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Earnings Per Share | 3 Months Ended
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Mar. 31, 2013
Earnings Per Share | I. Earnings Per Share – Basic earnings per share (EPS) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared and dividends and undistributed earnings allocated to participating securities, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding not classified as participating securities. The information used to compute basic and diluted EPS attributable to Alcoa common shareholders was as follows (shares in millions):
|  | First quarter ended March 31, |
|  | 2013 |  |  | 2012 |
Net income attributable to Alcoa common shareholders |  | $ | 149 |  |  | $ | 94 |
Less: preferred stock dividends declared |  |  | 1 |  |  |  | 1 |
Net income available to common equity |  |  | 148 |  |  |  | 93 |
Less: dividends and undistributed earnings allocated to participating securities |  |  | — |  |  |  | — |
Net income available to Alcoa common shareholders – basic |  |  | 148 |  |  |  | 93 |
Add: interest expense related to convertible notes |  |  | 8 |  |  |  | 8 |
Net income available to Alcoa common shareholders – diluted |  | $ | 156 |  |  | $ | 101 |
Average shares outstanding – basic |  |  | 1,069 |  |  |  | 1,066 |
Effect of dilutive securities: |  |  |  |  |  |  |  |
Stock options |  |  | 3 |  |  |  | 4 |
Stock and performance awards |  |  | 8 |  |  |  | 5 |
Convertible notes |  |  | 89 |  |  |  | 89 |
Average shares outstanding – diluted |  |  | 1,169 |  |  |  | 1,164 |
Participating securities are defined as unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) and are included in the computation of earnings per share pursuant to the two-class method. Prior to January 1, 2010, under Alcoa’s stock-based compensation programs, certain employees were granted stock and performance awards, which entitle those employees to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of Alcoa’s common stock. As such, these unvested stock and performance awards met the definition of a participating security. Under the two-class method, all earnings, whether distributed or undistributed, are allocated to each class of common stock and participating securities based on their respective rights to receive dividends. At March 31, 2013, there were no outstanding participating securities, as all such securities have vested and were converted into shares of common stock. At March 31, 2012, there were less than 1 million participating securities outstanding. Effective January 1, 2010, new grants of stock and performance awards do not contain a nonforfeitable right to dividends during the vesting period. As a result, an employee will forfeit the right to dividends accrued on unvested awards if that person does not fulfill their service requirement during the vesting period. As such, these awards are not treated as participating securities in the EPS calculation as the employees do not have equivalent dividend rights as common shareholders. These awards are included in the EPS calculation utilizing the treasury stock method similar to stock options. At March 31, 2013 and 2012, there were 17 million and 12 million such awards outstanding, respectively. Options to purchase 31 million and 28 million shares of common stock at a weighted average exercise price of $12.20 and $15.47 per share were outstanding as of March 31, 2013 and 2012, respectively, but were not included in the computation of diluted EPS because they were anti-dilutive, as the exercise prices of the options were greater than the average market price of Alcoa’s common stock.

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- Definition The entire disclosure for earnings per share. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 45 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7655603&loc=d3e1252-109256 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 55 -Paragraph 52 -URI http://asc.fasb.org/extlink&oid=16381557&loc=d3e4984-109258 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7655603&loc=d3e1278-109256 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 128 -Paragraph 40 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 225 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SX 210.5-03.21) -URI http://asc.fasb.org/extlink&oid=6880815&loc=d3e20235-122688 + Details
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