Alcoa 2010 Annual Report Download - page 100

The following table details the changes in the total carrying value of recorded AROs:
December 31, 2010 2009
Balance at beginning of year $453 $302
Accretion expense 21 18
Payments (38) (26)
Liabilities incurred 43 119
Translation and other 55 40
Balance at end of year $534 $453
In addition to the above AROs, certain CAROs related to alumina refineries, aluminum smelters, and fabrication
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, Alcoa
would record a retirement obligation 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 was required to
demolish all such structures immediately, the estimated CARO as of December 31, 2010 ranges from less than $1 to
$52 per structure (129 structures) in today’s dollars.
D. Restructuring and Other Charges
Restructuring and other charges for each year in the three-year period ended December 31, 2010 were comprised of the
following:
2010 2009 2008
Asset impairments $139 $ 54 $670
Layoff costs 43 186 183
Other exit costs 58 37 109
Reversals of previously recorded layoff and other exit costs (33) (40) (23)
Restructuring and other charges $207 $237 $939
Layoff costs were recorded based on approved detailed action plans submitted by the operating locations that specified
positions to be eliminated, benefits to be paid under existing severance plans, union contracts or statutory requirements,
and the expected timetable for completion of the plans.
2010 Actions. In 2010, Alcoa recorded Restructuring and other charges of $207 ($130 after-tax and noncontrolling
interests), which were comprised of the following components: $127 ($80 after-tax and noncontrolling interests) in
asset impairments and $46 ($29 after-tax and noncontrolling interests) in other exit costs related to the permanent
shutdown and planned demolition of certain idled structures at five U.S. locations (see below); $43 ($29 after-tax and
noncontrolling interests) for the layoff of approximately 830 employees (625 in the Engineered Products and Solutions
segment; 75 in the Primary Metals segment; 25 in the Flat-Rolled Products segment; 15 in the Alumina segment; and
90 in Corporate); $22 ($14 after-tax) in net charges (including $12 ($8 after-tax) for asset impairments) related to
divested and to be divested businesses (Automotive Castings, Global Foil, Transportation Products Europe, and
Packaging and Consumer) for, among other items, the settlement of a contract with a former customer, foreign
currency movements, working capital adjustments, and a tax indemnification; $2 ($2 after-tax and noncontrolling
interests) for various other exit costs; and $33 ($24 after-tax and noncontrolling interests) for the reversal of prior
periods’ layoff reserves, including a portion of those related to the Portovesme smelter in Italy due to the execution of a
new power agreement (see the European Commission Matters section of Note N).
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