Howmet Aerospace (HWM) 10-K 18 Feb 10 2009 FY Annual report Financial data

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Sales (Q)	$18,439	$26,901	$29,280
Cost of goods sold (exclusive of expenses below)	16,902	22,175	22,803
Selling, general administrative, and other expenses	1,009	1,167	1,444
Research and development expenses	169	246	238
Provision for depreciation, depletion, and amortization	1,311	1,234	1,244
Restructuring and other charges (D)	237	939	268
Interest expense (V)	470	407	401
Other income, net (O)	(161)	(59)	(1,920)
Total costs and expenses	19,937	26,109	24,478
(Loss) income from continuing operations before income taxes	(1,498)	792	4,802
(Benefit) provision for income taxes (T)	(574)	342	1,623
(Loss) income from continuing operations	(924)	450	3,179
Loss from discontinued operations (B)	(166)	(303)	(250)
Net (loss) income	(1,090)	147	2,929
Less: Net income attributable to noncontrolling interests	61	221	365
Net (Loss) Income Attributable to Alcoa	(1,151)	(74)	2,564
Amounts Attributable to Alcoa Common Shareholders
(Loss) income from continuing operations	(985)	229	2,814
Loss from discontinued operations	(166)	(303)	(250)
Net (loss) income	($1,151)	($74)	$2,564
Basic:
(Loss) income from continuing operations	-1.06	0.27	3.24
Loss from discontinued operations	-0.17	-0.37	-0.29
Net (loss) income	-1.23	-0.1	2.95
Diluted:
(Loss) income from continuing operations	-1.06	0.27	3.22
Loss from discontinued operations	-0.17	-0.37	-0.28
Net (loss) income	-1.23	-0.1	2.94

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents (X)	$1,481	$762
Receivables from customers, less allowances of $70 in 2009 and $65 in 2008	1,529	1,883
Other receivables	653	708
Inventories (G)	2,328	3,238
Fair value of hedged aluminum	0	586
Prepaid expenses and other current assets	1,031	973
Total current assets	7,022	8,150
Properties, plants, and equipment, net (H)	19,828	17,455
Goodwill (E)	5,051	4,981
Investments (I)	1,061	1,915
Deferred income taxes (T)	2,958	2,688
Other noncurrent assets (J)	2,419	2,386
Assets held for sale (B)	133	247
Total Assets	38,472	37,822
Current liabilities:
Short-term borrowings (K and X)	176	478
Commercial paper (K and X)	0	1,535
Accounts payable, trade	1,954	2,518
Accrued compensation and retirement costs	925	866
Taxes, including income taxes	345	378
Fair value of derivative contracts	127	461
Other current liabilities	1,218	987
Long-term debt due within one year (K and X)	669	56
Total current liabilities	5,414	7,279
Long-term debt, less amount due within one year (K and X)	8,974	8,509
Accrued pension benefits (W)	3,163	2,941
Accrued postretirement benefits (W)	2,696	2,730
Other noncurrent liabilities and deferred credits (L)	2,605	1,901
Liabilities of operations held for sale (B)	60	130
Total liabilities	22,912	23,490
Commitments and contingencies (N)
Convertible securities of subsidiary (I)	40	0
Alcoa shareholders' equity:
Preferred stock (R)	55	55
Common stock (R)	1,097	925
Additional capital	6,608	5,850
Retained earnings	11,020	12,400
Treasury stock, at cost	(4,268)	(4,326)
Accumulated other comprehensive loss	(2,092)	(3,169)
Total Alcoa shareholders' equity	12,420	11,735
Noncontrolling interests	3,100	2,597
Total equity	15,520	14,332
Total Liabilities and Equity	$38,472	$37,822

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Receivables from customers, allowances	$70	$65

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash from Operations
Net (loss) income	($1,090)	$147	$2,929
Adjustments to reconcile net (loss) income to cash from operations:
Depreciation, depletion, and amortization	1,311	1,234	1,245
Deferred income taxes (T)	(596)	(261)	311
Equity loss (income), net of dividends	39	(48)	(116)
Restructuring and other charges (D)	237	939	268
Net gain from investing activities-asset sales (O)	(106)	(50)	(1,806)
Provision for doubtful accounts	16	31	14
Loss from discontinued operations (B)	166	303	250
Stock-based compensation (R)	87	94	97
Excess tax benefits from stock-based payment arrangements	0	(15)	(79)
Other	203	(237)	(81)
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
Decrease in receivables	676	233	375
Decrease (increase) in inventories	1,258	(353)	169
Decrease (increase) in prepaid expenses and other current assets	126	(97)	(134)
(Decrease) increase in accounts payable, trade	(632)	21	177
(Decrease) in accrued expenses	(101)	(288)	(79)
(Decrease) increase in taxes, including income taxes	(144)	28	(185)
Cash received on long-term aluminum supply contract (F)	0	0	93
Pension contributions (W)	(128)	(523)	(322)
(Increase) in noncurrent assets	(203)	(242)	(282)
Increase in noncurrent liabilities	233	169	207
Decrease in net assets held for sale	27	16	24
Cash provided from continuing operations	1,379	1,101	3,075
Cash (used for) provided from discontinued operations	(14)	133	36
Cash provided from operations	1,365	1,234	3,111
Financing Activities
Net change in short-term borrowings (K)	(292)	(96)	94
Net change in commercial paper (K)	(1,535)	679	(617)
Additions to long-term debt (K)	1,049	2,253	2,050
Debt issuance costs (K)	(17)	(56)	(126)
Payments on long-term debt (K)	(156)	(204)	(873)
Proceeds from exercise of employee stock options (R)	0	177	835
Excess tax benefits from stock-based payment arrangements	0	15	79
Issuance of common stock (R)	876	0	0
Repurchase of common stock	0	(1,082)	(2,496)
Dividends paid to shareholders	(228)	(556)	(590)
Dividends paid to noncontrolling interests	(140)	(295)	(368)
Contributions from noncontrolling interests (I & M)	480	643	474
Cash provided from (used for) financing activities	37	1,478	(1,538)
Investing Activities
Capital expenditures	(1,617)	(3,413)	(3,614)
Capital expenditures of discontinued operations	(5)	(25)	(22)
Acquisitions, net of cash acquired (F and P)	112	(276)	(15)
Acquisitions of noncontrolling interests (F and P)	0	(141)	(3)
Proceeds from the sale of assets and businesses (F)	(65)	2,710	183
Additions to investments	(181)	(1,303)	(131)
Sales of investments (I)	1,031	72	2,011
Other	4	(34)	(34)
Cash used for investing activities	(721)	(2,410)	(1,625)
Effect of exchange rate changes on cash and cash equivalents	38	(23)	29
Net change in cash and cash equivalents	719	279	(23)
Cash and cash equivalents at beginning of year	762	483	506
Cash and cash equivalents at end of year	$1,481	$762	$483

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions	Preferred stock	Common stock	Additional capital	Retained earnings	Treasury stock	Accumulated other comprehensive loss	Noncontrolling interests	Total
Beginning Balance at Dec. 31, 2006	$55	$925	$5,817	$11,066	($1,999)	($1,233)	$1,800	$16,431
Net (loss) income				2,564			365	2,929
Other comprehensive income (loss)						896	170	1,066
Cash dividends declared:
Preferred @ $3.75 per share in 2009, 2008 and 2007				(2)				(2)
Common @ $0.26 per share in 2009, $0.68 per share in 2008 and $0.68 per share in 2007				(589)				(589)
Noncontrolling interest							(368)	(368)
Stock-based compensation (R)			97					97
Common stock issued: compensation plans (R)			(140)		1,055			915
Repurchase of common stock (R)					(2,496)			(2,496)
Contributions (M)							477	477
Purchase of equity from noncontrolling interest							(3)	(3)
Other							19	19
Ending Balance at Dec. 31, 2007	55	925	5,774	13,039	(3,440)	(337)	2,460	18,476
Net (loss) income				(74)			221	147
Other comprehensive income (loss)						(2,832)	(362)	(3,194)
Cash dividends declared:
Preferred @ $3.75 per share in 2009, 2008 and 2007				(2)				(2)
Common @ $0.26 per share in 2009, $0.68 per share in 2008 and $0.68 per share in 2007				(554)				(554)
Noncontrolling interest							(295)	(295)
Stock-based compensation (R)			94					94
Common stock issued: compensation plans (R)			(18)		196			178
Repurchase of common stock (R)					(1,082)			(1,082)
Contributions (M)							643	643
Purchase of equity from noncontrolling interest							(69)	(69)
Cumulative effect adjustment due to the adoption of accounting changes related to the measurement date of benefit plans, net of tax (W)				(9)				(9)
Other							(1)	(1)
Ending Balance at Dec. 31, 2008	55	925	5,850	12,400	(4,326)	(3,169)	2,597	14,332
Net (loss) income				(1,151)			61	(1,090)
Other comprehensive income (loss)						1,077	323	1,400
Cash dividends declared:
Preferred @ $3.75 per share in 2009, 2008 and 2007				(2)				(2)
Common @ $0.26 per share in 2009, $0.68 per share in 2008 and $0.68 per share in 2007				(227)				(227)
Noncontrolling interest							(140)	(140)
Beneficial conversion option on convertible notes, net of tax (K)			43					43
Stock-based compensation (R)			87					87
Common stock issued: compensation plans (R)			(76)		58			(18)
Issuance of common stock (R)		172	704					876
Contributions (M)							440	440
Purchase of equity from noncontrolling interest							(179)	(179)
Other							(2)	(2)
Ending Balance at Dec. 31, 2009	$55	$1,097	$6,608	$11,020	($4,268)	($2,092)	$3,100	$15,520

2_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $)
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Preferred, per share	3.75	3.75	3.75
Common, per share	0.26	0.68	0.68

Statement Of Other Comprehensiv

Statement Of Other Comprehensive Income (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Net (loss) income	($1,090)	$147	$2,929
Other comprehensive income (loss), net of tax:
Change in unrecognized losses and prior service cost related to pension and postretirement benefit plans	(102)	(1,434)	525
Foreign currency translation adjustments	1,697	(1,768)	1,017
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses)	49	(432)	747
Net amount reclassified to earnings	381	0	(1,159)
Net change in unrealized gains (losses) on available-for-sale securities	430	(432)	(412)
Unrecognized (losses) gains on derivatives (X):
Net change from periodic revaluations	(614)	285	(64)
Net amount reclassified to earnings	(11)	155	0
Net unrecognized (losses) gains on derivatives	(625)	440	(64)
Total Other comprehensive income (loss), net of tax	1,400	(3,194)	1,066
Comprehensive (loss) income	310	(3,047)	3,995
Parent
Net (loss) income	(1,151)	(74)	2,564
Other comprehensive income (loss), net of tax:
Change in unrecognized losses and prior service cost related to pension and postretirement benefit plans	(110)	(1,382)	506
Foreign currency translation adjustments	1,377	(1,457)	880
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses)	49	(432)	747
Net amount reclassified to earnings	381	0	(1,159)
Net change in unrealized gains (losses) on available-for-sale securities	430	(432)	(412)
Unrecognized (losses) gains on derivatives (X):
Net change from periodic revaluations	(609)	282	(69)
Net amount reclassified to earnings	(11)	157	(9)
Net unrecognized (losses) gains on derivatives	(620)	439	(78)
Total Other comprehensive income (loss), net of tax	1,077	(2,832)	896
Comprehensive (loss) income	(74)	(2,906)	3,460
Retained earnings
Net (loss) income	(1,151)	(74)	2,564
Accumulated other comprehensive loss
Unrecognized (losses) gains on derivatives (X):
Total Other comprehensive income (loss), net of tax	1,077	(2,832)	896
Noncontrolling interests
Net (loss) income	61	221	365
Other comprehensive income (loss), net of tax:
Change in unrecognized losses and prior service cost related to pension and postretirement benefit plans	8	(52)	19
Foreign currency translation adjustments	320	(311)	137
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses)	0	0	0
Net amount reclassified to earnings	0	0	0
Net change in unrealized gains (losses) on available-for-sale securities	0	0	0
Unrecognized (losses) gains on derivatives (X):
Net change from periodic revaluations	(5)	3	5
Net amount reclassified to earnings	0	(2)	9
Net unrecognized (losses) gains on derivatives	(5)	1	14
Total Other comprehensive income (loss), net of tax	323	(362)	170
Comprehensive (loss) income	$384	($141)	$535

Summary of Significant Accounti

Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Significant Accounting Policies	A. Summary of Significant Accounting Policies Basis of Presentation. The Consolidated Financial Statements of Alcoa Inc. and subsidiaries (Alcoa or the Company) are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and require management to make certain judgments, estimates, and assumptions. These may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. They also may affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates upon subsequent resolution of identified matters. Certain amounts in previously issued financial statements were reclassified to conform to the 2009 presentation. See Note Q for additional information. Principles of Consolidation. The Consolidated Financial Statements include the accounts of Alcoa and companies in which Alcoa has a controlling interest. Intercompany transactions have been eliminated. The equity method of accounting is used for investments in affiliates and other joint ventures over which Alcoa has significant influence but does not have effective control. Investments in affiliates in which Alcoa cannot exercise significant influence are accounted for on the cost method. Management also evaluates whether an Alcoa entity or interest is a variable interest entity and whether Alcoa is the primary beneficiary. Consolidation is required if both of these criteria are met. Alcoa does not have any variable interest entities requiring consolidation. Related Party Transactions. Alcoa buys products from and sells products to various related companies, consisting of entities in which Alcoa retains a 50% or less equity interest, at negotiated arms-length prices between the two parties. These transactions were not material to the financial position or results of operations of Alcoa for all periods presented. Cash Equivalents. Cash equivalents are highly liquid investments purchased with an original maturity of three months or less. Inventory Valuation. Inventories are carried at the lower of cost or market, with cost for a substantial portion of U.S. and Canadian inventories determined under the last-in, first-out (LIFO) method. The cost of other inventories is principally determined under the average-cost method. See Note G for additional information. Properties, Plants, and Equipment. Properties, plants, and equipment are recorded at cost. Depreciation is recorded principally on the straight-line method at rates based on the estimated useful lives of the assets. For greenfield smelters and mines, the units of production method is used to record depreciation. The following table details the weighted-average useful lives of structures and machinery and equipment by reporting segment (numbers in years): Segment Structures Machineryandequipment Alumina 29 26 Primary Metals 35 21 Flat-Rolled Products 31 20 Engineered Products and Solutions 28 13 Gains or losses from the sale of assets are generally recorded in other income (see p

Discontinued Operations and Ass

Discontinued Operations and Assets Held for Sale
	12 Months Ended Dec. 31, 2009 USD / shares
Discontinued Operations and Assets Held for Sale	B. Discontinued Operations and Assets Held for Sale For all periods presented in the accompanying Statement of Consolidated Operations, the Electrical and Electronic Solutions (EES) business was classified as discontinued operations. There were no other active businesses classified as discontinued operations in the three-year period ended December31, 2009. In late 2008, Alcoa reclassified the EES business to discontinued operations based on the decision to divest the business. The Consolidated Financial Statements for all prior periods presented were reclassified to reflect the EES business in discontinued operations. The divestiture of the wire harness and electrical portion of the EES business was completed in June 2009 and the divestiture of the electronics portion of the EES business was completed in December 2009 (see Note F). The results of the Engineered Products and Solutions segment were reclassified to reflect the movement of the EES business into discontinued operations. The following table details selected financial information for the businesses included within discontinued operations: 2009 2008 2007 Sales $ 306 $ 1,218 $ 1,468 Loss from operations before income taxes $ (221 ) $ (424 ) $ (333 ) Benefit for income taxes 55 121 83 Loss from discontinued operations $ (166 ) $ (303 ) $ (250 ) In 2009 and 2008, the loss from discontinued operations of $166 and $303, respectively, all related to the EES business. The $166 was comprised of a $129 ($168 pretax) loss on the divestiture of the wire harness and electrical portion of the EES business, a $9 ($13 pretax) loss on the divestiture of the electronics portion of the EES business, and the remainder was for the operational results of the EES business prior to the divestitures. The $303 was comprised of asset impairments of $162 ($225 pretax) to reflect the estimated fair value of the EES business and a net operating loss of $141 ($199 pretax), which included restructuring charges of $39 ($53 pretax) for headcount reductions of approximately 6,200 and a charge of $16 ($25 pretax) for obsolete inventory. In 2007, the loss from discontinued operations of $250 consisted of a $243 loss related to the EES business, including severance charges of $36 ($53 pretax) for headcount reductions of approximately 5,900, as part of a strategic business review to restructure EES, and impairment charges of $93 ($133 pretax) for goodwill and $60 ($74 pretax) for various fixed assets, as the forecasted future earnings and cash flows of the EES business no longer supported the carrying values of such assets; an $11 loss related to working capital and other adjustments associated with the 2006 sale of the home exteriors business; and net operating income of $4 for other discontinued businesses. For both periods presented in the accompanying Consolidated Balance Sheet, the assets and liabilities of operations classified as held for sale included the Global Foil business, the Transportation Products Europe business, and the Hawesville, KY automotive casting facility. Additiona

Asset Retirement Obligations

Asset Retirement Obligations
	12 Months Ended Dec. 31, 2009 USD / shares
Asset Retirement Obligations	C. Asset Retirement Obligations Alcoa has recorded AROs related to legal obligations associated with the normal operations of bauxite mining, alumina refining, and aluminum smelting facilities. These AROs consist primarily of costs associated with spent pot lining disposal, closure of bauxite residue areas, mine reclamation, and landfill closure. Alcoa also recognizes AROs for any significant lease restoration obligation, if required by a lease agreement, and for the disposal of regulated waste materials related to the demolition of certain power facilities. The following table details the carrying value of recorded AROs by major category (of which $38 and $29 was classified as a current liability as of December31, 2009 and 2008, respectively): December31, 2009 2008 Spent pot lining disposal $ 196 $ 155 Closure of bauxite residue areas 136 89 Mine reclamation 101 45 Landfill closure 17 11 Other 3 2 $ 453 $ 302 The following table details the changes in the total carrying value of recorded AROs: December31, 2009 2008 Balance at beginning of year $ 302 $ 311 Accretion expense 18 15 Payments (26 ) (35 ) Liabilities incurred 119 41 Translation and other 40 (30 ) Balance at end of year $ 453 $ 302 In addition to the above AROs, certain CAROs related to alumina refineries, aluminum smelters, and fabrication facilities have not been recorded in the Consolidated Financial Statements due to uncertainties surrounding the ultimate settlement date. Such uncertainties exist as a result of the perpetual nature of the structures, maintenance and upgrade programs, and other factors. At the date a reasonable estimate of the ultimate settlement date can be made, Alcoa would record a retirement obligation for the removal, treatment, transportation, storage, and (or) disposal of various regulated assets and hazardous materials such as asbestos, underground and aboveground storage tanks, PCBs, various process residuals, solid wastes, electronic equipment waste, and various other materials. If Alcoa was required to demolish all such structures immediately, the estimated CARO as of December31, 2009 ranges from less than $1 to $52 per structure (131 structures) in todays dollars.

Restructuring and Other Charges

Restructuring and Other Charges
	12 Months Ended Dec. 31, 2009 USD / shares
Restructuring and Other Charges	D. Restructuring and Other Charges Restructuring and other charges for each of the three years in the period ended December31, 2009 were comprised of the following: 2009 2008 2007 Asset impairments $ 54 $ 670 $ 214 Layoff costs 186 183 35 Other exit costs 37 109 47 Reversals of previously recorded layoff and other exit costs* (40 ) (23 ) (28 ) Restructuring and other charges $ 237 $ 939 $ 268 * Reversals of previously recorded layoff and other exit costs resulted from changes in facts and circumstances that led to changes in estimated costs. Layoff costs were recorded based on approved detailed action plans submitted by the operating locations that specified positions to be eliminated, benefits to be paid under existing severance plans, union contracts or statutory requirements, and the expected timetable for completion of the plans. 2009 Restructuring Program. In 2009, Alcoa recorded Restructuring and other charges of $237 ($151 after-tax and noncontrolling interests), which were comprised of the following components: $177 ($121 after-tax and noncontrolling interests) for the layoff of approximately 6,600 employees (2,980 in the Engineered Products and Solutions segment; 2,190 in the Flat-Rolled Products segment; 1,080 in the Primary Metals segment; 180 in the Alumina segment; and 170 in Corporate) to address the impact of the global economic downturn on Alcoas businesses and a $9 ($6 after-tax) curtailment charge due to the remeasurement of pension plans as a result of the workforce reductions (see Note W); $41 ($20 after-tax) in adjustments to the Global Foil and Transportation Products Europe businesses held for sale due to unfavorable foreign currency movements for both businesses and a change in the estimated fair value for the Global Foil business and $13 ($11 after-tax) in other asset impairments; $18 ($12 after-tax) for the write-off of previously capitalized third-party costs related to potential business acquisitions due to the adoption of changes to accounting for business combinations (see Note A) and net costs of $19 ($10 after-tax and noncontrolling interests) for various other items, such as accelerated depreciation and lease termination costs for shutdown facilities; and $40 ($29 after-tax and noncontrolling interests) for reversals of previously recorded layoff and other exit costs due to normal attrition and changes in facts and circumstances. As of December31, 2009, approximately 4,400 of the 6,600 employees were terminated. Cash payments of $62 were made against the 2009 Restructuring Program layoff reserves in 2009. 2008 Restructuring Program. In late 2008, Alcoa took specific actions to reduce costs and strengthen its portfolio, partly due to the economic downturn. Such actions included targeted reductions, curtailments, and plant closures and consolidations, which will reduce headcount by approximately 5,300, resulting in layoff charges of $138 ($98 after-tax and noncontrolling interests), asset impairments of $156 ($88 after-tax and noncontrolling interests), an

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets
	12 Months Ended Dec. 31, 2009 USD / shares
Goodwill and Other Intangible Assets	E. Goodwill and Other Intangible Assets The following table details the changes in the carrying amount of goodwill: Alumina Primary Metals Flat- Rolled Products Engineered Products and Solutions Corporate* Total Balance at December31, 2007: Goodwill $ 17 $ 938 $ 191 $ 2,332 $ 1,349 $ 4,827 Accumulated impairment losses - - - (28 ) - (28 ) 17 938 191 2,304 1,349 4,799 Acquisition of businesses - - 30 248 57 335 Translation (2 ) (6 ) (31 ) (78 ) (43 ) (160 ) Other adjustments - (1 ) 12 3 (7 ) 7 Balance at December31, 2008: Goodwill 15 931 202 2,505 1,356 5,009 Accumulated impairment losses - - - (28 ) - (28 ) 15 931 202 2,477 1,356 4,981 Acquisition of businesses - - - (2 ) - (2 ) Translation 2 8 7 29 35 81 Other adjustments - - 1 - (10 ) (9 ) Balance at December31, 2009: Goodwill 17 939 210 2,532 1,381 5,079 Accumulated impairment losses - - - (28 ) - (28 ) $ 17 $ 939 $ 210 $ 2,504 $ 1,381 $ 5,051 * As of December31, 2009, $1,356 of the amount reflected in Corporate is allocated to each of Alcoas four reportable segments ($165 to Alumina, $855 to Primary Metals, $62 to Flat-Rolled Products, and $274 to Engineered Products and Solutions) included in the table above for purposes of impairment testing (see Note A). This goodwill is reflected in Corporate for segment reporting purposes because it is not included in managements assessment of performance by the four reportable segments. Other intangible assets, which are included in Other noncurrent assets on the accompanying Consolidated Balance Sheet, are as follows: December31, 2009 Gross carrying amount Accumulated amortization Computer software $ 944 $ (487 ) Patents and licenses 148 (73 ) Other intangibles 78 (42 ) Total amortizable intangible assets 1,170 (602 ) Indefinite-lived trade names and trademarks 22 - Total other intangible assets $ 1,192 $ (602 ) December31, 2008 Gross carrying amount Accumulated amortization Computer software $ 872 $ (398 ) Patents and licenses 150 (68 ) Other intangibles 73 (41 ) Total amortizable intangible assets 1,095 (507 ) Indefinite-lived trade names and trademarks 22 - Total other intangible assets $ 1,117 $ (507 ) Computer software consists primarily of software costs associated with an enter

Acquisitions and Divestitures

Acquisitions and Divestitures
	12 Months Ended Dec. 31, 2009 USD / shares
Acquisitions and Divestitures	F. Acquisitions and Divestitures 2009 Acquisitions. In March 2009, Alcoa completed a non-cash exchange of its 45.45% stake in the Sapa AB joint venture for Orkla ASAs (Orkla) 50% stake in the Elkem Aluminium ANS joint venture (Elkem). As a result of this transaction, Elkem is now owned 100% by Alcoa and Sapa AB is now owned 100% by Orkla. Prior to the completion of the exchange transaction, Alcoa accounted for its investments in Sapa AB and Elkem on the equity method and the carrying values were $475 and $435, respectively, at December31, 2008. Elkem includes aluminum smelters in Lista and Mosjen, Norway with a combined output of 282 kmt and the anode plant in Mosjen in which Alcoa already held an 82% stake. These three facilities employed approximately 700 workers combined. The addition of the two smelters and anode plant (supports Norway and Iceland operations) strengthens Alcoas leadership position within the aluminum industry. The assets and liabilities of Elkem were included in the Primary Metals segment beginning March31, 2009 (the final amounts to be recorded will be based on valuation and other studies that have not yet been completed) and Elkems results of operations were reflected in this segment starting on April1, 2009 (prior to this transaction, Alcoas existing 50% stake in Elkem was reflected as equity income in this segment). The exchange transaction resulted in the recognition of a $188 gain ($133 after-tax), comprised of a $156 adjustment to the carrying value of Alcoas existing 50% interest in Elkem in accordance with fair value accounting and a $32 adjustment for the finalization of the estimated fair value of the Sapa AB joint venture. The $188 gain was reflected in Other income, net on the accompanying Statement of Consolidated Operations, of which $156 ($112 after-tax) was reflected in the Primary Metals segment and $32 ($21 after-tax) was reflected in Corporate. The portion of the gain reflected in Corporate was because the original write-down of the 45.45% Sapa AB investment to its estimated fair value in December 2008 was reflected in Corporate (see Note D and I). At the time the exchange transaction was completed, Elkem had $18 in cash, which was reflected in the accompanying Statement of Consolidated Cash Flows as a cash inflow on the acquisitions line. In June 2009, Alcoa completed an acquisition of a fasteners business located in Mexico for $3. This transaction did not have a material impact on Alcoas Consolidated Financial Statements. In July 2009, Alcoa World Alumina LLC (AWA LLC), a majority-owned subsidiary of Alcoa and part of Alcoa World Alumina and Chemicals, acquired a BHP Billiton (BHP) subsidiary that holds interests in four bauxite mines and one refining facility in the Republic of Suriname. These interests were part of joint ventures between AWA LLCs wholly-owned subsidiary in Suriname (Suriname Aluminum Company LLC (Suralco)) and BHPs subsidiary in which Suralco held a 55% stake and BHPs subsidiary held a 45% stake. This acquisition strengthens Alcoas presence in Suriname and supports its overall growth strategy. In this transaction, in exchange for relinquishing BHP of any further obligation

Inventories

Inventories
	12 Months Ended Dec. 31, 2009 USD / shares
Inventories	G. Inventories December31, 2009 2008 Finished goods $ 441 $ 747 Work-in-process 680 960 Bauxite and alumina 593 724 Purchased raw materials 359 575 Operating supplies 255 232 $ 2,328 $ 3,238 At December31, 2009 and 2008, 35% and 39% of total inventories, respectively, were valued on a LIFO basis. If valued on an average-cost basis, total inventories would have been $717 and $1,078 higher at December31, 2009 and 2008, respectively. During the three-year period ended December31, 2009, reductions in LIFO inventory quantities caused partial liquidations of the lower cost LIFO inventory base. These liquidations resulted in the recognition of income of $175 ($114 after-tax) in 2009, $38 ($25 after-tax) in 2008, and $31 ($20 after-tax) in 2007.

Properties, Plants, and Equipme

Properties, Plants, and Equipment, Net
	12 Months Ended Dec. 31, 2009 USD / shares
Properties, Plants, and Equipment, Net	H. Properties, Plants, and Equipment, Net December31, 2009 2008 Land and land rights, including mines $ 576 $ 447 Structures 10,542 7,825 Machinery and equipment 21,960 18,471 33,078 26,743 Less: accumulated depreciation, depletion, and amortization 15,697 13,846 17,381 12,897 Construction work-in-progress 2,447 4,558 $ 19,828 $ 17,455 As of December31, 2009 and 2008, the net carrying value of idled smelting assets was $710 and $453, representing 1,163 kmt and 807 kmt of idle capacity, respectively. Also, the net carrying value of idled refining assets was $157 as of December 31, 2009, representing 1,791 kmt of idle capacity.

Investments

Investments
	12 Months Ended Dec. 31, 2009 USD / shares
Investments	I. Investments December31, 2009 2008 Equity investments $ 953 $ 1,885 Other investments 108 30 $ 1,061 $ 1,915 Equity Investments. As of December31, 2009 and 2008, Equity investments included bauxite mining interests in Guinea and Brazil, hydroelectric power construction projects in Brazil (see Note N), a smelter operation in Canada, and a natural gas pipeline in Australia (see Note N). Also included in Equity investments as of December31, 2009 was an investment in a new joint venture in Saudi Arabia. Additionally, Equity investments as of December31, 2008 included a 45.45% investment in Sapa AB, a 50% investment in Elkem, and an 8.5% investment in Shining Prospect Pte. Ltd. (SPPL). In December 2009, Alcoa and Saudi Arabian Mining Company (known as Maaden) entered into a 30-year joint venture shareholders agreement (automatic extension for an additional twenty years, unless the parties agree otherwise or unless earlier terminated) setting forth the terms for the development, construction, ownership, and operation of an integrated bauxite mine, alumina refinery, aluminum smelter, and rolling mill, in the Kingdom of Saudi Arabia. Specifically, the project to be developed by the joint venture will consist of: (i)a bauxite mine for the extraction of approximately 4,000 kmt of bauxite from the Al Baitha bauxite deposit near Quiba in the northern part of the Kingdom of Saudi Arabia; (ii)an alumina refinery with an initial capacity of 1,800 kmt; (iii)a primary aluminum smelter with an initial capacity of 740 kmt; and (iv)a rolling mill with initial capacity of 250 kmt, which may be increased to 460 kmt. The refinery, smelter, and rolling mill will be constructed in an industrial area at Ras Az Zawr on the east coast of the Kingdom of Saudi Arabia. The facilities will use critical infrastructure, including power generation derived from reserves of natural gas, as well as port and rail facilities, developed by the Government of the Kingdom of Saudi Arabia. First production from the smelter and rolling mill is anticipated in 2013, and first production from the mine and refinery is expected in 2014. The joint venture will be owned 60% by Maaden and the other 40% will be controlled by Alcoa through a special-purpose vehicle (SPV). Through this SPV arrangement, Alcoa and Aluminum Financing Limited will each have a 20% economic interest in the joint venture. Aluminum Financing Limiteds investment is in the form of subordinated, participating convertible notes (the Notes), which have common equity rights in the SPV, issued by the SPV and will be converted into permanent equity at a future date based on certain conditions as defined in the underlying SPV agreement. The Notes contain put and call mechanisms under which Aluminum Financing Limited can require Alcoa to purchase, or Alcoa can require Aluminum Financing Limited to sell, its 20% interest during a certain period as defined in the SPV agreement. A portion of Alcoas 20% investment (related to the bauxite mine and alumina refinery) will be indirectly owned through an affiliate of Alcoa World Alumina and Chemicals, which is 40% owned

Other Noncurrent Assets

Other Noncurrent Assets
	12 Months Ended Dec. 31, 2009 USD / shares
Other Noncurrent Assets	J. Other Noncurrent Assets December31, 2009 2008 Intangibles, net (E) $ 590 $ 610 Prepaid pension benefit (W) 94 122 Prepaid gas transmission contract 288 217 Cash surrender value of life insurance 453 394 Other 994 1,043 $ 2,419 $ 2,386

Debt

Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Debt	K. Debt Long-Term Debt. December31, 2009 2008 7.375% Notes, due 2010 $ 511 $ 511 6.5% Notes, due 2011 584 584 6% Notes, due 2012 517 517 5.375% Notes, due 2013 600 600 6% Notes, due 2013 750 750 5.25% Convertible Notes, due 2014 575 - 5.55% Notes, due 2017 750 750 6.5% Bonds, due 2018 250 250 6.75% Notes, due 2018 750 750 5.72% Notes, due 2019 750 750 5.87% Notes, due 2022 627 627 5.9% Notes, due 2027 625 625 6.75% Bonds, due 2028 300 300 5.95% Notes due 2037 625 625 BNDES Loans, due 2010-2029 (see below for weighted average rates) 1,075 546 Other* 354 380 9,643 8,565 Less: amount due within one year 669 56 $ 8,974 $ 8,509 * Other includes various financing arrangements related to subsidiaries, unamortized debt discounts, a beneficial conversion feature related to the convertible notes (see below), and adjustments to the carrying value of long-term debt related to interest swap contracts accounted for as fair value hedges (see Note X). The principal amount of long-term debt maturing in each of the next five years is $666 in 2010, $844 in 2011, $701 in 2012, $1,537 in 2013, and $804 in 2014. 2009 ActivityIn March 2009, Alcoa issued $575 of 5.25% convertible notes due 2014 (the convertible notes) as senior debt securities under Alcoas shelf registration statement dated March 10, 2008. The issuance of the convertible notes included $75 related to the exercise of an over-allotment option by the underwriters. The underwriting discount and third-party expenses for the issuance of the convertible notes were $13 and are being amortized to interest expense over the five-year term of the convertible notes. Interest on the convertible notes is payable semi-annually in arrears on March15th and September15th each year, which commenced on September15, 2009. If there is an event of default under the convertible notes, the principal amount of the convertible notes, plus accrued and unpaid interest, may be declared immediately due and payable. These amounts automatically become due and payable if an event of default relating to certain events of bankruptcy, insolvency, or reorganization occurs. Alcoa does not have the right to redeem the convertible notes prior to the stated maturity date. Holders of the convertible notes have the option to convert their notes into shares of Alcoas common stock at any time prior to the close of business on the second scheduled trading day (March 13, 2014) immediately preceding the stated maturity date (March 15, 2014). The initial conversion rate for the convertible notes is 155.4908 shares of Alcoas common stock per $1,000 (in whole dollars) principal amount of notes (89,407,210 shares), equivalent to a conversion price of approximately $6.43 per share, subject to adjustment, as defined in the convertible notes. Other than receiving cash in lieu of fractional shares, holders do not have the option to receive cash instead of shares of common

Other Noncurrent Liabilities an

Other Noncurrent Liabilities and Deferred Credits
	12 Months Ended Dec. 31, 2009 USD / shares
Other Noncurrent Liabilities and Deferred Credits	L. Other Noncurrent Liabilities and Deferred Credits December31, 2009 2008 Deferred alumina and aluminum sales revenue $ 132 $ 140 Environmental remediation (N) 280 277 Asset retirement obligations (C) 415 273 Fair value of derivative contracts (X) 802 360 Accrued compensation and retirement costs 308 267 Deferred income taxes (T) 376 321 Other 292 263 $ 2,605 $ 1,901

Noncontrolling Interests

Noncontrolling Interests
	12 Months Ended Dec. 31, 2009 USD / shares
Noncontrolling Interests	M. Noncontrolling Interests The following table summarizes the noncontrolling shareholders interests in the equity of Alcoas majority-owned consolidated subsidiaries: December31, 2009 2008 Alcoa of Australia $ 1,272 $ 957 Alcoa World Alumina LLC 1,801 1,450 Mosjen Anodes ANS - 162 Other 27 28 $ 3,100 $ 2,597 In 2009 and 2008, Alcoa received $440 and $643, respectively, in contributions from the noncontrolling shareholder of Alcoa of Australia and Alcoa World Alumina LLC. During 2007, Alcoa received $474 in contributions from noncontrolling shareholders related to interests in Australia, Norway, Russia, and China (an additional $3 was received in the form of a noncash contribution). In March 2009, Alcoa acquired the outstanding noncontrolling interest in Mosjen Anodes ANS as part of the acquisition of Elkem (see Note F).

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingencies	N. Commitments and Contingencies Litigation. On February27, 2008, Alcoa Inc. received notice that Aluminium Bahrain B.S.C. (Alba) had filed suit against Alcoa Inc. and Alcoa World Alumina LLC (collectively, Alcoa), and others, in the U.S. District Court for the Western District of Pennsylvania (the Court), Civil Action number 08-299, styled Aluminium Bahrain B.S.C. v. Alcoa Inc., Alcoa World Alumina LLC, William Rice, and Victor Phillip Dahdaleh. The complaint alleges that certain Alcoa entities and their agents, including Victor Phillip Dahdaleh, have engaged in a conspiracy over a period of 15 years to defraud Alba. The complaint further alleges that Alcoa and its employees or agents (1)illegally bribed officials of the government of Bahrain and (or) officers of Alba in order to force Alba to purchase alumina at excessively high prices, (2)illegally bribed officials of the government of Bahrain and (or) officers of Alba and issued threats in order to pressure Alba to enter into an agreement by which Alcoa would purchase an equity interest in Alba, and (3)assigned portions of existing supply contracts between Alcoa and Alba for the sole purpose of facilitating alleged bribes and unlawful commissions. The complaint alleges that Alcoa and the other defendants violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and committed fraud. Albas complaint seeks compensatory, consequential, exemplary, and punitive damages, rescission of the 2005 alumina supply contract, and attorneys fees and costs. Alba seeks treble damages with respect to its RICO claims. On February26, 2008, Alcoa Inc. had advised the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) that it had recently become aware of these claims, had already begun an internal investigation, and intended to cooperate fully in any investigation that the DOJ or the SEC may commence. On March17, 2008, the DOJ notified Alcoa that it had opened a formal investigation and Alcoa has been cooperating with the government. In response to a motion filed by the DOJ on March27, 2008, the Court ordered the suit filed by Alba to be administratively closed and that all discovery be stayed to allow the DOJ to fully conduct an investigation without the interference and distraction of ongoing civil litigation. The Court further ordered that the case will be reopened at the close of the DOJs investigation. The Company is unable to reasonably predict an outcome or to estimate a range of reasonably possible loss. In November 2006, in Curtis v. Alcoa Inc., Civil Action No.3:06cv448 (E.D. Tenn.), a class action was filed by plaintiffs representing approximately 13,000 retired former employees of Alcoa or Reynolds Metals Company and spouses and dependents of such retirees alleging violation of the Employee Retirement Income Security Act (ERISA) and the Labor-Management Relations Act by requiring plaintiffs, beginning January1, 2007, to pay health insurance premiums and increased co-payments and co-insurance for certain medical procedures and prescription drugs. Plaintiffs allege these changes to their retiree health care plans violate their rights to vested hea

Other Income, Net

Other Income, Net
	12 Months Ended Dec. 31, 2009 USD / shares
Other Income, Net	O. Other Income, Net 2009 2008 2007 Equity loss (income) $ 14 $ (41 ) $ (71 ) Interest income (18 ) (53 ) (61 ) Dividend income (1 ) (1 ) (31 ) Foreign currency (gains) losses, net (82 ) 74 26 Net gain from asset sales (106 ) (50 ) (1,806 ) Other, net 32 12 23 $ (161 ) $ (59 ) $ (1,920 ) In 2009, Net gain from asset sales included a $188 gain related to the Elkem/Sapa AB exchange transaction (see Note F), a $182 loss on the sale of the SPPL investment (see Note I), and a $92 gain related to the acquisition of a BHP subsidiary (see Note F). In 2007, Net gain from asset sales included a $1,754 gain on the sale of Alcoas investment in the Aluminum Corporation of China Limited (Chalco). The dividend income in 2007 was virtually all related to Alcoas former stake in Chalco.

Cash Flow Information

Cash Flow Information
	12 Months Ended Dec. 31, 2009 USD / shares
Cash Flow Information	P. Cash Flow Information Cash paid for interest and income taxes are as follows: 2009 2008 2007 Interest, net of amount capitalized $ 396 $ 335 $ 275 Income taxes, net of amount refunded 168 730 1,376 The details related to acquisitions are as follows: 2009 2008 2007 Assets acquired $ 389 $ 352 $ 19 Liabilities assumed (294 ) (5 ) (3 ) Noncontrolling interests acquired - 70 3 Gain recognized (92 ) - - Cash paid 3 417 19 Less: cash acquired 115 - 1 Net cash (received) paid $ (112 ) $ 417 $ 18 In 2007, Alcoa sold its Three Oaks Mine for $140, which consisted of $70 in cash and a $70 note receivable. The $70 in cash was reflected in the Proceeds from the sale of assets and businesses on the accompanying Statement of Consolidated Cash Flows. The $70 note receivable was not reflected in the accompanying Statement of Consolidated Cash Flows as it represents a non-cash activity. In 2009, the note receivable was settled and was included in Proceeds from the sale of assets and businesses on the accompanying Statement of Consolidated Cash Flows.

Segment and Geographic Area Inf

Segment and Geographic Area Information
	12 Months Ended Dec. 31, 2009 USD / shares
Segment and Geographic Area Information	Q. Segment and Geographic Area Information In May 2009, management approved the movement of Alcoas hard alloy extrusions business from the Flat-Rolled Products segment to the Engineered Products and Solutions segment. This move was made to capture market, customer, and manufacturer synergies through the combination of the hard alloy extrusions business with the power and propulsion and forgings businesses. Prior period amounts were reclassified to reflect this change. Alcoa is primarily a producer of aluminum products. Aluminum and alumina represent more than three-fourths of Alcoas revenues. Nonaluminum products include precision castings and aerospace and industrial fasteners. Alcoas segments are organized by product on a worldwide basis. Segment performance under Alcoas management reporting system is evaluated based on a number of factors; however, the primary measure of performance is the after-tax operating income (ATOI) of each segment. Certain items such as the impact of LIFO inventory accounting; interest income and expense; noncontrolling interests; corporate expense (general administrative and selling expenses of operating the corporate headquarters and other global administrative facilities, along with depreciation and amortization on corporate-owned assets); restructuring and other charges; discontinued operations; and other items, including intersegment profit eliminations and other metal adjustments, differences between tax rates applicable to the segments and the consolidated effective tax rate, the results of the soft alloy extrusions business in Brazil, and other nonoperating items such as foreign currency translation gains/losses are excluded from segment ATOI. Segment assets exclude, among others, cash and cash equivalents, deferred income taxes, goodwill not allocated to businesses for segment reporting purposes, corporate fixed assets, LIFO reserves, and assets classified as held for sale related to discontinued operations. The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies (see Note A). Transactions among segments are established based on negotiation among the parties. Differences between segment totals and Alcoas consolidated totals for line items not reconciled are in Corporate. Alcoas products are used worldwide in packaging, transportation (including aerospace, automotive, truck, trailer, rail, and shipping), building and construction, oil and gas, defense, and industrial applications. Total export sales from the U.S. included in continuing operations were $1,678 in 2009, $2,732 in 2008, and $3,060 in 2007. Alcoas operations consist of four worldwide reportable segments as follows (there were five such segments previous to 2009): Alumina. This segment consists of Alcoas worldwide alumina system, including the mining of bauxite, which is then refined into alumina. Alumina is mainly sold directly to internal and external smelter customers worldwide or is sold to customers who process it into industrial chemical products. A portion of this segments third-party sales are completed through the use of agents, alumina traders, and distrib

Preferred and Common Stock

Preferred and Common Stock
	12 Months Ended Dec. 31, 2009 USD / shares
Preferred and Common Stock	R. Preferred and Common Stock Preferred Stock. Alcoa has two classes of preferred stock. Serial preferred stock has 660,000 shares authorized at a par value of $100 per share with an annual $3.75 cumulative dividend preference per share. There were 546,024 of such shares outstanding at December31, 2009 and 2008. Class B serial preferred stock has 10million shares authorized (none issued) and a par value of $1 per share. Common Stock. There are 1.8 billion shares authorized at a par value of $1 per share, and 1,097,074,538 and 924,574,538 shares were issued at December31, 2009 and 2008, respectively, (see Note Y). In March 2009, Alcoa issued 172.5million shares of common stock at a price of $5.25 per share. The issuance of common stock included 22.5million shares related to the exercise of an over-allotment option by the underwriters. The underwriting discount and third-party expenses for the issuance of the common stock were $30, which was recorded as a decrease to additional capital. The common stock was issued under Alcoas shelf registration statement dated March10, 2008. The net proceeds from the issuance of common stock ($876) and the convertible notes (see Note K) were used to prepay the $1,300 outstanding under Alcoas 364-day revolving credit facility (see Note K). The remaining net proceeds were used for general corporate purposes. In March 2009, the quarterly common stock dividend was reduced from $0.17 per share to $0.03 per share in connection with a series of financial actions initiated to improve liquidity. As of December31, 2009, 109million shares of common stock were reserved for issuance under Alcoas stock-based compensation plans. Alcoa issues shares from treasury stock to satisfy the exercise of stock options and the conversion of stock awards. Alcoa has a share repurchase program that authorizes the purchase of up to 25% (or approximately 217million shares) of its outstanding common stock at December31, 2006, in the open market or through privately negotiated transactions, directly or through brokers or agents, and expires on December31, 2010. During 2008, Alcoa repurchased 33million shares, leaving approximately 116million shares that may yet be repurchased under the current program. In October 2008, Alcoa elected to suspend share repurchases to preserve liquidity in light of the global economic downturn. Share Activity (number of shares) Common stock Treasury Outstanding Balance at end of 2006 56,834,994 867,739,544 Repurchased 67,712,689 (67,712,689 ) Issued for stock-based compensation plans (27,374,945 ) 27,374,945 Balance at end of 2007 97,172,738 827,401,800 Repurchased 33,421,626 (33,421,626 ) Issued for stock-based compensation plans (6,337,194 ) 6,337,194 Balance at end of 2008 124,257,170 800,317,368 Repurchased - - Public offering - 172,500,000 Issued for stock-based compensation plans (1,561,452 ) 1,561,452 Balance at end of 2009 122,695,718 974,378,820 Stock-based Compensation Stock options under Alcoas stock-based compensation plans have been

Earnings Per Share

Earnings Per Share
	12 Months Ended Dec. 31, 2009 USD / shares
Earnings Per Share	S. Earnings Per Share Basic earnings per share (EPS) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared and dividends and undistributed earnings allocated to participating securities, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding not classified as participating securities. As disclosed in Note A, on January1, 2009, Alcoa adopted changes issued by the FASB to the calculation of earnings per share. These changes state that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method for all periods presented. Under Alcoas stock-based compensation programs, certain employees are granted stock and performance awards, which entitle those employees to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of Alcoas common stock. As such, these unvested stock and performance awards meet the definition of a participating security. Under the two-class method, all earnings, whether distributed or undistributed, are allocated to each class of common stock and participating securities based on their respective rights to receive dividends. Prior to the adoption of these changes, stock and performance awards were considered potential shares of common stock and were included only in the diluted EPS calculation under the treasury stock method as long as their effect was not anti-dilutive. EPS data for prior periods presented were revised to reflect these changes. The information used to compute basic and diluted EPS on (loss) income from continuing operations attributable to Alcoa common shareholders was as follows (shares in millions): 2009 2008 2007 (Loss) income from continuing operations attributable to Alcoa common shareholders $ (985 ) $ 229 $ 2,814 Less: preferred stock dividends declared 2 2 2 (Loss) income from continuing operations available to common equity (987 ) 227 2,812 Less: dividends and undistributed earnings allocated to participating securities - 6 21 (Loss) income from continuing operations available to Alcoa common shareholders $ (987 ) $ 221 $ 2,791 Average shares outstandingbasic 935 810 861 Effect of dilutive securities: Potential shares of common stock, attributable to stock options - 3 5 Average shares outstandingdiluted 935 813 866 In 2009, basic average shares outstanding and diluted average shares outstanding were the same because the effect of potential shares of common stock was anti-dilutive since Alcoa generated a loss from continuing operations. As a result, 89million share equivalents related to the convertible notes and 26million stock options were not included in the computation of diluted

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes	T. Income Taxes The components of (loss) income from continuing operations before income taxes were as follows: 2009 2008 2007 U.S. $ (512 ) $ (999 ) $ 1,960 Foreign (986 ) 1,791 2,842 $ (1,498 ) $ 792 $ 4,802 The (benefit) provision for income taxes on (loss) income from continuing operations consisted of the following: 2009 2008 2007 Current: Federal* $ (119 ) $ 3 $ 516 Foreign 142 598 774 State and local (1 ) 2 22 22 603 1,312 Deferred: Federal* (89 ) (184 ) 231 Foreign (510 ) (77 ) 87 State and local 3 - (7 ) (596 ) (261 ) 311 Total $ (574 ) $ 342 $ 1,623 * Includes U.S. taxes related to foreign income Included in discontinued operations is a tax benefit of $55 in 2009, $121 in 2008 and $83 in 2007. The exercise of employee stock options generated a tax benefit of $20 in 2008 and $95 in 2007. This amount was credited to additional capital and reduced current taxes payable. There were no exercises of employee stock options in 2009. Alcoa also has unamortized tax-deductible goodwill of $358 resulting from intercompany stock sales and reorganizations (generally at a 30% to 34% rate). Alcoa recognizes the tax benefits associated with this tax-deductible goodwill as it is being amortized for local income tax purposes rather than in the period in which the transaction is consummated. A reconciliation of the U.S. federal statutory rate to Alcoas effective tax rate for continuing operations is as follows: 2009 2008 2007 U.S. federal statutory rate 35.0 % 35.0 % 35.0 % Taxes on foreign income 0.1 (10.1 ) (4.3 ) Permanent differences on restructuring charges and asset disposals 2.0 11.8 3.4 Audit and other adjustments to prior years accruals (0.7 ) (2.8 ) (0.1 ) Noncontrolling interests - 5.0 0.4 Statutory tax rate and law changes 4.2 3.5 0.2 Reorganization of equity investment 4.7 - - Items related to smelter operations Italy* (9.3 ) - - Other 2.3 0.8 (0.8 ) Effective tax rate 38.3 % 43.2 % 33.8 % * Includes items not tax benefited as follows: a $250 charge related to a recent decision by the European Commission on electricity pricing (see Note N), a $15 charge for environmental remediation (see Note N), and a $15 restructuring charge for layoffs. Also includes a $41 valuation allowance placed on existing deferred tax assets. The components of net deferred tax assets and liabilities are as follows: 2009 2008 December31, Deferred tax assets Deferred tax liabilities Deferred tax assets Deferred tax liabilities Depreciation $ - $ 1,154 $ - $ 1,188 Employee benefits 2,376 - 2,313

Accounts Receivable Securitizat

Accounts Receivable Securitizations
	12 Months Ended Dec. 31, 2009 USD / shares
Accounts Receivable Securitizations	U. Accounts Receivable Securitizations Alcoa has a program to sell a senior undivided interest in certain customer receivables, without recourse, on a continuous basis to a third-party for cash. This program was renewed on October29, 2009 and expires on October28, 2010. In August 2008, Alcoa increased the capacity of this program from $100 to $250. As of December31, 2009 and 2008, Alcoa derecognized $250 in Receivables from customers on the accompanying Consolidated Balance Sheet under this program (see Note A). Alcoa services the customer receivables for the third-party at market rates; therefore, no servicing asset or liability was recorded. Alcoa had an existing program with a different third-party to sell certain customer receivables. The sale of receivables under this program was conducted through a qualifying special purpose entity (QSPE) that was bankruptcy remote, and, therefore, was not consolidated by Alcoa. Effective August31, 2008, Alcoa terminated this program and all outstanding customer receivables were collected by the QSPE through the end of 2008.

Interest Cost Components

Interest Cost Components
	12 Months Ended Dec. 31, 2009 USD / shares
Interest Cost Components	V. Interest Cost Components 2009 2008 2007 Amount charged to expense $ 470 $ 407 $ 401 Amount capitalized 165 167 199 $ 635 $ 574 $ 600

Pension Plans and Other Postret

Pension Plans and Other Postretirement Benefits
	12 Months Ended Dec. 31, 2009 USD / shares
Pension Plans and Other Postretirement Benefits	W. Pension Plans and Other Postretirement Benefits Alcoa maintains pension plans covering most U.S. employees and certain employees in foreign locations. Pension benefits generally depend on length of service, job grade, and remuneration. Substantially all benefits are paid through pension trusts that are sufficiently funded to ensure that all plans can pay benefits to retirees as they become due. Most U.S. salaried and non-union hourly employees hired after March1, 2006 participate in a defined contribution plan instead of a defined benefit plan. Alcoa also maintains health care and life insurance benefit plans covering eligible U.S. retired employees and certain retirees from foreign locations. Generally, the medical plans pay a percentage of medical expenses, reduced by deductibles and other coverages. These plans are generally unfunded, except for certain benefits funded through a trust. Life benefits are generally provided by insurance contracts. Alcoa retains the right, subject to existing agreements, to change or eliminate these benefits. All U.S. salaried and certain hourly employees hired after January1, 2002 are not eligible for postretirement health care benefits. All U.S. salaried and certain hourly employees that retire on or after April1, 2008 are not eligible for postretirement life insurance benefits. For the year-ended December31, 2008, Alcoa adopted a change issued by the FASB requiring an employer to measure the funded status of each of its benefit plans as of the date of its year-end statement of financial position. This provision resulted in a charge of $9, which was recorded as an adjustment to December31, 2008 retained earnings. Prior to the effective date of this change, the funded status of most of Alcoas pension and other postretirement benefit plans were already measured as of December31st. Obligations and Funded Status Pension benefits Postretirementbenefits December31, 2009 2008 2009 2008 Change in benefit obligation Benefit obligation at beginning of year $ 10,765 $ 11,601 $ 3,121 $ 3,260 Service cost 143 185 21 25 Interest cost 690 693 184 193 Amendments 4 11 (1 ) - Actuarial losses (gains) 450 (457 ) (48 ) (16 ) Acquisitions 106 - 26 - Divestitures (10 ) (71 ) - (58 ) Settlements (28 ) (27 ) - - Curtailments 2 (2 ) - 3 Benefits paid, net of participants contributions (801 ) (771 ) (297 ) (308 ) Medicare Part D subsidy receipts - - 26 29 Other transfers, net - 23 - - Exchange rate 317 (420 ) 6 (7 ) Benefit obligation at end of year $ 11,638 $ 10,765 $ 3,038 $ 3,121 Change in plan assets Fair value of plan assets at beginning of year $ 7,908 $ 10,652 $ 162 $ 203 Actual return on plan assets 946 (2,058 ) 13

Derivatives and Other Financial

Derivatives and Other Financial Instruments
	12 Months Ended Dec. 31, 2009 USD / shares
Derivatives and Other Financial Instruments	X. Derivatives and Other Financial Instruments Derivatives. Alcoa is exposed to certain risks relating to its ongoing business operations, including financial, market, political, and economic risks. The following discussion provides information regarding Alcoas exposure to the risks of changing commodity prices, interest rates, and foreign currency exchange rates. Alcoas commodity and derivative activities are subject to the management, direction, and control of the Strategic Risk Management Committee (SRMC). The SRMC is composed of the chief executive officer, the chief financial officer, and other officers and employees that the chief executive officer selects. The SRMC reports to the Board of Directors on the scope of its activities. The aluminum, energy, interest rate, and foreign exchange contracts are held for purposes other than trading. They are used primarily to mitigate uncertainty and volatility, and to cover underlying exposures. Alcoa is not involved in trading activities for energy, weather derivatives, or other nonexchange commodity trading activities. The fair values of outstanding derivative contracts recorded as assets in the accompanying Consolidated Balance Sheet were as follows: Asset Derivatives BalanceSheetLocation December31, 2009 December31, 2008 Derivatives designated as hedging instruments: Aluminum contracts Prepaid expenses and other current assets $ 59 $ - Interest rate contracts Prepaid expenses and other current assets 34 14 Foreign exchange contracts Prepaid expenses and other current assets 7 - Energy contracts Prepaid expenses and other current assets 7 - Aluminum contracts Other noncurrent assets 22 26 Interest rate contracts Other noncurrent assets 73 146 Foreign exchange contracts Other noncurrent assets 5 - Total derivatives designated as hedging instruments $ 207 $ 186 Derivatives not designated as hedging instruments*: Aluminum contracts Prepaid expenses and other current assets $ 6 $ 35 Energy contracts Prepaid expenses and other current assets 1 17 Aluminum contracts Other noncurrent assets 3 - Energy contracts Other noncurrent assets - 1 Total derivatives not designated as hedging instruments $ 10 $ 53 Less margin held: Interest rate contracts Prepaid expenses and other current assets $ 19 $ 3 Aluminum contracts Prepaid expenses and other current assets 22 - Energy contracts Prepaid expenses and other current assets 1 - Interest rate contracts Other noncurrent assets 18 64 Sub-total $ 60 $ 67 Total Asset Derivatives $ 157 $ 172 * See the Other section within Note X for additional information on Alcoas purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies. The fair values of outstanding derivative contracts recorded as

Subsequent Events

Subsequent Events
	12 Months Ended Dec. 31, 2009 USD / shares
Subsequent Events	Y. Subsequent Events Management evaluated all activity of Alcoa through February18, 2010 (the issue date of the Consolidated Financial Statements) and concluded that no subsequent events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in the Notes to the Consolidated Financial Statements, except as follows: On January26, 2010, Alcoa contributed 44,313,146 newly issued shares of its common stock to a master trust that holds the assets of certain U.S. defined benefit pension plans in a private placement transaction. These shares were valued at $13.54 per share (the closing price of Alcoas common stock on January26, 2010), or $600 in the aggregate, and were issued to satisfy a portion of Alcoas outstanding future funding obligations of these plans, including a portion of the estimated minimum required funding for 2011. On January 27, 2010, the 44,313,146 shares were registered under Alcoas current shelf registration statement dated March 10, 2008 for resale by the master trust, as selling stockholder.

Supplemental Financial Informat

Supplemental Financial Information
	12 Months Ended Dec. 31, 2009 USD / shares
Supplemental Financial Information	Supplemental Financial Information (unaudited) Quarterly Data (dollars in millions, except per-share amounts) First Second Third Fourth Year 2009 Sales $ 4,147 $ 4,244 $ 4,615 $ 5,433 $ 18,439 Amounts attributable to Alcoa common shareholders: (Loss) income from continuing operations $ (480 ) $ (312 ) $ 73 $ (266 ) $ (985 ) (Loss) income from discontinued operations (B) (17 ) (142 ) 4 (11 ) (166 ) Net (loss) income $ (497 ) $ (454 ) $ 77 $ (277 ) $ (1,151 ) Earnings per share attributable to Alcoa common shareholders* (S): Basic: (Loss) income from continuing operations $ (0.59 ) $ (0.32 ) $ 0.07 $ (0.27 ) $ (1.06 ) (Loss) income from discontinued operations (0.02 ) (0.15 ) 0.01 (0.01 ) (0.17 ) Net (loss) income $ (0.61 ) $ (0.47 ) $ 0.08 $ (0.28 ) $ (1.23 ) Diluted: (Loss) income from continuing operations $ (0.59 ) $ (0.32 ) $ 0.07 $ (0.27 ) $ (1.06 ) (Loss) income from discontinued operations (0.02 ) (0.15 ) 0.01 (0.01 ) (0.17 ) Net (loss) income $ (0.61 ) $ (0.47 ) $ 0.08 $ (0.28 ) $ (1.23 ) First Second Third Fourth Year 2008 Sales $ 6,998 $ 7,245 $ 6,970 $ 5,688 $ 26,901 Amounts attributable to Alcoa common shareholders: Income (loss) from continuing operations $ 299 $ 553 $ 306 $ (929 ) $ 229 Income (loss) from discontinued operations (B) 4 (7 ) (38 ) (262 ) (303 ) Net income (loss) $ 303 $ 546 $ 268 $ (1,191 ) $ (74 ) Earnings per share attributable to Alcoa common shareholders* (S): Basic: Income (loss) from continuing operations $ 0.37 $ 0.68 $ 0.37 $ (1.16 ) $ 0.27 Income (loss) from discontinued operations - (0.01 ) (0.04 ) (0.33 ) (0.37 ) Net income (loss) $ 0.37 $ 0.67 $ 0.33 $ (1.49 ) $ (0.10 ) Diluted: Income (loss) from continuing operations $ 0.36 $ 0.67 $ 0.37 $ (1.16 ) $ 0.27 Income (loss) from discontinued operations 0.01 (0.01 ) (0.04 ) (0.33 ) (0.37 ) Net income (loss) $ 0.37 $ 0.66 $ 0.33 $ (1.49 ) $ (0.10 ) * Per share amounts are calculated independently for each period presented; therefore, the sum of the quarterly per share amounts may not equal the per share amounts for the year. Separately, in 2009, Alcoa adopted changes issued by the FASB to the calculation of earnings per share (see Note S). As a res

SCHEDULE II - VALUATION AND QUA

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
	12 Months Ended Dec. 31, 2009 USD / shares
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS	SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, (in millions) Col. A Col. B Col. C Col. D Col. E Additions Description Balanceat beginning of period Chargedto costsand expenses Charged toother accounts(A) Deductions(B) Balanceat endof period Allowance for doubtful accountscustomer receivables: 2009 $ 65 $ 9 $ 4 $ 8 $ 70 2008 68 26 (5 ) 24 65 2007 64 9 9 14 68 Allowance for doubtful accountsother receivables: 2009 $ 79 $ 6 $ 6 $ 1 $ 90 2008 88 13 (21 ) 1 79 2007 66 9 14 1 88 Income tax valuation allowance: 2009 $ 713 $ 140 $ 62 $ 7 $ 908 2008 517 204 7 15 713 2007 536 (19 ) - - 517 Notes: (A ) Amounts related to the allowances for doubtful accounts represent collections on accounts previously written off, acquisition/divestiture of subsidiaries, and foreign currency translation adjustments. Amounts related to the income tax valuation allowance represent acquisition/divestiture of subsidiaries and foreign currency translation adjustments. (B ) Amounts related to the allowances for doubtful accounts are due to the write-off of uncollectible accounts. Amounts related to the income tax valuation allowance are due to the utilization of tax loss carryforwards.

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Feb. 15, 2010	Jun. 30, 2009
Trading Symbol	AA
Entity Registrant Name	ALCOA INC
Entity Central Index Key	0000004281
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,020,277,257
Entity Public Float			$10,000,000,000