Alcoa 2012 Annual Report Download - page 110

The following table details the changes in the total carrying value of recorded AROs:
December 31, 2012 2011
Balance at beginning of year $579 $534
Accretion expense 25 22
Payments (81) (86)
Liabilities incurred 80 115
Foreign currency translation and other 7 (6)
Balance at end of year $610 $579
D. Restructuring and Other Charges
Restructuring and other charges for each year in the three-year period ended December 31, 2012 were comprised of the
following:
2012 2011 2010
Asset impairments $ 40 $150 $139
Layoff costs 47 93 43
Other exit costs 21 61 58
Reversals of previously recorded layoff and other exit costs (21) (23) (33)
Restructuring and other charges $ 87 $281 $207
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.
2012 Actions. In 2012, Alcoa recorded Restructuring and other charges of $87 ($73 after-tax and noncontrolling
interests), which were comprised of the following components: $47 ($29 after-tax and noncontrolling interests) for the
layoff of approximately 800 employees (390 in the Engineered Products and Solutions segment, 250 in the Primary
Metals segment, 85 in the Alumina segment, and 75 in Corporate), including $10 ($7 after-tax) for the layoff of an
additional 170 employees related to the previously reported smelter curtailments in Spain (see 2011 Actions below);
$30 ($30 after-tax) in asset impairments and $6 ($6 after-tax) for lease and contract termination costs due to a decision
to exit the lithographic sheet business in Bohai, China; $11 ($11 after-tax) in costs to idle the Portovesme smelter (see
2011 Actions below); $10 ($8 after-tax) in other asset impairments; a net charge of $4 ($4 after-tax and noncontrolling
interests) for other miscellaneous items; and $21 ($15 after-tax and noncontrolling interests) for the reversal of a
number of layoff reserves related to prior periods, including $10 ($7 after-tax) related to the smelters in Spain. The
reversal related to the smelters in Spain is due to lower than expected costs based on agreements with employee
representatives and the government, as well as a reduction of 55 in the number of layoffs due to the anticipation of the
restart of a portion of the previously curtailed capacity based on an agreement with the Spanish government that will
provide interruptibility rights (i.e. compensation for power interruptions when grids are overloaded) to the smelters
during 2013. A portion of this reversal relates to layoff costs recorded at the end of 2011 (see 2011 Actions below) and
a portion of this reversal relates to layoff costs recorded during 2012 (see above).
As of December 31, 2012, approximately 270 of the 800 employees were separated. The remaining separations for the
2012 restructuring programs are expected to be completed by the end of 2013. In 2012, cash payments of $16 were
made against layoff reserves related to the 2012 restructuring programs.
2011 Actions. In 2011, Alcoa recorded Restructuring and other charges of $281 ($181 after-tax and noncontrolling
interests), which were comprised of the following components: $127 ($82 after-tax) in asset impairments and $36
($23 after-tax) in other exit costs related to the permanent shutdown and planned demolition of certain idled structures
at two U.S. locations (see below); $93 ($68 after-tax and noncontrolling interests) for the layoff of approximately 1,600
employees (820 in the Primary Metals segment, 470 in the Global Rolled Products segment, 160 in the Alumina
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