D. Restructuring and Other Charges – In the first quarter of 2014, Alcoa recorded Restructuring and other charges of $461 ($274 after-tax and noncontrolling interests), which were comprised of the following components: $336 ($189 after-tax and noncontrolling interest) for exit costs related to decisions to permanently shut down and demolish two smelters and two rolling mills (see below); $70 ($46 after-tax and noncontrolling interest) for the temporary curtailment of two smelters and a related production slowdown at one refinery (see below); $33 ($26 after-tax) for asset impairments related to prior capitalized costs for a modernization project at a smelter in Canada that is no longer being pursued; $13 ($8 after-tax) for layoff costs, including the separation of approximately 170 employees (110 in the Engineered Products and Solutions segment and 60 in Corporate); $15 ($9 after-tax) of charges for other miscellaneous items; and $6 ($4 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2014 first quarter, management approved the permanent shutdown and demolition of the remaining capacity (84,000 metric-tons-per-year) at the Massena East smelter in New York and the full capacity (190,000 metric-tons-per-year) at the Point Henry smelter in Australia. The capacity at Massena East was fully shut down by the end of the first quarter of 2014 and the Point Henry smelter is expected to be shut down in August 2014. Demolition and remediation activities related to the Massena East and Point Henry smelters will begin in the second quarter of 2014 and second half of 2014, respectively, and are expected to be completed by the end of 2020 and 2018, respectively.

The decisions on the Massena East and Point Henry smelters are part of a 15-month review of 460,000 metric tons of smelting capacity initiated by management in the 2013 second quarter for possible curtailment. Through this review, management determined that the remaining capacity of the Massena East smelter was no longer competitive and the Point Henry smelter has no prospect of becoming financially viable. Management also initiated the temporary curtailment of the remaining capacity (62,000 metric-tons-per-year) at the Poços de Caldas smelter and additional capacity (85,000 metric-tons-per-year) at the São Luís smelter, both in Brazil. These curtailments are expected to be complete by the end of May 2014. As a result of these curtailments, production at the Poços de Caldas refinery will be reduced, which began near the end of the 2014 first quarter.

Also in the 2014 first quarter, management approved the permanent shutdown of Alcoa’s two rolling mills in Australia, Point Henry and Yennora. This decision was made due to the significant impact of excess can sheet capacity in both Australia and Asia. The two rolling mills have a combined can sheet capacity of 200,000 metric-tons-per-year and will be closed by the end of 2014. Demolition and remediation activities related to the two rolling mills will begin in 2015 and are expected to be completed by the end of 2018.

In the first quarter of 2014, costs related to the shutdown and curtailment actions included $133 for the layoff of approximately 1,830 employees (1,230 in the Primary Metals segment, 470 in the Global Rolled Products segment, 90 in the Alumina segment, and 40 in Corporate); asset impairments of $91 representing the write-off of the remaining book value of all related properties, plants, and equipment; accelerated depreciation of $59 related to the three facilities in Australia as they continue to operate during 2014; and $123 in other exit costs. Additionally, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value resulting in a charge of $34 ($20 after-tax and noncontrolling interest), which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other exit costs of $123 represent $55 in asset retirement obligations and $38 in environmental remediation, both triggered by the decisions to permanently shut down and demolish the aforementioned structures in the U.S. and Australia, and $30 in supplier and customer contract-related costs. Additional charges of approximately $220 are expected to be recognized throughout 2014 related to these shutdown actions in Australia.

In the first quarter of 2013, Alcoa recorded Restructuring and other charges of $7 ($5 after-tax), which were comprised of the following components: $3 ($2 after-tax) for layoff costs, including a pension plan settlement charge related to previously separated employees (see Note M) and the voluntary separation of approximately 60 employees (Primary Metals segment), and a net charge of $4 ($3 after-tax) for other miscellaneous items.

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:


	First quarter ended March 31,
	2014		2013
Alumina	$	7	$	—
Primary Metals		331		—
Global Rolled Products		90		3
Engineered Products and Solutions		4		3

Segment total		432		6
Corporate		29		1

Total restructuring and other charges	$	461	$	7

As of March 31, 2014, approximately 15 of the 2,000 employees associated with 2014 restructuring programs and approximately 1,260 of the 1,660 employees associated with 2013 restructuring programs were separated. The remaining separations for the 2014 and 2013 restructuring programs are expected to be completed by the end of 2014.

In the 2014 first quarter, cash payments of $1 and $24 were made against the layoff reserves related to the 2014 and 2013 restructuring programs, respectively.

Activity and reserve balances for restructuring charges were as follows:


	Layoff costs			Other exit costs			Total
Reserve balances at December 31, 2012	$	59		$	52		$	111

2013:
Cash payments		(63	)		(11	)		(74	)
Restructuring charges		201			85			286
Other*		(101	)		(84	)		(185	)

Reserve balances at December 31, 2013		96			42			138

2014:
Cash payments		(29	)		(3	)		(32	)
Restructuring charges		146			130			276
Other*		(5	)		(129	)		(134	)

Reserve balances at March 31, 2014	$	208		$	40		$	248

Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2014 three-month period, Other for other exit costs also included a reclassification of the following restructuring charges: $55 in asset retirement and $42 in environmental obligations, as these liabilities are included in Alcoa’s separate reserves for asset retirement obligations and environmental remediation (see Note G), respectively. In 2013, Other for layoff costs also included a reclassification of $92 in pension costs, as this obligation was included in Alcoa’s separate liability for pension obligations. Also in 2013, 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 were included in Alcoa’s separate reserves for asset retirement obligations and environmental remediation, respectively.

The remaining reserves are expected to be paid in cash during 2014, with the exception of approximately $35 to $40, which is expected to be paid over the next several years for lease termination costs, ongoing site remediation work, and special separation benefit payments.