UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

Form 10-Q

(Mark One)



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

For the Quarterly Period Ended February ~~23, 2020~~28, 2021



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

Commission file number: 001-06631

_________________

LEVI STRAUSS & CO.

(Exact Name of Registrant as Specified in Its Charter)



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

1155 Battery Street, San Francisco, California 94111

(Address of Principal Executive Offices) (Zip Code)

(415) 501-6000

(Registrant’s Telephone Number, Including Area Code)

None

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

_________________

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.001 par value per share

LEVI

New York Stock Exchange

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 þ No ¨

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

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



Large accelerated filer ¨þ	Accelerated filer ¨	Emerging growth company ¨☐
Non-accelerated filer þ¨		Smaller reporting company ¨☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

As of April 1, ~~2020,~~2021, the registrant had ~~61,718,601~~83,264,761 shares of Class A common stock, $0.001 par value per share and ~~334,475,655~~317,099,669 shares of Class B common stock, $0.001 par value per share, outstanding.

Table of Contents

LEVI STRAUSS & CO. AND SUBSIDIARIES

INDEX TO FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED FEBRUARY ~~23, 2020~~28, 2021


					Page Number

PART I — FINANCIAL INFORMATION

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

~~Item 1.~~	Consolidated Financial Statements (unaudited):
		Consolidated Balance Sheets as of February ~~23, 2020~~28, 2021 and November ~~24, 2019~~29, 2020			3
		Consolidated Statements of ~~Income~~Inc ome for the Three Months Ended February ~~23, 2020~~28, 2021 and February ~~24, 2019~~23, 2020			4
		Consolidated Statements of Comprehensive Income for the Three Months Ended February ~~23, 2020~~28, 2021 and February ~~24, 2019~~23, 2020			5
		Consolidated Statements of Stockholders' Equity as of February ~~23, 2020~~28, 2021 and February ~~24, 2019~~23, 2020			6
		Consolidated Statements of Cash Flows for the Three Months Ended February ~~23, 2020~~28, 2021 and February ~~24, 2019~~23, 2020			7
		Notes to Consolidated Financial Statements			8
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			4446
Item 4.		Controls and Procedures			4446

PART II — OTHER INFORMATION
Item 1.		Legal Proceedings			4547
Item 1A.		Risk Factors			4547
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			6368
Item 3.		Defaults Upon Senior Securities			6369
Item 4.		Mine Safety Disclosures			6369
Item 5.		Other Information			6369
Item 6.		Exhibits			6470
SIGNATURE					6571

WHERE YOU CAN FIND MORE INFORMATION

Investors and others should note that we announce material financial information to our investors using our corporate website, press releases, SEC filings and public conference calls and webcasts. We also use the following social media channels as a means of disclosing information about our company, products, planned financial and other announcements, attendance at upcoming investor and industry conferences and other matters, as well as for complying with our disclosure obligations under Regulation FD promulgated under the Securities Exchange Act of 1934, as amended:

•our Investor Relations page (https://levistrauss.com/investors/financial-news);

•our Twitter account (https://twitter.com/LeviStraussCo);

•our company blog (https://www.levistrauss.com/unzipped-blog/);

•our Facebook page (https://www.facebook.com/levistraussco/);

•our LinkedIn page (https://www.linkedin.com/company/levi-strauss-&-co-);

•our Instagram page (https://www.instagram.com/levistraussco/); and

•our YouTube channel (https://www.youtube.com/user/levistraussvideo).

The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Quarterly Report.

Table of Contents

PART I — FINANCIAL INFORMATION



Item 1.			CONSOLIDATED FINANCIAL STATEMENTS

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	(Unaudited)
	February 28, 2021		November 29, 2020

	(Dollars in thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	1,973,602	$	1,497,155
Short-term investments in marketable securities	94,273		96,531
Trade receivables, net	600,271		540,227
Inventories	835,357		817,692
Other current assets	192,092		174,636
Total current assets	3,695,595		3,126,241
Property, plant and equipment, net	440,857		454,532
Goodwill	267,072		264,768
Other intangible assets, net	47,274		47,426
Deferred tax assets, net	517,202		497,556
Operating lease right-of-use assets, net	1,006,107		988,801
Other non-current assets	262,087		261,917
Total assets	$	6,236,194	$	5,641,241

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term debt	$	8,059	$	17,631
Current maturities of long-term debt	789,283		0
Accounts payable	420,616		375,450
Accrued salaries, wages and employee benefits	165,855		179,081
Restructuring liabilities	45,300		54,723
Accrued income taxes	29,206		21,986
Accrued sales returns and allowances	193,416		185,868
Short-term operating lease liabilities	254,676		237,142
Other accrued liabilities	417,321		477,001
Total current liabilities	2,323,732		1,548,882
Long-term debt	1,262,704		1,546,700
Postretirement medical benefits	58,992		60,249
Pension liabilities	168,549		168,721
Long-term employee related benefits	97,719		94,654
Long-term operating lease liabilities	856,103		858,293
Other long-term liabilities	61,411		64,267
Total liabilities	4,829,210		4,341,766

Commitments and contingencies	0		0



Stockholders’ Equity:
Levi Strauss & Co. stockholders’ equity
Common stock — $0.001 par value; 1,200,000,000 Class A shares authorized, 80,774,783 shares and 74,352,481 shares issued and outstanding as of February 28, 2021 and November 29, 2020, respectively; and 422,000,000 Class B shares authorized, 319,050,011 shares and 323,547,674 shares issued and outstanding, as of February 28, 2021 and November 29, 2020, respectively	400		398
Additional paid-in capital	609,068		626,243
Accumulated other comprehensive loss	(443,276)		(441,446)
Retained earnings	1,240,792		1,114,280


Total stockholders’ equity	1,406,984		1,299,475
Total liabilities and stockholders’ equity	$	6,236,194	$	5,641,241

(Unaudited)
February 23,
2020 November 24,
2019
(Dollars in thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 873,564

$ 934,237
Short-term investments in marketable securities 83,978
80,741
Trade receivables, net of allowance for doubtful accounts of $5,835 and $6,172 709,989

782,846
Inventories:

Raw materials 5,152

4,929
Work-in-process 3,683

3,319
Finished goods 845,866

875,944
Total inventories 854,701

884,192
Other current assets 222,767

188,170
Total current assets 2,744,999

2,870,186
Property, plant and equipment, net of accumulated depreciation of $1,073,020 and $1,054,267 460,679

529,558
Goodwill 259,534

235,788
Other intangible assets, net 50,761

42,782
Deferred tax assets, net 416,390

407,905
Operating lease right-of-use assets, net (Note 1) 1,026,486
—
Other non-current assets 156,394

146,199
Total assets $ 5,115,243

$ 4,232,418

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term debt $ 19,341

$ 7,621
Accounts payable 304,207

360,324
Accrued salaries, wages and employee benefits 186,233

223,374
Accrued interest payable 15,911

5,350
Accrued income taxes 32,994

24,050
Accrued sales returns and allowances (Note 1) 185,830
171,113
Short-term operating lease liability (Note 1) 212,504
—
Other accrued liabilities (Note 1) 334,491

375,372
Total current liabilities 1,291,511

1,167,204
Long-term debt 994,392

1,006,745
Postretirement medical benefits 62,178

64,006
Pension liability 179,965

193,214
Long-term employee related benefits 94,597

84,957
Long-term income tax liabilities 10,823

10,486
Long-term operating lease liability (Note 1) 850,429
—
Other long-term liabilities 36,519

134,249
Total liabilities 3,520,414

2,660,861
Commitments and contingencies

Stockholders’ Equity:

Levi Strauss & Co. stockholders’ equity

Common stock — $.001 par value; 1,200,000,000 Class A shares authorized, 63,991,842 shares and 53,079,235 shares issued and outstanding as of February 23, 2020 and November 24, 2019, respectively; and 422,000,000 Class B shares authorized, 335,136,502 shares and 340,674,741 shares issued and outstanding, as of February 23, 2020 and November 24, 2019, respectively 399

394
Additional paid-in capital 601,976
657,659
Accumulated other comprehensive loss (452,734 )
(404,986 )
Retained earnings 1,445,188

1,310,464
Total Levi Strauss & Co. stockholders’ equity 1,594,829

1,563,531
Noncontrolling interest —

8,026
Total stockholders’ equity 1,594,829

1,571,557
Total liabilities and stockholders’ equity $ 5,115,243

$ 4,232,418

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

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED FEBRUARY ~~23, 2020~~28, 2021

As of February ~~23, 2020,~~28, 2021, the Company had forward foreign exchange contracts derivatives that were not designated as hedges in qualifying hedging relationships, of which ~~$865.5~~$617.2 million were contracts to buy and ~~$93.1~~$369.6 million were contracts to sell various foreign currencies. These contracts are at various exchange rates and expire at various dates through ~~May 2021~~. February 2022.

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


																				February 28, 2021								November 29, 2020
	February 23, 2020									November 24, 2019										Assets		(Liabilities)		Derivative Net Carrying Value				Assets				(Liabilities)			Derivative Net Carrying Value
	Assets		(Liabilities)			Derivative Net Carrying Value				Assets			(Liabilities)			Derivative Net Carrying Value				Carrying Value		Carrying Value					Carrying Value				Carrying Value
	Carrying Value		Carrying Value						Carrying Value			Carrying Value
	(Dollars in thousands)																			(Dollars in thousands)
Derivatives designated as hedging instruments																				Derivatives designated as hedging instruments
Foreign exchange risk cash flow hedges⁽¹⁾	$	13,636	$	—		$	13,636			$	6,149		$	—		$	6,149		Foreign exchange risk cash flow hedges(1)	$	3,390	$	0		$	3,390			$	1,489			$	0		$	1,489
Foreign exchange risk cash flow hedges⁽²⁾	—		(6,440		)	(6,440		)		—			(3,809		)	(3,809		)	Foreign exchange risk cash flow hedges(2)	0		(12,307)		(12,307)				0				(5,036)			(5,036)
Total	$	13,636	$	(6,440	)					$	6,149		$	(3,809	)				Total	$	3,390	$	(12,307)					$	1,489			$	(5,036)
Derivatives not designated as hedging instruments																			Derivatives not designated as hedging instruments
Forward foreign exchange contracts⁽¹⁾	$	22,293	$	(13,636	)	$	8,657			$	16,323		$	(6,149	)	$	10,174		Forward foreign exchange contracts(1)	$	4,872	$	(3,390)	$	1,482			$	4,902			$	(1,487)		$	3,415
Forward foreign exchange contracts⁽²⁾	6,452		(10,860		)	(4,408		)		3,813			(8,127		)	(4,314		)	Forward foreign exchange contracts(2)	12,306		(17,466)		(5,160)				5,035				(10,734)			(5,699)
Total	$	28,745	$	(24,496	)					$	20,136		$	(14,276	)				Total	$	17,178	$	(20,856)					$	9,937			$	(12,221)
Non-derivatives designated as hedging instruments																			Non-derivatives designated as hedging instruments
Euro senior notes	$	—	$	(512,193	)					$	—		$	(525,255	)				Euro senior notes	$	0	$	(578,028)					$	0			$	(565,820)

_____________


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


~~(2)~~	~~Included in "Other accrued liabilities" or "Other long-term liabilities" on the Company’s consolidated balance sheets.~~

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

~~LEVI STRAUSS & CO. AND SUBSIDIARIES~~

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

~~FOR THE QUARTERLY PERIOD ENDED FEBRUARY 23, 2020~~

(2)Included in "Other accrued liabilities" or "Other long-term liabilities" on the Company’s consolidated balance sheets.

The Company's over-the-counter forward foreign exchange contracts are subject to International Swaps and Derivatives Association, Inc. master agreements. These agreements permit the net settlement of these contracts on a per-institution basis; however, the Company records the fair value on a gross basis on its consolidated balance sheets based on maturity dates, including those subject to master netting arrangements. The table below presents the gross and net amounts of these contracts recognized on the Company's consolidated balance sheets by type of financial instrument:


	February 28, 2021							November 29, 2020
	Gross Amounts of Assets / (Liabilities) Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet		Net Amounts of Assets / (Liabilities)		Gross Amounts of Assets / (Liabilities) Presented in the Balance Sheet	Gross Amounts Not Offset in the Balance Sheet		Net Amounts of Assets / (Liabilities)


	(Dollars in thousands)
Foreign exchange risk contracts and forward foreign exchange contracts
Financial assets	$	20,570	$	(6,671)	$	13,899		$	11,426	$	(6,578)	$	4,848
Financial liabilities	(33,165)		6,671		(26,494)			(17,257)		6,578		(10,679)
Total					$	(12,595)						$	(5,831)

February 23, 2020 November 24, 2019
Gross Amounts of Assets / (Liabilities) Presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet Net Amounts of Assets / (Liabilities) Gross Amounts of Assets / (Liabilities) Presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet Net Amounts of Assets / (Liabilities)

(Dollars in thousands)
Foreign exchange risk contracts and forward foreign exchange contracts
Financial assets $ 42,382
$ (10,685 ) $ 31,697
$ 21,839
$ (10,142 ) $ 11,697
Financial liabilities (30,937 ) 10,685
(20,252 ) (16,290 ) 10,142
(6,148 )
Total $ 11,445
$ 5,549
Embedded derivative contracts
Financial assets $ —
$ —
$ —
$ 4,446
$ —
$ 4,446
Financial liabilities —
—
—
(1,795 ) —
(1,795 )
Total $ —
$ 2,651

LEVI STRAUSS & CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2021

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


												Amount of Gain (Loss) Recognized in AOCI (Effective Portion)				Amount of Gain (Loss) Reclassified from AOCI into Net Income(1)
	Amount of Gain (Loss) Recognized in OCI (Effective Portion)						Amount of Gain (Loss) Reclassified from AOCI into Net Income⁽¹⁾					As of February 28, 2021		As of November 29, 2020		Three Months Ended
	As of			As of			Three Months Ended									February 28, 2021		February 23, 2020
	February 23, 2020			November 24, 2019			February 23, 2020		February 24, 2019
	(Dollars in thousands)											(Dollars in thousands)
Foreign exchange risk contracts	$	5,124		$	2,781		$	3,065	$	880	Foreign exchange risk contracts	$	(17,002)	$	(11,896)	$	(1,878)	$	3,065
Realized forward foreign exchange swaps ⁽²⁾	4,637			4,637			—		—		Realized forward foreign exchange swaps (2)	4,637		4,637		0		0
Yen-denominated Eurobonds	(19,811		)	(19,811		)	—		—		Yen-denominated Eurobonds	(19,811)		(19,811)		0		0
Euro-denominated senior notes	(25,108		)	(38,171		)	—		—		Euro-denominated senior notes	(90,944)		(78,736)		0		0
Cumulative income taxes	14,335			25,606			—		—		Cumulative income taxes	34,243		31,350		0		0
Total	$	(20,823	)	$	(24,958	)					Total	$	(88,877)	$	(74,456)

•Americas. Currency translation did not have a significant impact for the three-month period ended February ~~23, 2020. Operating~~28, 2021. The increase in operating income for the three-month period ended February ~~23, 2020~~28, 2021 was ~~flat as compared~~due to lower SG&A expenses primarily reflecting the ~~comparable period~~cost-reduction initiatives started in the ~~prior~~second quarter of fiscal year ~~primarily due to an increase in~~2020 and lower variable expenses associated with lower revenues. These savings were partially offset by lower net revenues ~~and gross margin offset by higher SG&A, mainly~~as the COVID-19 pandemic continued to ~~support growth across our DTC channel. The decrease in operating income as a percent of net revenues is due to increased spending on advertising and promotion~~adversely impact the region during the quarter.

•Asia. Currency translation did not have a significant impact for the three-month period ended February ~~23, 2020.~~28, 2021. The decrease in operating income for the three-month period ended February 28, 2021 was primarily due to ~~an approximate $10.0 million~~lower net revenues as a result of the continued adverse impact ~~from store closures and reduced traffic resulting from~~of COVID-19 partially offset by lower SG&A expenses primarily reflecting the ~~recent COVID-19 outbreak as well as higher selling expenses incurred to support retail expansion and phasing~~cost-reduction initiatives started in the second quarter of ~~advertising and promotion spend versus the prior year.~~fiscal year 2020.

Table of Co ntents

Corporate. Corporate expenses represent costs that management does not attribute to any of our regional operating segments. Included in corporate expenses are restructuring charges, COVID-19 related charges and other corporate staff ~~costs and~~costs. Corporate expenses also include costs associated with our global inventory sourcing organization and COVID-19 related inventory costs which are reported as a component of consolidated gross margin. Currency translation did not have a significant impact on corporate expenses for the three-month period ended February ~~23, 2020.~~ 28, 2021.

The ~~increase~~decrease in ~~the~~ corporate expenses for the three-month period ended February ~~23, 2020~~28, 2021 was primarily due to ~~an increase in administration expenses~~the recognition of foreign currency transaction gains related ~~primarily~~ to ~~stock-based compensation~~our global sourcing organizations procurement of inventory on behalf of our foreign subsidiaries as well as ~~an increase~~$7.2 million in ~~information technology expenses~~reductions in COVID-19 related inventory charges, primarily related to ~~expand and support our technology infrastructure.~~lower adverse fabric purchase commitments. These decreases were partially offset by the recognition of $3.1 million in asset impairments.

Interest expense

Interest expense was $23.3 million for the three-month period ended February 28, 2021, as compared to $16.7 million for the ~~three-month periods ended February 23, 2020, as compared to $17.5 million for the same~~comparable prior-year period. The ~~decrease~~increase in interest expense was primarily related to ~~a reduction in short-term borrowings.~~the issuance of additional senior notes. Subsequent to quarter end, on March 4, 2021, we used the proceeds from the newly issued 3.50% Senior Notes due 2031 plus cash on hand to redeem $800.0 million of the 5.00% Senior Notes due 2025.

Our weighted-average interest rate on average borrowings outstanding during the ~~three months ended~~three-month period February ~~23, 2020~~28, 2021 was ~~4.88%~~4.55%, as compared to ~~5.22%~~4.88% during the comparable period in ~~2019.~~

~~Table of Contents~~

2020.

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

~~Other income (expense), net, primarily consists of foreign exchange management activities and transactions.~~ For the three-month ~~periods~~period ended February ~~23, 2020,~~28, 2021, we recorded income of ~~$2.7~~$0.9 million, as compared to ~~expense~~income of ~~$1.6~~$2.7 million for the same prior-year period. The decrease in other income, ~~in the three-month period ended February 23, 2020 is~~net, was primarily ~~from investment~~driven by lower interest income generated from money market funds and ~~short term investments.~~short-term investments compared to the prior year.

Income tax expense

The effective income tax rate was ~~7.4%~~7.9% for the three months ended February ~~23, 2020,~~28, 2021, compared to ~~19.4%~~7.4% for the same prior-year period. The ~~decrease~~increase in the effective tax rate in the quarter was primarily driven by a ~~12.8% ($21.0 million) discrete~~lower tax benefit attributable to employees exercising stock-based equity awards, offset by an increased benefit from foreign-derived intangible income in ~~2020.~~

the current year and more valuation allowance charges compared in the prior year.

3132

Table of ~~Contents~~Co ntents

Liquidity and Capital Resources

Liquidity outlook

We believe we will have adequate liquidity over the next 12 months to operate our business and to meet our cash requirements. As of February ~~23, 2020,~~28, 2021, we had cash and cash equivalents totaling approximately ~~$873.6 million,~~$2.0 billion, short-term investments of ~~$84.0~~$94.3 million and unused availability under ~~the~~our credit facility of ~~$819.5~~$689.1 million, resulting in a total liquidity position of approximately ~~$1.8~~$2.8 billion.

We ~~are also taking preemptive action~~continue to ~~preserve~~actively manage the impacts of COVID-19 on our operations and liquidity and ~~manage~~make cash management a priority. Through our restructuring actions as well as through negotiated vendor savings and reduced travel and other discretionary expenditures, we executed structural cost savings that will allow us to continue executing our strategies using our disciplined approach while also driving margin, cost productivity and working capital efficiencies. As part of our cash ~~flow, such as reducing~~management strategies, we will continue to assess the payment of our ~~discretionary spending, revisiting our investment strategies, suspending~~dividends on a quarterly basis and plan to keep our share ~~buyback~~repurchase program on hold until further ~~notice, and reducing payroll costs, including through employee furloughs and pay cuts.~~

notice. In ~~April, 2020, as a precautionary measure~~February 2021, we issued $500.0 million in aggregate principal amount of 3.50% Senior Notes due 2031. On March 4, 2021, subsequent to ~~maximize~~ our ~~liquidity and to increase our available~~quarter end, these proceeds plus cash on hand ~~we drew~~from the balance sheet were used to pay down ~~$300~~$800.0 million of our higher interest senior notes due 2025, which will yield annual savings in interest. We will continue to evaluate our cash on ~~our~~hand and expect to pay down the remaining $200 million of these senior ~~secured revolving credit facility. The proceeds will be available to be used for working capital, general corporate or other purposes.~~notes in fiscal year 2021, should business conditions improve.

While the impact and duration of COVID-19 on our business ~~is currently~~remains uncertain, the situation is expected to be temporary. In the longer term, we remain committed to increasing total shareholder returns through our three capital allocation priorities: (1) to invest in opportunities and initiatives to grow our business organically; (2) to return capital to our stockholders in the form of cash dividends, as well as stock repurchases to offset dilution that would otherwise be introduced from stock-based incentive compensation grants; and (3) to pursue acquisitions that support our current strategies. Future determinations regarding the declaration and payment of dividends, if any, will be at the discretion of our ~~board of directors~~Board and will depend on then-existing economic conditions, including our results of operations, payout ratio, capital requirements, financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our current and future debt agreements and other factors that our ~~board of directors~~Board may deem relevant.

Cash sources

We have historically relied primarily on cash flows from operations, borrowings under credit facilities, issuances of notes and other forms of debt financing. We regularly explore financing and debt reduction alternatives, including new credit agreements, unsecured and secured note issuances, equity financing, equipment and real estate financing, securitizations and asset sales.

We are party to ~~a second amended~~the Second Amended and ~~restated credit agreement~~Restated Credit Agreement that provides for a senior secured revolving credit facility. The maximum availability under our credit facility ~~("credit facility"). Our~~is $850.0 million, of which $800.0 million is available to us for revolving loans in U.S. Dollars and $50.0 million is available to us for revolving loans either in U.S. Dollars or Canadian Dollars. This credit facility is an asset-based facility, in which the borrowing availability is primarily based on the value of our U.S. ~~Levi’s~~^®Levi’s® trademarks and the levels of accounts receivable and inventory in the United States and Canada. The maximum availability under our credit facility is $850 million, of which $800 million is available to us for revolving loans in U.S. Dollars and $50 million is available to us for revolving loans either in U.S. Dollars or Canadian Dollars.

As of February ~~23, 2020,~~28, 2021, we did not have any borrowings under the credit facility, unused availability under the ~~credit~~ facility was ~~$819.5~~$689.1 million, and our total availability of ~~$850~~$719.9 million, based on collateral levels as defined by the agreement, was reduced by ~~$30.5~~$30.8 million of other credit-related instruments.

As of February ~~23, 2020,~~28, 2021, we had cash and cash equivalents totaling approximately ~~$873.6 million~~$2.0 billion and short-term investments of ~~$84.0~~$94.3 million resulting in a total liquidity position (unused availability and cash and cash equivalents and short-term investments) of approximately ~~$1.8~~$2.8 billion.

Cash uses

Our principal cash requirements include working capital, capital expenditures, payments of principal and interest on our debt, payments of taxes, contributions to our pension plans and payments for postretirement health benefit plans, settlement of shares issued under our equity incentive 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.

~~In December 2019,~~Subsequent to quarter end, on March 4, 2021, we ~~completed an acquisition for all operating assets related~~used the proceeds from the newly issued 3.50% Senior Notes due 2031 plus cash on hand to ~~Levi’s~~^® ~~and Dockers~~^® ~~brands from The Jeans Company ("TJC"), our distributor in Chile, Peru and Bolivia, for $52~~redeem $800.0 million ~~plus transaction costs. This includes 78 Levi’s~~^® ~~and Dockers~~^® ~~retail stores and one e-commerce site, distribution with~~of the ~~region’s leading multi-brand retailers, and the logistical operations in these markets.~~5.00% Senior Notes due 2025.

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In ~~January 2020, our board of directors~~April 2021, the Board declared a cash dividend of ~~$0.08~~$0.06 per share, which was $0.02 per share higher than the dividend declared in the prior quarter, to holders of record of ~~our~~its Class A and Class B common stock at the close of business on February 12, 2020 and approved a share repurchase program that authorizes the repurchase of up to $100 million of our Class A common stock. During the three months ended February 23, 2020, a $31.9 million dividend was paid to shareholders and 1.9 million shares were repurchased for $37.0 million, plus broker's commissions, in the open market.

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~~Subsequent to February 23, 2020, the Company repurchased 1.1 million shares for $19.2 million, plus broker's commissions, in the open market, bringing year-to-date shares repurchased to 3.0 million~~May 7, 2021, for a total ~~of $56.2 million, equating to an average repurchase price~~quarterly dividend of approximately ~~$18.73 per share. The Company has suspended its share buyback program until further notice.~~

In April 2020, our board of directors declared a cash dividend of $0.08 per share to holders of record of our Class A and Class B common stock at the close of business on April 24, 2020, which is expected to be paid on or about May 8, 2020.$24 million.

Cash flows

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

Three Months Ended
February 23,
2020 February 24,
2019
(Dollars in millions)
Cash provided by operating activities $ 197.9
$ 55.8
Cash used for investing activities (119.3 ) (80.2 )
Cash used for financing activities (138.0 ) (67.7 )
Cash and cash equivalents at period end 873.6
621.9


	Three Months Ended
	February 28, 2021		February 23, 2020

	(Dollars in millions)
Cash provided by operating activities	$	69.5	$	197.9
Cash used for investing activities	(34.9)		(119.3)
Cash provided by (used for) financing activities	439.7		(138.0)
Cash and cash equivalents at period end	1,973.6		873.6

Cash flows from operating activities

Cash provided by operating activities was ~~$197.9~~$69.5 million for the three-month period ended February ~~23, 2020,~~28, 2021, as compared to ~~$55.8~~$197.9 million for the comparable period in ~~2019.~~2020. The ~~increase~~decrease in cash provided by operating activities is primarily ~~reflects higher cash received from customers as well as~~driven by lower ~~payments for employee incentive compensation,~~sales in comparison to the same period of last year, partially offset by ~~higher payments for SG&A expenses to support our growth.~~lower spending on inventory and employee incentives. Our cash flows from operations in the first quarter of fiscal year 2020 had not yet been materially impacted by the global pandemic.

Cash flows from investing activities

Cash used for investing activities was ~~$119.3~~$34.9 million for the three-month period ended February ~~23, 2020,~~28, 2021, as compared to ~~$80.2~~$119.3 million for the comparable period in ~~2019.~~2020. The ~~increase~~decrease in cash used for investing activities is primarily due to anthe prior year including payments for a business acquisition, ~~of operating assets~~as well as decreases in ~~Chile, Peru and Bolivia, the timing~~settlement of foreign currency ~~contract settlements, and an increase in payments for~~contracts, capital expenditures, ~~partially offset by a decrease in short-term investment activities as 2019 included the initial acquisitions of~~and higher net proceeds from short-term investments.

Cash flows from financing activities

Cash ~~used for~~provided by financing activities was ~~$138.0~~$439.7 million for the three-month period ~~in 2020,~~ended February 28, 2021, as compared to ~~$67.7~~$138.0 million for the comparable period in ~~2019.~~2020. Cash provided in 2021 primarily reflects proceeds from senior notes of $500.0 million, partially offset by payments of $25.8 million for withholding tax on cashless equity award exercises, payment of a $16.0 million cash dividend, and payments of $10.1 million for debt issuance and refinancing costs. Cash used in 2020 primarily reflects payments of $30.1 million for common stock repurchases, $75.2 million for withholding tax on cashless equity award exercises, payment of a $31.9 million cash dividend and payments of $14.8 million for noncontrolling interest buyback. ~~Cash used in 2019primarily reflects the payment of a $55.0 million cash dividend.~~

Indebtedness

OfAs of February 28, 2021, our total debt of ~~$1.0~~$2.1 billion ~~as of February 23, 2020, we had~~was fixed-rate ~~debt of $1.0 billion (98.8% of total debt),~~and unsecured, net of capitalized debt issuance costs and, ~~variable-rate debt~~after giving effect to the repayment of ~~$12.5~~$800.0 million ~~(1.2%~~ of ~~total debt). As of February 23, 2020,~~ our ~~required~~5.00% Senior Notes due 2025 on March 4, 2021, aggregate debt principal payments ~~on our unsecured long-term debt were $1.0~~of $1.3 billion remain, with payments starting in ~~years after 2024.~~2025. Short-term borrowings of ~~$19.3~~$8.1 million at various foreign subsidiaries ~~were~~are expected to be either paid over the next twelve months or refinanced at the end of their applicable terms.

Our long-term debt agreements contain customary covenants restricting our activities as well as those of our subsidiaries. We were in compliance with all of these covenants as of February ~~23, 2020.~~28, 2021.

Non-GAAP Financial Measures

Adjusted Gross Profit, Adjusted Gross Margin, Adjusted SG&A, Adjusted EBIT, Adjusted EBIT Margin, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Margin and Adjusted Diluted Earnings per Share

For the ~~three months~~three-month and twelve-month periods ended February ~~23, 2020~~28, 2021 and the comparable ~~period~~periods in ~~2019,~~2020, we define the following non-GAAP financial measures as follows:

•Adjusted gross profit, as gross profit excluding COVID-19 related inventory costs.

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•Adjusted gross margin, as Adjusted gross profit as a percentage of net revenues;

•Adjusted SG&A, as SG&A less charges related to changes in fair value on cash-settled stock-based compensation, COVID-19 related charges, restructuring and restructuring ~~and~~ related charges, severance and other, net;

•Adjusted EBIT, as net income (loss) excluding income tax (benefit) expense, interest expense, other (income) expense, net, underwriter commission paid on behalf of selling stockholders, impact of changes in fair value on cash-settled stock-based compensation, COVID-19 related inventory costs and other charges, and restructuring and restructuring related charges, severance and other, ~~net, and~~ net;

•Adjusted EBIT margin as Adjusted EBIT as a percentage of net revenues;

•Adjusted EBITDA as Adjusted EBIT excluding depreciation and amortization expense;

•Adjusted net income, as net income excluding charges related to the impact of changes in fair value on cash-settled stock-based compensation, loss on early extinguishment of debt, COVID-19 related inventory costs and other charges, and restructuring and related charges, severance and other, net, adjusted to give effect to the income tax impact of such adjustments, using an effective tax rate equal to our year to date income tax expense divided by our year to date income before income taxes, each as reflected in our statement of ~~operations~~income for the relevant period with any impacts of changes in effective tax rate being recognized in the current three-month period;

•Adjusted net income margin as Adjusted net income as a percentage of net revenues; and

•Adjusted diluted earnings per share as Adjusted net income per weighted-average number of diluted common shares outstanding.

For the 12 months ended February 23, 2020 and the comparable period in 2019, Adjusted EBIT also excludes underwriter commission paid on behalf of selling stockholders and other costs incurred in connection with our IPO.

We believe Adjusted gross profit, Adjusted gross margin, Adjusted SG&A, Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted net income, Adjusted net income margin and Adjusted diluted earnings per share are useful to investors because they help identify underlying trends in our business that could otherwise be masked by certain expenses that we include in calculating net income but that can vary from company to company depending on its financing, capital structure and the method by which its assets were acquired, and can also vary significantly from period to period. Our management also uses Adjusted EBIT in conjunction with other GAAP financial measures for planning purposes, including as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance.

Adjusted gross profit, Adjusted gross margin, Adjusted SG&A, Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted net income, Adjusted net income margin and Adjusted diluted earnings per share have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results prepared and presented in accordance with GAAP. Some of these limitations include:

•Adjusted EBIT, Adjusted EBIT margin and Adjusted EBITDA do not reflect income tax payments that reduce cash available to us;

•Adjusted EBIT, Adjusted EBIT margin and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our indebtedness, which reduces cash available to us;

•Adjusted EBIT, Adjusted EBIT margin and Adjusted EBITDA exclude other expense (income) net, which ~~has primarily consisted~~includes losses on early extinguishment of debt as well as realized and unrealized gains and losses on our forward foreign exchange contracts and transaction gains and losses on our foreign exchange balances, although these items affect the amount and timing of cash available to us when these gains and losses are realized;

•all of these non-GAAP financial measures exclude the expense resulting from the impact of changes in fair value on our cash-settled stock-based compensation awards, even though, prior to March 2019, such awards were required to be settled in cash;

•all of these non-GAAP financial measures exclude COVID-19 related inventory costs and other charges, and restructuring and related charges, severance and other, net which can affect our current and future cash requirements;

•the expenses and other items that we exclude in our calculations of all of these non-GAAP financial measures may differ from the expenses and other items, if any, that other companies may exclude from all of these non-GAAP financial measures or similarly titled measures;

•Adjusted EBITDA excludes the recurring, non-cash expenses of depreciation of property and equipment and, although these are non-cash expenses, the assets being depreciated may need to be replaced in the future; and

Table of Co ntents

•Adjusted net income, Adjusted net income margin and Adjusted diluted earnings per share do not include all of the effects of income taxes and changes in income taxes reflected in net income.

Because of these limitations, all of these non-GAAP financial measures should be considered along with net income and other operating and financial performance measures prepared and presented in accordance with GAAP.

Adjusted Gross Profit:

The following table presents a reconciliation of gross profit, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted Gross Profit for each of the periods presented.



	Three Months Ended
	February 28, 2021			February 23, 2020

	(Dollars in millions)
	(Unaudited)
Most comparable GAAP measure:
Gross profit	$	760.0		$	839.3

Non-GAAP measure:
Gross profit	$	760.0		$	839.3
COVID-19 related inventory costs (1)	(7.2)			—
Adjusted gross profit	$	752.8		$	839.3
Adjusted gross margin	57.7		%	55.7		%

_____________

(1)Represents costs incurred in connection with COVID-19, including $7.2 million in reductions in COVID-19 related inventory charges recognized during the three-month period ended February 28, 2021, primarily due to reductions in our estimate of adverse fabric purchase commitments, initially recorded in the second quarter of 2020.

Adjusted SG&A:

The following table presents a reconciliation of SG&A, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted SG&A for each of the periods presented.


	Three Months Ended
	February 28, 2021		February 23, 2020

	(Dollars in millions)
	(Unaudited)
Most comparable GAAP measure:
Selling, general and administrative expenses	$	582.9	$	660.5

Non-GAAP measure:
Selling, general and administrative expenses	$	582.9	$	660.5
Impact of changes in fair value on cash-settled stock-based compensation	(0.9)		(4.9)
COVID-19 related charges(1)	(3.1)		—
Restructuring and restructuring related charges, severance and other, net(2)	(0.1)		(5.6)
Adjusted SG&A	$	578.8	$	650.0

_____________

(1)For the three-month period ended February 28, 2021, the $3.1 million in COVID-19 related charges is related to impairment of certain operating lease right-of-use assets and property and equipment related to certain retail locations, resulting from lower revenue and future cash flow projections from the ongoing effects of the COVID-19 pandemic.

(2)Other charges included in restructuring and restructuring related charges, severance and other, net include transaction and deal related costs, initial acquisition and integration costs and amortization of acquired intangible assets.

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Adjusted ~~SG&A:~~

Three Months Ended
February 23, 2020 February 24, 2019
(Dollars in millions)
(Unaudited)
Most comparable GAAP measure:
Selling, general and administrative expenses $ 660.5
$ 581.9

Non-GAAP measure:
Selling, general and administrative expenses $ 660.5
$ 581.9
Impact of changes in fair value on cash-settled stock-based compensation⁽¹⁾
(4.9 ) (5.3 )
Restructuring and related charges, severance and other, net⁽²⁾
(5.6 ) (0.1 )
Adjusted SG&A $ 650.0
$ 576.5

~~_____________~~


~~(1)~~	Includes the impact of changes in fair value of Class B common stock following the grant date on awards that were granted as cash-settled and subsequently replaced with stock-settled awards concurrent with the IPO.


~~(2)~~	Restructuring and related charges, severance and other, net include transaction and deal related costs, including initial acquisition and integration costs and amortization of acquired intangible assets.

EBIT and Adjusted EBITDA:

The following table presents a reconciliation of net income (loss), the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBIT and Adjusted EBITDA for each of the periods presented.



	Three Months Ended						Twelve Months Ended
	February 28, 2021			February 23, 2020				February 28, 2021		February 23, 2020

	(Dollars in millions)
	(Unaudited)
Most comparable GAAP measure:
Net income (loss)	$	142.5		$	152.7			$	(137.3)	$	401.2

Non-GAAP measure:
Net income (loss)	$	142.5		$	152.7			$	(137.3)	$	401.2
Income tax expense (benefit)	12.2			12.1				(62.5)		59.4
Interest expense	23.3			16.7				88.8		65.4
Other (income) expense, net	(0.9)			(2.7)				24.2		(6.3)
Underwriter commission paid on behalf of selling stockholders	—			—				—		24.9
Impact of changes in fair value on cash-settled stock-based compensation(1)	0.9			4.9				3.1		33.7
COVID-19 related inventory costs and other charges (2)	(4.1)			—				155.5		—
Restructuring and restructuring related charges, severance and other, net(3)	0.1			5.6				94.0		15.3
Adjusted EBIT	$	174.0		$	189.3			$	165.8	$	593.6
Depreciation and amortization(4)	35.2			34.7				137.1		130.0
Adjusted EBITDA	$	209.2		$	224.0			$	302.9	$	723.6
Adjusted EBIT margin	13.3		%	12.6		%

_____________

(1)Includes the impact of changes in fair value of Class B common stock following the grant date on awards that were granted as cash-settled and subsequently replaced with stock-settled awards concurrent with the IPO.

(2)For the three-month period ended February 28, 2021, the net reduction of $4.1 million in COVID-19 related inventory costs and other charges recognized mainly represents reductions in COVID-19 related inventory charges, as a result of reductions in our estimate of adverse fabric purchase commitments, the recoveries of receivables previously estimated to be not collectible, offset by incremental impairment costs in response to the global pandemic.

(3)Other charges included in restructuring and restructuring related charges, severance and other, net include transaction and deal related costs, initial acquisition and integration costs and amortization of acquired intangible assets.

(4)Depreciation and amortization amount net of amortization of acquired intangible assets included in Restructuring and related charges, severance and other, net.

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Adjusted ~~EBIT~~Net Income and Adjusted ~~EBITDA:~~Diluted Earnings per Share:

Three Months Ended Twelve Months Ended
February 23, 2020 February 24, 2019 February 23, 2020 February 24, 2019
(Dollars in millions)
(Unaudited)
Most comparable GAAP measure:
Net income $ 152.7
$ 146.5
$ 401.2
$ 450.4

Non-GAAP measure:
Net income $ 152.7
$ 146.5
$ 401.2
$ 450.4
Income tax expense 12.1
35.3
59.4
82.5
Interest expense 16.7
17.5
65.4
57.3
Other (income) expense, net (2.7 ) 1.6
(6.3 ) (23.7 )
Underwriter commission paid on behalf of selling stockholders —
—
24.9
—
Charges related to the transition to being a public company —
—
3.5
0.1
Impact of changes in fair value on cash-settled stock-based compensation⁽¹⁾
4.9
5.3
33.7
44.3
Restructuring and related charges, severance and other, net⁽²⁾
5.6
0.1
11.8
4.9
Adjusted EBIT $ 189.3
$ 206.3
$ 593.6
$ 615.8
Depreciation and amortization⁽³⁾
34.7
28.6
130.0
116.0
Adjusted EBITDA $ 224.0
$ 234.9
$ 723.6
$ 731.8
Adjusted EBIT margin 12.6 % 14.4 %

~~_____________~~


~~(1)~~	Includes the impact of changes in fair value of Class B common stock following the grant date on awards that were granted as cash-settled and subsequently replaced with stock-settled awards concurrent with the IPO.

~~Table of Contents~~


~~(2)~~	Restructuring and related charges, severance and other, net include transaction and deal related costs, including initial acquisition and integration costs and amortization of acquired intangible assets.


~~(3)~~	~~Depreciation and amortization amount net of amortization of acquired intangible assets included in Restructuring and related charges, severance and other, net.~~

The following table presents a reconciliation of net income, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted net income for each of the periods presented and the calculation of Adjusted diluted earnings per share for each of the periods presented.

~~Adjusted Net Income and Adjusted Diluted Earnings per Share:~~


								Three Months Ended
								February 28, 2021			February 23, 2020
	Three Months Ended
	February 23, 2020			February 24, 2019				(Dollars in millions, except per share amounts)
	(Dollars in millions, except per share amounts) (Unaudited)							(Unaudited)
Most comparable GAAP measure:							Most comparable GAAP measure:
Net income	$	152.7		$	146.5		Net income	$	142.5		$	152.7

Non-GAAP measure:							Non-GAAP measure:
Net income	$	152.7		$	146.5		Net income	$	142.5		$	152.7

Impact of changes in fair value on cash-settled stock-based compensation⁽¹⁾	4.9			5.3			Impact of changes in fair value on cash-settled stock-based compensation(1)	0.9			4.9
Restructuring and related charges, severance and other, net⁽²⁾	5.6			0.1
Loss on early extinguishment of debt							Loss on early extinguishment of debt	0.2			—
COVID-19 related inventory costs and other charges(2)							COVID-19 related inventory costs and other charges(2)	(4.1)			—
Restructuring and restructuring related charges, severance and other, net(3)							Restructuring and restructuring related charges, severance and other, net(3)	0.1			5.6
Tax impact of adjustments	(0.8		)	(1.0		)	Tax impact of adjustments	0.7			(0.8)
Adjusted net income	$	162.4		$	150.9		Adjusted net income	$	140.3		$	162.4

Adjusted net income margin	10.8		%	10.5		%	Adjusted net income margin	10.7		%	10.8		%
Adjusted diluted earnings per share	$	0.40		$	0.38		Adjusted diluted earnings per share	$	0.34		$	0.40


	Three Months Ended
	February 28, 2021		February 23, 2020

	(Dollars in thousands, except per share amounts) (Unaudited)
Net revenues	$	1,305,602	$	1,506,126
Cost of goods sold	545,573		666,799
Gross profit	760,029		839,327
Selling, general and administrative expenses	582,906		660,545

Operating income	177,123		178,782
Interest expense	(23,310)		(16,654)


Other income, net	858		2,700
Income before income taxes	154,671		164,828
Income tax expense	12,167		12,139
Net income	$	142,504	$	152,689


Earnings per common share attributable to common stockholders:
Basic	$	0.36	$	0.39
Diluted	$	0.35	$	0.37
Weighted-average common shares outstanding:
Basic	399,541,735		396,216,057
Diluted	411,872,771		410,068,373



	Three Months Ended
	February 23, 2020			February 24, 2019
	(Dollars in thousands, except per share amounts) (Unaudited)
Net revenues	$	1,506,126		$	1,434,458
Cost of goods sold	666,799			651,650
Gross profit	839,327			782,808
Selling, general and administrative expenses	660,545			581,896
Operating income	178,782			200,912
Interest expense	(16,654		)	(17,544		)
Other income (expense), net	2,700			(1,646		)
Income before income taxes	164,828			181,722
Income tax expense	12,139			35,271
Net income	152,689			146,451
Net loss attributable to noncontrolling interest	—			126
Net income attributable to Levi Strauss & Co.	$	152,689		$	146,577
Earnings per common share attributable to common stockholders:
Basic	$	0.39		$	0.39
Diluted	$	0.37		$	0.37
Weighted-average common shares outstanding:
Basic	396,216,057			377,077,111
Diluted	410,068,373			393,234,825


	Three Months Ended
	February 28, 2021		February 23, 2020

	(Dollars in thousands) (Unaudited)
Net income	$	142,504	$	152,689
Other comprehensive income, before related income taxes:
Pension and postretirement benefits	2,938		3,591
Derivative instruments	(17,315)		15,405
Foreign currency translation gains (losses)	10,941		(8,133)
Unrealized gains on marketable securities	401		1,556
Total other comprehensive (loss) income, before related income taxes	(3,035)		12,419
Income taxes expense related to items of other comprehensive income	1,203		(5,723)
Comprehensive income, net of income taxes	$	140,672	$	159,385



	Three Months Ended
	February 23, 2020			February 24, 2019
	(Dollars in thousands) (Unaudited)
Net income	$	152,689		$	146,451
Other comprehensive income, before related income taxes:
Pension and postretirement benefits	3,591			3,422
Derivative instruments	15,405			1,737
Foreign currency translation losses	(8,133		)	4,086
Unrealized gains on marketable securities	1,556			890
Total other comprehensive income, before related income taxes	12,419			10,135
Income taxes expense related to items of other comprehensive income	(5,723		)	(1,741		)
Comprehensive income, net of income taxes	159,385			154,845
Comprehensive loss (income) attributable to noncontrolling interest	—			(54		)
Comprehensive income attributable to Levi Strauss & Co.	$	159,385		$	154,791


	Three Months Ended
	February 28, 2021		February 23, 2020

	(Dollars in thousands) (Unaudited)
Cash Flows from Operating Activities:
Net income	$	142,504	$	152,689
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	35,469		35,974










Stock-based compensation	6,716		17,535

Benefit from deferred income taxes	(18,786)		(15,818)
Other, net	6,725		5,270
Change in operating assets and liabilities, net of effect of acquisition:
Trade receivables	(56,674)		67,767
Inventories	(13,901)		41,247


Accounts payable	45,038		(59,757)


Accrued salaries, wages and employee benefits and long-term employee related benefits	(13,885)		(40,527)
Other current and non-current assets	(36,137)		(28,083)
Other current and long-term liabilities	(27,589)		21,586
Net cash provided by operating activities	69,480		197,883
Cash Flows from Investing Activities:
Purchases of property, plant and equipment	(36,986)		(44,424)
Payments for business acquisition	0		(52,201)
Proceeds on settlement of forward foreign exchange contracts not designated for hedge accounting	78		(19,326)
Payments to acquire short-term investments	(30,915)		(30,121)
Proceeds from sale, maturity and collection of short-term investments	32,930		26,791
Net cash used for investing activities	(34,893)		(119,281)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	500,000		0






Other short-term borrowings, net	(9,622)		12,021

Payment of debt issuance and refinancing costs	(10,114)		0
Proceeds from issuance of common stock and employee stock purchase	1,929		2,030


Repurchase of common stock	0		(30,074)
Repurchase of shares surrendered for tax withholdings on equity awards	(25,818)		(75,242)
Payments to noncontrolling interests	0		(14,825)
Dividend to stockholders	(15,992)		(31,930)
Other financing, net	(715)		0
Net cash provided by (used for) financing activities	439,668		(138,020)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	2,191		(1,270)
Net increase (decrease) in cash and cash equivalents and restricted cash	476,446		(60,688)
Beginning cash and cash equivalents, and restricted cash	1,497,648		934,753
Ending cash and cash equivalents, and restricted cash	1,974,094		874,065
Less: Ending restricted cash	(492)		(501)
Ending cash and cash equivalents	$	1,973,602	$	873,564

Noncash Investing and Financing Activity:
Property, plant and equipment acquired and not yet paid at end of period	$	19,201	$	12,089

Realized (gain) loss on foreign currency contracts not yet settled at end of period	0		(17,338)
Repurchase of common stock not yet settled at end of period	0		6,997
Supplemental disclosure of cash flow information:
Cash paid for interest during the period	$	846	$	818
Cash paid for income taxes during the period, net of refunds	9,991		19,636


	Three Months Ended February 28, 2021
	Levi Strauss & Co. Stockholders
	Class A & Class B Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Stockholders' Equity

	(Dollars in thousands) (Unaudited)
Balance at November 29, 2020	$	398	$	626,243	$	1,114,280	$	(441,446)	$	0	$	1,299,475
Net income	—		—		142,504		—		—		142,504
Other comprehensive loss, net of tax	—		—		—		(1,830)		—		(1,830)
Stock-based compensation and dividends, net	2		6,714		0		—		—		6,716
Employee stock purchase plan	—		1,929		—		—		—		1,929

Shares surrendered for tax withholdings on equity awards	—		(25,818)		—		—		—		(25,818)


Cash dividends declared ($0.04 per share)	—		—		(15,992)		—		—		(15,992)
Balance at February 28, 2021	$	400	$	609,068	$	1,240,792	$	(443,276)	$	0	$	1,406,984



	Levi Strauss & Co. Stockholders
	Class A & Class B Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive (Loss)/Income			Noncontrolling Interest			Total Stockholders' Equity
	(Dollars in thousands) (Unaudited)
Balance at November 25, 2018	$	376	$	—		$	1,084,321		$	(424,584	)	$	7,346		$	667,459
Net income (loss)	—		—			146,577			—			(126		)	146,451
Other comprehensive income, net of tax	—		—			—			8,214			180			8,394
Stock-based compensation and dividends, net	—		1,497			—			—			—			1,497
Reclassification to temporary equity	—		(506		)	(23,339		)	—			—			(23,845		)
Repurchase of common stock	—		(165		)	(2,923		)	—			—			(3,088		)
Shares surrendered for tax withholdings on equity award exercises	—		(826		)	—			—			—			(826		)
Cash dividends declared ($0.29 per share)	—		—			(110,000		)	—			—			(110,000		)
Balance at February 24, 2019	$	376	$	—		$	1,094,636		$	(416,370	)	$	7,400		$	686,042

Balance at November 24, 2019	$	394	$	657,659		$	1,310,464		$	(404,986	)	$	8,026		$	1,571,557
Net income (loss)	—		—			152,689			—			—			152,689
Other comprehensive income, net of tax	—		—			—			6,696			—			6,696
Stock-based compensation and dividends, net	5		17,530			—			—			—			17,535
Employee stock purchase plan	—		2,030			—			—			—			2,030
Repurchase of common stock	—		—			(37,071		)	—			—			(37,071		)
Shares surrendered for tax withholdings on equity award exercises	—		(75,243		)	—			—			—			(75,243		)
Changes in ownership of noncontrolling interest	—		—			(8,672		)	—			(8,026		)	(16,698		)
Cumulative effect of the adoption of new accounting standards	—		—			59,708			(54,444		)	—			5,264
Cash dividends declared ($0.08 per share)	—		—			(31,930		)	—			—			(31,930		)
Balance at February 23, 2020	$	399	$	601,976		$	1,445,188		$	(452,734	)	$	—		$	1,594,829


	Three Months Ended February 23, 2020
	Levi Strauss & Co. Stockholders
	Class A & Class B Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Stockholders' Equity

	(Dollars in thousands) (Unaudited)
Balance at November 24, 2019	$	394	$	657,659	$	1,310,464	$	(404,986)	$	8,026	$	1,571,557
Net income	—		—		152,689		—		—		152,689
Other comprehensive income, net of tax	—		—		—		6,696		—		6,696
Stock-based compensation and dividends, net	5		17,530		—		—		—		17,535
Employee stock purchase plan	—		2,030		0		—		—		2,030
Repurchase of common stock	—		—		(37,071)		—		—		(37,071)
Shares surrendered for tax withholdings on equity awards	—		(75,243)		—		—		—		(75,243)
Changes in ownership of noncontrolling interest	—		—		(8,672)		—		(8,026)		(16,698)
Cumulative effect of the adoption of new accounting standards	—		—		59,708		(54,444)		—		5,264

Cash dividends declared ($0.08 per share)	—		—		(31,930)		—		—		(31,930)
Balance at February 23, 2020	$	399	$	601,976	$	1,445,188	$	(452,734)	$	0	$	1,594,829


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


~~(3)~~	The Company’s cash flow hedges 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. Refer to Note 3 for more information.


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



	February 23, 2020									November 24, 2019
	Gross Amounts of Assets / (Liabilities) Presented in the Balance Sheet			Gross Amounts Not Offset in the Balance Sheet			Net Amounts of Assets / (Liabilities)			Gross Amounts of Assets / (Liabilities) Presented in the Balance Sheet			Gross Amounts Not Offset in the Balance Sheet			Net Amounts of Assets / (Liabilities)
				Gross Amounts Not Offset in the Balance Sheet			Net Amounts of Assets / (Liabilities)						Gross Amounts Not Offset in the Balance Sheet			Net Amounts of Assets / (Liabilities)
	(Dollars in thousands)
Foreign exchange risk contracts and forward foreign exchange contracts
Financial assets	$	42,382		$	(10,685	)	$	31,697		$	21,839		$	(10,142	)	$	11,697
Financial liabilities	(30,937		)	10,685			(20,252		)	(16,290		)	10,142			(6,148		)
Total							$	11,445								$	5,549
Embedded derivative contracts
Financial assets	$	—		$	—		$	—		$	4,446		$	—		$	4,446
Financial liabilities	—			—			—			(1,795		)	—			(1,795		)
Total							$	—								$	2,651


~~(2)~~	Prior to and during 2005, the Company used foreign exchange currency swaps to hedge the net investment in its foreign operations. For hedges that qualified for hedge accounting, the net gains were included in AOCI and are not reclassified to earnings until the related net investment position has been liquidated.


	Three Months Ended February 28, 2021
	Liabilities		Net Charges (Reversals)			Payments		Foreign Currency Fluctuations		Liabilities
	November 29, 2020				February 28, 2021

	(Dollars in thousands)
Severance and employee-related benefits	$	60,604	$	(810)		$	(12,091)	$	331	$	48,034
Other	417		33			(51)		7		406
Total	$	61,021	$	(777)		$	(12,142)	$	338	$	48,440



	February 23, 2020⁽¹⁾
	(Dollars in thousands)
2020	$	188,290
2021	216,259
2022	183,395
2023	147,155
2024	118,315
Thereafter	284,609
Total undiscounted future cash flows related to lease payments	1,138,023
Less: Interest	75,090
Present value of lease liabilities	$	1,062,933



	~~February 23, 2020~~
~~Weighted-average remaining lease term (years)~~	~~6.1~~
~~Weighted-average discount rate~~	~~2.38~~	%



	February 23, 2020
Cash paid for amounts included in the measurement of lease liabilities:	(Dollars in thousands)
Operating cash outflows from operating leases	$	53,378
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities⁽¹⁾	$	25,368


~~(1)~~	~~On January 9, 2020, Company completed an all cash tender offer for the acquisition of the remaining minority interest shares of Levi Strauss Japan K.K. Refer to Note 1 for additional information.~~


	Three Months Ended February 28, 2021(1)
	Americas		Europe		Asia		Total

	(Dollars in thousands)
Net revenues by channel:
Wholesale	$	439,292	$	281,631	$	117,836	$	838,759
Direct-to-consumer	201,980		147,395		117,468		466,843
Total net revenues	$	641,272	$	429,026	$	235,304	$	1,305,602


	Three Months Ended February 23, 2020(1)
	Americas		Europe		Asia		Total

	(Dollars in thousands)
Net revenues by channel:
Wholesale	$	460,866	$	276,955	$	138,503	$	876,324
Direct-to-consumer	284,714		235,988		109,100		629,802
Total net revenues	$	745,580	$	512,943	$	247,603	$	1,506,126



	Three Months Ended February 24, 2019
	Americas		Europe		Asia		Total
	(Dollars in thousands)
Net revenues by channel:
Wholesale	$	483,801	$	252,933	$	132,575	$	869,309
Direct-to-consumer	233,463		211,743		119,943		565,149
Total net revenues	$	717,264	$	464,676	$	252,518	$	1,434,458


~~(1)~~	Gains and losses on forward foreign exchange contracts primarily resulted from currency fluctuations relative to negotiated contract rates. Losses in the three-month periods ended February 23, 2020 and February 24, 2019 were primarily due to unfavorable currency fluctuations relative to negotiated contract rates on positions to sell the Mexican Peso.


	Three Months Ended
	February 28, 2021(1)		February 23, 2020(1)

	(Dollars in thousands)
Net revenues:
Americas	$	641,272	$	745,580
Europe	429,026		512,943
Asia	235,304		247,603
Total net revenues	$	1,305,602	$	1,506,126
Operating income:
Americas	$	130,697	$	124,039
Europe	111,122		132,436
Asia	29,299		32,668
Regional operating income	271,118		289,143



Corporate expenses	93,995		110,361
Total operating income	177,123		178,782
Interest expense	(23,310)		(16,654)


Other income, net	858		2,700
Income before income taxes	$	154,671	$	164,828


	Three Months Ended
					% Increase (Decrease)
	February 28, 2021		February 23, 2020		As Reported		Constant Currency

	(Dollars in millions)
Net revenues:
Americas	$	641.3	$	745.6	(14.0)	%	(13.4)	%
Europe	429.0		512.9		(16.4)	%	(22.3)	%
Asia	235.3		247.6		(5.0)	%	(7.7)	%
Total net revenues	$	1,305.6	$	1,506.1	(13.3)	%	(15.6)	%



Period	(a) Total number of shares (or units) purchased ⁽¹⁾	(b) Average price paid per share (or unit)⁽²⁾		(c) Total number of shares (or units) purchased as part of publicly announced plans or programs	(d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
November 25, 2019 - December 29, 2020	—	—		—	—
December 30, 2020 - January 26, 2020	—	—		—	—
January 27, 2020 - February 23, 2020	1,859,248	$	19.92	1,859,248	$	62,966,451
Total	1,859,248	$	19.92	1,859,248	$	62,966,451



		Incorporated by Reference
Exhibit Number	Description of Document	Form	SEC File No.	Exhibit	Filing Date
3.1	Amended and Restated Certificate of Incorporation of the Registrant	8-K	001-06631	3.1	3/25/2019
3.2	Amended and Restated Bylaws of the Registrant	8-K	001-06631	3.2	3/25/2019
10.1	Separation agreement dated as of February 16, 2020 between the Company and Roy Bagattini. Filed herewith.
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.
32.1†	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.
101.INS	XBRL Instance Document. Filed herewith.
101.SCH	XBRL Taxonomy Extension Schema Document. Filed herewith.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document. Filed herewith.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. Filed herewith.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document. Filed herewith.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document. Filed herewith.


Date:		April 8, 2021		LEVI STRAUSS & CO.
				(Registrant)


~~Date:~~		~~April 7, 2020~~	By:	~~LEVI STRAUSS & CO.~~
		~~(Registrant)~~


	~~By:~~	/s/ GAVIN BROCKETT
				Gavin Brockett Senior Vice President and Global Controller
				(Principal Accounting Officer and Duly Authorized Officer)