Alcoa 2013 Annual Report Download - page 72

of $18 (Fusina and Massena East) representing the write-off of the remaining book value of all related properties,
plants, and equipment; and $55 in other exit costs. Additionally in 2013, remaining inventories, mostly operating
supplies and raw materials, were written down to their net realizable value resulting in a charge of $9 ($6 after-tax),
which was recorded in Cost of goods sold on the Statement of Consolidated Operations. The other exit costs of $55
represent $48 in asset retirement obligations and $5 in environmental remediation, both triggered by the decisions to
permanently shut down and demolish these structures, and $2 in other related costs.
As of December 31, 2013, approximately 1,020 of the 1,660 employees were separated. The remaining separations for
the 2013 restructuring programs are expected to be completed by the end of 2014. In 2013, cash payments of $33 were
made against layoff reserves related to the 2013 restructuring programs.
2012 Actions. In 2012, Alcoa recorded Restructuring and other charges of $172 ($106 after-tax and noncontrolling
interests), which were comprised of the following components: $85 ($33 after-tax and noncontrolling interest) related
to the civil portion of a legal matter; $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, 2013, the separations associated with 2012 restructuring programs were essentially complete. In
2013 and 2012, cash payments of $17 and $16, respectively, 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
segment, 20 in the Engineered Products and Solutions segment, and 130 in Corporate), including the effects of planned
smelter curtailments (see below); $23 ($12 after-tax and noncontrolling interests) for other asset impairments,
including the write-off of the carrying value of an idled structure in Australia that processed spent pot lining and
adjustments to the fair value of the one remaining foil location while it was classified as held for sale due to foreign
currency movements; $20 ($8 after-tax and noncontrolling interests) for a litigation matter related to the former St.
Croix location; a net charge of $5 ($4 after-tax) for other miscellaneous items; and $23 ($16 after-tax) for the reversal
of previously recorded layoff reserves due to normal attrition and changes in facts and circumstances, including a
change in plans for Alcoa’s aluminum powder facility in Rockdale, TX.
In late 2011, management approved the permanent shutdown and demolition of certain facilities at two U.S. locations,
each of which was previously temporarily idled for various reasons. The identified facilities are the smelter located in
Alcoa, TN (capacity of 215 kmt-per-year) and two potlines (capacity of 76 kmt-per-year) at the smelter located in
Rockdale, TX (remaining capacity of 191 kmt-per-year composed of four potlines). Demolition and remediation
activities related to these actions began in 2012 and are expected to be completed in 2015 for the Tennessee smelter
56