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Derivatives and Other Financial Instruments (Tables) | 9 Months Ended
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Sep. 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 September 30, 2015 |  |  | Unobservable input |  | Range ($ in full amounts)
Assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 784 |  |  | Price of aluminum beyond forward curve |  | Aluminum: $2,160 per metric ton in 2026 to $2,347 per metric ton in 2029 (two contracts) and $2,643 per metric ton in 2036 (one contract) Midwest premium: $0.0795 per pound in 2021 to $0.0795 per pound in 2029 (two contracts) and 2036 (one contract)
Embedded aluminum derivative |  |  | 87 |  |  | Interrelationship of future aluminum prices, foreign currency exchange rates, and the U.S. consumer price index (CPI) |  | Aluminum: $1,562 per metric ton in 2015 to $1,615 per metric ton in 2016 Foreign currency: A$1 = $0.70 in 2015 to $0.70 in 2016 CPI: 1982 base year of 100 and 235 in 2015 to 239 in 2016
Embedded aluminum derivative |  |  | 4 |  |  | Interrelationship of LME price to overall energy price |  | Aluminum: $1,560 per metric ton in 2015 to $1,817 per metric ton in 2019
Embedded aluminum derivative |  |  | — |  |  | Interrelationship of future aluminum and oil prices |  | Aluminum: $1,562 per metric ton in 2015 to $1,762 per metric ton in 2018 Oil: $47 per barrel in 2015 to $60 per barrel in 2018
Liabilities: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  |  | 223 |  |  | Price of aluminum beyond forward curve |  | Aluminum: $2,160 per metric ton in 2026 to $2,239 per metric ton in 2027
Embedded credit derivative |  |  | 32 |  |  | Credit spread between Alcoa and counterparty |  | 3.04% to 3.50% (3.27% median)
Energy contract |  |  | 5 |  |  | Price of electricity beyond forward curve |  | Electricity: $45 per megawatt hour in 2018 to $121 per megawatt hour in 2036
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:
|  | September 30, 2015 |  |  | December 31, 2014 |
Asset Derivatives |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Prepaid expenses and other current assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 70 |  |  | $ | 24 |
Other noncurrent assets: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  |  | 718 |  |  |  | 73 |
Energy contract |  |  | — |  |  |  | 2 |
Total derivatives designated as hedging instruments |  | $ | 788 |  |  | $ | 99 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Prepaid expenses and other current assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 87 |  |  | $ | 98 |
Other noncurrent assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  |  | — |  |  |  | 71 |
Total derivatives not designated as hedging instruments |  | $ | 87 |  |  | $ | 169 |
Total Asset Derivatives |  | $ | 875 |  |  | $ | 268 |
Liability Derivatives |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Other current liabilities: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  | $ | 11 |  |  | $ | 24 |
Other noncurrent liabilities and deferred credits: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  |  | 213 |  |  |  | 352 |
Energy contract |  |  | 4 |  |  |  | — |
Total derivatives designated as hedging instruments |  | $ | 228 |  |  | $ | 376 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Other current liabilities: |  |  |  |  |  |  |  |
Embedded credit derivative |  | $ | 4 |  |  | $ | 2 |
Other noncurrent liabilities and deferred credits: |  |  |  |  |  |  |  |
Embedded credit derivative |  |  | 28 |  |  |  | 16 |
Total derivatives not designated as hedging instruments |  | $ | 32 |  |  | $ | 18 |
Total Liability Derivatives |  | $ | 260 |  |  | $ | 394 |
Schedule of Reconciliation of Activity for Derivative Contracts | The following tables present a reconciliation of activity for Level 3 derivative contracts:
|  | Assets |  |  | Liabilities |
Third quarter ended September 30, 2015 |  | Embedded aluminum derivatives |  |  | Energy contract |  |  | Embedded aluminum derivatives |  |  | Embedded credit derivative |  |  | Energy contract |
Opening balance – July 1, 2015 |  | $ | 680 |  |  | $ | — |  |  | $ | 298 |  |  | $ | 19 |  |  | $ | 9 |
Total gains or losses (realized and unrealized) included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  |  | (2 | ) |  |  | — |  |  |  | (3 | ) |  |  | — |  |  |  | — |
Cost of goods sold |  |  | (25 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | 13 |  |  |  | — |
Other comprehensive loss |  |  | 229 |  |  |  | — |  |  |  | (72 | ) |  |  | — |  |  |  | (5 | )
Purchases, sales, issuances, and settlements* |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Transfers into and/or out of Level 3* |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign currency translation |  |  | (3 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |
Closing balance – September 30, 2015 |  | $ | 875 |  |  | $ | — |  |  | $ | 223 |  |  | $ | 32 |  |  | $ | 5 |
Change in unrealized gains or losses included in earnings for derivative contracts held at September 30, 2015: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cost of goods sold |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | 13 |  |  |  | — |
* | 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 |
Nine months ended September 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 |  |  | 11 |  |  |  | — |  |  |  | (14 | ) |  |  | — |  |  |  | — |
Cost of goods sold |  |  | (70 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | 14 |  |  |  | — |
Other comprehensive loss |  |  | 680 |  |  |  | (2 | ) |  |  | (139 | ) |  |  | — |  |  |  | 4 |
Purchases, sales, issuances, and settlements* |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Transfers into and/or out of Level 3* |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign currency translation |  |  | (7 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |
Closing balance – September 30, 2015 |  | $ | 875 |  |  | $ | — |  |  | $ | 223 |  |  | $ | 32 |  |  | $ | 5 |
Change in unrealized gains or losses included in earnings for derivative contracts held at September 30, 2015: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cost of goods sold |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | 14 |  |  |  | — |
* | 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:
|  | September 30, 2015 |  |  | December 31, 2014 |
|  | Carrying value |  |  | Fair value |  |  | Carrying value |  |  | Fair value |
Cash and cash equivalents |  | $ | 1,739 |  |  | $ | 1,739 |  |  | $ | 1,877 |  |  | $ | 1,877 |
Restricted cash |  |  | 24 |  |  |  | 24 |  |  |  | 20 |  |  |  | 20 |
Noncurrent receivables |  |  | 17 |  |  |  | 17 |  |  |  | 17 |  |  |  | 17 |
Available-for-sale securities |  |  | 177 |  |  |  | 177 |  |  |  | 153 |  |  |  | 153 |
Short-term borrowings |  |  | 50 |  |  |  | 50 |  |  |  | 54 |  |  |  | 54 |
Commercial paper |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Long-term debt due within one year |  |  | 136 |  |  |  | 136 |  |  |  | 29 |  |  |  | 29 |
Long-term debt, less amount due within one year |  |  | 9,091 |  |  |  | 9,062 |  |  |  | 8,769 |  |  |  | 9,445 |

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