Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 17, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | AA | |
Entity Registrant Name | ALCOA INC. | |
Entity Central Index Key | 4281 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,222,381,828 |
Statement_of_Consolidated_Oper
Statement of Consolidated Operations (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Sales (I) | $5,819 | $5,454 |
Cost of goods sold (exclusive of expenses below) | 4,443 | 4,495 |
Selling, general administrative, and other expenses | 232 | 236 |
Research and development expenses | 55 | 51 |
Provision for depreciation, depletion, and amortization | 321 | 340 |
Restructuring and other charges (D) | 177 | 461 |
Interest expense | 122 | 120 |
Other (income) expenses, net (H) | -12 | 25 |
Total costs and expenses | 5,338 | 5,728 |
Income (loss) before income taxes | 481 | -274 |
Provision (benefit) for income taxes (K) | 226 | -77 |
Net income (loss) | 255 | -197 |
Less: Net income (loss) attributable to noncontrolling interests | 60 | -19 |
Net income (loss) attributable to Alcoa | $195 | ($178) |
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS (J): | ||
Basic | $0.15 | ($0.16) |
Diluted | $0.14 | ($0.16) |
Dividends paid per common share | $0.03 | $0.03 |
Statement_of_Consolidated_Comp
Statement of Consolidated Comprehensive (Loss) Income (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net income (loss) | $255 | ($197) |
Other comprehensive (loss) income, net of tax (C): | ||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | 107 | 77 |
Foreign currency translation adjustments | -1,207 | 336 |
Net change in unrealized gains on available-for-sale securities | 2 | |
Net change in unrecognized losses on cash flow hedges | -64 | 34 |
Total Other comprehensive (loss) income, net of tax | -1,162 | 447 |
Comprehensive (loss) income | -907 | 250 |
Alcoa [Member] | ||
Net income (loss) | 195 | -178 |
Other comprehensive (loss) income, net of tax (C): | ||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | 105 | 77 |
Foreign currency translation adjustments | -957 | 249 |
Net change in unrealized gains on available-for-sale securities | 2 | |
Net change in unrecognized losses on cash flow hedges | -64 | 32 |
Total Other comprehensive (loss) income, net of tax | -914 | 358 |
Comprehensive (loss) income | -719 | 180 |
Noncontrolling Interests [Member] | ||
Net income (loss) | 60 | -19 |
Other comprehensive (loss) income, net of tax (C): | ||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | 2 | |
Foreign currency translation adjustments | -250 | 87 |
Net change in unrecognized losses on cash flow hedges | 2 | |
Total Other comprehensive (loss) income, net of tax | -248 | 89 |
Comprehensive (loss) income | ($188) | $70 |
Consolidated_Balance_Sheet
Consolidated Balance Sheet (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $1,191 | $1,877 |
Receivables from customers, less allowances of $13 in 2015 and $14 in 2014 (L) | 1,469 | 1,395 |
Other receivables (L) | 709 | 733 |
Inventories (F) | 3,173 | 3,082 |
Prepaid expenses and other current assets | 1,180 | 1,182 |
Total current assets | 7,722 | 8,269 |
Properties, plants, and equipment | 33,864 | 35,517 |
Less: accumulated depreciation, depletion, and amortization | 18,576 | 19,091 |
Properties, plants, and equipment, net | 15,288 | 16,426 |
Goodwill (E) | 5,050 | 5,247 |
Investments | 1,931 | 1,944 |
Deferred income taxes | 2,485 | 2,754 |
Other noncurrent assets (E) | 3,218 | 2,759 |
Total assets | 35,694 | 37,399 |
Current liabilities: | ||
Short-term borrowings | 80 | 54 |
Accounts payable, trade | 2,934 | 3,152 |
Accrued compensation and retirement costs | 777 | 937 |
Taxes, including income taxes | 357 | 348 |
Other current liabilities | 890 | 1,021 |
Long-term debt due within one year | 26 | 29 |
Total current liabilities | 5,064 | 5,541 |
Long-term debt, less amount due within one year | 8,711 | 8,769 |
Accrued pension benefits | 3,163 | 3,291 |
Accrued other postretirement benefits | 2,128 | 2,155 |
Other noncurrent liabilities and deferred credits | 2,785 | 2,849 |
Total liabilities | 21,851 | 22,605 |
CONTINGENCIES AND COMMITMENTS (G) | ||
Alcoa shareholders' equity: | ||
Preferred stock | 55 | 55 |
Mandatory convertible preferred stock | 3 | 3 |
Common stock | 1,304 | 1,304 |
Additional capital | 9,124 | 9,284 |
Retained earnings | 9,520 | 9,379 |
Treasury stock, at cost | -2,841 | -3,042 |
Accumulated other comprehensive loss (C) | -5,591 | -4,677 |
Total Alcoa shareholders' equity | 11,574 | 12,306 |
Noncontrolling interests | 2,269 | 2,488 |
Total equity | 13,843 | 14,794 |
Total liabilities and equity | $35,694 | $37,399 |
Consolidated_Balance_Sheet_Par
Consolidated Balance Sheet (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Receivables from customers, allowance | $13 | $14 |
Statement_of_Consolidated_Cash
Statement of Consolidated Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CASH FROM OPERATIONS | ||
Net income (loss) | $255 | ($197) |
Adjustments to reconcile net income (loss) to cash from operations: | ||
Depreciation, depletion, and amortization | 321 | 340 |
Deferred income taxes | 23 | -18 |
Equity income, net of dividends | 24 | 35 |
Restructuring and other charges (D) | 177 | 461 |
Net gain from investing activities - asset sales (H) | -27 | |
Net periodic pension benefit cost (M) | 122 | 109 |
Stock-based compensation | 26 | 25 |
Excess tax benefits from stock-based payment arrangements | -9 | -1 |
Other | -73 | 44 |
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: | ||
(Increase) in receivables | -146 | -255 |
(Increase) in inventories | -266 | -302 |
(Increase) decrease in prepaid expenses and other current assets | -20 | 13 |
(Decrease) in accounts payable, trade | -183 | -130 |
(Decrease) in accrued expenses | -354 | -381 |
Increase (decrease) in taxes, including income taxes | 93 | -120 |
Pension contributions | -85 | -91 |
(Increase) in noncurrent assets | -26 | -6 |
(Decrease) in noncurrent liabilities | -54 | -50 |
CASH USED FOR OPERATIONS | -175 | -551 |
FINANCING ACTIVITIES | ||
Net change in short-term borrowings (original maturities of three months or less) | 26 | -4 |
Additions to debt (original maturities greater than three months) | 517 | 621 |
Payments on debt (original maturities greater than three months) | -519 | -631 |
Proceeds from exercise of employee stock options | 24 | 71 |
Excess tax benefits from stock-based payment arrangements | 9 | 1 |
Dividends paid to shareholders | -54 | -33 |
Distributions to noncontrolling interests | -29 | -35 |
Contributions from noncontrolling interests | 20 | |
CASH (USED FOR) PROVIDED FROM FINANCING ACTIVITIES | -26 | 10 |
INVESTING ACTIVITIES | ||
Capital expenditures | -247 | -209 |
Acquisitions, net of cash acquired (E) | -204 | |
Proceeds from the sale of assets and businesses (E) | -8 | |
Additions to investments | -12 | -62 |
Sales of investments | 30 | |
Net change in restricted cash | -4 | -7 |
Other | 10 | 8 |
CASH USED FOR INVESTING ACTIVITIES | -465 | -240 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | -20 | 9 |
Net change in cash and cash equivalents | -686 | -772 |
Cash and cash equivalents at beginning of year | 1,877 | 1,437 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $1,191 | $665 |
Statement_of_Changes_in_Consol
Statement of Changes in Consolidated Equity (USD $) | Total | Preferred Class A [Member] | Preferred Class B [Member] | Preferred Stock [Member] | Mandatory Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Capital [Member] | Retained Earnings [Member] | Retained Earnings [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Noncontrolling Interests [Member] |
In Millions, unless otherwise specified | Preferred Class A [Member] | Preferred Class B [Member] | |||||||||||
Balance at Dec. 31, 2013 | $13,522 | $55 | $1,178 | $7,509 | $9,272 | ($3,762) | ($3,659) | $2,929 | |||||
Net income (loss) | -197 | -178 | -19 | ||||||||||
Other comprehensive income | 447 | 358 | 89 | ||||||||||
Cash dividends declared: | |||||||||||||
Preferred share, value | -1 | -1 | |||||||||||
Common share, value | -32 | -32 | |||||||||||
Stock-based compensation | 25 | 25 | |||||||||||
Common stock issued: compensation plans | 51 | -316 | 367 | ||||||||||
Issuance of common stock | 575 | 89 | 486 | ||||||||||
Distributions | -35 | -35 | |||||||||||
Contributions | 20 | 20 | |||||||||||
Other | -1 | -1 | |||||||||||
Balance at Mar. 31, 2014 | 14,374 | 55 | 1,267 | 7,704 | 9,061 | -3,395 | -3,301 | 2,983 | |||||
Balance at Dec. 31, 2014 | 14,794 | 55 | 3 | 1,304 | 9,284 | 9,379 | -3,042 | -4,677 | 2,488 | ||||
Net income (loss) | 255 | 195 | 60 | ||||||||||
Other comprehensive income | -1,162 | -914 | -248 | ||||||||||
Cash dividends declared: | |||||||||||||
Preferred share, value | -1 | -17 | -1 | -17 | |||||||||
Common share, value | -36 | -36 | |||||||||||
Stock-based compensation | 26 | 26 | |||||||||||
Common stock issued: compensation plans | 15 | -186 | 201 | ||||||||||
Distributions | -29 | -29 | |||||||||||
Other | -2 | -2 | |||||||||||
Balance at Mar. 31, 2015 | $13,843 | $55 | $3 | $1,304 | $9,124 | $9,520 | ($2,841) | ($5,591) | $2,269 |
Statement_of_Changes_in_Consol1
Statement of Changes in Consolidated Equity (Parenthetical) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Preferred, dividends per share | $0.94 | |
Common stock, dividends per share | $0.03 | $0.03 |
Preferred Class A [Member] | ||
Preferred, dividends per share | $0.94 | |
Preferred Class B [Member] | ||
Preferred, dividends per share | $6.72 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | A. Basis of Presentation – The interim Consolidated Financial Statements of Alcoa Inc. and its subsidiaries (“Alcoa” or the “Company”) are unaudited. These Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2014 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). This Form 10-Q report should be read in conjunction with Alcoa’s Annual Report on Form 10-K for the year ended December 31, 2014, which includes all disclosures required by GAAP. Certain amounts in previously issued financial statements were reclassified to conform to the current period presentation. |
Recently_Adopted_and_Recently_
Recently Adopted and Recently Issued Accounting Guidance | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted and Recently Issued Accounting Guidance | B. Recently Adopted and Recently Issued Accounting Guidance |
Adopted | |
On January 1, 2015, Alcoa adopted changes issued by the Financial Accounting Standards Board (FASB) to reporting discontinued operations and disclosures of disposals of components of an entity. These changes require a disposal of a component to meet a higher threshold in order to be reported as a discontinued operation in an entity’s financial statements. The threshold is defined as a strategic shift that has, or will have, a major effect on an entity’s operations and financial results such as a disposal of a major geographical area or a major line of business. Additionally, the following two criteria have been removed from consideration of whether a component meets the requirements for discontinued operations presentation: (i) the operations and cash flows of a disposal component have been or will be eliminated from the ongoing operations of an entity as a result of the disposal transaction, and (ii) an entity will not have any significant continuing involvement in the operations of the disposal component after the disposal transaction. Furthermore, equity method investments now may qualify for discontinued operations presentation. These changes also require expanded disclosures for all disposals of components of an entity, whether or not the threshold for reporting as a discontinued operation is met, related to profit or loss information and/or asset and liability information of the component. The adoption of these changes had no impact on the Consolidated Financial Statements. This guidance will need to be considered in the event Alcoa initiates a disposal transaction. | |
Issued | |
In January 2015, the FASB issued changes to the presentation of extraordinary items. Such items are defined as transactions or events that are both unusual in nature and infrequent in occurrence, and, currently, are required to be presented separately in an entity’s income statement, net of income tax, after income from continuing operations. The changes eliminate the concept of an extraordinary item and, therefore, the presentation of such items will no longer be required. Notwithstanding this change, an entity will still be required to present and disclose a transaction or event that is both unusual in nature and infrequent in occurrence in the notes to the financial statements. These changes become effective for Alcoa on January 1, 2016. Management has determined that the adoption of these changes will not have an impact on the Consolidated Financial Statements. | |
In February 2015, the FASB issued changes to the analysis that an entity must perform to determine whether it should consolidate certain types of legal entities. These changes (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with variable interest entities, particularly those that have fee arrangements and related party relationships, and (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. These changes become effective for Alcoa on January 1, 2016. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Equity [Abstract] | |||||||||||||||||
Accumulated Other Comprehensive Loss | C. Accumulated Other Comprehensive Loss | ||||||||||||||||
The following table details the activity of the four components that comprise Accumulated other comprehensive loss for both Alcoa’s shareholders and noncontrolling interests: | |||||||||||||||||
Alcoa | Noncontrolling Interests | ||||||||||||||||
First quarter ended | First quarter ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Pension and other postretirement benefits (M) | |||||||||||||||||
Balance at beginning of period | $ | (3,601 | ) | $ | (3,532 | ) | $ | (64 | ) | $ | (51 | ) | |||||
Other comprehensive income: | |||||||||||||||||
Unrecognized net actuarial loss and prior service cost/benefit | 42 | 17 | — | — | |||||||||||||
Tax expense | (11 | ) | (3 | ) | — | — | |||||||||||
Total Other comprehensive income before reclassifications, net of tax | 31 | 14 | — | — | |||||||||||||
Amortization of net actuarial loss and prior service cost/benefit(1) | 114 | 98 | 3 | 1 | |||||||||||||
Tax expense(2) | (40 | ) | (35 | ) | (1 | ) | (1 | ) | |||||||||
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7) | 74 | 63 | 2 | — | |||||||||||||
Total Other comprehensive income | 105 | 77 | 2 | — | |||||||||||||
Balance at end of period | $ | (3,496 | ) | $ | (3,455 | ) | $ | (62 | ) | $ | (51 | ) | |||||
Foreign currency translation | |||||||||||||||||
Balance at beginning of period | $ | (846 | ) | $ | 179 | $ | (351 | ) | $ | (110 | ) | ||||||
Other comprehensive (loss) income(3) | (957 | ) | 249 | (250 | ) | 87 | |||||||||||
Balance at end of period | $ | (1,803 | ) | $ | 428 | $ | (601 | ) | $ | (23 | ) | ||||||
Available-for-sale securities | |||||||||||||||||
Balance at beginning of period | $ | — | $ | 2 | $ | — | $ | — | |||||||||
Other comprehensive income(4) | 2 | — | — | — | |||||||||||||
Balance at end of period | $ | 2 | $ | 2 | $ | — | $ | — | |||||||||
Cash flow hedges (N) | |||||||||||||||||
Balance at beginning of period | $ | (230 | ) | $ | (308 | ) | $ | (2 | ) | $ | (2 | ) | |||||
Other comprehensive (loss) income: | |||||||||||||||||
Net change from periodic revaluations | (110 | ) | 36 | — | 3 | ||||||||||||
Tax benefit (expense) | 34 | (8 | ) | — | (1 | ) | |||||||||||
Total Other comprehensive (loss) income before reclassifications, net of tax | (76 | ) | 28 | — | 2 | ||||||||||||
Net amount reclassified to earnings: | |||||||||||||||||
Aluminum contracts(5) | 13 | 5 | — | — | |||||||||||||
Energy contracts(6) | 2 | — | — | — | |||||||||||||
Sub-total | 15 | 5 | — | — | |||||||||||||
Tax expense(2) | (3 | ) | (1 | ) | — | — | |||||||||||
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7) | 12 | 4 | — | — | |||||||||||||
Total Other comprehensive (loss) income | (64 | ) | 32 | — | 2 | ||||||||||||
Balance at end of period | $ | (294 | ) | $ | (276 | ) | $ | (2 | ) | $ | — | ||||||
(1) | These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note M). | ||||||||||||||||
(2) | These amounts were included in Provision (benefit) for income taxes on the accompanying Statement of Consolidated Operations. | ||||||||||||||||
(3) | In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings. | ||||||||||||||||
(4) | In all periods presented, unrealized and realized gains and losses related to these securities were immaterial. Realized gains and losses were included in Other (income) expenses, net on the accompanying Statement of Consolidated Operations. | ||||||||||||||||
(5) | These amounts were included in Sales on the accompanying Statement of Consolidated Operations. | ||||||||||||||||
(6) | These amounts were included in Cost of goods sold on the accompanying Statement of Consolidated Operations. | ||||||||||||||||
(7) | A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 1 through 6. |
Restructuring_and_Other_Charge
Restructuring and Other Charges | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||
Restructuring and Other Charges | D. Restructuring and Other Charges – In the first quarter of 2015, Alcoa recorded Restructuring and other charges of $177 ($158 after-tax and noncontrolling interest), which were comprised of the following components: $149 ($142 after-tax and noncontrolling interest) related to the March 2015 divestiture of a rolling mill in Russia and post-closing adjustments associated with three December 2014 divestitures (see Note E); $16 ($11 after-tax) for the separation of approximately 680 employees (Primary Metals segment) and supplier contract-related costs associated with the decision to temporarily curtail the remaining capacity (74,000 metric-tons-per-year) at the São Luís smelter in Brazil; $13 ($8 after-tax and noncontrolling interest) for layoff costs, including the separation of approximately 210 employees (130 in the Engineered Products and Solutions segment, 30 in the Global Rolled Products segment, and 50 in Corporate); a net charge of $6 ($3 after-tax and noncontrolling interest) for other miscellaneous items; and $7 ($6 after-tax) for the reversal of a number of small layoff reserves related to prior periods. | ||||||||||||
In the first quarter of 2014, Alcoa recorded Restructuring and other charges of $461 ($274 after-tax and noncontrolling interests), which were comprised of the following components: $336 ($189 after-tax and noncontrolling interest) for exit costs related to decisions to permanently shut down and demolish two smelters and two rolling mills (see below); $70 ($46 after-tax and noncontrolling interest) for the temporary curtailment of two smelters and a related production slowdown at one refinery (see below); $33 ($26 after-tax) for asset impairments related to prior capitalized costs for a modernization project at a smelter in Canada that is no longer being pursued; $13 ($8 after-tax) for layoff costs, including the separation of approximately 170 employees (110 in the Engineered Products and Solutions segment and 60 in Corporate); a net charge of $15 ($9 after-tax) for other miscellaneous items; and $6 ($4 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods. | |||||||||||||
In the 2014 first quarter, management approved the permanent shutdown and demolition of the remaining capacity (84,000 metric-tons-per-year) at the Massena East smelter in New York and the full capacity (190,000 metric-tons-per-year) at the Point Henry smelter in Australia. The capacity at Massena East was fully shut down by the end of the first quarter of 2014 and the Point Henry smelter was fully shut down in August 2014. Demolition and remediation activities related to both the Massena East and Point Henry smelters began in late 2014 and are expected to be completed by the end of 2020 and 2018, respectively. | |||||||||||||
The decisions on the Massena East and Point Henry smelters were part of a 15-month review of 460,000 metric tons of smelting capacity initiated by management in May 2013 for possible curtailment. Through this review, management determined that the remaining capacity of the Massena East smelter was no longer competitive and the Point Henry smelter had no prospect of becoming financially viable. Management also initiated the temporary curtailment of the remaining capacity (62,000 metric-tons-per-year) at the Poços de Caldas smelter and additional capacity (85,000 metric-tons-per-year) at the São Luís smelter, both in Brazil. These curtailments were completed by the end of May 2014. As a result of these curtailments, 200,000 metric-tons-per-year of production at the Poços de Caldas refinery was reduced by the end of June 2014. | |||||||||||||
Also in the 2014 first quarter, management approved the permanent shutdown of Alcoa’s two rolling mills in Australia, Point Henry and Yennora. This decision was made due to the significant impact of excess can sheet capacity in both Australia and Asia. The two rolling mills had a combined can sheet capacity of 200,000 metric-tons-per-year and were closed by the end of 2014. Demolition and remediation activities related to the two rolling mills will begin in mid 2015 and are expected to be completed by the end of 2018. | |||||||||||||
In the first quarter of 2014, costs related to the shutdown and curtailment actions included $133 for the layoff of approximately 1,830 employees (1,230 in the Primary Metals segment, 470 in the Global Rolled Products segment, 90 in the Alumina segment, and 40 in Corporate); asset impairments of $91 representing the write-off of the remaining book value of all related properties, plants, and equipment; accelerated depreciation of $59 related to the three facilities in Australia as they continued to operate during 2014; and $123 in other exit costs. Additionally, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value, resulting in a charge of $34 ($20 after-tax and noncontrolling interest), which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other exit costs of $123 represent $55 in asset retirement obligations and $38 in environmental remediation, both of which were triggered by the decisions to permanently shut down and demolish the aforementioned structures in the United States and Australia, and $30 in supplier and customer contract-related costs. | |||||||||||||
Alcoa does not include Restructuring and other charges in the results of its reportable segments. The pretax impact of allocating such charges to segment results would have been as follows: | |||||||||||||
First quarter ended | |||||||||||||
March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Alumina | $ | 7 | $ | 7 | |||||||||
Primary Metals | 25 | 331 | |||||||||||
Global Rolled Products | 135 | 90 | |||||||||||
Engineered Products and Solutions | 5 | 4 | |||||||||||
Segment total | 172 | 432 | |||||||||||
Corporate | 5 | 29 | |||||||||||
Total restructuring and other charges | $ | 177 | $ | 461 | |||||||||
As of March 31, 2015, approximately 90 of the 890 employees associated with 2015 restructuring programs, approximately 2,320 of the 2,870 employees (previously 2,910 - updated to reflect employees accepting other positions within Alcoa and natural attrition) associated with 2014 restructuring programs, and 1,460 of the 1,530 employees associated with 2013 restructuring programs were separated. The remaining separations for the 2015, 2014, and 2013 restructuring programs are expected to be completed by the end of 2015. | |||||||||||||
In the 2015 first quarter, cash payments of $1, $50, and $3 were made against the layoff reserves related to the 2015, 2014, and 2013 restructuring programs, respectively. | |||||||||||||
Activity and reserve balances for restructuring charges were as follows: | |||||||||||||
Layoff | Other | Total | |||||||||||
costs | exit costs | ||||||||||||
Reserve balances at December 31, 2013 | $ | 96 | $ | 42 | $ | 138 | |||||||
2014:00:00 | |||||||||||||
Cash payments | (191 | ) | (22 | ) | (213 | ) | |||||||
Restructuring charges | 259 | 194 | 453 | ||||||||||
Other* | (66 | ) | (180 | ) | (246 | ) | |||||||
Reserve balances at December 31, 2014 | 98 | 34 | 132 | ||||||||||
2015:00:00 | |||||||||||||
Cash payments | (54 | ) | (3 | ) | (57 | ) | |||||||
Restructuring charges | 24 | 6 | 30 | ||||||||||
Other* | (13 | ) | (6 | ) | (19 | ) | |||||||
Reserve balances at March 31, 2015 | $ | 55 | $ | 31 | $ | 86 | |||||||
* | Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2015 three-month period, Other for layoff costs also included a reclassification of $3 in pension costs, as this obligation was included in Alcoa’s separate liability for pension obligations (see Note M). In 2014, Other for layoff costs also included a reclassification of $26 in pension costs, as this obligation was included in Alcoa’s separate liability for pension obligations. Additionally in 2014, Other for other exit costs also included a reclassification of the following restructuring charges: $95 in asset retirement and $47 in environmental obligations, as these liabilities were included in Alcoa’s separate reserves for asset retirement obligations and environmental remediation. | ||||||||||||
The remaining reserves are expected to be paid in cash during 2015, with the exception of approximately $15 to $20, which is expected to be paid over the next several years for lease termination costs, ongoing site remediation work, and special separation benefit payments. |
Acquisitions_and_Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Mar. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | E. Acquisitions and Divestitures – In November 2014, Alcoa completed the acquisition of an aerospace jet engine components company, Firth Rixson, for $2,995 plus $130 in contingent consideration. The preliminary allocation of the purchase price at that time resulted in total assets of $3,470, including $1,898 in goodwill and $398 in intangibles, and $475 in total liabilities, including the $130 of contingent consideration. These amounts are subject to change upon further review by management, including consideration of a third-party valuation of the assets acquired and liabilities assumed. In the first quarter of 2015, Alcoa updated the estimated beginning balances of certain assets acquired, including a decrease to properties, plants, and equipment of $135, an increase to intangible assets of $570, and a decrease to goodwill of $275. These changes were based on management’s review of preliminary information from the in-progress third party valuation, which is expected to be completed by mid 2015. The intangible assets of $968 consist primarily of customer relationships and contracts, backlog, qualifications, and technology. |
In March 2015, Alcoa completed the acquisition of an aerospace structural castings company, TITAL, for $204 (€188) in cash. TITAL, a privately held company with approximately 650 employees based in Germany, produces aluminum and titanium investment casting products for the aerospace and defense end markets. The purpose of this acquisition is to capture increasing demand for advanced jet engine components made of titanium, establish titanium-casting capabilities in Europe, and expand existing aluminum casting capacity. The assets and liabilities of this business were included within Alcoa’s Engineered Products and Solutions segment since the date of acquisition. Based on the preliminary allocation of the purchase price, goodwill of $123 was recorded for this transaction, none of which is estimated to be deductible for income tax purposes. The final allocation of the purchase price will be based on management’s best estimates, including a valuation of the assets acquired and liabilities assumed, which may result in the identification of other intangible assets, and other studies related to potential environmental and contingent liabilities. This transaction is subject to certain post-closing adjustments as defined in the purchase agreement. | |
Also in March 2015, Alcoa signed a definitive agreement to acquire RTI International Metals, Inc. (RTI), a U.S. company publicly traded on the New York Stock Exchange under the ticker symbol, “RTI.” Alcoa plans to purchase all outstanding shares of RTI common stock in a stock-for-stock transaction valued at approximately $1,100 (based on the $12.92 per share March 31, 2015 closing price of Alcoa’s common stock). Each issued and outstanding share of RTI common stock immediately prior to the completion of the transaction will be converted into the right to receive 2.8315 shares of Alcoa common stock (no fractional shares will be issued; a cash payment (without interest) in an amount reflecting prevailing market prices of Alcoa common stock on the New York Stock Exchange following the effective time of the merger will be made in lieu thereof). The exchange ratio is the quotient of a $41 per RTI common share acquisition price and the $14.48 per share March 6, 2015 closing price of Alcoa’s common stock. As of March 31, 2015, RTI had 30,794,405 shares of common stock outstanding. Additionally, Alcoa will assume approximately $500 in debt (see below) and acquire approximately $300 in cash. | |
The outstanding shares of RTI common stock as of March 31, 2015 do not include certain compensatory RTI equity awards that will be granted the right to receive the exchange ratio as provided for in the merger agreement upon completion of the transaction. Additionally, the $500 of assumed debt relates to two outstanding series of RTI convertible senior notes, of which holders may elect to convert into shares of RTI common stock (13,070,774) upon meeting certain conditions in the related indenture prior to completion of the transaction. If such conversion occurs, these shares of RTI common stock also would be granted the right to receive the exchange ratio upon completion of the transaction. | |
RTI is a global supplier of titanium and specialty metal products and services for the commercial aerospace, defense, energy, and medical device end markets. The purpose of this acquisition is to expand Alcoa’s range of titanium offerings and add advanced technologies and materials, primarily related to the aerospace end market. In 2014, RTI generated net sales of $794 and had approximately 2,600 employees. The proposed transaction is subject to customary conditions, including the receipt of all applicable regulatory approvals and RTI shareholder approval. RTI will be included within Alcoa’s Engineered Products and Solutions segment. | |
In the 2015 first quarter, Alcoa completed the divestiture of an operation in Russia (see below) and had post-closing adjustments, as provided for in the respective purchase agreements, related to three divestitures completed in December 2014. The divestiture and post-closing adjustments combined resulted in a net cash payment of $8 and a net loss of $149 ($142 after-tax and noncontrolling interest), which was recorded in Restructuring and other charges (see Note D) on the accompanying Statement of Consolidated Operations. Three of these four divestitures remain subject to certain post-closing adjustments as defined in the respective purchase agreements. | |
In March 2015, Alcoa completed the sale of a rolling mill located in Belaya Kalitva, Russia to a wholly-owned subsidiary of Stupino Titanium Company. While owned by Alcoa, the operating results and assets and liabilities of the rolling mill were included in the Global Rolled Products segment. The rolling mill generated sales of approximately $130 in 2014 and, at the time of divestiture, had approximately 1,870 employees. |
Inventories
Inventories | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | F. Inventories | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Finished goods | $ | 769 | $ | 768 | |||||
Work-in-process | 1,106 | 1,035 | |||||||
Bauxite and alumina | 594 | 578 | |||||||
Purchased raw materials | 514 | 508 | |||||||
Operating supplies | 190 | 193 | |||||||
$ | 3,173 | $ | 3,082 | ||||||
At March 31, 2015 and December 31, 2014, the total amount of inventories valued on a last in, first out (LIFO) basis was $1,590 and $1,514, respectively. If valued on an average-cost basis, total inventories would have been $757 and $767 higher at March 31, 2015 and December 31, 2014, respectively. |
Contingencies_and_Commitments
Contingencies and Commitments | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | G. Contingencies and Commitments |
Contingencies | |
Litigation | |
Before 2002, Alcoa purchased power in Italy in the regulated energy market and received a drawback of a portion of the price of power under a special tariff in an amount calculated in accordance with a published resolution of the Italian Energy Authority, Energy Authority Resolution n. 204/1999 (“204/1999”). In 2001, the Energy Authority published another resolution, which clarified that the drawback would be calculated in the same manner, and in the same amount, in either the regulated or unregulated market. At the beginning of 2002, Alcoa left the regulated energy market to purchase energy in the unregulated market. Subsequently, in 2004, the Energy Authority introduced regulation no. 148/2004 which set forth a different method for calculating the special tariff that would result in a different drawback for the regulated and unregulated markets. Alcoa challenged the new regulation in the Administrative Court of Milan and received a favorable judgment in 2006. Following this ruling, Alcoa continued to receive the power price drawback in accordance with the original calculation method, through 2009, when the European Commission declared all such special tariffs to be impermissible “state aid.” In 2010, the Energy Authority appealed the 2006 ruling to the Consiglio di Stato (final court of appeal). On December 2, 2011, the Consiglio di Stato ruled in favor of the Energy Authority and against Alcoa, thus presenting the opportunity for the energy regulators to seek reimbursement from Alcoa of an amount equal to the difference between the actual drawback amounts received over the relevant time period, and the drawback as it would have been calculated in accordance with regulation 148/2004. On February 23, 2012, Alcoa filed its appeal of the decision of the Consiglio di Stato (this appeal was subsequently withdrawn in March 2013). On March 26, 2012, Alcoa received a letter from the agency (Cassa Conguaglio per il Settore Eletrico (CCSE)) responsible for making and collecting payments on behalf of the Energy Authority demanding payment in the amount of approximately $110 (€85), including interest. By letter dated April 5, 2012, Alcoa informed CCSE that it disputes the payment demand of CCSE since (i) CCSE was not authorized by the Consiglio di Stato decisions to seek payment of any amount, (ii) the decision of the Consiglio di Stato has been appealed (see above), and (iii) in any event, no interest should be payable. On April 29, 2012, Law No. 44 of 2012 (“44/2012”) came into effect, changing the method to calculate the drawback. On February 21, 2013, Alcoa received a revised request letter from CSSE demanding Alcoa’s subsidiary, Alcoa Trasformazioni S.r.l., make a payment in the amount of $97 (€76), including interest, which reflects a revised calculation methodology by CCSE and represents the high end of the range of reasonably possible loss associated with this matter of $0 to $97 (€76). Alcoa has rejected that demand and has formally challenged it through an appeal before the Administrative Court on April 5, 2013. The Administrative Court scheduled a hearing for December 19, 2013, which was subsequently postponed until April 17, 2014, and further postponed until June 19, 2014. On this date, the Administrative Court listened to Alcoa’s oral argument, and on September 2, 2014, rendered its decision. The Administrative Court declared the payment request of CCSE and the Energy Authority to Alcoa to be unsubstantiated based on the 148/2004 resolution with respect to the January 19, 2007 through November 19, 2009 timeframe. On December 18, 2014, the CCSE and the Energy Authority appealed the Administrative Court’s September 2, 2014 decision; however, a date for the hearing has not been scheduled. At this time, the Company is unable to reasonably predict an outcome for this matter. | |
European Commission Matters | |
In July 2006, the European Commission (EC) announced that it had opened an investigation to establish whether an extension of the regulated electricity tariff granted by Italy to some energy-intensive industries complied with European Union (EU) state aid rules. The Italian power tariff extended the tariff that was in force until December 31, 2005 through November 19, 2009 (Alcoa had been incurring higher power costs at its smelters in Italy subsequent to the tariff end date through the end of 2012). The extension was originally through 2010, but the date was changed by legislation adopted by the Italian Parliament effective on August 15, 2009. Prior to expiration of the tariff in 2005, Alcoa had been operating in Italy for more than 10 years under a power supply structure approved by the EC in 1996. That measure provided a competitive power supply to the primary aluminum industry and was not considered state aid from the Italian Government. The EC’s announcement expressed concerns about whether Italy’s extension of the tariff beyond 2005 was compatible with EU legislation and potentially distorted competition in the European market of primary aluminum, where energy is an important part of the production costs. | |
On November 19, 2009, the EC announced a decision in this matter stating that the extension of the tariff by Italy constituted unlawful state aid, in part, and, therefore, the Italian Government is to recover a portion of the benefit Alcoa received since January 2006 (including interest). The amount of this recovery was to be based on a calculation prepared by the Italian Government (see below). In late 2009, after discussions with legal counsel and reviewing the bases on which the EC decided, including the different considerations cited in the EC decision regarding Alcoa’s two smelters in Italy, Alcoa recorded a charge of $250 (€173), which included $20 (€14) to write off a receivable from the Italian Government for amounts due under the now expired tariff structure and $230 (€159) to establish a reserve. On April 19, 2010, Alcoa filed an appeal of this decision with the General Court of the EU (see below). Prior to 2012, Alcoa was involved in other legal proceedings related to this matter that separately sought the annulment of the EC’s July 2006 decision to open an investigation alleging that such decision did not follow the applicable procedural rules and requested injunctive relief to suspend the effectiveness of the EC’s November 19, 2009 decision. However, the decisions by the General Court, and subsequent appeals to the European Court of Justice, resulted in the denial of these remedies. | |
In June 2012, Alcoa received formal notification from the Italian Government with a calculated recovery amount of $375 (€303); this amount was reduced by $65 (€53) for amounts owed by the Italian Government to Alcoa, resulting in a net payment request of $310 (€250). In a notice published in the Official Journal of the European Union on September 22, 2012, the EC announced that it had filed an action against the Italian Government on July 18, 2012 to compel it to collect the recovery amount (on October 17, 2013, the European Court of Justice ordered Italy to so collect). On September 27, 2012, Alcoa received a request for payment in full of the $310 (€250) by October 31, 2012. Following discussions with the Italian Government regarding the timing of such payment, Alcoa paid the requested amount in five quarterly installments of $69 (€50) beginning in October 2012 through December 2013. Notwithstanding the payments made, Alcoa’s estimate of the most probable loss of the ultimate outcome of this matter and the low end of the range of reasonably possible loss, which is $172 (€159) to $329 (€303), remains the $172 (€159) recorded in 2009 (the U.S. dollar amount reflects the effects of foreign currency movements since 2009). Alcoa no longer has a reserve for this matter; instead, Alcoa has a noncurrent asset reflecting the excess of the total of the five payments made to the Italian Government over the reserve recorded in 2009. At March 31, 2015, the noncurrent asset was $99 (€91) (this does not include the $57 (€53) for amounts owed by the Italian Government to Alcoa mentioned above). | |
On October 16, 2014, Alcoa received notice from the General Court of the EU that its April 19, 2010 appeal of the EC’s November 19, 2009 decision was denied. On December 27, 2014, Alcoa filed an appeal of the General Court’s October 16, 2014 ruling to the European Court of Justice. A decision by the European Court of Justice in this matter could take up to two years or longer. | |
As a result of the EC’s November 19, 2009 decision, management had contemplated ceasing operations at its Italian smelters due to uneconomical power costs. In February 2010, management agreed to continue to operate its smelters in Italy for up to six months while a long-term solution to address increased power costs could be negotiated. Over a portion of this time, a long-term solution was not able to be reached related to the Fusina smelter, therefore, in May 2010, Alcoa and the Italian Government agreed to a temporary idling of the Fusina smelter. As of September 30, 2010, the Fusina smelter was fully curtailed (44,000 metric-tons-per-year). For the Portovesme smelter, Alcoa executed a new power agreement effective September 1, 2010 through December 31, 2012, replacing the short-term, market-based power contract that was in effect since early 2010. This new agreement along with interruptibility rights (i.e. compensation for power interruptions when grids are overloaded) granted to Alcoa for the Portovesme smelter provided additional time to negotiate a long-term solution (the EC had previously determined that the interruptibility rights were not considered state aid). | |
At the end of 2011, as part of a restructuring of Alcoa’s global smelting system, management decided to curtail operations at the Portovesme smelter during 2012 due to the uncertain prospects for viable, long-term power, along with rising raw materials costs and falling global aluminum prices (mid-2011 to late 2011). As of December 31, 2012, the Portovesme smelter was fully curtailed (150,000 metric-tons-per-year). | |
In June 2013 and August 2014, Alcoa decided to permanently shut down and demolish the Fusina and Portovesme smelters, respectively, due to persistent uneconomical conditions. | |
Environmental Matters | |
Alcoa participates in environmental assessments and cleanups at more than 100 locations. These include owned or operating facilities and adjoining properties, previously owned or operating facilities and adjoining properties, and waste sites, including Superfund (Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)) sites. | |
A liability is recorded for environmental remediation when a cleanup program becomes probable and the costs can be reasonably estimated. As assessments and cleanups proceed, the liability is adjusted based on progress made in determining the extent of remedial actions and related costs. The liability can change substantially due to factors such as the nature and extent of contamination, changes in remedial requirements, and technological changes, among others. | |
Alcoa’s remediation reserve balance was $538 and $543 at March 31, 2015 and December 31, 2014 (of which $66 and $70 was classified as a current liability), respectively, and reflects the most probable costs to remediate identified environmental conditions for which costs can be reasonably estimated. | |
In the 2015 first quarter, the remediation reserve was increased by $8 due to a charge of $7 related to the Portovesme location (see below) and a net charge of $1 associated with a number of other sites. The changes to the remediation reserve were recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. | |
Payments related to remediation expenses applied against the reserve were $6 in the 2015 first quarter. This amount includes expenditures currently mandated, as well as those not required by any regulatory authority or third party. In the 2015 first quarter, the change in the reserve also reflects a decrease of $7 due to the effects of foreign currency translation. | |
Included in annual operating expenses are the recurring costs of managing hazardous substances and environmental programs. These costs are estimated to be approximately 2% of cost of goods sold. | |
The following discussion provides details regarding the current status of certain significant reserves related to current or former Alcoa sites. | |
Massena West, NY—Alcoa has an ongoing remediation project related to the Grasse River, which is adjacent to Alcoa’s Massena plant site. Many years ago, it was determined that sediments and fish in the river contain varying levels of polychlorinated biphenyls (PCBs). The project, which was selected by the U.S. Environmental Protection Agency (EPA) in a Record of Decision (ROD) issued in April 2013, is aimed at capping PCB contaminated sediments with concentration in excess of one part per million in the main channel of the river and dredging PCB contaminated sediments in the near-shore areas where total PCBs exceed one part per million. At March 31, 2015 and December 31, 2014, the reserve balance associated with this matter was $238 and $239, respectively. Alcoa is in the planning and design phase, which is expected to take approximately two to three years from mid-2013, followed by the actual remediation fieldwork that is expected to take approximately four years. The majority of the project funding is expected to be spent between 2016 and 2020. | |
Sherwin, TX—In connection with the sale of the Sherwin alumina refinery, which was required to be divested as part of the Reynolds merger in 2000, Alcoa agreed to retain responsibility for the remediation of the then existing environmental conditions, as well as a pro rata share of the final closure of the active bauxite residue waste disposal areas (known as the Copano facility). Alcoa’s share of the closure costs is proportional to the total period of operation of the active waste disposal areas. At March 31, 2015 and December 31, 2014, the reserve balance associated with Sherwin was $32. Approximately half of the project funding is expected to be spent through 2019. The remainder is not expected to be spent in the foreseeable future as it is dependent upon the operating life of the active waste disposal areas. | |
East St. Louis, IL—Alcoa has an ongoing remediation project related to an area used for the disposal of bauxite residue from former alumina refining operations. The project, which was selected by the EPA in a ROD issued in July 2012, is aimed at implementing a soil cover over the affected area. On November 1, 2013, the U.S. Department of Justice lodged a consent decree on behalf of the EPA for Alcoa to conduct the work outlined in the ROD. This consent decree was entered as final in February 2014 by the U.S. Department of Justice. As a result, Alcoa began construction in March 2014; this project is expected to be completed in the second half of 2015. At March 31, 2015 and December 31, 2014, the reserve balance associated with this matter was $15. | |
Fusina and Portovesme, Italy—In 1996, Alcoa acquired the Fusina smelter and rolling operations and the Portovesme smelter, both of which are owned by Alcoa’s subsidiary Alcoa Trasformazioni S.r.l. (“Trasformazioni”), from Alumix, an entity owned by the Italian Government. At the time of the acquisition, Alumix indemnified Alcoa for pre-existing environmental contamination at the sites. In 2004, the Italian Ministry of Environment and Protection of Land and Sea (MOE) issued orders to Trasformazioni and Alumix for the development of a clean-up plan related to soil contamination in excess of allowable limits under legislative decree and to institute emergency actions and pay natural resource damages. Trasformazioni appealed the orders and filed suit against Alumix, among others, seeking indemnification for these liabilities under the provisions of the acquisition agreement. In 2009, Ligestra S.r.l. (“Ligestra”), Alumix’s successor, and Trasformazioni agreed to a stay of the court proceedings while investigations were conducted and negotiations advanced towards a possible settlement. | |
In December 2009, Trasformazioni and Ligestra reached an initial agreement for settlement of the liabilities related to Fusina while negotiations continued related to Portovesme (see below). The agreement outlined an allocation of payments to the MOE for emergency action and natural resource damages and the scope and costs for a proposed soil remediation project, which was formally presented to the MOE in mid-2010. The agreement was contingent upon final acceptance of the remediation project by the MOE. As a result of entering into this agreement, Alcoa increased the reserve by $12 in 2009 for Fusina. Based on comments received from the MOE and local and regional environmental authorities, Trasformazioni submitted a revised remediation plan in the first half of 2012; however, such revisions did not require any change to the existing reserve. In October 2013, the MOE approved the project submitted by Alcoa, resulting in no adjustment to the reserve. | |
In January 2014, in anticipation of Alcoa reaching a final administrative agreement with the MOE, Alcoa and Ligestra entered into a final agreement related to Fusina for allocation of payments to the MOE for emergency action and natural resource damages and the costs for the approved soil remediation project. The agreement resulted in Ligestra assuming 50% to 80% of all payments and remediation costs. On February 27, 2014, Alcoa and the MOE reached a final administrative agreement for conduct of work. This agreement, which is awaiting final approval by the Ministry of Infrastructure, includes both a soil and groundwater remediation project estimated to cost $33 (€24) and requires payments of $25 (€18) to the MOE for emergency action and natural resource damages. The remediation projects are slated to begin in the second half of 2015. Based on the final agreement with Ligestra, Alcoa’s share of all costs and payments is $17 (€12), of which $9 (€6) related to the damages will be paid annually over a 10-year period, which began in April 2014, and was previously fully reserved. | |
Separately, in 2009, due to additional information derived from the site investigations conducted at Portovesme, Alcoa increased the reserve by $3. In November 2011, Trasformazioni and Ligestra reached an agreement for settlement of the liabilities related to Portovesme, similar to the one for Fusina. A proposed soil remediation project for Portovesme was formally presented to the MOE in June 2012. Neither the agreement with Ligestra nor the proposal to the MOE resulted in a change to the reserve for Portovesme. In November 2013, the MOE rejected the proposed soil remediation project and requested a revised project be submitted. In May 2014, Trasformazioni and Ligestra submitted a revised soil remediation project that addressed certain stakeholders’ concerns. Alcoa increased the reserve by $3 in 2014 to reflect the estimated higher costs associated with the revised soil remediation project, as well as current operating and maintenance costs of the Portovesme site. | |
In October 2014, the MOE required a further revised project be submitted to reflect the removal of a larger volume of contaminated soil than what had been proposed, as well as design changes for the cap related to the remaining contaminated soil left in place and the expansion of an emergency containment groundwater pump and treatment system that was previously installed. Trasformazioni and Ligestra submitted the further revised soil remediation project in February 2015. As a result, Alcoa increased the reserve by $7 in the 2015 first quarter to reflect the increase in the estimated costs of the project. The ultimate outcome of this matter may result in a change to the existing reserve for Portovesme. | |
Baie Comeau, Quebec, Canada—In August 2012, Alcoa presented an analysis of remediation alternatives to the Quebec Ministry of Sustainable Development, Environment, Wildlife and Parks (MDDEP), in response to a previous request, related to known PCBs and polycyclic aromatic hydrocarbons (PAHs) contained in sediments of the Anse du Moulin bay. As such, Alcoa increased the reserve for Baie Comeau by $25 in 2012 to reflect the estimated cost of Alcoa’s recommended alternative, consisting of both dredging and capping of the contaminated sediments. In July 2013, Alcoa submitted the Environmental Impact Assessment for the project to the MDDEP and this document is currently in the regulatory review process. The ultimate selection of a remedy may result in additional liability at the time the MDDEP issues a final decision. | |
Mosjøen, Norway—In September 2012, Alcoa presented an analysis of remediation alternatives to the Norwegian Environmental Agency (NEA) (formerly the Norwegian Climate and Pollution Agency, or “Klif”), in response to a previous request, related to known PAHs in the sediments located in the harbor and extending out into the fjord. As such, Alcoa increased the reserve for Mosjøen by $20 in 2012 to reflect the estimated cost of the baseline alternative for dredging of the contaminated sediments. A proposed project reflecting this alternative was formally presented to the NEA in June 2014, and was resubmitted in the fourth quarter of 2014 to reflect changes by the NEA. The revised proposal did not result in a change to the reserve for Mosjøen. The ultimate selection of a remedy may result in additional liability at the time the NEA issues a final decision. | |
Other | |
In September 2010, following a corporate income tax audit covering the 2003 through 2005 tax years, an assessment was received as a result of Spain’s tax authorities disallowing certain interest deductions claimed by a Spanish consolidated tax group owned by the Company. An appeal of this assessment in Spain’s Central Tax Administrative Court by the Company was denied in October 2013. In December 2013, the Company filed an appeal of the assessment in Spain’s National Court. | |
Additionally, following a corporate income tax audit of the same Spanish tax group for the 2006 through 2009 tax years, Spain’s tax authorities issued an assessment in July 2013 similarly disallowing certain interest deductions. In August 2013, the Company filed an appeal of this second assessment in Spain’s Central Tax Administrative Court, which was denied in January 2015. The Company filed an appeal of this second assessment in Spain’s National Court in March 2015. | |
The combined assessments (remeasured for a tax rate change enacted in November 2014) total $247 (€228). The Company believes it has meritorious arguments to support its tax position and intends to vigorously litigate the assessments through Spain’s court system. However, in the event the Company is unsuccessful, a portion of the assessments may be offset with existing net operating losses available to the Spanish consolidated tax group. Additionally, it is possible that the Company may receive similar assessments for tax years subsequent to 2009. At this time, the Company is unable to reasonably predict an outcome for this matter. | |
In March 2013, Alcoa’s subsidiary, Alcoa World Alumina Brasil (AWAB), was notified by the Brazilian Federal Revenue Office (RFB) that approximately $110 (R$220) of value added tax credits previously claimed are being disallowed and a penalty of 50% assessed. Of this amount, AWAB received $41 (R$82) in cash in May 2012. The value added tax credits were claimed by AWAB for both fixed assets and export sales related to the Juruti bauxite mine and São Luís refinery expansion. The RFB has disallowed credits they allege belong to the consortium in which AWAB owns an interest and should not have been claimed by AWAB. Credits have also been disallowed as a result of challenges to apportionment methods used, questions about the use of the credits, and an alleged lack of documented proof. AWAB presented defense of its claim to the RFB on April 8, 2013. If AWAB is successful in this administrative process, the RFB would have no further recourse. If unsuccessful in this process, AWAB has the option to litigate at a judicial level. The estimated range of reasonably possible loss is $0 to $50 (R$155), whereby the maximum end of the range represents the sum of the portion of the disallowed credits applicable to the export sales and a 50% penalty of the gross amount disallowed. Additionally, the estimated range of disallowed credits related to AWAB’s fixed assets is $0 to $55 (R$175), which would increase the net carrying value of AWAB’s fixed assets if ultimately disallowed. It is management’s opinion that the allegations have no basis; however, at this time, management is unable to reasonably predict an outcome for this matter. | |
Between 2000 and 2002, Alcoa Alumínio (Alumínio) sold approximately 2,000 metric tons of metal per month from its Poços de Caldas facility, located in the State of Minas Gerais (the “State”), to Alfio, a customer also located in the State. Sales in the State were exempted from value-added tax (VAT) requirements. Alfio subsequently sold metal to customers outside of the State, but did not pay the required VAT on those transactions. In July 2002, Alumínio received an assessment from State auditors on the theory that Alumínio should be jointly and severally liable with Alfio for the unpaid VAT. In June 2003, the administrative tribunal found Alumínio liable, and Alumínio filed a judicial case in the State in February 2004 contesting the finding. In May 2005, the Court of First Instance found Alumínio solely liable, and a panel of a State appeals court confirmed this finding in April 2006. Alumínio filed a special appeal to the Superior Tribunal of Justice (STJ) in Brasilia (the federal capital of Brazil) later in 2006. In 2011, the STJ (through one of its judges) reversed the judgment of the lower courts, finding that Alumínio should neither be solely nor jointly and severally liable with Alfio for the VAT, which ruling was then appealed by the State. In August 2012, the STJ agreed to have the case reheard before a five-judge panel. A decision from this panel is pending, but additional appeals are likely. At March 31, 2015, the assessment totaled $40 (R$130), including penalties and interest. While the Company believes it has meritorious defenses, the Company is unable to reasonably predict an outcome. | |
In addition to the matters discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against Alcoa, including those pertaining to environmental, product liability, safety and health, and tax matters. While the amounts claimed in these other matters may be substantial, the ultimate liability cannot now be determined because of the considerable uncertainties that exist. Therefore, it is possible that the Company’s liquidity or results of operations in a particular period could be materially affected by one or more of these other matters. However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company. | |
Commitments | |
Investments | |
Alcoa has an investment in a joint venture for the development, construction, ownership, and operation of an integrated aluminum complex (bauxite mine, alumina refinery, aluminum smelter, and rolling mill) in Saudi Arabia. The joint venture is owned 74.9% by the Saudi Arabian Mining Company (known as “Ma’aden”) and 25.1% by Alcoa and consists of three separate companies as follows: one each for the mine and refinery, the smelter, and the rolling mill. Alcoa accounts for its investment in the joint venture under the equity method. Capital investment in the project is expected to total approximately $10,800 (SAR 40.5 billion) and has been funded through a combination of equity contributions by the joint venture partners and project financing by the joint venture, which has been guaranteed by both partners (see below). Both the equity contributions and the guarantees of the project financing are based on the joint venture’s partners’ ownership interests. Originally, it was estimated that Alcoa’s total equity investment in the joint venture would be approximately $1,100, of which Alcoa has contributed $956, including $4 in the 2015 first quarter. Based on changes to both the project’s capital investment and equity and debt structure from the initial plans, the estimated $1,100 equity contribution may be reduced. As of March 31, 2015 and December 31, 2014, the carrying value of Alcoa’s investment in this project was $969 and $983, respectively. | |
The smelting and rolling mill companies have project financing totaling $4,515, of which $1,133 represents Alcoa’s share (the equivalent of Alcoa’s 25.1% interest in the smelting and rolling mill companies). In conjunction with the financings, Alcoa issued guarantees on behalf of the smelting and rolling mill companies to the lenders in the event that such companies default on their debt service requirements through 2017 and 2020 for the smelting company and 2018 and 2021 for the rolling mill company (Ma’aden issued similar guarantees for its 74.9% interest). Alcoa’s guarantees for the smelting and rolling mill companies cover total debt service requirements of $176 in principal and up to a maximum of approximately $60 in interest per year (based on projected interest rates). At March 31, 2015 and December 31, 2014, the combined fair value of the guarantees was $8, which was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. | |
The mining and refining company has project financing totaling $2,232, of which $560 represents Alcoa World Alumina and Chemical’s (AWAC) 25.1% interest in the mining and refining company. In conjunction with the financings, Alcoa, on behalf of AWAC, issued guarantees to the lenders in the event that the mining and refining company defaults on its debt service requirements through 2019 and 2024 (Ma’aden issued similar guarantees for its 74.9% interest). Alcoa’s guarantees for the mining and refining company cover total debt service requirements of $120 in principal and up to a maximum of approximately $30 in interest per year (based on projected interest rates). At March 31, 2015 and December 31, 2014, the combined fair value of the guarantees was $4, which was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. In the event Alcoa would be required to make payments under the guarantees, 40% of such amount would be contributed to Alcoa by Alumina Limited, consistent with its ownership interest in AWAC. | |
Alumínio, a wholly-owned subsidiary of Alcoa, is a participant in four consortia that each owns a hydroelectric power project in Brazil. One of these projects is known as Estreito, which reached full capacity in March 2013. Alumínio’s investment in this project is 25.49%, which entitles Alumínio to approximately 150 megawatts of assured power. The Estreito consortium is an unincorporated joint venture, and, therefore, Alumínio’s share of the assets and liabilities of the consortium are reflected in the respective lines on the accompanying Consolidated Balance Sheet. Total estimated project costs are approximately $1,590 (R$5,170) and Alumínio’s share is approximately $400 (R$1,320). As of March 31, 2015, approximately $390 (R$1,270) of Alumínio’s commitment was expended on the project. | |
In 2004, Alcoa acquired a 20% interest in a consortium, which subsequently purchased the Dampier to Bunbury Natural Gas Pipeline (DBNGP) in Western Australia, in exchange for an initial cash investment of $17 (A$24). The investment in the DBNGP, which is classified as an equity investment, was made in order to secure a competitively priced long-term supply of natural gas to Alcoa’s refineries in Western Australia. Alcoa made additional contributions of $141 (A$176) for its share of the pipeline capacity expansion and other operational purposes of the consortium through September 2011. No further expansion of the pipeline’s capacity is planned at this time. In late 2011, the consortium initiated a three-year equity call plan to improve its capitalization structure. This plan required Alcoa to contribute $39 (A$40), all of which was made through December 2014. Following the completion of the three-year equity call plan in December 2014, the consortium initiated a new equity call plan to further improve its capitalization structure. This plan requires Alcoa to contribute $30 (A$36) through mid 2016, of which $4 (A$6) was made through March 31, 2015, including $3 (A$5) in the 2015 first quarter. In addition to its equity ownership, Alcoa has an agreement to purchase gas transmission services from the DBNGP. At March 31, 2015, Alcoa has an asset of $279 (A$362) representing prepayments made under the agreement for future gas transmission services. Alcoa’s maximum exposure to loss on the investment and the related contract is approximately $400 (A$520) as of March 31, 2015. |
Other_Income_Expenses_Net
Other (Income) Expenses, Net | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Other Income and Expenses [Abstract] | |||||||||
Other (Income) Expenses, Net | H. Other (Income) Expenses, Net | ||||||||
First quarter ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Equity loss | $ | 20 | $ | 38 | |||||
Interest income | (3 | ) | (4 | ) | |||||
Foreign currency (gains) losses, net | (16 | ) | 8 | ||||||
Net gain from asset sales | — | (27 | ) | ||||||
Net (gain) loss on mark-to-market derivative contracts (N) | (4 | ) | 5 | ||||||
Other, net | (9 | ) | 5 | ||||||
$ | (12 | ) | $ | 25 | |||||
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
Segment Information | I. Segment Information – The operating results of Alcoa’s reportable segments were as follows (differences between segment totals and consolidated totals are in Corporate): | ||||||||||||||||||||
Alumina | Primary | Global | Engineered | Total | |||||||||||||||||
Metals | Rolled | Products | |||||||||||||||||||
Products | and | ||||||||||||||||||||
Solutions | |||||||||||||||||||||
First quarter ended March 31, 2015 | |||||||||||||||||||||
Sales: | |||||||||||||||||||||
Third-party sales | $ | 887 | $ | 1,572 | $ | 1,621 | $ | 1,689 | $ | 5,769 | |||||||||||
Intersegment sales | 501 | 692 | 36 | — | 1,229 | ||||||||||||||||
Total sales | $ | 1,388 | $ | 2,264 | $ | 1,657 | $ | 1,689 | $ | 6,998 | |||||||||||
Profit and loss: | |||||||||||||||||||||
Equity loss | $ | (7 | ) | $ | (3 | ) | $ | (9 | ) | $ | — | $ | (19 | ) | |||||||
Depreciation, depletion, and amortization | 80 | 109 | 56 | 60 | 305 | ||||||||||||||||
Income taxes | 92 | 57 | 26 | 89 | 264 | ||||||||||||||||
After-tax operating income (ATOI) | 221 | 187 | 34 | 191 | 633 | ||||||||||||||||
First quarter ended March 31, 2014 | |||||||||||||||||||||
Sales: | |||||||||||||||||||||
Third-party sales | $ | 845 | $ | 1,424 | $ | 1,677 | $ | 1,443 | $ | 5,389 | |||||||||||
Intersegment sales | 510 | 734 | 43 | — | 1,287 | ||||||||||||||||
Total sales | $ | 1,355 | $ | 2,158 | $ | 1,720 | $ | 1,443 | $ | 6,676 | |||||||||||
Profit and loss: | |||||||||||||||||||||
Equity loss | $ | (5 | ) | $ | (28 | ) | $ | (5 | ) | $ | — | $ | (38 | ) | |||||||
Depreciation, depletion, and amortization | 97 | 124 | 58 | 40 | 319 | ||||||||||||||||
Income taxes | 40 | (11 | ) | 34 | 91 | 154 | |||||||||||||||
ATOI | 92 | (15 | ) | 59 | 189 | 325 | |||||||||||||||
The following table reconciles total segment ATOI to consolidated net income (loss) attributable to Alcoa: | |||||||||||||||||||||
First quarter ended | |||||||||||||||||||||
March 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Total segment ATOI | $ | 633 | $ | 325 | |||||||||||||||||
Unallocated amounts (net of tax): | |||||||||||||||||||||
Impact of LIFO | 7 | (7 | ) | ||||||||||||||||||
Interest expense | (80 | ) | (78 | ) | |||||||||||||||||
Noncontrolling interests | (60 | ) | 19 | ||||||||||||||||||
Corporate expense | (64 | ) | (67 | ) | |||||||||||||||||
Restructuring and other charges | (161 | ) | (321 | ) | |||||||||||||||||
Other | (80 | ) | (49 | ) | |||||||||||||||||
Consolidated net income (loss) attributable to Alcoa | $ | 195 | $ | (178 | ) | ||||||||||||||||
Items required to reconcile total segment ATOI to consolidated net income (loss) attributable to Alcoa include: the impact of LIFO inventory accounting; interest 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; and other items, including intersegment profit eliminations, 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 transaction gains/losses and interest income. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Earnings Per Share | J. Earnings Per Share – Basic earnings per share (EPS) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding. | ||||||||
The information used to compute basic and diluted EPS attributable to Alcoa common shareholders was as follows (shares in millions): | |||||||||
First quarter ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Net income (loss) attributable to Alcoa common shareholders | $ | 195 | $ | (178 | ) | ||||
Less: preferred stock dividends declared | 17 | 1 | |||||||
Net income (loss) available to Alcoa common shareholders – basic | 178 | (179 | ) | ||||||
Add: dividends related to mandatory convertible preferred stock | — | — | |||||||
Add: interest expense related to convertible notes | — | — | |||||||
Net income (loss) available to Alcoa common shareholders – diluted | $ | 178 | $ | (179 | ) | ||||
Average shares outstanding – basic | 1,221 | 1,101 | |||||||
Effect of dilutive securities: | |||||||||
Stock options | 6 | — | |||||||
Stock and performance awards | 11 | — | |||||||
Mandatory convertible preferred stock | — | — | |||||||
Convertible notes | — | — | |||||||
Average shares outstanding – diluted | 1,238 | 1,101 | |||||||
In the first quarter of 2015, 77 million share equivalents related to mandatory convertible preferred stock were not included in the computation of diluted EPS because their effect was anti-dilutive. | |||||||||
In the first quarter of 2014, 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 net loss. As a result, 66 million share equivalents related to convertible notes (see below), 18 million stock awards, and 31 million stock options were not included in the computation of diluted EPS. Had Alcoa generated sufficient net income in the 2014 first quarter, 66 million, 10 million, and 5 million potential shares of common stock related to the convertible notes, stock awards, and stock options, respectively, would have been included in diluted average shares outstanding. | |||||||||
In the first quarter of 2014, holders of convertible notes exercised their option to convert the notes into 89 million shares of Alcoa common stock. As a result, these 89 million shares were outstanding for a portion of the 2014 first quarter equivalent to a weighted average of 23 million shares. The 23 million shares were included in both basic and diluted average shares outstanding for the first quarter of 2014. For the portion of the 2014 first quarter that the notes were still outstanding debt, a weighted average of the 89 million share equivalents (66 million) would have been included only in the diluted average shares outstanding if their effect was dilutive. | |||||||||
Options to purchase 13 million and 10 million shares of common stock at a weighted average exercise price of $14.79 and $14.53 per share were outstanding as of March 31, 2015 and 2014, respectively, but were not included in the computation of diluted EPS because they were anti-dilutive, as the exercise prices of the options were greater than the average market price of Alcoa’s common stock. | |||||||||
In March 2015, Alcoa entered into an agreement to acquire RTI (see Note E). The purchase price will be paid in Alcoa common stock equivalent to approximately 90 million shares as of March 31, 2015. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | K. Income Taxes – The effective tax rate for the first quarter of 2015 and 2014 was 47.0% (provision on income) and 28.1% (benefit on a loss), respectively. |
The rate for the 2015 first quarter differs from the U.S. federal statutory rate of 35% primarily due to a loss on the sale of a rolling mill in Russia (see Note E) for which no tax benefit was recognized, a $35 unfavorable impact related to the interim period treatment of losses in certain foreign jurisdictions for which no tax benefit was recognized (impact is expected to reverse by the end of 2015), and a $33 net discrete income tax charge as described below, somewhat offset by foreign income taxed in lower rate jurisdictions. | |
In the first quarter of 2015, AWAC, a joint venture owned 60% by Alcoa and 40% by Alumina Limited (Alcoa consolidates AWAC for financial reporting purposes), recognized an $83 discrete income tax charge for a valuation allowance on certain deferred tax assets, which were related mostly to employee benefits and tax loss carryforwards. Alcoa also had a $50 deferred tax liability related to its 60%-share of these deferred tax assets that was written off as a result of the valuation allowance recognized by AWAC. | |
The rate for the 2014 first quarter differs from the U.S. federal statutory rate of 35% primarily due to a $56 unfavorable impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized (impact reversed by the end of 2014), partially offset by the U.S. tax impact of deemed distributions from otherwise lower tax rate foreign jurisdictions. |
Receivables
Receivables | 3 Months Ended |
Mar. 31, 2015 | |
Transfers and Servicing [Abstract] | |
Receivables | L. Receivables – Alcoa has an arrangement with three financial institutions to sell certain customer receivables without recourse on a revolving basis. The sale of such receivables is completed through the use of a bankruptcy remote special purpose entity, which is a consolidated subsidiary of Alcoa. This arrangement provides for minimum funding of $200 up to a maximum of $500 for receivables sold. The initial sale of receivables in March 2012 resulted in the setup of a deferred purchase price of $254. Alcoa has received net cash funding of $250 ($1,308 in draws and $1,058 in repayments) since the program’s inception (no draws or repayments occurred in the 2015 first quarter). |
As of March 31, 2015 and December 31, 2014, the deferred purchase price receivable was $417 and $356, respectively, which was included in Other receivables on the accompanying Consolidated Balance Sheet. The deferred purchase price receivable is reduced as collections of the underlying receivables occur; however, as this is a revolving program, the sale of new receivables will result in an increase in the deferred purchase price receivable. The net change in the deferred purchase price receivable was reflected in the (Increase) in receivables line item on the accompanying Statement of Consolidated Cash Flows. This activity is reflected as an operating cash flow because the related customer receivables are the result of an operating activity with an insignificant, short-term interest rate risk. | |
The gross amount of receivables sold and total cash collected under this program since its inception was $19,545 and $18,878, respectively. Alcoa services the customer receivables for the financial institutions at market rates; therefore, no servicing asset or liability was recorded. |
Pension_and_Other_Postretireme
Pension and Other Postretirement Benefits | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||
Pension and Other Postretirement Benefits | M. Pension and Other Postretirement Benefits – The components of net periodic benefit cost were as follows: | ||||||||||||||||
Pension benefits | Other postretirement | ||||||||||||||||
benefits | |||||||||||||||||
First quarter ended March 31, | 2015 | 2014 | 2015 | 2014 | |||||||||||||
Service cost | $ | 44 | $ | 41 | $ | 3 | $ | 4 | |||||||||
Interest cost | 144 | 160 | 23 | 29 | |||||||||||||
Expected return on plan assets | (188 | ) | (193 | ) | — | — | |||||||||||
Recognized net actuarial loss | 118 | 97 | 4 | 3 | |||||||||||||
Amortization of prior service cost (benefit) | 4 | 4 | (9 | ) | (5 | ) | |||||||||||
Settlement* | 1 | — | — | — | |||||||||||||
Special termination benefits* | 2 | — | — | — | |||||||||||||
Net periodic benefit cost | $ | 125 | $ | 109 | $ | 21 | $ | 31 | |||||||||
* | These amounts were recorded in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D). |
Derivatives_and_Other_Financia
Derivatives and Other Financial Instruments | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||
Derivatives and Other Financial Instruments | N. Derivatives and Other Financial Instruments | ||||||||||||||||
Fair Value | |||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (i) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (ii) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||||||||||||||||
• | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||||||||||||||||
• | Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||||||||||||||||
• | Level 3 - Inputs that are both significant to the fair value measurement and unobservable. | ||||||||||||||||
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 Alcoa’s exposure to the risks of changing commodity prices, interest rates, and foreign currency exchange rates. | |||||||||||||||||
Alcoa’s commodity and derivative activities are subject to the management, direction, and control of the Strategic Risk Management Committee (SRMC), which is composed of the chief executive officer, the chief financial officer, and other officers and employees that the chief executive officer selects. The SRMC meets on a periodic basis to review derivative positions and strategy and reports to Alcoa’s 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. | |||||||||||||||||
A number of Alcoa’s aluminum, energy, and foreign exchange contracts are classified as Level 1 and an interest rate contract is classified as Level 2 under the fair value hierarchy. These energy, foreign exchange, and interest rate contracts are not material to Alcoa’s Consolidated Financial Statements for all periods presented except as follows for a foreign exchange contract. Alcoa had a forward contract to purchase $231 (R$543) to mitigate the foreign currency risk associated with a potential future transaction denominated in Brazilian reais. This contract expired on March 31, 2014 and a loss of $4 was recognized in Other expenses, net on the accompanying Statement of Consolidated Operations in the 2014 first quarter. | |||||||||||||||||
For the aluminum contracts classified as Level 1, the total fair value of derivatives was $37 (liabilities) at March 31, 2015 and $2 (assets) and $31 (liabilities) at December 31, 2014. These contracts were entered into to either hedge forecasted sales or purchases of aluminum in order to manage the associated aluminum price risk. Certain of these contracts are designated as hedging instruments, either fair value or cash flow, and the remaining are not designated as such. Combined, Alcoa recognized a net gain of $26 and a net loss of $25 in Sales on the accompanying Statement of Consolidated Operations related to these aluminum contracts in the first quarter of 2015 and 2014, respectively. | |||||||||||||||||
In addition to the Level 1 and 2 derivative instruments described above, Alcoa has nine derivative instruments classified as Level 3 under the fair value hierarchy. These instruments are composed of seven embedded aluminum derivatives, an energy contract, and an embedded credit derivative, all of which relate to energy supply contracts associated with eight smelters and three refineries. Five of the embedded aluminum derivatives and the energy contract were designated as cash flow hedging instruments and two of the embedded aluminum derivatives and the embedded credit derivative were not designated as hedging instruments. | |||||||||||||||||
The following section describes the valuation methodologies used by Alcoa to measure its Level 3 derivative instruments at fair value. Derivative instruments classified as Level 3 in the fair value hierarchy represent those in which management has used at least one significant unobservable input in the valuation model. Alcoa uses a discounted cash flow model to fair value all Level 3 derivative instruments. Where appropriate, the description below includes the key inputs to those models and any significant assumptions. These valuation models are reviewed and tested at least on an annual basis. | |||||||||||||||||
Inputs in the valuation models for Level 3 derivative instruments are composed of the following: (i) quoted market prices (e.g., aluminum prices on the 10-year London Metal Exchange (LME) forward curve and energy prices), (ii) significant other observable inputs (e.g., information concerning time premiums and volatilities for certain option type embedded derivatives and regional premiums for aluminum contracts), and (iii) unobservable inputs (e.g., aluminum and energy prices beyond those quoted in the market). For periods beyond the term of quoted market prices for aluminum, Alcoa estimates the price of aluminum by extrapolating the 10-year LME forward curve. Additionally, for periods beyond the term of quoted market prices for energy, management has developed a forward curve based on independent consultant market research. Where appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads, and credit considerations. Such adjustments are generally based on available market evidence (Level 2). In the absence of such evidence, management’s best estimate is used (Level 3). If a significant input that is unobservable in one period becomes observable in a subsequent period, the related asset or liability would be transferred to the appropriate classification (Level 1 or 2) in the period of such change (there were no such transfers in the periods presented). | |||||||||||||||||
Alcoa has embedded derivatives in two power contracts that index the price of power to the LME price of aluminum. Additionally, in late 2014, Alcoa renewed three power contracts, each of which contain an embedded derivative that indexes the price of power to the LME price of aluminum plus the Midwest premium. The embedded derivatives in these five power contracts are primarily valued using observable market prices; however, due to the length of the contracts, the valuation models also require management to estimate the long-term price of aluminum based upon an extrapolation of the 10-year LME forward curve and/or 5-year Midwest premium curve. Significant increases or decreases in the actual LME price beyond 10 years and/or the Midwest premium beyond 5 years would result in a higher or lower fair value measurement. An increase in actual LME price and/or the Midwest premium over the inputs used in the valuation models will result in a higher cost of power and a corresponding decrease to the derivative asset or increase to the derivative liability. The embedded derivatives have been designated as cash flow hedges of forward sales of aluminum. Unrealized gains and losses were included in Other comprehensive (loss) income on the accompanying Consolidated Balance Sheet while realized gains and losses were included in Sales on the accompanying Statement of Consolidated Operations. | |||||||||||||||||
Also, Alcoa has a power contract separate from above that contains an LME-linked embedded derivative. The embedded derivative is valued using the probability and interrelationship of future LME prices, Australian dollar to U.S. dollar exchange rates, and the U.S. consumer price index. Significant increases or decreases in the LME price would result in a higher or lower fair value measurement. An increase in actual LME price over the inputs used in the valuation model will result in a higher cost of power and a corresponding decrease to the derivative asset. This embedded derivative did not qualify for hedge accounting treatment. Unrealized gains and losses from the embedded derivative were included in Other (income) expenses, net on the accompanying Statement of Consolidated Operations while realized gains and losses were included in Cost of goods sold on the accompanying Statement of Consolidated Operations as electricity purchases were made under the contract. At the time this derivative asset was recognized, an equivalent amount was recognized as a deferred credit in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. This deferred credit is recognized in Other (income) expenses, net on the accompanying Statement of Consolidated Operations as power is received over the life of the contract. Alcoa had a similar power contract and related embedded derivative associated with another smelter and rolling mill combined; however, the contract and related derivative instrument matured in July 2014. | |||||||||||||||||
Additionally, Alcoa has a natural gas supply contract, which has an LME-linked ceiling. This embedded derivative is valued using probabilities of future LME aluminum prices and the price of Brent crude oil (priced on Platts), including the interrelationships between the two commodities subject to the ceiling. Any change in the interrelationship would result in a higher or lower fair value measurement. An LME ceiling was embedded into the contract price to protect against an increase in the price of oil without a corresponding increase in the price of LME. An increase in oil prices with no similar increase in the LME price would limit the increase of the price paid for natural gas. This embedded derivative did not qualify for hedge accounting treatment. Unrealized gains and losses from the embedded derivative were included in Other (income) expenses, net on the accompanying Statement of Consolidated Operations while realized gains and losses were included in Cost of goods sold on the accompanying Statement of Consolidated Operations as gas purchases were made under the contract. | |||||||||||||||||
Furthermore, Alcoa has an embedded derivative in a power contract that indexes the difference between the long-term debt ratings of Alcoa and the counterparty from any of the three major credit rating agencies. Management uses market prices, historical relationships, and forecast services to determine fair value. Significant increases or decreases in any of these inputs would result in a lower or higher fair value measurement. A wider credit spread between Alcoa and the counterparty would result in a higher cost of power and a corresponding increase in the derivative liability. This embedded derivative did not qualify for hedge accounting treatment. Unrealized gains and losses were included in Other (income) expenses, net on the accompanying Statement of Consolidated Operations while realized gains and losses were included in Cost of goods sold on the accompanying Statement of Consolidated Operations as electricity purchases were made under the contract. | |||||||||||||||||
Finally, Alcoa has a derivative contract that will hedge the anticipated power requirements at one of its smelters once the existing power contract expires in 2016. Beyond the term where market information is available, management has developed a forward curve, for valuation purposes, based on independent consultant market research. Significant increases or decreases in the power market may result in a higher or lower fair value measurement. Lower prices in the power market would cause a decrease in the derivative asset. The derivative contract has been designated as a cash flow hedge of future purchases of electricity. Unrealized gains and losses on this contract were recorded in Other comprehensive (loss) income on the accompanying Consolidated Balance Sheet. Once the designated hedge period begins in 2016, realized gains and losses will be recorded in Cost of goods sold as electricity purchases are made under the power contract. | |||||||||||||||||
The following table presents quantitative information related to the significant unobservable inputs described above for Level 3 derivative contracts: | |||||||||||||||||
Fair value at | Unobservable | Range | |||||||||||||||
March 31, 2015* | input | ($ in full amounts) | |||||||||||||||
Assets: | |||||||||||||||||
Embedded aluminum derivative | $ | 140 | Interrelationship of future aluminum prices, foreign currency exchange rates, and the U.S. consumer price index (CPI) | Aluminum: $1,798 per metric ton in 2015 to $1,869 per metric ton in 2016 | |||||||||||||
Foreign currency: A$1 =0.77 in 2015 to $0.78 in 2016 | |||||||||||||||||
CPI: 1982 base year of 100 and 231 in 2015 to 239 in 2016 | |||||||||||||||||
Embedded aluminum derivative | — | Interrelationship of future aluminum and oil prices | Aluminum: $1,798 per metric ton in 2015 to $1,983 per metric ton in 2018 | ||||||||||||||
Oil: $56 per barrel in 2015 to $71 per barrel in 2018 | |||||||||||||||||
Energy contract | 8 | Price of electricity beyond forward curve | Electricity: $43 per megawatt hour in 2018 to $130 per megawatt hour in 2036 | ||||||||||||||
Liabilities: | |||||||||||||||||
Embedded aluminum derivative | 344 | Price of aluminum beyond forward curve | Aluminum: $2,320 per metric ton in 2025 to $2,425 per metric ton in 2027 | ||||||||||||||
Embedded aluminum derivative | 16 | Interrelationship of LME price to overall energy price | Aluminum: $1,830 per metric ton in 2015 to $2,003 per metric ton in 2019 | ||||||||||||||
Embedded aluminum derivatives | 4 | Price of aluminum beyond forward curve | Aluminum: $2,320 per metric ton in 2025 to $2,533 per metric ton in 2029 (two contracts) and $2,870 per metric ton in 2036 (one contract) | ||||||||||||||
Midwest premium: $0.1725 per pound in 2020 to $0.1725 per pound in 2029 (two contracts) and 2036 (one contract) | |||||||||||||||||
Embedded credit derivative | 16 | Credit spread between Alcoa and counterparty | 1.17% to 1.70% | ||||||||||||||
(1.44% median) | |||||||||||||||||
* | The fair value of embedded aluminum derivatives reflected as assets and liabilities in this table are both lower by $61 compared to the respective amounts reflected in the Level 3 table presented below. This is due to the fact that Alcoa has four derivatives that are in an asset position for the current portion but are in a liability position for the noncurrent portion, and are reflected as such on the accompanying Consolidated Balance Sheet. However, these derivatives are reflected as a net liability in this table for purposes of presenting the assumptions utilized to measure the fair value of the derivative instruments in their entirety. | ||||||||||||||||
The fair values of Level 3 derivative instruments recorded as assets and liabilities in the accompanying Consolidated Balance Sheet were as follows: | |||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Asset Derivatives | |||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||
Prepaid expenses and other current assets: | |||||||||||||||||
Embedded aluminum derivatives | $ | 29 | $ | 24 | |||||||||||||
Other noncurrent assets: | |||||||||||||||||
Embedded aluminum derivative | 32 | 73 | |||||||||||||||
Energy contract | 8 | 2 | |||||||||||||||
Total derivatives designated as hedging instruments | $ | 69 | $ | 99 | |||||||||||||
Derivatives not designated as hedging instruments*: | |||||||||||||||||
Prepaid expenses and other current assets: | |||||||||||||||||
Embedded aluminum derivatives | $ | 94 | $ | 98 | |||||||||||||
Other noncurrent assets: | |||||||||||||||||
Embedded aluminum derivatives | 46 | 71 | |||||||||||||||
Total derivatives not designated as hedging instruments | $ | 140 | $ | 169 | |||||||||||||
Total Asset Derivatives | $ | 209 | $ | 268 | |||||||||||||
Liability Derivatives | |||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||
Other current liabilities: | |||||||||||||||||
Embedded aluminum derivative | $ | 22 | $ | 24 | |||||||||||||
Other noncurrent liabilities and deferred credits: | |||||||||||||||||
Embedded aluminum derivatives | 403 | 352 | |||||||||||||||
Total derivatives designated as hedging instruments | $ | 425 | $ | 376 | |||||||||||||
Derivatives not designated as hedging instruments*: | |||||||||||||||||
Other current liabilities: | |||||||||||||||||
Embedded credit derivative | $ | 2 | $ | 2 | |||||||||||||
Other noncurrent liabilities and deferred credits: | |||||||||||||||||
Embedded credit derivative | 14 | 16 | |||||||||||||||
Total derivatives not designated as hedging instruments | $ | 16 | $ | 18 | |||||||||||||
Total Liability Derivatives | $ | 441 | $ | 394 | |||||||||||||
* | See the “Other” section within Note N for additional information on Alcoa’s purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies. | ||||||||||||||||
The following table presents a reconciliation of activity for Level 3 derivative contracts: | |||||||||||||||||
Assets | Liabilities | ||||||||||||||||
First quarter ended March 31, 2015 | Embedded | Energy | Embedded | Embedded | |||||||||||||
Aluminum | contract | Aluminum | credit | ||||||||||||||
derivatives | derivatives | derivative | |||||||||||||||
Opening balance – January 1, 2015 | $ | 266 | $ | 2 | $ | 376 | $ | 18 | |||||||||
Total gains or losses (realized and unrealized) included in: | |||||||||||||||||
Sales | 6 | — | (6 | ) | — | ||||||||||||
Cost of goods sold | (21 | ) | — | — | — | ||||||||||||
Other income, net | 1 | — | — | (2 | ) | ||||||||||||
Other comprehensive loss | (43 | ) | 6 | 55 | — | ||||||||||||
Purchases, sales, issuances, and settlements* | — | — | — | — | |||||||||||||
Transfers into and/or out of Level 3* | — | — | — | — | |||||||||||||
Foreign currency translation | (8 | ) | — | — | — | ||||||||||||
Closing balance – March 31, 2015 | $ | 201 | $ | 8 | $ | 425 | $ | 16 | |||||||||
Change in unrealized gains or losses included in earnings for derivative contracts held at March 31, 2015: | |||||||||||||||||
Sales | $ | — | $ | — | $ | — | $ | — | |||||||||
Cost of goods sold | — | — | — | — | |||||||||||||
Other income, net | 1 | — | — | (2 | ) | ||||||||||||
* | 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. | ||||||||||||||||
Derivatives Designated As Hedging Instruments – Cash Flow Hedges | |||||||||||||||||
For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of unrealized gains or losses on the derivative is reported as a component of other comprehensive income (OCI). Realized gains or losses on the derivative are reclassified from OCI into earnings in the same period or periods during which the hedged transaction impacts earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized directly in earnings immediately. | |||||||||||||||||
Alcoa has five Level 3 embedded aluminum derivatives and one Level 3 energy contract that have been designated as cash flow hedges as follows. | |||||||||||||||||
Embedded aluminum derivatives. Alcoa has entered into energy supply contracts that contain pricing provisions related to the LME aluminum price. The LME-linked pricing features are considered embedded derivatives. Five of these embedded derivatives have been designated as cash flow hedges of forward sales of aluminum, three of which were new derivatives contained in three power contracts that were renewed in late 2014. At March 31, 2015 and December 31, 2014, these embedded aluminum derivatives hedge forecasted aluminum sales of 3,566 kmt and 3,610 kmt, respectively. | |||||||||||||||||
In the first quarter of 2015 and 2014, Alcoa recognized an unrealized loss of $98 and an unrealized gain of $30, respectively, in Other comprehensive (loss) income related to these five derivative instruments. Additionally, Alcoa reclassified a realized loss of $12 and $5 from Accumulated other comprehensive loss to Sales in the first quarter of 2015 and 2014, respectively. Assuming market rates remain constant with the rates at March 31, 2015, a realized gain of $3 is expected to be recognized in Sales over the next 12 months. | |||||||||||||||||
In the first quarter of 2015, Alcoa also recognized a gain of $1 in Other (income) expenses, net related to the amount excluded from the assessment of hedge effectiveness. There was no ineffectiveness related to these five derivative instruments in the first quarter of 2015 and 2014. | |||||||||||||||||
Energy contract. Alcoa has a derivative contract that will hedge the anticipated power requirements at one of its smelters once the existing power contract expires in 2016. At March 31, 2015 and December 31, 2014, this energy contract hedges forecasted electricity purchases of 59,409,328 megawatt hours. In the first quarter of 2015 and 2014, Alcoa recognized an unrealized gain of $6 and $5, respectively, in Other comprehensive (loss) income. There was no ineffectiveness related to the energy contract in the first quarter of 2015 and 2014. | |||||||||||||||||
Derivatives Not Designated As Hedging Instruments | |||||||||||||||||
Alcoa has two Level 3 embedded aluminum derivatives and one Level 3 embedded credit derivative that do not qualify for hedge accounting treatment. As such, gains and losses related to the changes in fair value of these instruments are recorded directly in earnings. In the first quarter of 2015 and 2014, Alcoa recognized a gain of $3 and $1, respectively, in Other (income) expenses, net, of which a gain of $1 and a loss of less than $1, respectively, related to the two embedded aluminum derivatives and a gain of $2 and $1, respectively, related to the embedded credit derivative. | |||||||||||||||||
Material Limitations | |||||||||||||||||
The disclosures with respect to commodity prices, interest rates, and foreign currency exchange risk do not take into account the underlying commitments or anticipated transactions. If the underlying items were included in the analysis, the gains or losses on the futures contracts may be offset. Actual results will be determined by a number of factors that are not under Alcoa’s control and could vary significantly from those factors disclosed. | |||||||||||||||||
Alcoa is exposed to credit loss in the event of nonperformance by counterparties on the above instruments, as well as credit or performance risk with respect to its hedged customers’ commitments. Although nonperformance is possible, Alcoa does not anticipate nonperformance by any of these parties. Contracts are with creditworthy counterparties and are further supported by cash, treasury bills, or irrevocable letters of credit issued by carefully chosen banks. In addition, various master netting arrangements are in place with counterparties to facilitate settlement of gains and losses on these contracts. | |||||||||||||||||
Other Financial Instruments | |||||||||||||||||
The carrying values and fair values of Alcoa’s other financial instruments were as follows: | |||||||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||
value | value | value | value | ||||||||||||||
Cash and cash equivalents | $ | 1,191 | $ | 1,191 | $ | 1,877 | $ | 1,877 | |||||||||
Restricted cash | 23 | 23 | 20 | 20 | |||||||||||||
Noncurrent receivables | 17 | 17 | 17 | 17 | |||||||||||||
Available-for-sale securities | 156 | 156 | 153 | 153 | |||||||||||||
Short-term borrowings | 80 | 80 | 54 | 54 | |||||||||||||
Commercial paper | — | — | — | — | |||||||||||||
Long-term debt due within one year | 26 | 26 | 29 | 29 | |||||||||||||
Long-term debt, less amount due within one year | 8,711 | 9,452 | 8,769 | 9,445 | |||||||||||||
The following methods were used to estimate the fair values of other financial instruments: | |||||||||||||||||
Cash and cash equivalents, Restricted cash, Short-term borrowings, and Commercial paper. The carrying amounts approximate fair value because of the short maturity of the instruments. The fair value amounts for Cash and cash equivalents, Restricted cash, and Commercial paper were classified in Level 1, and Short-term borrowings were classified in Level 2. | |||||||||||||||||
Noncurrent receivables. The fair value of noncurrent receivables was based on anticipated cash flows, which approximates carrying value, and was classified in Level 2 of the fair value hierarchy. | |||||||||||||||||
Available-for-sale securities. The fair value of such securities was based on quoted market prices. These financial instruments consist of exchange-traded fixed income and equity securities, which are carried at fair value and were classified in Level 1 of the fair value hierarchy. | |||||||||||||||||
Long-term debt due within one year and Long-term debt, less amount due within one year. The fair value was based on quoted market prices for public debt and on interest rates that are currently available to Alcoa for issuance of debt with similar terms and maturities for non-public debt. The fair value amounts for all Long-term debt were classified in Level 2 of the fair value hierarchy. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | O. Subsequent Events – Management evaluated all activity of Alcoa 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 described below. |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Equity [Abstract] | |||||||||||||||||
Summary of Changes in Accumulated Other Comprehensive Loss by Component | The following table details the activity of the four components that comprise Accumulated other comprehensive loss for both Alcoa’s shareholders and noncontrolling interests: | ||||||||||||||||
Alcoa | Noncontrolling Interests | ||||||||||||||||
First quarter ended | First quarter ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Pension and other postretirement benefits (M) | |||||||||||||||||
Balance at beginning of period | $ | (3,601 | ) | $ | (3,532 | ) | $ | (64 | ) | $ | (51 | ) | |||||
Other comprehensive income: | |||||||||||||||||
Unrecognized net actuarial loss and prior service cost/benefit | 42 | 17 | — | — | |||||||||||||
Tax expense | (11 | ) | (3 | ) | — | — | |||||||||||
Total Other comprehensive income before reclassifications, net of tax | 31 | 14 | — | — | |||||||||||||
Amortization of net actuarial loss and prior service cost/benefit(1) | 114 | 98 | 3 | 1 | |||||||||||||
Tax expense(2) | (40 | ) | (35 | ) | (1 | ) | (1 | ) | |||||||||
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7) | 74 | 63 | 2 | — | |||||||||||||
Total Other comprehensive income | 105 | 77 | 2 | — | |||||||||||||
Balance at end of period | $ | (3,496 | ) | $ | (3,455 | ) | $ | (62 | ) | $ | (51 | ) | |||||
Foreign currency translation | |||||||||||||||||
Balance at beginning of period | $ | (846 | ) | $ | 179 | $ | (351 | ) | $ | (110 | ) | ||||||
Other comprehensive (loss) income(3) | (957 | ) | 249 | (250 | ) | 87 | |||||||||||
Balance at end of period | $ | (1,803 | ) | $ | 428 | $ | (601 | ) | $ | (23 | ) | ||||||
Available-for-sale securities | |||||||||||||||||
Balance at beginning of period | $ | — | $ | 2 | $ | — | $ | — | |||||||||
Other comprehensive income(4) | 2 | — | — | — | |||||||||||||
Balance at end of period | $ | 2 | $ | 2 | $ | — | $ | — | |||||||||
Cash flow hedges (N) | |||||||||||||||||
Balance at beginning of period | $ | (230 | ) | $ | (308 | ) | $ | (2 | ) | $ | (2 | ) | |||||
Other comprehensive (loss) income: | |||||||||||||||||
Net change from periodic revaluations | (110 | ) | 36 | — | 3 | ||||||||||||
Tax benefit (expense) | 34 | (8 | ) | — | (1 | ) | |||||||||||
Total Other comprehensive (loss) income before reclassifications, net of tax | (76 | ) | 28 | — | 2 | ||||||||||||
Net amount reclassified to earnings: | |||||||||||||||||
Aluminum contracts(5) | 13 | 5 | — | — | |||||||||||||
Energy contracts(6) | 2 | — | — | — | |||||||||||||
Sub-total | 15 | 5 | — | — | |||||||||||||
Tax expense(2) | (3 | ) | (1 | ) | — | — | |||||||||||
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7) | 12 | 4 | — | — | |||||||||||||
Total Other comprehensive (loss) income | (64 | ) | 32 | — | 2 | ||||||||||||
Balance at end of period | $ | (294 | ) | $ | (276 | ) | $ | (2 | ) | $ | — | ||||||
(1) | These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note M). | ||||||||||||||||
(2) | These amounts were included in Provision (benefit) for income taxes on the accompanying Statement of Consolidated Operations. | ||||||||||||||||
(3) | In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings. | ||||||||||||||||
(4) | In all periods presented, unrealized and realized gains and losses related to these securities were immaterial. Realized gains and losses were included in Other (income) expenses, net on the accompanying Statement of Consolidated Operations. | ||||||||||||||||
(5) | These amounts were included in Sales on the accompanying Statement of Consolidated Operations. | ||||||||||||||||
(6) | These amounts were included in Cost of goods sold on the accompanying Statement of Consolidated Operations. | ||||||||||||||||
(7) | A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 1 through 6. |
Restructuring_and_Other_Charge1
Restructuring and Other Charges (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||
Schedule of Restructuring and Other Charges by Reportable Segments, Pretax | The pretax impact of allocating such charges to segment results would have been as follows: | ||||||||||||
First quarter ended | |||||||||||||
March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Alumina | $ | 7 | $ | 7 | |||||||||
Primary Metals | 25 | 331 | |||||||||||
Global Rolled Products | 135 | 90 | |||||||||||
Engineered Products and Solutions | 5 | 4 | |||||||||||
Segment total | 172 | 432 | |||||||||||
Corporate | 5 | 29 | |||||||||||
Total restructuring and other charges | $ | 177 | $ | 461 | |||||||||
Activity and Reserve Balances for Restructuring Charges | Activity and reserve balances for restructuring charges were as follows: | ||||||||||||
Layoff | Other | Total | |||||||||||
costs | exit costs | ||||||||||||
Reserve balances at December 31, 2013 | $ | 96 | $ | 42 | $ | 138 | |||||||
2014:00:00 | |||||||||||||
Cash payments | (191 | ) | (22 | ) | (213 | ) | |||||||
Restructuring charges | 259 | 194 | 453 | ||||||||||
Other* | (66 | ) | (180 | ) | (246 | ) | |||||||
Reserve balances at December 31, 2014 | 98 | 34 | 132 | ||||||||||
2015:00:00 | |||||||||||||
Cash payments | (54 | ) | (3 | ) | (57 | ) | |||||||
Restructuring charges | 24 | 6 | 30 | ||||||||||
Other* | (13 | ) | (6 | ) | (19 | ) | |||||||
Reserve balances at March 31, 2015 | $ | 55 | $ | 31 | $ | 86 | |||||||
* | Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2015 three-month period, Other for layoff costs also included a reclassification of $3 in pension costs, as this obligation was included in Alcoa’s separate liability for pension obligations (see Note M). In 2014, Other for layoff costs also included a reclassification of $26 in pension costs, as this obligation was included in Alcoa’s separate liability for pension obligations. Additionally in 2014, Other for other exit costs also included a reclassification of the following restructuring charges: $95 in asset retirement and $47 in environmental obligations, as these liabilities were included in Alcoa’s separate reserves for asset retirement obligations and environmental remediation. |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventory Components | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Finished goods | $ | 769 | $ | 768 | |||||
Work-in-process | 1,106 | 1,035 | |||||||
Bauxite and alumina | 594 | 578 | |||||||
Purchased raw materials | 514 | 508 | |||||||
Operating supplies | 190 | 193 | |||||||
$ | 3,173 | $ | 3,082 | ||||||
Other_Income_Expenses_Net_Tabl
Other (Income) Expenses, Net (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Other Income and Expenses [Abstract] | |||||||||
Schedule of Other (Income) Expenses, Net | Other (Income) Expenses, Net | ||||||||
First quarter ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Equity loss | $ | 20 | $ | 38 | |||||
Interest income | (3 | ) | (4 | ) | |||||
Foreign currency (gains) losses, net | (16 | ) | 8 | ||||||
Net gain from asset sales | — | (27 | ) | ||||||
Net (gain) loss on mark-to-market derivative contracts (N) | (4 | ) | 5 | ||||||
Other, net | (9 | ) | 5 | ||||||
$ | (12 | ) | $ | 25 | |||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
Schedule of Operating Results of Alcoa's Reportable Segments | The operating results of Alcoa’s reportable segments were as follows (differences between segment totals and consolidated totals are in Corporate): | ||||||||||||||||||||
Alumina | Primary | Global | Engineered | Total | |||||||||||||||||
Metals | Rolled | Products | |||||||||||||||||||
Products | and | ||||||||||||||||||||
Solutions | |||||||||||||||||||||
First quarter ended March 31, 2015 | |||||||||||||||||||||
Sales: | |||||||||||||||||||||
Third-party sales | $ | 887 | $ | 1,572 | $ | 1,621 | $ | 1,689 | $ | 5,769 | |||||||||||
Intersegment sales | 501 | 692 | 36 | — | 1,229 | ||||||||||||||||
Total sales | $ | 1,388 | $ | 2,264 | $ | 1,657 | $ | 1,689 | $ | 6,998 | |||||||||||
Profit and loss: | |||||||||||||||||||||
Equity loss | $ | (7 | ) | $ | (3 | ) | $ | (9 | ) | $ | — | $ | (19 | ) | |||||||
Depreciation, depletion, and amortization | 80 | 109 | 56 | 60 | 305 | ||||||||||||||||
Income taxes | 92 | 57 | 26 | 89 | 264 | ||||||||||||||||
After-tax operating income (ATOI) | 221 | 187 | 34 | 191 | 633 | ||||||||||||||||
First quarter ended March 31, 2014 | |||||||||||||||||||||
Sales: | |||||||||||||||||||||
Third-party sales | $ | 845 | $ | 1,424 | $ | 1,677 | $ | 1,443 | $ | 5,389 | |||||||||||
Intersegment sales | 510 | 734 | 43 | — | 1,287 | ||||||||||||||||
Total sales | $ | 1,355 | $ | 2,158 | $ | 1,720 | $ | 1,443 | $ | 6,676 | |||||||||||
Profit and loss: | |||||||||||||||||||||
Equity loss | $ | (5 | ) | $ | (28 | ) | $ | (5 | ) | $ | — | $ | (38 | ) | |||||||
Depreciation, depletion, and amortization | 97 | 124 | 58 | 40 | 319 | ||||||||||||||||
Income taxes | 40 | (11 | ) | 34 | 91 | 154 | |||||||||||||||
ATOI | 92 | (15 | ) | 59 | 189 | 325 | |||||||||||||||
Schedule of Segment ATOI to Consolidated Net Income (Loss) Attributable to Alcoa | The following table reconciles total segment ATOI to consolidated net income (loss) attributable to Alcoa: | ||||||||||||||||||||
First quarter ended | |||||||||||||||||||||
March 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Total segment ATOI | $ | 633 | $ | 325 | |||||||||||||||||
Unallocated amounts (net of tax): | |||||||||||||||||||||
Impact of LIFO | 7 | (7 | ) | ||||||||||||||||||
Interest expense | (80 | ) | (78 | ) | |||||||||||||||||
Noncontrolling interests | (60 | ) | 19 | ||||||||||||||||||
Corporate expense | (64 | ) | (67 | ) | |||||||||||||||||
Restructuring and other charges | (161 | ) | (321 | ) | |||||||||||||||||
Other | (80 | ) | (49 | ) | |||||||||||||||||
Consolidated net income (loss) attributable to Alcoa | $ | 195 | $ | (178 | ) | ||||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Reconciliation of Information Used to Compute Basic and Diluted EPS | The information used to compute basic and diluted EPS attributable to Alcoa common shareholders was as follows (shares in millions): | ||||||||
First quarter ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Net income (loss) attributable to Alcoa common shareholders | $ | 195 | $ | (178 | ) | ||||
Less: preferred stock dividends declared | 17 | 1 | |||||||
Net income (loss) available to Alcoa common shareholders – basic | 178 | (179 | ) | ||||||
Add: dividends related to mandatory convertible preferred stock | — | — | |||||||
Add: interest expense related to convertible notes | — | — | |||||||
Net income (loss) available to Alcoa common shareholders – diluted | $ | 178 | $ | (179 | ) | ||||
Average shares outstanding – basic | 1,221 | 1,101 | |||||||
Effect of dilutive securities: | |||||||||
Stock options | 6 | — | |||||||
Stock and performance awards | 11 | — | |||||||
Mandatory convertible preferred stock | — | — | |||||||
Convertible notes | — | — | |||||||
Average shares outstanding – diluted | 1,238 | 1,101 | |||||||
Pension_and_Other_Postretireme1
Pension and Other Postretirement Benefits (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost were as follows: | ||||||||||||||||
Pension benefits | Other postretirement | ||||||||||||||||
benefits | |||||||||||||||||
First quarter ended March 31, | 2015 | 2014 | 2015 | 2014 | |||||||||||||
Service cost | $ | 44 | $ | 41 | $ | 3 | $ | 4 | |||||||||
Interest cost | 144 | 160 | 23 | 29 | |||||||||||||
Expected return on plan assets | (188 | ) | (193 | ) | — | — | |||||||||||
Recognized net actuarial loss | 118 | 97 | 4 | 3 | |||||||||||||
Amortization of prior service cost (benefit) | 4 | 4 | (9 | ) | (5 | ) | |||||||||||
Settlement* | 1 | — | — | — | |||||||||||||
Special termination benefits* | 2 | — | — | — | |||||||||||||
Net periodic benefit cost | $ | 125 | $ | 109 | $ | 21 | $ | 31 | |||||||||
* | These amounts were recorded in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D). |
Derivatives_and_Other_Financia1
Derivatives and Other Financial Instruments (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||
Schedule of Quantitative Information for Level 3 Derivative Contracts | The following table presents quantitative information related to the significant unobservable inputs described above for Level 3 derivative contracts: | ||||||||||||||||
Fair value at | Unobservable | Range | |||||||||||||||
March 31, 2015* | input | ($ in full amounts) | |||||||||||||||
Assets: | |||||||||||||||||
Embedded aluminum derivative | $ | 140 | Interrelationship of future aluminum prices, foreign currency exchange rates, and the U.S. consumer price index (CPI) | Aluminum: $1,798 per metric ton in 2015 to $1,869 per metric ton in 2016 | |||||||||||||
Foreign currency: A$1 =0.77 in 2015 to $0.78 in 2016 | |||||||||||||||||
CPI: 1982 base year of 100 and 231 in 2015 to 239 in 2016 | |||||||||||||||||
Embedded aluminum derivative | — | Interrelationship of future aluminum and oil prices | Aluminum: $1,798 per metric ton in 2015 to $1,983 per metric ton in 2018 | ||||||||||||||
Oil: $56 per barrel in 2015 to $71 per barrel in 2018 | |||||||||||||||||
Energy contract | 8 | Price of electricity beyond forward curve | Electricity: $43 per megawatt hour in 2018 to $130 per megawatt hour in 2036 | ||||||||||||||
Liabilities: | |||||||||||||||||
Embedded aluminum derivative | 344 | Price of aluminum beyond forward curve | Aluminum: $2,320 per metric ton in 2025 to $2,425 per metric ton in 2027 | ||||||||||||||
Embedded aluminum derivative | 16 | Interrelationship of LME price to overall energy price | Aluminum: $1,830 per metric ton in 2015 to $2,003 per metric ton in 2019 | ||||||||||||||
Embedded aluminum derivatives | 4 | Price of aluminum beyond forward curve | Aluminum: $2,320 per metric ton in 2025 to $2,533 per metric ton in 2029 (two contracts) and $2,870 per metric ton in 2036 (one contract) | ||||||||||||||
Midwest premium: $0.1725 per pound in 2020 to $0.1725 per pound in 2029 (two contracts) and 2036 (one contract) | |||||||||||||||||
Embedded credit derivative | 16 | Credit spread between Alcoa and counterparty | 1.17% to 1.70% | ||||||||||||||
(1.44% median) | |||||||||||||||||
* | The fair value of embedded aluminum derivatives reflected as assets and liabilities in this table are both lower by $61 compared to the respective amounts reflected in the Level 3 table presented below. This is due to the fact that Alcoa has four derivatives that are in an asset position for the current portion but are in a liability position for the noncurrent portion, and are reflected as such on the accompanying Consolidated Balance Sheet. However, these derivatives are reflected as a net liability in this table for purposes of presenting the assumptions utilized to measure the fair value of the derivative instruments in their entirety. | ||||||||||||||||
Schedule of Fair Values of Level 3 Derivative Instruments Recorded as Assets and Liabilities | The fair values of Level 3 derivative instruments recorded as assets and liabilities in the accompanying Consolidated Balance Sheet were as follows: | ||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Asset Derivatives | |||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||
Prepaid expenses and other current assets: | |||||||||||||||||
Embedded aluminum derivatives | $ | 29 | $ | 24 | |||||||||||||
Other noncurrent assets: | |||||||||||||||||
Embedded aluminum derivative | 32 | 73 | |||||||||||||||
Energy contract | 8 | 2 | |||||||||||||||
Total derivatives designated as hedging instruments | $ | 69 | $ | 99 | |||||||||||||
Derivatives not designated as hedging instruments*: | |||||||||||||||||
Prepaid expenses and other current assets: | |||||||||||||||||
Embedded aluminum derivatives | $ | 94 | $ | 98 | |||||||||||||
Other noncurrent assets: | |||||||||||||||||
Embedded aluminum derivatives | 46 | 71 | |||||||||||||||
Total derivatives not designated as hedging instruments | $ | 140 | $ | 169 | |||||||||||||
Total Asset Derivatives | $ | 209 | $ | 268 | |||||||||||||
Liability Derivatives | |||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||
Other current liabilities: | |||||||||||||||||
Embedded aluminum derivative | $ | 22 | $ | 24 | |||||||||||||
Other noncurrent liabilities and deferred credits: | |||||||||||||||||
Embedded aluminum derivatives | 403 | 352 | |||||||||||||||
Total derivatives designated as hedging instruments | $ | 425 | $ | 376 | |||||||||||||
Derivatives not designated as hedging instruments*: | |||||||||||||||||
Other current liabilities: | |||||||||||||||||
Embedded credit derivative | $ | 2 | $ | 2 | |||||||||||||
Other noncurrent liabilities and deferred credits: | |||||||||||||||||
Embedded credit derivative | 14 | 16 | |||||||||||||||
Total derivatives not designated as hedging instruments | $ | 16 | $ | 18 | |||||||||||||
Total Liability Derivatives | $ | 441 | $ | 394 | |||||||||||||
* | See the “Other” section within Note N for additional information on Alcoa’s purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies. | ||||||||||||||||
Schedule of Reconciliation of Activity for Derivative Contracts | The following table presents a reconciliation of activity for Level 3 derivative contracts: | ||||||||||||||||
Assets | Liabilities | ||||||||||||||||
First quarter ended March 31, 2015 | Embedded | Energy | Embedded | Embedded | |||||||||||||
Aluminum | contract | Aluminum | credit | ||||||||||||||
derivatives | derivatives | derivative | |||||||||||||||
Opening balance – January 1, 2015 | $ | 266 | $ | 2 | $ | 376 | $ | 18 | |||||||||
Total gains or losses (realized and unrealized) included in: | |||||||||||||||||
Sales | 6 | — | (6 | ) | — | ||||||||||||
Cost of goods sold | (21 | ) | — | — | — | ||||||||||||
Other income, net | 1 | — | — | (2 | ) | ||||||||||||
Other comprehensive loss | (43 | ) | 6 | 55 | — | ||||||||||||
Purchases, sales, issuances, and settlements* | — | — | — | — | |||||||||||||
Transfers into and/or out of Level 3* | — | — | — | — | |||||||||||||
Foreign currency translation | (8 | ) | — | — | — | ||||||||||||
Closing balance – March 31, 2015 | $ | 201 | $ | 8 | $ | 425 | $ | 16 | |||||||||
Change in unrealized gains or losses included in earnings for derivative contracts held at March 31, 2015: | |||||||||||||||||
Sales | $ | — | $ | — | $ | — | $ | — | |||||||||
Cost of goods sold | — | — | — | — | |||||||||||||
Other income, net | 1 | — | — | (2 | ) | ||||||||||||
* | There were no purchases, sales, issuances or settlements of Level 3 derivative instruments. Additionally, there were no transfers of derivative instruments into or out of Level 3. | ||||||||||||||||
Schedule of Carrying Values and Fair Values of Other Financial Instruments | The carrying values and fair values of Alcoa’s other financial instruments were as follows: | ||||||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||
value | value | value | value | ||||||||||||||
Cash and cash equivalents | $ | 1,191 | $ | 1,191 | $ | 1,877 | $ | 1,877 | |||||||||
Restricted cash | 23 | 23 | 20 | 20 | |||||||||||||
Noncurrent receivables | 17 | 17 | 17 | 17 | |||||||||||||
Available-for-sale securities | 156 | 156 | 153 | 153 | |||||||||||||
Short-term borrowings | 80 | 80 | 54 | 54 | |||||||||||||
Commercial paper | — | — | — | — | |||||||||||||
Long-term debt due within one year | 26 | 26 | 29 | 29 | |||||||||||||
Long-term debt, less amount due within one year | 8,711 | 9,452 | 8,769 | 9,445 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Loss by Component (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Pension and other postretirement benefits | ||
Total Other comprehensive income | $107 | $77 |
Foreign currency translation | ||
Other comprehensive (loss) income | -1,207 | 336 |
Available-for-sale securities | ||
Other comprehensive income | 2 | |
Cash flow hedges | ||
Total Other comprehensive (loss) income | -64 | 34 |
Energy Contracts [Member] | ||
Cash flow hedges | ||
Total Other comprehensive (loss) income before reclassifications, net of tax | 6 | 5 |
Alcoa [Member] | ||
Pension and other postretirement benefits | ||
Balance at beginning of period | -3,601 | -3,532 |
Unrecognized net actuarial loss and prior service cost/benefit | 42 | 17 |
Tax expense | -11 | -3 |
Total Other comprehensive income before reclassifications, net of tax | 31 | 14 |
Amortization of net actuarial loss and prior service cost/benefit | 114 | 98 |
Tax expense | -40 | -35 |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 74 | 63 |
Total Other comprehensive income | 105 | 77 |
Balance at end of period | -3,496 | -3,455 |
Foreign currency translation | ||
Balance at beginning of period | -846 | 179 |
Other comprehensive (loss) income | -957 | 249 |
Balance at end of period | -1,803 | 428 |
Available-for-sale securities | ||
Balance at beginning of period | 2 | |
Other comprehensive income | 2 | |
Balance at end of period | 2 | 2 |
Cash flow hedges | ||
Balance at beginning of period | -230 | -308 |
Net change from periodic revaluations | -110 | 36 |
Tax benefit (expense) | 34 | -8 |
Total Other comprehensive (loss) income before reclassifications, net of tax | -76 | 28 |
Net amount reclassified to earnings | 15 | 5 |
Tax expense | -3 | -1 |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 12 | 4 |
Total Other comprehensive (loss) income | -64 | 32 |
Balance at end of period | -294 | -276 |
Alcoa [Member] | Aluminum Contracts [Member] | ||
Cash flow hedges | ||
Net amount reclassified to earnings | 13 | 5 |
Alcoa [Member] | Energy Contracts [Member] | ||
Cash flow hedges | ||
Net amount reclassified to earnings | 2 | |
Noncontrolling Interests [Member] | ||
Pension and other postretirement benefits | ||
Balance at beginning of period | -64 | -51 |
Amortization of net actuarial loss and prior service cost/benefit | 3 | 1 |
Tax expense | -1 | -1 |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 2 | |
Total Other comprehensive income | 2 | |
Balance at end of period | -62 | -51 |
Foreign currency translation | ||
Balance at beginning of period | -351 | -110 |
Other comprehensive (loss) income | -250 | 87 |
Balance at end of period | -601 | -23 |
Cash flow hedges | ||
Balance at beginning of period | -2 | -2 |
Net change from periodic revaluations | 3 | |
Tax benefit (expense) | -1 | |
Total Other comprehensive (loss) income before reclassifications, net of tax | 2 | |
Total Other comprehensive (loss) income | 2 | |
Balance at end of period | ($2) |
Restructuring_and_Other_Charge2
Restructuring and Other Charges - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-13 | Mar. 31, 2015 | Mar. 31, 2014 | 31-May-14 | Jun. 30, 2014 | Dec. 31, 2014 |
t | Employees | t | t | Employees | ||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | $177 | $461 | ||||
Number of employees associated with layoff costs | 210 | |||||
Capacity of lines under review | 460,000 | |||||
Capacity of lines under review period | 15 months | |||||
Minimum amount of cash payments expected to be paid beyond the end of the current annual period | 15 | |||||
Maximum amount of cash payments expected to be paid beyond the end of the current annual period | 20 | |||||
Smelter [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of plants permanently shut down and demolished | 2 | |||||
Number of plants temporarily curtailed | 2 | |||||
Rolling Mill [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of plants permanently shut down and demolished | 2 | |||||
Primary Metals [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 16 | |||||
Restructuring and other charges, after-tax and noncontrolling interest | 11 | |||||
Number of employees associated with layoff costs | 680 | |||||
Engineered Products and Solutions [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of employees associated with layoff costs | 130 | |||||
Number of employees associated with layoff costs | 110 | |||||
Global Rolled Products [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of employees associated with layoff costs | 30 | |||||
Corporate [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of employees associated with layoff costs | 50 | |||||
Number of employees associated with layoff costs | 60 | |||||
Russia [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 149 | |||||
Restructuring and other charges, after-tax and noncontrolling interest | 142 | |||||
Sao Luis Smelter [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 13 | |||||
Restructuring and other charges, after-tax and noncontrolling interest | 8 | |||||
Capacity of lines under review | 74,000,000,000 | 85,000 | ||||
Massena East Smelter [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Reduction in production - result of market conditions, in mt per year | 84,000 | |||||
Point Henry Smelter [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Reduction in production - result of market conditions, in mt per year | 190,000 | |||||
Pocos De Caldas Refinery [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Capacity of lines under review | 62,000 | 200,000 | ||||
Massena East, Ny and Point Henry and Yennora, Australia and Portovesme [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Reduction in production - result of market conditions, in mt per year | 200,000 | |||||
Other Exit Costs [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 177 | 461 | ||||
Restructuring and other charges, after-tax and noncontrolling interest | 158 | 274 | ||||
Other Miscellaneous Items [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 6 | 15 | ||||
Restructuring and other charges, after-tax and noncontrolling interest | 3 | 9 | ||||
Small Layoff Reserves Related to Prior Periods [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 7 | 6 | ||||
Restructuring and other charges, after-tax and noncontrolling interest | 6 | 4 | ||||
Divested Businesses [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 336 | |||||
Restructuring and other charges, after-tax and noncontrolling interest | 189 | |||||
Smelter Curtailments [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 70 | |||||
Restructuring and other charges, after-tax and noncontrolling interest | 46 | |||||
Number of employees associated with layoff costs | 170 | |||||
Smelter Curtailments [Member] | Refinery [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of plants temporarily curtailed | 1 | |||||
Asset Impairment [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 33 | |||||
Restructuring and other charges, after-tax and noncontrolling interest | 26 | |||||
Layoff Costs [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 13 | |||||
Restructuring and other charges, after-tax and noncontrolling interest | 8 | |||||
Shutdown And Curtailment Actions [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 133 | |||||
Number of employees associated with layoff costs | 1,830 | |||||
Accelerated depreciation | 59 | |||||
Other asset impairment charges | 91 | |||||
Other exit costs | 123 | |||||
Inventory write-down - permanent shutdown and planned demolition of idled structures | 34 | |||||
Inventory write-down, after-tax and non-controlling interests | 20 | |||||
Shutdown And Curtailment Actions [Member] | Primary Metals [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of employees associated with layoff costs | 1,230 | |||||
Shutdown And Curtailment Actions [Member] | Global Rolled Products [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of employees associated with layoff costs | 470 | |||||
Shutdown And Curtailment Actions [Member] | Corporate [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of employees associated with layoff costs | 40 | |||||
Shutdown And Curtailment Actions [Member] | Alumina [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of employees associated with layoff costs | 90 | |||||
Shutdown And Curtailment Actions [Member] | Australia [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of facilities accelerated depreciation write off | 3 | |||||
Operating Supplies [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other exit costs | 55 | |||||
Environmental Remediation [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and other charges | 47 | |||||
Other exit costs | 38 | |||||
Supplier And Customer Contract [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other exit costs | 30 | |||||
Restructuring Programs Layoffs 2015 [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total number of employees already laid off | 90 | |||||
Number of positions separated | 890 | |||||
Cash payments made against the layoff reserves | 1 | |||||
Restructuring Programs Layoffs 2014 [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total number of employees already laid off | 2,320 | |||||
Number of positions separated | 2,870 | 2,910 | ||||
Cash payments made against the layoff reserves | 50 | |||||
Restructuring Programs Layoffs 2013 [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total number of employees already laid off | 1,460 | |||||
Number of positions separated | 1,530 | |||||
Cash payments made against the layoff reserves | $3 |
Restructuring_and_Other_Charge3
Restructuring and Other Charges - Schedule of Restructuring and Other Charges by Reportable Segments, Pretax (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges | $177 | $461 |
Operating Segments [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges | 172 | 432 |
Corporate [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges | 5 | 29 |
Alumina [Member] | Operating Segments [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges | 7 | 7 |
Primary Metals [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges | 16 | |
Primary Metals [Member] | Operating Segments [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges | 25 | 331 |
Global Rolled Products [Member] | Operating Segments [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges | 135 | 90 |
Engineered Products and Solutions [Member] | Operating Segments [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other charges | $5 | $4 |
Restructuring_and_Other_Charge4
Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve beginning balance | $132 | $138 |
Cash payments | -57 | -213 |
Restructuring charges | 30 | 453 |
Other | -19 | -246 |
Restructuring reserve ending balance | 86 | 132 |
Layoff Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve beginning balance | 98 | 96 |
Cash payments | -54 | -191 |
Restructuring charges | 24 | 259 |
Other | -13 | -66 |
Restructuring reserve ending balance | 55 | 98 |
Other Exit Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve beginning balance | 34 | 42 |
Cash payments | -3 | -22 |
Restructuring charges | 6 | 194 |
Other | -6 | -180 |
Restructuring reserve ending balance | $31 | $34 |
Restructuring_and_Other_Charge5
Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Parenthetical) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Restructuring Cost and Reserve [Line Items] | |||
Other layoff cost including reclassification in pension cost | $19 | $246 | |
Restructuring and other charges | 177 | 461 | |
Pension Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Other layoff cost including reclassification in pension cost | 3 | 26 | |
Asset Retirement Obligations [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other charges | 95 | ||
Environmental Remediation [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and other charges | $47 |
Acquisitions_and_Divestitures_
Acquisitions and Divestitures - Additional Information (Detail) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Nov. 30, 2014 | Mar. 31, 2015 | Nov. 30, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 06, 2015 | Mar. 31, 2015 |
In Millions, except Share data, unless otherwise specified | USD ($) | USD ($) | Stupino Titanium Company [Member] | Russia [Member] | Firth Rixson [Member] | Firth Rixson [Member] | Firth Rixson [Member] | Firth Rixson [Member] | Tital [Member] | Tital [Member] | RTI [Member] | RTI [Member] | RTI [Member] | RTI [Member] |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Goodwill [Member] | USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | Senior Notes [Member] | |||
Employees | USD ($) | Employees | Employees | Convertible Debt [Member] | ||||||||||
USD ($) | ||||||||||||||
Series | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Business acquisition purchase price | $2,995 | |||||||||||||
Contingent consideration | 130 | |||||||||||||
Total assets | 3,470 | |||||||||||||
Goodwill | 5,050 | 5,247 | 1,898 | 123 | ||||||||||
Intangible assets | 968 | 398 | ||||||||||||
Total liabilities | 475 | |||||||||||||
Properties, plants and equipment | 135 | |||||||||||||
Decrease in goodwill | 570 | -275 | ||||||||||||
Number of employees | 1,870 | 650 | 650 | 2,600 | ||||||||||
Cash paid for business acquisition | 204 | 188 | ||||||||||||
Common stock estimated value | 1,304 | 1,304 | 1,100 | |||||||||||
Business acquisition common stock issued, price per share | $12.92 | $14.48 | ||||||||||||
Number of shares to be issued upon conversion | $2.83 | |||||||||||||
Acquisition price per share | $41 | |||||||||||||
Common stock outstanding | 30,794,405 | |||||||||||||
Assumed debt | 500 | 500 | ||||||||||||
Business acquisition cash assumed | 300 | |||||||||||||
Number of additional series | 2 | |||||||||||||
Conversion of convertible senior notes to common stock | -13,070,774 | |||||||||||||
Generated sale,net | 130 | 794 | ||||||||||||
Net cash payment | 8 | |||||||||||||
Loss from divestitures before income tax | 149 | |||||||||||||
Net loss, after tax and noncontrolling interest | $142 |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventory Components (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Finished goods | $769 | $768 |
Work-in-process | 1,106 | 1,035 |
Bauxite and alumina | 594 | 578 |
Purchased raw materials | 514 | 508 |
Operating supplies | 190 | 193 |
Inventories, total | $3,173 | $3,082 |
Inventories_Additional_Informa
Inventories - Additional Information (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Inventories valued on a LIFO basis | $1,590 | $1,514 |
Total inventories valued on an average-cost basis | $757 | $767 |
Contingencies_and_Commitments_
Contingencies and Commitments - Additional Information (Detail) | 1 Months Ended | 0 Months Ended | 3 Months Ended | ||||||||||||||
Jul. 31, 2012 | Jun. 12, 2012 | Jun. 12, 2012 | Mar. 26, 2012 | Mar. 26, 2012 | Sep. 30, 2010 | Feb. 21, 2013 | Feb. 21, 2013 | Feb. 21, 2013 | Mar. 31, 2015 | Mar. 31, 2015 | Feb. 21, 2013 | Feb. 21, 2013 | Nov. 19, 2009 | Nov. 19, 2009 | Mar. 31, 2015 | Dec. 31, 2012 | |
Plant | USD ($) | EUR (€) | USD ($) | EUR (€) | t | Minimum [Member] | Maximum [Member] | Maximum [Member] | Alcoa [Member] | Alcoa [Member] | Alcoa Trasformazioni [Member] | Alcoa Trasformazioni [Member] | Italian Government [Member] | Italian Government [Member] | Italian Government [Member] | Portovesme [Member] | |
Installment | USD ($) | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | t | |||||||
Plant | Plant | ||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||
Management estimate for maximum exposure from class action | $110,000,000 | € 85,000,000 | $97,000,000 | € 76,000,000 | |||||||||||||
Provision for contract losses | 0 | 97,000,000 | 76,000,000 | ||||||||||||||
Number of years operating under a power supply structure | 10 years | ||||||||||||||||
Charge related to European Commission announcement | 250,000,000 | 173,000,000 | |||||||||||||||
Number of smelters | 2 | 2 | 2 | ||||||||||||||
Write-off of receivable | 20,000,000 | 14,000,000 | |||||||||||||||
Establishment reserve | 230,000,000 | 159,000,000 | |||||||||||||||
Recovery amount | 375,000,000 | 303,000,000 | |||||||||||||||
Reduction in recovery amount | 65,000,000 | 53,000,000 | 57,000,000 | 53,000,000 | |||||||||||||
Payments to Italian Government | 310,000,000 | 250,000,000 | |||||||||||||||
Payments to Italian Government, installments amount | 69,000,000 | 50,000,000 | |||||||||||||||
Number of installments, litigation payment | 5 | 5 | |||||||||||||||
Litigation reserve | 172,000,000 | 159,000,000 | |||||||||||||||
Range of reasonable possible loss, minimum | 172,000,000 | 159,000,000 | |||||||||||||||
Range of reasonable possible loss, maximum | 329,000,000 | 303,000,000 | |||||||||||||||
Noncurrent asset | $99,000,000 | € 91,000,000 | |||||||||||||||
Amount of curtailment, metric-tons-per-year | 44,000 | 150,000 |
Contingencies_and_Commitments_1
Contingencies and Commitments - Additional Information - 1 (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2009 | |
Loss Contingencies [Line Items] | |||
Number of cleanup locations | More than 100 | ||
Remediation reserve balance | $538,000,000 | $543,000,000 | |
Remediation reserve balance, classified as a current liability | 66,000,000 | 70,000,000 | |
Payments related to remediation expenses applied against the reserve | 6,000,000 | ||
Increase (Decrease) in reserves due to effects of foreign currency translation | 7,000,000 | ||
Actual remediation fieldwork period | 4 years | ||
Minimum [Member] | |||
Loss Contingencies [Line Items] | |||
Planning and design phase period | 2 years | ||
Majority of the project funding period | 2016 | ||
Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Planning and design phase period | 3 years | ||
Majority of the project funding period | 2020 | ||
Recurring Costs of Managing Hazardous Substances and Environmental Programs [Member] | |||
Loss Contingencies [Line Items] | |||
Percentage of cost of goods sold | 2.00% | ||
Massena West, NY [Member] | |||
Loss Contingencies [Line Items] | |||
Remediation reserve balance | 238,000,000 | 239,000,000 | |
Grasse River [Member] | |||
Loss Contingencies [Line Items] | |||
Increase in remediation reserve | 8,000,000 | ||
Sherwin, TX site [Member] | |||
Loss Contingencies [Line Items] | |||
Remediation reserve balance | 32,000,000 | 32,000,000 | |
Guarantees, expiration date | Through 2019 | ||
Portovesme [Member] | |||
Loss Contingencies [Line Items] | |||
Increase in remediation reserve | 3,000,000 | 3,000,000 | |
Remediation reserve adjustment | 7,000,000 | ||
Other Sites [Member] | |||
Loss Contingencies [Line Items] | |||
Remediation reserve adjustment | 1,000,000 | ||
East St. Louis, IL Site [Member] | |||
Loss Contingencies [Line Items] | |||
Remediation reserve balance | $15,000,000 | $15,000,000 |
Contingencies_and_Commitments_2
Contingencies and Commitments - Additional Information - 2 (Detail) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 36 Months Ended | 3 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 93 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | Mar. 31, 2015 | Jun. 12, 2012 | Jun. 12, 2012 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Feb. 27, 2014 | Feb. 27, 2014 | Mar. 31, 2015 | Jan. 31, 2014 | Jan. 31, 2014 | Feb. 27, 2014 | Feb. 27, 2014 | Apr. 08, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | 31-May-12 | 31-May-12 | Apr. 08, 2013 | Apr. 08, 2013 | Apr. 08, 2013 | Apr. 08, 2013 | Apr. 08, 2013 | Dec. 31, 2002 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2009 | Dec. 31, 2012 | Dec. 31, 2012 | Oct. 31, 2013 | Dec. 31, 2009 | Dec. 31, 2004 | Dec. 31, 2004 | Sep. 30, 2011 | Sep. 30, 2011 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | |
USD ($) | EUR (€) | USD ($) | EUR (€) | State and Local Jurisdiction [Member] | State and Local Jurisdiction [Member] | Maaden Alcoa Joint Venture [Member] | Maaden Alcoa Joint Venture [Member] | Maaden Alcoa Joint Venture [Member] | Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] | Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] | Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] | Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] | Maaden Alcoa Joint Venture Mine And Refinery Company [Member] | Maaden Alcoa Joint Venture Mine And Refinery Company [Member] | Maaden Alcoa Joint Venture Mine And Refinery Company [Member] | Maaden Alcoa Joint Venture Mine And Refinery Company [Member] | Ligestra [Member] | Ligestra [Member] | Ligestra [Member] | Ligestra [Member] | Ligestra [Member] | Italian Ministry of Environment and Protection of Land and Sea[Member] | Italian Ministry of Environment and Protection of Land and Sea[Member] | Alcoa World Alumina Brasil [Member] | Alcoa World Alumina Brasil [Member] | Alcoa World Alumina Brasil [Member] | Alcoa World Alumina Brasil [Member] | Alcoa World Alumina Brasil [Member] | Alcoa World Alumina Brasil [Member] | Alcoa World Alumina Brasil [Member] | Alcoa World Alumina Brasil [Member] | Alcoa World Alumina Brasil [Member] | Alcoa World Alumina Brasil [Member] | Alcoa Aluminio [Member] | Maaden Company [Member] | Alcoa [Member] | Alcoa [Member] | Alcoa [Member] | Estreito Project [Member] | Estreito Project [Member] | Portovesme [Member] | Portovesme [Member] | Baie Comeau [Member] | Mosjoen [Member] | Fusina [Member] | Fusina [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | |
USD ($) | BRL | USD ($) | SAR | USD ($) | USD ($) | Other Noncurrent Liabilities and Deferred Credits [Member] | Other Noncurrent Liabilities and Deferred Credits [Member] | Financial Guarantee [Member] | USD ($) | Other Noncurrent Liabilities and Deferred Credits [Member] | Other Noncurrent Liabilities and Deferred Credits [Member] | Financial Guarantee [Member] | USD ($) | EUR (€) | Minimum [Member] | Maximum [Member] | USD ($) | EUR (€) | BRL | USD ($) | BRL | USD ($) | BRL | Minimum [Member] | Maximum [Member] | Fixed Assets [Member] | Fixed Assets [Member] | Fixed Assets [Member] | t | Maaden Alcoa Joint Venture [Member] | Maaden Alcoa Joint Venture [Member] | Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] | Maaden Alcoa Joint Venture Mine And Refinery Company [Member] | USD ($) | BRL | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | AUD | USD ($) | AUD | Three-Year Equity Call Plan [Member] | Three-Year Equity Call Plan [Member] | Three-Year Equity Call Plan [Member] | Three-Year Equity Call Plan [Member] | New Equity Call Plan [Member] | New Equity Call Plan [Member] | ||||||
Entity | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | BRL | Minimum [Member] | Maximum [Member] | USD ($) | USD ($) | USD ($) | MWh | USD ($) | AUD | USD ($) | AUD | USD ($) | AUD | ||||||||||||||||||||||||||||||||||||
USD ($) | USD ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Increase in remediation reserve | $3,000,000 | $3,000,000 | $25,000,000 | $20,000,000 | $0 | $12,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of payments and remediation costs | 50.00% | 80.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Soil remediation project, estimated cost | 33,000,000 | 24,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments for emergency action and natural resource damages | 25,000,000 | 18,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs and payments | 17,000,000 | 12,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs and payments related to damages | 9,000,000 | 6,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment period | 10 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revised project cost submitted to reflect the removal of a larger volume of contaminated soil | 7,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total combined assessments | 247,000,000 | 228,000,000 | 40,000,000 | 130,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Disallowed tax credits | 110,000,000 | 220,000,000 | 175,000,000 | 0 | 55,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of penalty of the gross disallowed amount | 50.00% | 50.00% | 50.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Value added tax receivable | 41,000,000 | 82,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated range of reasonably possible loss, minimum | 155,000,000 | 0 | 50,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Administrative appeal, assessment period | 2 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Metal sold per month | 2,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership interest issued as guarantee for Saudi Arabian Joint Venture | 74.90% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership interest issued as guarantee for Saudi Arabian Joint Venture | 25.10% | 25.10% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of companies in Saudi Arabian joint venture | 3 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount invested by Alcoa and Aluminum Financing Limited | 10,800,000,000 | 40,500,000,000 | 1,100,000,000 | 39,000,000 | 40,000,000 | 30,000,000 | 36,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Capital investment | 4,000,000 | 956,000,000 | 17,000,000 | 24,000,000 | 141,000,000 | 176,000,000 | 3,000,000 | 5,000,000 | 4,000,000 | 6,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Equity method investment, carrying value | 969,000,000 | 983,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital investment | 1,133,000,000 | 560,000,000 | 4,515,000,000 | 2,232,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt service requirements, principal | 176,000,000 | 120,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt service requirements, interest maximum | 60,000,000 | 30,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantee issued on behalf of smelting and rolling mill companies | 8,000,000 | 8,000,000 | 4,000,000 | 4,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of amount required to be contributed in the event Alcoa would be required to make payments under the guarantees | 40.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment percentage | 25.49% | 25.49% | 20.00% | 20.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Assured power from installed capacity | 150 | 150 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated project costs | 1,590,000,000 | 5,170,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aluminio's share of project | 400,000,000 | 1,320,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitment expended on the project | 390,000,000 | 1,270,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepayments made under the agreement for future gas transmission services | 279,000,000 | 362,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Range of reasonable possible loss, maximum | $329,000,000 | € 303,000,000 | $400,000,000 | 520,000,000 |
Other_Income_Expenses_Net_Sche
Other (Income) Expenses, Net - Schedule of Other (Income) Expenses, Net (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Other Income and Expenses [Abstract] | ||
Equity loss | $20 | $38 |
Interest income | -3 | -4 |
Foreign currency (gains) losses, net | -16 | 8 |
Net gain from asset sales | -27 | |
Net (gain) loss on mark-to-market derivative contracts | -4 | 5 |
Other, net | -9 | 5 |
Other (income) expenses, net | ($12) | $25 |
Segment_Information_Schedule_o
Segment Information - Schedule of Operating Results of Alcoa's Reportable Segment (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Total sales | $5,819 | $5,454 |
Equity loss | -19 | -38 |
Depreciation, depletion, and amortization | 305 | 319 |
Income taxes | 264 | 154 |
After-tax operating income (ATOI) | 633 | 325 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total sales | 6,998 | 6,676 |
Intersegment Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Intersegment sales | 1,229 | 1,287 |
Third-Party Sales [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Third-party sales | 5,769 | 5,389 |
Alumina [Member] | ||
Segment Reporting Information [Line Items] | ||
Equity loss | -7 | -5 |
Depreciation, depletion, and amortization | 80 | 97 |
Income taxes | 92 | 40 |
After-tax operating income (ATOI) | 221 | 92 |
Alumina [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total sales | 1,388 | 1,355 |
Alumina [Member] | Intersegment Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Intersegment sales | 501 | 510 |
Alumina [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Third-party sales | 887 | 845 |
Primary Metals [Member] | ||
Segment Reporting Information [Line Items] | ||
Equity loss | -3 | -28 |
Depreciation, depletion, and amortization | 109 | 124 |
Income taxes | 57 | -11 |
After-tax operating income (ATOI) | 187 | -15 |
Primary Metals [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total sales | 2,264 | 2,158 |
Primary Metals [Member] | Intersegment Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Intersegment sales | 692 | 734 |
Primary Metals [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Third-party sales | 1,572 | 1,424 |
Global Rolled Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Equity loss | -9 | -5 |
Depreciation, depletion, and amortization | 56 | 58 |
Income taxes | 26 | 34 |
After-tax operating income (ATOI) | 34 | 59 |
Global Rolled Products [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total sales | 1,657 | 1,720 |
Global Rolled Products [Member] | Intersegment Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Intersegment sales | 36 | 43 |
Global Rolled Products [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Third-party sales | 1,621 | 1,677 |
Engineered Products and Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation, depletion, and amortization | 60 | 40 |
Income taxes | 89 | 91 |
After-tax operating income (ATOI) | 191 | 189 |
Engineered Products and Solutions [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total sales | 1,689 | 1,443 |
Engineered Products and Solutions [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Third-party sales | $1,689 | $1,443 |
Segment_Information_Schedule_o1
Segment Information - Schedule of Segment ATOI to Consolidated Net Income (Loss) Attributable to Alcoa (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Total segment ATOI | $633 | $325 |
Interest expense | -122 | -120 |
Noncontrolling interests | -60 | 19 |
Net income (loss) attributable to Alcoa | 195 | -178 |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Impact of LIFO | 7 | -7 |
Interest expense | -80 | -78 |
Noncontrolling interests | -60 | 19 |
Corporate expense | -64 | -67 |
Restructuring and other charges | -161 | -321 |
Other | ($80) | ($49) |
Earnings_Per_Share_Reconciliat
Earnings Per Share - Reconciliation of Information Used to Compute Basic and Diluted EPS (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to Alcoa common shareholders | $195 | ($178) |
Less: preferred stock dividends declared | 17 | 1 |
Net income (loss) available to Alcoa common shareholders - basic | 178 | -179 |
Add: dividends related to mandatory convertible preferred stock | 0 | 0 |
Add: interest expense related to convertible notes | 0 | 0 |
Net income (loss) available to Alcoa common shareholders - diluted | $178 | ($179) |
Average shares outstanding - basic | 1,221 | 1,101 |
Stock options | 6 | |
Stock and performance awards | 11 | |
Mandatory convertible preferred stock | 0 | 0 |
Convertible notes | 0 | 0 |
Average shares outstanding - diluted | 1,238 | 1,101 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock outstanding | 6,000,000 | |
Number of weighted average outstanding diluted shares | 1,238,000,000 | 1,101,000,000 |
Number of common stock shares issued in a part of acquisition | 90,000,000 | |
Convertible Debt Securities [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares, option exercised | 89,000,000 | |
Common stock outstanding | 89,000,000 | |
Number of weighted average outstanding shares included in both basic and diluted shares | 23,000,000 | |
Common stock outstanding | 89,000,000 | |
Number of weighted average outstanding diluted shares | 66,000,000 | |
Mandatory Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of anti-dilutive securities | 77,000,000 | |
Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of anti-dilutive securities | 66,000,000 | |
Shares that would have been included in diluted earnings per share calculation | 66,000,000 | |
Stock Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of anti-dilutive securities | 18,000,000 | |
Shares that would have been included in diluted earnings per share calculation | 10,000,000 | |
Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of anti-dilutive securities | 31,000,000 | |
Shares that would have been included in diluted earnings per share calculation | 5,000,000 | |
Weighted average exercise price of options | 14.79 | 14.53 |
Equity Unit Purchase Agreements [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of anti-dilutive securities | 13,000,000 | 10,000,000 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Contingency [Line Items] | ||
Effective tax rate | 47.00% | 28.10% |
Income tax benefit recognized | 35.00% | 35.00% |
Income tax benefit recognized | $226,000,000 | ($77,000,000) |
Operational losses in certain foreign jurisdictions | 35,000,000 | 56,000,000 |
Russia [Member] | ||
Income Tax Contingency [Line Items] | ||
Income tax benefit recognized | 0 | |
Alcoa World Alumina and Chemicals [Member] | ||
Income Tax Contingency [Line Items] | ||
Discrete income tax charge | 83,000,000 | |
Alcoa [Member] | Alcoa World Alumina and Chemicals [Member] | ||
Income Tax Contingency [Line Items] | ||
Percent of equity investment in other entity | 60.00% | |
Deferred tax liability | 50,000,000 | |
Deferred tax asset written off as valuation allowance | 60.00% | |
Alumina Limited [Member] | Alcoa World Alumina and Chemicals [Member] | ||
Income Tax Contingency [Line Items] | ||
Percent of equity investment in other entity | 40.00% | |
Foreign Jurisdictions [Member] | ||
Income Tax Contingency [Line Items] | ||
Income tax benefit recognized | 0 | 0 |
United States [Member] | ||
Income Tax Contingency [Line Items] | ||
Discrete income tax benefit | $33,000,000 |
Receivables_Additional_Informa
Receivables - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended |
Mar. 31, 2012 | Mar. 31, 2015 | Dec. 31, 2014 | |
Agreement | |||
Schedule Of Financial Receivables [Line Items] | |||
Number of arrangement with different financial institution to sell customer receivables | 3 | ||
Net cash funding received in current period | $0 | ||
Deferred purchase price receivable | 254,000,000 | 417,000,000 | 356,000,000 |
Net cash funding received | 250,000,000 | ||
Amount of cash draws under arrangement | 1,308,000,000 | ||
Amount of cash repayments under arrangement | 1,058,000,000 | ||
Accounts receivables | 19,545,000,000 | ||
Cash collections of other receivables | 18,878,000,000 | ||
Minimum [Member] | |||
Schedule Of Financial Receivables [Line Items] | |||
Funding of customer receivables sold | 200,000,000 | ||
Maximum [Member] | |||
Schedule Of Financial Receivables [Line Items] | |||
Funding of customer receivables sold | $500,000,000 |
Pension_and_Other_Postretireme2
Pension and Other Postretirement Benefits - Components of Net Periodic Benefit Cost (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $44 | $41 |
Interest cost | 144 | 160 |
Expected return on plan assets | -188 | -193 |
Recognized net actuarial loss | 118 | 97 |
Amortization of prior service cost (benefit) | 4 | 4 |
Settlement | 1 | |
Special termination benefits | 2 | |
Net periodic benefit cost | 125 | 109 |
Other Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 3 | 4 |
Interest cost | 23 | 29 |
Recognized net actuarial loss | 4 | 3 |
Amortization of prior service cost (benefit) | -9 | -5 |
Net periodic benefit cost | $21 | $31 |
Derivatives_and_Other_Financia2
Derivatives and Other Financial Instruments - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||||||||||||||||||
Jul. 31, 2012 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Jul. 31, 2012 | Jul. 31, 2012 | |
Contract | Agency | Level 3 [Member] | Level 1 [Member] | Level 1 [Member] | Level 1 [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Foreign Exchange Contracts Two [Member] | Foreign Exchange Contracts Two [Member] | Foreign Exchange Contracts Two [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Embedded Aluminum Derivative [Member] | Energy Contracts [Member] | Energy Contracts [Member] | Energy Contracts [Member] | Energy Contracts [Member] | Energy Contracts [Member] | Energy Contracts [Member] | Embedded Credit Derivative [Member] | Embedded Credit Derivative [Member] | Embedded Credit Derivative [Member] | Embedded Credit Derivative [Member] | Power Contract One [Member] | Power Contract Two [Member] | |
Plant | Derivative | USD ($) | USD ($) | USD ($) | Other Income Or Other Expense [Member] | Other Income Or Other Expense [Member] | USD ($) | Forward Contracts [Member] | Forward Contracts [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Level 3 [Member] | Level 3 [Member] | Level 3 [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Derivatives Not Designated as Hedging Instruments [Member] | USD ($) | USD ($) | Level 3 [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Designated as Hedging Instruments [Member] | Derivatives Designated as Hedging Instruments [Member] | Level 3 [Member] | Level 3 [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Derivatives Not Designated as Hedging Instruments [Member] | ||||
USD ($) | USD ($) | USD ($) | BRL | USD ($) | USD ($) | Derivative | Cash Flow Hedging [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Scenario, Forecast [Member] | Scenario, Forecast [Member] | USD ($) | Maximum [Member] | Cash Flow Hedging [Member] | USD ($) | USD ($) | MWh | Derivative | Derivatives Not Designated as Hedging Instruments [Member] | USD ($) | USD ($) | ||||||||||||
Derivative | Derivative | USD ($) | USD ($) | Nonoperating Income (Expense) [Member] | t | t | USD ($) | Derivative | MWh | Derivative | |||||||||||||||||||||||||
USD ($) | |||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||
Forward contract to purchase to mitigate the foreign currency risk related to a Canadian/Brazilian-denominated loan due in 2014 | $231,000,000 | 543,000,000 | |||||||||||||||||||||||||||||||||
Maturity date of forward contract | 31-Mar-14 | 31-Mar-14 | |||||||||||||||||||||||||||||||||
Loss recognized on forward contract | 4,000,000 | ||||||||||||||||||||||||||||||||||
Fair value of derivatives recorded as assets | 2,000,000 | ||||||||||||||||||||||||||||||||||
Fair value of derivatives recorded as liabilities | 37,000,000 | 31,000,000 | |||||||||||||||||||||||||||||||||
Net gain (loss) of derivative instruments | 26,000,000 | -25,000,000 | 3,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||||||
Number of derivative instruments | 9 | 7 | 5 | 2 | 1 | 1 | 0 | ||||||||||||||||||||||||||||
Other derivative contracts estimated term of quoted market prices, in years | 10 years | ||||||||||||||||||||||||||||||||||
Number of contracts | 2 | ||||||||||||||||||||||||||||||||||
Power contracts maturity date | 30-Jun-14 | 30-Jun-14 | |||||||||||||||||||||||||||||||||
Number of smelters | 2 | ||||||||||||||||||||||||||||||||||
Number of credit rating agencies | 3 | ||||||||||||||||||||||||||||||||||
Aluminum forecast sales | 3,566,000 | 3,610,000 | |||||||||||||||||||||||||||||||||
Recognized an unrealized (loss) | -98,000,000 | 30,000,000 | 6,000,000 | 5,000,000 | |||||||||||||||||||||||||||||||
Unrealized gain loss on derivatives | -12,000,000 | -5,000,000 | |||||||||||||||||||||||||||||||||
Amount of loss expected to be recognized into earnings over the next 12 months | 3,000,000 | ||||||||||||||||||||||||||||||||||
Other expenses (income), net | 1,000,000 | ||||||||||||||||||||||||||||||||||
Derivative instruments ineffectiveness | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||
Forecasted energy purchases in megawatt hours | 59,409,328 | 59,409,328 | |||||||||||||||||||||||||||||||||
Derivative gain | $2,000,000 | $1,000,000 |
Derivatives_and_Other_Financia3
Derivatives and Other Financial Instruments - Schedule of Quantitative Information for Level 3 Derivative Contracts (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative Assets, Fair value | $209 | $268 |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of Future Aluminum Prices, Foreign Currency Exchange Rates, and U.S. Consumer Price Index [Member] | Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative Assets, Fair value | 140 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of Future Aluminum Prices, Foreign Currency Exchange Rates, and U.S. Consumer Price Index [Member] | Average Price [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 1,798 | |
Maturity year of future aluminum price | 2015 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of Future Aluminum Prices, Foreign Currency Exchange Rates, and U.S. Consumer Price Index [Member] | Average Price [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 1,869 | |
Maturity year of future aluminum price | 2016 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of Future Aluminum Prices, Foreign Currency Exchange Rates, and U.S. Consumer Price Index [Member] | Estimated Foreign Currency Exchange Rate [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Foreign currency exchange rate | 0.77 | |
Foreign currency exchange rate expected year | 2015 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of Future Aluminum Prices, Foreign Currency Exchange Rates, and U.S. Consumer Price Index [Member] | Estimated Foreign Currency Exchange Rate [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Foreign currency exchange rate | 0.78 | |
Foreign currency exchange rate expected year | 2016 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of Future Aluminum Prices, Foreign Currency Exchange Rates, and U.S. Consumer Price Index [Member] | Consumer Price Index [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected consumer price index | 231 | |
Expected consumer price index, Year | 2015 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of Future Aluminum Prices, Foreign Currency Exchange Rates, and U.S. Consumer Price Index [Member] | Consumer Price Index [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Consumer price index base year | 1982 | |
Consumer price index base | 100 | |
Expected consumer price index | 239 | |
Expected consumer price index, Year | 2016 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of Future Aluminum and Oil Prices [Member] | Average Price [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 1,798 | |
Maturity year of future aluminum price | 2015 | |
Expected future oil prices | 56 | |
Maturity year of future oil price | 2015 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of Future Aluminum and Oil Prices [Member] | Average Price [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 1,983 | |
Maturity year of future aluminum price | 2018 | |
Expected future oil prices | 71 | |
Maturity year of future oil price | 2018 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Price of Aluminum beyond Forward Curve [Member] | Average Price [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 2,320 | |
Maturity year of future aluminum price | 2025 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Price of Aluminum beyond Forward Curve [Member] | Average Price [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 2,425 | |
Maturity year of future aluminum price | 2027 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of LME Price to Overall Energy Price [Member] | Average Price [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 1,830 | |
Maturity year of future aluminum price | 2015 | |
Assets [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of LME Price to Overall Energy Price [Member] | Average Price [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 2,003 | |
Maturity year of future aluminum price | 2019 | |
Assets [Member] | Energy Contracts [Member] | Price of Electricity beyond Forward Curve [Member] | Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative Assets, Fair value | 8 | |
Assets [Member] | Energy Contracts [Member] | Price of Electricity beyond Forward Curve [Member] | Average Price [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Price of electricity beyond forward curve | 43 | |
Maturity date of electricity beyond forward curve | 2018 | |
Assets [Member] | Energy Contracts [Member] | Price of Electricity beyond Forward Curve [Member] | Average Price [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Price of electricity beyond forward curve | 130 | |
Maturity date of electricity beyond forward curve | 2036 | |
Liability [Member] | Embedded Aluminum Derivative [Member] | Price of Aluminum beyond Forward Curve [Member] | Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative Liabilities, Fair value | 344 | |
Liability [Member] | Embedded Aluminum Derivative [Member] | Price of Aluminum beyond Forward Curve [Member] | Average Price [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 2,320 | |
Maturity year of future aluminum price | 2025 | |
Liability [Member] | Embedded Aluminum Derivative [Member] | Price of Aluminum beyond Forward Curve [Member] | Midwest Premium | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Midwest Premium | 0.1725 | |
Foreign currency exchange rate expected year | 2020 | |
Liability [Member] | Embedded Aluminum Derivative [Member] | Price of Aluminum beyond Forward Curve [Member] | Midwest Premium | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Midwest Premium | 0.1725 | |
Liability [Member] | Embedded Aluminum Derivative [Member] | Interrelationship of LME Price to Overall Energy Price [Member] | Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative Liabilities, Fair value | 16 | |
Liability [Member] | Embedded Aluminum Derivative [Member] | Two Contracts [Member] | Price of Aluminum beyond Forward Curve [Member] | Average Price [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 2,533 | |
Maturity year of future aluminum price | 2029 | |
Liability [Member] | Embedded Aluminum Derivative [Member] | Two Contracts [Member] | Price of Aluminum beyond Forward Curve [Member] | Midwest Premium | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Foreign currency exchange rate expected year | 2029 | |
Liability [Member] | Embedded Aluminum Derivative [Member] | One Contract [Member] | Price of Aluminum beyond Forward Curve [Member] | Average Price [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 2,870 | |
Maturity year of future aluminum price | 2036 | |
Liability [Member] | Embedded Aluminum Derivative [Member] | One Contract [Member] | Price of Aluminum beyond Forward Curve [Member] | Midwest Premium | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Foreign currency exchange rate expected year | 2036 | |
Liability [Member] | Embedded Credit Derivative [Member] | Credit Spread between Alcoa and Counterparty [Member] | Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative Liabilities, Fair value | 16 | |
Liability [Member] | Embedded Credit Derivative [Member] | Credit Spread between Alcoa and Counterparty [Member] | Credit Spread [Member] | Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Percentage of credit spread | 1.44% | |
Liability [Member] | Embedded Credit Derivative [Member] | Credit Spread between Alcoa and Counterparty [Member] | Credit Spread [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Percentage of credit spread | 1.17% | |
Liability [Member] | Embedded Credit Derivative [Member] | Credit Spread between Alcoa and Counterparty [Member] | Credit Spread [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Percentage of credit spread | 1.70% | |
Liability [Member] | Embedded Aluminum Derivatives [Member] | Price of Aluminum beyond Forward Curve [Member] | Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative Liabilities, Fair value | $4 |
Derivatives_and_Other_Financia4
Derivatives and Other Financial Instruments - Schedule of Fair Values of Level 3 Derivative Instruments Recorded as Assets and Liabilities (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | $209 | $268 |
Fair value liability derivatives | 441 | 394 |
Derivatives Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 69 | 99 |
Fair value liability derivatives | 425 | 376 |
Derivatives Designated as Hedging Instruments [Member] | Prepaid Expenses and Other Current Assets [Member] | Embedded Aluminum Derivative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 29 | 24 |
Derivatives Designated as Hedging Instruments [Member] | Other Noncurrent Assets [Member] | Embedded Aluminum Derivative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 32 | 73 |
Derivatives Designated as Hedging Instruments [Member] | Other Noncurrent Assets [Member] | Energy Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 8 | 2 |
Derivatives Designated as Hedging Instruments [Member] | Other Current Liabilities [Member] | Embedded Aluminum Derivative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value liability derivatives | 22 | 24 |
Derivatives Designated as Hedging Instruments [Member] | Other Noncurrent Liabilities and Deferred Credits [Member] | Embedded Aluminum Derivative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value liability derivatives | 403 | 352 |
Derivatives Not Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 140 | 169 |
Fair value liability derivatives | 16 | 18 |
Derivatives Not Designated as Hedging Instruments [Member] | Prepaid Expenses and Other Current Assets [Member] | Embedded Aluminum Derivative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 94 | 98 |
Derivatives Not Designated as Hedging Instruments [Member] | Other Noncurrent Assets [Member] | Embedded Aluminum Derivative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 46 | 71 |
Derivatives Not Designated as Hedging Instruments [Member] | Other Current Liabilities [Member] | Embedded Credit Derivative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value liability derivatives | 2 | 2 |
Derivatives Not Designated as Hedging Instruments [Member] | Other Noncurrent Liabilities and Deferred Credits [Member] | Embedded Credit Derivative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value liability derivatives | $14 | $16 |
Derivatives_and_Other_Financia5
Derivatives and Other Financial Instruments - Schedule of Reconciliation of Activity for Derivative Contracts (Detail) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Embedded Aluminum Derivative [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value measurement, Assets, Beginning balance | $266 |
Fair value measurement, Assets, Sales | 6 |
Fair value measurement, Assets, Cost of goods sold | -21 |
Fair value measurement, Assets, Other income, net | 1 |
Fair value measurement, Assets, Other comprehensive loss | -43 |
Fair value measurement, Assets, Purchases, sales, issuances, and settlements | 0 |
Fair value measurement, Assets, Transfers into and/or out of Level 3 | 0 |
Fair value measurement, Assets, Foreign currency translation | -8 |
Fair value measurement, Assets, Ending balance | 201 |
Fair value measurement, Assets, Sales | 0 |
Fair value measurement, Assets, Cost of goods sold | 0 |
Fair value measurement, Assets, Other income, net | 1 |
Fair value measurement, Liabilities, Beginning balance | 376 |
Fair value measurement, Liabilities, Sales | -6 |
Fair value measurement, Liabilities, Cost of goods sold | 0 |
Fair value measurement, Liabilities, Other comprehensive loss | 55 |
Fair value measurement, Liabilities, Purchases, sales, issuances, and settlements | 0 |
Fair value measurement, Liabilities, Transfers into and/or out of Level 3 | 0 |
Fair value measurement, Liabilities, Foreign currency translation | 0 |
Fair value measurement, Liabilities, Ending balance | 425 |
Fair value measurement, Liabilities, Sales | 0 |
Fair value measurement, Liabilities, Cost of goods sold | 0 |
Embedded Credit Derivative [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value measurement, Liabilities, Beginning balance | 18 |
Fair value measurement, Liabilities, Cost of goods sold | 0 |
Fair value measurement, Liabilities, Other income, net | -2 |
Fair value measurement, Liabilities, Purchases, sales, issuances, and settlements | 0 |
Fair value measurement, Liabilities, Transfers into and/or out of Level 3 | 0 |
Fair value measurement, Liabilities, Foreign currency translation | 0 |
Fair value measurement, Liabilities, Ending balance | 16 |
Fair value measurement, Liabilities, Sales | 0 |
Fair value measurement, Liabilities, Cost of goods sold | 0 |
Fair value measurement, Liabilities, Other income, net | -2 |
Energy Contracts [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value measurement, Assets, Beginning balance | 2 |
Fair value measurement, Assets, Other comprehensive loss | 6 |
Fair value measurement, Assets, Purchases, sales, issuances, and settlements | 0 |
Fair value measurement, Assets, Transfers into and/or out of Level 3 | 0 |
Fair value measurement, Assets, Ending balance | 8 |
Fair value measurement, Assets, Sales | 0 |
Fair value measurement, Assets, Cost of goods sold | $0 |
Derivatives_and_Other_Financia6
Derivatives and Other Financial Instruments - Schedule of Carrying Values and Fair Values of Other Financial Instruments (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Carrying Value[Member] | ||
Derivative [Line Items] | ||
Cash and cash equivalents | $1,191 | $1,877 |
Restricted cash | 23 | 20 |
Noncurrent receivables | 17 | 17 |
Available-for-sale securities | 156 | 153 |
Short-term borrowings | 80 | 54 |
Commercial paper | 0 | 0 |
Long-term debt due within one year | 26 | 29 |
Long-term debt, less amount due within one year | 8,711 | 8,769 |
Fair Value [Member] | ||
Derivative [Line Items] | ||
Cash and cash equivalents | 1,191 | 1,877 |
Restricted cash | 23 | 20 |
Noncurrent receivables | 17 | 17 |
Available-for-sale securities | 156 | 153 |
Short-term borrowings | 80 | 54 |
Commercial paper | 0 | 0 |
Long-term debt due within one year | 26 | 29 |
Long-term debt, less amount due within one year | $9,452 | $9,445 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 0 Months Ended |
In Millions, unless otherwise specified | Jun. 12, 2012 | Mar. 31, 2015 | Apr. 08, 2015 |
Installment | Installment | ||
Refinery | |||
Subsequent Event [Line Items] | |||
Number of installments | 5 | ||
Alcoa Of Australia Limited [Member] | Majority-Owned Subsidiary | Service Agreements [Member] | |||
Subsequent Event [Line Items] | |||
Gas supply agreement period | 12 years | ||
Subsequent Event [Member] | Alcoa Of Australia Limited [Member] | Majority-Owned Subsidiary | Service Agreements [Member] | |||
Subsequent Event [Line Items] | |||
Number of alumina refineries to be powered under supplied agreement | 3 | ||
Number of installments | 2 | ||
Contract termination penalty | $0 | ||
First installment paid at the time of third party obligation | 500 | ||
Subsequent Event [Member] | Alcoa Of Australia Limited [Member] | Majority-Owned Subsidiary | Service Agreements [Member] | First Installment [Member] | |||
Subsequent Event [Line Items] | |||
First installment paid at the time of third party obligation | 300 | ||
Subsequent Event [Member] | Alcoa Of Australia Limited [Member] | Majority-Owned Subsidiary | Service Agreements [Member] | Second Installment [Member] | |||
Subsequent Event [Line Items] | |||
First installment paid at the time of third party obligation | $200 |