Exit and disposal activities

12 Months Ended

Aug. 31, 2017

Restructuring and Related Activities [Abstract]

Exit and disposal activities

Exit and disposal activities

On April 8, 2015, the Walgreens Boots Alliance Board of Directors approved a plan to implement a 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 focused primarily on the Retail Pharmacy USA segment, but included activities from all segments. The Company completed the Cost Transformation Program in the fourth quarter of fiscal 2017, and over the duration of the program, closed a total of 255 stores. The Company recognized cumulative pre-tax charges to its financial results in accordance with generally accepted accounting principles in the United States of America (“GAAP”) of $1.8 billion, which were primarily recorded within selling, general and administrative expenses. These charges included $743 million related to asset impairment charges, $665 million in real estate costs and $393 million in severance and other business transition and exit costs.

The Company incurred pre-tax charges of $835 million related to the Cost Transformation Program during fiscal 2017. The Company incurred pre-tax charges of $424 million related to the Cost Transformation Program during fiscal 2016. The Company incurred pre-tax charges of $542 million related to the Cost Transformation Program during fiscal 2015. Restructuring charges are recognized as the costs are incurred in accordance with GAAP.

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

	Retail Pharmacy
Fiscal 2017	USA		International		Pharmaceutical Wholesale		Consolidated
Asset impairments	$	272	$	21	$	2	$	295
Real estate costs	372		—		—		372
Severance and other business transition and exit costs	87		46		35		168
Total restructuring costs	$	731	$	67	$	37	$	835
Fiscal 2016
Asset impairments	$	215	$	10	$	—	$	225
Real estate costs	89		1		1		91
Severance and other business transition and exit costs	70		18		20		108
Total restructuring costs	$	374	$	29	$	21	$	424
Fiscal 2015
Asset impairments	$	216	$	7	$	—	$	223
Real estate costs	219		—		—		219
Severance and other business transition and exit costs	105		12		—		117
Total restructuring costs	$	540	$	19	$	—	$	559

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	295			372			168			835
Payments	—			(99		)	(119		)	(218		)
Other - non cash	(295		)	—			—			(295		)
Currency translation adjustments	—			—			3			3
Balance at August 31, 2017	$	—		$	521		$	79		$	600