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Derivatives and Other Financial Instruments (Tables) | 6 Months Ended
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Jun. 30, 2016
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, 2016* |  |  | Unobservable input |  | Range ($ in full amounts)
Assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 718 |  |  | Price of aluminum beyond forward curve |  | Aluminum: $2,093 per metric ton in 2026 to $2,245 per metric ton in 2029 (two contracts) and $2,540 per metric ton in 2036 (one contract) Midwest premium: $0.0775 per pound in 2021 to $0.0775 per pound in 2029 (two contracts) and 2036 (one contract)
Embedded aluminum derivative |  |  | 23 |  |  | Interrelationship of future aluminum prices, foreign currency exchange rates, and the U.S. consumer price index (CPI) |  | Aluminum: $1,631 per metric ton in July 2016 to $1,637 per metric ton in September 2016 Foreign currency: A$1 = $0.74 in 2016 (July through September) CPI: 1982 base year of 100 and 236 in 2016 (July through September)
Embedded aluminum derivative |  |  | 4 |  |  | Interrelationship of LME price to overall energy price |  | Aluminum: $1,614 per metric ton in 2016 to $1,755 per metric ton in 2019
Embedded aluminum derivative |  |  | — |  |  | Interrelationship of future aluminum and oil prices |  | Aluminum: $1,631 per metric ton in 2016 to $1,710 per metric ton in 2018 Oil: $49 per barrel in 2016 to $55 per barrel in 2018
Energy contract |  |  | 40 |  |  | Price of electricity beyond forward curve |  | Electricity: $48 per megawatt hour in 2019 to $116 per megawatt hour in 2036
Liabilities: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  |  | 196 |  |  | Price of aluminum beyond forward curve |  | Aluminum: $2,093 per metric ton in 2026 to $2,137 per metric ton in 2027
Embedded aluminum derivative |  |  | 32 |  |  | Interrelationship of LME price to the amount of megawatt hours of energy needed to produce the forecasted metric tons of aluminum |  | Aluminum: $1,631 per metric ton in 2016 to $1,729 per metric ton in 2019 Midwest premium: $0.0725 per pound in 2016 to $0.0775 per pound in 2019 Electricity: rate at 2 million megawatt hours per year
Embedded credit derivative |  |  | 33 |  |  | Credit spread between Alcoa and counterparty |  | 3.45% to 3.81% (3.63% median)
* | The fair value of the energy contract reflected as an asset in this table is lower by $9 compared to the respective amount reflected in the Level 3 tables presented below. This is due to the fact that this contract is in a liability position for the current portion but is in an asset position for the noncurrent portion, and is reflected as such on the accompanying Consolidated Balance Sheet. However, this derivative is reflected as a net asset in the above table for purposes of presenting the assumptions utilized to measure the fair value of the derivative instrument in its 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, 2016 |  |  | December 31, 2015 |
Asset Derivatives |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Prepaid expenses and other current assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 51 |  |  | $ | 72 |
Other noncurrent assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  |  | 671 |  |  |  | 994 |
Energy contract |  |  | 49 |  |  |  | 2 |
Total derivatives designated as hedging instruments |  | $ | 771 |  |  | $ | 1,068 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Prepaid expenses and other current assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 23 |  |  | $ | 69 |
Total derivatives not designated as hedging instruments |  | $ | 23 |  |  | $ | 69 |
Total Asset Derivatives |  | $ | 794 |  |  | $ | 1,137 |
Liability Derivatives |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Other current liabilities: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  | $ | 14 |  |  | $ | 9 |
Energy contract |  |  | 9 |  |  |  | 4 |
Other noncurrent liabilities and deferred credits: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  |  | 182 |  |  |  | 160 |
Total derivatives designated as hedging instruments |  | $ | 205 |  |  | $ | 173 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Other current liabilities: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  | $ | 8 |  |  | $ | — |
Embedded credit derivative |  |  | 5 |  |  |  | 6 |
Other noncurrent liabilities and deferred credits: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  |  | 24 |  |  |  | — |
Embedded credit derivative |  |  | 28 |  |  |  | 29 |
Total derivatives not designated as hedging instruments |  | $ | 65 |  |  | $ | 35 |
Total Liability Derivatives |  | $ | 270 |  |  | $ | 208 |
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, 2016 |  | Embedded aluminum derivatives |  |  | Energy contract |  |  | Embedded aluminum derivative |  |  | Embedded credit derivative |  |  | Energy contract |
Opening balance – April 1, 2016 |  | $ | 988 |  |  | $ | 6 |  |  | $ | 161 |  |  | $ | 33 |  |  | $ | 11 |
Total gains or losses (realized and unrealized) included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  |  | (3 | ) |  |  | — |  |  |  | (3 | ) |  |  | — |  |  |  | — |
Cost of goods sold |  |  | (30 | ) |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | — |
Other income, net |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | — |
Other comprehensive loss |  |  | (215 | ) |  |  | 37 |  |  |  | 38 |  |  |  | — |  |  |  | (8 | )
Purchases, sales, issuances, and settlements* |  |  | — |  |  |  | — |  |  |  | 32 |  |  |  | — |  |  |  | — |
Transfers into and/or out of Level 3* |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other |  |  | 9 |  |  |  | 6 |  |  |  | — |  |  |  | — |  |  |  | 6 |
Closing balance – June 30, 2016 |  | $ | 745 |  |  | $ | 49 |  |  | $ | 228 |  |  | $ | 33 |  |  | $ | 9 |
Change in unrealized gains or losses included in earnings for derivative contracts held at June 30, 2016: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cost of goods sold |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | — |
* | In the 2016 second quarter, there was an issuance of a new embedded derivative contained in an amendment to an existing power contract. There were no purchases, sales 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, 2016 |  |  | December 31, 2015 |
|  | Carrying value |  |  | Fair value |  |  | Carrying value |  |  | Fair value |
Cash and cash equivalents |  | $ | 1,929 |  |  | $ | 1,929 |  |  | $ | 1,919 |  |  | $ | 1,919 |
Restricted cash |  |  | 30 |  |  |  | 30 |  |  |  | 37 |  |  |  | 37 |
Noncurrent receivables |  |  | 19 |  |  |  | 19 |  |  |  | 17 |  |  |  | 17 |
Available-for-sale securities |  |  | 68 |  |  |  | 68 |  |  |  | 193 |  |  |  | 193 |
Short-term borrowings |  |  | 33 |  |  |  | 33 |  |  |  | 38 |  |  |  | 38 |
Commercial paper |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Long-term debt due within one year |  |  | 774 |  |  |  | 791 |  |  |  | 21 |  |  |  | 21 |
Contingent payment related to an acquisition |  |  | 132 |  |  |  | 132 |  |  |  | 130 |  |  |  | 130 |
Long-term debt, less amount due within one year |  |  | 8,278 |  |  |  | 8,670 |  |  |  | 8,993 |  |  |  | 8,922 |

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