Note 4. 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 included plans to close approximately 200 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 Company’s Retail Pharmacy USA segment, but includes activities from all segments and are expected to be substantially complete by the end of the Company’s 2017 fiscal year. The Company estimates that it will recognize cumulative pre-tax charges to its GAAP financial results of between $1.6 billion and $1.8 billion, including costs associated with lease obligations and other real estate payments, asset impairments and employee termination and other business transition and exit costs. The Company expects to incur pre-tax charges of between $525 million and $600 million for real estate costs, including lease obligations (net of estimated sublease income); between $650 million and $725 million for asset impairment charges relating primarily to asset write-offs from store closures, information technology, inventory and other non-operational real estate asset write-offs; and between $425 million and $475 million for employee severance and other business transition and exit costs. The Company incurred pre-tax charges of $90 million ($52 million related to real estate costs, $25 million in asset impairment charges and $13 million in severance and other business transition and exit costs) related to the Cost Transformation Program during the three months ended November 30, 2015. No charges were incurred with respect to the Cost Transformation Program in the three months ended November 30, 2014. From inception through November 30, 2015, the Company incurred pre-tax charges of $632 million ($254 million in real estate costs, $248 million related to asset impairment charges and $130 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. As the program is implemented, the restructuring charges will be recognized as the costs are incurred over time in accordance with GAAP.

In March 2014, the Walgreens Board of Directors approved a plan to close underperforming stores in efforts to optimize and focus resources within the Company’s Retail Pharmacy USA segment in a manner intended to increase stockholder value. As of August 31, 2015, this plan was completed and no additional charges related to the plan are expected. For the three months ended November 30, 2014, the Company incurred pre-tax charges of $17 million, which were primarily related to lease termination costs. All charges related to this plan have been recorded within selling, general and administrative expenses.

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

	Retail Pharmacy				Pharmaceutical Wholesale		Consolidated
	USA		International		Pharmaceutical Wholesale		Consolidated
Three Months Ended November 30, 2015
Real estate costs	$	52	$	—	$	—	$	52
Asset impairments		25		—		—		25
Severance and other business transition and exit costs		8		5		—		13
Total restructuring costs	$	85	$	5	$	—	$	90

Three Months Ended November 30, 2014
Real estate costs	$	17	$	—	$	—	$	17
Asset impairments		—		—		—		—
Severance and other business transition and exit costs		—		—		—		—
Total restructuring costs	$	17	$	—	$	—	$	17