. These trends are partially offset by continued economic growth in developing economies such as Mexico and China, where rising incomes and an expanding middle class create new consumers for our products. 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~~Some competitors also continue to expand their global footprints in both brick-and-mortar retail and online. ~~While currency~~Currency values ~~are~~continue to be in a state of constant ~~flux, the~~flux. The appreciation of the U.S. Dollar against various foreign currencies, particularly the Euro, will continue to impact our financial results, affecting translation, margins, as well as traffic in stores located in or near major domestic tourist ~~attractions.~~destinations. The recent announcement of the Referendum of the United Kingdom’s Membership of the European Union (referred to as Brexit) has introduced additional volatility and uncertainty in global stock markets and currency exchange rates.

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

Operating income. Compared to the ~~first~~second quarter of 2015, consolidated operating income increased by approximately 9%22% and operating margin improved to ~~11%~~6%, primarily reflecting an improvement in our gross margin and higher constant-currency revenues, partially offset by increased investments in retail and advertising and the effects of currency.

Cash flows. Cash flows provided by operating activities were ~~approximately $46~~$103.3 million for the ~~three-month~~six-month period in 2016 as compared to ~~$38~~$102.6 million for the same period in 2015; the slight increase reflected higher trade receivable collections and lower payments to vendors, ~~partially~~ offset by ~~higher~~increased investment in inventory levels.

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 2016 and 2015 consists of 13 weeks.

Segments. We manage our business according to three regional segments: the Americas, Europe and Asia.

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

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.

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:

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.

Total net revenues ~~increased~~remained relatively flat on ~~both~~a reported ~~and constant-currency bases~~basis for the ~~three-month~~three- and six-month period ended ~~February 28,~~May 29, 2016, as compared to the same prior-year period. On a constant-currency basis, total revenues increased for both the three- and six-month period ended May 29, 2016, as compared to the same period last year.

Americas. Net revenues in our Americas region decreased on both a reported basis and ~~increased on a~~ constant-currency basis for the ~~three-month~~three- and six-month period ended May 29, 2016, with currency affecting net revenues unfavorably by approximately $8 million and $19 million, respectively.

The decline in net revenues for both periods was largely attributed to lower wholesale revenues in the United States due to a continued weak environment for apparel retailers and lower volume to certain large wholesale customers, partially offset by an increase in net revenues in Mexico in retail and wholesale. Net revenues were also unfavorably impacted as a result of a transition of Dockers products.

Europe~~February 28,~~. Net revenues in Europe increased both on a reported basis and constant-currency basis for each of the three- and six-month period ended May 29, 2016, with currency affecting net revenues ~~unfavorably by approximately $11 million.~~

~~Constant-currency net revenues increased at wholesale and retail, primarily due to our performance in Mexico. In~~minimally during the ~~United States, net revenues declined slightly, primarily at wholesale due to a decline in the Dockers~~^® ~~brand in anticipation of 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 ~~February 28,~~May 29, 2016~~, with currency affecting net revenues~~ and unfavorably by approximately $22 ~~million.~~million during the six-month period ended May 29, 2016.

Constant-currency net revenues increased as a result of ~~the improved~~strong performance and expansion of our company-operated retail ~~network, including ecommerce.~~network.

Asia. Net revenues in Asia increased on both a reported and constant-currency ~~bases~~basis for the ~~three-month~~three- and six-month period ended ~~February 28,~~May 29, 2016, with currency affecting net revenues unfavorably by approximately ~~$13 million.~~$6 million and $19 million, respectively.

The increase in net revenues was primarily due to the performance and expansion of our company-operated retail network, particularly in China, and improved ~~wholesale~~ performance in Japan.

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

Currency translation unfavorably impacted gross profit by approximately ~~$24~~$5 million and $29 million for the ~~three-month~~three- and six-month period ended ~~February 28, 2016.~~May 29, 2016, respectively. Gross margin improved primarily due to our international retail growth, lower negotiated product costs, ~~and~~ streamlined supply chain operations and price increases, 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:

Currency impacted SG&A favorably by approximately ~~$15~~$4 million and $19 million for the ~~three-month~~three- and six-month period ended ~~February 28, 2016.~~May 29, 2016, respectively.

Selling. Currency impacted selling expenses favorably by approximately $9$3 million and $12 million for the ~~three-month~~three- and six-month period ended ~~February 28,~~May 29, 2016. Higher selling expenses primarily reflected costs associated with the expansion of our company-operated store network and investment in our ecommerce business. We had 8666 more company-operated stores at the end of the ~~first~~second quarter of 2016 than we did at the end of the ~~first~~second quarter of 2015.

Advertising and promotion. Currency did not have a significant impact on advertising and promotion expenses for the ~~three-month~~three- and six-month period ended ~~February 28,~~May 29, 2016. The increase in advertising and promotion expenses primarily reflected increased investment in strengthening our brands through advertising as well as a difference in the timing of our ~~campaigns as well as increased investment in strengthening our brands through advertising.~~campaigns.

Administration. Administration expenses include functional administrative and organization costs. Currency ~~impacted~~had a favorable impact on administration expenses ~~favorably~~ by approximately $2$1 million and $3 million for the ~~three-month~~three- and six-month period ended ~~February 28,~~May 29, 2016. As compared to the same prior-year periods, administration expenses in 2016 reflect lower organization costs including salaries, benefits and long-term incentive compensation.

Other. Other SG&A includes distribution, information resources, and marketing organization costs. Currency ~~impacted~~did not have a significant impact on other SG&A expenses ~~favorably by~~for the three months ended May 29, 2016 and had a favorable impact of approximately $3$2 million for the ~~three-month period~~six months ended ~~February 28,~~May 29, 2016. Higher other SG&A costs primarily reflected increased distribution and information technology expenses. We recorded a gain of $6.1 million in conjunction with the sale-leaseback of our distribution center in the United Kingdom in the second quarter of 2016 as compared to a $7.5 million gain recognized related to the sale of our finishing and distribution facility in Turkey in 2015.

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 are expected to benefit future periods and thus were recorded in SG&A in the Company's consolidated statements of 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:

Americas. Currency translation unfavorably affected operating income in the region by approximately $2$1 million and $3 million for the ~~three-month~~three- and six-month period ended ~~February 28, 2016. Lower~~May 29, 2016, respectively. For both periods ended May 29, 2016, the decline in operating income is primarily ~~reflected higher SG&A~~due to lower net revenues in the region ~~primarily advertising.~~and higher advertising expenses. For the three months, these results were partially offset by an improvement in the region's gross margin.

Europe. Currency translation favorably affected operating income in the region by approximately $1 million and unfavorably affected operating income in the region by approximately $4$3 million for the ~~three-month~~three- and six-month period ended ~~February 28, 2016.~~May 29, 2016, respectively. Excluding the effect of currency, operating income and operating margin increased in both periods due to the region's higher net revenues and an improvement in the region's gross ~~margin.~~margin, partially offset by an increased investment in retail and advertising in the region.

Asia. Currency translation unfavorably affected operating income in the region by approximately $4$1 million and $5 million for the ~~three-month~~three- and six-month period ended ~~February 28, 2016.~~May 29, 2016, respectively. Excluding the effect of currency, operating income increased due to the region's higher net ~~revenues.~~revenues, partially offset by increased investment in retail in the region.

Corporate. Corporate expenses 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~~three- and six-month period ended ~~February 28,~~May 29, 2016. As compared to the same prior-year period, corporate expenses primarily reflected lower ~~global sourcing organization costs~~restructuring and restructuring-related charges as well as lower ~~restructuring and restructuring-related charges.~~global sourcing organization costs.

Interest expense was ~~$14.9~~$20.4 million and $35.3 million for the ~~three-month~~three- and six-month period ended ~~February 28,~~May 29, 2016, respectively, as compared to ~~$23.3~~$21.9 million and $45.3 million for the same ~~period~~periods in 2015. The decrease in interest expense was due to lower average borrowing rates in 2016, resulting from our debt refinancing activities in 2015, and lower interest expense on our deferred compensation plans.

~~The~~Our weighted-average interest rate on average borrowings outstanding ~~for~~during the ~~three-month period~~three and six months ended ~~February 28,~~May 29, 2016, was 6.41% and 6.33%, ~~was 6.26%~~respectively, as compared to ~~7.65% for~~6.91% and 7.22%, respectively, in the same ~~period in~~ ~~2015~~.

~~Table~~Loss on early extinguishment of ~~Contents~~debt

During the three months ended May 31, 2015, we recorded a $14.0 million loss on early extinguishment of debt as a result of our debt refinancing activities during the period. The loss was comprised of tender and redemption premiums of $7.5 million, the write-off of $3.5 million of unamortized debt issuance costs, and $3.0 million of other costs.

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

Other ~~expense,~~income (expense), net, primarily consists of foreign exchange management activities and transactions. For the ~~three-month~~three- and six-month period ended ~~February 28,~~May 29, 2016,, we recorded ~~net expense~~income of ~~$2.2~~$4.3 million and $2.1 million, respectively, as compared to ~~$26.0~~income of $7.6 million and expense of $18.4 million for the same prior-year ~~period.~~periods. The ~~net expense~~income in the three-month period in 2016 primarily reflected net ~~losses~~gains on our foreign currency denominated ~~balances, partially offset by net~~balances. Income in the six-month period in 2016 primarily reflected gains on our foreign exchange ~~derivatives.~~contracts and other income. The income in the three-month period in 2015 reflected net ~~expense~~gains on our embedded derivatives and over-the-counter forward foreign exchange contracts. The income in the six-month period 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.~~balances.

Income tax expense

The effective income tax rate was ~~33.4%~~31.1% for the ~~three~~six months ended ~~February 28,~~May 29, 2016, compared to ~~34.1%~~35.8% for the same period ended ~~March 1,~~May 31, 2015.

The decrease in the effective tax rate in 2016 as compared to 2015 primarily reflected a higher proportion of 2016 earnings in jurisdictions where we are subject to lower tax rates.

Table of Contents

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.

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 ~~February 28,~~May 29, 2016, we had borrowings of ~~$20.0~~$105.0 million under the credit facility, all of which is classified as short-term debt. Unused availability under the credit facility was $~~739.7~~610.8 million, as our total availability of $~~798.2~~665.8 million, based on collateral levels as defined by the agreement, was reduced by $~~58.5~~55.0 million of other credit-related instruments.

As of ~~February 28,~~May 29, 2016, we had cash and cash equivalents totaling approximately $~~271.1~~359.5 million, resulting in a total liquidity position (unused availability and cash and cash equivalents) of approximately $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.

There have been no material changes to our estimated cash requirements for 2016 from those disclosed in our 2015 Annual Report on Form 10-K, except that potential payments in 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
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



	Six Months Ended
	May 29, 2016			May 31, 2015
	(Dollars in millions)
Cash provided by operating activities	$	103.3		$	102.6
Cash used for investing activities	(13.0		)	(36.0		)
Cash used for financing activities	(49.1		)	(67.4		)
Cash and cash equivalents	359.5			284.6

Cash flows from operating activities

Cash provided by operating activities was ~~$46.1~~$103.3 million for the ~~three-month~~six-month period in 2016, as compared to ~~$37.6~~$102.6 million for the same period in 2015. ~~Cash provided by operating activities increased compared to the prior year primarily due to an~~The slight increase ~~in cash received from customers, reflecting our~~reflected higher ~~beginning accounts~~trade receivable ~~balance~~collections and ~~higher constant-currency revenues, as well as~~ lower payments to vendors, ~~due to timing and lower cash payments for our global productivity initiative. The increase in cash provided by operating activities was partially~~ offset by ~~an increase~~increased investment in ~~cash used for~~ inventory ~~reflecting our higher inventory levels due to earlier timing~~levels.

Table of ~~inventory receipts and lower-than-anticipated sales, particularly in the Americas.~~Contents

Cash flows from investing activities

Cash used for investing activities was ~~$17.8~~$13.0 million for the ~~three-month~~six-month period in 2016,, as compared to ~~$25.1~~$36.0 million for the same period in ~~2015~~.2015. The decrease in cash used for investing activities as compared to the prior year primarily reflected realized gains on the settlement of our forward foreign exchange contracts and cash received from the sale-leaseback of our distribution center in the United Kingdom, partially offset by increased investment in information technology systems and distribution.

Cash flows from financing activities

Cash used for financing activities was ~~$73.6~~$49.1 million for the ~~three-month~~six-month period in 2016,, as compared to ~~$96.5~~$67.4 million for the same period in ~~2015~~.2015. Cash used in 2016 primarily reflected the payment of a $60 million cash dividend in the second quarter of 2016, partially offset by net borrowing on our senior revolving credit facility and other short-term borrowings. Cash used in 2015 primarily reflected the ~~utilization~~payment of a $50 million cash dividend as well as our ~~senior revolving credit facility.~~refinancing activities and debt reduction during the period.

Indebtedness

The borrower of substantially all of our debt is Levi Strauss & Co., the parent and U.S. operating company. Of our total debt of ~~$1.1~~$1.2 billion as of ~~February 28,~~May 29, 2016, we had fixed-rate debt of $1.1 billion ~~(98%~~(90% of total debt), net of capitalized debt issuance costs, and variable-rate debt of ~~$26.4~~$112.7 million ~~(2%~~(10% of total debt). As of ~~February 28,~~May 29, 2016, our required aggregate debt principal payments on our unsecured long-term debt were $1.0 billion in 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~~$105.0 million borrowed under our senior secured revolving credit facility was expected to be repaid over the next twelve months, and short-term borrowings of ~~$20.8~~$19.2 million at various foreign subsidiaries were expected to be either paid over the next 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. We were in compliance with all of these covenants as of ~~February 28,~~May 29, 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 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 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.

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These risks and uncertainties, including those disclosed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended November 29, 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 fluctuations, and our ability to plan for and respond to the impact of those 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 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 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 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;

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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 or our customers do business.

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 2015 Annual Report on Form 10-K.

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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 ~~February 28,~~May 29, 2016. Based on that evaluation, our chief executive officer and our chief financial officer concluded that as of ~~February 28,~~May 29, 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.

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PART II — OTHER INFORMATION



Item 1.	LEGAL PROCEEDINGS

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



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

~~On February 9, 2016, our Board approved the award~~We repurchased a total of ~~stock appreciation rights (“SARs”) representing an aggregate of 871,153~~17,142 shares of our common stock ~~to certain~~during the quarter in connection with the exercise of ~~our executives. These awards were made~~call and put rights under our ~~2006~~2016 Equity Incentive Plan, ~~(the “Plan”).~~

~~SARs are granted with an exercise price equal~~as amended and restated 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:~~

~~522,694~~date; of the ~~SARs, referred to as service-vested SARs,~~total shares repurchased during the quarter, all 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; andrepurchased in March 2016.

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 2016, 2017 and 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, 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.

We will not receive any proceeds from the issuance or vesting of SARs. The 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 7,~~July 6, 2016, we had 37,452,319 shares outstanding.



Item 3.	DEFAULTS UPON SENIOR SECURITIES

None.



Item 4.	MINE SAFETY DISCLOSURES

Not applicable.



Item 5.	OTHER INFORMATION

None.

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Item 6.	EXHIBITS



10.1		Separation Agreement and General Release between Anne Rohosy and the Company, effective as of March 4, 2016. Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the Commission on March 10, 2016.*

10.2		Levi Strauss & Co. 2016 Equity Incentive Plan, as amended and restated effective April 13, 2016. Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the Commission on April 19, 2016.*

10.3		Agreement with Roy Bagattini, effective as of May 2, 2016. Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the Commission on May 6, 2016.*

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.

		* Management contract, compensatory plan or arrangement.

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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 12,~~July 11, 2016		LEVI STRAUSS & Co.
			(Registrant)


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

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EXHIBIT INDEX



10.1		Separation Agreement and General Release between Anne Rohosy and the Company, effective as of March 4, 2016. Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the Commission on March 10, 2016.*

10.2		Levi Strauss & Co. 2016 Equity Incentive Plan, as amended and restated effective April 13, 2016. Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the Commission on April 19, 2016.*

10.3		Agreement with Roy Bagattini, effective as of May 2, 2016. Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the Commission on May 6, 2016.*

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.

		* Management contract, compensatory plan or arrangement.

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	Three Months Ended						Six Months Ended
	February 28, 2016			March 1, 2015			May 29, 2016			May 31, 2015
	(Dollars in thousands) (Unaudited)						(Dollars in thousands) (Unaudited)
Cash Flows from Operating Activities:
Net income	$	66,291		$	38,283		$	97,351		$	49,735
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	25,111			26,475			50,496			50,471
Asset impairments	459			184			680			1,573
(Gain) loss on disposal of assets	(12		)	26
Unrealized foreign exchange losses	8,348			7,489
Gain on disposal of assets							(6,024		)	(8,617		)
Unrealized foreign exchange losses (gains)							16,927			(2,072		)
Realized (gain) loss on settlement of forward foreign exchange contracts not designated for hedge accounting	(12,967		)	3,960			(16,887		)	1,368
Employee benefit plans’ amortization from accumulated other comprehensive loss	3,734			4,272			7,487			8,548
Employee benefit plans’ curtailment gain, net							—			—
Noncash restructuring charges	—			335			—			387
Noncash loss on early extinguishment of debt							—			3,448
Amortization of premium, discount and debt issuance costs	620			557			1,256			881
Stock-based compensation	(1,053		)	3,600			1,976			7,848
Allowance for doubtful accounts	498			519			2,209			1,192
Change in operating assets and liabilities:
Trade receivables	104,777			129,587			157,291			173,660
Inventories	(134,923		)	30,939			(185,806		)	18,582
Other current assets	(2,758		)	(12,647		)	1,993			(1,100		)
Other non-current assets	(1,425		)	746			(4,163		)	(1,368		)
Accounts payable and other accrued liabilities	49,462			(106,432		)	41,392			(85,738		)
Restructuring liabilities	(5,614		)	(16,009		)	(10,691		)	(25,880		)
Income tax liabilities	23,654			409			18,397			(5,414		)
Accrued salaries, wages and employee benefits and long-term employee related benefits	(78,302		)	(74,484		)	(73,463		)	(72,301		)
Other long-term liabilities	178			(201		)	2,883			(13,853		)
Other, net	—			21			—			1,214
Net cash provided by operating activities	46,078			37,629			103,304			102,564
Cash Flows from Investing Activities:
Purchases of property, plant and equipment	(30,746		)	(21,152		)	(47,231		)	(43,163		)
Proceeds from sales of assets	21			11			17,431			8,785
Proceeds (payments) on settlement of forward foreign exchange contracts not designated for hedge accounting	12,967			(3,960		)	16,887			(1,368		)
Acquisitions, net of cash acquired							(47		)	(251		)
Other							—			—
Net cash used for investing activities	(17,758		)	(25,101		)	(12,960		)	(35,997		)
Cash Flows from Financing Activities:
Repayments of capital leases	(781		)	(741		)
Proceeds from issuance of long-term debt							—			500,000
Repayments of long-term debt and capital leases							(1,571		)	(526,490		)
Proceeds from senior revolving credit facility	75,000			35,000			180,000			265,000
Repayments of senior revolving credit facility	(154,000		)	(135,000		)	(174,000		)	(255,000		)
Proceeds from short-term credit facilities	9,208			7,753			14,216			11,884
Repayments of short-term credit facilities	(6,763		)	(5,045		)	(10,389		)	(8,407		)
Other short-term borrowings, net	3,102			689			593			310
Debt issuance costs							—			(3,937		)
Change in restricted cash, net	663			736			3,315			1,110
Repurchase of common stock							(1,393		)	(2,221		)
Excess tax benefits from stock-based compensation	—			75			179			347
Dividend to stockholders							(60,000		)	(50,000		)
Net cash used for financing activities	(73,571		)	(96,533		)	(49,050		)	(67,404		)
Effect of exchange rate changes on cash and cash equivalents	(2,219		)	(11,520		)	(325		)	(12,784		)
Net decrease in cash and cash equivalents	(47,470		)	(95,525		)
Net increase (decrease) in cash and cash equivalents							40,969			(13,621		)
Beginning cash and cash equivalents	318,571			298,255			318,571			298,255
Ending cash and cash equivalents	$	271,101		$	202,730		$	359,540		$	284,634

Noncash Investing Activity:
Purchases of property, plant and equipment not yet paid at end of period	$	14,244		$	9,993		$	22,911		$	10,035

Supplemental disclosure of cash flow information:
Cash paid for interest during the period	$	1,176		$	2,020		$	33,536		$	42,526
Cash paid for income taxes during the period, net of refunds	11,164			18,049			21,703			33,619


	February 28, 2016						November 29, 2015						May 29, 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	$	24,892	$	24,892	$	—	$	26,013	$	26,013	$	—	$	26,402	$	26,402	$	—	$	26,013	$	26,013	$	—
Forward foreign exchange contracts, net⁽³⁾	19,741		—		19,741		27,131		—		27,131		11,901		—		11,901		27,131		—		27,131
Total	$	44,633	$	24,892	$	19,741	$	53,144	$	26,013	$	27,131	$	38,303	$	26,402	$	11,901	$	53,144	$	26,013	$	27,131
Financial liabilities carried at fair value
Forward foreign exchange contracts, net⁽³⁾	$	9,373	$	—	$	9,373	$	7,809	$	—	$	7,809	$	7,236	$	—	$	7,236	$	7,809	$	—	$	7,809


	February 28, 2016				November 29, 2015				May 29, 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	$	20,031	$	20,031	$	99,020	$	99,020	$	105,128	105,128		$	99,020	$	99,020
4.25% Yen-denominated Eurobonds due 2016⁽¹⁾	35,861		36,480		32,736		33,593		36,565		37,111		32,736		33,593
6.875% senior notes due 2022⁽¹⁾	536,519		575,871		527,715		570,355		527,488		562,242		527,715		570,355
5.00% senior notes due 2025⁽¹⁾	488,749		486,347		482,145		480,945		482,998		482,998		482,145		480,945
Short-term borrowings	20,806		20,806		15,996		15,996		19,377		19,377		15,996		15,996
Total	$	1,101,966	$	1,139,535	$	1,157,612	$	1,199,909	$	1,171,556	$	1,206,856	$	1,157,612	$	1,199,909


	February 28, 2016									November 29, 2015										May 29, 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⁾	$	25,123	$	(5,382	)	$	19,741			$	31,808		$	(4,677	)		$	27,131		$	17,669	$	(5,768	)	Derivative Net Carrying Value	$	11,901		$	31,808		$	(4,677	)		$	27,131
Forward foreign exchange contracts⁽²⁾	1,668		(11,041		)	(9,373		)		253			(8,062		)		(7,809		)	1,805		(9,041		)	(7,236		)	253			(8,062		)		(7,809		)
Total	$	26,791	$	(16,423	)					$	32,061		$	(12,739	)					$	19,474	$	(14,809	)				$	32,061		$	(12,739	)
Non-derivatives designated as hedging instruments
Yen-denominated Eurobonds	$	—	$	(8,496	)					$	—		$	(7,832	)					$	—	$	(8,746	)				$	—		$	(7,832	)


	February 28, 2016									November 29, 2015										May 29, 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	$	26,211		$	(7,050	)	$	19,161		$	30,837		Gross Amounts Offset in the Statement of Financial Position		$	(4,930	)		$	25,907		$	17,273			$	(7,572	)		$	9,701			$	30,837			$	(4,930	)		$	25,907
Financial liabilities	(9,690		)	7,050			(2,640		)	(7,599		)	4,930				(2,669		)	(11,129		)		7,572				(3,557		)		(7,599		)		4,930				(2,669		)
Total							$	16,521									$	23,238										$	6,144											$	23,238
Embedded derivative contracts
Financial assets	$	580		$	—		$	580		$	1,224		$	—			$	1,224		$	2,200			$	—			$	2,200			$	1,224			$	—			$	1,224
Financial liabilities	(6,733		)	—			(6,733		)	(5,140		)	—				(5,140		)	(3,679		)		—				(3,679		)		(5,140		)		—				(5,140		)
Total							$	(6,153	)								$	(3,916	)									$	(1,479	)										$	(3,916	)



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



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


(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.


(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 of these contracts on a per-institution basis.


(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.


(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.


	Gain or (Loss) Recognized in AOCI (Effective Portion)						Gain or (Loss) Recognized in Other expense, net (Ineffective Portion and Amount Excluded from Effectiveness Testing)					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)
	As of			As of			Three Months Ended					As of			As of			Three Months Ended					Six Months Ended
	February 28, 2016			November 29, 2015			February 28, 2016			March 1, 2015		May 29, 2016			November 29, 2015			May 29, 2016			May 31, 2015		May 29, 2016			May 31, 2015
	(Dollars in thousands)											(Dollars in thousands)
Forward foreign exchange contracts	$	4,637		$	4,637							$	4,637		$	4,637
Yen-denominated Eurobonds	(19,646		)	(18,982		)	$	(2,103	)	$	346	(19,896		)	(18,982		)	$	(792	)	$	1,250	$	(2,895	)	$	1,596
Euro senior notes	(15,751		)	(15,751		)	—			—		(15,751		)	(15,751		)	—			—		—			—
Cumulative income taxes	12,104			11,849								12,200			11,849
Total	$	(18,656	)	$	(18,247	)						$	(18,810	)	$	(18,247	)


	Gain or (Loss)						Gain or (Loss)
	Three Months Ended						Three Months Ended					Six Months Ended
	February 28, 2016			March 1, 2015			May 29, 2016			May 31, 2015		May 29, 2016			May 31, 2015
	(Dollars in thousands)						(Dollars in thousands)
Forward foreign exchange contracts:
Realized	$	12,967		$	(3,960	)	$	3,920		$	2,592	$	16,887		$	(1,368	)
Unrealized	(9,231		)	11,868			(5,038		)	11,355		(14,269		)	23,223
Total	$	3,736		$	7,908		$	(1,118	)	$	13,947	$	2,618		$	21,855


(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.


(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" on the Company's consolidated balance sheets.


																				Three Months Ended May 29, 2016
	Three Months Ended February 28, 2016																			Liabilities							Adjustments								Foreign Currency Fluctuation				Liabilities
	Liabilities				Adjustments								Foreign Currency Fluctuation				Liabilities			February 28, 2016				Charges						Payments								May 29, 2016
	November 29, 2015		Charges					Payments								February 28, 2016			(Dollars in thousands)
	(Dollars in thousands)
Severance and employee-related benefits	$	20,774	$	1,445		$	279			$	(7,339	)		$	515			$	15,674		$	15,674			$	400		$	(683	)		$	(3,829	)		$	206			$	11,768
Lease and other contract termination costs	—		—		—				—				—				—
Other	964		124		—				(124		)		—				964			964				92			—				(1,056		)		—				—
Total	$	21,738	$	1,569	$	279			$	(7,463	)		$	515			$	16,638		$	16,638			$	492		$	(683	)		$	(4,885	)		$	206			$	11,768

Current portion	$	20,141															$	15,736		$	15,736																		$	10,853
Long-term portion	1,597																902			902																			915
Total	$	21,738															$	16,638		$	16,638																		$	11,768

	Three Months Ended March 1, 2015																			Three Months Ended May 31, 2015
	Liabilities				Adjustments								Foreign Currency Fluctuation				Liabilities			Liabilities							Adjustments								Foreign Currency Fluctuation				Liabilities
	November 30, 2014		Charges					Payments								March 1, 2015			March 1, 2015				Charges							Payments								May 31, 2015
	(Dollars in thousands)																			(Dollars in thousands)

Severance and employee-related benefits	$	56,963	$	5,320		$	(1,249	)		$	(13,681	)		$	(3,738	)		$	43,615		$	43,615			$	2,436		$	(514	)		$	(11,792	)		$	(618	)		$	33,127
Lease and other contract termination costs	—		—		—				—				—				—
Other	6,400		414		(482		)		(6,331		)		—				1			1				965			15				(981		)		—				—
Total	$	63,363	$	5,734	$	(1,731	)		$	(20,012	)		$	(3,738	)		$	43,616		$	43,616			$	3,401		$	(499	)		$	(12,773	)		$	(618	)		$	33,127

Current portion	$	57,817															$	42,596		$	42,596																		$	32,472
Long-term portion	5,546																1,020			1,020																			655
Total	$	63,363															$	43,616		$	43,616																		$	33,127


(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.

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