Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 07, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ARNC | |
Entity Registrant Name | ARCONIC INC. | |
Entity Central Index Key | 4,281 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 438,478,283 |
Statement of Consolidated Opera
Statement of Consolidated Operations (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Sales (L) | $ 5,213 | $ 5,573 | $ 15,455 | $ 17,289 |
Cost of goods sold (exclusive of expenses below) | 4,217 | 4,559 | 12,474 | 13,665 |
Selling, general administrative, and other expenses (R) | 275 | 261 | 821 | 717 |
Research and development expenses | 38 | 55 | 119 | 178 |
Provision for depreciation, depletion, and amortization | 316 | 318 | 934 | 958 |
Restructuring and other charges (D) | 18 | 66 | 134 | 460 |
Interest expense | 133 | 123 | 389 | 369 |
Other income, net (K) | (117) | (15) | (120) | (27) |
Total costs and expenses | 4,880 | 5,367 | 14,751 | 16,320 |
Income before income taxes | 333 | 206 | 704 | 969 |
Provision for income taxes | 147 | 100 | 329 | 401 |
Net income | 186 | 106 | 375 | 568 |
Less: Net income attributable to noncontrolling interests | 20 | 62 | 58 | 189 |
Consolidated net income attributable to Arconic | 166 | 44 | 317 | 379 |
AMOUNTS ATTRIBUTABLE TO ARCONIC COMMON SHAREHOLDERS (N): | ||||
Net income | $ 148 | $ 26 | $ 265 | $ 327 |
Earnings per share: | ||||
Basic | $ 0.34 | $ 0.06 | $ 0.60 | $ 0.79 |
Diluted | 0.33 | 0.06 | 0.60 | 0.78 |
Dividends paid per share | $ 0.09 | $ 0.09 | $ 0.27 | $ 0.27 |
Statement of Consolidated Compr
Statement of Consolidated Comprehensive (Loss) Income (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net income | $ 186 | $ 106 | $ 375 | $ 568 |
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 | (463) | 120 | (363) | 226 |
Foreign currency translation adjustments | 202 | (1,188) | 689 | (2,166) |
Net change in unrealized losses/gains on available-for-sale securities | (2) | 4 | (2) | |
Net change in unrecognized gains/losses on cash flow hedges | (348) | 215 | (567) | 581 |
Total Other comprehensive (loss) income, net of tax | (609) | (855) | (237) | (1,361) |
Comprehensive (loss) income | (423) | (749) | 138 | (793) |
Arconic [Member] | ||||
Net income | 166 | 44 | 317 | 379 |
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 | (462) | 111 | (365) | 212 |
Foreign currency translation adjustments | 157 | (889) | 505 | (1,649) |
Net change in unrealized losses/gains on available-for-sale securities | (2) | 4 | (2) | |
Net change in unrecognized gains/losses on cash flow hedges | (338) | 214 | (571) | 584 |
Total Other comprehensive (loss) income, net of tax | (643) | (566) | (427) | (855) |
Comprehensive (loss) income | (477) | (522) | (110) | (476) |
Noncontrolling Interests [Member] | ||||
Net income | 20 | 62 | 58 | 189 |
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 | (1) | 9 | 2 | 14 |
Foreign currency translation adjustments | 45 | (299) | 184 | (517) |
Net change in unrecognized gains/losses on cash flow hedges | (10) | 1 | 4 | (3) |
Total Other comprehensive (loss) income, net of tax | 34 | (289) | 190 | (506) |
Comprehensive (loss) income | $ 54 | $ (227) | $ 248 | $ (317) |
Consolidated Balance Sheet (Una
Consolidated Balance Sheet (Unaudited) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 1,863 | $ 1,919 |
Restricted cash (I) | 1,337 | 37 |
Receivables from customers, less allowances of $14 in 2016 and $13 in 2015 (O) | 1,675 | 1,340 |
Other receivables (O) | 458 | 522 |
Inventories (F) | 3,455 | 3,442 |
Prepaid expenses and other current assets | 580 | 693 |
Total current assets | 9,368 | 7,953 |
Properties, plants, and equipment | 34,943 | 33,687 |
Less: accumulated depreciation, depletion, and amortization | 19,821 | 18,872 |
Properties, plants, and equipment, net | 15,122 | 14,815 |
Goodwill (E) | 5,384 | 5,401 |
Investments (G) | 1,465 | 1,685 |
Deferred income taxes | 3,074 | 2,668 |
Other noncurrent assets (H) | 3,035 | 3,955 |
Total assets | 37,448 | 36,477 |
Current liabilities: | ||
Short-term borrowings | 32 | 38 |
Accounts payable, trade | 2,739 | 2,889 |
Accrued compensation and retirement costs | 830 | 850 |
Taxes, including income taxes | 217 | 239 |
Other current liabilities | 909 | 1,174 |
Long-term debt due within one year | 773 | 21 |
Total current liabilities | 5,500 | 5,211 |
Long-term debt, less amount due within one year (I) | 9,501 | 8,993 |
Accrued pension benefits | 3,700 | 3,298 |
Accrued other postretirement benefits | 2,177 | 2,106 |
Other noncurrent liabilities and deferred credits | 2,625 | 2,738 |
Total liabilities | 23,503 | 22,346 |
CONTINGENCIES AND COMMITMENTS (J) | ||
Arconic shareholders' equity: | ||
Preferred stock | 55 | 55 |
Mandatory convertible preferred stock | 3 | 3 |
Common stock | 438 | 1,391 |
Additional capital | 8,197 | 10,019 |
Retained earnings | 8,940 | 8,834 |
Treasury stock, at cost | (2,825) | |
Accumulated other comprehensive loss (C) | (5,858) | (5,431) |
Total Arconic shareholders' equity | 11,775 | 12,046 |
Noncontrolling interests | 2,170 | 2,085 |
Total equity | 13,945 | 14,131 |
Total liabilities and equity | $ 37,448 | $ 36,477 |
Consolidated Balance Sheet (Un5
Consolidated Balance Sheet (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Receivables from customers, allowance | $ 14 | $ 13 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FROM OPERATIONS | ||
Net income | $ 375 | $ 568 |
Adjustments to reconcile net income to cash from operations: | ||
Depreciation, depletion, and amortization | 938 | 959 |
Deferred income taxes | (67) | (18) |
Equity income, net of dividends | 32 | 137 |
Restructuring and other charges (D) | 134 | 460 |
Net gain from investing activities - asset sales (G & K) | (152) | (69) |
Net periodic pension benefit cost (P) | 246 | 365 |
Stock-based compensation | 73 | 78 |
Excess tax benefits from stock-based payment arrangements | (9) | |
Other | 67 | (65) |
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: | ||
(Increase) in receivables | (226) | (97) |
Decrease (increase) in inventories | 7 | (176) |
(Increase) decrease in prepaid expenses and other current assets | (10) | 31 |
(Decrease) in accounts payable, trade | (196) | (240) |
(Decrease) in accrued expenses | (417) | (424) |
Increase in taxes, including income taxes | 63 | 135 |
Pension contributions | (227) | (363) |
(Increase) in noncurrent assets (J) | (284) | (348) |
(Decrease) in noncurrent liabilities | (148) | (207) |
CASH PROVIDED FROM OPERATIONS | 208 | 717 |
FINANCING ACTIVITIES | ||
Net change in short-term borrowings (original maturities of three months or less) | (6) | (6) |
Additions to debt (original maturities greater than three months) | 1,313 | 1,534 |
Debt issuance costs | (2) | |
Payments on debt (original maturities greater than three months) | (1,324) | (1,551) |
Proceeds from exercise of employee stock options | 3 | 26 |
Excess tax benefits from stock-based payment arrangements | 9 | |
Dividends paid to shareholders | (171) | (149) |
Distributions to noncontrolling interests | (176) | (72) |
Contributions from noncontrolling interests | 11 | |
CASH USED FOR FINANCING ACTIVITIES | (350) | (211) |
INVESTING ACTIVITIES | ||
Capital expenditures | (814) | (782) |
Acquisitions, net of cash acquired (E) | 10 | 97 |
Proceeds from the sale of assets and businesses (E & H) | 683 | 112 |
Additions to investments | (23) | (86) |
Sales of investments (G) | 280 | 40 |
Net change in restricted cash | (72) | (7) |
Other | 15 | 23 |
CASH PROVIDED FROM (USED FOR) INVESTING ACTIVITIES | 79 | (603) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 7 | (41) |
Net change in cash and cash equivalents | (56) | (138) |
Cash and cash equivalents at beginning of year | 1,919 | 1,877 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 1,863 | $ 1,739 |
Statement of Changes in Consoli
Statement of Changes in Consolidated Equity (Unaudited) - USD ($) $ in Millions | 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]Preferred Class A [Member] | Retained Earnings [Member]Preferred Class B [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Noncontrolling Interests [Member] |
Balance at Dec. 31, 2014 | $ 14,794 | $ 55 | $ 3 | $ 1,304 | $ 9,284 | $ 9,379 | $ (3,042) | $ (4,677) | $ 2,488 | ||||
Net income | 568 | 379 | 189 | ||||||||||
Other comprehensive (loss) income (C) | (1,361) | (855) | (506) | ||||||||||
Cash dividends declared: | |||||||||||||
Preferred share, value | $ (2) | $ (50) | $ (2) | $ (50) | |||||||||
Common share, value | (153) | (153) | |||||||||||
Stock-based compensation | 78 | 78 | |||||||||||
Common stock issued: compensation plans | 21 | (191) | 212 | ||||||||||
Issuance of common stock (E) | 870 | 87 | 783 | ||||||||||
Distributions | (72) | (72) | |||||||||||
Other | (2) | (2) | |||||||||||
Balance at Sep. 30, 2015 | 14,691 | 55 | 3 | 1,391 | 9,954 | 9,553 | (2,830) | (5,532) | 2,097 | ||||
Balance at Jun. 30, 2015 | 14,638 | 55 | 3 | 1,304 | 9,147 | 9,605 | (2,834) | (4,966) | 2,324 | ||||
Net income | 106 | 44 | 62 | ||||||||||
Other comprehensive (loss) income (C) | (855) | (566) | (289) | ||||||||||
Cash dividends declared: | |||||||||||||
Preferred share, value | (1) | (16) | (1) | (16) | |||||||||
Common share, value | (79) | (79) | |||||||||||
Stock-based compensation | 23 | 23 | |||||||||||
Common stock issued: compensation plans | 5 | 1 | 4 | ||||||||||
Issuance of common stock (E) | 870 | 87 | 783 | ||||||||||
Distributions | (1) | (1) | |||||||||||
Other | 1 | 1 | |||||||||||
Balance at Sep. 30, 2015 | 14,691 | 55 | 3 | 1,391 | 9,954 | 9,553 | (2,830) | (5,532) | 2,097 | ||||
Balance at Dec. 31, 2015 | 14,131 | 55 | 3 | 1,391 | 10,019 | 8,834 | (2,825) | (5,431) | 2,085 | ||||
Net income | 375 | 317 | 58 | ||||||||||
Other comprehensive (loss) income (C) | (237) | (427) | 190 | ||||||||||
Cash dividends declared: | |||||||||||||
Preferred share, value | (2) | (50) | (2) | (50) | |||||||||
Common share, value | (159) | (159) | |||||||||||
Stock-based compensation | 73 | 73 | |||||||||||
Common stock issued: compensation plans | (23) | (209) | 186 | ||||||||||
Retirement of Treasury stock (M) | (76) | (2,563) | 2,639 | ||||||||||
Reverse stock split (A & M) | (877) | 877 | |||||||||||
Distributions | (176) | (176) | |||||||||||
Other | 13 | 13 | |||||||||||
Balance at Sep. 30, 2016 | 13,945 | 55 | 3 | 438 | 8,197 | 8,940 | (5,858) | 2,170 | |||||
Balance at Jun. 30, 2016 | 14,529 | 55 | 3 | 1,391 | 9,877 | 8,871 | (2,647) | (5,215) | 2,194 | ||||
Net income | 186 | 166 | 20 | ||||||||||
Other comprehensive (loss) income (C) | (609) | (643) | 34 | ||||||||||
Cash dividends declared: | |||||||||||||
Preferred share, value | $ (1) | $ (16) | $ (1) | $ (16) | |||||||||
Common share, value | (80) | (80) | |||||||||||
Stock-based compensation | 18 | 18 | |||||||||||
Common stock issued: compensation plans | (4) | (12) | 8 | ||||||||||
Retirement of Treasury stock (M) | (76) | (2,563) | $ 2,639 | ||||||||||
Reverse stock split (A & M) | (877) | 877 | |||||||||||
Distributions | (92) | (92) | |||||||||||
Other | 14 | 14 | |||||||||||
Balance at Sep. 30, 2016 | $ 13,945 | $ 55 | $ 3 | $ 438 | $ 8,197 | $ 8,940 | $ (5,858) | $ 2,170 |
Statement of Changes in Consol8
Statement of Changes in Consolidated Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Common stock, dividends per share | $ 0.18 | $ 0.06 | $ 0.36 | $ 0.12 |
Preferred Class A [Member] | ||||
Preferred, dividends per share | 1.875 | 1.875 | 3.7500 | 3.75 |
Preferred Class B [Member] | ||||
Preferred, dividends per share | $ 6.7188 | $ 6.7188 | $ 20.1563 | $ 20.15625 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | A. Basis of Presentation The separation of Alcoa Inc. into two standalone, publicly-traded companies, Arconic Inc. and Alcoa Corporation, (the “Separation Transaction”) became effective before the opening of the New York Stock Exchange (NYSE) on November 1, 2016 (see Note R). The accompanying unaudited, interim Consolidated Financial Statements include the historical results of Alcoa Corporation, as the Separation Transaction did not take place until November 1, 2016, after the most recent period reported in this Form 10-Q. In future filings, the historical results of the businesses that comprise Alcoa Corporation will be presented as discontinued operations in the Company’s Consolidated Financial Statements. As a result of the Separation Transaction, the accompanying unaudited, interim Consolidated Financial Statements are not indicative of the Company’s future financial position, results of operations or cash flows. Pursuant to the authorization provided at a special meeting of Arconic common shareholders held on October 5, 2016, shareholders approved a 1-for-3 reverse stock split of Arconic’s outstanding and authorized shares of common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 3 shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, without any change in the par value per share. The Reverse Stock Split reduced the number of shares of common stock outstanding from approximately 1.3 billion shares to approximately 0.4 billion shares. The Company’s common stock began trading on a reverse stock split-adjusted basis on the NYSE on October 6, 2016. All share and per share data for all periods presented in this report has been retroactively restated to reflect the Reverse Stock Split (see Note M). |
Recently Adopted and Recently I
Recently Adopted and Recently Issued Accounting Guidance | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016, Arconic adopted changes issued by the Financial Accounting Standards Board (FASB) 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 previously, were 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 is no longer required. Notwithstanding this change, an entity is still 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. The adoption of these changes had no impact on the Consolidated Financial Statements. On January 1, 2016, Arconic adopted changes issued by the FASB to the analysis 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. The adoption of these changes had no impact on the Consolidated Financial Statements. On January 1, 2016, Arconic adopted changes issued by the FASB to the presentation of debt issuance costs. Previously, such costs were required to be presented as a noncurrent asset in an entity’s balance sheet and amortized into interest expense over the term of the related debt instrument. The changes require that debt issuance costs be presented in an entity’s balance sheet as a direct deduction from the carrying value of the related debt liability. The amortization of debt issuance costs remains unchanged. The FASB issued an update to these changes based on an announcement of the staff of the U.S. Securities and Exchange Commission. This update provides an exception to the FASB changes allowing debt issuance costs related to line-of-credit arrangements to continue to be presented as an asset regardless of whether there are any outstanding borrowings under such arrangement. This additional change also was adopted by Arconic on January 1, 2016. This adoption is required on a retrospective basis; therefore, the December 31, 2015 Consolidated Balance Sheet has been updated to conform to the September 30, 2016 presentation. As a result, $51 of debt issuance costs (previously reported in Other noncurrent assets) were reclassified to the Long-term debt, less amount due within one year line item on the December 31, 2015 Consolidated Balance Sheet. Issued In January 2016, the FASB issued changes to equity investments. These changes require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Additionally, the impairment assessment of equity investments without readily determinable fair values has been simplified by requiring a qualitative assessment to identify impairment. These changes become effective for Arconic on January 1, 2018. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. In February 2016, the FASB issued changes to the accounting and presentation of leases. These changes require lessees to recognize a right of use asset and lease liability on the balance sheet for all leases with terms longer than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a right of use asset and lease liability. Additionally, when measuring assets and liabilities arising from a lease, optional payments should be included only if the lessee is reasonably certain to exercise an option to extend the lease, exercise a purchase option, or not exercise an option to terminate the lease. These changes become effective for Arconic on January 1, 2019. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. In March 2016, the FASB issued changes to employee share-based payment accounting. Currently, an entity must determine for each share-based payment award whether the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes results in either an excess tax benefit or a tax deficiency. Excess tax benefits are recognized in additional paid-in capital; tax deficiencies are recognized either as an offset to accumulated excess tax benefits, if any, or in the income statement. Excess tax benefits are not recognized until the deduction reduces taxes payable. The changes require all excess tax benefits and tax deficiencies related to share-based payment awards to be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity also should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Additionally, the presentation of excess tax benefits related to share-based payment awards in the statement of cash flows is changed. Currently, excess tax benefits must be separated from other income tax cash flows and classified as a financing activity. The changes require excess tax benefits to be classified along with other income tax cash flows as an operating activity. Also, the changes require cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity. Currently, there is no specific guidance on the classification in the statement of cash flows of cash paid by an employer to the tax authorities when directly withholding shares for tax-withholding purposes. Additionally, for a share-based award to qualify for equity classification it cannot partially settle in cash in excess of the employer’s minimum statutory withholding requirements. The changes permit equity classification of share-based awards for withholdings up to the maximum statutory tax rates in applicable jurisdictions. These changes become effective for Arconic on January 1, 2017. Management has concluded that the adoption of this guidance will have no material effect on the Consolidated Financial Statements. In March 2016, the FASB issued changes eliminating the requirement for an investor to adjust an equity method investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held as a result of an increase in the level of ownership interest or degree of influence. Additionally, an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting must recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. These changes become effective for Arconic on January 1, 2017. Management has concluded that the adoption of this guidance will have no impact on the Consolidated Financial Statements. This guidance will need to be considered in the event that Arconic changes its level of ownership interest or degree of influence in an equity method investment. In March 2016, the FASB issued changes to derivative instruments designated as hedging instruments. These changes clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. These changes become effective for Arconic on January 1, 2017. Management does not expect these changes to have a material impact on the Consolidated Financial Statements. In June 2016, the FASB added a new impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. These changes become effective for Arconic on January 1, 2020. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. In August 2016, the FASB issued changes to the classification of certain cash receipts and cash payments within the statement of cash flows. The guidance identifies eight specific cash flow items and the sections where they must be presented within the statement of cash flows. These changes become effective for Arconic on January 1, 2018 and early adoption is permitted. Management does not expect these changes to have a material impact on the Consolidated Financial Statements. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2016 | |
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 Arconic’s shareholders and noncontrolling interests: Arconic Noncontrolling Interests Third quarter ended September 30, Third quarter ended September 30, 2016 2015 2016 2015 Pension and other postretirement benefits (P) Balance at beginning of period $ (3,514 ) $ (3,500 ) $ (53 ) $ (59 ) Other comprehensive (loss) income: Unrecognized net actuarial loss and prior service cost/benefit (819 ) 46 (1 ) 10 Tax expense 286 (10 ) — (1 ) Total Other comprehensive (loss) income before reclassifications, net of tax (533 ) 36 (1 ) 9 Amortization of net actuarial loss and prior service cost/benefit (1) 109 116 1 — Tax expense (2) (38 ) (41 ) (1 ) — Total amount reclassified from Accumulated other comprehensive loss, net of tax (9) 71 75 — — Total Other comprehensive (loss) income (462 ) 111 (1 ) 9 Balance at end of period $ (3,976 ) $ (3,389 ) $ (54 ) $ (50 ) Foreign currency translation Balance at beginning of period $ (2,064 ) $ (1,606 ) $ (641 ) $ (569 ) Other comprehensive income (loss) (3) 157 (889 ) 45 (299 ) Balance at end of period $ (1,907 ) $ (2,495 ) $ (596 ) $ (868 ) Available-for-sale securities Balance at beginning of period $ (1 ) $ — $ — $ — Other comprehensive loss (4) — (2 ) — — Balance at end of period $ (1 ) $ (2 ) $ — $ — Cash flow hedges (Q) Balance at beginning of period $ 364 $ 140 $ 11 $ (6 ) Other comprehensive (loss) income: Net change from periodic revaluations (430 ) 288 20 1 Tax benefit (expense) 126 (79 ) (6 ) — Total Other comprehensive (loss) income before reclassifications, net of tax (304 ) 209 14 1 Net amount reclassified to earnings: Aluminum contracts (5) 5 3 — — Energy contracts (6) (50 ) — (34 ) — Foreign exchange contracts (5) (1 ) 2 — — Interest rate contracts (7) — — — — Nickel contracts (8) — 1 — — Sub-total (46 ) 6 (34 ) — Tax benefit (expense) (2) 12 (1 ) 10 — Total amount reclassified from Accumulated other comprehensive (loss) income, net of tax (9) (34 ) 5 (24 ) — Total Other comprehensive (loss) income (338 ) 214 (10 ) 1 Balance at end of period $ 26 $ 354 $ 1 $ (5 ) Arconic Noncontrolling Interests Nine months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Pension and other postretirement benefits (P) Balance at beginning of period $ (3,611 ) $ (3,601 ) $ (56 ) $ (64 ) Other comprehensive (loss) income: Unrecognized net actuarial loss and prior service cost/benefit (883 ) (30 ) — 13 Tax benefit (expense) 312 18 — (1 ) Total Other comprehensive (loss) income before reclassifications, net of tax (571 ) (12 ) — 12 Amortization of net actuarial loss and prior service cost/benefit (1) 317 345 3 4 Tax expense (2) (111 ) (121 ) (1 ) (2 ) Total amount reclassified from Accumulated other comprehensive loss, net of tax (9) 206 224 2 2 Total Other comprehensive (loss) income (365 ) 212 2 14 Balance at end of period $ (3,976 ) $ (3,389 ) $ (54 ) $ (50 ) Foreign currency translation Balance at beginning of period $ (2,412 ) $ (846 ) $ (780 ) $ (351 ) Other comprehensive income (loss) (3) 505 (1,649 ) 184 (517 ) Balance at end of period $ (1,907 ) $ (2,495 ) $ (596 ) $ (868 ) Available-for-sale securities Balance at beginning of period $ (5 ) $ — $ — $ — Other comprehensive income (loss) (4) 4 (2 ) — — Balance at end of period $ (1 ) $ (2 ) $ — $ — Cash flow hedges (Q) Balance at beginning of period $ 597 $ (230 ) $ (3 ) $ (2 ) Other comprehensive (loss) income: Net change from periodic revaluations (772 ) 792 35 (4 ) Tax benefit (expense) 229 (235 ) (10 ) 1 Total Other comprehensive (loss) income before reclassifications, net of tax (543 ) 557 25 (3 ) Net amount reclassified to earnings: Aluminum contracts (5) (1 ) 26 — — Energy contracts (6) (49 ) 4 (34 ) — Foreign exchange contracts (5) — 3 — — Interest rate contracts (7) 8 1 5 — Nickel contracts (8) 1 1 — — Sub-total (41 ) 35 (29 ) — Tax benefit (expense) (2) 13 (8 ) 8 — Total amount reclassified from Accumulated other comprehensive (loss) income, net of tax (9) (28 ) 27 (21 ) — Total Other comprehensive (loss) income (571 ) 584 4 (3 ) Balance at end of period $ 26 $ 354 $ 1 $ (5 ) (1) These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note P). (2) These amounts were included in Provision 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, net on the accompanying Statement of Consolidated Operations. (5) These amounts were included in Sales on the accompanying Statement of Consolidated Operations. (6) For Arconic, $50 of the amount in both the third quarter ended and nine months ended as of September 30, 2016 was included in Other income, net on the accompanying Statement of Consolidated Operations. The remaining amount in both the third quarter ended and nine months ended as of September 30, 2016 and the entire amount in both the third quarter ended and nine months ended as of September 30, 2015 were included in Cost of goods sold on the accompanying Statement of Consolidated Operations. For Noncontrolling interests, the amount in both the third quarter and nine months ended as of September 30, 2016 was included in Other income, net on the accompanying Statement of Consolidated Operations. (7) For Arconic, $7 of the amount in the nine months ended as of September 30, 2016 was included in Other income, net on the accompanying Statement of Consolidated Operations. The remaining amount in the nine months ended as of September 30, 2016 and the entire amount in the third quarter ended September 30, 2016 and both the third quarter ended and nine months ended as of September 30, 2015 were included in Interest expense on the accompanying Statement of Consolidated Operations. For Noncontrolling interests, the amount in the nine months ended as of September 30, 2016 was included in Other income, net on the accompanying Statement of Consolidated Operations. (8) These amounts were included in Cost of goods sold on the accompanying Statement of Consolidated Operations. (9) 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 7. |
Restructuring and Other Charges
Restructuring and Other Charges | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | D. Restructuring and Other Charges – Restructuring and other charges in the 2016 third quarter included $20 ($10 after-tax and noncontrolling interest) for layoff costs related to cost reduction initiatives and the Separation Transaction (see Note R), including the separation of approximately 100 employees (60 in the Engineered Products and Solutions segment, 30 in the Primary Metals segment, and 10 in Corporate) and related pension settlement costs (see Note P); a net charge of $8 ($5 after-tax and noncontrolling interest) for other miscellaneous items; $8 ($4 after-tax and noncontrolling interest) for the reversal of a number of small layoff reserves related to prior periods; and a favorable benefit of $2 ($1 after-tax and noncontrolling interest) for the net reversal of costs related to decisions made in the fourth quarter of 2015 to permanently close and demolish the Warrick (Indiana) smelter and to curtail the Wenatchee (Washington) smelter and Point Comfort (Texas) refinery (see below). In the 2016 nine-month period, Restructuring and other charges included $84 ($56 after-tax and noncontrolling interest) for additional net costs related to decisions made in the fourth quarter of 2015 to permanently close and demolish the Warrick (Indiana) smelter and to curtail the Wenatchee (Washington) smelter and Point Comfort (Texas) refinery (see below); $54 ($35 after-tax and noncontrolling interest) for layoff costs related to cost reduction initiatives and the Separation Transaction (see Note R), including the separation of approximately 1,200 employees (860 in the Engineered Products and Solutions segment, 240 in the Transportation and Construction Solutions segment, 60 in the Primary Metals segment, 30 in the Global Rolled Products segment, and 10 in Corporate); a net charge of $16 ($9 after-tax and noncontrolling interest) for other miscellaneous items; and $20 ($13 after-tax and noncontrolling interest) for the reversal of a number of small layoff reserves related to prior periods. In the 2016 nine-month period, costs related to the closure and curtailment actions included accelerated depreciation of $70 related to the Warrick smelter as it continued to operate during the 2016 first quarter; $24 ($4 in the 2016 third quarter) for the reversal of severance costs initially recorded in the 2015 fourth quarter; and $38 ($2 in the 2016 third quarter) in other costs. Additionally in the 2016 nine-month period, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value, resulting in a charge of $5 ($3 after-tax and noncontrolling interest), which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other costs of $38 ($2 in the 2016 third quarter) represent $30 ($3 in the 2016 third quarter) for contract termination, $4 (($3) in the 2016 third quarter) in asset retirement obligations for the rehabilitation of a coal mine related to the Warrick smelter, and $4 ($2 in the 2016 third quarter) in other related costs. Additional charges may be recognized in future periods related to these actions. In the third quarter and nine-month period of 2015, Arconic recorded Restructuring and other charges of $66 ($30 after-tax and noncontrolling interest) and $460 ($329 after-tax and noncontrolling interest), respectively. Restructuring and other charges in the 2015 third quarter included $42 ($20 after-tax and noncontrolling interest) for charges related to the decision to curtail the remaining capacity (887,000 metric-tons-per-year) at the refinery in Suriname; $33 ($29 after-tax) for layoff costs, including the separation of approximately 370 employees (355 in the Transportation and Construction Solutions segment and a combined 15 in three other segments and Corporate); an $18 ($13 after-tax) gain on the sale of land related to one of the rolling mills in Australia that was permanently closed in December 2014; $11 ($5 after-tax and noncontrolling interest) for exit costs related to the decision to permanently shut down and demolish a power station (see below); a net charge of $2 (a net credit of $9 after-tax and noncontrolling interest) for other miscellaneous items; and $4 ($2 after-tax and noncontrolling interest) for the reversal of a few layoff reserves related to prior periods. In the 2015 nine-month period, Restructuring and other charges included $190 ($120 after tax and noncontrolling interest) for exit costs related to decisions to permanently shut down and demolish a smelter and a power station (see below); $161 ($151 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; $80 ($43 after-tax and noncontrolling interest) for the separation of approximately 800 employees (680 in the Primary Metals segment and 120 in the Alumina segment), supplier contract-related costs, and other charges associated with the decisions to temporarily curtail the remaining capacity at both the São Luís smelter (74,000 metric-ton-per-year) and the refinery in Suriname (1,330,000 metric-tons-per-year); $62 ($50 after-tax and noncontrolling interest) for layoff costs, including the separation of approximately 970 employees (410 in the Transportation and Construction Solutions segment, 275 in the Engineered Products and Solutions segment, 165 in the Primary Metals segment, 70 in the Global Rolled Products segment, and 50 in Corporate); the previously mentioned $18 ($13 after-tax) gain on a land sale; a net credit of $3 ($13 after-tax and noncontrolling interest) for other miscellaneous items; and $12 ($9 after-tax and noncontrolling interest) for the reversal of a number of small layoff reserves related to prior periods. In the second quarter of 2015, management approved the permanent shutdown and demolition of the Poços de Caldas smelter (capacity of 96,000 metric-tons-per-year) in Brazil and the Anglesea power station (includes the closure of a related coal mine) in Australia. The entire capacity at Poços de Caldas has been temporarily idled since May 2014 and the Anglesea power station was shut down at the end of August 2015. Demolition and remediation activities related to the Poços de Caldas smelter and the Anglesea power station began in late 2015 and are expected to be completed by the end of 2026 and 2020, respectively. The decision on the Poços de Caldas smelter was due to management’s conclusion that the smelter was no longer competitive as a result of challenging global market conditions for primary aluminum, which led to the initial curtailment, that have not dissipated and higher costs. For the Anglesea power station, the decision was made because a sale process did not result in a sale and there would be imminent operating costs and financial constraints related to this site in the remainder of 2015 and beyond, including significant costs to source coal from available resources, necessary maintenance costs, and a depressed outlook for forward electricity prices. The Anglesea power station previously supplied approximately 40 percent of the power needs for the Point Henry smelter, which was closed in August 2014. In the 2015 nine-month period, costs related to the shutdown actions included asset impairments of $86, representing the write-off of the remaining book value of all related properties, plants, and equipment; $22 ($11 in the 2015 third quarter) for the layoff of approximately 90 employees (Primary Metals segment); including $11 in pension costs (see Note P); and $82 in other exit costs. Additionally in the 2015 nine-month period, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value, resulting in a charge of $4 ($2 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 $82 represent $45 in asset retirement obligations and $29 in environmental remediation, both of which were triggered by the decisions to permanently shut down and demolish the aforementioned structures in Brazil and Australia (includes the rehabilitation of a related coal mine), and $8 in supplier and customer contract-related costs. Arconic 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: Third quarter ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Alumina $ (1 ) $ 38 $ 3 $ 55 Primary Metals 17 11 105 209 Global Rolled Products (1 ) (17 ) 1 119 Engineered Products and Solutions (1 ) 22 16 33 Transportation and Construction Solutions (2 ) 3 6 6 Segment total 12 57 131 422 Corporate 6 9 3 38 Total restructuring and other charges $ 18 $ 66 $ 134 $ 460 As of September 30, 2016, approximately 900 of the 1,200 employees associated with 2016 restructuring programs and approximately 4,100 of the 4,700 employees (previously 5,000) associated with 2015 restructuring programs were separated. Additionally, the separations associated with 2014 restructuring programs were essentially complete. The total number of employees associated with the 2015 restructuring programs was updated to reflect employees, who were initially identified for separation, accepting other positions within Arconic and natural attrition. Most of the remaining separations for the 2016 restructuring programs and all of the remaining separations for the 2015 restructuring programs are expected to be completed by the end of 2016. In the 2016 third quarter and nine-month period, cash payments of $8 and $19, respectively, were made against layoff reserves related to 2016 restructuring programs, $17 and $109, respectively, were made against layoff reserves related to 2015 restructuring programs, and $1 and $4, respectively, were made against layoff reserves related to 2014 restructuring programs. Activity and reserve balances for restructuring charges were as follows: Layoff costs Other exit costs Total Reserve balances at December 31, 2014 $ 98 $ 34 $ 132 2015: Cash payments (111 ) (12 ) (123 ) Restructuring charges 299 233 532 Other* (60 ) (231 ) (291 ) Reserve balances at December 31, 2015 226 24 250 2016: Cash payments (132 ) (33 ) (165 ) Restructuring charges 54 52 106 Other* (56 ) (3 ) (59 ) Reserve balances at September 30, 2016 $ 92 $ 40 $ 132 * Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2016 nine-month period, Other for layoff costs also included a reclassification of $14 in pension benefits costs, as this obligation was included in Arconic’s separate liability for pension benefits obligations (see Note P). Additionally in the 2016 nine-month period, Other for other exit costs also included a reclassification of $4 in asset retirement obligations, as this liability was included in Arconic’s separate reserve for asset retirement obligations. In the 2015 nine month period, Other for layoff costs also included a reclassification of $28 in pension and other postretirement benefits costs, as this obligation was included in Arconic’s separate liability for pension and other postretirement benefits obligations (see Note P). Additionally in the 2015 nine month period, Other exit costs also included a reclassification of the following restructuring charges: $45 in asset retirement obligations and $29 in environmental obligations, as these liabilities were included in Arconic’s separate reserves for asset retirement obligations and environmental remediation. The remaining reserves are expected to be paid in cash during the remainder of 2016, with the exception of approximately $30 to $35, which is expected to be paid over the next several years for ongoing site remediation work and special layoff benefit payments. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | E. Acquisitions and Divestitures In July 2016, Arconic’s wholly-owned subsidiary, Alcoa Power Generating Inc., reached an agreement to sell its 215-megawatt Yadkin Hydroelectric Project (Yadkin) to ISQ Hydro Aggregator LLC. Yadkin encompasses four hydroelectric power developments (reservoirs, dams and powerhouses), known as High Rock, Tuckertown, Narrows and Falls, situated along a 38-mile stretch of the Yadkin River through the central part of North Carolina. This transaction is expected to close by the end of 2016, subject to customary federal and state regulatory approvals. The power generated by Yadkin is primarily sold into the open market. Yadkin generated sales of approximately $20 in 2015, and had approximately 33 employees as of September 30, 2016. The carrying value of the net assets to be sold was $127 as of both September 30, 2016 and December 31, 2015 and consists mostly of properties, plants, and equipment. In March 2015, Arconic completed the acquisition of an aerospace structural castings company, TITAL, for $204 (€188) in cash (an additional $1 (€1) was paid in September 2015 to settle working capital in accordance with the purchase agreement). TITAL, a privately held company with approximately 650 employees based in Germany, produces aluminum and titanium investment casting products for the aerospace and defense 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, including the associated goodwill, and liabilities of this business were included within Arconic’s Engineered Products and Solutions segment since the date of acquisition. Based on the preliminary allocation of the purchase price, goodwill of $118 was recorded for this transaction. In the first quarter of 2016, the allocation of the purchase price was finalized, based, in part, on the completion of a third-party valuation of certain assets acquired, resulting in a $1 reduction of the initial goodwill amount. None of the $117 in goodwill is deductible for income tax purposes and no other intangible assets were identified. This transaction is no longer subject to post-closing adjustments. In July 2015, Arconic completed the acquisition of RTI, a global supplier of titanium and specialty metal products and services for the commercial aerospace, defense, energy, and medical device markets, for $870 in Arconic common stock. During the third quarter of 2016, the final purchase price allocation was completed. The following table represents the final allocation of the purchase price by major asset acquired and liability assumed, as well as the amount of goodwill recognized: Assets: Cash $ 303 Receivables from customers 94 Inventories 483 Prepaid expenses and other current assets 47 Properties, plants, and equipment 321 Goodwill 298 Other noncurrent assets 60 Total assets $ 1,606 Liabilities: Accounts payable $ 86 Other current liabilities 94 Long-term debt due within one year 115 Long-term debt, less amount due within one year 387 Other noncurrent liabilities 111 Total liabilities $ 793 Equity Additional capital $ 60 Total equity $ 60 As reflected in the table above, Arconic recognized goodwill of $298, which represents the earnings growth potential of RTI, Arconic’s ability to expand its titanium capabilities in the aerospace market, and expected synergies from combining the operations of the two companies. This goodwill was allocated to a new Arconic reporting unit associated with the Engineered Products and Solutions segment, Arconic Titanium and Engineered Products, which consists solely of the acquired RTI business. None of this goodwill is deductible for income tax purposes. The other noncurrent assets in the table above represent intangible assets. These intangible assets consist primarily of customer relationships which are being amortized over a period of 20 years. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | F. Inventories September 30, 2016 December 31, 2015 Finished goods $ 854 $ 811 Work-in-process 1,325 1,272 Bauxite and alumina 401 445 Purchased raw materials 670 720 Operating supplies 205 194 $ 3,455 $ 3,442 At September 30, 2016 and December 31, 2015, the total amount of inventories valued on a LIFO basis was $1,311 and $1,373, respectively. If valued on an average-cost basis, total inventories would have been $567 and $559 higher at September 30, 2016 and December 31, 2015, respectively. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2016 | |
Investments Schedule [Abstract] | |
Investments | G. Investments Third quarter ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Sales $ 888 $ 1,015 $ 2,684 $ 2,872 Cost of goods sold 840 796 2,200 2,353 Net income (loss) (6 ) 20 23 (66 ) In April 2016, Arconic’s majority-owned subsidiary, Alcoa of Australia Limited (AofA), sold its 20% interest in a consortium, DBP, the owner and operator of the Dampier to Bunbury Natural Gas Pipeline (DBNGP) in Western Australia, to the only other member of the consortium, DUET Group. AofA received $145 (A$192) in cash, which was included in Sales of investments on the accompanying Statement of Consolidated Cash Flows, and recorded a gain of $27 (A$35) ($11 (A$15) after-tax and noncontrolling interest) in Other income, net on the accompanying Statement of Consolidated Operations. Prior to this transaction, AofA’s 20% interest was previously classified as an equity investment on Arconic’s Consolidated Balance Sheet. As part of the transaction, AofA will maintain its current access to approximately 30% of the DBNGP transmission capacity for gas supply to its three alumina refineries in Western Australia. AofA is part of Alcoa World Alumina and Chemicals (AWAC), an unincorporated joint venture that consists of a group of companies, which are owned 60% by Arconic and 40% by Alumina Limited of Australia. In the 2016 nine-month period, Arconic sold various exchange-traded fixed income and equity securities held by its captive insurance company for $130, which was included in Sales of investments on the accompanying Statement of Consolidated Cash Flows, and recorded a loss of $3 ($2 after-tax) in Other income, net on the accompanying Statement of Consolidated Operations. Previously, these securities were classified as available-for-sale investments on Arconic’s Consolidated Balance Sheet and were carried at fair value with unrealized gains and losses recognized in other comprehensive income. As of September 30, 2016 and December 31, 2015, the carrying value of available-for-sale-securities was $83 and $193, respectively, which was included in Investments on the accompanying Consolidated Balance Sheet. |
Other Noncurrent Assets
Other Noncurrent Assets | 9 Months Ended |
Sep. 30, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Noncurrent Assets | H. Other Noncurrent Assets |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | I. Long-Term Debt The release of the escrowed funds will be subject to conditions set forth in the escrow agreements. Alcoa Corporation intends to use the proceeds from the offering to make a payment to Arconic to fund the transfer of certain assets from Arconic to Alcoa Corporation relating to the Separation Transaction and for general corporate purposes. The notes are guaranteed on a senior unsecured basis by Alcoa Corporation. In September 2016, Arconic entered into an amendment to its Five-Year Revolving Credit Agreement (as amended). The amendment was entered into to permit the Separation Transaction and to amend certain terms of the Credit Agreement including the replacement of the existing financial covenant with a leverage ratio and reduction of total commitments available from $4,000 to $3,000. The existing financial covenant, currently based upon Consolidated Net Worth (as defined in the Credit Agreement) will be replaced. Arconic will be required to maintain a ratio of Indebtedness (as defined in the Credit Agreement), to Consolidated EBITDA (as defined in the Credit Agreement) of 5.50 to 1.00 for the period of the four fiscal quarters most recently ended, declining to 3.50 to 1.00 on December 31, 2019 and thereafter. The amendment became effective on the separation date of November 1, 2016. |
Contingencies and Commitments
Contingencies and Commitments | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | J. Contingencies and Commitments Contingencies Litigation On June 5, 2015, Alcoa World Alumina LLC (“AWA”) and St. Croix Alumina, L.L.C. (“SCA”) filed a complaint in Delaware Chancery Court for a declaratory judgment and injunctive relief to resolve a dispute between Arconic and Glencore Ltd. (“Glencore”) with respect to claimed obligations under a 1995 asset purchase agreement between Arconic and Glencore. The dispute arose from Glencore’s demand that Arconic indemnify it for liabilities it may have to pay to Lockheed Martin (“Lockheed”) related to the St. Croix alumina refinery. Lockheed had earlier filed suit against Glencore in federal court in New York seeking indemnity for liabilities it had incurred and would incur to the U.S. Virgin Islands to remediate certain properties at the refinery property and claimed that Glencore was required by an earlier, 1989 purchase agreement to indemnify it. Glencore had demanded that Arconic indemnify and defend it in the Lockheed case and threatened to claim against Arconic in the New York action despite exclusive jurisdiction for resolution of disputes under the 1995 purchase agreement being in Delaware. After Glencore conceded that it was not seeking to add Arconic to the New York action, AWA and SCA dismissed their complaint in the Chancery Court case and on August 6, 2015 filed a complaint for declaratory judgment in Delaware Superior Court. AWA and SCA filed a motion for judgment on the pleadings on September 16, 2015. Glencore answered AWA’s and SCA’s complaint and asserted counterclaims on August 27, 2015, and on October 2, 2015 filed its own motion for judgment on the pleadings. Argument on the parties’ motions was held by the court on December 7, 2015, and by order dated February 8, 2016, the court granted Arconic’s motion and denied Glencore’s motion, resulting in Arconic not being liable to indemnify Glencore for the Lockheed action. The decision also leaves for pretrial discovery and possible summary judgment or trial Glencore’s claims for costs and fees it incurred in defending and settling an earlier Superfund action brought against Glencore by the Government of the Virgin Islands. On February 17, 2016, Glencore filed notice of its application for interlocutory appeal of the February 8, 2016 ruling. AWA and SCA filed an opposition to that application on February 29, 2016. On March 10, 2016, the court denied Glencore’s motion for interlocutory appeal and on the same day entered judgment on claims other than Glencore’s claims for costs and fees it incurred in defending and settling the earlier Superfund action brought against Glencore by the Government of the Virgin Islands. On March 29, 2016, Glencore filed a withdrawal of its notice of interlocutory appeal, and on April 6, 2016, Glencore filed an appeal of the court’s March 10, 2016 judgment to the Delaware Supreme Court, which set the appeal for argument for November 2, 2016. On November 4, 2016, the Delaware Supreme Court affirmed the judgment of the Delaware Superior Court. Remaining in the case are Glencore’s claims for costs and fees it incurred in defending and settling an earlier superfund action brought against Glencore by the Government of the Virgin Islands. These claims are not material. Before 2002, Arconic 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, Arconic 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. Arconic challenged the new regulation in the Administrative Court of Milan and received a favorable judgment in 2006. Following this ruling, Arconic 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 Arconic, thus presenting the opportunity for the energy regulators to seek reimbursement from Arconic 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, Arconic filed its appeal of the decision of the Consiglio di Stato (this appeal was subsequently withdrawn in March 2013). On March 26, 2012, Arconic 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, Arconic 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, Arconic received a revised request letter from CCSE demanding Arconic’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). Arconic rejected that demand and 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 that date, the Administrative Court listened to Arconic’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 Arconic 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. As a result of the conclusion of the European Commission Matter on January 26, 2016 (see Note N in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015), management modified its outlook with respect to a portion of the pending legal proceedings related to this matter. As such, a charge of $37 (€34) was recorded in Restructuring and other charges for the year ended December 31, 2015 to establish a partial reserve for this matter. At this time, the Company is unable to reasonably predict the ultimate outcome for this matter. Environmental Matters Arconic 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. Arconic’s remediation reserve balance was $602 and $604 at September 30, 2016 and December 31, 2015 (of which $54 and $50 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 2016 third quarter and nine-month period, the remediation reserve was increased by $13 and $26, respectively. The change in both periods was due to a net charge associated with a number of sites and was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. Payments related to remediation expenses applied against the reserve were $24 and $49 in the 2016 third quarter and nine-month period, respectively. These amounts include expenditures currently mandated, as well as those not required by any regulatory authority or third party. In the 2016 third quarter and nine-month period, the change in the reserve also reflects an increase of $7 and $18, respectively, due to the effects of foreign currency translation and an increase of $3 for the nine-month period, related to the acquisition of RTI (see Note E). 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 Arconic sites. Massena West, NY— Sherwin, TX— East St. Louis, IL— Fusina and Portovesme, Italy— 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, Arconic 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 Arconic, resulting in no adjustment to the reserve. In January 2014, in anticipation of Arconic reaching a final administrative agreement with the MOE, Arconic 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, Arconic and the MOE reached a final administrative agreement for conduct of work. The agreement 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 as soon as Arconic receives final approval from the Ministry of Infrastructure. Based on the final agreement with Ligestra, Arconic’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, Arconic 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. Arconic 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, Arconic increased the reserve by $7 in March 2015 to reflect the increase in the estimated costs of the project. In October 2015, Arconic received a final ministerial decree approving the February 2015 revised soil remediation project. Work on the soil remediation project commenced in the second quarter of 2016 and is expected to be completed in 2019. Arconic and Ligestra are now working on a final groundwater remediation project, which will be submitted to the MOE for approval in 2017. The ultimate outcome of this matter may result in a change to the existing reserve for Portovesme. Baie Comeau, Quebec, Canada— Mosjøen, Norway— In April 2015, the NEA notified Arconic that the revised project was approved and required submission of the final project design before issuing a final order. Arconic completed and submitted the final project design, which identified a need to stabilize the related wharf structure to allow for the sediment dredging in the harbor. As a result, Arconic increased the reserve for Mosjøen by $11 in June 2015 to reflect the estimated cost of the wharf stabilization. Also in June 2015, the NEA issued a final order approving the project as well as the final project design. In September 2015, Arconic increased the reserve by $1 to reflect the potential need (based on prior experience with similar projects) to perform additional dredging if the results of sampling, which is required by the order, don’t achieve the required cleanup levels. Project construction commenced in the first quarter of 2016 and is expected to be completed by the end of 2017. Tax 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. At September 30, 2016, the combined assessments total $296 (€244), including interest. 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, Arconic’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. Separately from AWAB’s administrative appeal, in June 2015, new tax law was enacted repealing the provisions in the tax code that were the basis for the RFB assessing a 50% penalty in this matter. As such, the estimated range of reasonably possible loss is $0 to $32 (R$103), whereby the maximum end of the range represents the portion of the disallowed credits applicable to the export sales and excludes the 50% penalty. Additionally, the estimated range of disallowed credits related to AWAB’s fixed assets is $0 to $36 (R$117), 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, Arconic’s subsidiary, 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 September 30, 2016, the assessment totaled $43 (R$140), including penalties and interest. While the Company believes it has meritorious defenses, the Company is unable to reasonably predict an outcome. Other In connection with the sale in 2001 of Reynolds Metals Company’s (“Reynolds,” a subsidiary of Arconic), alumina refinery in Gregory, Texas, Reynolds assigned an Energy Services Agreement (“ESA”) with Gregory Power Partners (“Gregory Power”) for purchase of steam and electricity by the refinery. On January 11, 2016, Sherwin Alumina Company, LLC (“Sherwin”), the current owner of the refinery, and one of its affiliate entities, filed bankruptcy petitions in Corpus Christi, Texas for reorganization under Chapter 11 of the Bankruptcy Code. On January 26, 2016, Gregory Power delivered notice to Reynolds that Sherwin’s bankruptcy filing constitutes a breach of the ESA; on January 29, 2016, Reynolds responded that the filing does not constitute a breach. Sherwin informed the bankruptcy court that it intends to cease operations because it is not able continue its bauxite supply agreement and thereafter Gregory Power filed a complaint in the bankruptcy case against Reynolds alleging breach of the ESA. On October 4, 2016, the State of Texas filed suit against Sherwin in the bankruptcy proceeding seeking to hold Sherwin responsible for remediation of alleged environmental conditions at the facility. On October 11, 2016, Sherwin filed a similar suit against Reynolds in the case. The outcome of this matter is neither estimable nor probable. In addition to the matters discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against Arconic, 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 Arconic 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 Arconic and consists of three separate companies as follows: one each for the mine and refinery, the smelter, and the rolling mill. Arconic 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 Arconic’s total equity investment in the joint venture would be approximately $1,100, of which Arconic has contributed $982, including $1 in the 2016 nine-month period. 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 September 30, 2016 and December 31, 2015, the carrying value of Arconic’s investment in this project was $863 and $928, respectively. The smelting and rolling mill companies have project financing totaling $4,207 (reflects principal repayments made through September 30, 2016), of which $1,056 represents Arconic’s share (the equivalent of Arconic’s 25.1% interest in the smelting and rolling mill companies). In conjunction with the financings, Arconic 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). Arconic’s guarantees for the smelting and rolling mill companies cover total debt service requirements of $100 in principal and up to a maximum of approximately $35 in interest per year (based on projected interest rates). At September 30, 2016 and December 31, 2015, the combined fair value of the guarantees was $3 and $7, respectively, 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 AWAC’s 25.1% interest in the mining and refining company. In conjunction with the financings, Arconic, 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). Arconic’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 both September 30, 2016 and December 31, 2015, the combined fair value of the guarantees was $3, which was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. In the event Arconic would be required to make payments under the guarantees, 40% of such amount would be contributed to Arconic by Alumina Limited, consistent with its ownership interest in AWAC. In 2004, AofA 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 was classified as an equity investment, was made in order to secure a competitively priced long-term supply of natural gas to AofA’s refineries in Western Australia. AofA 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. In late 2011, the consortium initiated a three-year equity call plan to improve its capitalization structure. This plan required AofA 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 required AofA to contribute $30 (A$36) through mid-2016, of which $20 (A$27) was made through March 31, 2016, including $3 (A$5) in the 2016 first quarter. In April 2016, AofA sold its interest in the consortium (see Note G), effectively terminating its remaining obligation to make contributions under the current equity call plan. As part of the sale transaction, AofA will maintain its current access to approximately 30% of the DBNGP transmission capacity for gas supply to its three alumina refineries in Western Australia under an existing agreement to purchase gas transmission services from the DBNGP. At September 30, 2016, AofA has an asset of $288 (A$373) representing prepayments made under the agreement for future gas transmission services. On April 8, 2015, AofA secured a new 12-year gas supply agreement to power its three alumina refineries in Western Australia beginning in July 2020. This agreement was conditional on the completion of a third-party acquisition of the related energy assets from the then-current owner, which occurred in June 2015. The terms of AofA’s gas supply agreement required a prepayment of $500 to be made in two installments. The first installment of $300 was made at the time of the completion of the third-party acquisition in June 2015 and the second installment of $200 was made in April 2016. Both of these amounts were included in (Increase) in noncurrent assets on the accompanying Statement of Consolidated Cash Flows in the respective periods. At September 30, 2016 and December 31, 2015, Arconic has an asset of $504 (A$654) and $288 (A$395), respectively, representing the respective prepayments made under this agreement, which were included in Other noncurrent assets on the accompanying Consolidated Balance Sheet. |
Other Income, Net
Other Income, Net | 9 Months Ended |
Sep. 30, 2016 | |
Other Income and Expenses [Abstract] | |
Other Income, Net | K. Other Income, Net Third quarter ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Equity loss $ 15 $ 24 $ 52 $ 68 Interest income (5 ) (4 ) (14 ) (11 ) Foreign currency (gains) losses, net 10 (17 ) 16 (27 ) Net gain from asset sales (124 ) (41 ) (152 ) (69 ) Net income (loss) on mark-to-market derivative contracts (Q) (4 ) 16 5 19 Other, net (9 ) 7 (27 ) (7 ) $ (117 ) $ (15 ) $ (120 ) $ (27 ) In the 2016 third quarter and nine-month period, Net gain from asset sales included a $118 gain related to the sale of the Intalco smelter wharf property. Additionally, in the 2016 nine-month period, Net gain from assets sales included a $27 gain related to the sale of an equity interest in a natural gas pipeline in Australia (see Note G). In the 2015 nine-month period, Net gain from assets sales included a $29 gain related to the sale of land around the Lake Charles, LA anode facility. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | L. Segment Information Alumina Primary Global Engineered Transportation Total Third quarter ended September 30, 2016 Sales: Third-party sales $ 687 $ 1,148 $ 1,521 $ 1,406 $ 450 $ 5,212 Intersegment sales 287 440 30 — — 757 Total sales $ 974 $ 1,588 $ 1,551 $ 1,406 $ 450 $ 5,969 Profit and loss: Equity (loss) income $ (9 ) $ 3 $ (10 ) $ — $ — $ (16 ) Depreciation, depletion, and amortization 68 99 59 63 12 301 Income taxes 31 — 18 71 17 137 After-tax operating income (ATOI) 72 56 58 162 47 395 Third quarter ended September 30, 2015 Sales: Third-party sales $ 912 $ 1,249 $ 1,527 $ 1,397 $ 475 $ 5,560 Intersegment sales 391 479 29 — — 899 Total sales $ 1,303 $ 1,728 $ 1,556 $ 1,397 $ 475 $ 6,459 Profit and loss: Equity loss $ (9 ) $ (7 ) $ (8 ) $ — $ — $ (24 ) Depreciation, depletion, and amortization 71 106 56 61 11 305 Income taxes 85 (49 ) 28 71 18 153 ATOI 212 (59 ) 62 151 44 410 Alumina Primary Global Engineered Transportation Total Nine months ended September 30, 2016 Sales: Third-party sales $ 1,926 $ 3,390 $ 4,468 $ 4,320 $ 1,346 $ 15 450 Intersegment sales 879 1,388 88 — — 2,355 Total sales $ 2,805 $ 4,778 $ 4,556 $ 4,320 $ 1 346 $ 17,805 Profit and loss: Equity (loss) income $ (30 ) $ 7 $ (31 ) $ — $ — $ (54 ) Depreciation, depletion, and amortization 197 302 170 190 35 894 Income taxes 76 (16 ) 80 236 49 470 ATOI 189 111 194 504 132 1,130 Nine months ended September 30, 2015 Sales: Third-party sales $ 2,723 $ 4,355 $ 4,816 $ 3,933 $ 1,438 $ 17,265 Intersegment sales 1,323 1,733 99 — — 3,155 Total sales $ 4,046 $ 6,088 $ 4,915 $ 3,933 $ 1,438 $ 20,420 Profit and loss: Equity loss $ (27 ) $ (15 ) $ (24 ) $ — $ — $ (66 ) Depreciation, depletion, and amortization 228 324 168 166 32 918 Income taxes 264 14 89 228 49 644 ATOI 648 195 192 472 126 1,633 The following table reconciles total segment ATOI to consolidated net income attributable to Arconic: Third quarter ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Total segment ATOI $ 395 $ 410 $ 1,130 $ 1,633 Unallocated amounts (net of tax): Impact of LIFO 1 50 (5 ) 93 Metal price lag 4 (48 ) 12 (110 ) Interest expense (86 ) (80 ) (253 ) (240 ) Noncontrolling interests (20 ) (62 ) (58 ) (189 ) Corporate expense (77 ) (72 ) (209 ) (199 ) Restructuring and other charges (13 ) (48 ) (89 ) (368 ) Other (38 ) (106 ) (211 ) (241 ) Consolidated net income attributable to Arconic $ 166 $ 44 $ 317 $ 379 Items required to reconcile total segment ATOI to consolidated net income attributable to Arconic include: the impact of LIFO inventory accounting; metal price lag; 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, and other nonoperating items such as foreign currency transaction gains/losses and interest income. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Common Stock | M. Common Stock – In August 2016, Arconic retired its outstanding treasury stock consisting of approximately 76 million shares. As a result, Common stock and Additional capital were decreased by $76 and $2,563, respectively, to reflect the retirement of the treasury shares. This transaction is not reflected on the Statement of Consolidated Cash Flows for the nine months ended September 30, 2016 as it represents a noncash financing activity. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | N. Earnings Per Share The number of shares and per share amounts for all periods presented below have been updated to reflect the Reverse Stock Split (see Note A). The information used to compute basic and diluted EPS attributable to Arconic common shareholders was as follows (shares in millions): Third quarter ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Net income attributable to Arconic $ 166 $ 44 $ 317 $ 379 Less: preferred stock dividends declared 18 18 52 52 Net income available to Arconic common shareholders – basic 148 26 265 327 Add: interest expense related to convertible notes 2 — — — Add: dividends related to mandatory convertible preferred stock — — — — Net income available to Arconic common shareholders – diluted $ 150 $ 26 $ 265 $ 327 Average shares outstanding – basic 438 427 438 414 Effect of dilutive securities: Stock options 1 — 1 1 Stock and performance awards 5 4 4 4 Convertible notes 9 — — — Mandatory convertible preferred stock — — — — Average shares outstanding – diluted 453 431 443 419 In all periods presented, 26 million share equivalents related to mandatory convertible preferred stock were not included in the computation of diluted EPS because their effect was anti-dilutive. Additionally, in the 2016 nine-month period, 9 million share equivalents related to convertible notes were not included in the computation of diluted EPS because their effect was anti-dilutive. In the 2015 third quarter and nine-month period, 8 million and 3 million (weighted-average), respectively, share equivalents related to convertible debt (acquired through RTI – see Note E) were not included in the computation of diluted EPS because their effect was anti-dilutive. Options to purchase 8 million and 9 million shares of common stock at a weighted average exercise price of $38.16 and $38.28 per share were outstanding as of September 30, 2016 and 2015, 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 Arconic’s common stock. In July 2015, Arconic issued 29 million shares of its common stock to acquire RTI (see Note E). As a result, the basic average number of shares in the third quarter and nine-month period includes 19 million and 7 million, respectively, representing the weighted average number of shares for the length of time the 29 million shares were outstanding during the respective periods. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2016 | |
Transfers and Servicing [Abstract] | |
Receivables | O. Receivables As of September 30, 2016 and December 31, 2015, the deferred purchase price receivable was $162 and $249, 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 $28,738 and $28,226, respectively. Arconic services the customer receivables for the financial institutions at market rates; therefore, no servicing asset or liability was recorded. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Benefits | P. Pension and Other Postretirement Benefits Third quarter ended September 30, Nine months ended September 30, Pension benefits 2016 2015 2016 2015 Service cost $ 43 $ 44 $ 124 $ 132 Interest cost 114 144 358 433 Expected return on plan assets (187 ) (189 ) (558 ) (566 ) Recognized net actuarial loss 104 117 308 352 Amortization of prior service cost 4 4 12 12 Settlements* 13 13 15 14 Curtailments* — 9 — 9 Special termination benefits* — — 1 12 Net periodic benefit cost $ 91 $ 142 $ 260 $ 398 * Except for Settlements of $2 during the nine months ended September 30, 2016 and $2 in both the third quarter and nine months ended September 30, 2015, these amounts were recorded in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D). Third quarter ended September 30, Nine months ended September 30, Other postretirement benefits 2016 2015 2016 2015 Service cost $ 3 $ 4 $ 10 $ 11 Interest cost 16 23 53 69 Recognized net actuarial loss 8 4 19 13 Amortization of prior service benefit (6 ) (9 ) (19 ) (28 ) Curtailments* — (5 ) — (6 ) Special termination benefits* — — — 1 Net periodic benefit cost $ 21 $ 17 $ 63 $ 60 * These amounts were recorded in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D). In conjunction with the annual measurement of the funded status of Arconic’s pension and other postretirement benefit plans at December 31, 2015, management elected to change the manner in which the interest cost component of net periodic benefit cost is determined in 2016 and beyond. Previously, the interest cost component was determined by multiplying the single equivalent rate and the aggregate discounted cash flows of the plans’ projected benefit obligations. Under the new methodology, the interest cost component is determined by aggregating the product of the discounted cash flows of the plans’ projected benefit obligations for each year and an individual spot rate (referred to as the “spot rate” approach). In the 2016 third quarter and nine-month period, this change resulted in a lower interest cost component of net periodic benefit cost under the new methodology compared to the previous methodology of $22 and $70, respectively, for pension plans and $4 and $12, respectively, for other postretirement benefit plans. Management believes this new methodology, which represents a change in an accounting estimate, is a better measure of the interest cost as each year’s cash flows are specifically linked to the interest rates of bond payments in the same respective year. Effective August 1, 2016, certain U.S. pension and postretirement benefit plans were separated, requiring a remeasurement as of this date. Additionally, one pension plan was required to be remeasured as a result of settlement accounting. Together, these remeasurements resulted in an increase to Arconic’s pension liability of $845 and the plans’ unrecognized net actuarial loss (included in Accumulated other comprehensive loss) of $551 (after-tax). The plan remeasurements together also resulted in a $5 decrease to third quarter 2016 net periodic benefit cost. During the third quarter of 2016, the Pension Benefit Guaranty Corporation approved management’s plan to separate the Arconic Inc. pension plans between Arconic Inc. and Alcoa Corporation. The agreement stipulates that Arconic will make cash contributions over a period of 30 months to its two largest pension funds. Payments are expected to be made in three increments of no less than $50 each ($150 total) over this 30-month period, with the first payment due no later than six months after the separation date of November 1, 2016. |
Derivatives and Other Financial
Derivatives and Other Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Other Financial Instruments | Q. 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 Arconic is exposed to certain risks relating to its ongoing business operations, including financial, market, political, and economic risks. The following discussion provides information regarding Arconic’s exposure to the risks of changing commodity prices, interest rates, and foreign currency exchange rates. Arconic’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 Arconic’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. Arconic is not involved in trading activities for energy, weather derivatives, or other nonexchange commodity trading activities. A number of Arconic’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 Arconic’s Consolidated Financial Statements for all periods presented. For the aluminum contracts classified as Level 1, the total fair value of derivatives recorded as assets and liabilities was $11 and $9, respectively, at September 30, 2016 and $8 and $58, respectively, at December 31, 2015. 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, Arconic recognized a net gain of $1 and $4 in the 2016 third quarter and nine-month period, respectively, and a net loss of $7 and a net gain of $34 in the 2015 third quarter and nine-month period, respectively, in Sales on the accompanying Statement of Consolidated Operations related to these aluminum contracts. Arconic recognized a net gain of $1 for both the 2016 third quarter and nine-month period in Other Comprehensive (Loss) Income. No net gain or loss was recognized in the 2015 third quarter and nine-month period in Other Comprehensive (Loss) Income. In addition to the Level 1 and 2 derivative instruments described above, Arconic has ten derivative instruments classified as Level 3 under the fair value hierarchy. These instruments are composed of eight embedded aluminum derivatives, an energy contract, and an embedded credit derivative, all of which relate to energy supply contracts associated with nine smelters and three refineries. Five of the embedded aluminum derivatives and the energy contract were designated as cash flow hedging instruments and three 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 Arconic 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. Arconic 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, Arconic 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). Arconic has two power contracts, each of which contain an embedded derivative that indexes the price of power to the LME price of aluminum. Additionally, Arconic has 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. Additionally, for three of these contracts, management also estimates the Midwest premium, generally, for the next twelve months based on recent transactions and then holds the premium estimated in that twelfth month constant for the remaining duration of the contract. Significant increases or decreases in the actual LME beyond 10 years and/or the Midwest premium 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, Arconic has a power contract (which expired in September 2016 – see below) separate from above that contains an LME-linked embedded derivative. Prior to its expiration, the embedded derivative was 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 would 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, 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 was recognized in Other income, net on the accompanying Statement of Consolidated Operations as power was received over the life of the contract. Additionally, Arconic 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, 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. In the second quarter of 2016, Arconic and the related counterparty elected to modify the pricing of an existing power contract for a smelter in the United States. This amendment contains an embedded derivative that indexes the price of power to the LME price of aluminum plus the Midwest premium. The embedded derivative is valued using the interrelationship of future metal prices (LME base plus Midwest premium) and the amount of megawatt hours of energy needed to produce the forecasted metric tons of aluminum at the smelter. Significant increases or decreases in the metal price would result in a higher or lower fair value measurement. An increase in actual metal price over the inputs used in the valuation model will result in a higher cost of power and a corresponding increase to the derivative liability. Management elected not to qualify the embedded derivative for hedge accounting treatment. Unrealized gains and losses from the embedded derivative will be included in Other income, net on the accompanying Statement of Consolidated Operations while realized gains and losses will be included in Cost of goods sold on the accompanying Statement of Consolidated Operations as electricity purchases are made under the contract. At the time this derivative liability was recognized, an equivalent amount was recognized as a deferred charge in Other noncurrent assets on the accompanying Consolidated Balance Sheet. This deferred charge will be recognized in Other income, net on the accompanying Statement of Consolidated Operations as power is received over the life of the contract. Furthermore, Arconic has a power contract, which contains an embedded derivative that indexes the difference between the long-term debt ratings of Arconic 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 Arconic 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, 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, Arconic has a derivative contract that hedges the anticipated power requirements at one of its smelters that began when the previous power contract expired in September 2016 (see above). Beyond the term where market information is available, management 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, while realized gains and losses will be recorded in Cost of goods sold as electricity purchases are made under the power contract. In August 2016, Arconic gave the required notice to terminate this derivative contract one year from the date of notification. As a result, Arconic decreased both the related derivative asset recorded in Other noncurrent assets and the unrealized gain recorded in Accumulated other comprehensive loss by $83, which related to the August 2017 through 2036 timeframe, resulting in no impact to Arconic’s earnings. The following table presents quantitative information related to the significant unobservable inputs described above for Level 3 derivative contracts: Fair value at September 30, 2016 Unobservable input Range ($ in full amounts) Assets: Embedded aluminum derivatives $ 306 Price of aluminum beyond forward curve Aluminum: $2,197 per metric ton in 2027 to $2,337 per metric ton in 2029 (two contracts) and $2,633 per metric ton in 2036 (one contract) Midwest premium: $0.0630 per pound in 2016 to $0.0750 per pound in 2029 (two contracts) and 2036 (one contract) Embedded aluminum derivative 4 Interrelationship of LME price to overall energy price Aluminum: $1,680 per metric ton in 2016 to $1,802 per metric ton in 2019 Embedded aluminum derivative — Interrelationship of future aluminum and oil prices Aluminum: $1,662 per metric ton in 2016 to $1,762 per metric ton in 2018 Oil: $49 per barrel in 2016 to $55 per barrel in 2018 Energy contract 7 Price of electricity beyond forward curve Electricity: $57 per megawatt hour in 2016 to $58 per megawatt hour in 2017 Liabilities: Embedded aluminum derivative 242 Price of aluminum beyond forward curve Aluminum: $2,197 per metric ton in 2027 to $2,229 per metric ton in 2027 Embedded aluminum derivative 30 Interrelationship of LME price to the amount of megawatt hours of energy needed to produce the forecasted metric tons of aluminum Aluminum: $1,662 per metric ton in 2016 to $1,785 per metric ton in 2019 Midwest premium: $0.0630 per pound in 2016 to $0.0750 per pound in 2019 Electricity: rate of 2 million megawatt hours per year Embedded credit derivative 24 Credit spread between Arconic and counterparty 2.15% to 2.89% (2.52% median) The fair values of Level 3 derivative instruments recorded as assets and liabilities in the accompanying Consolidated Balance Sheet were as follows: September 30, 2016 December 31, Asset Derivatives Derivatives designated as hedging instruments: Prepaid expenses and other current assets: Embedded aluminum derivatives $ 40 $ 72 Energy contract 7 — Other noncurrent assets: Embedded aluminum derivatives 270 994 Energy contract — 2 Total derivatives designated as hedging instruments $ 317 $ 1,068 Derivatives not designated as hedging instruments: Prepaid expenses and other current assets: Embedded aluminum derivatives $ — $ 69 Total derivatives not designated as hedging instruments $ — $ 69 Total Asset Derivatives $ 317 $ 1,137 Liability Derivatives Derivatives designated as hedging instruments: Other current liabilities: Embedded aluminum derivative $ 25 $ 9 Energy contract — 4 Other noncurrent liabilities and deferred credits: Embedded aluminum derivative 247 160 Total derivatives designated as hedging instruments $ 272 $ 173 Derivatives not designated as hedging instruments: Other current liabilities: Embedded credit derivative $ 4 $ 6 Other noncurrent liabilities and deferred credits: Embedded credit derivative 20 29 Total derivatives not designated as hedging instruments $ 24 $ 35 Total Liability Derivatives $ 296 $ 208 The following tables present a reconciliation of activity for Level 3 derivative contracts: Assets Liabilities Third quarter ended September 30, 2016 Embedded aluminum Energy Embedded aluminum Embedded Energy Opening balance – July 1, 2016 $ 745 $ 49 $ 228 $ 33 $ 9 Total gains or losses (realized and unrealized) included in: Sales 1 — (3 ) — — Cost of goods sold (31 ) — — (1 ) — Other income, net (5 ) (85 ) 2 (8 ) (1 ) Other comprehensive (loss) income (414 ) 48 48 — (1 ) Purchases, sales, issuances, and settlements** — — — — — Transfers into and/or out of Level 3** — — — — — Other 14 (5 ) (3 ) — (7 ) Closing balance – September 30, 2016 $ 310 $ 7 $ 272 $ 24 $ — Change in unrealized gains or losses included in earnings for derivative contracts held at September 30, 2016: Sales $ — $ — $ — $ — $ — Cost of goods sold — — — — — Other income, net* (5 ) (85 ) 2 (8 ) (1 ) * In August 2016, Arconic elected to terminate the energy contract in accordance with the provisions of the agreement (see above). As a result, Arconic decreased the derivative asset and recorded a charge in Other income of $84, which is reflected in the table above. Additionally, Arconic also decreased the related unrealized gain and recorded a benefit in Other income of $84. As such, the termination of most of the remaining term of this derivative contract did not have an impact on Arconic’s earnings. ** In the 2016 nine-month period, there was an issuance of a new embedded derivative contained in an amendment to an existing power contract. There were no purchases, sales or settlements of Level 3 derivative instruments. Additionally, there were no transfers of derivative instruments into or out of Level 3. Assets Liabilities Nine months ended September 30, 2016 Embedded aluminum Energy Embedded aluminum Embedded Energy Opening balance – January 1, 2016 $ 1,135 $ 2 $ 169 $ 35 $ 4 Total gains or losses (realized and unrealized) included in: Sales (9 ) — (8 ) — — Cost of goods sold (92 ) — — (4 ) — Other income, net (13 ) (83 ) 2 (7 ) (2 ) Other comprehensive (loss) income (750 ) 87 80 — (1 ) Purchases, sales, issuances, and settlements** — — 32 — — Transfers into and/or out of Level 3** — — — — — Other 39 1 (3 ) — (1 ) Closing balance – September 30, 2016 $ 310 $ 7 $ 272 $ 24 $ — Change in unrealized gains or losses included in earnings for derivative contracts held at September 30, 2016: Sales $ — $ — $ — $ — $ — Cost of goods sold — — — — — Other income, net* (13 ) (83 ) 2 (7 ) (2 ) * In August 2016, Arconic elected to terminate the energy contract in accordance with the provisions of the agreement (see above). As a result, Arconic decreased the derivative asset and recorded a charge in Other income of $84, which is reflected in the table above. Additionally, Arconic also decreased the related unrealized gain and recorded a benefit in Other income of $84. As such, the termination of most of the remaining term of this derivative contract did not have an impact on Arconic’s earnings. ** In the 2016 third quarter, there were no purchases, sales, issuances or settlements of Level 3 derivative instruments. Additionally, there were no transfers of derivative instruments into or out of Level 3. 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. Arconic 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. Arconic recognized a net unrealized loss of $462 and $830 in the 2016 third quarter and nine-month period, respectively, and a net unrealized gain of $301 and $819 in the 2015 third quarter and nine-month period, respectively, in Other comprehensive (loss) income related to these five derivative instruments. Additionally, Arconic reclassified a realized gain of $1 and a realized loss of $4 in the 2016 third quarter and nine-month period, respectively, and a realized loss of $1 and $25 in the 2015 third quarter and nine-month period, respectively, from Accumulated other comprehensive loss to Sales. Assuming market rates remain constant with the rates at September 30, 2016, a realized gain of $23 is expected to be recognized in Sales over the next 12 months. Also, Arconic recognized a gain of less than $1 in the 2016 nine-month period (no such gain was recognized in the 2016 third quarter) and a gain of less than $1 and $2 in the 2015 third quarter and nine-month period, respectively, in Other income, net related to the amount excluded from the assessment of hedge effectiveness. There was no ineffectiveness related to these five derivative instruments in the 2016 third quarter and nine-month period and the 2015 third quarter and nine-month period. Energy contract. Derivatives Not Designated As Hedging Instruments Arconic has three 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 third quarter of 2016 and 2015, Arconic recognized a gain of $1 and a loss of $17, respectively, in Other income, net, of which a loss of $7 and $4, respectively, related to the embedded aluminum derivatives and a gain of $8 and a loss of $13, respectively, related to the embedded credit derivative. In the nine-month period of 2016 and 2015, Arconic recognized a loss of $8 and $19, respectively, in Other income, net, of which a loss of $15 and $5, respectively, related to the embedded aluminum derivatives and a gain of $7 and a loss of $14, 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 Arconic’s control and could vary significantly from those factors disclosed. Arconic 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, Arconic 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 Arconic’s other financial instruments were as follows: September 30, 2016 December 31, 2015 Carrying Fair value Carrying Fair value Cash and cash equivalents $ 1,863 $ 1,863 $ 1,919 $ 1,919 Restricted cash 1,337 1,337 37 37 Noncurrent receivables 19 19 17 17 Available-for-sale securities 83 83 193 193 Short-term borrowings 32 32 38 38 Commercial paper — — — — Long-term debt due within one year 773 783 21 21 Contingent payment related to an acquisition 133 133 130 130 Long-term debt, less amount due within one year 9,501 10,195 8,993 8,922 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. Noncurrent receivables. Available-for-sale securities. Contingent payment related to an acquisition. Long-term debt due within one year and Long-term debt, less amount due within one year. |
Separation Transaction
Separation Transaction | 9 Months Ended |
Sep. 30, 2016 | |
Text Block [Abstract] | |
Separation Transaction | R. Separation Transaction On September 29, 2016, the Board approved the completion of the Separation Transaction by means of a pro rata distribution (the “Distribution”) by the Company on November 1, 2016 of 80.1 percent of the outstanding common stock of Alcoa Corporation to Company shareholders of record as of the close of business on October 20, 2016 (the “Record Date”). Arconic will retain 19.9 percent of the Alcoa Corporation common stock. On November 1, 2016, the Separation Transaction was completed and became effective before the opening of the NYSE. In the Distribution, each Company shareholder received one share of Alcoa Corporation common stock for every three shares of the Company’s common stock held as of the close of business on the Record Date. Shareholders received cash in lieu of fractional shares of Alcoa Corporation common stock. In connection with the Separation Transaction, at the end of October 2016, the Company entered into certain agreements with Alcoa Corporation to implement the legal and structural separation between the two companies, govern the relationship between the Company and Alcoa Corporation after the completion of the Separation Transaction, and allocate between the Company and Alcoa Corporation various assets, liabilities and obligations, including, among other things, employee benefits, environmental liabilities, intellectual property, and tax-related assets and liabilities. These agreements included a Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, Transition Services Agreement and certain Patent, Know-How, Trade Secret License and Trademark License Agreements. In the 2016 third quarter and nine-month period, Arconic recognized $55 ($44 after-tax) and $118 ($98 after-tax), respectively, in Selling, general administrative, and other expenses on the accompanying Statement of Consolidated Operations for costs related to the Separation Transaction. In addition, Arconic also incurred capital expenditures and debt issuance costs (see Note I) of $60 in the third quarter and $81 in the nine-month period of 2016 related to the separation. Inception to date costs recorded in Selling, general administrative, and other expenses were $142 as well as capital expenditures and debt issuance costs of $81. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | S. Subsequent Events |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 Arconic’s shareholders and noncontrolling interests: Arconic Noncontrolling Interests Third quarter ended September 30, Third quarter ended September 30, 2016 2015 2016 2015 Pension and other postretirement benefits (P) Balance at beginning of period $ (3,514 ) $ (3,500 ) $ (53 ) $ (59 ) Other comprehensive (loss) income: Unrecognized net actuarial loss and prior service cost/benefit (819 ) 46 (1 ) 10 Tax expense 286 (10 ) — (1 ) Total Other comprehensive (loss) income before reclassifications, net of tax (533 ) 36 (1 ) 9 Amortization of net actuarial loss and prior service cost/benefit (1) 109 116 1 — Tax expense (2) (38 ) (41 ) (1 ) — Total amount reclassified from Accumulated other comprehensive loss, net of tax (9) 71 75 — — Total Other comprehensive (loss) income (462 ) 111 (1 ) 9 Balance at end of period $ (3,976 ) $ (3,389 ) $ (54 ) $ (50 ) Foreign currency translation Balance at beginning of period $ (2,064 ) $ (1,606 ) $ (641 ) $ (569 ) Other comprehensive income (loss) (3) 157 (889 ) 45 (299 ) Balance at end of period $ (1,907 ) $ (2,495 ) $ (596 ) $ (868 ) Available-for-sale securities Balance at beginning of period $ (1 ) $ — $ — $ — Other comprehensive loss (4) — (2 ) — — Balance at end of period $ (1 ) $ (2 ) $ — $ — Cash flow hedges (Q) Balance at beginning of period $ 364 $ 140 $ 11 $ (6 ) Other comprehensive (loss) income: Net change from periodic revaluations (430 ) 288 20 1 Tax benefit (expense) 126 (79 ) (6 ) — Total Other comprehensive (loss) income before reclassifications, net of tax (304 ) 209 14 1 Net amount reclassified to earnings: Aluminum contracts (5) 5 3 — — Energy contracts (6) (50 ) — (34 ) — Foreign exchange contracts (5) (1 ) 2 — — Interest rate contracts (7) — — — — Nickel contracts (8) — 1 — — Sub-total (46 ) 6 (34 ) — Tax benefit (expense) (2) 12 (1 ) 10 — Total amount reclassified from Accumulated other comprehensive (loss) income, net of tax (9) (34 ) 5 (24 ) — Total Other comprehensive (loss) income (338 ) 214 (10 ) 1 Balance at end of period $ 26 $ 354 $ 1 $ (5 ) Arconic Noncontrolling Interests Nine months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Pension and other postretirement benefits (P) Balance at beginning of period $ (3,611 ) $ (3,601 ) $ (56 ) $ (64 ) Other comprehensive (loss) income: Unrecognized net actuarial loss and prior service cost/benefit (883 ) (30 ) — 13 Tax benefit (expense) 312 18 — (1 ) Total Other comprehensive (loss) income before reclassifications, net of tax (571 ) (12 ) — 12 Amortization of net actuarial loss and prior service cost/benefit (1) 317 345 3 4 Tax expense (2) (111 ) (121 ) (1 ) (2 ) Total amount reclassified from Accumulated other comprehensive loss, net of tax (9) 206 224 2 2 Total Other comprehensive (loss) income (365 ) 212 2 14 Balance at end of period $ (3,976 ) $ (3,389 ) $ (54 ) $ (50 ) Foreign currency translation Balance at beginning of period $ (2,412 ) $ (846 ) $ (780 ) $ (351 ) Other comprehensive income (loss) (3) 505 (1,649 ) 184 (517 ) Balance at end of period $ (1,907 ) $ (2,495 ) $ (596 ) $ (868 ) Available-for-sale securities Balance at beginning of period $ (5 ) $ — $ — $ — Other comprehensive income (loss) (4) 4 (2 ) — — Balance at end of period $ (1 ) $ (2 ) $ — $ — Cash flow hedges (Q) Balance at beginning of period $ 597 $ (230 ) $ (3 ) $ (2 ) Other comprehensive (loss) income: Net change from periodic revaluations (772 ) 792 35 (4 ) Tax benefit (expense) 229 (235 ) (10 ) 1 Total Other comprehensive (loss) income before reclassifications, net of tax (543 ) 557 25 (3 ) Net amount reclassified to earnings: Aluminum contracts (5) (1 ) 26 — — Energy contracts (6) (49 ) 4 (34 ) — Foreign exchange contracts (5) — 3 — — Interest rate contracts (7) 8 1 5 — Nickel contracts (8) 1 1 — — Sub-total (41 ) 35 (29 ) — Tax benefit (expense) (2) 13 (8 ) 8 — Total amount reclassified from Accumulated other comprehensive (loss) income, net of tax (9) (28 ) 27 (21 ) — Total Other comprehensive (loss) income (571 ) 584 4 (3 ) Balance at end of period $ 26 $ 354 $ 1 $ (5 ) (1) These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note P). (2) These amounts were included in Provision 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, net on the accompanying Statement of Consolidated Operations. (5) These amounts were included in Sales on the accompanying Statement of Consolidated Operations. (6) For Arconic, $50 of the amount in both the third quarter ended and nine months ended as of September 30, 2016 was included in Other income, net on the accompanying Statement of Consolidated Operations. The remaining amount in both the third quarter ended and nine months ended as of September 30, 2016 and the entire amount in both the third quarter ended and nine months ended as of September 30, 2015 were included in Cost of goods sold on the accompanying Statement of Consolidated Operations. For Noncontrolling interests, the amount in both the third quarter and nine months ended as of September 30, 2016 was included in Other income, net on the accompanying Statement of Consolidated Operations. (7) For Arconic, $7 of the amount in the nine months ended as of September 30, 2016 was included in Other income, net on the accompanying Statement of Consolidated Operations. The remaining amount in the nine months ended as of September 30, 2016 and the entire amount in the third quarter ended September 30, 2016 and both the third quarter ended and nine months ended as of September 30, 2015 were included in Interest expense on the accompanying Statement of Consolidated Operations. For Noncontrolling interests, the amount in the nine months ended as of September 30, 2016 was included in Other income, net on the accompanying Statement of Consolidated Operations. (8) These amounts were included in Cost of goods sold on the accompanying Statement of Consolidated Operations. (9) 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 7. |
Restructuring and Other Charg29
Restructuring and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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: Third quarter ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Alumina $ (1 ) $ 38 $ 3 $ 55 Primary Metals 17 11 105 209 Global Rolled Products (1 ) (17 ) 1 119 Engineered Products and Solutions (1 ) 22 16 33 Transportation and Construction Solutions (2 ) 3 6 6 Segment total 12 57 131 422 Corporate 6 9 3 38 Total restructuring and other charges $ 18 $ 66 $ 134 $ 460 |
Activity and Reserve Balances for Restructuring Charges | Activity and reserve balances for restructuring charges were as follows: Layoff costs Other exit costs Total Reserve balances at December 31, 2014 $ 98 $ 34 $ 132 2015: Cash payments (111 ) (12 ) (123 ) Restructuring charges 299 233 532 Other* (60 ) (231 ) (291 ) Reserve balances at December 31, 2015 226 24 250 2016: Cash payments (132 ) (33 ) (165 ) Restructuring charges 54 52 106 Other* (56 ) (3 ) (59 ) Reserve balances at September 30, 2016 $ 92 $ 40 $ 132 * Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2016 nine-month period, Other for layoff costs also included a reclassification of $14 in pension benefits costs, as this obligation was included in Arconic’s separate liability for pension benefits obligations (see Note P). Additionally in the 2016 nine-month period, Other for other exit costs also included a reclassification of $4 in asset retirement obligations, as this liability was included in Arconic’s separate reserve for asset retirement obligations. In the 2015 nine month period, Other for layoff costs also included a reclassification of $28 in pension and other postretirement benefits costs, as this obligation was included in Arconic’s separate liability for pension and other postretirement benefits obligations (see Note P). Additionally in the 2015 nine month period, Other exit costs also included a reclassification of the following restructuring charges: $45 in asset retirement obligations and $29 in environmental obligations, as these liabilities were included in Arconic’s separate reserves for asset retirement obligations and environmental remediation. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
RTI [Member] | |
Summary of Final Allocation of Purchase Price by Major Asset Acquired and Liability Assumed, Amount of Goodwill Recognized | The following table represents the final allocation of the purchase price by major asset acquired and liability assumed, as well as the amount of goodwill recognized: Assets: Cash $ 303 Receivables from customers 94 Inventories 483 Prepaid expenses and other current assets 47 Properties, plants, and equipment 321 Goodwill 298 Other noncurrent assets 60 Total assets $ 1,606 Liabilities: Accounts payable $ 86 Other current liabilities 94 Long-term debt due within one year 115 Long-term debt, less amount due within one year 387 Other noncurrent liabilities 111 Total liabilities $ 793 Equity Additional capital $ 60 Total equity $ 60 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory Components | September 30, 2016 December 31, 2015 Finished goods $ 854 $ 811 Work-in-process 1,325 1,272 Bauxite and alumina 401 445 Purchased raw materials 670 720 Operating supplies 205 194 $ 3,455 $ 3,442 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments Schedule [Abstract] | |
Summary of Unaudited Financial Information for Alcoa's Equity Investments | A summary of unaudited financial information for Arconic’s equity investments is as follows (amounts represent 100% of investee financial information): Third quarter ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Sales $ 888 $ 1,015 $ 2,684 $ 2,872 Cost of goods sold 840 796 2,200 2,353 Net income (loss) (6 ) 20 23 (66 ) |
Other Income, Net (Tables)
Other Income, Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Income, Net | Third quarter ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Equity loss $ 15 $ 24 $ 52 $ 68 Interest income (5 ) (4 ) (14 ) (11 ) Foreign currency (gains) losses, net 10 (17 ) 16 (27 ) Net gain from asset sales (124 ) (41 ) (152 ) (69 ) Net income (loss) on mark-to-market derivative contracts (Q) (4 ) 16 5 19 Other, net (9 ) 7 (27 ) (7 ) $ (117 ) $ (15 ) $ (120 ) $ (27 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Operating Results of Arconic's Reportable Segments | The operating results of Arconic’s reportable segments were as follows (differences between segment totals and consolidated totals are in Corporate): Alumina Primary Global Engineered Transportation Total Third quarter ended September 30, 2016 Sales: Third-party sales $ 687 $ 1,148 $ 1,521 $ 1,406 $ 450 $ 5,212 Intersegment sales 287 440 30 — — 757 Total sales $ 974 $ 1,588 $ 1,551 $ 1,406 $ 450 $ 5,969 Profit and loss: Equity (loss) income $ (9 ) $ 3 $ (10 ) $ — $ — $ (16 ) Depreciation, depletion, and amortization 68 99 59 63 12 301 Income taxes 31 — 18 71 17 137 After-tax operating income (ATOI) 72 56 58 162 47 395 Third quarter ended September 30, 2015 Sales: Third-party sales $ 912 $ 1,249 $ 1,527 $ 1,397 $ 475 $ 5,560 Intersegment sales 391 479 29 — — 899 Total sales $ 1,303 $ 1,728 $ 1,556 $ 1,397 $ 475 $ 6,459 Profit and loss: Equity loss $ (9 ) $ (7 ) $ (8 ) $ — $ — $ (24 ) Depreciation, depletion, and amortization 71 106 56 61 11 305 Income taxes 85 (49 ) 28 71 18 153 ATOI 212 (59 ) 62 151 44 410 Alumina Primary Global Engineered Transportation Total Nine months ended September 30, 2016 Sales: Third-party sales $ 1,926 $ 3,390 $ 4,468 $ 4,320 $ 1,346 $ 15 450 Intersegment sales 879 1,388 88 — — 2,355 Total sales $ 2,805 $ 4,778 $ 4,556 $ 4,320 $ 1 346 $ 17,805 Profit and loss: Equity (loss) income $ (30 ) $ 7 $ (31 ) $ — $ — $ (54 ) Depreciation, depletion, and amortization 197 302 170 190 35 894 Income taxes 76 (16 ) 80 236 49 470 ATOI 189 111 194 504 132 1,130 Nine months ended September 30, 2015 Sales: Third-party sales $ 2,723 $ 4,355 $ 4,816 $ 3,933 $ 1,438 $ 17,265 Intersegment sales 1,323 1,733 99 — — 3,155 Total sales $ 4,046 $ 6,088 $ 4,915 $ 3,933 $ 1,438 $ 20,420 Profit and loss: Equity loss $ (27 ) $ (15 ) $ (24 ) $ — $ — $ (66 ) Depreciation, depletion, and amortization 228 324 168 166 32 918 Income taxes 264 14 89 228 49 644 ATOI 648 195 192 472 126 1,633 |
Schedule of Segment ATOI to Consolidated Net Income Attributable to Arconic | The following table reconciles total segment ATOI to consolidated net income attributable to Arconic: Third quarter ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Total segment ATOI $ 395 $ 410 $ 1,130 $ 1,633 Unallocated amounts (net of tax): Impact of LIFO 1 50 (5 ) 93 Metal price lag 4 (48 ) 12 (110 ) Interest expense (86 ) (80 ) (253 ) (240 ) Noncontrolling interests (20 ) (62 ) (58 ) (189 ) Corporate expense (77 ) (72 ) (209 ) (199 ) Restructuring and other charges (13 ) (48 ) (89 ) (368 ) Other (38 ) (106 ) (211 ) (241 ) Consolidated net income attributable to Arconic $ 166 $ 44 $ 317 $ 379 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 Arconic common shareholders was as follows (shares in millions): Third quarter ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Net income attributable to Arconic $ 166 $ 44 $ 317 $ 379 Less: preferred stock dividends declared 18 18 52 52 Net income available to Arconic common shareholders – basic 148 26 265 327 Add: interest expense related to convertible notes 2 — — — Add: dividends related to mandatory convertible preferred stock — — — — Net income available to Arconic common shareholders – diluted $ 150 $ 26 $ 265 $ 327 Average shares outstanding – basic 438 427 438 414 Effect of dilutive securities: Stock options 1 — 1 1 Stock and performance awards 5 4 4 4 Convertible notes 9 — — — Mandatory convertible preferred stock — — — — Average shares outstanding – diluted 453 431 443 419 |
Pension and Other Postretirem36
Pension and Other Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost were as follows: Third quarter ended September 30, Nine months ended September 30, Pension benefits 2016 2015 2016 2015 Service cost $ 43 $ 44 $ 124 $ 132 Interest cost 114 144 358 433 Expected return on plan assets (187 ) (189 ) (558 ) (566 ) Recognized net actuarial loss 104 117 308 352 Amortization of prior service cost 4 4 12 12 Settlements* 13 13 15 14 Curtailments* — 9 — 9 Special termination benefits* — — 1 12 Net periodic benefit cost $ 91 $ 142 $ 260 $ 398 * Except for Settlements of $2 during the nine months ended September 30, 2016 and $2 in both the third quarter and nine months ended September 30, 2015, these amounts were recorded in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D). Third quarter ended September 30, Nine months ended September 30, Other postretirement benefits 2016 2015 2016 2015 Service cost $ 3 $ 4 $ 10 $ 11 Interest cost 16 23 53 69 Recognized net actuarial loss 8 4 19 13 Amortization of prior service benefit (6 ) (9 ) (19 ) (28 ) Curtailments* — (5 ) — (6 ) Special termination benefits* — — — 1 Net periodic benefit cost $ 21 $ 17 $ 63 $ 60 * These amounts were recorded in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D). |
Derivatives and Other Financi37
Derivatives and Other Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Quantitative Information for Level 3 Derivative Contracts | The following table presents quantitative information related to the significant unobservable inputs described above for Level 3 derivative contracts: Fair value at September 30, 2016 Unobservable input Range ($ in full amounts) Assets: Embedded aluminum derivatives $ 306 Price of aluminum beyond forward curve Aluminum: $2,197 per metric ton in 2027 to $2,337 per metric ton in 2029 (two contracts) and $2,633 per metric ton in 2036 (one contract) Midwest premium: $0.0630 per pound in 2016 to $0.0750 per pound in 2029 (two contracts) and 2036 (one contract) Embedded aluminum derivative 4 Interrelationship of LME price to overall energy price Aluminum: $1,680 per metric ton in 2016 to $1,802 per metric ton in 2019 Embedded aluminum derivative — Interrelationship of future aluminum and oil prices Aluminum: $1,662 per metric ton in 2016 to $1,762 per metric ton in 2018 Oil: $49 per barrel in 2016 to $55 per barrel in 2018 Energy contract 7 Price of electricity beyond forward curve Electricity: $57 per megawatt hour in 2016 to $58 per megawatt hour in 2017 Liabilities: Embedded aluminum derivative 242 Price of aluminum beyond forward curve Aluminum: $2,197 per metric ton in 2027 to $2,229 per metric ton in 2027 Embedded aluminum derivative 30 Interrelationship of LME price to the amount of megawatt hours of energy needed to produce the forecasted metric tons of aluminum Aluminum: $1,662 per metric ton in 2016 to $1,785 per metric ton in 2019 Midwest premium: $0.0630 per pound in 2016 to $0.0750 per pound in 2019 Electricity: rate of 2 million megawatt hours per year Embedded credit derivative 24 Credit spread between Arconic and counterparty 2.15% to 2.89% (2.52% median) |
Schedule of Fair Values of Level 3 Derivative Instruments Recorded as Assets and Liabilities | The fair values of Level 3 derivative instruments recorded as assets and liabilities in the accompanying Consolidated Balance Sheet were as follows: September 30, 2016 December 31, Asset Derivatives Derivatives designated as hedging instruments: Prepaid expenses and other current assets: Embedded aluminum derivatives $ 40 $ 72 Energy contract 7 — Other noncurrent assets: Embedded aluminum derivatives 270 994 Energy contract — 2 Total derivatives designated as hedging instruments $ 317 $ 1,068 Derivatives not designated as hedging instruments: Prepaid expenses and other current assets: Embedded aluminum derivatives $ — $ 69 Total derivatives not designated as hedging instruments $ — $ 69 Total Asset Derivatives $ 317 $ 1,137 Liability Derivatives Derivatives designated as hedging instruments: Other current liabilities: Embedded aluminum derivative $ 25 $ 9 Energy contract — 4 Other noncurrent liabilities and deferred credits: Embedded aluminum derivative 247 160 Total derivatives designated as hedging instruments $ 272 $ 173 Derivatives not designated as hedging instruments: Other current liabilities: Embedded credit derivative $ 4 $ 6 Other noncurrent liabilities and deferred credits: Embedded credit derivative 20 29 Total derivatives not designated as hedging instruments $ 24 $ 35 Total Liability Derivatives $ 296 $ 208 |
Schedule of Reconciliation of Activity for Derivative Contracts | The following tables present a reconciliation of activity for Level 3 derivative contracts: Assets Liabilities Third quarter ended September 30, 2016 Embedded aluminum Energy Embedded aluminum Embedded Energy Opening balance – July 1, 2016 $ 745 $ 49 $ 228 $ 33 $ 9 Total gains or losses (realized and unrealized) included in: Sales 1 — (3 ) — — Cost of goods sold (31 ) — — (1 ) — Other income, net (5 ) (85 ) 2 (8 ) (1 ) Other comprehensive (loss) income (414 ) 48 48 — (1 ) Purchases, sales, issuances, and settlements** — — — — — Transfers into and/or out of Level 3** — — — — — Other 14 (5 ) (3 ) — (7 ) Closing balance – September 30, 2016 $ 310 $ 7 $ 272 $ 24 $ — Change in unrealized gains or losses included in earnings for derivative contracts held at September 30, 2016: Sales $ — $ — $ — $ — $ — Cost of goods sold — — — — — Other income, net* (5 ) (85 ) 2 (8 ) (1 ) * In August 2016, Arconic elected to terminate the energy contract in accordance with the provisions of the agreement (see above). As a result, Arconic decreased the derivative asset and recorded a charge in Other income of $84, which is reflected in the table above. Additionally, Arconic also decreased the related unrealized gain and recorded a benefit in Other income of $84. As such, the termination of most of the remaining term of this derivative contract did not have an impact on Arconic’s earnings. ** In the 2016 nine-month period, there was an issuance of a new embedded derivative contained in an amendment to an existing power contract. There were no purchases, sales or settlements of Level 3 derivative instruments. Additionally, there were no transfers of derivative instruments into or out of Level 3. Assets Liabilities Nine months ended September 30, 2016 Embedded aluminum Energy Embedded aluminum Embedded Energy Opening balance – January 1, 2016 $ 1,135 $ 2 $ 169 $ 35 $ 4 Total gains or losses (realized and unrealized) included in: Sales (9 ) — (8 ) — — Cost of goods sold (92 ) — — (4 ) — Other income, net (13 ) (83 ) 2 (7 ) (2 ) Other comprehensive (loss) income (750 ) 87 80 — (1 ) Purchases, sales, issuances, and settlements** — — 32 — — Transfers into and/or out of Level 3** — — — — — Other 39 1 (3 ) — (1 ) Closing balance – September 30, 2016 $ 310 $ 7 $ 272 $ 24 $ — Change in unrealized gains or losses included in earnings for derivative contracts held at September 30, 2016: Sales $ — $ — $ — $ — $ — Cost of goods sold — — — — — Other income, net* (13 ) (83 ) 2 (7 ) (2 ) * In August 2016, Arconic elected to terminate the energy contract in accordance with the provisions of the agreement (see above). As a result, Arconic decreased the derivative asset and recorded a charge in Other income of $84, which is reflected in the table above. Additionally, Arconic also decreased the related unrealized gain and recorded a benefit in Other income of $84. As such, the termination of most of the remaining term of this derivative contract did not have an impact on Arconic’s earnings. ** In the 2016 third quarter, there were no purchases, sales, issuances or settlements of Level 3 derivative instruments. Additionally, there were no transfers of derivative instruments into or out of Level 3. |
Schedule of Carrying Values and Fair Values of Other Financial Instruments | The carrying values and fair values of Arconic’s other financial instruments were as follows: September 30, 2016 December 31, 2015 Carrying Fair value Carrying Fair value Cash and cash equivalents $ 1,863 $ 1,863 $ 1,919 $ 1,919 Restricted cash 1,337 1,337 37 37 Noncurrent receivables 19 19 17 17 Available-for-sale securities 83 83 193 193 Short-term borrowings 32 32 38 38 Commercial paper — — — — Long-term debt due within one year 773 783 21 21 Contingent payment related to an acquisition 133 133 130 130 Long-term debt, less amount due within one year 9,501 10,195 8,993 8,922 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) shares in Billions | Oct. 05, 2016shares | Sep. 30, 2016 | Oct. 04, 2016shares |
Basis Of Presentation [Line Items] | |||
Reverse stock split ratio | 0.33 | ||
Subsequent Event [Member] | |||
Basis Of Presentation [Line Items] | |||
Reverse stock split ratio | 0.33 | ||
Common stock share outstanding | 0.4 | 1.3 |
Recently Adopted and Recently39
Recently Adopted and Recently Issued Accounting Guidance - Additional Information (Detail) $ in Millions | Jan. 01, 2016USD ($) |
Accounting Changes and Error Corrections [Abstract] | |
Change due to recent accounting guidance | $ 51 |
Accumulated Other Comprehensi40
Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive (Loss) Income by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pension and other postretirement benefits | ||||
Total Other comprehensive (loss) income | $ (463) | $ 120 | $ (363) | $ 226 |
Foreign currency translation | ||||
Other comprehensive income (loss) | 202 | (1,188) | 689 | (2,166) |
Available-for-sale securities | ||||
Other comprehensive income (loss) | (2) | 4 | (2) | |
Cash flow hedges | ||||
Total Other comprehensive (loss) income | (348) | 215 | (567) | 581 |
Energy Contracts [Member] | ||||
Cash flow hedges | ||||
Total Other comprehensive (loss) income before reclassifications, net of tax | 49 | 3 | 88 | (8) |
Arconic [Member] | ||||
Pension and other postretirement benefits | ||||
Balance at beginning of period | (3,514) | (3,500) | (3,611) | (3,601) |
Unrecognized net actuarial loss and prior service cost/benefit | (819) | 46 | (883) | (30) |
Tax benefit (expense) | (286) | 10 | 312 | 18 |
Total Other comprehensive (loss) income before reclassifications, net of tax | (533) | 36 | (571) | (12) |
Amortization of net actuarial loss and prior service cost/benefit | 109 | 116 | 317 | 345 |
Tax expense | (38) | (41) | (111) | (121) |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 71 | 75 | 206 | 224 |
Total Other comprehensive (loss) income | (462) | 111 | (365) | 212 |
Balance at end of period | (3,976) | (3,389) | (3,976) | (3,389) |
Foreign currency translation | ||||
Balance at beginning of period | (2,064) | (1,606) | (2,412) | (846) |
Other comprehensive income (loss) | 157 | (889) | 505 | (1,649) |
Balance at end of period | (1,907) | (2,495) | (1,907) | (2,495) |
Available-for-sale securities | ||||
Balance at beginning of period | (1) | (5) | ||
Other comprehensive income (loss) | (2) | 4 | (2) | |
Balance at end of period | (1) | (2) | (1) | (2) |
Cash flow hedges | ||||
Balance at beginning of period | 364 | 140 | 597 | (230) |
Net change from periodic revaluations | (430) | 288 | (772) | 792 |
Tax benefit (expense) | 126 | (79) | 229 | (235) |
Total Other comprehensive (loss) income before reclassifications, net of tax | (304) | 209 | (543) | 557 |
Net amount reclassified to earnings | (46) | 6 | (41) | 35 |
Tax benefit (expense) | 12 | (1) | 13 | (8) |
Total amount reclassified from Accumulated other comprehensive (loss) income, net of tax | (34) | 5 | (28) | 27 |
Total Other comprehensive (loss) income | (338) | 214 | (571) | 584 |
Balance at end of period | 26 | 354 | 26 | 354 |
Arconic [Member] | Aluminum Contracts [Member] | ||||
Cash flow hedges | ||||
Net amount reclassified to earnings | 5 | 3 | (1) | 26 |
Arconic [Member] | Energy Contracts [Member] | ||||
Cash flow hedges | ||||
Net amount reclassified to earnings | (50) | (49) | 4 | |
Arconic [Member] | Foreign Exchange Contracts [Member] | ||||
Cash flow hedges | ||||
Net amount reclassified to earnings | (1) | 2 | 3 | |
Arconic [Member] | Interest Rate Contracts [Member] | ||||
Cash flow hedges | ||||
Net amount reclassified to earnings | 8 | 1 | ||
Arconic [Member] | Nickel Contracts [Member] | ||||
Cash flow hedges | ||||
Net amount reclassified to earnings | 1 | 1 | 1 | |
Noncontrolling Interests [Member] | ||||
Pension and other postretirement benefits | ||||
Balance at beginning of period | (53) | (59) | (56) | (64) |
Unrecognized net actuarial loss and prior service cost/benefit | (1) | 10 | 13 | |
Tax benefit (expense) | 1 | (1) | ||
Total Other comprehensive (loss) income before reclassifications, net of tax | (1) | 9 | 12 | |
Amortization of net actuarial loss and prior service cost/benefit | 1 | 3 | 4 | |
Tax expense | (1) | (1) | (2) | |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 2 | 2 | ||
Total Other comprehensive (loss) income | (1) | 9 | 2 | 14 |
Balance at end of period | (54) | (50) | (54) | (50) |
Foreign currency translation | ||||
Balance at beginning of period | (641) | (569) | (780) | (351) |
Other comprehensive income (loss) | 45 | (299) | 184 | (517) |
Balance at end of period | (596) | (868) | (596) | (868) |
Cash flow hedges | ||||
Balance at beginning of period | 11 | (6) | (3) | (2) |
Net change from periodic revaluations | 20 | 1 | 35 | (4) |
Tax benefit (expense) | (6) | (10) | 1 | |
Total Other comprehensive (loss) income before reclassifications, net of tax | 14 | 1 | 25 | (3) |
Net amount reclassified to earnings | (34) | (29) | ||
Tax benefit (expense) | 10 | 8 | ||
Total amount reclassified from Accumulated other comprehensive (loss) income, net of tax | (24) | (21) | ||
Total Other comprehensive (loss) income | (10) | 1 | 4 | (3) |
Balance at end of period | 1 | $ (5) | 1 | $ (5) |
Noncontrolling Interests [Member] | Energy Contracts [Member] | ||||
Cash flow hedges | ||||
Net amount reclassified to earnings | $ (34) | (34) | ||
Noncontrolling Interests [Member] | Interest Rate Contracts [Member] | ||||
Cash flow hedges | ||||
Net amount reclassified to earnings | $ 5 |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive (Loss) Income by Component (Parenthetical) (Detail) - Other Income [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Energy Contracts [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net amount reclassified to earnings | $ 50 | $ 50 |
Interest Rate Contracts [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net amount reclassified to earnings | 7 | |
Nickel Contracts [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net amount reclassified to earnings | $ 50 | $ 50 |
Restructuring and Other Charg42
Restructuring and Other Charges - Additional Information (Detail) | Sep. 30, 2016Employees | Sep. 30, 2016USD ($)Employees | Sep. 30, 2015USD ($)EmployeesT | Jun. 30, 2015t | Sep. 30, 2016USD ($)Employees | Sep. 30, 2015USD ($)Employeest | Dec. 31, 2015Employees |
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 18,000,000 | $ 66,000,000 | $ 134,000,000 | $ 460,000,000 | |||
Restructuring and other charges after tax and noncontrolling interest | 10,000,000 | 30,000,000 | 87,000,000 | 329,000,000 | |||
Inventory write down | 4,000,000 | ||||||
Inventory write down after tax and noncontrolling interests | 2,000,000 | ||||||
Minimum amount of cash payments expected to be paid beyond the end of the current annual period | 30,000,000 | ||||||
Maximum amount of cash payments expected to be paid beyond the end of the current annual period | 35,000,000 | ||||||
Restructuring Charges [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 42,000,000 | ||||||
Restructuring and other charges after tax and noncontrolling interest | 20,000,000 | ||||||
Corporate [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 6,000,000 | $ 9,000,000 | $ 3,000,000 | 38,000,000 | |||
Three Other Segments and Corporate [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 15 | ||||||
Capacity closure | T | 887,000,000,000 | ||||||
Pocos de Caldas Smelter [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Capacity closure | t | 96,000 | ||||||
Point Henry Smelter [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Percentage of power supply | 40.00% | ||||||
Sao Luis Smelter [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 80,000,000 | ||||||
Restructuring and other charges after tax and noncontrolling interest | $ 43,000,000 | ||||||
Number of employees associated with layoff costs | Employees | 800 | ||||||
Curtailment capacity | t | 74,000 | ||||||
Sao Luis Smelter [Member] | Primary Metals [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 680 | ||||||
Sao Luis Smelter [Member] | Alumina [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 120 | ||||||
Suriname [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Curtailment capacity | t | 1,330,000 | ||||||
Warrick Smelter, Wenatchee Smelter and Point Comfort [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 2,000,000 | $ 84,000,000 | |||||
Restructuring and other charges after tax and noncontrolling interest | 1,000,000 | 56,000,000 | |||||
Warrick, IN Smelter [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Other costs | 2,000,000 | 38,000,000 | |||||
Inventory write down | 5,000,000 | ||||||
Inventory write down after tax and noncontrolling interests | 3,000,000 | ||||||
Other related costs | 2,000,000 | 4,000,000 | |||||
Asset Retirement Obligation Costs [Member] | Warrick, IN Smelter [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Other costs | 3,000,000 | 4,000,000 | |||||
Exit Cost [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 190,000,000 | ||||||
Restructuring and other charges after tax and noncontrolling interest | 120,000,000 | ||||||
Divested Businesses [Member] | Rolling Mill in Russia [Member] | Global Rolled Products [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 161,000,000 | ||||||
Restructuring and other charges after tax and noncontrolling interest | 151,000,000 | ||||||
Restructuring Programs Layoffs 2014 [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 33,000,000 | 62,000,000 | |||||
Restructuring and other charges after tax and noncontrolling interest | $ 29,000,000 | $ 50,000,000 | |||||
Number of employees associated with layoff costs | Employees | 370 | 970 | |||||
Cash payments made against the layoff reserves | 1,000,000 | 4,000,000 | |||||
Restructuring Programs Layoffs 2014 [Member] | Corporate [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 50 | ||||||
Restructuring Programs Layoffs 2014 [Member] | Global Rolled Products [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 70 | ||||||
Restructuring Programs Layoffs 2014 [Member] | Primary Metals [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 165 | ||||||
Restructuring Programs Layoffs 2014 [Member] | Transportation and Construction Solutions [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 355 | 410 | |||||
Restructuring Programs Layoffs 2014 [Member] | Engineered Products and Solutions [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 275 | ||||||
Other Miscellaneous Items [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 8,000,000 | $ 2,000,000 | 16,000,000 | $ 3,000,000 | |||
Restructuring and other charges after tax and noncontrolling interest | 5,000,000 | 9,000,000 | 9,000,000 | 13,000,000 | |||
Other Adjustments [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 8,000,000 | 4,000,000 | 20,000,000 | 12,000,000 | |||
Restructuring and other charges after tax and noncontrolling interest | 4,000,000 | 2,000,000 | 13,000,000 | 9,000,000 | |||
Shutdown and Curtailment Actions [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Asset impairment charges | $ 86,000,000 | ||||||
Number of employees associated with layoff costs | Employees | 90 | ||||||
Shutdown and Curtailment Actions [Member] | Australia [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Gain on sale of land | 18,000,000 | ||||||
Gain on sale of land after tax | 13,000,000 | ||||||
Layoff Costs [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 11,000,000 | $ 22,000,000 | |||||
Other Exit Costs [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 82,000,000 | ||||||
Other Exit Costs [Member] | Three Other Segments and Corporate [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 11,000,000 | ||||||
Restructuring and other charges after tax and noncontrolling interest | $ 5,000,000 | ||||||
Asset Retirement Obligations [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 45,000,000 | ||||||
Environmental Remediation [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 29,000,000 | ||||||
Supplier and Customer Contract [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 8,000,000 | ||||||
Pension Costs [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 11,000,000 | ||||||
Restructuring And Related Charges [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 20,000,000 | ||||||
Restructuring and other charges after tax and noncontrolling interest | $ 10,000,000 | ||||||
Restructuring Programs Layoffs 2015 [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 54,000,000 | ||||||
Restructuring and other charges after tax and noncontrolling interest | $ 35,000,000 | ||||||
Number of employees associated with layoff costs | Employees | 4,700 | 100 | 1,200 | 5,000 | |||
Approximate number of employees already laid off | Employees | 4,100 | 4,100 | 4,100 | ||||
Cash payments made against the layoff reserves | $ 17,000,000 | $ 109,000,000 | |||||
Restructuring Programs Layoffs 2015 [Member] | Corporate [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 10 | 10 | |||||
Restructuring Programs Layoffs 2015 [Member] | Global Rolled Products [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 30 | ||||||
Restructuring Programs Layoffs 2015 [Member] | Primary Metals [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 30 | 60 | |||||
Restructuring Programs Layoffs 2015 [Member] | Transportation and Construction Solutions [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 240 | ||||||
Restructuring Programs Layoffs 2015 [Member] | Engineered Products and Solutions [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 60 | 860 | |||||
Asset Impairment and Accelerated Depreciation [Member] | Warrick, IN Smelter [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 70,000,000 | ||||||
Severance costs | $ 4,000,000 | 24,000,000 | |||||
Other costs | 2,000,000 | 38,000,000 | |||||
Contract Termination [Member] | Warrick, IN Smelter [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Other costs | $ 3,000,000 | $ 30,000,000 | |||||
Restructuring Programs Layoffs 2016 [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 1,200 | ||||||
Approximate number of employees already laid off | Employees | 900 | 900 | 900 | ||||
Cash payments made against the layoff reserves | $ 8,000,000 | $ 19,000,000 |
Restructuring and Other Charg43
Restructuring and Other Charges - Schedule of Restructuring and Other Charges by Reportable Segments, Pretax (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 18 | $ 66 | $ 134 | $ 460 |
Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 12 | 57 | 131 | 422 |
Corporate [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 6 | 9 | 3 | 38 |
Alumina [Member] | Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | (1) | 38 | 3 | 55 |
Primary Metals [Member] | Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 17 | 11 | 105 | 209 |
Global Rolled Products [Member] | Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | (1) | (17) | 1 | 119 |
Engineered Products and Solutions [Member] | Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | (1) | 22 | 16 | 33 |
Transportation and Construction Solutions [Member] | Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ (2) | $ 3 | $ 6 | $ 6 |
Restructuring and Other Charg44
Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve beginning balance | $ 250 | $ 132 |
Cash payments | (165) | (123) |
Restructuring charges | 106 | 532 |
Other | (59) | (291) |
Restructuring reserve ending balance | 132 | 250 |
Layoff Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve beginning balance | 226 | 98 |
Cash payments | (132) | (111) |
Restructuring charges | 54 | 299 |
Other | (56) | (60) |
Restructuring reserve ending balance | 92 | 226 |
Other Exit Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve beginning balance | 24 | 34 |
Cash payments | (33) | (12) |
Restructuring charges | 52 | 233 |
Other | (3) | (231) |
Restructuring reserve ending balance | $ 40 | $ 24 |
Restructuring and Other Charg45
Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||
Asset retirement obligations | $ 4 | $ 45 | $ 4 | $ 45 |
Restructuring and other charges | $ 18 | 66 | 134 | 460 |
Pension And Other Postretirement Benefits Costs Charged To Restructuring [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other layoff cost including reclassification in pension cost | 28 | |||
Environmental Remediation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 29 | |||
Pension Benefits [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other layoff cost including reclassification in pension cost | 14 | |||
Restructuring and other charges | $ 2 | $ 2 | $ 2 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - 2015 Acquisitions - Additional Information (Detail) € in Millions | Jul. 29, 2016HydroelectricPowerDevelopments | Apr. 30, 2016USD ($) | Apr. 30, 2016USD ($) | Mar. 31, 2015USD ($)Employees | Mar. 31, 2015EUR (€)Employees | Sep. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Apr. 29, 2016USD ($)Employees | Sep. 30, 2016USD ($)Employees | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Jul. 31, 2015USD ($) | Mar. 31, 2015EUR (€) |
Business Acquisition [Line Items] | ||||||||||||||
Gain from sale of Remmele Medical business | $ 0 | $ 0 | ||||||||||||
Sale generated in last annual period prior to divestiture | $ 5,213,000,000 | $ 5,573,000,000 | $ 15,455,000,000 | $ 17,289,000,000 | ||||||||||
Number of employees | Employees | 33 | |||||||||||||
No of hydroelectric power developments held by Yadkin | HydroelectricPowerDevelopments | 4 | |||||||||||||
Sale generated by Yadkin | $ 20,000,000 | |||||||||||||
Goodwill | 5,384,000,000 | $ 5,384,000,000 | 5,401,000,000 | |||||||||||
Income tax expense | 147,000,000 | $ 100,000,000 | $ 329,000,000 | $ 401,000,000 | ||||||||||
Weighted average amortization period of intangible asset | 20 years | |||||||||||||
Goodwill [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Increase (decrease) intangible assets | $ (44,000,000) | |||||||||||||
LISI MEDICAL [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash received on sale of operations | 102,000,000 | |||||||||||||
Sale of Remmele Medical business, net of transaction costs | $ 99,000,000 | |||||||||||||
RTI [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Sale generated in last annual period prior to divestiture | $ 20,000,000 | |||||||||||||
Number of employees | Employees | 330 | |||||||||||||
Goodwill | 298,000,000 | $ 298,000,000 | ||||||||||||
Common stock conversion transaction value | $ 870,000,000 | |||||||||||||
Goodwill deductible for income tax purpose | 0 | 0 | ||||||||||||
Yadkin [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Carrying value of net assets to be sold | 127,000,000 | 127,000,000 | $ 127,000,000 | |||||||||||
TITAL [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Number of employees | Employees | 650 | 650 | ||||||||||||
Cash paid for business acquisition | $ 204,000,000 | € 188 | ||||||||||||
Business acquisition transaction cost | 1,000,000 | € 1 | ||||||||||||
Goodwill | $ 118,000,000 | 117,000,000 | 117,000,000 | |||||||||||
Income tax expense | 0 | |||||||||||||
Other intangible assets | $ 0 | $ 0 | ||||||||||||
TITAL [Member] | Goodwill [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Increase (decrease) intangible assets | $ 1,000,000 |
Acquisitions and Divestitures47
Acquisitions and Divestitures - Summary of Final Allocation of Purchase Price by Major Asset Acquired and Liability Assumed, Amount of Goodwill Recognized (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Goodwill | $ 5,384 | $ 5,401 |
RTI [Member] | ||
Assets: | ||
Cash | 303 | |
Receivables from customers | 94 | |
Inventories | 483 | |
Prepaid expenses and other current assets | 47 | |
Properties, plants, and equipment | 321 | |
Goodwill | 298 | |
Other noncurrent assets | 60 | |
Total assets | 1,606 | |
Liabilities: | ||
Accounts payable | 86 | |
Other current liabilities | 94 | |
Long-term debt due within one year | 115 | |
Long-term debt, less amount due within one year | 387 | |
Other noncurrent liabilities | 111 | |
Total liabilities | 793 | |
Equity | ||
Additional capital | 60 | |
Total equity | $ 60 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory Components (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 854 | $ 811 |
Work-in-process | 1,325 | 1,272 |
Bauxite and alumina | 401 | 445 |
Purchased raw materials | 670 | 720 |
Operating supplies | 205 | 194 |
Inventories, total | $ 3,455 | $ 3,442 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Inventories valued on a LIFO basis | $ 1,311 | $ 1,373 |
Total inventories valued on an average-cost basis | $ 567 | $ 559 |
Investments - Summary of Unaudi
Investments - Summary of Unaudited Financial Information for Alcoa's Equity Investments (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Investments Schedule [Abstract] | ||||
Sales | $ 888 | $ 1,015 | $ 2,684 | $ 2,872 |
Cost of goods sold | 840 | 796 | 2,200 | 2,353 |
Net income (loss) | $ (6) | $ 20 | $ 23 | $ (66) |
Investments - Additional Inform
Investments - Additional Information (Detail) AUD in Millions, $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Apr. 30, 2016USD ($)Refinery | Apr. 30, 2016AUDRefinery | Sep. 30, 2016USD ($) | Sep. 30, 2016AUD | Sep. 30, 2015USD ($) | Dec. 31, 2004 | Dec. 31, 2015USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||||
Number of alumina refineries to be powered under supplied agreement | Refinery | 3 | 3 | |||||
Sales of investments | $ 280 | $ 40 | |||||
Alcoa Joint Venture [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest in joint venture | 60.00% | 60.00% | 25.10% | 25.10% | |||
Alumina Limited of Australia [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Ownership interest in joint venture | 40.00% | 40.00% | |||||
AofA [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Gain after tax and noncontrolling interest | $ 11 | AUD 15 | |||||
Pretax gain on sale of investments | 27 | AUD 35 | |||||
AofA [Member] | Dampier to Bunbury Natural Gas Pipeline [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Investment percentage in DBP to be sold | 20.00% | 20.00% | |||||
Amount to be received by sale of investment percentage in DBP | $ 145 | AUD 192 | |||||
Percentage of access to be maintained in DBNGP transmission capacity for gas supply | 30.00% | 30.00% | 20.00% | ||||
Exchange Traded Fixed Income and Equity Securities [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Sales of investments | 130 | ||||||
Loss on sale of investment | 3 | ||||||
Loss on sale of investment, after tax | (2) | ||||||
Carrying value of available-for-sale-securities | $ 83 | $ 193 |
Other Noncurrent Assets - Addit
Other Noncurrent Assets - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Other Assets, Noncurrent [Abstract] | ||||
Proceeds from sale of company-owned life insurance policies | $ 223,000,000 | $ 234,000,000 | ||
Gain or loss recognized on sale of company-owned life insurance policies | $ 0 | |||
Cash surrender value of life insurance | $ 25,000,000 | $ 492,000,000 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) $ in Millions | 9 Months Ended | |
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | |
Debt Instrument [Line Items] | ||
Cash held in escrow | $ 72 | $ 7 |
Proceeds from issuance of public debt offering | $ 1,313 | $ 1,534 |
Ratio of consolidated indebtedness to consolidated EBITDDA | 5.50 | |
Alcoa Nederland Holding BV [Member] | ||
Debt Instrument [Line Items] | ||
Cash held in escrow | $ 1,309 | |
Proceeds from issuance of public debt offering | 1,228 | |
Cash on hand to fund redemption of senior notes | $ 81 | |
Amended Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Revolving credit facility, term | 5 years | |
Ratio of Indebtedness December 31, 2019 and Thereafter [Member] | ||
Debt Instrument [Line Items] | ||
Declining ratio of consolidated indebtedness to consolidated EBITDDA | 3.50 | |
Line of Credit Prior to Amendment [Member] | ||
Debt Instrument [Line Items] | ||
Replacement of existing financial covenant | $ 4,000 | |
Post Amendment [Member] | ||
Debt Instrument [Line Items] | ||
Replacement of existing financial covenant | 3,000 | |
6.75% Senior Notes Due 2024 [Member] | Alcoa Nederland Holding BV [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount of debt | $ 750 | |
Senior notes, interest percentage | 6.75% | |
Debt instrument maturity date | 2,024 | |
7% Senior Notes Due 2026 [Member] | Alcoa Nederland Holding BV [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount of debt | $ 500 | |
Senior notes, interest percentage | 7.00% | |
Debt instrument maturity date | 2,026 |
Contingencies and Commitments -
Contingencies and Commitments - Additional Information (Detail) | 12 Months Ended | |||||
Dec. 31, 2015USD ($) | Dec. 31, 2015EUR (€) | Feb. 21, 2013USD ($) | Feb. 21, 2013EUR (€) | Mar. 26, 2012USD ($) | Mar. 26, 2012EUR (€) | |
Loss Contingencies [Line Items] | ||||||
Management estimate for maximum exposure from class action | $ 110,000,000 | € 85,000,000 | ||||
Partial reserve | $ 37,000,000 | € 34,000,000 | ||||
Alcoa Trasformazioni [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Management estimate for maximum exposure from class action | $ 97,000,000 | € 76,000,000 | ||||
Minimum [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Provision for contract losses | 0 | |||||
Maximum [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Provision for contract losses | $ 97,000,000 | € 76,000,000 |
Contingencies and Commitments55
Contingencies and Commitments - Additional Information - 1 (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Loss Contingencies [Line Items] | ||||
Number of cleanup locations | More than 100 | |||
Remediation reserve balance | $ 602 | $ 602 | $ 604 | |
Remediation reserve balance, classified as a current liability | 54 | 54 | 50 | |
Increase in remediation reserve | $ 1 | 13 | 26 | |
Payments related to remediation expenses applied against the reserve | 24 | 49 | ||
Increase (Decrease) in reserves due to effects of foreign currency translation | 7 | 18 | ||
Increase (Decrease) in reserves due to effects of Acquisition | $ 3 | |||
Actual remediation fieldwork period | 4 years | |||
Guarantee debt service expiration year | 2,019 | |||
Minimum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Majority of the project funding period | 2,017 | |||
Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Majority of the project funding period | 2,021 | |||
Massena West, NY [Member] | ||||
Loss Contingencies [Line Items] | ||||
Remediation reserve balance | 230 | $ 230 | 234 | |
Sherwin, TX site [Member] | ||||
Loss Contingencies [Line Items] | ||||
Remediation reserve balance | 30 | 30 | 30 | |
Expected portion of funding through 2019 | 15 | 15 | ||
East St. Louis, IL Site [Member] | ||||
Loss Contingencies [Line Items] | ||||
Remediation reserve balance | $ 3 | $ 3 | $ 8 | |
Recurring Costs of Managing Hazardous Substances and Environmental Programs [Member] | ||||
Loss Contingencies [Line Items] | ||||
Percentage of cost of goods sold | 2.00% |
Contingencies and Commitments56
Contingencies and Commitments - Additional Information - 2 (Detail) € in Millions, BRL in Millions, AUD in Millions, SAR in Billions | Apr. 08, 2015USD ($)InstallmentRefinery | Feb. 27, 2014USD ($) | Feb. 27, 2014EUR (€) | Apr. 08, 2013USD ($) | Apr. 08, 2013BRL | Apr. 30, 2016Refinery | Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Jan. 31, 2014 | Oct. 31, 2013USD ($) | Mar. 31, 2013USD ($) | May 31, 2012USD ($) | May 31, 2012BRL | Sep. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2016AUD | Jun. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2016SAR | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2014AUD | Dec. 31, 2012USD ($) | Dec. 31, 2009USD ($) | Dec. 31, 2004USD ($) | Dec. 31, 2004AUD | Dec. 31, 2002t | Sep. 30, 2011USD ($) | Sep. 30, 2011AUD | Sep. 30, 2016EUR (€) | Sep. 30, 2016BRL | Sep. 30, 2016AUD | Dec. 31, 2015AUD | Apr. 08, 2013BRL | Mar. 31, 2013BRL |
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Increase in remediation reserve | $ 1,000,000 | $ 13,000,000 | $ 26,000,000 | ||||||||||||||||||||||||||||||||
Revised project cost submitted to reflect the removal of a larger volume of contaminated soil | $ 7,000,000 | ||||||||||||||||||||||||||||||||||
Total combined assessments | 296,000,000 | 296,000,000 | € 244 | ||||||||||||||||||||||||||||||||
Number of alumina refineries to be powered under supplied agreement | Refinery | 3 | ||||||||||||||||||||||||||||||||||
State and Local Jurisdiction [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Total combined assessments | 43,000,000 | 43,000,000 | BRL 140 | ||||||||||||||||||||||||||||||||
Maaden Alcoa Joint Venture [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Required plan contributions | 10,800,000,000 | SAR 40.5 | |||||||||||||||||||||||||||||||||
Capital investment | 1,000,000 | ||||||||||||||||||||||||||||||||||
Equity investments | 863,000,000 | 863,000,000 | $ 928,000,000 | ||||||||||||||||||||||||||||||||
Maaden Alcoa Joint Venture [Member] | Arconic [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Required plan contributions | 1,100,000,000 | ||||||||||||||||||||||||||||||||||
Capital investment | $ 982,000,000 | ||||||||||||||||||||||||||||||||||
Ma'aden Joint Venture [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Ownership interest in joint venture | 74.90% | 74.90% | |||||||||||||||||||||||||||||||||
Alcoa Joint Venture [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Ownership interest in joint venture | 60.00% | 25.10% | 25.10% | ||||||||||||||||||||||||||||||||
Project financing Investment | 0 | $ 0 | |||||||||||||||||||||||||||||||||
Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Project financing Investment | 4,207,000,000 | 4,207,000,000 | |||||||||||||||||||||||||||||||||
Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] | Other Noncurrent Liabilities and Deferred Credits [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Guarantee issued on behalf of smelting and rolling mill companies | 3,000,000 | 3,000,000 | 7,000,000 | ||||||||||||||||||||||||||||||||
Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] | Financial Guarantee [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Debt service requirements, principal | 100,000,000 | ||||||||||||||||||||||||||||||||||
Debt service requirements, interest maximum | 35,000,000 | ||||||||||||||||||||||||||||||||||
Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] | Arconic [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Project financing Investment | 1,056,000,000 | 1,056,000,000 | |||||||||||||||||||||||||||||||||
Maaden Alcoa Joint Venture Mine And Refinery Company [Member] | Other Noncurrent Liabilities and Deferred Credits [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Guarantee issued on behalf of smelting and rolling mill companies | 3,000,000 | 3,000,000 | $ 3,000,000 | ||||||||||||||||||||||||||||||||
Maaden Alcoa Joint Venture Mine And Refinery Company [Member] | Financial Guarantee [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Debt service requirements, principal | 120,000,000 | ||||||||||||||||||||||||||||||||||
Debt service requirements, interest maximum | 30,000,000 | ||||||||||||||||||||||||||||||||||
Maaden Alcoa Joint Venture Mine And Refinery Company [Member] | AWAC [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Project financing Investment | 560,000,000 | 560,000,000 | |||||||||||||||||||||||||||||||||
Maaden Alcoa Joint Venture Mine And Refinery Company [Member] | Arconic [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Project financing Investment | 2,232,000,000 | $ 2,232,000,000 | |||||||||||||||||||||||||||||||||
Alumina Limited [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Percentage of amount required to be contributed in the event Alcoa would be required to make payments under the guarantees | 40.00% | 40.00% | |||||||||||||||||||||||||||||||||
Ligestra [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Costs and payments | $ 17,000,000 | € 12 | |||||||||||||||||||||||||||||||||
Costs and payments related to damages | 9,000,000 | 6 | |||||||||||||||||||||||||||||||||
Payment period | 10 years | 10 years | |||||||||||||||||||||||||||||||||
Ligestra [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Percentage of payments and remediation costs | 50.00% | ||||||||||||||||||||||||||||||||||
Ligestra [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Percentage of payments and remediation costs | 80.00% | ||||||||||||||||||||||||||||||||||
Italian Ministry of Environment and Protection of Land and Sea[Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Soil remediation project, estimated cost | 33,000,000 | 24 | |||||||||||||||||||||||||||||||||
Payments for emergency action and natural resource damages | $ 25,000,000 | € 18 | |||||||||||||||||||||||||||||||||
Alcoa World Alumina Brasil [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Disallowed tax credits | $ 110,000,000 | BRL 220 | |||||||||||||||||||||||||||||||||
Percentage of penalty of the gross disallowed amount | 50.00% | 50.00% | 50.00% | ||||||||||||||||||||||||||||||||
Value added tax receivable | $ 41,000,000 | BRL 82 | |||||||||||||||||||||||||||||||||
Estimated range of reasonably possible loss, minimum | BRL | BRL 103 | ||||||||||||||||||||||||||||||||||
Alcoa World Alumina Brasil [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Estimated range of reasonably possible loss, minimum | $ 0 | ||||||||||||||||||||||||||||||||||
Alcoa World Alumina Brasil [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Estimated range of reasonably possible loss, minimum | 32,000,000 | ||||||||||||||||||||||||||||||||||
Alcoa World Alumina Brasil [Member] | Fixed Assets [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Disallowed tax credits | BRL | BRL 117 | ||||||||||||||||||||||||||||||||||
Alcoa World Alumina Brasil [Member] | Fixed Assets [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Disallowed tax credits | 0 | ||||||||||||||||||||||||||||||||||
Alcoa World Alumina Brasil [Member] | Fixed Assets [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Disallowed tax credits | $ 36,000,000 | ||||||||||||||||||||||||||||||||||
Alcoa Aluminio [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Metal sold per month | t | 2,000 | ||||||||||||||||||||||||||||||||||
Majority-Owned Subsidiary | AofA [Member] | Service Agreements [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Gas supply agreement period | 12 years | ||||||||||||||||||||||||||||||||||
Number of alumina refineries to be powered under supplied agreement | Refinery | 3 | ||||||||||||||||||||||||||||||||||
Number of installments | Installment | 2 | ||||||||||||||||||||||||||||||||||
Gas supply agreement prepayment amount | $ 500,000,000 | ||||||||||||||||||||||||||||||||||
Majority-Owned Subsidiary | AofA [Member] | Service Agreements [Member] | First Installment [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Gas supply agreement prepayment amount | 300,000,000 | ||||||||||||||||||||||||||||||||||
Asset included in other noncurrent assets | 504,000,000 | $ 504,000,000 | $ 288,000,000 | AUD 654 | AUD 395 | ||||||||||||||||||||||||||||||
Majority-Owned Subsidiary | AofA [Member] | Service Agreements [Member] | Second Installment [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Gas supply agreement prepayment amount | $ 200,000,000 | ||||||||||||||||||||||||||||||||||
Fusina [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Increase in remediation reserve | $ 0 | $ 12,000,000 | |||||||||||||||||||||||||||||||||
Portovesme [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Increase in remediation reserve | $ 3,000,000 | $ 3,000,000 | |||||||||||||||||||||||||||||||||
Baie Comeau Smelter [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Increase in remediation reserve | $ 25,000,000 | ||||||||||||||||||||||||||||||||||
Mosjoen [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Increase in remediation reserve | $ 11,000,000 | $ 20,000,000 | |||||||||||||||||||||||||||||||||
Dampier to Bunbury Natural Gas Pipeline [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Capital investment | $ 17,000,000 | AUD 24 | |||||||||||||||||||||||||||||||||
Dampier to Bunbury Natural Gas Pipeline [Member] | AofA [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Capital investment | $ 141,000,000 | AUD 176 | |||||||||||||||||||||||||||||||||
Investment percentage | 30.00% | 20.00% | 20.00% | ||||||||||||||||||||||||||||||||
Prepayments made under the agreement for future gas transmission services | $ 288,000,000 | $ 288,000,000 | AUD 373 | ||||||||||||||||||||||||||||||||
Dampier to Bunbury Natural Gas Pipeline [Member] | Three-Year Equity Call Plan [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Required plan contributions | 39,000,000 | AUD 40 | |||||||||||||||||||||||||||||||||
Dampier to Bunbury Natural Gas Pipeline [Member] | New Equity Call Plan [Member] | |||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||
Required plan contributions | $ 3,000,000 | AUD 5 | $ 30,000,000 | AUD 36 | |||||||||||||||||||||||||||||||
Capital investment | $ 20,000,000 | AUD 27 |
Other Income, Net - Schedule of
Other Income, Net - Schedule of Other Income, Net (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Other Income and Expenses [Abstract] | ||||
Equity loss | $ 15 | $ 24 | $ 52 | $ 68 |
Interest income | (5) | (4) | (14) | (11) |
Foreign currency (gains) losses, net | 10 | (17) | 16 | (27) |
Net gain from asset sales | (124) | (41) | (152) | (69) |
Net income (loss) on mark-to-market derivative contracts (Q) | (4) | 16 | 5 | 19 |
Other, net | (9) | 7 | (27) | (7) |
Other (income) expenses, net | $ (117) | $ (15) | $ (120) | $ (27) |
Other Income, Net - Additional
Other Income, Net - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Other Non operating Income Expense [Line Items] | ||||
Net loss (gain) from asset sales | $ 124 | $ 41 | $ 152 | $ 69 |
Disposal of Equity Interests [Member] | ||||
Other Non operating Income Expense [Line Items] | ||||
Net loss (gain) from asset sales | 27 | |||
Disposal of Land [Member] | ||||
Other Non operating Income Expense [Line Items] | ||||
Net loss (gain) from asset sales | $ 118 | $ 118 | $ 29 |
Segment Information - Schedule
Segment Information - Schedule of Operating Results of Arconic's Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Total sales | $ 5,213 | $ 5,573 | $ 15,455 | $ 17,289 |
Equity (loss) income | (16) | (24) | (54) | (66) |
Depreciation, depletion, and amortization | 301 | 305 | 894 | 918 |
Income taxes | 137 | 153 | 470 | 644 |
After-tax operating income (ATOI) | 395 | 410 | 1,130 | 1,633 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 5,969 | 6,459 | 17,805 | 20,420 |
Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment sales | 757 | 899 | 2,355 | 3,155 |
Third-Party Sales [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Third-party sales | 5,212 | 5,560 | 17,265 | |
Alumina [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Equity (loss) income | (9) | (9) | (30) | (27) |
Depreciation, depletion, and amortization | 68 | 71 | 197 | 228 |
Income taxes | 31 | 85 | 76 | 264 |
After-tax operating income (ATOI) | 72 | 212 | 189 | 648 |
Alumina [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 974 | 1,303 | 2,805 | 4,046 |
Alumina [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment sales | 287 | 391 | 879 | 1,323 |
Alumina [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Third-party sales | 687 | 912 | 1,926 | 2,723 |
Primary Metals [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Equity (loss) income | 3 | (7) | 7 | (15) |
Depreciation, depletion, and amortization | 99 | 106 | 302 | 324 |
Income taxes | (49) | (16) | 14 | |
After-tax operating income (ATOI) | 56 | (59) | 111 | 195 |
Primary Metals [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 1,588 | 1,728 | 4,778 | 6,088 |
Primary Metals [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment sales | 440 | 479 | 1,388 | 1,733 |
Primary Metals [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Third-party sales | 1,148 | 1,249 | 3,390 | 4,355 |
Global Rolled Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Equity (loss) income | (10) | (8) | (31) | (24) |
Depreciation, depletion, and amortization | 59 | 56 | 170 | 168 |
Income taxes | 18 | 28 | 80 | 89 |
After-tax operating income (ATOI) | 58 | 62 | 194 | 192 |
Global Rolled Products [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 1,551 | 1,556 | 4,556 | 4,915 |
Global Rolled Products [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment sales | 30 | 29 | 88 | 99 |
Global Rolled Products [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Third-party sales | 1,521 | 1,527 | 4,468 | 4,816 |
Engineered Products and Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation, depletion, and amortization | 63 | 61 | 190 | 166 |
Income taxes | 71 | 71 | 236 | 228 |
After-tax operating income (ATOI) | 162 | 151 | 504 | 472 |
Engineered Products and Solutions [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 1,406 | 1,397 | 4,320 | 3,933 |
Engineered Products and Solutions [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Third-party sales | 1,406 | 1,397 | 4,320 | 3,933 |
Transportation and Construction Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation, depletion, and amortization | 12 | 11 | 35 | 32 |
Income taxes | 17 | 18 | 49 | 49 |
After-tax operating income (ATOI) | 47 | 44 | 132 | 126 |
Transportation and Construction Solutions [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 450 | 475 | 1,438 | |
Transportation and Construction Solutions [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Third-party sales | $ 450 | $ 475 | $ 1,346 | $ 1,438 |
Segment Information - Schedul60
Segment Information - Schedule of Segment ATOI to Consolidated Net Income Attributable to Arconic (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Total segment ATOI | $ 395 | $ 410 | $ 1,130 | $ 1,633 |
Metal price lag | 4 | (48) | 12 | (110) |
Interest expense | (133) | (123) | (389) | (369) |
Noncontrolling interests | (20) | (62) | (58) | (189) |
Consolidated net income attributable to Arconic | 166 | 44 | 317 | 379 |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Impact of LIFO | 1 | 50 | (5) | 93 |
Interest expense | (86) | (80) | (253) | (240) |
Noncontrolling interests | (20) | (62) | (58) | (189) |
Corporate expense | (77) | (72) | (209) | (199) |
Restructuring and other charges | (13) | (48) | (89) | (368) |
Other | $ (38) | $ (106) | $ (211) | $ (241) |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) $ / shares in Units, $ in Millions | Oct. 05, 2016$ / sharesshares | Aug. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Oct. 04, 2016$ / sharesshares |
Class of Stock [Line Items] | |||||
Reverse stock split ratio | 0.33 | ||||
Decrease in common stock due to reverse stock split | $ (877) | ||||
Increase in additional paid in capital due to reverse stock split | 877 | ||||
Retirement of treasury stock | $ 76 | ||||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Retirement of treasury stock | (76) | $ 76 | 76 | ||
Additional Capital [Member] | |||||
Class of Stock [Line Items] | |||||
Retirement of treasury stock | $ (2,563) | $ 2,563 | $ 2,563 | ||
Subsequent Event [Member] | |||||
Class of Stock [Line Items] | |||||
Reverse stock split ratio | 0.33 | ||||
Common stock shares outstanding | shares | 400,000,000 | 1,300,000,000 | |||
Common stock shares authorized | shares | 600,000,000 | 1,800,000,000 | |||
Common stock par value | $ / shares | $ 1 | $ 1 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Information Used to Compute Basic and Diluted EPS (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to Arconic | $ 166 | $ 44 | $ 317 | $ 379 |
Less: preferred stock dividends declared | 18 | 18 | 52 | 52 |
Net income available to Arconic common shareholders - basic | 148 | 26 | 265 | 327 |
Add: interest expense related to convertible notes | 2 | |||
Add: dividends related to mandatory convertible preferred stock | 0 | 0 | 0 | 0 |
Net income available to Arconic common shareholders - diluted | $ 150 | $ 26 | $ 265 | $ 327 |
Average shares outstanding - basic | 438 | 427 | 438 | 414 |
Stock options | 1 | 1 | 1 | |
Stock and performance awards | 5 | 4 | 4 | 4 |
Convertible notes | 9 | |||
Mandatory convertible preferred stock | 0 | 0 | 0 | 0 |
Average shares outstanding - diluted | 453 | 431 | 443 | 419 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - $ / shares shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Basic average number of share | 19 | 7 | |||
Weighted average number of shares outstanding | 438 | 427 | 438 | 414 | |
Weighted Average [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of anti-dilutive securities | 8 | 3 | |||
RTI [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of common stock shares issued in a part of acquisition | 29 | ||||
Weighted average number of shares outstanding | 29 | 29 | |||
Mandatory Convertible Notes [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of anti-dilutive securities | 26 | 26 | 26 | 26 | |
Equity Unit Purchase Agreements [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of anti-dilutive securities | 8 | 9 | |||
Stock Options [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Weighted average exercise price of options | $ 38.16 | $ 38.28 | |||
Convertible Notes [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of anti-dilutive securities | 9 |
Receivables - Additional Inform
Receivables - Additional Information (Detail) | Mar. 30, 2012USD ($) | Sep. 30, 2016USD ($)Agreement | Dec. 31, 2015USD ($) |
Schedule Of Financial Receivables [Line Items] | |||
Number of arrangement with different financial institution to sell customer receivables | Agreement | 3 | ||
Deferred purchase price receivable | $ 254,000,000 | $ 162,000,000 | $ 249,000,000 |
Net cash funding received since inception | 350,000,000 | ||
Amount of cash draws under arrangement since inception | 1,608,000,000 | ||
Amount of cash repayments under arrangement since inception | 1,258,000,000 | ||
Net cash funding received during the period | 100,000,000 | ||
Amount of cash draws under arrangement during the period | 300,000,000 | ||
Amount of cash repayments under arrangement during the period | 200,000,000 | ||
Accounts receivables | 28,738,000,000 | ||
Cash collections of other receivables | 28,226,000,000 | ||
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 | $ 400,000,000 |
Pension and Other Postretirem65
Pension and Other Postretirement Benefits - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 43 | $ 44 | $ 124 | $ 132 |
Interest cost | 114 | 144 | 358 | 433 |
Expected return on plan assets | (187) | (189) | (558) | (566) |
Recognized net actuarial loss | 104 | 117 | 308 | 352 |
Amortization of prior service benefit | 4 | 4 | 12 | 12 |
Settlements | 13 | 13 | 15 | 14 |
Curtailments | 9 | 9 | ||
Special termination benefits | 1 | 12 | ||
Net periodic benefit cost | 91 | 142 | 260 | 398 |
Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 3 | 4 | 10 | 11 |
Interest cost | 16 | 23 | 53 | 69 |
Recognized net actuarial loss | 8 | 4 | 19 | 13 |
Amortization of prior service benefit | (6) | (9) | (19) | (28) |
Curtailments | (5) | (6) | ||
Special termination benefits | 1 | |||
Net periodic benefit cost | $ 21 | $ 17 | $ 63 | $ 60 |
Pension and Other Postretirem66
Pension and Other Postretirement Benefits - Components of Net Periodic Benefit Cost (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Restructuring and other charges | $ 18 | $ 66 | $ 134 | $ 460 |
Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Restructuring and other charges | $ 2 | $ 2 | $ 2 |
Pension and Other Postretirem67
Pension and Other Postretirement Benefits - Additional Information (Detail) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016USD ($)Installments | Sep. 30, 2016USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||
Increase in pension liability, separation transaction | $ 845,000,000 | |
Accumulated increase in net actuarial loss after-tax, separation transaction | (551,000,000) | |
Decrease in net periodic benefit cost, separation transaction | $ 5,000,000 | |
Cash contribution term to pension plan | 30 months | |
Number of installments | Installments | 3 | |
Minimum required cash contribution to pension plan | $ 50,000,000 | |
Aggregate cash cash contribution to pension plan | 150,000,000 | |
Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Change in interest cost component of net periodic benefit cost determination | 22,000,000 | 70,000,000 |
Other Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Change in interest cost component of net periodic benefit cost determination | $ 4,000,000 | $ 12,000,000 |
Derivatives and Other Financi68
Derivatives and Other Financial Instruments - Additional Information (Detail) t in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Aug. 31, 2016USD ($) | Sep. 30, 2016USD ($)Derivative | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)MWhDerivativeAgencyt | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)MWht | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other derivative contracts estimated term of quoted market prices, in years | 10 years | |||||
Number of credit rating agencies | Agency | 3 | |||||
Decrease in unrealized gain | $ 4,000,000 | $ (16,000,000) | $ (5,000,000) | $ (19,000,000) | ||
Other Comprehensive Income (Loss) [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Decrease in unrealized gain | $ 83,000,000 | |||||
Other Noncurrent Assets [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Decreased derivative asset | 83,000,000 | |||||
Level 1 [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of derivatives recorded as assets | 11,000,000 | 11,000,000 | $ 8,000,000 | |||
Fair value of derivatives recorded as liabilities | 9,000,000 | 9,000,000 | $ 58,000,000 | |||
Net gain (loss) of derivative instruments | 1,000,000 | 7,000,000 | 4,000,000 | 34,000,000 | ||
Level 1 [Member] | Other Comprehensive Income (Loss) [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Net gain (loss) of derivative instruments | $ 1,000,000 | 0 | $ 1,000,000 | 0 | ||
Level 3 [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of derivative instruments | Derivative | 10 | 10 | ||||
Derivatives Not Designated as Hedging Instruments [Member] | Other Expenses (Income), Net [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Net gain (loss) of derivative instruments | $ 1,000,000 | (17,000,000) | $ (8,000,000) | (19,000,000) | ||
Embedded Aluminum Derivative [Member] | Cash Flow Hedging [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Recognized an unrealized gain (loss) | 462,000,000 | 301,000,000 | 830,000,000 | 819,000,000 | ||
Realized gain (loss) on derivatives | $ 1,000,000 | (1,000,000) | $ (4,000,000) | (25,000,000) | ||
Embedded Aluminum Derivative [Member] | Level 3 [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of derivative instruments | Derivative | 8 | 8 | ||||
Embedded Aluminum Derivative [Member] | Level 3 [Member] | Cash Flow Hedging [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of derivative instruments | Derivative | 9 | 9 | ||||
Embedded Aluminum Derivative [Member] | Derivatives Not Designated as Hedging Instruments [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Net gain (loss) of derivative instruments | $ (7,000,000) | (4,000,000) | $ (15,000,000) | (5,000,000) | ||
Embedded Aluminum Derivative [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Level 3 [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of derivative instruments | Derivative | 3 | 3 | ||||
Embedded Aluminum Derivative [Member] | Derivatives Designated as Hedging Instruments [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Aluminum forecast sales | t | 3,521 | 3,307 | ||||
Embedded Aluminum Derivative [Member] | Derivatives Designated as Hedging Instruments [Member] | Cash Flow Hedging [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Amount of gain (loss) expected to be recognized into earnings over the next 12 months | $ 23,000,000 | |||||
Derivative instruments ineffectiveness | $ 0 | 0 | 0 | 0 | ||
Embedded Aluminum Derivative [Member] | Derivatives Designated as Hedging Instruments [Member] | Cash Flow Hedging [Member] | Other Expenses (Income), Net [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other expenses (income), net | 0 | 1,000,000 | 1,000,000 | 2,000,000 | ||
Energy Contracts [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Decrease in unrealized gain | $ 84,000,000 | |||||
Recognized an unrealized gain (loss) | $ 49,000,000 | 3,000,000 | $ 88,000,000 | (8,000,000) | ||
Energy Contracts [Member] | Level 3 [Member] | Cash Flow Hedging [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of derivative instruments | Derivative | 3 | 3 | ||||
Energy Contracts [Member] | Derivatives Designated as Hedging Instruments [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Derivative instruments ineffectiveness | $ 0 | 0 | $ 3,000,000 | 0 | ||
Forecasted energy purchases in megawatt hours | MWh | 2,130,122 | 59,409,328 | ||||
Embedded Credit Derivative [Member] | Level 3 [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of derivative instruments | Derivative | 5 | 5 | ||||
Embedded Credit Derivative [Member] | Derivatives Not Designated as Hedging Instruments [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Net gain (loss) of derivative instruments | $ 8,000,000 | $ (13,000,000) | $ 7,000,000 | $ (14,000,000) | ||
Embedded Credit Derivative [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Level 3 [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of derivative instruments | Derivative | 0 | 0 |
Derivatives and Other Financi69
Derivatives and Other Financial Instruments - Schedule of Quantitative Information for Level 3 Derivative Contracts (Detail) $ in Millions | 9 Months Ended | |
Sep. 30, 2016USD ($)MWh$ / MWh$ / Metric_Ton$ / lb$ / Barrels | Dec. 31, 2015USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative Assets, Fair value | $ | $ 317 | $ 1,137 |
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 Assets, Fair value | $ | 306 | |
Derivative Liabilities, Fair value | $ | $ 242 | |
Embedded Aluminum Derivative [Member] | Price of Aluminum beyond Forward Curve [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 2,197 | |
Maturity year of future aluminum price | 2,027 | |
Embedded Aluminum Derivative [Member] | Price of Aluminum beyond Forward Curve [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Expected future aluminum prices | 2,229 | |
Maturity year of future aluminum price | 2,027 | |
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 | 2,197 | |
Maturity year of future aluminum price | 2,027 | |
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 | $ / lb | 0.0630 | |
Midwest Premium expected year | 2,016 | |
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 | $ / lb | 0.075 | |
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 | 1,680 | |
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 Assets, Fair value | $ | $ 4 | |
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 | 1,662 | |
Maturity year of future aluminum price | 2,016 | |
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 | 1,802 | |
Maturity year of future aluminum price | 2,019 | |
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] | ||
Maturity year of future aluminum price | 2,016 | |
Expected future oil prices | $ / Barrels | 49 | |
Maturity year of future oil price | 2,016 | |
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 | 1,762 | |
Maturity year of future aluminum price | 2,018 | |
Expected future oil prices | $ / Barrels | 55 | |
Maturity year of future oil price | 2,018 | |
Embedded Aluminum Derivative [Member] | Interrelationship of London Metal Exchange Price to Amount Of Megawatt Hours of Energy Needed to Produce Forecasted Metric Tons of Aluminum [Member] | Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative Liabilities, Fair value | $ | $ 30 | |
Megawatt hours per year | MWh | 2,000,000 | |
Embedded Aluminum Derivative [Member] | Interrelationship of London Metal Exchange Price to Amount Of Megawatt Hours of Energy Needed to Produce Forecasted Metric Tons of Aluminum [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 | 1,662 | |
Maturity year of future aluminum price | 2,016 | |
Embedded Aluminum Derivative [Member] | Interrelationship of London Metal Exchange Price to Amount Of Megawatt Hours of Energy Needed to Produce Forecasted Metric Tons of Aluminum [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 | 1,785 | |
Maturity year of future aluminum price | 2,019 | |
Embedded Aluminum Derivative [Member] | Interrelationship of London Metal Exchange Price to Amount Of Megawatt Hours of Energy Needed to Produce Forecasted Metric Tons of Aluminum [Member] | Midwest Premium | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Midwest Premium | $ / lb | 0.063 | |
Midwest Premium expected year | 2,016 | |
Embedded Aluminum Derivative [Member] | Interrelationship of London Metal Exchange Price to Amount Of Megawatt Hours of Energy Needed to Produce Forecasted Metric Tons of Aluminum [Member] | Midwest Premium | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Midwest Premium | $ / lb | 0.075 | |
Midwest Premium expected year | 2,019 | |
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 | 2,337 | |
Maturity year of future aluminum price | 2,029 | |
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] | ||
Midwest Premium expected year | 2,029 | |
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 | 2,633 | |
Maturity year of future aluminum price | 2,036 | |
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] | ||
Midwest Premium expected year | 2,036 | |
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 | $ | $ 7 | |
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 | $ / MWh | 57 | |
Maturity date of electricity beyond forward curve | 2,016 | |
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 | $ / MWh | 58 | |
Maturity date of electricity beyond forward curve | 2,017 | |
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 | $ | $ 24 | |
Percentage of credit spread | 2.52% | |
Embedded Credit Derivative [Member] | Credit Spread between Alcoa and Counterparty [Member] | Level 3 [Member] | Minimum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Percentage of credit spread | 2.15% | |
Embedded Credit Derivative [Member] | Credit Spread between Alcoa and Counterparty [Member] | Level 3 [Member] | Maximum [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Percentage of credit spread | 2.89% |
Derivatives and Other Financi70
Derivatives and Other Financial Instruments - Schedule of Fair Values of Level 3 Derivative Instruments Recorded as Assets and Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | $ 317 | $ 1,137 |
Fair value liability derivatives | 296 | 208 |
Derivatives Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 317 | 1,068 |
Fair value liability derivatives | 272 | 173 |
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 | 40 | 72 |
Derivatives Designated as Hedging Instruments [Member] | Prepaid Expenses and Other Current Assets [Member] | Energy Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 7 | |
Derivatives Designated as Hedging Instruments [Member] | Other Noncurrent Assets [Member] | Embedded Aluminum Derivative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 270 | 994 |
Derivatives Designated as Hedging Instruments [Member] | Other Noncurrent Assets [Member] | Energy Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 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 | 25 | 9 |
Derivatives Designated as Hedging Instruments [Member] | Other Current Liabilities [Member] | Energy Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value liability derivatives | 4 | |
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 | 247 | 160 |
Derivatives Not Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value asset derivatives | 69 | |
Fair value liability derivatives | 24 | 35 |
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 | 69 | |
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 | 4 | 6 |
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 | $ 20 | $ 29 |
Derivatives and Other Financi71
Derivatives and Other Financial Instruments - Schedule of Reconciliation of Activity for Derivative Contracts (Detail) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value measurement, Assets, Purchases, sales, issuances, and settlements | $ 0 | $ 0 |
Embedded Aluminum Derivative [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value measurement, Assets, Beginning balance | 745,000,000 | 1,135,000,000 |
Fair value measurement, Assets, Other comprehensive income | 414,000,000 | (750,000,000) |
Fair value measurement, Assets, Transfers into and/or out of Level 3 | 0 | 0 |
Fair value measurement, Assets, Other | 14,000,000 | 39,000,000 |
Fair value measurement, Assets, Ending balance | 310,000,000 | 310,000,000 |
Fair value measurement, Assets, Sales | 0 | 0 |
Fair value measurement, Assets, Cost of goods sold | 0 | 0 |
Fair value measurement, Liabilities, Beginning balance | 228,000,000 | 169,000,000 |
Fair value measurement, Liabilities, Other comprehensive (loss) income | 48,000,000 | 80,000,000 |
Fair value measurement, Liabilities, Purchases, sales, issuances, and settlements | 32,000,000 | |
Fair value measurement, Liabilities, Transfers into and/or out of Level 3 | 0 | 0 |
Fair value measurement, Liabilities, Other | (3,000,000) | (3,000,000) |
Fair value measurement, Liabilities, Ending balance | 272,000,000 | 272,000,000 |
Fair value measurement, Liabilities, Sales | 0 | 0 |
Fair value measurement, Liabilities, Cost of goods sold | 0 | 0 |
Fair value measurement, Liabilities, Other income, net | 2,000,000 | 2,000,000 |
Embedded Aluminum Derivative [Member] | Sales [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value measurement, Assets | 1,000,000 | (9,000,000) |
Fair value measurement, Assets | 1,000,000 | (9,000,000) |
Fair value measurement, Liabilities | (3,000,000) | (8,000,000) |
Embedded Aluminum Derivative [Member] | Other Income [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value measurement, Assets | (5,000,000) | (13,000,000) |
Fair value measurement, Assets | (5,000,000) | (13,000,000) |
Fair value measurement, Liabilities | 2,000,000 | 2,000,000 |
Embedded Aluminum Derivative [Member] | Cost of Goods Sold [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value measurement, Assets | (31,000,000) | (92,000,000) |
Fair value measurement, Assets | (31,000,000) | (92,000,000) |
Embedded Credit Derivative [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value measurement, Liabilities, Beginning balance | 33,000,000 | 35,000,000 |
Fair value measurement, Liabilities, Cost of goods sold | (1,000,000) | (4,000,000) |
Fair value measurement, Liabilities, Transfers into and/or out of Level 3 | 0 | 0 |
Fair value measurement, Liabilities, Ending balance | 24,000,000 | 24,000,000 |
Fair value measurement, Liabilities, Sales | 0 | 0 |
Fair value measurement, Liabilities, Cost of goods sold | 0 | 0 |
Fair value measurement, Liabilities, Other income, net | (8,000,000) | (7,000,000) |
Embedded Credit Derivative [Member] | Other Income [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value measurement, Liabilities | (8,000,000) | (7,000,000) |
Energy Contracts [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value measurement, Assets, Beginning balance | 49,000,000 | 2,000,000 |
Fair value measurement, Assets, Other comprehensive income | (48,000,000) | 87,000,000 |
Fair value measurement, Assets, Transfers into and/or out of Level 3 | 0 | 0 |
Fair value measurement, Assets, Other | (5,000,000) | 1,000,000 |
Fair value measurement, Assets, Ending balance | 7,000,000 | 7,000,000 |
Fair value measurement, Assets, Sales | 0 | 0 |
Fair value measurement, Assets, Cost of goods sold | 0 | 0 |
Fair value measurement, Liabilities, Beginning balance | 9,000,000 | 4,000,000 |
Fair value measurement, Liabilities, Other comprehensive (loss) income | (1,000,000) | (1,000,000) |
Fair value measurement, Liabilities, Transfers into and/or out of Level 3 | 0 | 0 |
Fair value measurement, Liabilities, Other | (7,000,000) | (1,000,000) |
Fair value measurement, Liabilities, Sales | 0 | 0 |
Fair value measurement, Liabilities, Cost of goods sold | 0 | 0 |
Fair value measurement, Liabilities, Other income, net | (1,000,000) | (2,000,000) |
Energy Contracts [Member] | Other Income [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value measurement, Assets | (85,000,000) | (83,000,000) |
Fair value measurement, Assets | (85,000,000) | (83,000,000) |
Fair value measurement, Liabilities | $ (1,000,000) | $ (2,000,000) |
Derivatives and Other Financi72
Derivatives and Other Financial Instruments - Schedule of Reconciliation of Activity for Derivative Contracts (Parenthetical) (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Decrease in unrealized gain | $ 4,000,000 | $ (16,000,000) | $ (5,000,000) | $ (19,000,000) | |
Fair value measurement, Assets, Purchases, sales, issuances and settlements | $ 0 | $ 0 | |||
Energy Contracts [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Decrease in unrealized gain | $ 84,000,000 | ||||
Energy Contracts [Member] | Other Expenses (Income), Net [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Decreased derivative asset | $ 84,000,000 |
Derivatives and Other Financi73
Derivatives and Other Financial Instruments - Schedule of Carrying Values and Fair Values of Other Financial Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Carrying Value [Member] | ||
Derivative [Line Items] | ||
Cash and cash equivalents | $ 1,863 | $ 1,919 |
Restricted cash | 1,337 | 37 |
Noncurrent receivables | 19 | 17 |
Available-for-sale securities | 83 | 193 |
Short-term borrowings | 32 | 38 |
Commercial paper | 0 | 0 |
Long-term debt due within one year | 773 | 21 |
Contingent payment related to an acquisition | 133 | 130 |
Long-term debt, less amount due within one year | 9,501 | 8,993 |
Fair Value [Member] | ||
Derivative [Line Items] | ||
Cash and cash equivalents | 1,863 | 1,919 |
Restricted cash | 1,337 | 37 |
Noncurrent receivables | 19 | 17 |
Available-for-sale securities | 83 | 193 |
Short-term borrowings | 32 | 38 |
Commercial paper | 0 | 0 |
Long-term debt due within one year | 783 | 21 |
Contingent payment related to an acquisition | 133 | 130 |
Long-term debt, less amount due within one year | $ 10,195 | $ 8,922 |
Separation Transaction - Additi
Separation Transaction - Additional Information (Detail) $ in Millions | Sep. 29, 2016 | Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) |
Separation Transaction [Line Items] | |||
Separation based on pro rata distribution percentage on common stock | 80.10% | ||
Percentage of common stock retained | 19.90% | ||
Reverse stock split ratio | 0.33 | ||
Capital expenditure incurred | $ 60 | $ 81 | |
Selling, General Administrative, and Other Expenses [Member] | |||
Separation Transaction [Line Items] | |||
Costs related to separation transaction, pre-tax | 55 | 118 | |
Costs related to separation transaction, after-tax | 44 | $ 98 | |
Cost related to separation transaction, inception to date | 142 | ||
Other Expense [Member] | |||
Separation Transaction [Line Items] | |||
Debt issuance and capital expenditures | $ 81 |