Levi Strauss & Co. (LEVI) 8-K Levi Strauss & Co. Announces Fourth-quarter and Fiscal-year 2006 Financial Results

Exhibit 99.1

LEVI	1155 Battery Street, San Francisco, CA 94111
STRAUSS
& Co.
NEWS

Investor Contact: Allison Malkin
Integrated Corporate Relations, Inc.
(203) 682-8200

Media Contact: Jeff Beckman
Levi Strauss & Co.
(415) 501-3317

LEVI STRAUSS & CO. ANNOUNCES FOURTH-QUARTER AND
FISCAL-YEAR 2006 FINANCIAL RESULTS

Fourth-Quarter Growth Completes Fiscal Year

SAN FRANCISCO (February 13, 2007) — Levi Strauss & Co. (LS&CO.) today announced financial results for the fourth quarter and fiscal year ended November 26, 2006 and filed its 2006 Form 10-K with the Securities and Exchange Commission.

Fourth-quarter results reflect improvements across key operating measures. Net revenues for the quarter increased 4 percent or $48 million and net income increased 119 percent or $52 million.

Fiscal-year 2006 results show continued profitability improvements with stable net revenues. Net income improved 53 percent or $83 million.

“Our fourth-quarter performance was encouraging, with net revenue growth in each of our three regions,” said John Anderson, chief executive officer. “For the full year, we delivered stable revenues and strong profits, and paid down debt. The year ended with improved performance in virtually all of our business units. I am pleased with our positive momentum heading into 2007.”

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LS&CO. FY 2006 Results/Add One
February 13, 2007

Fourth-Quarter 2006 Highlights

• Fourth-quarter net revenues increased 4 percent to $1.24 billion compared to $1.19 billion for the same period in 2005. Net revenues increased in all three regions.

• Gross profit increased 9 percent to $593 million compared with $542 million for the same period of 2005. Gross margin increased 240 basis points to 48.0 percent of revenues for the fourth quarter of 2006 compared to 45.6 percent of revenues in the fourth quarter of 2005. The margin increase was primarily due to increased sales of higher margin products.

• Selling, general and administrative expenses increased 1 percent or $5 million to $422 million for the quarter from $417 million in the 2005 period. Higher SG&A expenses in the 2006 period were primarily attributable to an increase in company-operated retail stores and the impact of currency translations, partially offset by lower advertising and promotion expense in Europe.

• Operating income for the fourth quarter increased $49 million to $170 million compared to $121 million for the 2005 period. The 40 percent increase was primarily due to higher net revenues and improved gross margin.

• Net income for the fourth quarter was $96 million compared to $44 million in same period of 2005. The improvement was driven primarily by higher operating income and lower tax expense primarily attributable to a $29 million net reversal of valuation allowances due to operating profits in certain jurisdictions.

Fiscal-Year 2006 Highlights

• Net revenues for the fiscal year were $4.19 billion compared to $4.22 billion in 2005, a 0.8 percent decrease. Stable net revenue reflects higher net revenues in the U.S. Levi’s^®, U.S. Dockers^® and Asia Pacific businesses, offset by lower net revenues in the Europe and U.S. Levi Strauss Signature^® businesses and currency translation.

• Selling, general and administrative expenses decreased 2 percent or $33 million to $1.3 billion for 2006 compared to the prior year. The decrease reflects reduced advertising and promotion expense and a $29 million third-quarter benefit plan curtailment gain, partially offset by costs related to new company-operated retail stores.

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LS&CO. FY 2006 Results/Add Two
February 13, 2007

• Operating income increased $24 million to $614 million compared to $589 million in 2005. The increase was driven primarily by lower selling, general and administrative expenses. The operating margin for 2006 was 14.6 percent compared to 13.9 percent in 2005.

• Interest expense for the year decreased $13 million to $251 million compared to $264 million in 2005. The decrease was primarily attributable to lower debt levels and lower average interest rates in 2006.

• Net income for 2006 was $239 million compared to $156 million in the prior year. The increase in net income was primarily due to the curtailment gain, lower losses on early extinguishment of debt, and lower income tax and interest expense. The effective tax rate for 2006 was 30.8% compared to 44.8% for 2005, driven by a $32 million benefit resulting from a modification of the ownership structure of certain of our foreign subsidiaries in the second quarter of 2006 and a $29 million net reversal of valuation allowances in certain jurisdictions in the fourth quarter of 2006.

• Strong cash flow in 2006 is attributable to lower income tax payments, improved working capital management, and lower restructuring and interest payments.

“We accomplished our objectives for 2006,” said Hans Ploos van Amstel, chief financial officer. “We ended the year with revenues growing, and we sustained our strong margins while increasing our investments in our brands, retail expansion and SAP. We also delivered strong cash flow, which is a key priority for us. For 2007, we expect to continue our strong profits and cash flow and, at minimum, achieve revenue stability.”

Investor Conference Call
The company’s full-year 2006 and fourth-quarter investor conference call will be available through a live audio Webcast athttp://levistrauss.com/news/webcast.htm today, February 13, 2007, at 1 p.m. PST/4 p.m. EST. A replay is available on the Web site the same day and will be archived for one month. A telephone replay also is available through February 20 at 800-642-1687 in the United States and Canada, or 706-645-9291 internationally; I.D. No. 8121313.

This news release contains, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current assumptions, expectations and projections about future events. We use words like “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Investors should consider the information contained in our filings with the U.S. Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended 2006, especially in the Management’s Discussion and Analysis - “Financial Condition and Results of Operations” and “Risk Factors” sections, our most recent Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Other unknown or unpredictable factors also could have material adverse effects on our future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this news release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this news release. We are not under any obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this news release to reflect circumstances existing after the date of this news release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

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LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	November 26,			November 27,
	2006			2005
	(Dollars in thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	279,501		$	239,584
Restricted cash		1,616			2,957
Trade receivables, net of allowance for doubtful accounts of $17,998 and $26,550		589,975			626,866
Inventories:
Raw materials		13,543			16,431
Work-in-process		13,479			16,908
Finished goods		523,041			506,902
Total inventories		550,063			540,241
Deferred tax assets, net of valuation allowance of $41,759 and $42,890		101,823			94,137
Other current assets		86,292			57,388
Total current assets		1,609,270			1,561,173
Property, plant and equipment, net of accumulated depreciation of $530,513 and $471,545		404,429			380,186
Goodwill		203,989			202,250
Other intangible assets, net of accumulated amortization of $244 and $215		42,815			42,981
Non-current deferred tax assets, net of valuation allowance of $285,122 and $260,383		457,105			499,647
Other assets		86,457			117,897
Total assets	$	2,804,065		$	2,804,134
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Current maturities of long-term debt and short-term borrowings	$	11,089		$	95,797
Current maturities of capital leases		1,608			1,510
Accounts payable		245,629			235,450
Restructuring liabilities		13,080			14,594
Accrued liabilities		194,601			187,145
Accrued salaries, wages and employee benefits		261,234			277,007
Accrued interest payable		61,827			61,996
Accrued taxes		14,226			30,300
Total current liabilities		803,294			903,799
Long-term debt, less current maturities		2,206,323			2,230,902
Long-term capital leases, less current maturities		3,086			4,077
Postretirement medical benefits		379,188			458,229
Pension liability		184,090			195,939
Long-term employee related benefits		136,408			156,327
Long-term tax liabilities		19,994			17,396
Other long-term liabilities		46,635			41,659
Minority interest		17,138			17,891
Total liabilities		3,796,156			4,026,219
Commitments and contingencies (Note 7)
Temporary equity (Note 14)		1,956			—
Stockholders’ deficit:
Common stock—$.01 par value; 270,000,000 shares authorized; 37,278,238 shares issued and outstanding		373			373
Additional paid-in capital		89,837			88,808
Accumulated deficit		(959,478	)		(1,198,481	)
Accumulated other comprehensive loss		(124,779	)		(112,785	)
Stockholders’ deficit		(994,047	)		(1,222,085	)
Total liabilities, temporary equity and stockholders’ deficit	$	2,804,065		$	2,804,134

The notes accompanying our consolidated financial statements in our Form 10-K are an integral part of these consolidated financial statements.

LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

	Year Ended			Year Ended			Year Ended
	November 26,			November 27,			November 28,
	2006			2005			2004
	(Dollars in thousands)
Net sales	$	4,106,572		$	4,150,931		$	4,093,615
Licensing revenue		86,375			73,879			57,117
Net revenues		4,192,947			4,224,810			4,150,732
Cost of goods sold		2,216,562			2,236,962			2,288,406
Gross profit		1,976,385			1,987,848			1,862,326
Selling, general and administrative expenses		1,348,577			1,381,955			1,367,604
Restructuring charges, net of reversals		14,149			16,633			133,623
Operating income		613,659			589,260			361,099
Interest expense		250,637			263,650			260,124
Loss on early extinguishment of debt		40,278			66,066			—
Other (income) expense, net		(22,418	)		(23,057	)		5,450
Income before income taxes		345,162			282,601			95,525
Income tax expense		106,159			126,654			65,135
Net income	$	239,003		$	155,947		$	30,390

The notes accompanying our consolidated financial statements in our Form 10-K are an integral part of these consolidated financial statements.

LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended			Year Ended			Year Ended
	November 26,			November 27,			November 28,
	2006			2005			2004
	(Dollars in thousands)
Cash Flows from Operating Activities:
Net income	$	239,003		$	155,947		$	30,390
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization		62,249			59,423			62,606
Asset write-offs associated with reorganization initiatives		—			1,610			35,204
Gain on disposal of assets		(6,218	)		(5,750	)		(3,576	)
Unrealized foreign exchange gains		(16,826	)		(16,504	)		(18,395	)
Employee benefit plans’ curtailment gains		(29,041	)		—			(31,275	)
Write-off of unamortized costs associated with early extinguishment of debt		17,264			12,473			—
Amortization of deferred debt issuance costs		8,254			12,504			12,676
Stock-based compensation		2,985			—			—
(Benefit) provision for doubtful accounts		(1,021	)		4,858			7,892
Provision for deferred taxes		39,452			1,827			28,746
Change in operating assets and liabilities:
Decrease (increase) in trade receivables		46,572			(22,110	)		(100,547	)
(Increase) decrease in inventories		(6,095	)		3,130			100,942
(Increase) decrease in other current assets		(3,254	)		8,191			38,941
Decrease (increase) in other non-current assets		1,730			(24,901	)		289
Increase (decrease) in accounts payable and accrued liabilities		18,536			(38,444	)		105,110
Decrease in income tax liabilities		(14,918	)		(78,066	)		(42,180	)
Decrease in restructuring liabilities		(2,855	)		(25,648	)		(45,566	)
(Decrease) increase in accrued salaries, wages and employee benefits		(41,433	)		(13,005	)		113,166
Decrease in long-term employee related benefits		(55,655	)		(79,329	)		(99,458	)
Increase (decrease) in other long-term liabilities		3,847			(827	)		1,777
Other, net		(696	)		844			3,154
Net cash provided by (used for) operating activities		261,880			(43,777	)		199,896
Cash Flows from Investing Activities:
Purchases of property, plant and equipment		(77,080	)		(41,868	)		(16,299	)
Proceeds from sale of property, plant and equipment		9,139			11,528			11,351
Acquisition of retail stores		(1,656	)		(2,645	)		—
Acquisition of Turkey minority interest		—			(3,835	)		—
Cash inflow (outflow) from net investment hedges		—			2,163			(7,982	)
Net cash used for investing activities		(69,597	)		(34,657	)		(12,930	)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt		475,690			1,031,255			—
Repayments of long-term debt		(620,146	)		(979,253	)		(13,532	)
Net decrease in short-term borrowings		(63	)		(2,975	)		(4,018	)
Debt issuance costs		(12,176	)		(24,632	)		(10,844	)
Decrease (increase) in restricted cash		1,467			(1,323	)		(1,885	)
Other, net		—			—			(1,841	)
Net cash (used for) provided by financing activities		(155,228	)		23,072			(32,120	)
Effect of exchange rate changes on cash		2,862			(4,650	)		1,305
Net increase (decrease) in cash and cash equivalents		39,917			(60,012	)		156,151
Beginning cash and cash equivalents		239,584			299,596			143,445
Ending cash and cash equivalents	$	279,501		$	239,584		$	299,596
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	229,789		$	238,683		$	233,512
Income taxes		83,492			197,315			82,985
Restructuring initiatives		16,998			43,112			143,593

The notes accompanying our consolidated financial statements in our Form 10-K are an integral part of these consolidated financial statements.