C. Restructuring and Other Charges – In the third quarter and nine-month period of 2013, Alcoa recorded Restructuring and other charges of $151 ($108 after-tax and noncontrolling interests) and $402 ($283 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2013 third quarter included $152 ($109 after-tax) for exit costs related to the permanent shutdown and demolition of certain structures at two smelter locations (see below); a charge of $1 ($1 after-tax) for other miscellaneous items; and $2 ($2 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2013 nine-month period, Restructuring and other charges included $238 ($179 after-tax) for exit costs related to the permanent shutdown and demolition of certain structures at three smelter locations (see below); $103 ($62 after noncontrolling interest) related to a legal matter (see the Government Investigations section under Litigation in Note F); $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 510 employees (190 in the Global Rolled Products segment, 170 in the Engineered Products and Solutions segment, 120 in the Primary Metals segment, and 30 in Corporate) and a pension plan settlement charge related to previously separated employees; a charge of $9 ($6 after-tax) for other miscellaneous items; and $4 ($3 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 (i) 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 (ii) the smelter located in Fusina, Italy (capacity of 44,000 metric-tons-per-year). Additionally, in the 2013 third quarter, management approved the permanent shutdown and demolition of one potline (capacity of 41,000 metric-tons-per-year) that utilizes Soderberg technology at the Massena East, N.Y. smelter (remaining capacity of 84,000 metric-tons-per-year composed of two Soderberg potlines). The aforementioned Soderberg lines at Baie Comeau and Massena East were 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 all three facilities will begin in the fourth quarter of 2013 and are expected to be completed by the end of 2014 (Massena East), 2015 (Baie Comeau), and 2017 (Fusina).

The decisions on the Soderberg lines for Baie Comeau and Massena East are 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 all three 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.

In the third quarter and nine-month period of 2013, exit costs related to these actions included $107 for the layoff of approximately 520 employees (Primary Metals segment) in both periods, including $78 in pension costs (see Note L); accelerated depreciation of $35 and $58, respectively, (Baie Comeau) and asset impairments of $4 and $18, respectively, (Fusina and Massena East) representing the write off of the remaining book value of all related properties, plants, and equipment; and $6 and $55, respectively, in other exit costs. Additionally in the third quarter and nine-month period of 2013, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value resulting in a charge of $2 ($1 after-tax) and $9 ($6 after-tax), respectively, which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other exit costs of $55 represent $48 in asset retirement obligations and $5 in environmental remediation, both triggered by the decisions to permanently shut down and demolish these structures, and $2 in other related costs.

In the third quarter and nine-month period of 2012, Alcoa recorded Restructuring and other charges of $2 ($2 after-tax) and $27 ($19 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2012 third quarter included $3 ($2 after-tax) for the layoff of approximately 20 employees (Primary Metals segment), including additional employees related to the previously reported smelter curtailments in Spain, and $1 (less than $1 after-tax) for the reversal of a number of small layoff reserves related to prior periods.

In the 2012 nine-month period, Restructuring and other charges included $20 ($14 after-tax and noncontrolling interests) for the layoff of approximately 350 employees (180 in the Primary Metals segment, 70 in the Engineered Products and Solutions segment, 25 in the Alumina segment, and 75 in Corporate), including $9 ($6 after-tax) for the layoff of an additional 160 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 $4 ($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:


	Third quarter ended September 30,					Nine months ended September 30,
	2013		2012			2013		2012
Alumina	$	—	$	—		$	—	$	1
Primary Metals		150		3			244		9
Global Rolled Products		—		—			10		1
Engineered Products and Solutions		—		—			22		3

Segment total		150		3			276		14
Corporate		1		(1	)		126		13

Total restructuring and other charges	$	151	$	2		$	402	$	27

As of September 30, 2013, approximately 780 of the 1,030 employees associated with 2013 restructuring programs and approximately 640 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 third quarter and nine-month period, cash payments of $10 and $12, respectively, were made against the layoff reserves related to the 2013 restructuring programs; $2 and $13, respectively, were made against the layoff reserves related to the 2012 restructuring programs; and $2 and $8, 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		(35	)		(8	)		(43	)
Restructuring charges		135			77			212
Other*		(87	)		(75	)		(162	)

Reserve balances at September 30, 2013	$	72		$	46		$	118

Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2013 nine-month period, Other for layoff costs also included a reclassification of $80 in pension costs, as this obligation is included in Alcoa’s separate liability for pension obligations. In the 2013 nine-month period, Other for other exit costs also included a reclassification of the following restructuring charges: $58 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 $65 to $70, which is expected to be paid over the next several years for lease termination costs, special separation benefit payments, and ongoing site remediation work.