Q. Asset Retirement Obligations

Alcoa Corporation has recorded AROs related to legal obligations associated with the standard operation of bauxite mines, alumina refineries, and aluminum smelters. These AROs consist primarily of costs associated with mine reclamation, closure of bauxite residue areas, spent pot lining disposal, and landfill closure. Alcoa Corporation also recognizes AROs for any significant lease restoration obligation, if required by a lease agreement, and for the disposal of regulated waste materials related to the demolition of certain power facilities.

In addition to AROs, certain CAROs related to alumina refineries, aluminum smelters, rolling mills, and energy generation facilities have not been recorded in the Consolidated Financial Statements due to uncertainties surrounding the ultimate settlement date. Such uncertainties exist as a result of the perpetual nature of the structures, maintenance and upgrade programs, and other factors. At the date a reasonable estimate of the ultimate settlement date can be made (e.g., planned demolition), Alcoa Corporation would record an ARO for the removal, treatment, transportation, storage, and/or disposal of various regulated assets and hazardous materials such as asbestos, underground and aboveground storage tanks, PCBs, various process residuals, solid wastes, electronic equipment waste, and various other materials. If Alcoa Corporation was required to demolish all such structures immediately, the estimated CARO as of December 31, 2017 ranges from $3 to $28 per structure (24 structures) in today’s dollars.

The following table details the carrying value of recorded AROs by major category (of which $108 and $104 was classified as a current liability as of December 31, 2017 and 2016, respectively):


December 31,	2017		2016
Mine reclamation	$	221	$	199
Closure of bauxite residue areas		238		219
Spent pot lining disposal		125		135
Demolition*		113		121
Landfill closure		27		30
Other		1		4
	$	725	$	708

*	In 2017, 2016, and 2015, AROs were recorded as a result of management’s decision to permanently close and demolish certain structures (see Note D).

The following table details the changes in the total carrying value of recorded AROs:


December 31,	2017			2016
Balance at beginning of year	$	708		$	635
Accretion expense		17			19
Payments		(69	)		(47	)
Liabilities incurred		43			117
Foreign currency translation and other		26			(16	)
Balance at end of year	$	725		$	708