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Derivatives and Other Financial Instruments (Tables) | 6 Months Ended
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Jun. 30, 2021
Fair Value Disclosures [Abstract] |
Schedule of Detail for Level 1, 2 and 3 Derivatives | The following tables present the detail for Level 1, 2 and 3 derivatives (see additional Level 3 information in further tables below):
|  | June 30, 2021 |  |  | December 31, 2020 |
|  | Assets |  |  | Liabilities |  |  | Assets |  |  | Liabilities |
Level 1 and 2 derivative instruments |  | $ | 23 |  |  | $ | 24 |  |  | $ | 21 |  |  | $ | 7 |
Level 3 derivative instruments |  |  | 5 |  |  |  | 1,415 |  |  |  | — |  |  |  | 838 |
Total |  | $ | 28 |  |  | $ | 1,439 |  |  | $ | 21 |  |  | $ | 845 |
Less: Current |  |  | 25 |  |  |  | 236 |  |  |  | 21 |  |  |  | 103 |
Noncurrent |  | $ | 3 |  |  | $ | 1,203 |  |  | $ | — |  |  | $ | 742 |
|  | 2021 |  |  | 2020 |
Second quarter ended June 30, |  | Unrealized (loss) gain recognized in Other comprehensive (loss) income |  |  | Realized (loss) gain reclassed from Other comprehensive (loss) income to earnings |  |  | Unrealized (loss) gain recognized in Other comprehensive (loss) income |  |  | Realized (loss) gain reclassed from Other comprehensive (loss) income to earnings |
Level 1 and 2 derivative instruments |  | $ | 6 |  |  | $ | (3 | ) |  | $ | 22 |  |  | $ | (1 | )
Level 3 derivative instruments |  |  | (394 | ) |  |  | (60 | ) |  |  | (536 | ) |  |  | (14 | )
Noncontrolling and equity interest |  |  | (9 | ) |  |  | (4 | ) |  |  | 1 |  |  |  | 2 |
Total |  | $ | (397 | ) |  | $ | (67 | ) |  | $ | (513 | ) |  | $ | (13 | )
|  | 2021 |  |  | 2020 |
Six months ended June 30, |  | Unrealized (loss) gain recognized in Other comprehensive (loss) income |  |  | Realized (loss) gain reclassed from Other comprehensive (loss) income to earnings |  |  | Unrealized gain (loss) recognized in Other comprehensive (loss) income |  |  | Realized (loss) gain reclassed from Other comprehensive (loss) income to earnings |
Level 1 and 2 derivative instruments |  | $ | (8 | ) |  | $ | (3 | ) |  | $ | (7 | ) |  | $ | (15 | )
Level 3 derivative instruments |  |  | (694 | ) |  |  | (115 | ) |  |  | 331 |  |  |  | (22 | )
Noncontrolling and equity interest |  |  | 2 |  |  |  | (1 | ) |  |  | 15 |  |  |  | (1 | )
Total |  | $ | (700 | ) |  | $ | (119 | ) |  | $ | 339 |  |  | $ | (38 | )
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 instruments (megawatt hours in MWh):
|  | June 30, 2021 |  |  | Unobservable Input |  | Unobservable Input Range
Asset Derivatives |  |  |  |  |  |  |  |  |  |
Financial contract |  | $ | 2 |  |  | Interrelationship of |  | Electricity (per MWh) |  | 2021: $51.94
|  |  |  |  |  | forward energy price and the Consumer Price Index |  |  |  |
Financial contract |  |  | 3 |  |  | MWh of energy needed |  | Electricity (per MWh) |  | 2021: $47.27
(undesignated) |  |  |  |  |  | to produce the forecasted |  |  |  | 2021: $35.06
|  |  |  |  |  | mt of aluminum |  | LME (per mt) |  | 2021: $2,523
|  |  |  |  |  |  |  |  |  | 2021: $2,513
Total Asset Derivatives |  | $ | 5 |  |  |  |  |  |  |
Liability Derivatives |  |  |  |  |  |  |  |  |  |
Power contract |  | $ | 290 |  |  | MWh of energy needed |  | LME (per mt) |  | 2021: $2,520
|  |  |  |  |  | to produce the forecasted |  |  |  | 2027: $2,379
|  |  |  |  |  | mt of aluminum |  | Electricity |  | Rate of 4 million MWh per year
Power contracts |  |  | 1,105 |  |  | MWh of energy needed to produce the forecasted mt of aluminum |  | LME (per mt) |  | 2021: $2,520 2029: $2,456 2036: $2,752
|  |  |  |  |  |  |  | Midwest premium (per pound) |  | 2021: $0.2850 2029: $0.2750 2036: $0.2750
|  |  |  |  |  |  |  | Electricity |  | Rate of 17 million MWh per year
Power contract |  |  | 2 |  |  | MWh of energy needed to produce the forecasted mt of aluminum |  | LME (per mt) |  | 2021: $2,520 2021: $2,525
|  |  |  |  |  |  |  | Midwest premium (per pound) |  | 2021: $0.2850 2021: $0.2950
|  |  |  |  |  |  |  | Electricity |  | Rate of 2 million MWh per year
Power contract (undesignated) |  | 18 |  |  | Estimated spread between the 30-year debt yield of Alcoa and the counterparty |  | Credit spread |  | 2.45%: 30-year debt yield spread 5.32%: Alcoa (estimated) 2.87%: counterparty
Total Liability Derivatives |  | $ | 1,415 |  |  |  |  |  |  |
Schedule of Fair Values of Level 3 Derivative Instruments Recorded as Liabilities | The fair values of Level 3 derivative instruments recorded in the accompanying Consolidated Balance Sheet were as follows:
Asset Derivatives |  | June 30, 2021 |  |  | December 31, 2020 |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Current—financial contract |  | $ | 2 |  |  | $ | — |
Total derivatives designated as hedging instruments |  | $ | 2 |  |  | $ | — |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Current—financial contract |  | $ | 3 |  |  | $ | — |
Total derivatives not designated as hedging instruments |  | $ | 3 |  |  | $ | — |
Total Asset Derivatives |  | $ | 5 |  |  | $ | — |
Liability Derivatives |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Current—power contracts |  | $ | 213 |  |  | $ | 94 |
Current—financial contract |  |  | — |  |  |  | 1 |
Noncurrent—power contracts |  |  | 1,184 |  |  |  | 720 |
Total derivatives designated as hedging instruments |  | $ | 1,397 |  |  | $ | 815 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Current—embedded credit derivative |  | $ | 3 |  |  | $ | 4 |
Noncurrent—embedded credit derivative |  |  | 15 |  |  |  | 19 |
Total derivatives not designated as hedging instruments |  | $ | 18 |  |  | $ | 23 |
Total Liability Derivatives |  | $ | 1,415 |  |  | $ | 838 |
Fair Value Assets Liabilities Measured On Recurring Basis Unobservable Input Reconciliation Text Block | The following tables present the reconciliation of activity for Level 3 derivative instruments:
|  | Assets |  |  | Liabilities |
Second quarter ended June 30, 2021 |  | Financial contract |  |  | Power contracts |  |  | Financial contract |  |  | Embedded credit derivative |
April 1, 2021 |  | $ | — |  |  | $ | 1,047 |  |  | $ | 15 |  |  | $ | 18 |
Total gains or losses included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales (realized) |  |  | — |  |  |  | (67 | ) |  |  | — |  |  |  | — |
Cost of goods sold (realized) |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | — |
Other income, net (unrealized/realized) |  |  | 3 |  |  |  | — |  |  |  | (1 | ) |  |  | 1 |
Other comprehensive (loss) income (unrealized) |  |  | 2 |  |  |  | 417 |  |  |  | (21 | ) |  |  | — |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | )
June 30, 2021 |  | $ | 5 |  |  | $ | 1,397 |  |  | $ | — |  |  | $ | 18 |
Change in unrealized gains or losses included in earnings for derivative instruments held at June 30, 2021: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other income, net |  | $ | 3 |  |  | $ | — |  |  | $ | (1 | ) |  | $ | 1 |
|  | Assets |  |  | Liabilities |
Six months ended June 30, 2021 |  | Financial contract |  |  | Power contracts |  |  | Financial contract |  |  | Embedded credit derivative |
January 1, 2021 |  | $ | — |  |  | $ | 814 |  |  | $ | 1 |  |  | $ | 23 |
Total gains or losses included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales (realized) |  |  | — |  |  |  | (107 | ) |  |  | — |  |  |  | — |
Cost of goods sold (realized) |  |  | — |  |  |  | — |  |  |  | (8 | ) |  |  | — |
Other expenses (income), net (unrealized/realized) |  |  | 3 |  |  |  | — |  |  |  | (1 | ) |  |  | (5 | )
Other comprehensive (loss) income (unrealized) |  |  | 2 |  |  |  | 690 |  |  |  | 6 |  |  |  | — |
Other |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | — |
June 30, 2021 |  | $ | 5 |  |  | $ | 1,397 |  |  | $ | — |  |  | $ | 18 |
Change in unrealized gains or losses included in earnings for derivative instruments held at June 30, 2021: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other expenses (income), net |  | $ | 3 |  |  | $ | — |  |  | $ | (1 | ) |  | $ | (4 | )
Schedule of Carrying Values and Fair Values of Other Financial Instruments | The carrying values and fair values of Alcoa Corporation’s other financial instruments were as follows:
|  | June 30, 2021 |  |  | December 31, 2020 |
|  | Carrying value |  |  | Fair value |  |  | Carrying value |  |  | Fair value |
Cash and cash equivalents |  | $ | 1,652 |  |  | $ | 1,652 |  |  | $ | 1,607 |  |  | $ | 1,607 |
Restricted cash |  |  | 3 |  |  |  | 3 |  |  |  | 3 |  |  |  | 3 |
Short-term borrowings |  |  | 77 |  |  |  | 77 |  |  |  | 77 |  |  |  | 77 |
Long-term debt due within one year |  |  | 1 |  |  |  | 1 |  |  |  | 2 |  |  |  | 2 |
Long-term debt, less amount due within one year |  |  | 2,216 |  |  |  | 2,408 |  |  |  | 2,463 |  |  |  | 2,692 |

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- Definition Tabular disclosure of the fair value measurement of assets and liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of asset and liability. + References No definition available. + Details
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