D. Restructuring and Other Charges – In the second quarter and six-month period of 2018, Alcoa Corporation recorded Restructuring and other charges of $231 and $212, respectively, which were comprised of the following components: $167 and $144 (net), respectively, related to settlements and/or curtailments of certain pension and other postretirement employee benefits (see Note K); $80 and $84, respectively, for additional costs related to the curtailed Wenatchee (Washington) smelter, including $73 in both periods associated with recent management decisions (see below); a $15 net benefit in both periods related to the Portovesme (Italy) smelter (see “Italy 148” in the Litigation section of Note N); and a $1 net benefit in both periods for miscellaneous items.

In June 2018, management decided not to restart the fully curtailed Wenatchee smelter within the term provided in the related electricity supply agreement. Alcoa Corporation was therefore required to make a $62 payment to the energy supplier under the provisions of the agreement. Additionally, management decided to permanently close one (38 kmt) of the four potlines at this smelter. This potline has not operated since 2001 and the investments needed to restart this line are cost prohibitive. The remaining three curtailed potlines have a capacity of 146 kmt. In connection with these decisions, the Company recognized a charge of $73, composed of the $62 payment, $10 for asset impairments, and $1 for asset retirement obligations triggered by the decision to decommission the potline.

In the second quarter and six-month period of 2017, Alcoa Corporation recorded Restructuring and other charges of $12 and $22, respectively, which were comprised of the following components: $5 and $18, respectively, for additional contract costs related to the curtailed Wenatchee smelter; $11 and $13, respectively, for layoff costs related to cost reduction initiatives, including the separation of approximately 110 employees in the Aluminum segment; and a reversal of $4 and $9, respectively, associated with several reserves related to prior periods.

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:


	Second quarter ended June 30,					Six months ended June 30,
	2018		2017			2018		2017
Bauxite	$	—	$	—		$	—	$	—
Alumina		3		(1	)		2		(1	)
Aluminum		79		15			84		27

Segment total		82		14			86		26
Corporate		149		(2	)		126		(4	)

Total restructuring and other charges	$	231	$	12		$	212	$	22

As of June 30, 2018, approximately 125 of the 140 employees associated with 2017 restructuring programs were separated. The remaining separations for the 2017 restructuring programs are expected to be completed by the end of 2018.

In the 2018 six-month period, cash payments of $2 were made against layoff reserves related to 2017 restructuring programs.

Activity and reserve balances for restructuring charges were as follows:


	Layoff costs			Other costs			Total
Reserve balances at December 31, 2016	$	38		$	28		$	66

2017:
Cash payments		(30	)		(43	)		(73	)
Restructuring charges		23			67			90
Other*		(20	)		(18	)		(38	)

Reserve balances at December 31, 2017		11			34			45

2018:
Cash payments		(5	)		(88	)		(93	)
Restructuring charges		1			100			101
Other*		(1	)		(7	)		(8	)

Reserve balances at June 30, 2018	$	6		$	39		$	45

Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2018 six-month period, Other for Other costs also included a reclassification of the following restructuring charges: $1 in asset retirement and $2 in environmental obligations, as these liabilities were included in Alcoa Corporation’s separate reserves for asset retirement obligations and environmental remediation. In 2017, Other for Layoff costs also included a reclassification of $8 in pension benefits costs, as these obligations were included in Alcoa Corporation’s separate liability for pension benefits obligations. Additionally in 2017, Other for Other costs also included a reclassification of the following restructuring charges: $10 in asset retirement and $8 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 2018, with the exception of $19, of which $15 relates to the Portovesme smelter (see “Italy 148” in the Litigation section of Note N) and $4 relates to the termination of an office lease contract. Half of these amounts are scheduled to be paid in each of 2019 and 2020.