Exit and disposal activities (Tables)

12 Months Ended

Aug. 31, 2020

Restructuring and Related Activities [Abstract]

Restructuring costs and reserves

Costs related to exit and disposal activities under the Transformational Cost Management Program for the fiscal year ended August 31, 2020 and 2019 were as follows (in millions):

Twelve Months Ended August 31, 2020	Retail Pharmacy USA		Retail Pharmacy International		Pharmaceutical Wholesale		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs1	$	204	$	10	$	2	$	217
Asset impairments2	51		21		19		90
Employee severance and business transition costs	159		95		42		295
Information technology transformation and other exit costs	72		42		4		118
Total pre-tax exit and disposal charges	$	486	$	168	$	66	$	720

¹Includes $166 million of impairments relating to operating lease right-of-use and finance lease assets. Refer to note 4, leases for additional information.

²Primarily includes write down of leasehold improvements, certain software and inventory.

Twelve Months Ended August 31, 2019	Retail Pharmacy USA		Retail Pharmacy International		Pharmaceutical Wholesale		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	5	$	19	$	1	$	25
Asset impairments1	95		67		98		260
Employee severance and business transition costs	42		34		49		125
Information technology transformation and other exit costs	5		10		7		22
Total pre-tax exit and disposal charges	$	147	$	130	$	154	$	432

¹Primarily includes write down of leasehold improvements, certain software and inventory.

Costs related to the Store Optimization Program for the twelve months ended August 31, 2020, 2019 and 2018 were as follows (in millions):

	2020		2019		2018
Lease obligations and other real estate costs1	$	22	$	119	$	19
Employee severance and other exit costs	31		77		81
Total costs	$	53	$	196	$	100

1Includes $11 million operating lease right-of-use impairments for the fiscal year ended August 31, 2020. Refer to note 4, leases for additional information.

Schedule of restructuring reserve by type of cost

The changes in liabilities and assets related to the exit and disposal activities under Transformational Cost Management Program include the following (in millions):

	Lease obligations and other real estate costs		Asset Impairments		Employee severance and business transition costs		Information technology transformation and other exit costs		Total
Balance at August 31, 2018	$	—	$	—	$	—	$	—	$	—
Costs	25		260		125		22		432
Payments	(8)		—		(69)		(13)		(90)
Other - non cash	—		(260)		—		(6)		(265)
Currency	—		—		1		—		1
Balance at August 31, 2019	$	17	$	—	$	57	$	4	$	78
Costs	217		90		295		118		720
Payments	(43)		—		(142)		(102)		(286)
Other1	(166)		(90)		13		(11)		(255)
ASC 842 Leases adoption2	(4)		—		—		—		(4)
Currency	1		—		4		—		5
Balance at August 31, 2020	$	22	$	—	$	227	$	8	$	257

¹Includes $166 million of impairments relating to operating lease right-of-use and finance lease assets. Refer to note 4, leases for additional information.

²Represents liability for facility closings and related lease termination charges recorded as an offset to right-of-use assets upon the adoption of ASC 842. Refer to note 1, summary of major accounting policies and note 4, leases for additional information.

The changes in liabilities related to the Store Optimization Program for the fiscal years ended August 31, 2020 and 2019 include the following (in millions):

	Lease obligations and other real estate costs		Employee severance and other exit costs		Total
Balance at August 31, 2018	$	308	$	21	$	329
Costs	119		77		196
Payments	(171)		(69)		(240)
Other - non cash1	152		(7)		144
Balance at August 31, 2019	$	407	$	22	$	429
Costs	22		31		53
Payments	(36)		(40)		(76)
Other - non cash2	(11)		(12)		(23)
ASC 842 Leases adoption3	(378)		—		(378)
Balance at August 31, 2020	$	5	$	1	$	6

¹Primarily represents unfavorable lease liabilities from acquired Rite Aid stores.

²Includes write down of operating lease right-of-use assets and inventory.

³Represents liability for facility closings and related lease termination charges recorded as an offset to right-of-use assets upon the adoption of ASC 842. Refer to note 1, summary of major accounting policies and note 4, leases for additional information.