C. Restructuring and Other Charges – In the second quarter and six-month period of 2013, Alcoa recorded Restructuring and other charges of $244 ($170 after-tax and noncontrolling interests) and $251 ($175 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2013 second quarter included $103 ($62 after noncontrolling interest) related to a legal matter (see the Government Investigations section under Litigation in Note F); $14 ($14 after-tax) in asset impairments, $23 ($16 after-tax) in accelerated depreciation, and $49 ($40 after-tax) in other exit costs related to the permanent shutdown and demolition of certain structures at two non-U.S. locations (see below); $29 ($19 after-tax) for asset impairments and related costs for retirements of previously idled structures; $24 ($18 after-tax and noncontrolling interests) for the layoff of approximately 470 employees (190 in the Global Rolled Products segment, 180 in the Engineered Products and Solutions segment, 55 in the Primary Metals segment, and 45 in Corporate); a charge of $4 ($2 after-tax) for other miscellaneous items; and $2 ($1 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2013 six-month period, Restructuring and other charges included $103 ($62 after noncontrolling interest) related to a legal matter (see the Government Investigations section under Litigation in Note F); $86 ($70 after-tax) for the previously mentioned charges related to the permanent shutdown and demolition of certain structures at two non-U.S. locations (see below); $29 ($19 after-tax) for asset impairments and related costs for retirements of previously idled structures; $27 ($20 after-tax and noncontrolling interests) for layoff costs, including the separation of approximately 530 employees (190 in the Global Rolled Products segment, 180 in the Engineered Products and Solutions segment, 115 in the Primary Metals segment, and 45 in Corporate) and a pension plan settlement charge related to previously separated employees; a charge of $8 ($5 after-tax) for other miscellaneous items; and $2 ($1 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2013 second quarter, management approved the permanent shutdown and demolition of two potlines (capacity of 105,000 metric-tons-per-year) that utilize Soderberg technology at the smelter located in Baie Comeau, Québec, Canada (remaining capacity of 280,000 metric-tons-per-year composed of two prebake potlines) and the smelter located in Fusina, Italy (capacity of 44,000 metric-tons-per-year). The two Soderberg lines at Baie Comeau will be fully shut down by the end of the third quarter of 2013 while the Fusina smelter was previously temporarily idled in 2010. Demolition and remediation activities related to the two Soderberg lines and the Fusina smelter will begin in the fourth quarter of 2013 and are expected to be completed by the end of 2015 and 2017, respectively. The decision on the two Soderberg lines is part of a 15-month review of 460,000 metric tons of smelting capacity initiated by management earlier in the 2013 second quarter for possible curtailment (announced on May 1, 2013), while the decision on the Fusina smelter is in addition to the capacity being reviewed. Factors leading to both decisions were in general focused on achieving sustained competitiveness and included, among others: lack of an economically viable, long-term power solution (Italy); changed market fundamentals; other existing idle capacity; and restart costs. The accelerated depreciation of $23 and asset impairments of $14 represent the write off of a portion of the two Soderberg lines and all of the Fusina smelter’s remaining book value of properties, plants, and equipment, respectively. Additionally, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value resulting in a charge of $7 ($5 after-tax), which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other exit costs of $49 represent $44 ($36 after-tax) in asset retirement obligations and $5 ($4 after-tax) in environmental remediation, both triggered by the decision to permanently shut down and demolish these structures. Additional charges, including accelerated depreciation and voluntary layoff costs, of approximately $140 ($100 after-tax) may be recognized in future periods related to the Baie Comeau smelter.

In the second quarter and six-month period of 2012, Alcoa recorded Restructuring and other charges of $15 ($10 after-tax and noncontrolling interests) and $25 ($17 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2012 second quarter included $9 ($5 after-tax) for lease termination costs; $6 ($4 after-tax and noncontrolling interests) for the layoff of approximately 110 employees (25 in the Alumina segment, 10 in the Primary Metals segment, and 75 in Corporate); $1 ($1 after-tax) in other miscellaneous charges; and $1 (less than $1 after-tax) for the reversal of a number of small layoff reserves related to prior periods.

In the 2012 six-month period, Restructuring and other charges included $17 ($12 after-tax and noncontrolling interests) for the layoff of approximately 330 employees (160 in the Primary Metals segment, 70 in the Engineered Products and Solutions segment, 25 in the Alumina segment, and 75 in Corporate), including $6 ($4 after-tax) for the layoff of an additional 150 employees related to the previously reported smelter curtailments in Spain; $9 ($5 after-tax) for lease termination costs; $2 ($2 after-tax) in other miscellaneous charges; and $3 ($2 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

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


	Second quarter ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
Alumina	$	—	$	1	$	—	$	1
Primary Metals		94		1		94		6
Global Rolled Products		7		—		10		1
Engineered Products and Solutions		19		—		22		3

Segment total		120		2		126		11
Corporate		124		13		125		14

Total restructuring and other charges	$	244	$	15	$	251	$	25

As of June 30, 2013, approximately 120 of the 530 employees associated with 2013 restructuring programs and approximately 560 of the 800 employees associated with 2012 restructuring programs were separated. The separations associated with 2011 restructuring programs were essentially complete. The remaining separations for the 2013 and 2012 restructuring programs are expected to be completed by the end of 2013.

In the 2013 second quarter and six-month period, cash payments of $1 and $2, respectively, were made against the layoff reserves related to the 2013 restructuring programs; $4 and $11, respectively, were made against the layoff reserves related to the 2012 restructuring programs; and $2 and $6, respectively, were made against the layoff reserves related to the 2011 restructuring programs.

Activity and reserve balances for restructuring charges were as follows:


	Layoff costs			Other exit costs			Total
Reserve balances at December 31, 2011	$	77		$	57		$	134

2012:
Cash payments		(44	)		(13	)		(57	)
Restructuring charges		47			13			60
Other*		(21	)		(5	)		(26	)

Reserve balances at December 31, 2012		59			52			111

2013:
Cash payments		(19	)		(6	)		(25	)
Restructuring charges		27			71			98
Other*		(7	)		(69	)		(76	)

Reserve balances at June 30, 2013	$	60		$	48		$	108

Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2013 six-month period, Other for other exit costs also included a reclassification of the following restructuring charges: $54 in asset retirement and $12 in environmental obligations, as these liabilities are included in Alcoa’s separate reserves for asset retirement obligations and environmental remediation (see Note F), respectively.

The remaining reserves are expected to be paid in cash during 2013, with the exception of approximately $55 to $60, which is expected to be paid over the next several years for lease termination costs, special separation benefit payments, and ongoing site remediation work.