LEVI STRAUSS & COLEVI

LEVI STRAUSS & CO Leases Disclosure

10-KFiled Jan 28, 20263 min read
LEASES
On June 6, 2024, the Company entered into an agreement to replace certain of the Company’s legacy U.S. distribution centers with a new third-party logistics center. The Company maintains certain rights over the warehouse, and warehouse equipment and technologies which resulted in an Operating lease ROU asset and lease liability of $30.6 million in “Operating lease right-of-use assets, net” and “Short-term Operating lease liabilities” and “Long-term Operating lease liabilities” balances and a Financing lease ROU asset and lease liability of $14.0 million in “Other non-current assets” and “Other long-term liabilities” balances on the consolidated balance sheets during 2024. In the first quarter of 2025, the Company recorded an additional Financing lease ROU asset and lease liability of $61.6 million in “Other non-current assets” and “Other long-term liabilities” balances on the consolidated balance sheets.
In the fourth quarter of fiscal year 2023, the Company leased a distribution facility in Germany and recognized a ROU asset of $80.8 million and corresponding lease liability of $91.6 million. During 2023, the Company capitalized approximately $57.4 million for Company-owned equipment to be installed in the leased facility. During 2024, the Company entered into an agreement with a third-party logistics provider to manage all aspects of the distribution center. The Company has received payments of approximately $87.1 million from the provider for use of the Company’s warehouse equipment and technologies over the term of the agreement. The Company maintains certain rights over the warehouse equipment and technologies and retains the related equipment on the consolidated balance sheets. The upfront payment is being amortized as a reduction in the related distribution expenses over the expected term of the arrangement, which commenced in the second half of 2024. The upfront payment was recognized on the consolidated balance sheets in “Other accrued liabilities” and “Other long-term liabilities” and the proceeds were recorded as an operating activity in “Net change in operating assets and liabilities” on the consolidated statements of cash flows.
Operating lease costs and finance lease amortization of ROU assets are primarily recognized in SG&A within the Company's consolidated statements of income, based on the underlying nature of the leased asset. Interest expense on finance lease liabilities is recognized in “Interest expense” on the Company's consolidated statements of income. The components of operating lease costs were as follows:
November 30, 2025December 1, 2024November 26, 2023
(Dollars in millions)
Operating leases:
Operating lease costs, including variable lease costs and short-term lease costs
$411.7 $405.1 $372.0 
Variable lease costs
98.2 99.3 91.8 
Short-term lease costs
12.3 7.5 7.6 
Amounts of future undiscounted cash flows related to lease payments over the lease term are as follows and are reconciled to the present value of the lease liabilities as recorded in the Company's consolidated balance sheets.
November 30,
2025
(Dollars in millions)
Operating Leases
Finance Leases
2026$304.8 $13.4 
2027259.8 13.4 
2028213.5 13.4 
2029163.8 13.4 
2030130.4 13.2 
Thereafter377.3 29.0 
Total undiscounted future cash flows related to lease payments1,449.6 95.8 
Less: Interest183.3 22.3 
Present value of lease liabilities$1,266.3 $73.5 

The following table includes the weighted average remaining lease terms, in years, and the weighted average discount rate used to calculate the present value of lease liabilities:
November 30,
2025		December 1,
2024
Operating leases:
Weighted-average remaining lease term (years)6.76.9
Weighted-average discount rate4.34 %4.27 %
Finance leases:
Weighted-average remaining lease term (years)7.26.9
Weighted-average discount rate7.87 %7.61 %

The table below includes supplemental cash and non-cash information related to leases:
November 30,
2025		December 1,
2024
(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases$319.5 $292.4 
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities306.9 305.4 
Finance lease right-of-use assets acquired in exchange for finance lease obligations
63.9 14.0 
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Historical Timeline

Fiscal YearFiled
2025Jan 28, 2026Showing above
2024Jan 29, 2025
2023Jan 25, 2024
2022Jan 25, 2023
2021Jan 26, 2022
2020Jan 27, 2021

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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