D. Restructuring and Other Charges – In the third quarter and nine-month period of 2017, Alcoa Corporation recorded $10 of income and $12 of expense, respectively, in Restructuring and other charges, which were comprised of the following components: $6 and $24, respectively, for additional contract costs related to the curtailed Wenatchee (Washington) and São Luís (Brazil) smelters; $4 and $17, respectively, for layoff costs, including the separation of approximately 10 and 120 (110 in the Aluminum segment) employees, respectively, and related pension costs of $3 and $6, respectively (see Note J); $7 (both periods) for costs related to the relocation of the Company’s headquarters and principal executive office from New York, New York to Pittsburgh, Pennsylvania; a charge of $2 (both periods) for other miscellaneous items; and a reversal of $29 and $38, respectively, associated with several reserves related to prior periods (see below).

On July 11, 2017, Alcoa Corporation announced plans to restart three (161,400 metric tons of capacity) of the five potlines (268,800 metric tons of capacity) at the Warrick (Indiana) smelter, which is expected to be complete in the second quarter of 2018. This smelter was previously permanently closed in March 2016 by ParentCo. The capacity identified for restart will directly supply the existing rolling mill at the Warrick location to improve efficiency of the integrated site and provide an additional source of metal to help meet an anticipated increase in production volumes. As a result of the decision to reopen this smelter, in the 2017 third quarter, Alcoa Corporation reversed $29 in remaining liabilities related to the original closure decision. These liabilities consisted of $20 in asset retirement obligations and $4 in environmental remediation obligations, which were necessary due to the previous decision to demolish the smelter, and $5 in severance and contract termination costs. Additionally, the carrying value of the smelter and related assets was reduced to zero as the smelter ramped down between the permanent closure decision date (end of 2015) and the end of March 2016. Once these assets are placed back into service in conjunction with the restart, their carrying value will remain zero. As such, only newly acquired or constructed assets related to the Warrick smelter will be depreciated.

In the third quarter and nine-month period of 2016, Alcoa Corporation recorded Restructuring and other charges of $17 and $109, respectively.

Restructuring and other charges in the 2016 third quarter included $17 for layoff costs related to cost reduction initiatives, including the separation of approximately 30 employees in the Aluminum segment and related pension settlement costs (see Note J); a net credit of $1 for other miscellaneous items; and a net charge of $1 related to corporate actions of ParentCo allocated to Alcoa Corporation.

In the 2016 nine-month period, Restructuring and other charges included $84 for additional net costs related to decisions made in late 2015 to permanently close and demolish the Warrick smelter (see above) and to curtail the Wenatchee smelter and Point Comfort (Texas) refinery (see below); $28 for layoff costs related to cost reduction initiatives, including the separation of approximately 60 employees in the Aluminum segment and related pension settlement costs (see Note J); a net charge of $1 related to corporate actions of ParentCo allocated to Alcoa Corporation (see Cost Allocations in Note A); and a reversal of $4 associated with several layoff reserves related to prior periods.

In the 2016 nine-month period, the additional net costs related to the closure and curtailment actions included accelerated depreciation of $70 related to the Warrick smelter as it continued to operate through March 2016; a reversal of $24 ($4 in the 2016 third quarter) associated with severance costs initially recorded in late 2015; and $38 ($2 in the 2016 third quarter) in other costs. Additionally in the 2016 nine-month period, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value, resulting in a charge of $5, which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other costs of $38 ($2 in the 2016 third quarter) represent $30 ($3 in the 2016 third quarter) for contract terminations, $4 (($3) in the 2016 third quarter) in asset retirement obligations for the rehabilitation of a coal mine related to the Warrick smelter, and $4 ($2 in the 2016 third quarter) in other related costs.

Alcoa Corporation does not include Restructuring and other charges in the results of its reportable segments. The impact of allocating such charges to segment results would have been as follows:


	Third quarter ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Bauxite	$	1		$	–		$	1		$	–
Alumina		4			(1	)		4			1
Aluminum		(22	)		17			(1	)		107

Segment total		(17	)		16			4			108
Corporate		7			1			8			1

Total restructuring and other charges	$	(10	)	$	17		$	12		$	109

As of September 30, 2017, approximately 70 of the 120 employees associated with 2017 restructuring programs were separated. The remaining separations for 2017 restructuring programs are expected to be completed by the end of 2017. As of June 30, 2017, the separations associated with 2016 and 2015 restructuring programs were essentially complete.

In the 2017 third quarter and nine-month period, cash payments of $2 and $7, respectively, were made against layoff reserves related to 2017 restructuring programs, less than $1 and $2, respectively, were made against layoff reserves related to 2016 restructuring programs, and $4 and $16, respectively, were made against layoff reserves related to 2015 restructuring programs.

Activity and reserve balances for restructuring charges were as follows:


	Layoff costs			Other costs			Total
Reserve balances at December 31, 2015	$	137		$	15		$	152

2016:
Cash payments		(74	)		(35	)		(109	)
Restructuring charges		32			168			200
Other*		(57	)		(120	)		(177	)

Reserve balances at December 31, 2016		38			28			66

2017:
Cash payments		(25	)		(33	)		(58	)
Restructuring charges		17			30			47
Other*		(17	)		(2	)		(19	)

Reserve balances at September 30, 2017	$	13		$	23		$	36

Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2017 nine-month period and 2016, Other for layoff costs also included a reclassification of $6 (see Note J) and $16, respectively, in pension benefits costs, as these obligations were included in Alcoa Corporation’s separate liability for pension benefits obligations. Additionally in 2016, Other for other costs also included a reclassification of the following restructuring charges: $97 in asset retirement and $26 in environmental obligations, as these liabilities were included in Alcoa Corporation’s separate reserves for asset retirement obligations and environmental remediation.

The remaining reserves are expected to be paid in cash during the remainder of 2017, with the exception of $15, which is expected to be paid by no later than the end of 2019, for contract termination and special layoff benefit payments.