Note 2. Restructuring

On April 8, 2015, the Walgreens Boots Alliance Board of Directors approved a plan to implement a new restructuring program (the “Cost Transformation Program”) as part of an initiative to reduce costs and increase operating efficiencies. The Cost Transformation Program implemented and built on the cost-reduction initiative previously announced by the Company on August 6, 2014 and included plans to close stores across the U.S.; reorganize corporate and field operations; drive operating efficiencies; and streamline information technology and other functions. The actions under the Cost Transformation Program focus primarily on the Retail Pharmacy USA segment. From inception through November 30, 2016, the Company incurred pre-tax charges of $1.0 billion ($496 million related to asset impairment charges, $302 million in real estate costs and $249 million in severance and other business transition and exit costs) related to the Cost Transformation Program. All charges related to the Cost Transformation Program have been recorded within selling, general and administrative expenses. Restructuring charges are recognized as the costs are incurred in accordance with GAAP.

Restructuring costs by segment are as follows (in millions):

Three Months Ended November 30, 2016	Retail Pharmacy USA		Retail Pharmacy International		Pharmaceutical Wholesale		Walgreens Boots Alliance, Inc.
Asset impairments	$	46	$	2	$	-	$	48
Real estate costs		9		-		-		9
Severance and other business transition and exit costs		17		4		3		24
Total restructuring costs	$	72	$	6	$	3	$	81

Three Months Ended November 30, 2015
Asset impairments	$	25	$	-	$	-	$	25
Real estate costs		52		-		-		52
Severance and other business transition and exit costs		8		5		-		13
Total restructuring costs	$	85	$	5	$	-	$	90
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	Asset Impairments			Real estate costs			Severance and other business transition and exit costs			Total
Balance at August 31, 2016	$	-		$	248		$	27		$	275
Costs incurred, net of expected sublease income		48			9			24			81
Payments		-			(12	)		(22	)		(34	)
Other - non cash		(48	)		-			-			(48	)
Currency translation adjustments		-			-			(2	)		(2	)
Balance at November 30, 2016	$	-		$	245		$	27		$	272
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