XML 54 R37.htm IDEA: XBRL DOCUMENT
v3.5.0.2

Derivatives and Other Financial Instruments (Tables) | 9 Months Ended
--- | ---
Sep. 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 September 30, 2016 |  |  | Unobservable input |  | Range ($ in full amounts)
Assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 306 |  |  | Price of aluminum beyond forward curve |  | Aluminum: $2,197 per metric ton in 2027 to $2,337 per metric ton in 2029 (two contracts) and $2,633 per metric ton in 2036 (one contract) Midwest premium: $0.0630 per pound in 2016 to $0.0750 per pound in 2029 (two contracts) and 2036 (one contract)
Embedded aluminum derivative |  |  | 4 |  |  | Interrelationship of LME price to overall energy price |  | Aluminum: $1,680 per metric ton in 2016 to $1,802 per metric ton in 2019
Embedded aluminum derivative |  |  | — |  |  | Interrelationship of future aluminum and oil prices |  | Aluminum: $1,662 per metric ton in 2016 to $1,762 per metric ton in 2018 Oil: $49 per barrel in 2016 to $55 per barrel in 2018
Energy contract |  |  | 7 |  |  | Price of electricity beyond forward curve |  | Electricity: $57 per megawatt hour in 2016 to $58 per megawatt hour in 2017
Liabilities: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  |  | 242 |  |  | Price of aluminum beyond forward curve |  | Aluminum: $2,197 per metric ton in 2027 to $2,229 per metric ton in 2027
Embedded aluminum derivative |  |  | 30 |  |  | Interrelationship of LME price to the amount of megawatt hours of energy needed to produce the forecasted metric tons of aluminum |  | Aluminum: $1,662 per metric ton in 2016 to $1,785 per metric ton in 2019 Midwest premium: $0.0630 per pound in 2016 to $0.0750 per pound in 2019 Electricity: rate of 2 million megawatt hours per year
Embedded credit derivative |  |  | 24 |  |  | Credit spread between Arconic and counterparty |  | 2.15% to 2.89% (2.52% median)
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, 2016 |  |  | December 31, 2015 |
Asset Derivatives |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Prepaid expenses and other current assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | 40 |  |  | $ | 72 |
Energy contract |  |  | 7 |  |  |  | — |
Other noncurrent assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  |  | 270 |  |  |  | 994 |
Energy contract |  |  | — |  |  |  | 2 |
Total derivatives designated as hedging instruments |  | $ | 317 |  |  | $ | 1,068 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Prepaid expenses and other current assets: |  |  |  |  |  |  |  |
Embedded aluminum derivatives |  | $ | — |  |  | $ | 69 |
Total derivatives not designated as hedging instruments |  | $ | — |  |  | $ | 69 |
Total Asset Derivatives |  | $ | 317 |  |  | $ | 1,137 |
Liability Derivatives |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Other current liabilities: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  | $ | 25 |  |  | $ | 9 |
Energy contract |  |  | — |  |  |  | 4 |
Other noncurrent liabilities and deferred credits: |  |  |  |  |  |  |  |
Embedded aluminum derivative |  |  | 247 |  |  |  | 160 |
Total derivatives designated as hedging instruments |  | $ | 272 |  |  | $ | 173 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Other current liabilities: |  |  |  |  |  |  |  |
Embedded credit derivative |  | $ | 4 |  |  | $ | 6 |
Other noncurrent liabilities and deferred credits: |  |  |  |  |  |  |  |
Embedded credit derivative |  |  | 20 |  |  |  | 29 |
Total derivatives not designated as hedging instruments |  | $ | 24 |  |  | $ | 35 |
Total Liability Derivatives |  | $ | 296 |  |  | $ | 208 |
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, 2016 |  | Embedded aluminum derivatives |  |  | Energy contract |  |  | Embedded aluminum derivative |  |  | Embedded credit derivative |  |  | Energy contract |
Opening balance – July 1, 2016 |  | $ | 745 |  |  | $ | 49 |  |  | $ | 228 |  |  | $ | 33 |  |  | $ | 9 |
Total gains or losses (realized and unrealized) included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  |  | 1 |  |  |  | — |  |  |  | (3 | ) |  |  | — |  |  |  | — |
Cost of goods sold |  |  | (31 | ) |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | — |
Other income, net |  |  | (5 | ) |  |  | (85 | ) |  |  | 2 |  |  |  | (8 | ) |  |  | (1 | )
Other comprehensive (loss) income |  |  | (414 | ) |  |  | 48 |  |  |  | 48 |  |  |  | — |  |  |  | (1 | )
Purchases, sales, issuances, and settlements** |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Transfers into and/or out of Level 3** |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other |  |  | 14 |  |  |  | (5 | ) |  |  | (3 | ) |  |  | — |  |  |  | (7 | )
Closing balance – September 30, 2016 |  | $ | 310 |  |  | $ | 7 |  |  | $ | 272 |  |  | $ | 24 |  |  | $ | — |
Change in unrealized gains or losses included in earnings for derivative contracts held at September 30, 2016: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cost of goods sold |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net* |  |  | (5 | ) |  |  | (85 | ) |  |  | 2 |  |  |  | (8 | ) |  |  | (1 | )
* | In August 2016, Arconic elected to terminate the energy contract in accordance with the provisions of the agreement (see above). As a result, Arconic decreased the derivative asset and recorded a charge in Other income of $84, which is reflected in the table above. Additionally, Arconic also decreased the related unrealized gain and recorded a benefit in Other income of $84. As such, the termination of most of the remaining term of this derivative contract did not have an impact on Arconic’s earnings.
** | In the 2016 nine-month period, 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.
|  | Assets |  |  | Liabilities |
Nine months ended September 30, 2016 |  | Embedded aluminum derivatives |  |  | Energy contract |  |  | Embedded aluminum derivative |  |  | Embedded credit derivative |  |  | Energy contract |
Opening balance – January 1, 2016 |  | $ | 1,135 |  |  | $ | 2 |  |  | $ | 169 |  |  | $ | 35 |  |  | $ | 4 |
Total gains or losses (realized and unrealized) included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  |  | (9 | ) |  |  | — |  |  |  | (8 | ) |  |  | — |  |  |  | — |
Cost of goods sold |  |  | (92 | ) |  |  | — |  |  |  | — |  |  |  | (4 | ) |  |  | — |
Other income, net |  |  | (13 | ) |  |  | (83 | ) |  |  | 2 |  |  |  | (7 | ) |  |  | (2 | )
Other comprehensive (loss) income |  |  | (750 | ) |  |  | 87 |  |  |  | 80 |  |  |  | — |  |  |  | (1 | )
Purchases, sales, issuances, and settlements** |  |  | — |  |  |  | — |  |  |  | 32 |  |  |  | — |  |  |  | — |
Transfers into and/or out of Level 3** |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other |  |  | 39 |  |  |  | 1 |  |  |  | (3 | ) |  |  | — |  |  |  | (1 | )
Closing balance – September 30, 2016 |  | $ | 310 |  |  | $ | 7 |  |  | $ | 272 |  |  | $ | 24 |  |  | $ | — |
Change in unrealized gains or losses included in earnings for derivative contracts held at September 30, 2016: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cost of goods sold |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other income, net* |  |  | (13 | ) |  |  | (83 | ) |  |  | 2 |  |  |  | (7 | ) |  |  | (2 | )
* | In August 2016, Arconic elected to terminate the energy contract in accordance with the provisions of the agreement (see above). As a result, Arconic decreased the derivative asset and recorded a charge in Other income of $84, which is reflected in the table above. Additionally, Arconic also decreased the related unrealized gain and recorded a benefit in Other income of $84. As such, the termination of most of the remaining term of this derivative contract did not have an impact on Arconic’s earnings.
** | In the 2016 third quarter, 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 Arconic’s other financial instruments were as follows:
|  | September 30, 2016 |  |  | December 31, 2015 |
|  | Carrying value |  |  | Fair value |  |  | Carrying value |  |  | Fair value |
Cash and cash equivalents |  | $ | 1,863 |  |  | $ | 1,863 |  |  | $ | 1,919 |  |  | $ | 1,919 |
Restricted cash |  |  | 1,337 |  |  |  | 1,337 |  |  |  | 37 |  |  |  | 37 |
Noncurrent receivables |  |  | 19 |  |  |  | 19 |  |  |  | 17 |  |  |  | 17 |
Available-for-sale securities |  |  | 83 |  |  |  | 83 |  |  |  | 193 |  |  |  | 193 |
Short-term borrowings |  |  | 32 |  |  |  | 32 |  |  |  | 38 |  |  |  | 38 |
Commercial paper |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Long-term debt due within one year |  |  | 773 |  |  |  | 783 |  |  |  | 21 |  |  |  | 21 |
Contingent payment related to an acquisition |  |  | 133 |  |  |  | 133 |  |  |  | 130 |  |  |  | 130 |
Long-term debt, less amount due within one year |  |  | 9,501 |  |  |  | 10,195 |  |  |  | 8,993 |  |  |  | 8,922 |

X
- Definition Schedule of carrying values and fair values of other financial instruments. + References No definition available. + Details
Name: | arnc_ScheduleOfCarryingValuesAndFairValuesOfOtherFinancialInstrumentsTableTextBlock
Namespace Prefix: | arnc_
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: | arnc_ScheduleOfDerivativeAssetsAndLiabilitiesAtFairValueTableTextBlock
Namespace Prefix: | arnc_
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: | arnc_ScheduleOfQuantitativeInformationForLevelThreeDerivativeContractsTableTextBlock
Namespace Prefix: | arnc_
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=66048111&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=66048111&loc=d3e19279-110258 + Details
Name: | us-gaap_FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisUnobservableInputReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration