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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

or

FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2003

Commission file number: 333-36234

LEVI STRAUSS & CO.

(Exact Name of Registrant as Specified in Its Charter)

1155 BATTERY STREET, SAN FRANCISCO, CALIFORNIA 94111

(Address of Principal Executive Offices)

(415) 501-6000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨    No  x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (¶229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes  ¨    No  x

The Company is privately held. Nearly all of its common equity is owned by members of the families of several descendants of the Company’s founder, Levi Strauss. 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 — 37,278,238 shares outstanding on February 23, 2004

Documents incorporated by reference: None

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LEVI STRAUSS & CO.

TABLE OF CONTENTS TO FORM 10-K

FOR FISCAL YEAR ENDING NOVEMBER 30, 2003

Table of Contents

PART I

Item 1. BUSINESS

Overview

We are one of the world’s leading branded apparel companies, with sales in more than 110 countries. We design and market jeans and jeans-related pants, casual and dress pants, tops, jackets and related accessories for men, women and children under our Levi’s^®, Dockers^® and Levi Strauss Signature^™ brands. We were founded in San Francisco in 1853 and, in 2003, celebrated our 150^th year of business.

Our net sales for 2003 were $4.1 billion. Net sales for the year by brand were as follows:

Pants, including jeans, casual and dress pants, represented approximately 85%, 86% and 84%, respectively, of our total units sold in 2003, 2002 and 2001.

Our Levi’s^® and Dockers^® products are distributed primarily through chain retailers and department stores in the United States and primarily through department stores and specialty retailers abroad. We also distribute Levi’s^® and Dockers^® products through approximately 950 independently-owned franchised stores outside the United States and through a small number of company-owned stores located in the U.S., Europe and Asia. We entered the mass channel in the Americas and Asia in 2003 and in Europe in early 2004 with our new Levi Strauss Signature^™ brand.

We are a Delaware corporation. Our headquarters is located in San Francisco. Our stock is privately held primarily by descendants of the family of Levi Strauss and is not publicly traded. We conduct our operations in the United States primarily through Levi Strauss & Co. and outside the United States through foreign subsidiaries owned directly or indirectly by Levi Strauss & Co.

Our business in 2003 was organized into three geographic regions. The following table provides employee headcount, sales and operating income for those regions:

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We restated our annual and quarterly financial statements for 2001 and 2002, and our quarterly financial statements for the first two quarters of 2003. Except as otherwise clearly stated, all financial information contained in this Annual Report on Form 10-K gives effect to these restatements. For information concerning the background of the restatements, the specific adjustments made on an annual and quarterly basis, and management’s discussion and analysis of our results of operations for interim quarterly periods giving effect to the restated information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Restatements of Financial Information” and Notes 2 and 22 of the Notes to Consolidated Financial Statements.

Factors Affecting Our Performance

For the past seven years, our net sales have declined year-over-year as shown in the following table:

These declines were due to both industry-wide and company-specific factors. Key factors affecting the retail environment, our industry and our company during that time include:

In addition to these external issues, internal factors have affected our ability to be competitive and to turn around our business in recent years, including:

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Business Strategies

In response to these factors, we have taken actions and pursued several core business strategies aimed at improving our competitiveness, increasing our financial strength and resuming profitable growth. We have:

We are continuing to execute against the following core business strategies:

In December 2003, we retained Alvarez & Marsal, Inc. to work with our board of directors and leadership team in identifying additional actions to accelerate our financial turnaround and help us achieve our objectives. We appointed managing directors of Alvarez & Marsal, Inc. as senior advisor to our chief executive officer and as chief financial officer. Alvarez & Marsal, Inc. is now engaged in an analysis of our business, operations, capital structure, financial condition and short and long-term prospects. We expect them to complete their assessment in April 2004. Alvarez & Marsal, Inc. also is assisting us in identifying potential cost reduction, product line rationalization, operational, working capital and revenue growth opportunities. Our work with Alvarez & Marsal, Inc. reflects our key priorities for 2004:

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Our Brands and Products

We market a broad range of branded jeanswear, casual wear and dress pants that appeal to diverse demographic groups in markets around the world. Through a number of sub-brands and product lines under the Levi’s^®, Dockers^® and Levi Strauss Signature^™ brands, we target specific consumer segments and provide product differentiation for a wide range of retail channels. We focus on creating new, innovative products relevant to our target consumers, as well as ensuring that our core traditional products are updated with new fits, finishes, fabrics and features. We strive to leverage our global brand recognition, product design and marketing capabilities by taking products and design concepts developed in one region and introducing them in other geographic markets. We also license our Levi’s^®, Dockers^® and Levi Strauss Signature^™ trademarks for a variety of products.

Levi’s^® Brand

Since 1873, when our founder Levi Strauss and tailor Jacob Davis received the U.S. patent to make riveted denim clothing, creating the first blue jean, Levi’s^® jeans have become one of the most widely recognized brands in the history of the apparel industry. The Levi’s^® brand is the number one jeans brand in the United States in terms of unit sales, according to NPD Fashion World. Based on the results of a brand tracking study conducted in 2003 by Synovate, a market research firm, nearly 70% of men in the United States, ages 15 to 49, own and wear Levi’s^® jeans. The original jean has evolved to include a wide range of men’s, women’s and kids’ products designed to appeal to a variety of consumer segments who shop in a number of different retail channels. We sell Levi’s^® brand products in more than 110 countries around the world.

Our Levi’s^® brand features a wide selection of product offerings, including:

Sales of Levi’s^® men’s, women’s and kids’ products in 2003 as a percentage of brand sales were estimated as follows:

Dockers^® Brand

We market casual clothing, primarily pants and tops, under the Dockers^® brand in more than 57 countries, with the United States generating approximately 83% of total Dockers^® brand sales in 2003. We believe that the Dockers^® brand, through its product offering and marketing, played a major role in the resurgence of khaki pants

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and the movement toward casual attire in the U.S. workplace in the 1990s by helping create a standard for business casual clothing. The Dockers^® brand is the number one men’s pant brand in the United States in terms of unit sales, according to NPD Fashion World. Based on the results of a brand tracking study conducted in 2003 by Synovate, nearly 75% of men in the United States who wear casual pants own and wear Dockers^® pants.

Our Dockers^® brand offerings are primarily targeted to men and women ages 25 to 39 and include:

Sales of Dockers^® men’s, women’s and kid’s products in 2003 as a percentage of brand sales were estimated as follows:

Levi Strauss Signature^™ Brand

In 2003 we introduced a new casual clothing brand, the Levi Strauss Signature^™ brand. We created this brand of men’s, women’s and kids’ apparel for value-conscious consumers who shop in mass channel retail stores. According to data from NPD Fashion World, the mass channel is the largest retail channel in the United States, selling more than 29% of all jeans sold in 2003.

Our Levi Strauss Signature^™ brand products include a range of denim and non-denim pants and shirts as well as denim jackets for men, women and kids with product styling, finish and design that is distinct from our Levi’s^® brand. Each season, the brand will offer products with a different identity from our Levi’s^® brand, with distinct finishes and differentiated designs, construction and styling that we believe will be relevant to mass channel consumers. Levi Strauss Signature^™ products have a distinctive logo, packaging and back waistband patch, and do not have the Tab Device or Arcuate Stitching Design trademarks of the Levi’s^® brand. As a result, we believe that our customers and consumers see the difference between the new brand and the Levi’s^® brand and that their perception of our core Levi’s^® brand will not be adversely affected. Our research in the U.S.

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indicates that we have not experienced any substantial cannibalization of Levi’s^® brand sales as a result of our introduction of the Levi Strauss Signature^™ brand.

Our Levi Strauss Signature^™ products in the U.S. in 2003 included 5-pocket, carpenter and cargo jeans styles with vintage-inspired finishes, jackets and tops. The 2004 spring season includes capris and shorts. In Europe, our initial Levi Strauss Signature^™ offering includes regular and bootcut jeans, a cotton twill carpenter jean and denim jacket for men, and jeans, denim skirts and jackets for women.

We launched the Levi Strauss Signature^™ brand initially in July 2003, shipping men’s, women’s and kids’ products to nearly 3,000 Wal-Mart, Inc. stores in the United States. Since then, we have introduced the brand at Target Corporation Target stores in the United States and have begun to roll out the brand to mass channel retailers worldwide. Levi Strauss Signature^™ brand products are now available in Canada at Wal-Mart stores; in Australia at Lowes and Big W stores and at Target and Kmart stores (which are operated by Coles Myer Ltd. and not affiliated with the Target Corporation or Kmart Corporation); and in Japan at Justco and Saty. In early 2004, we launched the Levi Strauss Signature^™ brand in Europe initially at Carrefour stores in France, ASDA-Wal-Mart in the United Kingdom and in Wal-Mart, Woolworth, Citti and Ratio stores in Germany.

Sales of Levi Strauss Signature^™ men’s, women’s and kid’s products in 2003 as a percentage of brand sales were estimated as follows:

Licensing

We license the Levi’s^® and Dockers^® trademarks for a variety of products and plan to introduce licensed products under the Levi Strauss Signature^™ brand for fall 2004. Our licensed products by brand include:

In addition, we enter into agreements with licensees to produce, market and distribute our core products in several countries with smaller markets, including various Latin America and Middle East countries.

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Licensing revenues in 2003 were $39.9 million. The following table shows our royalty income from trademark licensing in 2003 and 2002 and changes in these items from 2002 to 2003 (including accessory and country licenses):

In 2004 and beyond, we expect to increase our licensing of product lines that we currently manufacture and distribute ourselves in order to concentrate our resources on a more focused set of product categories.

Our Go-to-Market Process

We refer to the process from initial product concept to placement of the product on the retailer’s shelf as the “go-to-market process.” It is designed to:

Each brand modifies its go-to-market process based on market requirements, including product category, distribution channel and segment differences, within the framework of our principal strategies, activities and tasks.

We are continuously looking for ways to refine our go-to-market process to improve market performance and position our brands to be as responsive, competitive and profitable as possible. Over the past three years, we have reduced the time it takes to bring product to the retailer’s shelf. In September 2003, we made substantial changes in our U.S. and European organizations, our global supply chain organization and our go-to-market process. Our objectives in making those changes include further reducing the time it takes to get new products to market and reducing our costs.

Sourcing, Manufacturing and Logistics

Organization. We have a worldwide supply chain organization. Our supply chain organization, working through global sourcing and product development and regional supply chain services functions, is responsible for taking a product from the design concept stage through production to delivery at retail. Our objective is to leverage our global scale to achieve product development and sourcing efficiencies across brands and regions while maintaining our focus on local market service levels and inventory management.

Product Procurement. We obtain our products from a combination of independent manufacturers and company-owned facilities. Since 1997, we have shifted substantially toward outsourcing our pants production by closing 42 company-owned production and finishing facilities in North America and Europe, including three Canadian facilities that will close in March 2004. We believe that outsourcing allows us to maintain production flexibility, in terms of both location and nature of production, while helping us variabilize our cost structure and avoid the substantial capital expenditures and costs related to operating a large internal production capability. We continue to own and operate eight plants located in Europe, Asia and South Africa.

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We source our products from contract manufacturers in two ways:

The following table shows, for 2003 and 2002, the approximate percentage of our pants, tops and other products sourced through our owned plants, under cut-make-trim arrangements with contractors and under package arrangements with contractors:

We are rapidly increasing our use of package production. For example, we now source all non-denim Levi’s^®, Dockers^® and Levi Strauss Signature^™ products for the European market on a package basis. We expect to source essentially all of our U.S. products on a package basis by the third quarter of 2004. In Europe and Asia, we expect to shift entirely from cut-make-trim arrangements to package production by the first quarter of 2005.

We use numerous independent manufacturers located throughout the world for the production and finishing of our garments. We typically conduct business with our garment manufacturing and finishing contractors on an order-by-order basis. We inspect fabrics and finished goods as part of our quality control program to ensure that consumers receive products that meet our high standards.

Contractor Standards. We require all third party contractors who manufacture or finish products for us to abide by a stringent code of conduct that sets guidelines for employment practices such as wages and benefits, working hours, health and safety, working age and disciplinary practices, and for environmental, ethical and legal matters. We regularly assess manufacturing and finishing facilities to see if they are complying with our code of conduct. Our program includes periodic on-site facility inspections and continuous improvement activities. We also hire independent monitors to supplement our efforts.

Logistics. We own and operate dedicated distribution centers in a number of countries and we also outsource distribution activities to third party logistics providers, including third party arrangements in the United States, Europe and Asia. Distribution center activities include receiving finished goods from our plants and contractors, inspecting those products and shipping them to our customers. We continually explore opportunities in all of our regions to improve efficiencies and reduce costs in both our in-bound and out-bound logistics activities.

Sales, Distribution and Customers

We distribute our products in a wide variety of retail formats around the world including chain and department stores, franchise stores dedicated to our brands, specialty retailers and mass channel retailers. Our distribution strategy focuses on ensuring that the economics for our retail customers are attractive, that the right products are available and in stock at retail and that our products are presented in ways that enhance brand appeal and attract consumers.

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The following table shows our principal distribution channels and selected customers in the Americas, Europe and Asia Pacific:

Americas

In the Americas, we distribute our products through national and regional chains, department stores, specialty stores, Levi’s^® Store retail shops and the mass channel. We have approximately 3,300 retail customers operating more than 26,000 locations in the United States, Canada and Latin America. We also target premium products like Levi’s^® Vintage Clothing to independent, image-conscious specialty stores in major metropolitan areas who cater to more fashion-forward, trend-initiating consumers.

Sales to our top five and top 10 customers in the United States accounted for approximately 34% and 43%, respectively, of our consolidated net sales in 2003, and approximately 53% and 67%, respectively, of our Americas net sales in 2003, as compared to approximately 35% and 45%, respectively, of our consolidated net sales in 2002, and approximately 53% and 69%, respectively, of our Americas net sales in 2002. Our top 10 customers in 2003, on both an Americas and total company basis, were (in alphabetical order): Costco Wholesale Corporation, Federated Department Stores, Inc., Goody’s Family Clothing, Inc., J.C. Penney Company, Inc.,

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Kohl’s, The May Department Stores Company, the Mervyn’s unit of Target Corporation, nZANIA, Inc., Sears, Roebuck & Co. and Wal-Mart Stores, Inc. (nZANIA, Inc. purchases closeout, slow-moving and irregular products from our U.S. business.) J.C. Penney Company, Inc. is the only customer that represented more than 10% of our total net sales, accounting for approximately 11%, 12% and 13% of our total net sales in 2003, 2002 and 2001, respectively.

Europe

Our European Levi’s^® and Dockers^® brand customers include large department stores, such as El Corte Ingles in Spain, Galeries Lafayette in France and Kaufhof and Karstadt in Germany; single-brand Levi’s^® Store and Dockers^® Store retail shops; mail-order accounts; and a substantial number of independent retailers operating either a single or small group of jeans-focused stores or general clothing stores. During 2003, nearly half our European sales were by these independent retailers. In early 2004, we launched our Levi Strauss Signature^™ brand products in Carrefour stores in France, ASDA-Wal-Mart stores in the United Kingdom and in Wal-Mart, Woolworth, Citti and Ratio stores in Germany.

The more varied and fragmented nature of European retailing means that we are less dependent on major customers than we are in the United States. In 2003, our top 10 European customers accounted for approximately 11% of our total European net sales.

Asia Pacific

During 2003, in Asia Pacific we generated over half of our sales through the specialty store channel, which includes multi-brand as well as independently owned Levi’s^® Store retail shops. The rest of our products are sold through department stores, general merchandise stores and, beginning in 2003, mass channel retailers such as Target and Kmart stores operated by Coles Myer Ltd., Lowes and Big W in Australia and Justco and Saty stores in Japan. As in Europe, the varied and fragmented nature of Asian retailing means we are less dependent on individual customers in the region. Our Asia Pacific business is heavily weighted toward Japan, which represented approximately 52% of our 2003 net sales in the region.

Dedicated Stores

The following table shows the number of dedicated retail and outlet stores we and our franchisees and licensees operated as of November 30, 2003:

We operate 39 retail and outlet stores dedicated to the Levi’s^® brand, including Levi’s Stores in the United States located in New York, Chicago, Orange County, Santa Monica, San Francisco, San Diego, Miami, Boston,

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Portland and Seattle and in Europe in London, Paris and Berlin. Our outlet stores are located in the United States, France, Germany, Japan and the United Kingdom. Sales from company-owned stores represented approximately 1% of our total net sales for 2003.

We have a network of approximately 950 franchised or other licensed stores selling Levi’s^® brand or Dockers^® brand products under the “Original Levi’s Store^®,” “Levi’s^® Store,” “Selvedge^®” and “Dockers^® Store” names in Europe, Asia, Canada and Latin America. These dedicated-format stores are strategically important as vehicles for demonstrating the breadth of our product line, enhancing brand image and generating sales. These stores also are an important distribution channel in newer and smaller markets in Eastern Europe, Asia Pacific and Latin America. These stores are owned and operated by independent third parties. We also license third parties to operate outlet stores in the United States and abroad.

Internet

We operate websites devoted to the Levi’s^®, Dockers^® and Levi Strauss Signature^™ brands as marketing vehicles to enhance consumer understanding of our brands. We do not sell products directly to consumers through these internet websites. In the United States, our products are currently sold online through specifically authorized third party internet sites that meet our standards. Our sites enable visitors to link to authorized online retailers through our sites. In Canada and Europe, authorized dealers and mail order accounts who meet our standards relating to customer service, return policy, site content, trademark use and other matters may sell our products to consumers through their own internet sites.

Advertising and Promotion

We engage in advertising, retail and promotion activities to drive consumer demand for our brands. We incurred expenses of approximately $283.0 million, or 6.9% of total net sales (7.3% of net sales excluding sales of Levi Strauss Signature^™ products), in 2003 on these activities, compared with expenses of approximately $307.1 million, or 7.4% of net sales, in 2002. We advertise through a broad mix of media, including television, national publications, billboards and other outdoor vehicles. We execute region-specific marketing programs that are based on globally consistent brand values. This approach allows us to achieve consistent brand positioning while giving us flexibility to optimize program execution in local markets. We try to make sure our advertising spending is efficient and will generate the maximum impact for the amount spent.

Our marketing strategy focuses on:

We also use other marketing vehicles, including event and music sponsorships, product placement in television shows, music videos and films and alternative marketing techniques, including street-level and nightclub events and similar targeted, small-scale activities.

Competition

The worldwide apparel industry is highly competitive and fragmented. In all three of our regions we compete with numerous branded manufacturers, retailer private labels, designers and vertically integrated specialty store retailers.

Principal competitive factors include:

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We believe our competitive strengths include:

Americas

We face intense competition across all of our brands from vertically integrated specialty stores, mass merchants, retailer private labels, designer labels and other branded labels. We sell both basic and seasonal products under the Levi’s^®, Dockers^® and Levi Strauss Signature^™ brands to retailers in diverse channels across a wide range of retail price points. As a result, we face a wide range of competitors, including:

Europe

Brands such as VF Corporation’s Lee and Wrangler brands, Diesel and Pepe Jeans London have a pan-European presence. Strong local brands and retailers exist in certain markets, including G-Star in the Netherlands and Miss Sixty in Italy. Other competitors include vertically integrated specialty retailers, such as Zara, Hennes & Mauritz AB, Next and Celio. Companies based in the United States, such as Gap, Inc., Polo Ralph Lauren and Tommy Hilfiger, also compete in Europe. The khaki and casual pant segment in Europe is fragmented and there is currently no significant pan-European branded competitor of our Dockers^® brand in Europe. Competitors in local markets include store private labels and, in Germany, Hugo Boss.

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Asia Pacific

Japan continues to be our largest market in Asia Pacific, representing approximately 52% of regional net sales in 2003. Asia Pacific is a fragmented market with no strong pan-regional competitor. Competitors in jeanswear consist of regional brands, such as Edwin, Something and Bobson in Japan, and U.S. companies such as Gap, Inc., VF Corporation and Earl Jeans. We also face competition from vertically integrated specialty stores, such as UNIQLO and Giordano. Athletic wear companies such as Adidas-Salomon and Nike, Inc. compete in tops and casual pants.

Trademarks

Substantially all of our global trademarks are owned by Levi Strauss & Co. We regard our trademarks as our most valuable assets and believe they have substantial value in the marketing of our products. The Levi’s^®, Dockers^®, Levi Strauss Signature^™, Silvertab^® and 501^® trademarks, the Wings and Anchor Design, the Arcuate Stitching Design, the Tab Device and the Two Horse^® design are among our core trademarks. We protect these trademarks by registering them with the U.S. Patent and Trademark Office and with governmental agencies in other countries, particularly where our products are manufactured and/or sold. We work vigorously to enforce and protect our trademark rights by engaging in regular market reviews, helping local law enforcement authorities detect and prosecute counterfeiters, issuing cease-and-desist letters against third parties infringing or denigrating our trademarks and initiating litigation as necessary. We also work with trade groups and industry participants seeking to strengthen laws relating to the protection of intellectual property rights in markets around the world. We grant licenses to other parties to manufacture and sell products with our trademarks in product categories and in geographic areas in which we do not operate.

Seasonality and Backlog

Although the first quarter is typically our lowest sales quarter and our fourth quarter is typically our highest, our sales do not vary substantially by quarter in any of our three regions, as the apparel industry has become less seasonal due to more frequent selling seasons and offerings of both basic and fashion oriented merchandise throughout the year. In 2003, our net sales in the first, second, third and fourth quarters represented 21.4%, 22.8%, 26.5% and 29.3%, respectively, of our total net sales for the year.

Orders are generally subject to cancellation. In addition, our business centers on core basic products, and we are increasingly doing business on an at-once replenishment basis. As a result, our order backlog may not be indicative of future shipments.

Government Regulation

We are subject to federal, state, local and foreign laws and regulations affecting our business, including those related to labor, employment, worker health and safety, environmental protection, products liability, product labeling, consumer protection, and anti-corruption. In the United States, these laws include the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the Foreign Corrupt Practices Act and the rules and regulations of the Consumer Products Safety Commission and the Federal Trade Commission. We are also subject to import and export laws, including the U.S. economic sanctions and embargo regulations and other related laws such as the U.S. anti-boycott law and the U.S. export controls regulations. We are also subject to comparable laws of the European Union, Japan, and other foreign jurisdictions where we have a presence. We believe that we are in substantial compliance with the applicable federal, state, local, and foreign rules and regulations governing our business.

In addition, all of our import operations are subject to tariffs and quotas set by the governments through mutual agreements or bilateral actions. Countries in which our products are manufactured or imported may from time to time impose additional new quotas, duties, tariffs or other restrictions on our imports or adversely modify

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existing restrictions. Adverse changes in these import costs and restrictions, or our suppliers’ failure to comply with customs regulations or similar laws, can result in substantial costs and harm our business.

Our operations are also subject to the effects of international trade agreements and regulations such as the North American Free Trade Agreement, the Caribbean Basin Initiative and the European Economic Area Agreement, and the activities and regulations of the World Trade Organization. Generally, these trade agreements have positive effects on trade liberalization and benefit our business by reducing or eliminating the duties and/or quotas assessed on products manufactured in a particular country. However, trade agreements can also impose requirements that adversely affect our business, such as limiting the countries from which we can purchase raw materials and setting quotas on products that may be imported from a particular country into our key markets such as the United States or the European Union. In fact, some trade agreements can provide our competitors with an advantage over us, or increase our costs, either of which could have an adverse effect on our business and financial condition.

In addition, the impending elimination of quotas on World Trade Organization member countries by 2005 could result in increased competition from developing countries which historically have lower labor costs, including China. This increased competition, including from those competitors who can quickly create cost and sourcing advantages from these changes in trade arrangements, could have an adverse effect on our business and financial condition.

Social Responsibility

Since our founding, we have emphasized conducting our business in a socially responsible manner and giving back to the communities in which we operate throughout the world. We continue that tradition today through corporate philanthropy, employee volunteerism and responsible business practices. Our strong commitment to workers’ rights is reflected in our history of public advocacy for responsible trade policies and our responsible business practices with manufacturing and finishing contractors. For example, in 2003, we advocated for the prominent inclusion of labor provisions in the U.S.-Central America Free Trade Agreement.

Employees

As of November 30, 2003, we employed approximately 12,300 people, approximately 4,360 of whom were located in the United States. Of our 12,300 employees, approximately 6,000 were associated with manufacturing of our products and approximately 6,300 were non-production employees. Of the non-production employees, approximately 1,600 worked in distribution. Most of our distribution employees in the United States are covered by various collective bargaining agreements. Outside the United States, most of our production and distribution employees are covered by either industry-sponsored and/or state-sponsored collective bargaining mechanisms. We consider our relations with our employees to be good and have not recently experienced any material job actions or labor shortages.

General Information

We were incorporated in Delaware in 1971. Our executive offices are located at Levi’s Plaza, 1155 Battery Street, San Francisco, California 94111. Our telephone number is (415) 501-6000. Our website is located at www.levistrauss.com. Our website and information contained on our website are not part of this Annual Report on Form 10-K and are not incorporated by reference in this Annual Report on Form 10-K.

Item 2. PROPERTIES

Properties

We conduct manufacturing, distribution and administrative activities in owned and leased facilities. We operate eight manufacturing-related facilities (none in the Americas, six in Europe and two in Asia) and

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13 distribution-only centers around the world. We have renewal rights for most of our property leases. We anticipate that we will be able to extend these leases on terms satisfactory to us or, if necessary, locate substitute facilities on acceptable terms. We believe our facilities and equipment are in good condition and are suitable for our needs. Information about manufacturing, finishing and distribution facilities and one other key operating property in use as of November 30, 2003 is summarized in the following table:

In addition, as of November 30, 2003, we operated manufacturing and finishing facilities in San Antonio, Texas and in Stoney Creek, Brantford and Edmonton, Canada, and distribution facilities in Schoten, Belgium, Les Ulis, France and Amsterdam, Netherlands. We have since closed the San Antonio operations and expect to close the Canadian operations in March 2004. We are transitioning the functions performed at the three European distribution facilities to a third party logistics provider and expect to close those facilities by April 2004. We also lease a manufacturing facility in Dongguan, China where a third party operates production activities for us at that facility.

Our global headquarters and the headquarters of our Americas business are both located in leased premises in San Francisco, California. Our Europe and Asia Pacific headquarters are located in leased premises in Brussels, Belgium and Singapore. We also lease or own 109 administrative and sales offices in 36 countries, as well as lease a small number of warehouses in four countries.

In addition, we have 49 company-operated retail and outlet stores in leased premises in eight countries. We have 23 stores in the Americas region, 18 stores in the Europe region and eight stores in the Asia Pacific region. In 2003, we opened six company-operated stores and closed 10 stores. We also own or lease several facilities we formerly operated and have subleased or are working to sell or sublease many of those facilities.

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Item 3. LEGAL PROCEEDINGS

Wrongful Termination Litigation. On April 14, 2003, two former employees of our tax department filed a complaint in the Superior Court of the State of California for San Francisco County in which they allege that they were wrongfully terminated in December 2002. Plaintiffs allege, among other things, that Levi Strauss & Co. engaged in a variety of fraudulent tax-motivated transactions over several years, that we manipulated tax reserves to inflate reported income and that we fraudulently failed to set appropriate valuation allowances on deferred tax assets. They also allege that, as a result of these and other tax-related transactions, our financial statements for several years violate generally accepted accounting principles and Securities and Exchange Commission regulations and are fraudulent and misleading, that reported net income for these years was overstated and that these various activities resulted in our paying excessive and improper bonuses to management for fiscal year 2002. Plaintiffs in this action further allege that they were instructed by us to withhold information concerning these matters from our auditors and the Internal Revenue Service, that they refused to do so and, because of this refusal, they were wrongfully terminated. Plaintiffs seek a number of remedies, including compensatory and punitive damages, attorneys’ fees, restitution, injunctive relief and any other relief the court may find proper.

We are vigorously defending this litigation and filed our formal answer to the lawsuit in California Superior Court on May 23, 2003. In our answer we categorically deny all the allegations and spell out the reasons that led to the dismissal of these two employees. We also filed a cross complaint against them. We do not expect this litigation will have a material impact on our financial condition or results of operations.

On September 15, 2003, we announced that our Audit Committee had completed its investigation of the tax and related accounting issues raised in the wrongful termination suit. The Audit Committee concluded that our tax and related accounting positions were reasonable and legally defensible and noted that in the course of its investigation it did not discover evidence of tax or other fraud. The Audit Committee also did not find evidence that information was improperly withheld from the IRS with respect to these issues in connection with IRS audits. The Audit Committee investigation was initiated following the filing of the wrongful termination litigation.

The scope of the Audit Committee investigation was to review issues raised in the complaint. The Audit Committee retained independent counsel, Simpson Thacher & Bartlett LLP, to assist it in the investigation. An independent accounting firm was retained by Simpson Thacher & Bartlett to consult on specified accounting issues. The investigation took place over a period of approximately four and one-half months, and involved extensive discussions with employees of the company, various legal and tax advisors, and our independent auditors, as well as an extensive review of documents.

In addition to the conclusions noted above, the Audit Committee observed that, during the period from 1994 through 2001, we established, maintained and released varying amounts of unspecified tax reserves. These tax reserves were not supported by sufficient contemporaneous documentation that related the reserves to specified tax exposures. In reviewing the matter, the Committee noted that these tax reserves were communicated to and discussed with our outside independent auditors at the time they were created and maintained. We and our Audit Committee are of the view that the handling of the unspecified tax reserves during these periods was not intended to, and did not, materially affect our SEC-filed financial statements. There was also no evidence of tax or other fraud in connection with the establishment of these reserves.

In the course of the Audit Committee investigation, we have communicated with the SEC on an informal basis, and we expect to continue these communications with respect to the results of the investigation and further developments relating to the litigation as appropriate.

In a related administrative proceeding before the U.S. Department of Labor under Section 1107 of the Sarbanes-Oxley Act, the plaintiffs made a claim based on the same allegations made in the wrongful termination suit. We defended vigorously this proceeding. On January 23, 2004, the plaintiffs withdrew their complaint just prior to the issuance by the Department of Labor of an initial determination.

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Class Actions Securities Litigation. On December 12, 2003, a putative bondholder class action styled Orens v. Levi Strauss & Co., et al., Case No. C-03-5605, RMW (HRL), was filed in the United States District Court for the Northern District of California against us, our chief executive officer and our former chief financial officer. The action purports to be brought on behalf of purchasers of our bonds in the period from January 10, 2001 to October 9, 2003, and makes claims under the federal securities laws, including Section 10(b) and 20(a) of the Securities Exchange Act of 1934, relating to our SEC filings and other public statements. Specifically, the action alleges that certain of our financial statements and other public statements during this period materially overstated our net income and other financial results and were otherwise false and misleading, and that our public disclosures omitted to state that we lacked adequate internal controls such that we were unable to ascertain our true financial condition. Plaintiffs contend that such statements and omissions caused the trading price of our bonds to be artificially inflated. Plaintiffs seek compensatory damages as well as other relief.

On February 20, 2004, a putative bondholder class action styled General Retirement System of the City of Detroit, et al. v. Levi Strauss & Co., et al., Case No. C-04-00712, JW (EAI), was filed in the United States District Court for the Northern District of California, San Jose Division, against us, our chief executive officer, our former chief financial officer, our directors and our underwriters in connection with our April 6, 2001 and June 16, 2003 registered bond offerings. As of February 29, 2004, we had not been served with this lawsuit. The action purports to be brought on behalf of purchasers of our bonds who made purchases pursuant or traceable to our prospectuses dated March 8, 2001 or April 28, 2003, or who purchased our bonds in the open market from January 10, 2001 to October 9, 2003. The action makes claims under the federal securities laws, including Sections 11 and 15 of the Securities Act of 1933, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, relating to our SEC filings and other public statements. Specifically, the action alleges that certain of our financial statements and other public statements during this period materially overstated our net income and other financial results and were otherwise false and misleading, and that our public disclosures omitted to state that we made reserve adjustments that plaintiffs allege were improper. Plaintiffs contend that these statements and omissions caused the trading price of our bonds to be artificially inflated. Plaintiffs seek compensatory damages as well as other relief.

We are in the initial stages of these lawsuits. We expect to defend these cases vigorously.

Saipan Class Action Litigation. In April 2000, we were named as an additional defendant in a class action suit filed in 1999 in federal district court in Saipan by non-resident garment workers, who currently or formerly worked in Saipan, against several manufacturers operating on the island. (Saipan is a U.S. commonwealth in the Northern Mariana Islands.) The complaint related to working conditions for the operators in Saipan facilities and alleged violation of the Racketeer Influenced and Corrupt Organization Act, the Alien Tort Claims Act and state common and international law. All other defendants settled the lawsuit in September 2002 for $20 million. We refused to join the settlement as we believed that the allegations about us in the lawsuit were not true.

On January 21, 2003, the court entered judgment in our favor on the Alien Tort Claims Act claims. On December 18, 2003, the court dismissed all remaining claims against us at the request of plaintiffs. As part of the dismissal, we agreed only that all parties should bear their own costs and that we would not sue plaintiffs or their attorneys for malicious prosecution.

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

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of our security holders during our 2003 fiscal fourth quarter.

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PART II

Our shares of common stock are held by members of the families of several descendants of our founder, Levi Strauss, and by several former members of our management. There is no established public trading market for our shares and none of our shares are convertible into shares of any other class of stock or other securities.

All shares of our common stock are deposited in a voting trust, a legal arrangement that transfers the voting power of the shares to a trustee or group of trustees. The four voting trustees are Peter E. Haas, Sr., Peter E. Haas, Jr., Robert D. Haas and F. Warren Hellman. The voting trustees have the exclusive ability to elect and remove directors, amend our by-laws and take certain other actions which would normally be within the power of stockholders of a Delaware corporation. Our equity holders who, as a result of the voting trust, legally hold “voting trust certificates,” not stock, retain the right to direct the trustees on specified mergers and business combinations, liquidations, sales of substantially all of our assets and specified amendments to our certificate of incorporation.

The voting trust will last until April 2011, unless the trustees unanimously decide, or holders of at least two-thirds of the outstanding voting trust certificates decide, to terminate it earlier. If Robert D. Haas ceases to be a trustee for any reason, then the question of whether to continue the voting trust will be decided by the holders. If Peter E. Haas, Sr. ceases to be a trustee, his successor will be his spouse, Miriam L. Haas. The existing trustees will select the successors to the other trustees. The agreement among the stockholders and the trustees creating the voting trust contemplates that, in selecting successor trustees, the trustees will attempt to select individuals who share a common vision with the sponsors of the 1996 transaction that gave rise to the voting trust, represent and reflect the financial and other interests of the equity holders and bring a balance of perspectives to the trustee group as a whole. A trustee may be removed if the other three trustees unanimously vote for removal or if holders of at least two-thirds of the outstanding voting trust certificates vote for removal.

Our common stock, as noted, and the voting trust certificates, are not publicly held or traded. All shares and the voting trust certificates are subject to a stockholders’ agreement. The agreement, which expires in April 2016, limits the transfer of shares and certificates to other holders, family members, specified charities and foundations and to us. The agreement does not provide for registration rights or other contractual devices for forcing a public sale of shares or certificates, or other access to liquidity. The scheduled expiration date of the stockholders’ agreement is five years later than that of the voting trust agreement in order to permit an orderly transition from effective control by the voting trust trustees to direct control by the stockholders.

We may hold “annual stockholders’ meetings” to which all voting trust certificate holders are invited to attend. These meetings are not a “meeting of stockholders” in the traditional corporate law sense. Under the voting trust agreement, the trustees, not the voting trust certificate holders, elect the directors and vote the shares on most other corporate matters. In addition, the meetings are not official formal meetings, under the voting trust agreement, of the voting trust certificate holders. Instead, these annual gatherings are opportunities for the voting trust certificate holders to interact with the board of directors and management and to learn more about our business.

As of November 30, 2003, there were 168 record holders of voting trust certificates.

We did not declare or pay any dividends in our two most recent fiscal years, and we do not expect to pay any dividends in the foreseeable future. Our senior secured term loan and senior secured revolving credit facility prohibits our declaring or paying any dividends without first obtaining consents from our lenders. In addition, the indentures relating to our 11.625% senior notes due 2008 and our 12.25% senior notes due 2012 limit our paying dividends. For more detailed information about our loan agreements and senior notes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition” and Notes to Consolidated Financial Statements.

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Item 6. SELECTED FINANCIAL DATA

The following table summarizes our selected financial data. The following selected statements of operations data and cash flow data for 2003, 2002 and 2001 and the consolidated balance sheet data of such periods are derived from our financial statements that have been audited by KPMG LLP. The following selected statements of operations data and cash flow data for 2000 and 1999 and the consolidated balance sheet data of such periods are derived from our financial statements that were previously audited by Arthur Andersen LLP, independent public accountants, and restated as a result of the 2001 reaudit by KPMG LLP but not separately reaudited by KPMG LLP. All financial information set forth below reflects the restatement of our financial statements for fiscal years 2001 and 2002, as discussed below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Restatements of Financial Information” and Note 2 of the Notes to Consolidated Financial Statements.

The financial data set forth below should be read in conjunction with, and are qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements and the related notes to those financial statements, included elsewhere in this report. Certain prior year amounts have been reclassified to conform to the 2003 presentation.

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Introduction

Overview. We are one of the world’s leading branded apparel companies, with sales in more than 110 countries. We design and market jeans and jeans-related pants, casual and dress pants, tops, jackets and related accessories for men, women and children under our Levi’s^®, Dockers^® and Levi Strauss Signature^™ brands. We were founded in San Francisco in 1853 and, in 2003, celebrated our 150^th year of business.

Our net sales for 2003 were $4.1 billion. Net sales for the year by brand were as follows:

Pants, including jeans, casual and dress pants, represented approximately 85% of our total units sold in 2003.

Our Levi’s^® and Dockers^® products are distributed primarily through chain retailers and department stores in the United States and primarily through department stores and specialty retailers abroad. We also distribute Levi’s^® and Dockers^® products through approximately 950 independently-owned franchised stores outside the United States and through a small number of company-owned stores located in the U.S., Europe and Asia. We entered the mass channel in the Americas and Asia in 2003 and in Europe in early 2004 with our new Levi Strauss Signature^™ brand.

Our business in 2003 was organized into three geographic regions. The following table provides employee headcount, sales and operating income for those regions:

Our Markets and Business in 2003. Key factors in our markets and developments in our business in 2003 included the following:

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These factors and developments underlie our priorities for 2004: stabilizing our sales and improving our profitability; reducing costs and increasing cash flow in order to pay down debt; and ensuring that we execute successfully changes in our U.S., European and global supply chain organizations and in our go-to-market process we need to improve our ability to compete in this environment.

Our Organization. In 2003, we took a number of actions relating to our product offering, organization, management and cost structure:

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These actions reflect our core strategies and cost reduction priorities. Our launch of the Levi Strauss Signature^™ brand enables us to reach consumers who shop in the mass channel, the largest retail channel in the United States and an important presence in Europe and Asia. Our organizational and go-to-market process changes are intended to help us bring innovative products to market more quickly. Our plant closures continue our shift to contract manufacturing outside North America. The organizational changes, plant closures, systems installation suspension and changes in compensation and benefit plans are intended to help us reduce our operating expenses and our cost of goods sold. Our engagement of Alvarez & Marsal, Inc. is intended to help drive these and other operational and financial improvements forward at a more rapid pace.

Going Forward. Going into 2004, we expect price and competitive pressures to continue. We expect continuing pressure on our key distribution channels for Levi’s^® and Dockers^® products in the U.S. and Europe. We will experience the full-year effect of the wholesale price reductions we took during 2003. We will see the impact of revamped Levi’s^® brand product lines and advertising, including our introduction in Europe of an updated Levi’s^® 501^® jean supported by a substantial marketing campaign. Our key challenges in this environment include making operational the substantial changes we began in late 2003 in our U.S., European and global supply chain organizations, go-to-market processes and sourcing practices, without impairing our customer service levels, product quality or other key aspects of our business. We also must execute successfully our expansion of the Levi Strauss Signature^™ brand to new customers in the Americas, Europe and Asia.

We believe we are beginning 2004 on an encouraging note. We expect our net sales for the first quarter to increase approximately 5% over the same period in 2003. We anticipate that sales for the first quarter of 2004 on a constant currency basis will be approximately flat with the first quarter of 2003. This improved performance reflects the continued roll-out of our Levi Strauss Signature^™ brand as well as continued growth in Asia Pacific. While we expect sales of the Levi’s^® brand in the United States and our European sales in the first quarter of this year to decline compared to the same period in 2003, our expected performance overall indicates improvement from the sales trend through 2003.

Our Debt and Liquidity. During 2003, we entered into a $500.0 million senior secured term loan and a $650.0 million senior secured revolving credit facility. We paid off our $350.0 million 6.80% notes that were due in November 2003 and a $10.0 million industrial revenue bond. We also terminated our U.S. and European receivables securitization arrangements. As of February 29, 2004, our availability under our domestic asset-based revolving credit facility was approximately $455 million and we had no outstanding borrowings under this facility. After taking into account usage of availability for other credit-related instruments such as documentary and standby letters of credit, our unused availability was approximately $269 million. In addition, we had highly liquid short-term investments in the U.S. totaling approximately $97 million, leaving us with total U.S. liquidity (availability and liquid short term investments) of $366 million.

Our Financial Reporting Developments. During 2003, we experienced various unusual developments relating to our financial reporting:

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