UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the Quarterly Period Ended February 26, 2012

	¨	~~For the Quarterly Period Ended August 28, 2011~~
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number:002-90139

LEVI STRAUSS & CO.

(Exact Name of Registrant as Specified in Its Charter)

DELAWARE

94-0905160

~~DELAWARE~~

(State or Other Jurisdiction of

Incorporation or Organization)

~~94-0905160~~

(I.R.S. Employer

Identification No.)

1155 Battery Street, San Francisco, California 94111

(Address of Principal Executive Offices) (Zip Code)

(415) 501-6000

(Registrant’s ~~telephone number, including area code)~~

Telephone Number, Including Area Code)

None

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o¨ 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 ofRegulation 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 o¨

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” inRule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o¨	Accelerated filer o¨	Non-accelerated filer þ	Smaller reporting company o¨
	(Do not check if a smaller reporting company)

~~(Do not check if a smaller reporting company)~~

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Act). Yes o¨ 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 — ~~37,354,021~~37,345,985 shares outstanding on ~~October 6, 2011~~

April 5, 2012

LEVI STRAUSS & CO. AND SUBSIDIARIES

INDEX TOFORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~AUGUST 28, 2011~~FEBRUARY 26, 2012


		Page Number
		~~Number~~

PART I — FINANCIAL INFORMATION
~~Item 1.~~

Item 1.	Consolidated Financial Statements (unaudited):

	Consolidated Balance Sheets as of ~~August 28, 2011,~~February 26, 2012, and November ~~28, 2010~~27, 2011		3
	Consolidated Statements of Income for the Three ~~and Nine~~ Months Ended ~~August 28,~~February 26, 2012, and February 27, 2011 ~~and August 29, 2010~~		4
	Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~August 28,~~February 26, 2012, and February 27, 2011 ~~and August 29, 2010~~		5
	Notes to Consolidated Financial Statements		6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		1915

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		2923

Item 4.	Controls and Procedures		2923

PART II — OTHER INFORMATION
~~Item 1.~~

Item 1.	Legal Proceedings		3025

Item 1A.	Risk Factors		3025

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		3026

Item 3.	Defaults Upon Senior Securities		3026

Item 4.	~~Removed and Reserved~~Mine Safety Disclosures		3026

Item 5.	Other Information		3026

Item 6.	Exhibits		3027

SIGNATURE			3128
~~EX-31.1~~
~~EX-31.2~~
~~EX-32~~
~~EX-101 INSTANCE DOCUMENT~~
~~EX-101 SCHEMA DOCUMENT~~
~~EX-101 CALCULATION LINKBASE DOCUMENT~~
~~EX-101 LABELS LINKBASE DOCUMENT~~
~~EX-101 PRESENTATION LINKBASE DOCUMENT~~

PART I — FINANCIAL INFORMATION


Item 1.	*CONSOLIDATED FINANCIAL STATEMENTS*

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

August 28,
November 28,

2011 2010
(Dollars in thousands)

ASSETS
Current Assets:
Cash and cash equivalents $ 230,844 $ 269,726
Restricted cash 7,432 4,028
Trade receivables, net of allowance for doubtful accounts of $22,778 and $24,617 539,042 553,385
Inventories:
Raw materials 7,960 6,770
Work-in-process 13,421 9,405
Finished goods 709,253 563,728

Total inventories 730,634 579,903
Deferred tax assets, net 143,466 137,892
Other current assets 140,546 106,198

Total current assets 1,791,964 1,651,132
Property, plant and equipment, net of accumulated depreciation of $729,843 and $683,258 507,933 488,603
Goodwill 243,680 241,472
Other intangible assets, net 76,015 84,652
Non-current deferred tax assets, net 558,881 559,053
Other assets 109,285 110,337

Total assets
$ 3,287,758 $ 3,135,249

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Short-term debt $ 129,010 $ 46,418
Current maturities of long-term debt — —
Current maturities of capital leases 1,740 1,777
Accounts payable 248,806 212,935
Other accrued liabilities 233,871 275,443
Accrued salaries, wages and employee benefits 192,553 196,152
Accrued interest payable 37,319 9,685
Accrued income taxes 18,333 17,115

Total current liabilities 861,632 759,525
Long-term debt 1,856,237 1,816,728
Long-term capital leases 2,795 3,578
Postretirement medical benefits 139,410 147,065
Pension liability 326,344 400,584
Long-term employee related benefits 94,441 102,764
Long-term income tax liabilities 48,659 50,552
Other long-term liabilities 54,250 54,281

Total liabilities 3,383,768 3,335,077

Commitments and contingencies
Temporary equity 10,720 8,973

Stockholders’ Deficit:
Levi Strauss & Co. stockholders’ deficit
Common stock — $.01 par value; 270,000,000 shares authorized; 37,346,643 shares and 37,322,358 shares issued and outstanding 373 373
Additional paid-in capital 24,857 18,840
Retained earnings 106,894 33,346
Accumulated other comprehensive loss (247,555 ) (272,168 )

Total Levi Strauss & Co. stockholders’ deficit (115,431 ) (219,609 )
Noncontrolling interest 8,701 10,808

Total stockholders’ deficit (106,730 ) (208,801 )

Total liabilities, temporary equity and stockholders’ deficit
$ 3,287,758 $ 3,135,249


	(Unaudited) February 26, 2012			November 27, 2011
	(Dollars in thousands)
ASSETS

Current Assets:
Cash and cash equivalents	$	238,320		$	204,542
Trade receivables, net of allowance for doubtful accounts of $25,324 and $22,684		533,364			654,903
Inventories:
Raw materials		7,422			7,086
Work-in-process		7,725			9,833
Finished goods		625,530			594,483

Total inventories		640,677			611,402
Deferred tax assets, net		99,162			99,544
Other current assets		173,317			172,830

Total current assets		1,684,840			1,743,221
Property, plant and equipment, net of accumulated depreciation of $764,227 and $731,859		485,849			502,388
Goodwill		241,297			240,970
Other intangible assets, net		69,328			71,818
Non-current deferred tax assets, net		610,445			613,161
Other non-current assets		118,759			107,997

Total assets	$	3,210,518		$	3,279,555


LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Short-term debt	$	114,075		$	154,747
Current maturities of capital leases		1,355			1,714
Accounts payable		214,520			204,897
Other accrued liabilities		216,535			256,316
Accrued salaries, wages and employee benefits		171,766			235,530
Accrued interest payable		36,775			9,679
Accrued income taxes		18,073			9,378

Total current liabilities		773,099			872,261
Long-term debt		1,814,258			1,817,625
Long-term capital leases		1,906			1,999
Postretirement medical benefits		137,025			140,108
Pension liability		395,722			427,422
Long-term employee related benefits		81,223			75,520
Long-term income tax liabilities		43,126			42,991
Other long-term liabilities		54,444			51,458

Total liabilities		3,300,803			3,429,384

Commitments and contingencies
Temporary equity		6,205			7,002


Stockholders’ Deficit:
Levi Strauss & Co. stockholders’ deficit Common stock — $.01 par value; 270,000,000 shares authorized; 37,354,021 shares and 37,354,021 shares issued and outstanding		374			374
Additional paid-in capital		31,262			29,266
Retained earnings		199,523			150,770
Accumulated other comprehensive loss		(336,156	)		(346,002	)

Total Levi Strauss & Co. stockholders’ deficit		(104,997	)		(165,592	)
Noncontrolling interest		8,507			8,761

Total stockholders’ deficit		(96,490	)		(156,831	)

Total liabilities, temporary equity and stockholders’ deficit	$	3,210,518		$	3,279,555

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

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended Nine Months Ended
August 28,
August 29,
August 28,
August 29,

2011 2010 2011 2010
(Dollars in thousands)

(Unaudited)

Net sales $ 1,183,890 $ 1,090,448 $ 3,358,175 $ 3,064,414
Licensing revenue 20,127 18,557 59,457 56,326

Net revenues 1,204,017 1,109,005 3,417,632 3,120,740
Cost of goods sold 634,573 565,393 1,749,525 1,544,779

Gross profit 569,444 543,612 1,668,107 1,575,961
Selling, general and administrative expenses 488,545 457,309 1,423,358 1,313,185

Operating income 80,899 86,303 244,749 262,776
Interest expense (30,208 ) (31,734 ) (98,589 ) (100,347 )
Loss on early extinguishment of debt — — — (16,587 )
Other income (expense), net (5,779 ) (7,695 ) (12,744 ) 11,462

Income before income taxes 44,912 46,874 133,416 157,304
Income tax expense 13,612 20,252 42,437 93,203

Net income 31,300 26,622 90,979 64,101
Net loss attributable to noncontrolling interest 893 1,556 2,860 6,050

Net income attributable to Levi Strauss & Co. $ 32,193 $ 28,178 $ 93,839 $ 70,151


	Three Months Ended
	February 26, 2012			February 27, 2011
	(Dollars in thousands)
	(Unaudited)
Net revenues	$	1,164,961		$	1,120,693
Cost of goods sold		616,167			562,726

Gross profit		548,794			557,967
Selling, general and administrative expenses		438,583			459,093

Operating income		110,211			98,874
Interest expense		(38,573	)		(34,866	)
Other income (expense), net		1,172			(5,959	)

Income before income taxes		72,810			58,049
Income tax expense		23,513			18,881

Net income		49,297			39,168
Net (income) loss attributable to noncontrolling interest		(79	)		1,507

Net income attributable to Levi Strauss & Co.	$	49,218		$	40,675

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

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended
August 28,
August 29,

2011 2010
(Dollars in thousands) (Unaudited)

Cash Flows from Operating Activities:

Net income $ 90,979 $ 64,101
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 87,420 77,983
Asset impairments 2,957 2,307
Gain on disposal of property, plant and equipment — (100 )
Unrealized foreign exchange losses (gains) 11,262 (15,789 )
Realized loss on settlement of forward foreign exchange contracts not designated for hedge accounting 8,252 8,412
Employee benefit plans’ amortization from accumulated other comprehensive loss (4,555 ) 2,557
Employee benefit plans’ curtailment loss, net 1,629 100
Noncash gain on extinguishment of debt, net of write-off of unamortized debt issuance costs — (13,647 )
Amortization of deferred debt issuance costs 3,241 3,293
Stock-based compensation 7,741 4,419
Allowance for doubtful accounts 4,957 6,428
Change in operating assets and liabilities:
Trade receivables 22,260 16,871
Inventories (115,169 ) (134,592 )
Other current assets (28,823 ) (6,930 )
Other non-current assets 1,124 (17,320 )
Accounts payable and other accrued liabilities 1,309 55,700
Income tax liabilities (3,554 ) 63,760
Accrued salaries, wages and employee benefits and long-term employee related benefits (73,019 ) (40,820 )
Other long-term liabilities (994 ) 19,113
Other, net 270 (17 )

Net cash provided by operating activities 17,287 95,829

Cash Flows from Investing Activities:

Purchases of property, plant and equipment (106,010 ) (107,874 )
Proceeds from sale of property, plant and equipment 158 1,375
Payments on settlement of forward foreign exchange contracts not designated for hedge accounting (8,252 ) (8,412 )
Acquisitions, net of cash acquired — (12,242 )
Other (500 ) (114 )

Net cash used for investing activities (114,604 ) (127,267 )

Cash Flows from Financing Activities:

Proceeds from issuance of long-term debt — 909,390
Repayments of long-term debt and capital leases (1,470 ) (865,527 )
Proceeds from senior revolving credit facility 70,000 —
Short-term borrowings, net 6,926 19,176
Debt issuance costs — (17,512 )
Restricted cash (2,866 ) (248 )
Repurchase of common stock (245 ) —
Dividend to stockholders (20,023 ) (20,013 )

Net cash provided by financing activities 52,322 25,266

Effect of exchange rate changes on cash and cash equivalents 6,113 (3,434 )

Net decrease in cash and cash equivalents (38,882 ) (9,606 )
Beginning cash and cash equivalents 269,726 270,804

Ending cash and cash equivalents
$ 230,844 $ 261,198

Supplemental disclosure of cash flow information:

Cash paid during the period for:
Interest $ 69,124 $ 87,097
Income taxes 43,697 34,980


		Three Months Ended
		February 26, 2012			February 27, 2011
		(Dollars in thousands)
		(Unaudited)
Cash Flows from Operating Activities:
Net income		$	49,297		$	39,168
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			31,218			28,390
Asset impairments			58			596
Gain on disposal of property, plant and equipment			(88	)		(59	)
Unrealized foreign exchange (gains) losses			(1,639	)		6,650
Realized loss on settlement of forward foreign exchange contracts not designated for hedge accounting			3,485			5,723
Employee benefit plans’ amortization from accumulated other comprehensive loss	��		373			793
Employee benefit plans’ curtailment gain, net			(773	)		(16	)
Amortization of deferred debt issuance costs			1,110			1,058
Stock-based compensation			1,214			1,841
Allowance for doubtful accounts			2,919			3,028
Change in operating assets and liabilities:
Trade receivables			118,185			87,388
Inventories			(29,961	)		(43,962	)
Other current assets			(17,713	)		3,313
Other non-current assets			(1,744	)		(5,350	)
Accounts payable and other accrued liabilities			26,711			(11,799	)
Income tax liabilities			11,764			3,799
Accrued salaries, wages and employee benefits and long-term employee related benefits			(90,766	)		(74,259	)
Other long-term liabilities			1,049			(359	)
Other, net			94			83

Net cash provided by operating activities			104,793			46,026

Cash Flows from Investing Activities:
Purchases of property, plant and equipment			(17,291	)		(40,498	)
Proceeds from sale of property, plant and equipment			117			76
Payments on settlement of forward foreign exchange contracts not designated for hedge accounting			(3,485	)		(5,723	)

Net cash used for investing activities			(20,659	)		(46,145	)

Cash Flows from Financing Activities:
Repayments of long-term debt and capital leases			(458	)		(456	)
Proceeds from senior revolving credit facility			50,000			—
Repayments of senior revolving credit facility			(110,000	)		—
Short-term borrowings, net			7,754			(2,261	)
Debt issuance costs			(51	)		—
Restricted cash			(305	)		618
Repurchase of common stock			(479	)		(245	)
Dividend to stockholders			—			(20,023	)

Net cash used for financing activities			(53,539	)		(22,367	)

Effect of exchange rate changes on cash and cash equivalents			3,183			1,873

Net increase (decrease) in cash and cash equivalents			33,778			(20,613	)
Beginning cash and cash equivalents			204,542			269,726

Ending cash and cash equivalents		$	238,320		$	249,113

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest		$	5,796		$	5,009
Income taxes			4,077			11,933

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

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTERLY PERIOD ENDED ~~AUGUST 28, 2011~~FEBRUARY 26, 2012


~~NOTE 1:~~	~~SIGNIFICANT ACCOUNTING POLICIES~~

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Levi Strauss & Co. (the “Company”) is one of the world’s leading branded apparel companies. The Company designs and markets jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear and related accessories, for men, women and children under the Levi’s^®, Dockers^®, Signature by Levi Strauss & Co.^tm™ and Denizen^tm® brands. The Company markets its products in three geographic regions: Americas, Europe and Asia Pacific.

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 ~~28, 2010,~~27, 2011, included in the Annual Report onForm 10-K filed by the Company with the Securities and Exchange Commission (“SEC”) on February ~~8, 2011.~~

7, 2012.

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. ~~Certain prior-year amounts have been reclassified to conform to the current presentation.~~ The results of operations for the three ~~and nine~~ months ended ~~August 28, 2011,~~February 26, 2012, may not be indicative of the results to be expected for any other interim period or the year ending November ~~27, 2011.~~

25, 2012.

The Company’s fiscal year ends on the last Sunday of November in each year, although the fiscal years of certain foreign subsidiaries ~~are fixed at~~end on November ~~30 due to local statutory requirements. Apart from these subsidiaries, each~~30. Each quarter of both fiscal years ~~2011~~2012 and ~~2010~~2011 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.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the related notes to 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.

~~Pension and Postretirement Benefits~~

The Company has several non-contributory defined benefit retirement plans covering eligible employees. The Company also provides certain health care benefits for U.S. employees who meet age, participation and length of service requirements at retirement. In addition, the Company sponsors other retirement or post-employment plans for its foreign employees in accordance with local government programs and requirements. The Company retains the right to amend, curtail or discontinue any aspect of the plans, subject to local regulations.

~~LEVI STRAUSS & CO. AND SUBSIDIARIES~~

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

~~FOR THE QUARTERLY PERIOD ENDED AUGUST 28, 2011~~

The Company recognizes either an asset or a liability for any plan’s funded status in its consolidated balance sheets. The Company measures changes in funded status using actuarial models which utilize an attribution approach that generally spreads individual events either over the estimated service lives of the remaining employees in the plan, or, for plans where participants will not earn additional benefits by rendering future service — which, beginning in the second quarter of 2011, includes the Company’s U.S. plans — over the plan participants’ estimated remaining lives. The Company’s policy is to fund its retirement plans based upon actuarial recommendations and in accordance with applicable laws, income tax regulations and credit agreements. Net pension and postretirement benefit income or expense is generally determined using assumptions which include expected long-term rates of return on plan assets, discount rates, compensation rate increases (where applicable) and medical trend rates. The Company considers several factors including actual historical rates, expected rates and external data to determine the assumptions used in the actuarial models.

~~Pension benefits are primarily paid through trusts funded by the Company. The Company pays postretirement benefits to the healthcare service providers on behalf of the plan’s participants.~~

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, from those disclosed in the Company’s ~~2010~~2011 Annual Report onForm ~~10-K,~~ ~~except for the following, which have been grouped by their required effective dates for the Company:~~

~~Second Quarter of 2012~~


	•	~~In May 2011, the FASB issued Accounting Standards UpdateNo. 2011-04,~~~~“Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs,”~~~~(“ASU2011-04”).~~ ~~ASU2011-04~~ changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements to ensure consistency between U.S. GAAP and IFRS. ASU~~2011-04~~ also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is to be applied prospectively. The Company anticipates that the adoption of this standard will not materially change its consolidated financial statement footnote disclosures.

~~Fourth Quarter of 2012~~


	•	~~In September 2011, the FASB issued Accounting Standards UpdateNo. 2011-09,~~~~“Compensation — Retirement Benefits — Multiemployer Plans (Subtopic715-80),”~~~~(“ASU2011-09”).~~ ~~ASU2011-09~~ requires that employers provide additional separate disclosures for multiemployer pension plans and multiemployer other postretirement benefit plans. The additional quantitative and qualitative disclosures will provide users with more detailed information about an employer’s involvement in multiemployer pension plans. The Company anticipates that the adoption of this standard will expand its consolidated financial statement footnote disclosures.

~~First Quarter of 2013~~


	•	~~In June 2011, the FASB issued Accounting Standards UpdateNo. 2011-05,~~~~“Comprehensive Income (Topic 220): Presentation of Comprehensive Income,”~~~~(“ASU2011-05”).~~ ~~ASU2011-05~~ ~~eliminates the option to report other comprehensive income and its components in the statement of changes in equity. ASU2011-05~~ requires that all nonowner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This new guidance is to

710-K.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~AUGUST 28, 2011~~FEBRUARY 26, 2012


		~~be applied retrospectively. The Company anticipates that the adoption of this standard may materially change the presentation of its consolidated financial statements.~~

~~• In September 2011, the FASB issued Accounting Standards UpdateNo. 2011-08,~~~~“Intangibles — Goodwill and Other (Topic 350),”~~~~(“ASU2011-08”).~~ ~~ASU2011-08~~ allows entities to first assess qualitatively whether it is necessary to perform the two-step goodwill impairment test. If an entity believes, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting period is less than its carrying amount, the quantitative two-step goodwill impairment test is required. An entity has the unconditional option to bypass the qualitative assessment and proceed directly to performing the first step of the goodwill impairment test. The Company elected to early adopt this accounting guidance at the beginning of its fourth quarter of 2011 on a prospective basis for goodwill impairment tests. The Company anticipates that the adoption of this standard will not have a material impact on its consolidated financial statements and footnote disclosures.


~~NOTE 2:~~	~~GOODWILL AND OTHER INTANGIBLE ASSETS~~

~~The changes in the carrying amount of goodwill by business segment for the nine months ended August 28, 2011, were as follows:~~

Asia

Americas Europe Pacific Total
(Dollars in thousands)

Balance, November 28, 2010 $ 207,427 $ 31,603 $ 2,442 $ 241,472
Foreign currency fluctuation (1 ) 2,279 (70 ) 2,208

Balance, August 28, 2011 $ 207,426 $ 33,882 $ 2,372 $ 243,680

~~Other intangible assets, net, were as follows:~~

August 28, 2011 November 28, 2010
Gross
Accumulated
Gross
Accumulated

Carrying Value Amortization Total Carrying Value Amortization Total
(Dollars in thousands)

Unamortized intangible assets:
Trademarks $ 42,743 $ — $ 42,743 $ 42,743 $ — $ 42,743
Amortized intangible assets:
Acquired contractual rights 41,944 (20,881 ) 21,063 45,712 (17,765 ) 27,947
Customer lists 21,567 (9,358 ) 12,209 20,037 (6,075 ) 13,962

Total $ 106,254 $ (30,239 ) $ 76,015 $ 108,492 $ (23,840 ) $ 84,652

For the three and nine months ended August 28, 2011, amortization of these intangible assets was $3.1 million and $9.1 million, respectively, compared to $3.6 million and $11.2 million, respectively, in the same periods of 2010.

~~LEVI STRAUSS & CO. AND SUBSIDIARIES~~

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

~~FOR THE QUARTERLY PERIOD ENDED AUGUST 28, 2011~~


~~NOTE 3:~~	~~FAIR VALUE OF FINANCIAL INSTRUMENTS~~

NOTE 2: FAIR VALUE OF FINANCIAL INSTRUMENTS

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

August 28, 2011 November 28, 2010
Fair Value Estimated Using Fair Value Estimated Using
Leve1 1
Level 2
Leve1
Level 2

Fair Value Inputs⁽¹⁾ Inputs⁽²⁾ Fair Value Inputs⁽¹⁾ Inputs⁽²⁾
(Dollars in thousands)

Financial assets carried at fair value

Rabbi trust assets $ 18,365 $ 18,365 $ — $ 18,316 $ 18,316 $ —
Forward foreign exchange contracts, net⁽³⁾
7,753 — 7,753 1,385 — 1,385

Total $ 26,118 $ 18,365 $ 7,753 $ 19,701 $ 18,316 $ 1,385

Financial liabilities carried at fair value

Forward foreign exchange contracts, net⁽³⁾
$ 4,489 $ — $ 4,489 $ 5,003 $ — $ 5,003

Total $ 4,489 $ — $ 4,489 $ 5,003 $ — $ 5,003


	February 26, 2012						November 27, 2011
			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⁾
	(Dollars in thousands)
Financial assets carried at fair value
Rabbi trust assets	$	19,443	$	19,443	$	—	$	18,064	$	18,064	$	—
Forward foreign exchange contracts, net⁽³⁾		12,262		—		12,262		25,992		—		25,992

Total	$	31,705	$	19,443	$	12,262	$	44,056	$	18,064	$	25,992

Financial liabilities carried at fair value
Forward foreign exchange contracts, net⁽³⁾	$	3,090	$	—	$	3,090	$	5,256	$	—	$	5,256

Total	$	3,090	$	—	$	3,090	$	5,256	$	—	$	5,256


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

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

(3)

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

August 28, 2011 November 28, 2010
Carrying
Estimated
Carrying
Estimated

Value Fair Value⁽¹⁾ Value Fair Value⁽¹⁾
(Dollars in thousands)

Financial liabilities carried at adjusted historical cost

Senior revolving credit facility $ 178,529 $ 177,638 $ 108,482 $ 107,129
Senior term loan due 2014 324,665 282,553 324,423 311,476
8.875% senior notes due 2016 362,770 373,270 355,004 373,379
4.25% Yen-denominated Eurobonds due 2016 119,304 100,765 109,429 98,063
7.75% Euro senior notes due 2018 440,971 389,210 401,982 407,993
7.625% senior notes due 2020 536,564 510,314 526,557 542,307
Short-term borrowings 59,454 59,454 46,722 46,722

Total $ 2,022,257 $ 1,893,204 $ 1,872,599 $ 1,887,069


	February 26, 2012				November 27, 2011
	Carrying Value		Estimated Fair Value⁽¹⁾		Carrying Value		Estimated Fair Value⁽¹⁾
	(Dollars in thousands)
Financial liabilities carried at adjusted historical cost
Senior revolving credit facility	$	140,145	$	139,795	$	200,267	$	199,767
Senior term loan due 2014		324,741		314,208		324,663		316,562
8.875% senior notes due 2016		362,684		376,246		354,918		366,293
4.25% Yen-denominated Eurobonds due 2016		115,595		101,491		118,618		102,508
7.75% Euro senior notes due 2018		409,914		417,937		401,495		381,478
7.625% senior notes due 2020		536,453		562,703		526,446		519,883
Short-term borrowings		74,861		74,861		54,975		54,975

Total	$	1,964,393	$	1,987,241	$	1,981,382	$	1,941,466


(1)		Fair value estimate incorporates mid-market price quotes.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~AUGUST 28, 2011~~FEBRUARY 26, 2012


~~NOTE 4:~~	~~DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES~~

NOTE 3: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

As of ~~August 28, 2011,~~February 26, 2012, the Company had forward foreign exchange contracts to buy ~~$551.1~~$763.3 million and to sell ~~$455.3~~$425.1 million against various foreign currencies. These contracts are at various exchange rates and expire at various dates through ~~June~~November 2012.

The table below provides data about the carrying values of derivative instruments and non-derivative ~~instruments designated as net investment hedges:~~

August 28, 2011 November 28, 2010
Assets (Liabilities) Assets (Liabilities)
Derivative
Derivative

Carrying
Carrying
Net Carrying
Carrying
Carrying
Net Carrying

Value Value Value Value Value Value
(Dollars in thousands)

Derivatives not designated as hedging

instruments

Forward foreign exchange contracts⁽¹⁾
$ 9,369 $ (1,616 ) $ 7,753 $ 7,717 $ (6,332 ) $ 1,385
Forward foreign exchange contracts⁽²⁾
9,147 (13,636 ) (4,489 ) 4,266 (9,269 ) (5,003 )

Total $ 18,516 $ (15,252 ) $ 11,983 $ (15,601 )

Non-derivatives designated as hedging instruments

4.25% Yen-denominated Eurobonds due 2016 $ — $ (50,615 ) $ — $ (61,075 )
7.75% Euro senior notes due 2018 — (431,340 ) — (400,740 )

Total $ — $ (481,955 ) $ — $ (461,815 )

instruments:


	February 26, 2012								November 27, 2011
	Assets		(Liabilities)						Assets		(Liabilities)
	Carrying Value		Carrying Value			Derivative Net Carrying Value			Carrying Value		Carrying Value			Derivative Net Carrying Value
	(Dollars in thousands)
Derivatives not designated as hedging instruments
Forward foreign exchange contracts⁽¹⁾	$	21,603	$	(9,341	)	$	12,262		$	31,906	$	(5,914	)	$	25,992
Forward foreign exchange contracts⁽²⁾		310		(3,400	)		(3,090	)		4,547		(9,803	)		(5,256	)

Total	$	21,913	$	(12,741	)				$	36,453	$	(15,717	)

Non-derivatives designated as hedging instruments
4.25% Yen-denominated Eurobonds due 2016	$	—	$	(44,448	)				$	—	$	(46,115	)
7.75% Euro senior notes due 2018		—		(401,160	)					—		(400,350	)

Total	$	—	$	(445,608	)				$	—	$	(446,465	)


(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.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED FEBRUARY 26, 2012

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

Gain or (Loss) Recognized in Other

Gain or (Loss)
Income (Expense), net (Ineffective

Recognized in AOCI
Portion and Amount Excluded from

(Effective Portion) Effectiveness Testing)
As of
As of
Three Months Ended Nine Months Ended
August 28,
November 28,
August 28,
August 29,
August 28,
August 29,

2011 2010 2011 2010 2011 2010
(Dollars in thousands)

Forward foreign exchange contracts $ 4,637 $ 4,637 $ — $ — $ — $ —
Yen-denominated Eurobonds (28,316 ) (24,377 ) (3,161 ) (2,818 ) (4,707 ) 2,732
Euro senior notes (54,271 ) (23,671 ) — — — —
Cumulative income taxes 30,316 17,022

Total $ (47,634 ) $ (26,389 )


	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 February 26, 2012			As of November 27, 2011			Three Months Ended
	As of February 26, 2012			As of November 27, 2011			February 26, 2012		February 27, 2011
	(Dollars in thousands)
Forward foreign exchange contracts	$	4,637		$	4,637		$	—	$	—
Yen-denominated Eurobonds		(26,859	)		(28,525	)		2,606		(1,093	)
Euro senior notes		(24,091	)		(23,281	)		—		—
Cumulative income taxes		18,145			18,476

Total	$	(28,168	)	$	(28,693	)

~~LEVI STRAUSS & CO. AND SUBSIDIARIES~~

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

~~FOR THE QUARTERLY PERIOD ENDED AUGUST 28, 2011~~

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

Gain or (Loss)
Three Months Ended Nine Months Ended
August 28,
August 29,
August 28,
August 29,

2011 2010 2011 2010
(Dollars in thousands)

Forward foreign exchange contracts:
Realized $ (3,389 ) $ (3,072 ) $ (8,252 ) $ (8,412 )
Unrealized 8,008 (3,459 ) 7,040 12,486

Total $ 4,619 $ (6,531 ) $ (1,212 ) $ 4,074


~~NOTE 5:~~	~~DEBT~~

August 28,
November 28,

2011 2010
(Dollars in thousands)

Long-term debt

Secured:
Senior revolving credit facility $ 108,250 $ 108,250
Unsecured:
Senior term loan due 2014 323,939 323,676
8.875% senior notes due 2016 350,000 350,000
4.25% Yen-denominated Eurobonds due 2016 117,708 109,062
7.75% Euro senior notes due 2018 431,340 400,740
7.625% senior notes due 2020 525,000 525,000

Total unsecured 1,747,987 1,708,478
Less: current maturities — —

Total long-term debt $ 1,856,237 $ 1,816,728

Short-term debt

Secured:
Senior revolving credit facility $ 70,000 $ —
Unsecured:
Short-term borrowings 59,010 46,418
Current maturities of long-term debt — —

Total short-term debt $ 129,010 $ 46,418

Total long-term and short-term debt $ 1,985,247 $ 1,863,146


	Gain or (Loss)
	Three Months Ended
	February 26, 2012			February 27, 2011
	(Dollars in thousands)
Forward foreign exchange contracts:
Realized	$	(3,485	)	$	(5,723	)
Unrealized		(11,767	)		(2,373	)

Total	$	(15,252	)	$	(8,096	)

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~AUGUST 28, 2011~~FEBRUARY 26, 2012

NOTE 4:    DEBT
   February 26,
2012    November 27,
2011

   (Dollars in thousands)
Long-term debt

Secured:

Senior revolving credit facility
   $ 100,000    $ 100,000
Unsecured:

Senior term loan due 2014
   324,127    324,032
8.875% senior notes due 2016
   350,000    350,000
4.25% Yen-denominated Eurobonds due 2016
   113,971    118,243
7.75% Euro senior notes due 2018
   401,160    400,350
7.625% senior notes due 2020
   525,000    525,000




Total unsecured
   1,714,258    1,717,625




Total long-term debt
   $ 1,814,258    $ 1,817,625




Short-term debt

Senior revolving credit facility
   $ 40,000    $ 100,000
Short-term borrowings
   74,075    54,747




Total short-term debt
   $ 114,075    $ 154,747




Total long-term and short-term debt
   $ 1,928,333    $ 1,972,372




Senior Revolving Credit Facility
The Company’s unused availability under its senior secured revolving credit facility was $554.6 million at February 26, 2012, as the Company’s total availability of $636.9 million was reduced by $82.3 million of letters of credit and other credit usage allocated under the facility.

Interest Rates on Borrowings

The Company’s weighted-average interest rate on average borrowings outstanding during the three ~~and nine~~ months ended ~~August 28, 2011,~~February 26, 2012, was ~~6.74% and 6.81%, respectively,~~6.99% as compared to ~~6.74% and 7.27%, respectively,~~6.84% in the same ~~periods~~period of ~~2010.~~

~~Senior Revolving Credit Facility~~

As of August 28, 2011, the Company’s total availability of $421.0 million under its then-effective senior secured revolving credit facility was reduced by $84.3 million of letters of credit and other credit usage under the facility, yielding a net availability of $336.7 million.

On September 30, 2011, the Company entered into a new senior secured revolving credit facility. The new facility is an asset-based facility, in which the borrowing availability varies according to the levels of accounts receivable, inventory and cash and investment securities deposited in secured accounts with the administrative agent or other lenders as further described below.

~~Availability, interest and maturity.~~ The maximum availability under the new facility is $850.0 million, of which $800.0 million is available to the Company for revolving loans in U.S. Dollars and $50.0 million is available to the Company for revolving loans either in U.S. Dollars or Canadian Dollars. Subject to the level of this borrowing base, the Company may make and repay borrowings from time to time until the maturity of the facility. The Company may make voluntary prepayments of borrowings at any time and must make mandatory prepayments if certain events occur. Borrowings under the facility will bear an interest rate of LIBOR plus 150 to 275 basis points, depending on borrowing base availability, and undrawn availability bears a rate of 37.5 to 50 basis points. The facility has a maturity date of September 30, 2016, which may be accelerated to December 26, 2013, if the senior term loan due 2014 is still outstanding on that date and the Company has not met other conditions set forth in the new facility. Upon the maturity date, all of the obligations outstanding under the new facility become due.

~~Guarantees and security.~~ The Company’s obligations under the new facility are guaranteed by its domestic subsidiaries. The facility is secured by, among other domestic assets, certain U.S. trademarks associated with the Levi’s^® brand and accounts receivable, goods and inventory in the U.S. Additionally, the obligations of Levi Strauss & Co. (Canada) Inc. under the new facility are secured by Canadian accounts receivable, goods, inventory and other Canadian assets. The lien on the U.S. Levi’s^® ~~trademarks and related intellectual property may be released at the Company’s discretion so long as it meet certain conditions; such release would reduce the borrowing base.~~

~~Covenants.~~ The new facility contains customary covenants restricting the Company’s activities as well as those of the Company’s subsidiaries, including limitations on the ability to sell assets; engage in mergers; enter into transactions involving related parties or derivatives; incur or prepay indebtedness or grant liens or negative pledges on the Company’s assets; make loans or other investments; pay dividends or repurchase stock or other securities; guaranty third-party obligations; and make changes in the Company’s corporate structure. There are exceptions to these covenants, and some are only applicable when unused availability falls below specified thresholds. In addition, the new facility includes as a financial covenant a springing fixed charge coverage ratio of 1.0:1.0, which arises when availability falls below a specified threshold.

~~Events of default.~~ The new facility contains customary events of default, including payment failures; failure to comply with covenants; failure to satisfy other obligations under the credit agreements or related documents; defaults in respect of other indebtedness; bankruptcy, insolvency and inability to pay debts when due; material judgments; pension plan terminations or specified underfunding; substantial stock ownership changes; and specified changes in the composition of our board of directors. The cross-default provisions in the facility apply if a default occurs on other indebtedness in excess of $50.0 million and the applicable grace period in respect of the indebtedness has expired, such that the lenders of or trustee for the defaulted indebtedness have the right to

2011.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~AUGUST 28, 2011~~FEBRUARY 26, 2012

accelerate. If an event of default occurs under the new facility, the lenders may terminate their commitments, declare immediately payable all borrowings under the facility and foreclose on the collateral.

~~Use of proceeds.~~ In connection with the new senior secured revolving credit facility, the Company terminated the previous amended and restated senior secured revolving credit facility. Borrowings outstanding under the previous facility were refinanced into the new senior secured revolving credit facility.


~~NOTE 6:~~	~~EMPLOYEE BENEFIT PLANS~~

NOTE 5: EMPLOYEE BENEFIT PLANS

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

Pension Benefits Postretirement Benefits
Three Months Ended Three Months Ended
August 28,
August 29,
August 28,
August 29,

2011 2010 2011 2010
(Dollars in thousands)

Net periodic benefit cost (income):

Service cost $ 2,552 $ 1,908 $ 119 $ 120
Interest cost 15,123 14,855 1,908 2,168
Expected return on plan assets (13,535 ) (11,439 ) — —
Amortization of prior service (benefit) cost⁽¹⁾
(20 ) 111 (7,236 ) (7,392 )
Amortization of actuarial loss 1,939 6,665 1,256 1,402
Curtailment gain (1,426 ) — — —
Net settlement loss 20 117 — —

Net periodic benefit cost (income) 4,653 12,217 (3,953 ) (3,702 )

Changes in accumulated other comprehensive loss:

Actuarial loss 105 — — —
Amortization of prior service benefit (cost) 20 (111 ) 7,236 7,392
Amortization of actuarial loss (1,939 ) (6,665 ) (1,256 ) (1,402 )
Curtailment loss (7 ) — — —
Net settlement loss (9 ) (39 ) — —

Total recognized in accumulated other comprehensive loss (1,830 ) (6,815 ) 5,980 5,990

Total recognized in net periodic benefit cost (income) and accumulated other comprehensive loss $ 2,823 $ 5,402 $ 2,027 $ 2,288

~~LEVI STRAUSS & CO. AND SUBSIDIARIES~~

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

~~FOR THE QUARTERLY PERIOD ENDED AUGUST 28, 2011~~

Pension Benefits Postretirement Benefits
Nine Months Ended Nine Months Ended
August 28,
August 29,
August 28,
August 29,

2011 2010 2011 2010
(Dollars in thousands)

Net periodic benefit cost (income):

Service cost $ 7,739 $ 5,822 $ 358 $ 356
Interest cost 45,277 44,732 5,722 6,506
Expected return on plan assets (39,490 ) (34,529 ) — —
Amortization of prior service cost (benefit)⁽¹⁾
65 340 (21,709 ) (22,175 )
Amortization of actuarial loss 12,973 19,996 3,769 4,206
Curtailment loss 1,629 100 — —
Net settlement loss 736 309 — —

Net periodic benefit cost (income) 28,929 36,770 (11,860 ) (11,107 )

Changes in accumulated other comprehensive loss:

Actuarial (gain) loss (32,310 ) 303 — —
Amortization of prior service (cost) benefit (65 ) (340 ) 21,709 22,175
Amortization of actuarial loss (12,973 ) (19,996 ) (3,769 ) (4,206 )
Curtailment loss (3,078 ) (13 ) — —
Net settlement loss (347 ) (190 ) — —

Total recognized in accumulated other comprehensive loss (48,773 ) (20,236 ) 17,940 17,969

Total recognized in net periodic benefit cost (income) and accumulated other comprehensive loss $ (19,844 ) $ 16,534 $ 6,080 $ 6,862


~~(1)~~		~~Postretirement benefits amortization of prior service benefit recognized during each period relates primarily to the favorable impact of the February 2004 and August 2003 plan amendments.~~

The estimated net loss for the Company’s defined benefit pension plans that will be amortized from “Accumulated other comprehensive loss” into net periodic benefit cost in 2011 is expected to be approximately $15.0 million.


	Pension Benefits						Postretirement Benefits
	Three Months Ended						Three Months Ended
	February 26, 2012			February 27, 2011			February 26, 2012			February 27, 2011
	(Dollars in thousands)
Net periodic benefit cost (income):
Service cost	$	2,247		$	2,583		$	99		$	120
Interest cost		14,413			15,028			1,659			1,907
Expected return on plan assets		(13,009	)		(12,898	)		—			—
Amortization of prior service (benefit) cost		(20	)		65			(4,089	)		(7,236	)
Amortization of actuarial loss		3,142			6,730			1,289			1,256
Curtailment gain		(773	)		(16	)		—			—
Net settlement loss		107			11			—			—

Net periodic benefit cost (income)		6,107			11,503			(1,042	)		(3,953	)

Changes in accumulated other comprehensive loss:
Actuarial gain		(4	)		—			—			—
Amortization of prior service benefit (cost)		20			(65	)		4,089			7,236
Amortization of actuarial loss		(3,142	)		(6,730	)		(1,289	)		(1,256	)
Curtailment loss		(1	)		—			—			—
Net settlement (loss) gain		(51	)		22			—			—

Total recognized in accumulated other comprehensive loss		(3,178	)		(6,773	)		2,800			5,980

Total recognized in net periodic benefit cost (income) and accumulated other comprehensive loss	$	2,929		$	4,730		$	1,758		$	2,027


~~NOTE 7:~~	~~COMMITMENTS AND CONTINGENCIES~~

NOTE 6: COMMITMENTS AND CONTINGENCIES

Forward Foreign Exchange Contracts

The Company usesover-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 43 for additional information.

~~LEVI STRAUSS & CO. AND SUBSIDIARIES~~

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

~~FOR THE QUARTERLY PERIOD ENDED AUGUST 28, 2011~~

Other Contingencies

Litigation. There have been no material developments with respect to the information previously reported in the Company’s ~~2010~~2011 Annual Report onForm 10-K related to legal proceedings.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED FEBRUARY 26, 2012

In the ordinary course of business, the Company has various pending cases involving contractual matters, facility- and employee-related matters, distribution questions, 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, or results of operations or cash flows.


~~NOTE 8:~~	~~DIVIDEND PAYMENT~~

The Company paid a cash dividend of $20 million in the first quarter of 2011. The Company does not have an 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 tax impact to the dividend recipients, the Company’s financial condition and compliance with the terms of its debt agreements.


~~NOTE 9:~~	~~COMPREHENSIVE INCOME~~

NOTE 7: COMPREHENSIVE INCOME (LOSS)

The following is a summary of the components of total comprehensive income (loss), net of related income taxes:

Three Months Ended Nine Months Ended
August 28,
August 29,
August 28,
August 29,

2011 2010 2011 2010
(Dollars in thousands)

Net income $ 31,300 $ 26,622 $ 90,979 $ 64,101
Other comprehensive income (loss):
Pension and postretirement benefits (2,700 ) 560 19,150 1,583
Net investment hedge (losses) gains (5,785 ) (9,673 ) (21,245 ) 35,170
Foreign currency translation gains (losses) 4,943 13,054 27,833 (38,554 )
Unrealized (loss) gain on marketable securities (1,038 ) 542 (371 ) 726

Total other comprehensive income (loss) (4,580 ) 4,483 25,367 (1,075 )

Comprehensive income 26,720 31,105 116,346 63,026
Comprehensive loss attributable to noncontrolling interest (431 ) (1,775 ) (2,106 ) (7,237 )

Comprehensive income attributable to Levi Strauss & Co. $ 27,151 $ 32,880 $ 118,452 $ 70,263


	Three Months Ended
	February 26, 2012			February 27, 2011
	(Dollars in thousands)
Net income	$	49,297		$	39,168

Other comprehensive income (loss):
Pension and postretirement benefits		296			515
Net investment hedge gains (losses)		525			(8,890	)
Foreign currency translation gains		7,424			8,527
Unrealized gain on marketable securities		1,268			574

Total other comprehensive income		9,513			726

Comprehensive income		58,810			39,894
Comprehensive loss attributable to noncontrolling interest		(254	)		(1,291	)

Comprehensive income attributable to Levi Strauss & Co.	$	59,064		$	41,185

~~LEVI STRAUSS & CO. AND SUBSIDIARIES~~

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

~~FOR THE QUARTERLY PERIOD ENDED AUGUST 28, 2011~~

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

August 28,
November 28,

2011 2010
(Dollars in thousands)

Pension and postretirement benefits $ (179,657 ) $ (198,807 )
Net investment hedge losses (47,634 ) (26,389 )
Foreign currency translation losses (9,221 ) (37,054 )
Unrealized (loss) gain on marketable securities (214 ) 157

Accumulated other comprehensive loss (236,726 ) (262,093 )
Accumulated other comprehensive income attributable to noncontrolling interest 10,829 10,075

Accumulated other comprehensive loss attributable to Levi Strauss & Co. $ (247,555 ) $ (272,168 )


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


	February 26, 2012			November 27, 2011
	(Dollars in thousands)
Pension and postretirement benefits	$	(255,388	)	$	(255,684	)
Net investment hedge losses		(28,168	)		(28,693	)
Foreign currency translation losses		(42,785	)		(50,209	)
Unrealized gain (loss) on marketable securities		721			(547	)

Accumulated other comprehensive loss		(325,620	)		(335,133	)
Accumulated other comprehensive income attributable to noncontrolling interest		10,536			10,869

Accumulated other comprehensive loss attributable to Levi Strauss & Co.	$	(336,156	)	$	(346,002	)

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED FEBRUARY 26, 2012

NOTE 8: OTHER INCOME (EXPENSE), NET

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

Three Months Ended Nine Months Ended
August 28,
August 29,
August 28,
August 29,

2011 2010 2011 2010
(Dollars in thousands)

Foreign exchange management gains (losses)⁽¹⁾
$ 4,619 $ (6,531 ) $ (1,212 ) $ 4,074
Foreign currency transaction (losses) gains⁽²⁾
(10,118 ) (1,698 ) (13,412 ) 6,505
Interest income 477 438 1,296 1,730
Other (757 ) 96 584 (847 )

Total other income (expense), net $ (5,779 ) $ (7,695 ) $ (12,744 ) $ 11,462


	Three Months Ended
	February 26, 2012			February 27, 2011
	(Dollars in thousands)
Foreign exchange management losses⁽¹⁾	$	(15,252	)	$	(8,096	)
Foreign currency transaction gains⁽²⁾		15,441			942
Interest income		347			415
Other		636			780

Total other income (expense), net	$	1,172		$	(5,959	)


(1)		~~Gains~~Losses on forward foreign exchange contracts in the three-month period in 2011 primarily resulted from favorable currency fluctuations relative to negotiated contract rates on positions to buy the Euro and sell the Mexican Peso. Losses in the three-month period in 2010 primarily resulted from unfavorable currency fluctuations relative to negotiated contract ~~rates on positions to sell the Euro, the Swedish Krona and the Australian Dollar.~~rates.


(2)		~~Losses~~Foreign currency transaction gains in the nine-month period in 2011 primarily resulted from unfavorable currency fluctuations relative to negotiated contract rates on positions to sell the Swedish Krona and the Australian Dollar, partially offset by a correction recorded in the second quarter of 2011 for embedded foreign currency derivatives in certain of the Company’s leases. Gains in the nine-month period in 20102012 were primarily due to the appreciation of various foreign currencies against the U.S. ~~Dollar against negotiated contract rates on positions on the Euro and the Swedish Krona.~~

~~(2)~~		Foreign currency transaction losses in 2011 were primarily due to the depreciation of the U.S. Dollar, the Turkish Lira and the Mexican Peso against various currencies. Foreign currency transaction gains in the nine-month period of 2010 were primarily due to the appreciation of the U.S. Dollar against the Euro and Japanese Yen.Dollar.


~~NOTE 11:~~	~~INCOME TAXES~~

NOTE 9: INCOME TAXES

The effective income tax rate was ~~31.8%~~32.3% for the ~~nine~~three months ended ~~August 28, 2011,~~February 26, 2012, compared to ~~59.3%~~32.5% for the same period ended ~~August 29, 2010. The reduction in~~February 27, 2011. Income tax expense was $23.5 million for the ~~effective tax rate as~~three months ended February 26, 2012, compared to the ~~prior year~~$18.9 million for the same period ended February 27, 2011. The increase in income tax expense was primarily ~~caused by two significant discrete~~attributed to higher income tax charges recognized in the second quarter of 2010, described below, as well as an increase in 2011 of the proportion of earnings in foreign jurisdictions where the Company is subject to lower tax rates.

before income taxes.

~~LEVI STRAUSS & CO. AND SUBSIDIARIES~~

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

~~FOR THE QUARTERLY PERIOD ENDED AUGUST 28, 2011~~

During the second quarter of 2010, the Company recorded a discrete tax expense of $14.2 million to recognize a valuation allowance to fully offset the amount of deferred tax assets in Japan and another discrete tax expense of $14.0 million to recognize the reduction in deferred tax assets as a result of the enactment of the Patient Protection and Affordable Care Act.

As of ~~August 28, 2011,~~February 26, 2012, the Company’s total gross amount of unrecognized tax benefits was ~~$148.7~~$145.7 million, of which ~~$88.8~~$90.2 million would impact the effective tax rate, if recognized. As of November ~~28, 2010,~~27, 2011, the Company’s total gross amount of unrecognized tax benefits was ~~$150.7~~$143.4 million, of which ~~$87.2~~$87.9 million would have impacted the effective tax rate, if recognized.


~~NOTE 12:~~	~~RELATED PARTIES~~

NOTE 10: RELATED PARTIES

Robert D. Haas, a director and Chairman Emeritus of the Company, is the President of the Levi Strauss Foundation, which is not a consolidated entity of the Company. ~~During the three and nine months ended August 28, 2011, the~~The Company donated $0.3 million ~~and $1.0 million, respectively,~~ to the Levi Strauss Foundation ~~as compared to $0.4 million and $1.0 million, respectively, for the same prior-year periods.~~

~~Stephen C. Neal, a director and, effective September 1, 2011, Chairman~~in each of the ~~Board of Directors, is Chairman of the law firm Cooley LLP. During the nine months~~three-month periods ended ~~August 29, 2010, the Company paid fees to Cooley LLP of approximately $0.2 million.~~

February 26, 2012, and February 27, 2011.


~~NOTE 13:~~	~~BUSINESS SEGMENT INFORMATION~~

NOTE 11: BUSINESS SEGMENT INFORMATION

The Company manages its business according to three regional segments, the Americas, Europe and Asia ~~Pacific, under~~Pacific. The Company considers its chief executive officer to be the ~~leadership of senior executives who report to the~~Company’s chief operating decision ~~maker: the Company’s chief executive officer.~~maker. The Company’s management, including the chief operating decision maker, manages business operations, evaluates performance and allocates resources based on the regional segments’ net revenues and operating income.

In On February 16, 2012, the ~~first quarter of 2011, accountability for certain information technology, human resources, advertising and promotion, and marketing staff costs of a global nature, that in prior years were captured in~~Company announced organizational changes appointing Anne Rohosy to lead the Company’s ~~geographic regions, was centralized under corporate management. Beginning in 2011, these costs have been classified as corporate expenses. These costs were not significant~~commercial operations for the Americas and Europe, and formalizing Aaron Boey’s leadership of commercial operations for Asia Pacific. Both Ms. Rohosy and Mr. Boey report directly to ~~any of~~ the Company’s ~~regional segments individually in any of the periods presented herein, and accordingly business segment information for prior years has not been revised.~~

chief operating decision maker.

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED ~~AUGUST 28, 2011~~FEBRUARY 26, 2012

Business segment information for the Company is as follows:

Three Months Ended Nine Months Ended
August 28,
August 29,
August 28,
August 29,

2011 2010 2011 2010
(Dollars in thousands)

Net revenues:
Americas $ 717,586 $ 673,443 $ 1,908,846 $ 1,776,654
Europe 275,127 259,097 867,839 805,350
Asia Pacific 211,304 176,465 640,947 538,736

Total net revenues $ 1,204,017 $ 1,109,005 $ 3,417,632 $ 3,120,740

Operating income:
Americas $ 111,485 $ 102,934 $ 269,118 $ 263,914
Europe 31,316 34,401 140,129 132,384
Asia Pacific 26,450 15,340 89,242 62,889

Regional operating income 169,251 152,675 498,489 459,187
Corporate expenses 88,352 66,372 253,740 196,411

Total operating income 80,899 86,303 244,749 262,776
Interest expense (30,208 ) (31,734 ) (98,589 ) (100,347 )
Loss on early extinguishment of debt — — — (16,587 )
Other income (expense), net (5,779 ) (7,695 ) (12,744 ) 11,462

Income before income taxes $ 44,912 $ 46,874 $ 133,416 $ 157,304


	Three Months Ended
	February 26, 2012			February 27, 2011
	(Dollars in thousands)
Net revenues:
Americas	$	647,294		$	592,186
Europe		289,452			311,604
Asia Pacific		228,215			216,903

Total net revenues	$	1,164,961		$	1,120,693

Operating income:
Americas	$	79,636		$	75,033
Europe		52,073			71,291
Asia Pacific		41,160			37,363

Regional operating income		172,869			183,687
Corporate expenses		62,658			84,813

Total operating income		110,211			98,874
Interest expense		(38,573	)		(34,866	)
Other income (expense), net		1,172			(5,959	)

Income before income taxes	$	72,810		$	58,049

~~NOTE 14:~~ ~~SUBSEQUENT EVENT~~

On September 1, 2011, R. John Anderson retired as the Company’s President and Chief Executive Officer and was succeeded by Charles V. Bergh. Charges of $11.5 million associated with Mr. Anderson’s separation agreement were recorded in the Company’s third quarter financial statements and are included in “Selling, general and administrative expenses” in the Company’s consolidated statements of income. Costs associated with Mr. Bergh’s employment agreement will begin to be recorded in the fourth quarter.


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

Overview

We design, market and ~~market~~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 under our Levi’s^®, Dockers^®, Signature by Levi Strauss & Co.^tm™ (“Signature”) and Denizen^tm® brands around the world. ~~We also license our trademarks in many countries throughout the world for a wide array of products, including accessories, pants, tops, footwear and other products.~~

Our business is operated through three geographic regions: Americas, Europe and Asia Pacific. Our products are sold in approximately 55,000 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 nearly 1,800 franchised and other brand-dedicated stores outside of the United States. We also distribute our Levi’s^® and Dockers^® products through 492 company-operated stores located in 32 countries, including the United States, and through the online stores we ~~operate,~~operate. Our company-operated and ~~499 company-operated stores located in 31 countries, including the United States. These~~online stores generated approximately ~~18%~~21% of our net revenues in the ~~nine-month~~three-month period of ~~2011,~~2012, as compared to the same period in ~~2010,~~2011, when our company-operated and online stores generated ~~15%~~18% of our net revenues. In addition, we distribute our Levi’s^® and Dockers^® products through online stores operated by certain of our key wholesale customers and other third parties. We distribute products under ~~the~~our Signature ~~brand~~and Denizen^® brands primarily through mass channel retailers in the ~~United States~~Americas and ~~Canada and~~through franchised stores in Asia Pacific. ~~We currently distribute our Denizen~~

tm ~~products through franchised stores in Asia Pacific and certain wholesale channels in the United States and Mexico.~~

Our Europe and Asia Pacific businesses, collectively, contributed approximately 44% of our net revenues and ~~46%~~54% of our regional operating income in the ~~nine-month~~three-month period in ~~2011.~~2012. Sales of Levi’s^® brand products represented approximately ~~83%~~84% of our total net sales in the ~~nine-month~~three-month period in ~~2011.~~

2012.

Trends Affecting Our Business

During the ~~third~~first quarter of ~~2011,~~2012, we remained focused on our key long-term strategies: ~~build upon~~grow our ~~leadership position in the jean and khaki categories~~global brands through product innovation and ~~marketing innovation,~~consumer focus, enhance relationships with wholesale customers and expand our dedicated ~~store network~~retail channels to drive sales growth, capitalize on our global footprint to maximize opportunities in targeted growth markets, and continuously increase our ~~productivity.~~

~~During the quarter,~~productivity while refining our operating model and organizational structure.

Economic challenges continue to impact most markets around the world, ~~continued~~including having an increasingly adverse effect on the traditional growth markets in our Asia Pacific region. Margins remained pressured by cotton costs during the quarter, and we expect this to ~~feel the impact of ongoing economic challenges. We expect continued cotton and other input cost pressures for the balance of 2011 and at least~~continue through the first half of 2012.

Our response to these conditions has included product price increases and enhanced support of our supply chain partners to maintain product availability. The conditions within our industry, combined with the challenging consumer environment, may impact our margins, working capital, and sales volumes.

First Quarter 2012 Results

Our ~~Third Quarter 2011 Results~~

~~Our third~~first quarter ~~2011~~2012 results reflect net revenue growth and ~~the effects of the strategic investments we have made in line with our long-term strategies.~~

increased cash flows from operations.


	•		Net revenues. Consolidated net revenues increased by 9%4% compared to the ~~third~~first quarter of ~~2010, an increase of 4%~~2011, and increased 5% on a constant-currency basis. Increased net revenues were primarily associated with our Levi’s^® brand, due to the price increases we have implemented, and through the ~~expansion~~improved performance and ~~performance~~expansion of our store network globally.

	•		Operating ~~income.~~income. Consolidated operating income increased by 11% and operating margin ~~declined~~increased seventy basis-points compared to the ~~third~~first quarter of ~~2010, as the benefits from the increase in our net revenues were offset primarily by a lower gross~~2011. Gross margin ~~reflecting higher sales discounts and~~declined due to the higher cost of cotton, which our price increases did not fully ~~cover.~~cover, but the decline was more than offset by lower advertising and promotion expenses and the increase in our net revenues.

•

Cash flows. Cash flows provided by operating activities were ~~$17~~$104.8 million for the ~~nine-month~~three-month period in ~~2011~~2012 as compared to ~~$96~~$46 million for the same period in ~~2010,~~2011, primarily reflecting ~~the increased cost of~~higher trade receivable collections.


		~~inventory due primarily to higher cotton prices, our higher operating expenses and higher contribution to our pension plans in 2011.~~

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 ~~are fixed at~~end on November ~~30 due to local statutory requirements. Apart from these subsidiaries, each~~30. Each quarter of fiscal years ~~2011~~2012 and ~~2010~~2011 consisted of 13 weeks.

Segments. We manage our business according to three regional segments: the Americas, Europe and Asia Pacific. In the first quarter of 2011, accountability for certain information technology, human resources, advertising and promotion, and marketing staff costs of a global nature, that in prior years were captured in our geographic regions, was centralized under corporate management in conjunction with our key strategy of driving productivity. Beginning in 2011, these costs have been classified as corporate expenses. These costs were not significant to any of our regional segments individually in any of the periods presented herein, and accordingly business segment information for prior years has not been revised.

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

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

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


	•	Net sales is primarily comprised of sales of products to wholesale customers, including franchised stores, and direct sales to consumers at our company-operated and online stores and at our company-operated~~shop-in-shops~~ ~~located within department stores. It includes discounts, allowances for estimated returns and incentives.~~

	•	~~Licensing revenue consists of royalties earned from the use of our trademarks by third-party licensees in connection with the manufacturing, advertising and distribution of trademarked products.~~

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

	•	~~Selling costs include, among other things, all occupancy costs and depreciation associated with our company-operated stores and commission payments associated with our company-operatedshop-in-shops.~~

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

Selling costs include, among other things, all occupancy costs and depreciation associated with our company-operated stores and commission payments associated with our company-operated shop-in-shops.

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

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

Constant currency. Constant-currency comparisons are based on translating local currency amounts in both periods at the foreign exchange rates used in the Company’s internal planning process for the current year. We routinely evaluate our financial performance on a constant-currency basis in order to facilitateperiod-to-period comparisons without regard to the impact of changing foreign currency exchange rates.

Results of Operations for Three ~~and Nine~~ Months Ended ~~August 28, 2011,~~February 26, 2012, as Compared to Same ~~Periods~~Period in ~~2010~~2011

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

Three Months Ended Nine Months Ended
August 28,
August 29,
August 28,
August 29,

%
2011
2010
%
2011
2010

August 28,
August 29,
Increase
% of Net
% of Net
August 28,
August 29,
Increase
% of Net
% of Net

2011 2010 (Decrease) Revenues Revenues 2011 2010 (Decrease) Revenues Revenues
(Dollars in millions)

Net sales $ 1,183.9 $ 1,090.4 8.6 % 98.3 % 98.3 % $ 3,358.2 $ 3,064.4 9.6 % 98.3 % 98.2 %
Licensing revenue 20.1 18.6 8.5 % 1.7 % 1.7 % 59.4 56.3 5.6 % 1.7 % 1.8 %

Net revenues 1,204.0 1,109.0 8.6 % 100.0 % 100.0 % 3,417.6 3,120.7 9.5 % 100.0 % 100.0 %
Cost of goods sold 634.6 565.4 12.2 % 52.7 % 51.0 % 1,749.5 1,544.7 13.3 % 51.2 % 49.5 %

Gross profit 569.4 543.6 4.8 % 47.3 % 49.0 % 1,668.1 1,576.0 5.8 % 48.8 % 50.5 %
Selling, general and administrative expenses 488.5 457.3 6.8 % 40.6 % 41.2 % 1,423.4 1,313.2 8.4 % 41.6 % 42.1 %

Operating income 80.9 86.3 (6.3 )% 6.7 % 7.8 % 244.7 262.8 (6.9 )% 7.2 % 8.4 %
Interest expense (30.2 ) (31.7 ) (4.8 )% (2.5 )% (2.9 )% (98.6 ) (100.3 ) (1.8 )% (2.9 )% (3.2 )%
Loss on early extinguishment of debt — — — — — — (16.6 ) (100.0 )% — (0.5 )%
Other income (expense), net (5.8 ) (7.7 ) (24.9 )% (0.5 )% (0.7 )% (12.7 ) 11.4 (211.2 )% (0.4 )% 0.4 %

Income before income taxes 44.9 46.9 (4.2 )% 3.7 % 4.2 % 133.4 157.3 (15.2 )% 3.9 % 5.0 %
Income tax expense 13.6 20.3 (32.8 )% 1.1 % 1.8 % 42.4 93.2 (54.5 )% 1.2 % 3.0 %

Net income 31.3 26.6 17.6 % 2.6 % 2.4 % 91.0 64.1 41.9 % 2.7 % 2.1 %
Net loss attributable to noncontrolling interest 0.9 1.6 (42.6 )% 0.1 % 0.1 % 2.8 6.1 (52.7 )% 0.1 % 0.2 %

Net income attributable to Levi Strauss & Co. $ 32.2 $ 28.2 14.2 % 2.7 % 2.5 % $ 93.8 $ 70.2 33.8 % 2.7 % 2.2 %


	Three Months Ended
	February 26, 2012			February 27, 2011			% Increase (Decrease)			February 26, 2012 % of Net Revenues			February 27, 2011 % of Net Revenues
	(Dollars in millions)
Net revenues	$	1,165.0		$	1,120.7			4.0	%		100.0	%		100.0	%
Cost of goods sold		616.2			562.7			9.5	%		52.9	%		50.2	%

Gross profit		548.8			558.0			(1.6	)%		47.1	%		49.8	%
Selling, general and administrative expenses		438.6			459.1			(4.5	)%		37.6	%		41.0	%

Operating income		110.2			98.9			11.5	%		9.5	%		8.8	%
Interest expense		(38.6	)		(34.9	)		10.6	%		(3.3	)%		(3.1	)%
Other income (expense), net		1.2			(6.0	)		(119.7	)%		0.1	%		(0.5	)%

Income before income taxes		72.8			58.0			25.4	%		6.2	%		5.2	%
Income tax expense		23.5			18.8			24.5	%		2.0	%		1.7	%

Net income		49.3			39.2			25.9	%		4.2	%		3.5	%
Net (income) loss attributable to noncontrolling interest		(0.1	)		1.5			(105.2	)%		—			0.1	%

Net income attributable to Levi Strauss & Co.	$	49.2		$	40.7			21.0	%		4.2	%		3.6	%

Net revenues

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

Three Months Ended Nine Months Ended
% Increase (Decrease) % Increase (Decrease)
August 28,
August 29,
As
Constant
August 28,
August 29,
As
Constant

2011 2010 Reported Currency 2011 2010 Reported Currency
(Dollars in millions)

Net revenues:
Americas $ 717.6 $ 673.4 6.6 % 5.7 % $ 1,908.9 $ 1,776.6 7.4 % 6.7 %
Europe 275.1 259.1 6.2 % (4.1 )% 867.8 805.4 7.8 % 3.7 %
Asia Pacific 211.3 176.5 19.7 % 11.3 % 640.9 538.7 19.0 % 11.9 %

Total net revenues $ 1,204.0 $ 1,109.0 8.6 % 4.2 % $ 3,417.6 $ 3,120.7 9.5 % 6.8 %


	Three Months Ended
					% Increase (Decrease)
	February 26, 2012		February 27, 2011		As Reported			Constant Currency
	(Dollars in millions)
Net revenues:
Americas	$	647.3	$	592.2		9.3	%		10.1	%
Europe		289.5		311.6		(7.1	)%		(3.2	)%
Asia Pacific		228.2		216.9		5.2	%		5.1	%

Total net revenues	$	1,165.0	$	1,120.7		4.0	%		5.4	%

Total net revenues increased on both reported and constant-currency bases for the ~~three- and nine-month periods~~three-month period ended ~~August 28, 2011,~~February 26, 2012, as compared to the same prior-year ~~periods. Reported amounts were affected favorably by changes in foreign currency exchange rates across all regions.~~

period.

Americas.. On both reported and constant-currency bases, net revenues in our Americas region increased for the ~~three- and nine-month periods,~~three-month period, with currency affecting net revenues ~~favorably~~unfavorably by approximately ~~$5 million and $13 million, respectively.~~

~~For both periods, the~~$4 million.

The region’s increased net revenues primarily reflected a higher ~~volume of~~ Levi’s^® brand sales, ~~in our retail stores, most prominently in our outlets, and~~mainly due to the ~~U.S. launch of our Denizen~~^tm ~~brand products. Levi’s~~^® ~~brand sales in our wholesale channels increased, however the benefit of~~ price increases we have implemented, ~~were substantially~~partially offset by related volume ~~declines. Both periods~~declines in certain wholesale customers. Higher revenues also reflected ~~continued declines~~an increased proportion of ~~net~~premium-priced Levi’s^® brand products and increased sales ~~from~~of our ~~U.S. Dockers~~Denizen^® ~~brand.~~

and Signature brand products.

Europe. Net revenues in Europe ~~increased on a reported basis but~~ decreased on aboth reported and constant-currency ~~basis~~bases for the three-month period, with currency affecting net revenues ~~favorably~~unfavorably by approximately ~~$27~~$12 million. ~~For~~

Net revenues in the ~~nine-month period, net revenues increased on both reported~~region decreased primarily due to a lower volume of sales to franchisee stores and ~~constant-currency bases, with currency affecting net revenues favorably by approximately $32 million.~~

~~For both periods, net~~to our traditional wholesale channels, reflecting the ongoing depressed retail environment, most notably in southern Europe. Net revenues of our company-operated retail network grew, reflecting ~~expansion and~~ improved performance of our ~~stores and the success of our Levi’s~~^® brand women’s products throughout the region. This growth was fully and partially offset during the three- and nine-month periods, respectively, by lower net sales to our wholesale customers, reflecting temporary issues fulfilling customer orders during the implementation and stabilization of our enterprise resource planning system in the region during the third quarter.

stores.

Asia Pacific. Net revenues in Asia Pacific increased on both reported and constant-currency bases for the ~~three- and nine-month periods,~~three-month period, with currency ~~affecting~~having little effect on net revenues ~~favorably by approximately $14 million and $36 million, respectively.~~

during the quarter.

The net revenues increase ~~in both periods~~ was primarily from our Levi’s^® brand, reflecting the price increases we have implemented, partially offset by volume declines, and a higher proportion of premium-priced products in the mix. Revenues also increased through the continued expansion of our brand-dedicated retail network in ~~China and India as well as other of our emerging markets, partially offset by the continued decline of net revenues in Japan. Sales of our Denizen~~^tm ~~brand products were partially offset by corresponding declines in Signature brand sales as we transition the brand in~~ the region.

Gross profit

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

Three Months Ended Nine Months Ended
%
%

August 28,
August 29,
Increase
August 28,
August 29,
Increase

2011 2010 (Decrease) 2011 2010 (Decrease)
(Dollars in millions)

Net revenues $ 1,204.0 $ 1,109.0 8.6 % $ 3,417.6 $ 3,120.7 9.5 %
Cost of goods sold 634.6 565.4 12.2 % 1,749.5 1,544.7 13.3 %

Gross profit $ 569.4 $ 543.6 4.8 % $ 1,668.1 $ 1,576.0 5.8 %

Gross margin
47.3 % 49.0 % 48.8 % 50.5 %


	Three Months Ended
	February 26, 2012			February 27, 2011			% Increase (Decrease)
	(Dollars in millions)
Net revenues	$	1,165.0		$	1,120.7			4.0	%
Cost of goods sold		616.2			562.7			9.5	%

Gross profit	$	548.8		$	558.0			(1.6	)%

Gross margin		47.1	%		49.8	%

As compared to the same prior-year ~~periods,~~period, the gross profit ~~increase~~decrease for the ~~three- and nine-month periods~~three-month period ended ~~August 28, 2011,~~February 26, 2012, primarily resulted from a decline in our gross margin, partially offset by the increase in our net ~~revenues and favorable currency impact of~~revenues. Currency affected gross profit unfavorably by approximately ~~$30 million and $52 million, respectively, partially offset by a decline~~$14 million. The decrease in our gross ~~margin. The gross~~ margin ~~decrease~~ was primarily due to ~~an increase in sales discounts, in both our Levi’s~~^® ~~and Dockers~~^® ~~brands, to drive sales and manage inventory, and~~ the higher cost of cotton, which our price increases did not fully cover. The ~~gross~~ margin ~~decrease~~decline was partially offset by a decline in sales to lower-margin channels and the increased revenue contribution from our company-operated retail network, which generally has a higher gross margin than our wholesale business.

Selling, general and administrative expenses

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


	Three Months Ended
	February 26, 2012		February 27, 2011		% Increase (Decrease)			February 26, 2012 % of Net Revenues			February 27, 2011 % of Net Revenues
	(Dollars in millions)
Selling	$	176.8	$	175.2		0.9	%		15.2	%		15.6	%
Advertising and promotion		45.9		62.2		(26.2	)%		3.9	%		5.6	%
Administration		95.3		104.0		(8.4	)%		8.2	%		9.3	%
Other		120.6		117.7		2.5	%		10.4	%		10.5	%

Total SG&A	$	438.6	$	459.1		(4.5	)%		37.6	%		41.0	%

Currency contributed approximately ~~$21 million and $36~~$4 million of the ~~increase~~decrease in SG&A ~~expenses~~ for the ~~three- and nine-month periods~~three-month period ended ~~August 28, 2011, respectively,~~February 26, 2012, as compared to the same prior-year ~~periods.~~

period.

Selling.~~. Currency contributed approximately $9 million and $16 million of the increase for the three- and nine-month periods, respectively. Higher selling~~ Selling expenses ~~across all business segments primarily reflected additional~~reflect costs such as rents and ~~increased~~ headcount associated with the support and continued expansion of our company-operated store network. We had 43ten more company-operated stores at the end of the ~~third~~first quarter of ~~2011~~2012 than we did at the end of the ~~third~~first quarter of ~~2010.~~

2011.

Advertising and promotion.~~. For both periods, the~~ The decrease in advertising and promotion expenses ~~was attributable to~~primarily reflected a difference in timing of advertising campaigns as well as a reduction of our advertising activities in ~~most markets as compared to the prior year.~~

some markets.

Administration.~~. Higher administration~~ Administration expenses ~~in both periods included separation benefits related~~decreased primarily due to ~~the retirement of our former chief executive officer, and with respect to the nine-month period, an increase~~a decline in incentive compensation expense related to ~~higher projected funding. These costs were partially offset by~~lower achievement against our internally-set objectives, and a decline in pension expense primarily as a result of changes to the U.S. pension plans in the second quarter of 2011.

Other.. Other SG&A ~~expenses include~~includes distribution, information resources, and marketing organization costs. These costs increased primarily due to our investment in global information technology systems, increased marketing project costs related to our strategic initiatives, and currency, which contributed approximately $5 million and $8 million of the increase for the three- and nine-month periods, respectively.

Operating income

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

�� Three Months Ended Nine Months Ended
August 28,
August 29,
August 28,
August 29,

%
2011
2010
%
2011
2010

August 28,
August 29,
Increase
% of Net
% of Net
August 28,
August 29,
Increase
% of Net
% of Net

2011 2010 (Decrease) Revenues Revenues 2011 2010 (Decrease) Revenues Revenues
(Dollars in millions)

Operating income:
Americas $ 111.5 $ 102.9 8.3 % 15.5 % 15.3 % $ 269.1 $ 263.9 2.0 % 14.1 % 14.9 %
Europe 31.3 34.4 (9.0 )% 11.4 % 13.3 % 140.1 132.4 5.9 % 16.1 % 16.4 %
Asia Pacific 26.5 15.4 72.4 % 12.5 % 8.7 % 89.3 62.9 41.9 % 13.9 % 11.7 %

Total regional operating income 169.3 152.7 10.9 % 14.1 %* 13.8 %* 498.5 459.2 8.6 % 14.6 %* 14.7 %*
Corporate expenses 88.4 66.4 33.1 % 7.3 %* 6.0 %* 253.8 196.4 29.2 % 7.4 %* 6.3 %*

Total operating income $ 80.9 $ 86.3 (6.3 )% 6.7 %* 7.8 %* $ 244.7 $ 262.8 (6.9 )% 7.2 %* 8.4 %*

Operating margin
6.7 % 7.8 % 7.2 % 8.4 %


	Three Months Ended
	February 26, 2012			February 27, 2011			% Increase (Decrease)			February 26, 2012 % of Net Revenues			February 27, 2011 % of Net Revenues
	(Dollars in millions)
Operating income:
Americas	$	79.6		$	75.0			6.1	%		12.3	%		12.7	%
Europe		52.1			71.3			(27.0	)%		18.0	%		22.9	%
Asia Pacific		41.2			37.4			10.2	%		18.0	%		17.2	%

Total regional operating income		172.9			183.7			(5.9	)%		14.8	%*		16.4	%*
Corporate expenses		62.7			84.8			(26.1	)%		5.4	%*		7.6	%*

Total operating income	$	110.2		$	98.9			11.5	%		9.5	%*		8.8	%*

Operating margin		9.5	%		8.8	%


*		Percentage of consolidated net revenues

Currency ~~favorably~~unfavorably affected total operating income by approximately ~~$9 million and $16~~$10 million for the ~~three- and nine-month periods, respectively.~~

three-month period.

Regional operating income..


	•		Americas. The increase in operating income ~~in both periods~~ primarily reflected higher constant-currency net ~~revenue growth~~revenues in the region. ~~For~~Operating margin was flat as compared to the ~~nine-month~~same prior-year period as a decline in the ~~increase~~region’s gross margin was ~~partially~~ offset by alower SG&A.

•		Europe. The decrease in operating ~~margin, primarily reflecting the region’s decline in gross margin.~~

•	~~Europe.~~ ~~For the three-~~income and ~~nine-month periods, the~~ operating margin ~~decreased~~was primarily due to the region’s ~~decline in~~lower constant-currency net revenues, a lower gross margin, and the ~~effects of which on operating income were offset partially and fully, respectively, by the favorable~~unfavorable impact of ~~currency, and with respect to the nine-month period, the region’s higher net revenues.~~currency.

•

Asia Pacific. The increases in operating margin and operating income ~~for the three-month period~~ primarily reflected the region’s lower SG&A ~~expenses; the increases for the nine-month period primarily reflected the region’s improved gross margin~~ and higher constant-currency net revenues. ~~In both periods, the region benefitted from the favorable impact of currency.~~

Corporate. Corporate expenses are selling, general and administrative expenses that are not attributed to any of our regional operating segments. ~~Higher~~Lower corporate expenses ~~in both periods~~ reflected ~~an increase in our investment in global information technology systems and separation benefits related to~~ the ~~retirement of our former chief executive officer, and with respect to the nine-month period, an increase~~decrease in incentive compensation expense ~~related to higher projected funding. Corporate expenses for~~and the three- and nine-month periods also increased over the same prior-year period due to the classification of certain marketing, advertising and promotion, information technology and human resources costs of a global nature centralized under corporate management beginning in the first quarter of 2011. Such costs totaled approximately $7 million and $20 million, respectively, in our Americas region and were not significant to our Europe and Asia Pacific regions; prior period amounts have not been reclassified. These increases were partially offset by a decline in pension ~~expense primarily as a result of changes to the U.S. pension plans in the second quarter of 2011.~~

24expense.

Interest expense

Interest expense ~~decreased~~increased to ~~$30.2 million and $98.6~~$38.6 million for the ~~three- and nine-month periods~~three-month period ended ~~August 28, 2011, respectively,~~February 26, 2012, from ~~$31.7 million and $100.3~~$34.9 million for the same ~~periods~~period in ~~2010.~~

2011. The increase in interest expense was due to higher interest expense on our deferred compensation plans, as well as higher average debt balances resulting from increased borrowings under our senior secured revolving credit facility.

The weighted-average interest rate on average borrowings outstanding for the ~~three- and nine-month periods~~three-month period ended ~~August 28, 2011,~~February 26, 2012, was ~~6.74% and 6.81%, respectively,~~6.99% as compared to ~~6.74% and 7.27%, respectively,~~6.84% for ~~each of~~ the same ~~periods~~period in ~~2010.~~

2011.

Other income (expense), net

Other income (expense), net, primarily consists of foreign exchange management activities and transactions. For the ~~three- and nine-month periods~~three-month period ended ~~August 28, 2011,~~February 26, 2012, we recorded ~~expense~~income of ~~$5.8~~$1.2 million ~~and $12.7 million, respectively,~~ as compared to expense of ~~$7.7~~$6.0 million ~~and income of $11.5 million, respectively,~~ for the same prior-year ~~periods.~~

~~The net expense in both periods in 2011 primarily reflected losses on our foreign currency denominated balances.~~period. The expense in ~~the three-month period in 2010 primarily~~2011 reflected losses on foreign exchange derivatives which generally economically hedge future cash flow obligations of our foreign operations. ~~The income in the nine-month period in 2010 primarily reflected gains on our foreign currency denominated balances and foreign exchange derivatives.~~

Income tax expense

Our effective income tax rate was ~~31.8%~~32.3% for the ~~nine~~three months ended ~~August 28, 2011,~~February 26, 2012, compared to ~~59.3%~~32.5% for the same period ended ~~August 29, 2010.~~February 27, 2011. Our income tax expense was $23.5 million for the three months ended February 26, 2012, compared to $18.9 million for the same period ended February 27, 2011. The ~~reduction~~increase in our ~~effective~~income tax ~~rate~~expense was primarily ~~caused by two significant discrete~~attributed to higher income tax charges recognized in the second quarter of 2010, described below, as well as an increase in 2011 of the proportion of our earnings in foreign jurisdictions where we are subject to lower tax rates.

During the second quarter of 2010, we recorded a discrete tax expense of $14.2 million to recognize a valuation allowance to fully offset the amount of deferred tax assets in Japan and another discrete tax expense of $14.0 million to recognize the reduction in deferred tax assets as a result of the enactment of the Patient Protection and Affordable Care Act.

before taxes.

Liquidity and Capital Resources

Liquidity outlook

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

Cash sources

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

~~During the quarter and prior to the below-referenced refinancing, we were~~

We are borrowers under ~~an amended and restated senior secured revolving credit facility that had~~ a ~~maximum availability of $750 million, secured by certain of our domestic assets and certain U.S. trademarks associated with the Levi’s~~^® brand and other related intellectual property. The facility included a $250 million trademark tranche and a $500 million revolving tranche. As of August 28, 2011, we had borrowings of $70.0 million under the revolving tranche, which was the full amount we borrowed during the quarter, and $108.3 million under the trademark tranche. Unused availability under the revolving tranche was $336.7 million at quarter end, as our total availability of $421.0 million, based on collateral levels as defined by the agreement, was reduced by $84.3 million of other credit-related instruments such as documentary and standby letters of credit allocated under the facility.

As of August 28, 2011, we had cash and cash equivalents totaling approximately $230.8 million, resulting in a total liquidity position (unused availability and cash and cash equivalents) of $567.5 million.

~~On September 30, 2011, we entered into a new~~ senior secured revolving credit facility. The ~~new~~ facility is an asset-based facility, in which the borrowing availability ~~varies according to~~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 ~~cash and investment securities deposited in secured accounts with the administrative agent or other lenders.~~Canada. The maximum availability under the ~~new~~ facility is $850 million, of which $800 million is available to us for revolving loans in U.S. ~~dollars~~Dollars and $50 million is available to us for revolving loans either in U.S. ~~dollars~~Dollars or Canadian ~~dollars. Upon entering into the new facility,~~Dollars.

As of February 26, 2012, we ~~borrowed $215~~had borrowings of $140.0 million ~~and used the proceeds to repay the borrowings outstanding~~ under the ~~previous senior secured revolving credit~~ facility, $40.0 million of which is classified as short-term debt. Unused availability under the facility was $554.6 million, as our total availability of $636.9 million, based on collateral levels as defined by the agreement, was reduced by $82.3 million of other credit-related instruments.

As of February 26, 2012, we ~~then terminated.~~

had cash and cash equivalents totaling approximately $238.3 million, resulting in a total liquidity position (unused availability and cash and cash equivalents) of $792.9 million.

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, 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 ~~2011~~2012 from those disclosed in our ~~2010~~2011 Annual Report onForm ~~10-K,~~ except for our projected pension plan contributions. Based on changes in discount rates and the updated valuation of our pension assets, as well as our current evaluation of alternative methods available to us for measuring our pension funding obligation, we now expect our required contribution amount in 2011 to be approximately $70 million.

10-K.

Cash flows

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

Nine Months Ended
August 28,
August 29,

2011 2010
(Dollars in millions)

Cash provided by operating activities $ 17.3 $ 95.8
Cash used for investing activities (114.6 ) (127.3 )
Cash provided by financing activities 52.3 25.3
Cash and cash equivalents 230.8 261.2


	Three Months Ended
	February 26, 2012			February 27, 2011
	(Dollars in millions)
Cash provided by operating activities	$	104.8		$	46.0
Cash used for investing activities		(20.7	)		(46.1	)
Cash used for financing activities		(53.5	)		(22.4	)
Cash and cash equivalents		238.3			249.1

Cash flows from operating activities

Cash provided by operating activities was ~~$17.3~~$104.8 million for the ~~nine-month~~three-month period in ~~2011,~~2012, as compared to ~~$95.8~~$46.0 million for the same period in ~~2010.~~2011. Cash provided by operating activities ~~declined~~increased compared to the prior year due to higher cash used for inventory, our pension plan contribution in the first quarter of 2011, and higher payments to vendors, reflecting the increase in our SG&A expenses. This decline was partially offset by an increase in customer collections, reflecting our higher ~~net revenues, and a decrease in interest payments~~beginning accounts receivable balance. This was partially offset by higher cash used for inventory as a result of ~~our refinancing activities in May 2010.~~

higher cotton costs.

Cash flows from investing activities

Cash used for investing activities was ~~$114.6~~$20.7 million for the ~~nine-month~~three-month period in ~~2011,~~2012, as compared to ~~$127.3~~$46.1 million for the same period in ~~2010.~~2011. The decrease in cash used for investing activities as compared to the prior year primarily reflects the higher information technology costs in ~~2010 associated with the remodeling of the Company’s headquarters and the final payment for a 2009 acquisition. This was partially offset by an increase in~~ 2011 ~~in information technology costs~~ associated with the installation of our global enterprise resource planning system.

Cash flows from financing activities

Cash ~~provided by~~used for financing activities was ~~$52.3~~$53.5 million for the ~~nine-month~~three-month period in ~~2011,~~2012, as compared to ~~$25.3~~$22.4 million for the same period in ~~2010.~~2011. Net cash ~~provided~~used in 2012 primarily related to net repayments of our senior revolving credit facility. Cash used in 2011 primarily related to ~~proceeds~~our dividend payments to stockholders of ~~$70.0 million borrowed under our senior revolving credit facility. Net cash provided in 2010 reflected our May 2010 refinancing activities.~~

$20.0 million.

Indebtedness

~~We had fixed-rate debt of approximately $1.5 billion (74% of total debt) and variable-rate debt of approximately $0.5 billion (26% of total debt) as of August 28, 2011.~~

The borrower of substantially all of our debt is Levi Strauss & Co., the parent and U.S. operating company. ~~Required~~Of our total debt of $1.9 billion as of February 26, 2012, we had fixed-rate debt of approximately $1.4 billion (75% of total debt) and variable-rate debt of approximately $0.5 billion (25% of total debt). There have been no substantial changes to our required aggregate debt principal payments on our ~~August 28, 2011,~~ long-term debt ~~adjusted to reflect the impact~~for each of the ~~new credit facility, are $323.9~~next five years and thereafter from those disclosed in our 2011 Annual Report on Form 10-K. Short-term debt of $40.0 million ~~in 2014 and the remaining $1.5 billion in years after 2015. Our quarter-end balance of $70.0 million of short-term debt~~ borrowed under our senior secured revolving credit facility iswas expected to be repaid over the next twelve months; ~~unsecured~~ short-term borrowings of ~~$59.0~~$74.1 million ~~are~~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. WeCurrently, we are in compliance with all of these covenants.

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 ~~2010~~2011 Annual Report onForm 10-K.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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 ~~2010~~2011 Annual Report onForm ~~10-K~~ ~~except for the following:~~


	•	~~We no longer consider our accounting policy on derivative and foreign exchange management activities to be critical; and~~

	•	We measure changes in the funded status of our pension and postretirement benefits plans using actuarial models which utilize an attribution approach that generally spreads individual events either over the estimated service lives of the remaining employees in the plan, or, for plans where participants will not earn additional benefits by rendering future service, over the plan participants’ estimated remaining lives.

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.

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 prospectsand/or statements preceded by, followed by or that include the words “believe”, “anticipate”, “intend”, “estimate”, “expect”, “project”, “could”, “plans”, “seeks” and similar expressions. These ~~forward-~~

~~looking~~forward-looking statements speak only as of the date stated and we do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these expectations may not prove to be correct or we may not achieve the financial results, savings or other benefits anticipated in the forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which may be beyond our control. These risks and uncertainties, including those disclosed under “Risk Factors” in our Annual Report onForm 10-K for the fiscal year ended November ~~28, 2010,~~27, 2011, 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 the level of consumer spending for apparel in view of general economic and environmental conditions and pricing trends, and our ability to plan for and respond to the impact of those changes;

consequences of impacts to the businesses of our wholesale customers caused by factors such as lower consumer spending, pricing changes, general economic conditions and changing consumer preferences;


	•	consequences of impacts to the businesses of our wholesale customers caused by factors such as lower consumer spending, pricing changes and general economic conditions and changing consumer preferences;

	•	changes in the level of consumer spending for apparel in view of general economic and environmental conditions and pricing trends, and our ability to plan for and respond to the impact of those changes;

	•	~~our ability to mitigate costs related to manufacturing, sourcing, and raw materials supply, such as cotton, and to manage consumer response to such mitigating actions;~~

	•	~~consequences of the actions we take to support our supply chain partners as a response to the rising costs of manufacturing, sourcing, and raw materials supply;~~

	•	~~our ability to mitigate the impact of a slowdown in the Japanese economy due to the natural disasters and related events in that country;~~

	•	~~our adjustment to organizational changes including the continued globalization of our brand management and the introduction of a new chief executive officer;~~

	•	~~our ability to grow our Dockers~~^® ~~brand and to expand our Denizen~~^tm ~~brand into new markets and channels;~~

	•	our ability to mitigate the variability of costs related to manufacturing, sourcing, and raw materials supply, such as cotton, and to manage consumer response to such mitigating actions; consequences of the actions we take to support our supply chain partners as a response to the fluctuating costs of manufacturing, sourcing, and raw materials supply; our and our wholesale customers’ decisions to modify strategies and adjust product mix, and our ability to manage any resulting product transition costs;

	•	~~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 and shopping experiences;~~

	•	~~our ability to respond to price, innovation and other competitive pressures in the apparel industry and on our key customers;~~

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

	•	~~our effectiveness in increasing productivity and efficiency in our operations;~~

	•	~~our ability to implement, stabilize and optimize our enterprise resource planning system throughout our business without disruption or to mitigate such disruptions;~~

	•	~~consequences of foreign currency exchange rate fluctuations;~~

	•	~~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;~~

	•	~~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 in countries where we do business.~~

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 and shopping experiences;

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

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

our effectiveness in increasing productivity and efficiency in our operations;

our ability to implement, stabilize and optimize our enterprise resource planning system throughout our business without disruption or to mitigate such disruptions;

consequences of foreign currency exchange rate fluctuations;

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;

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 in countries where we 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 ~~2010~~2011 Annual Report onForm 10-K.


Item 4.	*CONTROLS AND PROCEDURES*

Evaluation of Disclosure Controls and Procedures

~~As of August 28, 2011, we updated our evaluation of the effectiveness of the design and operation of our~~

We maintain disclosure controls and procedures ~~for purposes of filing reports~~(as defined in Rule 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934 (the “Exchange Act”). This controls evaluation was done under the supervision and with the participation of management, including our chief executive officer and our chief financial officer. Our chief executive officer and our chief financial officer concluded1934) that ~~at August 28, 2011, our disclosure controls and procedures (as defined inRule 13a-15(e)~~ ~~and15d-15(e)~~ ~~under the Exchange Act)~~ are ~~effective~~designed to provide reasonable assurance that information ~~that we are~~ required to ~~disclose~~be disclosed in the reports ~~that~~ 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. Our disclosure controls~~forms, and ~~procedures are designed to provide reasonable assurance~~ 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 updated our evaluation, under the supervision and with the participation of management, including our chief executive officer and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of February 26, 2012. Based on that evaluation, our chief executive officer and our chief financial officer concluded that as of February 26, 2012, 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 have been implementing an enterprise resource planning (“ERP”) system on a staged basis in~~There were no changes to our ~~subsidiaries around the world. We began the implementation of the ERP system in Europe~~internal control over financial reporting during our last fiscal quarter ~~and this resulted in a change~~that have materially affected, or are reasonably likely to materially affect, our ~~system of~~ internal control over financial reporting.

PART II — OTHER INFORMATION


Item 1.	*LEGAL PROCEEDINGS*

Litigation. There have been no material developments with respect to the information previously reported in our ~~2010~~2011 Annual Report onForm 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 questions, 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, or 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 ~~2010~~2011 Annual Report onForm 10-K.

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

On February 2, 2012, our board approved the award of restricted stock units (“RSUs”) representing an aggregate of 2,604 shares of our common stock to Stephen C. Neal, and the award of stock appreciation rights (“SARs”) representing an aggregate of 1,305,284 shares of our common stock to certain of our executives. These awards were made under our 2006 Equity Incentive Plan.

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

SARs are typically granted with an exercise price equal to the fair market value of the common stock on the date of grant as determined by the board. Twenty-five percent of each SAR grant vests on February 1, 2013, with the remaining 75% balance vesting at a rate of 75%/36 months (2.08% per month) commencing February 2, 2013, and ending January 2, 2016, subject to continued service. However, 25% of the shares subject to one of the awards made to Charles V. Bergh on February 2, 2012, in the amount of 436,720 units, vest on September 1, 2012; with the remaining 75% balance vesting in equal monthly installments beginning September 1, 2012, and ending August 1, 2015, in accordance with the terms of his employment agreement.

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 RSUs or SARs nor upon the exercise of the SARs. The RSUs and SARs were granted under Section 4(2) of the Securities Act of 1933, as amended. Section 4(2) generally provides an exemption from registration for transactions by an issuer not involving any public offering.

In addition to the above-referenced issuances of securities, we also repurchased a total of 14,974 shares of our common stock during the quarter in connection with the exercise of put rights under our 2006 Equity Incentive Plan.

We are a privately-held corporation; there is no public trading of our common stock. As of April 5, 2012, we had 37,345,985 shares outstanding.

Item 3.

DEFAULTS UPON SENIOR SECURITIES

None.

Item 4.

MINE SAFETY DISCLOSURES

None.

Item 5.

OTHER INFORMATION

None.

Item 6. EXHIBITS


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

~~Item 3.~~31.2	*~~DEFAULTS UPON SENIOR SECURITIES~~*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

~~None.~~


~~Item 4.~~32	*~~REMOVED AND RESERVED~~*	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.


~~Item 5.~~101.INS	*~~OTHER INFORMATION~~*	XBRL Instance Document. Furnished herewith.

~~None.~~


~~Item 6.~~101.SCH	*~~EXHIBITS~~*	XBRL Taxonomy Extension Schema Document. Furnished herewith.

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

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

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

10 .1 Employment Agreement between the Company and Charles V. Bergh, dated June 9, 2011. Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report onForm 8-K filed with the Commission on June 16, 2011.
10 .2 Transition Services, Separation Agreement and Release of All Claims between John Anderson and the Company, dated June 16, 2011. Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report onForm 8-K filed with the Commission on June 16, 2011.
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. Furnished herewith.
101 .SCH XBRL Taxonomy Extension Schema Document. Furnished herewith.
101 .CAL XBRL Taxonomy Extension Calculation Linkbase Document. Furnished herewith.
101 .LAB XBRL Taxonomy Extension Label Linkbase Document. Furnished herewith.
101 .PRE XBRL Taxonomy Extension Presentation Linkbase Document. Furnished herewith.

SIGNATURE

~~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.

~~LEVI STRAUSS & C~~


Date: April 10, 2012	LEVI STRAUSS & Co.
	(Registrant)

	By:	/s/ HEIDI L. MANES
		Heidi L. Manes Vice President and Controller (Principal Accounting Officer)

oEXHIBIT INDEX.

~~(Registrant)~~


31.1	~~By:~~	~~/s/~~ ~~Heidi L. Manes~~ 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. Furnished herewith.
101.SCH		XBRL Taxonomy Extension Schema Document. Furnished herewith.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document. Furnished herewith.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document. Furnished herewith.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document. Furnished herewith.

~~Heidi L. Manes~~

~~Vice President and Controller~~

~~(Principal Accounting Officer)~~

~~Date: October 11, 2011~~

~~EXHIBIT INDEX~~


	(Unaudited)
	August 28,			November 28,
	2011			2010
	(Dollars in thousands)

ASSETS
Current Assets:
Cash and cash equivalents	$	230,844		$	269,726
Restricted cash		7,432			4,028
Trade receivables, net of allowance for doubtful accounts of $22,778 and $24,617		539,042			553,385
Inventories:
Raw materials		7,960			6,770
Work-in-process		13,421			9,405
Finished goods		709,253			563,728

Total inventories		730,634			579,903
Deferred tax assets, net		143,466			137,892
Other current assets		140,546			106,198

Total current assets		1,791,964			1,651,132
Property, plant and equipment, net of accumulated depreciation of $729,843 and $683,258		507,933			488,603
Goodwill		243,680			241,472
Other intangible assets, net		76,015			84,652
Non-current deferred tax assets, net		558,881			559,053
Other assets		109,285			110,337

Total assets	$	3,287,758		$	3,135,249


LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Short-term debt	$	129,010		$	46,418
Current maturities of long-term debt		—			—
Current maturities of capital leases		1,740			1,777
Accounts payable		248,806			212,935
Other accrued liabilities		233,871			275,443
Accrued salaries, wages and employee benefits		192,553			196,152
Accrued interest payable		37,319			9,685
Accrued income taxes		18,333			17,115

Total current liabilities		861,632			759,525
Long-term debt		1,856,237			1,816,728
Long-term capital leases		2,795			3,578
Postretirement medical benefits		139,410			147,065
Pension liability		326,344			400,584
Long-term employee related benefits		94,441			102,764
Long-term income tax liabilities		48,659			50,552
Other long-term liabilities		54,250			54,281

Total liabilities		3,383,768			3,335,077

Commitments and contingencies
Temporary equity		10,720			8,973

Stockholders’ Deficit:
Levi Strauss & Co. stockholders’ deficit
Common stock — $.01 par value; 270,000,000 shares authorized; 37,346,643 shares and 37,322,358 shares issued and outstanding		373			373
Additional paid-in capital		24,857			18,840
Retained earnings		106,894			33,346
Accumulated other comprehensive loss		(247,555	)		(272,168	)

Total Levi Strauss & Co. stockholders’ deficit		(115,431	)		(219,609	)
Noncontrolling interest		8,701			10,808

Total stockholders’ deficit		(106,730	)		(208,801	)

Total liabilities, temporary equity and stockholders’ deficit	$	3,287,758		$	3,135,249


	Three Months Ended						Nine Months Ended
	August 28,			August 29,			August 28,			August 29,
	2011			2010			2011			2010
				(Dollars in thousands)
				(Unaudited)

Net sales	$	1,183,890		$	1,090,448		$	3,358,175		$	3,064,414
Licensing revenue		20,127			18,557			59,457			56,326

Net revenues		1,204,017			1,109,005			3,417,632			3,120,740
Cost of goods sold		634,573			565,393			1,749,525			1,544,779

Gross profit		569,444			543,612			1,668,107			1,575,961
Selling, general and administrative expenses		488,545			457,309			1,423,358			1,313,185

Operating income		80,899			86,303			244,749			262,776
Interest expense		(30,208	)		(31,734	)		(98,589	)		(100,347	)
Loss on early extinguishment of debt		—			—			—			(16,587	)
Other income (expense), net		(5,779	)		(7,695	)		(12,744	)		11,462

Income before income taxes		44,912			46,874			133,416			157,304
Income tax expense		13,612			20,252			42,437			93,203

Net income		31,300			26,622			90,979			64,101
Net loss attributable to noncontrolling interest		893			1,556			2,860			6,050

Net income attributable to Levi Strauss & Co.	$	32,193		$	28,178		$	93,839		$	70,151


						Asia
	Americas			Europe		Pacific			Total
				(Dollars in thousands)

Balance, November 28, 2010	$	207,427		$	31,603	$	2,442		$	241,472
Foreign currency fluctuation		(1	)		2,279		(70	)		2,208

Balance, August 28, 2011	$	207,426		$	33,882	$	2,372		$	243,680


	August 28, 2011							November 28, 2010
	Gross		Accumulated					Gross		Accumulated
	Carrying Value		Amortization			Total		Carrying Value		Amortization			Total
						(Dollars in thousands)

Unamortized intangible assets:
Trademarks	$	42,743	$	—		$	42,743	$	42,743	$	—		$	42,743
Amortized intangible assets:
Acquired contractual rights		41,944		(20,881	)		21,063		45,712		(17,765	)		27,947
Customer lists		21,567		(9,358	)		12,209		20,037		(6,075	)		13,962

Total	$	106,254	$	(30,239	)	$	76,015	$	108,492	$	(23,840	)	$	84,652


	August 28, 2011						November 28, 2010
			Fair Value Estimated Using						Fair Value Estimated Using
			Leve1 1		Level 2				Leve1		Level 2
	Fair Value		Inputs⁽¹⁾		Inputs⁽²⁾		Fair Value		Inputs⁽¹⁾		Inputs⁽²⁾
	(Dollars in thousands)

Financial assets carried at fair value
Rabbi trust assets	$	18,365	$	18,365	$	—	$	18,316	$	18,316	$	—
Forward foreign exchange contracts, net⁽³⁾		7,753		—		7,753		1,385		—		1,385

Total	$	26,118	$	18,365	$	7,753	$	19,701	$	18,316	$	1,385

Financial liabilities carried at fair value
Forward foreign exchange contracts, net⁽³⁾	$	4,489	$	—	$	4,489	$	5,003	$	—	$	5,003

Total	$	4,489	$	—	$	4,489	$	5,003	$	—	$	5,003


	August 28, 2011				November 28, 2010
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value⁽¹⁾		Value		Fair Value⁽¹⁾
			(Dollars in thousands)

Financial liabilities carried at adjusted historical cost
Senior revolving credit facility	$	178,529	$	177,638	$	108,482	$	107,129
Senior term loan due 2014		324,665		282,553		324,423		311,476
8.875% senior notes due 2016		362,770		373,270		355,004		373,379
4.25% Yen-denominated Eurobonds due 2016		119,304		100,765		109,429		98,063
7.75% Euro senior notes due 2018		440,971		389,210		401,982		407,993
7.625% senior notes due 2020		536,564		510,314		526,557		542,307
Short-term borrowings		59,454		59,454		46,722		46,722

Total	$	2,022,257	$	1,893,204	$	1,872,599	$	1,887,069


							Gain or (Loss) Recognized in Other
	Gain or (Loss)						Income (Expense), net (Ineffective
	Recognized in AOCI						Portion and Amount Excluded from
	(Effective Portion)						Effectiveness Testing)
	As of			As of			Three Months Ended						Nine Months Ended
	August 28,			November 28,			August 28,			August 29,			August 28,			August 29,
	2011			2010			2011			2010			2011			2010
	(Dollars in thousands)

Forward foreign exchange contracts	$	4,637		$	4,637		$	—		$	—		$	—		$	—
Yen-denominated Eurobonds		(28,316	)		(24,377	)		(3,161	)		(2,818	)		(4,707	)		2,732
Euro senior notes		(54,271	)		(23,671	)		—			—			—			—
Cumulative income taxes		30,316			17,022

Total	$	(47,634	)	$	(26,389	)


	Three Months Ended										Nine Months Ended
					% Increase (Decrease)										% Increase (Decrease)
	August 28,		August 29,		As			Constant			August 28,		August 29,		As			Constant
	2011		2010		Reported			Currency			2011		2010		Reported			Currency
								(Dollars in millions)

Net revenues:
Americas	$	717.6	$	673.4		6.6	%		5.7	%	$	1,908.9	$	1,776.6		7.4	%		6.7	%
Europe		275.1		259.1		6.2	%		(4.1	)%		867.8		805.4		7.8	%		3.7	%
Asia Pacific		211.3		176.5		19.7	%		11.3	%		640.9		538.7		19.0	%		11.9	%

Total net revenues	$	1,204.0	$	1,109.0		8.6	%		4.2	%	$	3,417.6	$	3,120.7		9.5	%		6.8	%


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


10	.1	Employment Agreement between the Company and Charles V. Bergh, dated June 9, 2011. Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report onForm 8-K filed with the Commission on June 16, 2011.
10	.2	Transition Services, Separation Agreement and Release of All Claims between John Anderson and the Company, dated June 16, 2011. Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report onForm 8-K filed with the Commission on June 16, 2011.
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. Furnished herewith.
101	.SCH	XBRL Taxonomy Extension Schema Document. Furnished herewith.
101	.CAL	XBRL Taxonomy Extension Calculation Linkbase Document. Furnished herewith.
101	.LAB	XBRL Taxonomy Extension Label Linkbase Document. Furnished herewith.
101	.PRE	XBRL Taxonomy Extension Presentation Linkbase Document. Furnished herewith.