XML 35 R30.htm IDEA: XBRL DOCUMENT
v3.2.0.727

Derivatives and Other Financial Instruments (Tables) | 6 Months Ended
--- | ---
Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Schedule of Quantitative Information for Level 3 Derivative Contracts | The following table presents quantitative information related to the significant unobservable inputs described above for Level 3 derivative contracts:
|  | Fair value at June 30, 2015* |  |  | Unobservable input |  | Range ($ in full amounts)
Assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 557 |  |  | Price of aluminum beyond forward curve |  | Aluminum: $2,660 per metric ton in 2025 to $2,460 per metric ton in 2029 (two contracts) and $2,756 per metric ton in 2036 (one contract) Midwest premium: $0.0920 per pound in 2020 to $0.0920 per pound in 2029 (two contracts) and 2036 (one contract)
Embedded aluminum derivative |  |  | 119 |  |  | Interrelationship of future aluminum prices, foreign currency exchange rates, and the U.S. consumer price index (CPI) |  | Aluminum: $1,668 per metric ton in 2015 to $1,761 per metric ton in 2016 Foreign currency: A$1 = $0.77 in 2015 to $0.77 in 2016 CPI: 1982 base year of 100 and 234 in 2015 to 241 in 2016
Embedded aluminum derivative |  |  | — |  |  | Interrelationship of future aluminum and oil prices |  | Aluminum: $1,668 per metric ton in 2015 to $1,910 per metric ton in 2018 Oil: $62 per barrel in 2015 to $72 per barrel in 2018
Liabilities: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  |  | 294 |  |  | Price of aluminum beyond forward curve |  | Aluminum: $2,260 per metric ton in 2025 to $2,353 per metric ton in 2027
Embedded aluminum derivative |  |  | — |  |  | Interrelationship of LME price to overall energy price |  | Aluminum: $1,802 per metric ton in 2015 to $1,935 per metric ton in 2019
Embedded credit derivative |  |  | 19 |  |  | Credit spread between Alcoa and counterparty |  | 1.65% to 1.95% (1.80% median)
Energy contract |  |  | 9 |  |  | Price of electricity beyond forward curve |  | Electricity: $43 per megawatt hour in 2018 to $130 per megawatt hour in 2036
* | The fair value of embedded aluminum derivatives reflected as assets and liabilities in this table are both lower by $4 compared to the respective amounts reflected in the Level 3 table presented below. This is due to the fact that Alcoa has one derivative that is in an asset position for the current portion but is in a liability position for the noncurrent portion, and is reflected as such on the accompanying Consolidated Balance Sheet. However, this derivative is reflected as a net liability in the above table for purposes of presenting the assumptions utilized to measure the fair value of the derivative instrument in their entirety.
Schedule of Fair Values of Level 3 Derivative Instruments Recorded as Assets and Liabilities | The fair values of Level 3 derivative instruments recorded as assets and liabilities in the accompanying Consolidated Balance Sheet were as follows:
|  | June 30, 2015 |  |  | December 31, 2014 |
Asset Derivatives |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Prepaid expenses and other current assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 49 |  |  | $ | 24 |
Other noncurrent assets: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  |  | 512 |  |  |  | 73 |
Energy contract |  |  | — |  |  |  | 2 |
Total derivatives designated as hedging instruments |  | $ | 561 |  |  | $ | 99 |
Derivatives not designated as hedging instruments*: |  |  |  |  |  |  |  |
Prepaid expenses and other current assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 95 |  |  | $ | 98 |
Other noncurrent assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  |  | 24 |  |  |  | 71 |
Total derivatives not designated as hedging instruments |  | $ | 119 |  |  | $ | 169 |
Total Asset Derivatives |  | $ | 680 |  |  | $ | 268 |
Liability Derivatives |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Other current liabilities: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  | $ | 17 |  |  | $ | 24 |
Other noncurrent liabilities and deferred credits: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  |  | 281 |  |  |  | 352 |
Energy contract |  |  | 9 |  |  |  | — |
Total derivatives designated as hedging instruments |  | $ | 307 |  |  | $ | 376 |
Derivatives not designated as hedging instruments*: |  |  |  |  |  |  |  |
Other current liabilities: |  |  |  |  |  |  |  |
Embedded credit derivative |  | $ | 3 |  |  | $ | 2 |
Other noncurrent liabilities and deferred credits: |  |  |  |  |  |  |  |
Embedded credit derivative |  |  | 16 |  |  |  | 16 |
Total derivatives not designated as hedging instruments |  | $ | 19 |  |  | $ | 18 |
Total Liability Derivatives |  | $ | 326 |  |  | $ | 394 |
* | See the “Other” section within Note N for additional information on Alcoa’s purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies.
Schedule of Reconciliation of Activity for Derivative Contracts | The following tables present a reconciliation of activity for Level 3 derivative contracts:
|  | Assets |  |  | Liabilities |
Second quarter ended June 30, 2015 |  | Embedded aluminum derivatives |  |  | Energy contract |  |  | Embedded aluminum derivatives |  |  | Embedded credit derivative |  |  | Energy contract |
Opening balance – April 1, 2015 |  | $ | 201 |  |  | $ | 8 |  |  | $ | 425 |  |  | $ | 16 |  |  | $ | — |
Total gains or losses (realized and unrealized) included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  |  | 7 |  |  |  | — |  |  |  | (5 | ) |  |  | — |  |  |  | — |
Cost of goods sold |  |  | (24 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | — |
Other comprehensive income |  |  | 494 |  |  |  | (8 | ) |  |  | (122 | ) |  |  | — |  |  |  | 9 |
Purchases, sales, issuances, and settlements* |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Transfers into and/or out of Level 3* |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign currency translation |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Closing balance – June 30, 2015 |  | $ | 680 |  |  | $ | — |  |  | $ | 298 |  |  | $ | 19 |  |  | $ | 9 |
Change in unrealized gains or losses included in earnings for derivative contracts held at June 30, 2015: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cost of goods sold |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | — |
* | There were no purchases, sales, issuances or settlements of Level 3 derivative instruments. Additionally, there were no transfers of derivative instruments into or out of Level 3.
|  | Assets |  |  | Liabilities |
Six months ended June 30, 2015 |  | Embedded aluminum derivatives |  |  | Energy contract |  |  | Embedded aluminum derivatives |  |  | Embedded credit derivative |  |  | Energy contract |
Opening balance – January 1, 2015 |  | $ | 266 |  |  | $ | 2 |  |  | $ | 376 |  |  | $ | 18 |  |  | $ | — |
Total gains or losses (realized and unrealized) included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  |  | 13 |  |  |  | — |  |  |  | (11 | ) |  |  | — |  |  |  | — |
Cost of goods sold |  |  | (45 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | — |
Other comprehensive loss |  |  | 451 |  |  |  | (2 | ) |  |  | (67 | ) |  |  | — |  |  |  | 9 |
Purchases, sales, issuances, and settlements* |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Transfers into and/or out of Level 3* |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign currency translation |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Closing balance – June 30, 2015 |  | $ | 680 |  |  | $ | — |  |  | $ | 298 |  |  | $ | 19 |  |  | $ | 9 |
Change in unrealized gains or losses included in earnings for derivative contracts held at June 30, 2015: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cost of goods sold |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | — |
* | There were no purchases, sales, issuances or settlements of Level 3 derivative instruments. Additionally, there were no transfers of derivative instruments into or out of Level 3.
Schedule of Carrying Values and Fair Values of Other Financial Instruments | The carrying values and fair values of Alcoa’s other financial instruments were as follows:
|  | June 30, 2015 |  |  | December 31, 2014 |
|  | Carrying value |  |  | Fair value |  |  | Carrying value |  |  | Fair value |
Cash and cash equivalents |  | $ | 1,311 |  |  | $ | 1,311 |  |  | $ | 1,877 |  |  | $ | 1,877 |
Restricted cash |  |  | 29 |  |  |  | 29 |  |  |  | 20 |  |  |  | 20 |
Noncurrent receivables |  |  | 17 |  |  |  | 17 |  |  |  | 17 |  |  |  | 17 |
Available-for-sale securities |  |  | 157 |  |  |  | 157 |  |  |  | 153 |  |  |  | 153 |
Short-term borrowings |  |  | 50 |  |  |  | 50 |  |  |  | 54 |  |  |  | 54 |
Commercial paper |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Long-term debt due within one year |  |  | 26 |  |  |  | 26 |  |  |  | 29 |  |  |  | 29 |
Long-term debt, less amount due within one year |  |  | 8,713 |  |  |  | 9,215 |  |  |  | 8,769 |  |  |  | 9,445 |

X
- Definition Schedule of carrying values and fair values of other financial instruments. + References No definition available. + Details
Name: | aa_ScheduleOfCarryingValuesAndFairValuesOfOtherFinancialInstrumentsTableTextBlock
Namespace Prefix: | aa_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Schedule Of Derivative Assets And Liabilities At Fair Value Table [Text Block] + References No definition available. + Details
Name: | aa_ScheduleOfDerivativeAssetsAndLiabilitiesAtFairValueTableTextBlock
Namespace Prefix: | aa_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Schedule of quantitative information for level three derivative contracts. + References No definition available. + Details
Name: | aa_ScheduleOfQuantitativeInformationForLevelThreeDerivativeContractsTableTextBlock
Namespace Prefix: | aa_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of financial instrument classified as a derivative asset (liability) after deduction of derivative liability (asset) using recurring unobservable inputs that reflect the entity's own assumption about the assumptions market participants would use in pricing. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19279-110258 + Details
Name: | us-gaap_FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisUnobservableInputReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration