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 May 31, 2017, the Company incurred pre-tax charges of $1.6 billion ($677 million related to asset impairment charges, $557 million in real estate costs and $324 million in severance and other business transition and exit costs) related to the Cost Transformation Program, which are primarily 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 May 31, 2017	Retail Pharmacy USA		Retail Pharmacy International		Pharmaceutical Wholesale		Walgreens Boots Alliance, Inc.
Asset impairments	$	96	$	18	$	—	$	114
Real estate costs	15		—		—		15
Severance and other business transition and exit costs	18		8		16		42
Total restructuring costs	$	129	$	26	$	16	$	171

Three months ended May 31, 2016
Asset impairments	$	48	$	—	$	—	$	48
Real estate costs	—		—		—		—
Severance and other business transition and exit costs	12		6		7		25
Total restructuring costs	$	60	$	6	$	7	$	73



Nine months ended May 31, 2017	Retail Pharmacy USA		Retail Pharmacy International		Pharmaceutical Wholesale		Walgreens Boots Alliance, Inc.
Asset impairments	$	207	$	21	$	1	$	229
Real estate costs	264		—		—		264
Severance and other business transition and exit costs	46		30		23		99
Total restructuring costs	$	517	$	51	$	24	$	592

Nine months ended May 31, 2016
Asset impairments	$	73	$	—	$	—	$	73
Real estate costs	52		—		—		52
Severance and other business transition and exit costs	45		14		7		66
Total restructuring costs	$	170	$	14	$	7	$	191

The changes in accrued expenses and other liabilities related to the Cost Transformation Program include the following (in millions):



	Asset impairments			Real estate costs			Severance and other business transition and exit costs			Total
Balance at August 31, 2016	$	—		$	248		$	27		$	275
Restructuring costs	229			264			99			592
Payments	—			(51		)	(80		)	(131		)
Other - non cash	(229		)	—			—			(229		)
Currency translation adjustments	—			—			—			—
Balance at May 31, 2017	$	—		$	461		$	46		$	507