10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2011

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-3610

ALCOA INC.

(Exact name of registrant as specified in its charter)

PENNSYLVANIA	25-0317820
(State of incorporation)	(I.R.S. Employer Identification No.)
390 Park Avenue, New York, New York	10022-4608
(Address of principal executive offices)	(Zip code)

Investor Relations 212-836-2674

Office of the Secretary 212-836-2732

(Registrant’s telephone number including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of October 14, 2011, 1,064,303,727 shares of common stock, par value $1.00 per share, of the registrant were outstanding.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Alcoa and subsidiaries

Statement of Consolidated Operations (unaudited)

(in millions, except per-share amounts)

	Third quarter  ended September 30,					Nine months ended September 30,
	2011		2010			2011			2010
Sales (J)	$	6,419	$	5,287		$	18,962		$	15,361
Cost of goods sold (exclusive of expenses below)		5,290		4,413			15,252			12,636
Selling, general administrative, and other expenses		261		232			759			679
Research and development expenses		47		40			136			124
Provision for depreciation, depletion, and amortization		376		358			1,112			1,079
Restructuring and other charges (D)		9		2			49			219
Interest expense		125		139			399			376
Other expenses (income), net (I)		31		43			(47	)		48
Total costs and expenses		6,139		5,227			17,660			15,161
Income from continuing operations before income taxes		280		60			1,302			200
Provision (benefit) for income taxes (M)		55		(49	)		329			92
Income from continuing operations		225		109			973			108
Loss from discontinued operations (C)		—		—			(5	)		(8	)
Net income		225		109			968			100
Less: Net income attributable to noncontrolling interests		53		48			166			104
NET INCOME (LOSS) ATTRIBUTABLE TO ALCOA	$	172	$	61		$	802		$	(4	)
AMOUNTS ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS:
Income from continuing operations	$	172	$	61		$	807		$	4
Loss from discontinued operations		—		—			(5	)		(8	)
Net income (loss)	$	172	$	61		$	802		$	(4	)
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS (L):
Basic:
Income from continuing operations	$	0.16	$	0.06		$	0.76		$	—
Loss from discontinued operations		—		—			(0.01	)		(0.01	)
Net income (loss)	$	0.16	$	0.06		$	0.75		$	(0.01	)
Diluted:
Income from continuing operations	$	0.15	$	0.06		$	0.71		$	—
Loss from discontinued operations		—		—			—			(0.01	)
Net income (loss)	$	0.15	$	0.06		$	0.71		$	(0.01	)
Dividends paid per common share	$	0.03	$	0.03		$	0.09		$	0.09

The accompanying notes are an integral part of the consolidated financial statements.

2

Alcoa and subsidiaries

Consolidated Balance Sheet (unaudited)

(in millions)

	September 30, 2011			December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	1,332		$	1,543
Receivables from customers, less allowances of $39 in 2011 and $45 in 2010		1,915			1,565
Other receivables		386			326
Inventories (F)		3,172			2,562
Prepaid expenses and other current assets		865			873
Total current assets		7,670			6,869
Properties, plants, and equipment		37,343			37,446
Less: accumulated depreciation, depletion, and amortization		17,872			17,285
Properties, plants, and equipment, net		19,471			20,161
Goodwill		5,271			5,119
Investments		1,521			1,340
Deferred income taxes		3,060			3,184
Other noncurrent assets		2,527			2,521
Assets held for sale (C)		78			99
Total assets	$	39,598		$	39,293
LIABILITIES
Current liabilities:
Short-term borrowings	$	57		$	92
Commercial paper		107			—
Accounts payable, trade		2,480			2,322
Accrued compensation and retirement costs		956			929
Taxes, including income taxes		510			461
Other current liabilities		1,024			1,201
Long-term debt due within one year		489			231
Total current liabilities		5,623			5,236
Long-term debt, less amount due within one year		8,658			8,842
Accrued pension benefits (O)		2,081			2,923
Accrued other postretirement benefits		2,555			2,615
Other noncurrent liabilities and deferred credits		2,373			2,560
Liabilities of operations held for sale (C)		25			31
Total liabilities		21,315			22,207
COMMITMENTS AND CONTINGENCIES (H)
EQUITY
Alcoa shareholders’ equity:
Preferred stock		55			55
Common stock (K)		1,178			1,141
Additional capital (K)		7,545			7,087
Retained earnings		11,820			11,149
Treasury stock, at cost		(3,954	)		(4,146	)
Accumulated other comprehensive loss		(1,725	)		(1,675	)
Total Alcoa shareholders’ equity		14,919			13,611
Noncontrolling interests		3,364			3,475
Total equity		18,283			17,086
Total liabilities and equity	$	39,598		$	39,293

The accompanying notes are an integral part of the consolidated financial statements.

3

Alcoa and subsidiaries

Statement of Consolidated Cash Flows (unaudited)

(in millions)

	Nine months ended September 30,
	2011			2010
CASH FROM OPERATIONS
Net income	$	968		$	100
Adjustments to reconcile net income to cash from operations:
Depreciation, depletion, and amortization		1,113			1,080
Deferred income taxes		(78	)		62
Equity income, net of dividends		(28	)		(25	)
Restructuring and other charges (D)		49			219
Net loss (gain) from investing activities – asset sales (I)		1			(8	)
Loss from discontinued operations (C)		5			8
Stock-based compensation		70			70
Excess tax benefits from stock-based payment arrangements		(6	)		(1	)
Other		35			121
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
(Increase) in receivables		(415	)		(467	)
(Increase) in inventories		(606	)		(94	)
Decrease in prepaid expenses and other current assets		11			34
Increase in accounts payable, trade		171			16
(Decrease) in accrued expenses		(195	)		(384	)
Increase in taxes, including income taxes		117			167
Pension contributions		(217	)		(70	)
(Increase) in noncurrent assets		(96	)		(56	)
Increase in noncurrent liabilities		160			136
(Increase) in net assets held for sale (C)		(2	)		(24	)
CASH PROVIDED FROM CONTINUING OPERATIONS		1,057			884
CASH (USED FOR) PROVIDED FROM DISCONTINUED OPERATIONS		(6	)		7
CASH PROVIDED FROM OPERATIONS		1,051			891
FINANCING ACTIVITIES
Net change in short-term borrowings		(36	)		(57	)
Net change in commercial paper		107			—
Additions to long-term debt (G)		1,254			1,082
Debt issuance costs		(17	)		(5	)
Payments on long-term debt (G)		(1,122	)		(1,587	)
Proceeds from exercise of employee stock options		36			8
Excess tax benefits from stock-based payment arrangements		6			1
Dividends paid to shareholders		(98	)		(94	)
Distributions to noncontrolling interests		(253	)		(154	)
Contributions from noncontrolling interests		136			121
Acquisitions of noncontrolling interests		—			(66	)
CASH PROVIDED FROM (USED FOR) FINANCING ACTIVITIES		13			(751	)
INVESTING ACTIVITIES
Capital expenditures		(801	)		(650	)
Acquisitions, net of cash acquired (E)		(240	)		(72	)
Proceeds from the sale of assets and businesses		(6	)		(6	)
Additions to investments		(216	)		(224	)
Sales of investments		5			138
Other		(11	)		16
CASH USED FOR INVESTING ACTIVITIES		(1,269	)		(798	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(6	)		20
Net change in cash and cash equivalents		(211	)		(638	)
Cash and cash equivalents at beginning of year		1,543			1,481
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,332		$	843

The accompanying notes are an integral part of the consolidated financial statements.

4

Alcoa and subsidiaries

Statement of Changes in Consolidated Equity (unaudited)

(in millions, except per-share amounts)

	Alcoa Inc. Shareholders
	Preferred stock		Common stock		Additional capital			Retained earnings			Treasury stock			Accumulated other comprehensive loss			Non- controlling interests			Total equity
Balance at June 30, 2010	$	55	$	1,141	$	7,091		$	10,892		$	(4,177	)	$	(2,393	)	$	3,116		$	15,725
Net income		—		—		—			61			—			—			48			109
Other comprehensive income		—		—		—			—			—			705			241			946
Cash dividends declared:
Preferred @ $0.9375 per share		—		—		—			(1	)		—			—			—			(1	)
Common @ $0.03 per share		—		—		—			(30	)		—			—			—			(30	)
Stock-based compensation		—		—		20			—			—			—			—			20
Common stock issued: compensation plans		—		—		(17	)		—			6			—			—			(11	)
Distributions		—		—		—			—			—			—			(41	)		(41	)
Contributions		—		—		—			—			—			—			61			61
Balance at September 30, 2010	$	55	$	1,141	$	7,094		$	10,922		$	(4,171	)	$	(1,688	)	$	3,425		$	16,778
Balance at June 30, 2011	$	55	$	1,178	$	7,522		$	11,714		$	(3,959	)	$	(858	)	$	3,717		$	19,369
Net income		—		—		—			172			—			—			53			225
Other comprehensive loss		—		—		—			—			—			(867	)		(348	)		(1,215	)
Cash dividends declared:
Preferred @ $1.875 per share		—		—		—			(1	)		—			—			—			(1	)
Common @ $0.06 per share		—		—		—			(65	)		—			—			—			(65	)
Stock-based compensation		—		—		25			—			—			—			—			25
Common stock issued: compensation plans		—		—		(2	)		—			5			—			—			3
Distributions		—		—		—			—			—			—			(66	)		(66	)
Contributions		—		—		—			—			—			—			8			8
Balance at September 30, 2011	$	55	$	1,178	$	7,545		$	11,820		$	(3,954	)	$	(1,725	)	$	3,364		$	18,283

The accompanying notes are an integral part of the consolidated financial statements.

5

Alcoa and subsidiaries

Statement of Changes in Consolidated Equity (unaudited), continued

(in millions, except per-share amounts)

	Alcoa Inc. Shareholders
	Preferred stock		Common stock		Additional capital			Retained earnings			Treasury stock			Accumulated other comprehensive loss			Non- controlling interests			Total equity
Balance at December 31, 2009	$	55	$	1,097	$	6,608		$	11,020		$	(4,268	)	$	(2,092	)	$	3,100		$	15,520
Net (loss) income		—		—		—			(4	)		—			—			104			100
Other comprehensive income		—		—		—			—			—			404			254			658
Cash dividends declared:
Preferred @ $2.8125 per share		—		—		—			(2	)		—			—			—			(2	)
Common @ $0.09 per share		—		—		—			(92	)		—			—			—			(92	)
Stock-based compensation		—		—		70			—			—			—			—			70
Common stock issued: compensation plans		—		—		(118	)		—			97			—			—			(21	)
Issuance of common stock		—		44		556			—			—			—			—			600
Distributions		—		—		—			—			—			—			(154	)		(154	)
Contributions		—		—		—			—			—			—			125			125
Purchase of equity from noncontrolling interest		—		—		(2	)		—			—			—			(4	)		(6	)
Other		—		—		(20	)		—			—			—			—			(20	)
Balance at September 30, 2010	$	55	$	1,141	$	7,094		$	10,922		$	(4,171	)	$	(1,688	)	$	3,425		$	16,778
Balance at December 31, 2010	$	55	$	1,141	$	7,087		$	11,149		$	(4,146	)	$	(1,675	)	$	3,475		$	17,086
Net income		—		—		—			802			—			—			166			968
Other comprehensive loss		—		—		—			—			—			(50	)		(159	)		(209	)
Cash dividends declared:
Preferred @ $3.75 per share		—		—		—			(2	)		—			—			—			(2	)
Common @ $0.12 per share		—		—		—			(129	)		—			—			—			(129	)
Stock-based compensation		—		—		70			—			—			—			—			70
Common stock issued: compensation plans		—		—		(175	)		—			192			—			—			17
Issuance of common stock (K)		—		37		563			—			—			—			—			600
Distributions		—		—		—			—			—			—			(253	)		(253	)
Contributions		—		—		—			—			—			—			136			136
Other		—		—		—			—			—			—			(1	)		(1	)
Balance at September 30, 2011	$	55	$	1,178	$	7,545		$	11,820		$	(3,954	)	$	(1,725	)	$	3,364		$	18,283

The accompanying notes are an integral part of the consolidated financial statements.

6

Alcoa and subsidiaries

Statement of Consolidated Comprehensive (Loss) Income (unaudited)

(in millions)

	Alcoa Inc.						Noncontrolling Interests						Total
	Third quarter ended September 30,						Third quarter ended September 30,						Third quarter ended September 30,
	2011			2010			2011			2010			2011			2010
Net income	$	172		$	61		$	53		$	48		$	225		$	109
Other comprehensive (loss) income, net of tax:
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits		62			29			1			1			63			30
Foreign currency translation adjustments		(1,108	)		895			(351	)		242			(1,459	)		1,137
Unrealized (losses) gains on available-for-sale securities:
Unrealized holding (losses) gains		(2	)		1			—			—			(2	)		1
Net amount reclassified to earnings		—			—			—			—			—			—
Net change in unrealized (losses) gains on available-for-sale securities		(2	)		1			—			—			(2	)		1
Unrecognized gains (losses) on derivatives (P):
Net change from periodic revaluations		149			(248	)		1			(2	)		150			(250	)
Net amount reclassified to earnings		32			28			1			—			33			28
Net unrecognized gains (losses) on derivatives		181			(220	)		2			(2	)		183			(222	)
Total Other comprehensive (loss) income, net of tax		(867	)		705			(348	)		241			(1,215	)		946
Comprehensive (loss) income	$	(695	)	$	766		$	(295	)	$	289		$	(990	)	$	1,055
	Nine months ended September 30,						Nine months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010			2011			2010
Net income (loss)	$	802		$	(4	)	$	166		$	104		$	968		$	100
Other comprehensive (loss) income, net of tax:
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits		158			(11	)		4			3			162			(8	)
Foreign currency translation adjustments		(386	)		342			(170	)		251			(556	)		593
Unrealized (losses) gains on available-for-sale securities:
Unrealized holding losses		(1	)		(1	)		—			—			(1	)		(1	)
Net amount reclassified to earnings		—			2			—			—			—			2
Net change in unrealized (losses) gains on available-for-sale securities		(1	)		1			—			—			(1	)		1
Unrecognized gains on derivatives (P):
Net change from periodic revaluations		65			(35	)		6			—			71			(35	)
Net amount reclassified to earnings		114			107			1			—			115			107
Net unrecognized gains on derivatives		179			72			7			—			186			72
Total Other comprehensive (loss) income, net of tax		(50	)		404			(159	)		254			(209	)		658
Comprehensive income	$	752		$	400		$	7		$	358		$	759		$	758

The accompanying notes are an integral part of the consolidated financial statements.

7

Alcoa and subsidiaries

Notes to the Consolidated Financial Statements (unaudited)

(dollars in millions, except per-share amounts)

A. Basis of Presentation – The interim Consolidated Financial Statements of Alcoa Inc. and its subsidiaries (“Alcoa” or the “Company”) are unaudited. These Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2010 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). This Form 10-Q report should be read in conjunction with Alcoa’s Annual Report on Form 10-K for the year ended December 31, 2010, which includes all disclosures required by GAAP.

B. Recently Adopted and Recently Issued Accounting Guidance

Adopted

On January 1, 2011, Alcoa adopted changes issued by the Financial Accounting Standards Board (FASB) to revenue recognition for multiple-deliverable arrangements. These changes require separation of consideration received in such arrangements by establishing a selling price hierarchy (not the same as fair value) for determining the selling price of a deliverable, which will be based on available information in the following order: vendor-specific objective evidence, third-party evidence, or estimated selling price; eliminate the residual method of allocation and require that the consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the arrangement to each deliverable on the basis of each deliverable’s selling price; require that a vendor determine its best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis; and expand the disclosures related to multiple-deliverable revenue arrangements. The adoption of these changes had no impact on the Consolidated Financial Statements, as Alcoa does not currently have any such arrangements with its customers.

On January 1, 2011, Alcoa adopted changes issued by the FASB to the classification of certain employee share-based payment awards. These changes clarify that there is not an indication of a condition that is other than market, performance, or service if an employee share-based payment award’s exercise price is denominated in the currency of a market in which a substantial portion of the entity’s equity securities trade and differs from the functional currency of the employer entity or payroll currency of the employee. An employee share-based payment award is required to be classified as a liability if the award does not contain a market, performance, or service condition. Prior to this guidance, Alcoa did not consider the difference between the currency denomination of an employee share-based payment award’s exercise price and the functional currency of the employer entity or payroll currency of the employee in determining the proper classification of the share-based payment award. The adoption of these changes had no impact on the Consolidated Financial Statements.

On January 1, 2011, Alcoa adopted changes issued by the FASB to disclosure requirements for fair value measurements. Specifically, the changes require a reporting entity to disclose, in the reconciliation of fair value measurements using significant unobservable inputs (Level 3), separate information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). These changes were applied to the disclosures in the Derivatives section of Note P to the Consolidated Financial Statements.

On January 1, 2011, Alcoa adopted changes issued by the FASB to the testing of goodwill for impairment. These changes require an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if it is more likely than not (more than 50%) that a goodwill impairment exists based on qualitative factors. This will result in the elimination of an entity’s ability to assert that such a reporting unit’s goodwill is not impaired and additional testing is not necessary despite the existence of qualitative factors that indicate otherwise. Based on the most recent impairment review of Alcoa’s goodwill (2010 fourth quarter), the adoption of these changes had no impact on the Consolidated Financial Statements.

On January 1, 2011, Alcoa adopted changes issued by the FASB to the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Also, the existing supplemental pro forma disclosures

8

were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The adoption of these changes had no impact on the Consolidated Financial Statements.

Issued

In May 2011, the FASB issued changes to conform existing guidance regarding fair value measurement and disclosure between GAAP and International Financial Reporting Standards. These changes both clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and amend certain principles or requirements for measuring fair value or for disclosing information about fair value measurements. The clarifying changes relate to the application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity’s shareholders’ equity, and disclosure of quantitative information about unobservable inputs used for Level 3 fair value measurements. The amendments relate to measuring the fair value of financial instruments that are managed within a portfolio; application of premiums and discounts in a fair value measurement; and additional disclosures concerning the valuation processes used and sensitivity of the fair value measurement to changes in unobservable inputs for those items categorized as Level 3, a reporting entity’s use of a nonfinancial asset in a way that differs from the asset’s highest and best use, and the categorization by level in the fair value hierarchy for items required to be measured at fair value for disclosure purposes only. These changes become effective for Alcoa on January 1, 2012. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements.

In June 2011, the FASB issued changes to the presentation of comprehensive income. These changes give an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements; the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated. The items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income were not changed. Additionally, no changes were made to the calculation and presentation of earnings per share. These changes become effective for Alcoa on January 1, 2012. Management is currently evaluating these changes to determine which option will be chosen for the presentation of comprehensive income. Other than the change in presentation, management has determined these changes will not have an impact on the Consolidated Financial Statements.

In September 2011, the FASB issued changes to the testing of goodwill for impairment. These changes provide an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that the fair value of a reporting unit is less than its carrying amount. Such qualitative factors may include the following: macroeconomic conditions; industry and market considerations; cost factors; overall financial performance; and other relevant entity-specific events. If an entity elects to perform a qualitative assessment and determines that an impairment is more likely than not, the entity is then required to perform the existing two-step quantitative impairment test, otherwise no further analysis is required. An entity also may elect not to perform the qualitative assessment and, instead, go directly to the two-step quantitative impairment test. These changes become effective for Alcoa for any goodwill impairment test performed on January 1, 2012 or later, although early adoption is permitted. Management performs a review of Alcoa’s goodwill in the fourth quarter of each calendar year and plans to early adopt these changes effective for its review of goodwill in the fourth quarter of 2011. As these changes should not affect the outcome of the impairment analysis of a reporting unit, management has determined these changes will not have an impact on the Consolidated Financial Statements.

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C. Discontinued Operations and Assets Held for Sale – For the third quarter and nine months ended September 30, 2011 and 2010, there were no active businesses classified as discontinued operations. Activity of discontinued operations in all periods presented represents post-closing and other adjustments related to divested businesses previously classified as discontinued operations.

The following table details selected financial information of discontinued operations:

	Third quarter  ended September 30,				Nine months  ended September 30,
	2011		2010		2011			2010
Sales	$	—	$	—	$	—		$	—
Loss from operations before income taxes	$	—	$	—	$	(7	)	$	(13	)
Benefit for income taxes		—		—		2			5
Loss from discontinued operations	$	—	$	—	$	(5	)	$	(8	)

In the 2011 nine-month period, discontinued operations included an additional loss of $3 ($5 pretax) related to the wire harness and electrical portion (divested in June 2009) of the Electrical and Electronic Solutions (EES) business as a result of a negotiated preliminary settlement related to claims filed in 2010 against Alcoa by Platinum Equity in an insolvency proceeding in Germany and an additional loss of $2 ($2 pretax) related to both the wire harness and electrical portion and the electronics portion (divested in December 2009) of the EES business for a number of small post-closing and other adjustments. In the 2010 nine-month period, discontinued operations included an additional loss of $6 ($9 pretax) related to the wire harness and electrical portion of the EES business as a result of a contract settlement with a former customer of this business and an additional loss of $2 ($4 pretax) related to the electronics portion of the EES business for the settling of working capital, which was not included in the divestiture transaction.

For both periods presented in the accompanying Consolidated Balance Sheet, the assets and liabilities of operations classified as held for sale included the Global Foil business (one remaining plant located in Brazil), the electronics portion of the EES business (working capital components), and the Hawesville, KY automotive casting facility.

The major classes of assets and liabilities of operations held for sale were as follows:

	September 30, 2011		December 31, 2010
Assets:
Receivables	$	29	$	28
Inventories		22		22
Properties, plants, and equipment		21		35
Other assets		6		14
Assets held for sale	$	78	$	99
Liabilities:
Accounts payable, trade	$	8	$	10
Accrued expenses		17		21
Liabilities of operations held for sale	$	25	$	31

D. Restructuring and Other Charges – In the third quarter and nine-month period of 2011, Alcoa recorded Restructuring and other charges of $9 ($5 after-tax and noncontrolling interests) and $49 ($26 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2011 third quarter included $18 ($11 after-tax and noncontrolling interests) for the layoff of approximately 150 employees (70 in the Flat-Rolled Products segment, 40 in the Primary Metals segment, 30 in the Alumina segment, and 10 in Corporate); a net charge of $1 (less than $1 after-tax) for other small items; and $10 ($6 after-tax) for the reversal of previously recorded layoff reserves, primarily related to a change in plans for Alcoa’s aluminum powder facility in Rockdale, TX.

In the 2011 nine-month period, Restructuring and other charges included $31 ($19 after-tax and noncontrolling interests) for the layoff of approximately 630 employees (420 in the Flat-Rolled Products segment, 110 in the Primary Metals segment, 60 in the Alumina segment, 30 in the Engineered Products and Solutions segment, and 10 in Corporate); $20 ($8 after-tax and noncontrolling interests) for a litigation matter related to the former St. Croix location (see the Litigation section of Note H); an $8 ($5 after-tax) charge for an adjustment to the fair value of the one remaining foil location classified as held for

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sale due to foreign currency movements; a net charge of $4 ($3 after-tax) for other small items; and $14 ($9 after-tax) for the reversal of previously recorded layoff reserves, primarily related to a change in plans for Alcoa’s aluminum powder facility in Rockdale, TX.

In the third quarter and nine-month period of 2010, Alcoa recorded Restructuring and other charges of $2 (a credit of $1 after-tax and noncontrolling interests) and $219 ($138 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2010 third quarter included $3 ($2 after-tax and noncontrolling interests) for the layoff of approximately 30 employees (20 in the Primary Metals segment and 10 in Corporate); $8 ($5 after-tax) in net charges related to divested and to be divested businesses (Global Foil, Packaging and Consumer, and Transportation Products Europe) for, among other items, working capital adjustments and a tax indemnification; $1 ($1 after-tax and noncontrolling interests) in net charges for various other exit costs; and $10 ($9 after-tax) for the reversal of previously recorded layoff reserves, including a portion of those related to the Portovesme smelter in Italy due to the execution of a new power agreement (see the European Commission Matters section of Note H).

In the 2010 nine-month period, Restructuring and other charges included $128 ($81 after-tax and noncontrolling interests) in asset impairments and $46 ($29 after-tax and noncontrolling interests) in other exit costs related to the permanent shutdown and planned demolition of certain idled structures at five U.S. locations (see below); $39 ($26 after-tax and noncontrolling interests) for the layoff of approximately 830 employees (625 in the Engineered Products and Solutions segment; 80 in the Primary Metals segment; 25 in the Flat-Rolled Products segment; 10 in the Alumina segment; and 90 in Corporate); $22 ($14 after-tax) in net charges related to divested and to be divested businesses (Automotive Castings, Global Foil, Transportation Products Europe, and Packaging and Consumer) for, among other items, the settlement of a contract with a former customer, foreign currency movements, working capital adjustments, and a tax indemnification; $9 ($7 after-tax) in net charges for various other exit costs; and $25 ($19 after-tax) for the reversal of previously recorded layoff reserves.

In the 2010 first quarter, management approved the permanent shutdown and demolition of the following structures, each of which was previously temporarily idled for different reasons: the Eastalco smelter located in Frederick, MD (capacity of 195 kmt-per-year); the smelter located in Badin, NC (capacity of 60 kmt-per-year); an aluminum fluoride plant in Point Comfort, TX; a paste plant and cast house in Massena, NY; and one potline at the smelter in Warrick, IN (capacity of 40 kmt-per-year). This decision was made after a comprehensive strategic analysis was performed to determine the best course of action for each facility. Factors leading to this decision included then-current market fundamentals, cost competitiveness, other existing idle capacity, required future capital investment, and restart costs, as well as the elimination of ongoing holding costs. The asset impairments of $128 represent the write off of the remaining book value of properties, plants, and equipment related to these facilities. Additionally, remaining inventories, mostly operating supplies, were written down to their net realizable value resulting in a charge of $8 ($5 after-tax and noncontrolling interests), which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other exit costs of $46 represent $30 ($19 after-tax and noncontrolling interests) in asset retirement obligations and $14 ($9 after-tax) in environmental remediation, both triggered by the decision to permanently shutdown and demolish these structures, and $2 ($1 after-tax and noncontrolling interests) in other related costs.

Alcoa does not include Restructuring and other charges in the results of its reportable segments. The pretax impact of allocating such charges to segment results would have been as follows:

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Alumina	$	6		$	—		$	32		$	13
Primary Metals		(6	)		(7	)		(4	)		145
Flat-Rolled Products		5			—			7			(7	)
Engineered Products and Solutions		(2	)		—			1			22
Segment total		3			(7	)		36			173
Corporate		6			9			13			46
Total restructuring and other charges	$	9		$	2		$	49		$	219

As of September 30, 2011, approximately 170 of the 630 employees associated with 2011 restructuring programs, approximately 760 of the 880 employees associated with 2010 restructuring programs, and approximately 5,600 of the 6,000 employees associated with 2009 restructuring programs were terminated. The remaining terminations for a portion of the 2011 restructuring programs and all of the 2010 and 2009 restructuring programs are expected to be completed by the end of 2011. In the 2011

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third quarter and nine-month period, cash payments of $11 and $14, respectively, were made against the layoff reserves related to the 2011 restructuring programs; $2 and $6, respectively, were made against the layoff reserves related to the 2010 restructuring programs; and $2 and $11, respectively, were made against the layoff reserves related to the 2009 restructuring programs.

Activity and reserve balances for restructuring charges were as follows:

	Layoff costs			Other exit costs			Total
Reserve balances at December 31, 2009	$	160		$	66		$	226
2010:
Cash payments		(93	)		(15	)		(108	)
Restructuring charges		43			53			96
Other*		(57	)		(41	)		(98	)
Reserve balances at December 31, 2010		53			63			116
2011:
Cash payments		(32	)		(6	)		(38	)
Restructuring charges		31			1			32
Other*		(13	)		—			(13	)
Reserve balances at September 30, 2011	$	39		$	58		$	97

* Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In 2010, Other for other exit costs also included a reclassification of the following restructuring charges: $30 in asset retirement and $14 in environmental obligations, as these liabilities are included in Alcoa’s separate reserves for asset retirement obligations and environmental remediation, respectively.

The remaining reserves are expected to be paid in cash during 2011, with the exception of approximately $60 to $65, which is expected to be paid over the next several years for ongoing site remediation work, special termination benefit payments, and lease termination costs.

E. Acquisitions and Divestitures – On March 9, 2011, Alcoa completed an acquisition of the aerospace fastener business of TransDigm Group Inc. for $240. This business is a leading global designer, producer, and supplier of highly engineered aircraft components, with three locations (one in the state of California and two in the United Kingdom) that employ a combined 400 people. Specifically, this business provides a wide variety of high-strength, high temperature nickel alloy specialty engine fasteners, airframe bolts, and slotted entry bearings. In 2010, this business generated sales of $61. The assets and liabilities of this business were included in the Engineered Products and Solutions segment as of March 31, 2011; this business’ results of operations were included in this segment beginning March 9, 2011. Based on the preliminary purchase price allocation, goodwill of $213 was recorded for this transaction. In the second and third quarter of 2011, the initial goodwill amount was reduced by $53 and $13, respectively, due to purchase price allocation adjustments of the estimated fair value of the acquired business. Approximately $60 of goodwill is estimated to be deductible for income tax purposes. The final allocation of the purchase price will be based on valuation and other studies, including environmental and other contingent liabilities, which are expected to be completed by the end of 2011. Other intangible assets may be identified as a result of the final valuation. This acquisition is part of a strategic plan to accelerate the growth of Alcoa’s fastener business, while adding efficiencies, broadening the existing technology base, and expanding product offerings to better serve customers and increase shareholder value. Pro forma results of Alcoa, assuming this acquisition was made at the beginning of the earliest period presented, would not have been materially different from the results reported.

F. Inventories

	September 30, 2011		December 31, 2010
Finished goods	$	592	$	470
Work-in-process		1,042		814
Bauxite and alumina		697		621
Purchased raw materials		571		401
Operating supplies		270		256
	$	3,172	$	2,562

At September 30, 2011 and December 31, 2010, the total amount of inventories valued on a last in, first out (LIFO) basis was 37% and 36%, respectively. If valued on an average-cost basis, total

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inventories would have been $818 and $742 higher at September 30, 2011 and December 31, 2010, respectively.

G. Debt – In April 2011, Alcoa completed a public debt offering under its existing shelf registration statement (dated February 18, 2011) for $1,250 of 5.40% Notes due 2021 (the “2021 Notes”). Alcoa received $1,241 in net proceeds from the public debt offering reflecting an original issue discount and payment of financing costs. The net proceeds were used for the early retirement of $881 in outstanding notes (see below), early repayment of $101 in outstanding loans related to the bauxite mine development in Brazil, and the remainder was used for general corporate purposes. The original issue discount and financing costs were deferred and are being amortized to interest expense over the term of the 2021 Notes. Interest on the 2021 Notes will be paid semi-annually in April and October, commencing October 2011. Alcoa has the option to redeem the 2021 Notes, as a whole or in part, at any time or from time to time, on at least 30 days, but not more than 60 days, prior notice to the holders of the 2021 Notes at a redemption price specified in the 2021 Notes. The 2021 Notes are subject to repurchase upon the occurrence of a change in control repurchase event (as defined in the 2021 Notes) at a repurchase price in cash equal to 101% of the aggregate principal amount of the 2021 Notes repurchased, plus any accrued and unpaid interest on the 2021 Notes repurchased. The 2021 Notes rank pari passu with Alcoa’s other unsecured senior unsubordinated indebtedness.

In May 2011, Alcoa completed the following tender offers: (i) any and all of its 5.375% Notes due 2013 (the “5.375% Notes”) and (ii) up to $400 of its 6.00% Notes due 2013 (the “6.00% Notes” and collectively with the 5.375% Notes, the “Notes”). Upon expiration of the tender offers, $269 and $328 of the aggregate outstanding principal amount of the 5.375% Notes and 6.00% Notes, respectively, were validly tendered and accepted. Additionally in May 2011, subsequent to the expiration of the tender offer for the 5.375% Notes, Alcoa elected to call for redemption the remaining outstanding principal of $284 under the provisions of the 5.375% Notes. The total cash paid to the holders of the tendered 5.375% Notes and 6.00% Notes and the called 5.375% Notes was $972, which consisted of $881 in debt principal, $74 in purchase premiums, and $17 in accrued and unpaid interest from the respective last interest payment dates up to, but not including, the respective settlement dates. The $74 was recorded in Interest expense on the accompanying Statement of Consolidated Operations. The 6.00% Notes have a remaining outstanding principal of $422.

In conjunction with the early retirement of the 5.375% Notes, Alcoa terminated interest rate swaps with a notional amount totaling $550. These swaps were accounted for as fair value hedges and were used to convert the stated interest rate of the 5.375% Notes from fixed to floating. At the time of termination, the swaps were “in-the-money” resulting in a gain of $33, which was recorded in Interest expense on the accompanying Statement of Consolidated Operations.

On July 25, 2011, Alcoa entered into a Five-Year Revolving Credit Agreement (the “Credit Agreement”) with a syndicate of lenders and issuers named therein. The Credit Agreement provides a $3,750 senior unsecured revolving credit facility (the “Credit Facility”), the proceeds of which are to be used to provide working capital or for other general corporate purposes of Alcoa, including support of Alcoa’s commercial paper program. Subject to the terms and conditions of the Credit Agreement, Alcoa may from time to time request increases in lender commitments under the Credit Facility, not to exceed $500 in aggregate principal amount, and may also request the issuance of letters of credit, subject to a letter of credit sublimit of $1,000 under the Credit Facility.

The Credit Facility matures on July 25, 2016, unless extended or earlier terminated in accordance with the provisions of the Credit Agreement. Alcoa may make two one-year extension requests during the term of the Credit Facility, with any extension being subject to the lender consent requirements set forth in the Credit Agreement. Under the provisions of the Credit Agreement, Alcoa will pay a fee of 0.25% (based on Alcoa’s long-term debt ratings as of September 30, 2011) of the total commitment per annum to maintain the Credit Facility.

The Credit Facility is unsecured and amounts payable under it will rank pari passu with all other unsecured, unsubordinated indebtedness of Alcoa. Borrowings under the Credit Facility may be denominated in U.S. dollars or euros. Loans will bear interest at a base rate or a rate equal to LIBOR, plus, in each case, an applicable margin based on the credit ratings of Alcoa’s outstanding senior unsecured long-term debt. The applicable margin on base rate loans and LIBOR loans will be 0.50% and 1.50% per annum, respectively, based on Alcoa’s long-term debt ratings as of September 30, 2011. Loans may be prepaid without premium or penalty, subject to customary breakage costs.

The Credit Facility replaces Alcoa’s Five-Year Revolving Credit Agreement, dated as of October 2, 2007 (the “Former Credit Agreement”), which was scheduled to mature on October 2, 2012. The Former Credit Agreement, which had a total capacity (excluding the commitment of Lehman Commercial Paper Inc.) of $3,275 and was undrawn, was terminated effective July 25, 2011.

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The Credit Agreement includes covenants substantially similar to those in the Former Credit Agreement, including, among others, (a) a leverage ratio, (b) limitations on Alcoa’s ability to incur liens securing indebtedness for borrowed money, (c) limitations on Alcoa’s ability to consummate a merger, consolidation or sale of all or substantially all of its assets, and (d) limitations on Alcoa’s ability to change the nature of its business.

The obligation of Alcoa to pay amounts outstanding under the Credit Facility may be accelerated upon the occurrence of an “Event of Default” as defined in the Credit Agreement. Such Events of Default include, among others, (a) Alcoa’s failure to pay the principal of, or interest on, borrowings under the Credit Facility, (b) any representation or warranty of Alcoa in the Credit Agreement proving to be materially false or misleading, (c) Alcoa’s breach of any of its covenants contained in the Credit Agreement, and (d) the bankruptcy or insolvency of Alcoa.

There were no amounts outstanding under the Credit Facility at September 30, 2011 and no amounts were borrowed under the Credit Facility during the 2011 third quarter.

H. Commitments and Contingencies

Litigation

On February 27, 2008, Alcoa Inc. received notice that Aluminium Bahrain B.S.C. (Alba) had filed suit against Alcoa Inc. and Alcoa World Alumina LLC (collectively, “Alcoa”), and others, in the U.S. District Court for the Western District of Pennsylvania (the “Court”), Civil Action number 08-299, styled Aluminium Bahrain B.S.C. v. Alcoa Inc., Alcoa World Alumina LLC, William Rice, and Victor Phillip Dahdaleh. The complaint alleges that certain Alcoa entities and their agents, including Victor Phillip Dahdaleh, have engaged in a conspiracy over a period of 15 years to defraud Alba. The complaint further alleges that Alcoa and its employees or agents (1) illegally bribed officials of the government of Bahrain and (or) officers of Alba in order to force Alba to purchase alumina at excessively high prices, (2) illegally bribed officials of the government of Bahrain and (or) officers of Alba and issued threats in order to pressure Alba to enter into an agreement by which Alcoa would purchase an equity interest in Alba, and (3) assigned portions of existing supply contracts between Alcoa and Alba for the sole purpose of facilitating alleged bribes and unlawful commissions. The complaint alleges that Alcoa and the other defendants violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and committed fraud. Alba’s complaint seeks compensatory, consequential, exemplary, and punitive damages, rescission of the 2005 alumina supply contract, and attorneys’ fees and costs. Alba seeks treble damages with respect to its RICO claims.

On February 26, 2008, Alcoa Inc. had advised the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) that it had recently become aware of these claims, had already begun an internal investigation, and intended to cooperate fully in any investigation that the DOJ or the SEC may commence. On March 17, 2008, the DOJ notified Alcoa that it had opened a formal investigation and Alcoa has been cooperating with the government.

In response to a motion filed by the DOJ on March 27, 2008, the Court ordered the suit filed by Alba to be administratively closed and that all discovery be stayed to allow the DOJ to fully conduct an investigation without the interference and distraction of ongoing civil litigation. The Court further ordered that the case will be reopened at the close of the DOJ’s investigation. The Company is unable to reasonably predict an outcome or to estimate a range of reasonably possible loss with respect to any or all of the above matters.

In November 2006, in Curtis v. Alcoa Inc., Civil Action No. 3:06cv448 (E.D. Tenn.), a class action was filed by plaintiffs representing approximately 13,000 retired former employees of Alcoa or Reynolds Metals Company and spouses and dependants of such retirees alleging violation of the Employee Retirement Income Security Act (ERISA) and the Labor-Management Relations Act by requiring plaintiffs, beginning January 1, 2007, to pay health insurance premiums and increased co-payments and co-insurance for certain medical procedures and prescription drugs. Plaintiffs alleged these changes to their retiree health care plans violated their rights to vested health care benefits. Plaintiffs additionally alleged that Alcoa had breached its fiduciary duty to plaintiffs under ERISA by misrepresenting to them that their health benefits would never change. Plaintiffs sought injunctive and declaratory relief, back payment of benefits, and attorneys’ fees. Alcoa had consented to treatment of plaintiffs’ claims as a class action. During the fourth quarter of 2007, following briefing and argument, the court ordered consolidation of the plaintiffs’ motion for preliminary injunction with trial, certified a plaintiff class, bifurcated and stayed the plaintiffs’ breach of fiduciary duty claims, struck the plaintiffs’ jury demand, but indicated it would use an advisory jury, and set a trial date of September 17, 2008. In August 2008, the court set a new trial date of March 24, 2009 and, subsequently, the trial date was moved to September 22, 2009. In June 2009, the court indicated that it would not use an advisory jury at trial. Trial in the matter was held over eight days

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commencing September 22, 2009 and ending on October 1, 2009 in federal court in Knoxville, TN before the Honorable Thomas Phillips, U.S. District Court Judge. At the conclusion of evidence, the court set a post-hearing briefing schedule for submission of proposed findings of fact and conclusions of law by the parties and for replies to the same. Post trial briefing was submitted on December 4, 2009.

On March 9, 2011, the court issued a judgment order dismissing plaintiffs’ lawsuit in its entirety with prejudice for the reasons stated in its Findings of Fact and Conclusions of Law. On March 23, 2011, plaintiffs filed a motion for clarification and/or amendment of the judgment order, which seeks, among other things, a declaration that plaintiffs’ retiree benefits are vested subject to an annual cap and an injunction preventing Alcoa, prior to 2017, from modifying the plan design to which plaintiffs are subject or changing the premiums and deductibles that plaintiffs must pay. Also on March 23, 2011, plaintiffs filed a motion for award of attorney’s fees and expenses. Alcoa filed its opposition to both motions on April 11, 2011. The time for plaintiffs to appeal from the court’s March 9, 2011 judgment will not begin until the court disposes of these motions.

On April 23, 2004, St. Croix Renaissance Group, L.L.L.P. (SCRG), Brownfield Recovery Corp., and Energy Answers Corporation of Puerto Rico (collectively referred to as “Plaintiffs”) filed a suit against St. Croix Alumina L.L.C. and Alcoa World Alumina, LLC (collectively referred to as “Alcoa”) in the Territorial Court of the Virgin Islands, Division of St. Croix for claims related to the sale of Alcoa’s former St. Croix alumina refinery to Plaintiffs. Alcoa thereafter removed the case to federal court and after a several year period of discovery and motion practice, a jury trial on the matter took place in St. Croix from January 11, 2011 to January 20, 2011. The jury returned a verdict in favor of Plaintiffs and awarded damages as described: on a claim of breaches of warranty, the jury awarded $13; on the same claim, the jury awarded punitive damages in the amount of $6; and on a negligence claim for property damage, the jury awarded $10. Plaintiffs filed a motion seeking pre-judgment interest on the jury award. On February 17, 2011, Alcoa filed post-trial motions seeking judgment notwithstanding the verdict or, in the alternative, a new trial. On May 31, 2011, the court granted Alcoa’s motion for judgment regarding Plaintiffs’ $10 negligence award and denied the remainder of Alcoa’s motions. Additionally, the court awarded Plaintiffs pre-judgment interest of $2 on the breach of warranty award. As a result of the court’s post-trial decisions, Alcoa recorded a charge of $20 in the 2011 second quarter (See Note D). On June 14, 2011, Alcoa filed a notice of appeal with the U.S. Court of Appeals for the Third Circuit regarding Alcoa’s denied post-trial motions. On June 22, 2011, SCRG filed a notice of cross appeal with the Third Circuit Court related to certain pre-trial decisions of the court and of the court’s post-trial ruling on the negligence claim.

In addition to the litigation discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against Alcoa, including those pertaining to environmental, product liability, and safety and health matters. While the amounts claimed 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 financial position, liquidity, or results of operations in a particular period could be materially affected by certain contingencies. However, based on facts currently available, management believes that the disposition of matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position, liquidity, or the results of operations of the Company.

European Commission Matters

In July 2006, the European Commission (EC) announced that it had opened an investigation to establish whether an extension of the regulated electricity tariff granted by Italy to some energy-intensive industries complies with European Union (EU) state aid rules. The Italian power tariff extended the tariff that was in force until December 31, 2005 through November 19, 2009 (Alcoa has been incurring higher power costs at its smelters in Italy subsequent to the tariff end date). The extension was originally through 2010, but the date was changed by legislation adopted by the Italian Parliament effective on August 15, 2009. Prior to expiration of the tariff in 2005, Alcoa had been operating in Italy for more than 10 years under a power supply structure approved by the EC in 1996. That measure provided a competitive power supply to the primary aluminum industry and was not considered state aid from the Italian Government. The EC’s announcement expressed concerns about whether Italy’s extension of the tariff beyond 2005 was compatible with EU legislation and potentially distorted competition in the European market of primary aluminum, where energy is an important part of the production costs.

On November 19, 2009, the EC announced a decision in this matter stating that the extension of the tariff by Italy constituted unlawful state aid, in part, and, therefore, the Italian Government is to recover a portion of the benefit Alcoa received since January 2006 (including interest). The amount of this recovery will be based on a calculation that is being prepared by the Italian Government. Pending formal notification from the Italian Government, Alcoa estimates that a payment in the range of $300 to $500 will

15

be required (the timing of such payment is uncertain). In late 2009, after discussions with legal counsel and reviewing the bases on which the EC decided, including the different considerations cited in the EC decision regarding Alcoa’s two smelters in Italy, Alcoa recorded a charge of $250, including $20 to write off a receivable from the Italian Government for amounts due under the now expired tariff structure. On April 19, 2010, Alcoa filed an appeal of this decision with the General Court of the EU. Alcoa will pursue all substantive and procedural legal steps available to annul the EC’s decision. On May 22, 2010, Alcoa also filed with the General Court a request for injunctive relief to suspend the effectiveness of the decision, but, on July 12, 2010, the General Court denied such request. On September 10, 2010, Alcoa appealed the July 12, 2010 decision to the European Court of Justice (ECJ).

On March 23, 2011, the EC announced that it has decided to refer the Italian Government to the ECJ for failure to comply with the EC’s November 19, 2009 decision.

As a result of the EC’s November 19, 2009 decision, management had contemplated ceasing operations at its Italian smelters due to uneconomical power costs. In February 2010, management agreed to continue to operate its smelters in Italy for up to six months while a long-term solution to address increased power costs could be negotiated.

Also in February 2010, the Italian Government issued a decree, which was converted into law by the Italian Parliament in March 2010, to provide interruptibility rights to certain industrial customers who were willing to be subject to temporary interruptions in the supply of power (i.e. compensation for power interruptions when grids are overloaded) over a three-year period. Alcoa applied for and was granted such rights (expiring on December 31, 2012) related to its Portovesme smelter. In May 2010, the EC stated that, based on their review of the validity of the decree, the interruptibility rights should not be considered state aid. On July 29, 2010, Alcoa executed a new power agreement effective September 1, 2010 through December 31, 2012 for the Portovesme smelter, replacing the short-term, market-based power contract that was in effect since early 2010.

Additionally in May 2010, Alcoa and the Italian Government agreed to a temporary idling of the Fusina smelter. As of September 30, 2010, the Fusina smelter was fully curtailed (44 kmt-per-year).

Separately, on November 29, 2006, Alcoa filed an appeal before the General Court (formerly the European Court of First Instance) seeking the annulment of the EC’s decision to open an investigation alleging that such decision did not follow the applicable procedural rules. On March 25, 2009, the General Court denied Alcoa’s appeal. On May 29, 2009, Alcoa appealed the March 25, 2009 ruling before the ECJ. The hearing of the May 29, 2009 appeal was held on June 24, 2010. On July 21, 2011, the ECJ denied Alcoa’s appeal.

In January 2007, the EC announced that it had opened an investigation to establish whether the regulated electricity tariffs granted by Spain comply with EU state aid rules. At the time the EC opened its investigation, Alcoa had been operating in Spain for more than nine years under a power supply structure approved by the Spanish Government in 1986, an equivalent tariff having been granted in 1983. The investigation is limited to the year 2005 and is focused both on the energy-intensive consumers and the distribution companies. The investigation provided 30 days to any interested party to submit observations and comments to the EC. With respect to the energy-intensive consumers, the EC opened the investigation on the assumption that prices paid under the tariff in 2005 were lower than a pool price mechanism, therefore being, in principle, artificially below market conditions. Alcoa submitted comments in which the company provided evidence that prices paid by energy-intensive consumers were in line with the market, in addition to various legal arguments defending the legality of the Spanish tariff system. It is Alcoa’s understanding that the Spanish tariff system for electricity is in conformity with all applicable laws and regulations, and therefore no state aid is present in the tariff system. While Alcoa does not believe that an unfavorable decision is probable, management has estimated that the total potential impact from an unfavorable decision could be approximately $100 (€70) pretax. Also, while Alcoa believes that any additional cost would only be assessed for the year 2005, it is possible that the EC could extend its investigation to later years. If the EC’s investigation concludes that the regulated electricity tariffs for industries are unlawful, Alcoa will have an opportunity to challenge the decision in the EU courts.

Environmental Matters

Alcoa continues to participate in environmental assessments and cleanups at a number of locations (more than 100). 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 or damages 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 and damages. The liability can change

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substantially due to factors such as the nature and extent of contamination, changes in remedial requirements, and technological changes, among others.

Alcoa’s remediation reserve balance was $327 and $333 at September 30, 2011 and December 31, 2010 (of which $34 and $31 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 2011 third quarter and nine-month period, the remediation reserve was increased by $2 and $6, respectively, associated with a number of sites. The changes to the remediation reserve were recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. Payments related to remediation expenses applied against the reserve were $5 and $13 in the 2011 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 2011 third quarter and nine-month period, the change in the reserve also reflects a decrease of $2 and an increase of $1, respectively, due to the effects of foreign currency translation.

Included in annual operating expenses are the recurring costs of managing hazardous substances and environmental programs. These costs are estimated to be approximately 2% of cost of goods sold.

The following discussion provides details regarding the current status of certain significant reserves related to current or former Alcoa sites. It is possible that Alcoa’s financial position, liquidity, or results of operations, in a particular period, could be materially affected by matters relating to these sites. However, based on facts currently available, management believes that adequate reserves have been provided and that the disposition of these matters will not have a materially adverse effect on the financial position, liquidity, or the results of operations of the Company.

Massena West, NY—Alcoa has been conducting investigations and studies of the Grasse River, adjacent to Alcoa’s Massena plant site, under a 1989 order from the U.S. Environmental Protection Agency (EPA) issued under CERCLA. Sediments and fish in the river contain varying levels of polychlorinated biphenyls (PCBs).

Alcoa submitted various Analysis of Alternatives Reports to the EPA starting in 1998 through 2002 that reported the results of river and sediment studies, potential alternatives for remedial actions related to the PCB contamination, and additional information requested by the EPA.

In June 2003, the EPA requested that Alcoa gather additional field data to assess the potential for sediment erosion from winter river ice formation and breakup. The results of these additional studies, submitted in a report to the EPA in April 2004, suggest that this phenomenon has the potential to occur approximately every 10 years and may impact sediments in certain portions of the river under all remedial scenarios. The EPA informed Alcoa that a final remedial decision for the river could not be made without substantially more information, including river pilot studies on the effects of ice formation and breakup on each of the remedial techniques. Alcoa submitted to the EPA, and the EPA approved, a Remedial Options Pilot Study (ROPS) to gather this information. The scope of this study included sediment removal and capping, the installation of an ice control structure, and significant monitoring.

From 2004 through 2008, Alcoa completed the work outlined in the ROPS. In November 2008, Alcoa submitted an update to the EPA incorporating the new information obtained from the ROPS related to the feasibility and costs associated with various capping and dredging alternatives, including options for ice control. As a result, Alcoa increased the reserve associated with the Grasse River by $40 for the estimated costs of a proposed ice control remedy and for partial settlement of potential damages of natural resources.

In late 2009, the EPA requested that Alcoa submit a complete revised Analysis of Alternatives Report in March 2010 to address questions and comments from the EPA and various stakeholders. On March 24, 2010, Alcoa submitted the revised report, which included an expanded list of proposed remedial alternatives, as directed by the EPA. Alcoa increased the reserve associated with the Grasse River by $17 to reflect an increase in the estimated costs of the Company’s recommended capping alternative as a result of changes in scope that occurred due to the questions and comments from the EPA and various stakeholders. While the EPA reviews the revised report, Alcoa will continue with its on-going monitoring and field studies activities. In late 2010, Alcoa increased the reserve by $2 based on the most recent estimate of costs expected to be incurred for on-going monitoring and field studies activities as the EPA continues its review during 2011.

The ultimate selection of a remedy may result in additional liability. Alternatives analyzed in the most recent Analysis of Alternatives report that are equally effective as the recommended capping remedy range in additional estimated costs between $20 and $100. As such, Alcoa may be required to record a subsequent reserve adjustment at the time the EPA’s Record of Decision is issued.

Sherwin, TX—In connection with the sale of the Sherwin alumina refinery, which was required to be divested as part of the Reynolds merger in 2000, Alcoa agreed to retain responsibility for the remediation of the then existing environmental conditions, as well as a pro rata share of the final closure of the active waste disposal areas, which remain in use. Alcoa’s share of the closure costs is proportional to the total

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period of operation of the active waste disposal areas. Alcoa estimated its liability for the active disposal areas by making certain assumptions about the period of operation, the amount of material placed in the area prior to closure, and the appropriate technology, engineering, and regulatory status applicable to final closure. The most probable cost for remediation was reserved.

East St. Louis, IL—In response to questions regarding environmental conditions at the former East St. Louis operations, Alcoa and the City of East St. Louis, the owner of the site, entered into an administrative order with the EPA in December 2002 to perform a remedial investigation and feasibility study of an area used for the disposal of bauxite residue from historic alumina refining operations. A draft feasibility study was submitted to the EPA in April 2005. The feasibility study included remedial alternatives that ranged from no further action to significant grading, stabilization, and water management of the bauxite residue disposal areas. As a result, Alcoa increased the environmental reserve for this location by $15 in 2005. The EPA’s ultimate selection of a remedy could result in additional liability. Alcoa may be required to record a subsequent reserve adjustment at the time the EPA’s Record of Decision is issued.

Fusina and Portovesme, Italy—In 1996, Alcoa acquired the Fusina smelter and rolling operations and the Portovesme smelter, both of which are owned by Alcoa’s subsidiary Alcoa Trasformazioni S.r.l., from Alumix, an entity owned by the Italian Government. At the time of the acquisition, Alumix indemnified Alcoa for pre-existing environmental contamination at the sites. In 2004, the Italian Ministry of Environment (MOE) issued orders to Alcoa Trasformazioni S.r.l. and Alumix for the development of a clean-up plan related to soil contamination in excess of allowable limits under legislative decree and to institute emergency actions and pay natural resource damages. Alcoa Trasformazioni S.r.l. appealed the orders and filed suit against Alumix, among others, seeking indemnification for these liabilities under the provisions of the acquisition agreement. In 2009, Ligestra S.r.l., Alumix’s successor, and Alcoa Trasformazioni S.r.l. agreed to a stay on the court proceedings while investigations were conducted and negotiations advanced towards a possible settlement. In December 2009, Alcoa Trasformazioni S.r.l. and Ligestra S.r.l. reached an agreement for settlement of the liabilities related to Fusina while negotiations continue related to Portovesme. The agreement outlines 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 is contingent upon final acceptance of the remediation project by the MOE. As a result of entering into this agreement, Alcoa increased the reserve by $12 for Fusina. Additionally, due to new information derived from the site investigations conducted at Portovesme, Alcoa increased the reserve by $3 in 2009.

Investments

Alcoa has an investment in a joint venture for the development, construction, ownership, and operation of an integrated aluminum complex (bauxite mine, alumina refinery, aluminum smelter, and rolling mill) in Saudi Arabia. The joint venture is owned 74.9% by the Saudi Arabian Mining Company (known as “Ma’aden”) and 25.1% by Alcoa and consists of three separate companies as follows: one each for the mine and refinery, the smelter, and the rolling mill. Alcoa accounts for its investment in the joint venture under the equity method. Capital investment in the project is expected to total approximately $10,800 (SAR 40.5 billion). Alcoa’s equity investment in the joint venture will be approximately $1,100 over a four-year period, and Alcoa will be responsible for its pro rata share of the joint venture’s project financing. Alcoa has contributed $325, including $13 and $165 in the 2011 third quarter and nine-month period, respectively, towards the $1,100 commitment. As of September 30, 2011 and December 31, 2010, the carrying value of Alcoa’s investment in this project was $461 and $285, respectively.

In late 2010, the smelting and rolling mill companies entered into project financing totaling $4,000, of which $1,004 represents Alcoa’s share (the equivalent of Alcoa’s 25.1% interest in the smelting and rolling mill companies). In conjunction with the financing, Alcoa issued guarantees on behalf of the smelting and rolling mill companies to the lenders in the event that such companies default on their debt service requirements through June 2017 and December 2018, respectively, (Ma’aden issued similar guarantees for its 74.9% interest). Alcoa’s guarantees for the smelting and rolling mill companies cover total debt service requirements of $108 in principal and up to a maximum of approximately $50 in interest per year (based on projected interest rates). At September 30, 2011 and December 31, 2010, the fair value of the guarantees was $8 and was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. Under the project financing, a downgrade of Alcoa’s credit ratings below investment grade by at least two agencies would require Alcoa to provide a letter of credit or fund an escrow account for a portion or all of Alcoa’s remaining equity commitment to the joint venture project in Saudi Arabia.

Alcoa Alumínio (Alumínio), a wholly-owned subsidiary of Alcoa, is a participant in several hydroelectric power construction projects in Brazil for purposes of increasing its energy self-sufficiency

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and providing a long-term, low-cost source of power for its facilities. Two of these projects, Machadinho and Barra Grande, were completed in 2002 and 2006, respectively.

Alumínio committed to taking a share of the output of the Machadinho and Barra Grande projects each for 30 years at cost (including cost of financing the project). In the event that other participants in either one of these projects fail to fulfill their financial responsibilities, Alumínio may be required to fund a portion of the deficiency. In accordance with the respective agreements, if Alumínio funds any such deficiency, its participation and share of the output from the respective project will increase proportionately.

With Machadinho and Barra Grande, Alumínio’s current power self-sufficiency is approximately 40% (will be approximately 70% once the hydroelectric power projects described below are completed and operating at full capacity), to meet a total energy demand of approximately 690 megawatts from Brazilian primary plants. Alumínio accounts for the Machadinho and Barra Grande hydroelectric projects as equity method investments. Alumínio’s investment participation in these projects is 30.99% for Machadinho and 42.18% for Barra Grande. Its total investment in these projects was $266 (R$487) and $274 (R$461) at September 30, 2011 and December 31, 2010, respectively. Alcoa’s maximum exposure to loss on these completed projects is approximately $310 (R$570), which represents Alumínio’s investments in both projects and guarantee of debt for only Machadinho as of September 30, 2011.

In early 2006, Alumínio acquired an additional 6.41% share in the Estreito hydroelectric power project, reaching 25.49% of total participation in the consortium. This additional share entitles Alumínio to 38 megawatts of assured energy. Alumínio’s share of the project is estimated to have installed capacity of approximately 280 megawatts and assured power of approximately 150 megawatts. In December 2006, the consortium obtained the environmental installation license, after completion of certain socioeconomic and cultural impact studies as required by a governmental agency. Construction began in early 2007 and is expected to be completed in 2012 (start-up of the facility began in April 2011 with full capacity expected to be reached in 2012). In early 2010, the consortium approved an increase of approximately $720 (R$1,300) in estimated costs to complete the Estreito project as a result of currency, inflation, and the price and scope of construction, among other factors. Total estimated project costs are approximately $2,700 (R$4,900) and Alumínio’s share is approximately $680 (R$1,250). As of September 30, 2011, approximately $620 (R$1,100) of Alumínio’s commitment was expended on the project.

Construction began on the Serra do Facão hydroelectric power project in early 2007 and was completed in the first half of 2011 (this facility is operating at full capacity). Alumínio’s share of the Serra do Facão project is 34.97% and entitles Alumínio to approximately 65 megawatts of assured power. Total estimated project costs are approximately $550 (R$1,000) and Alumínio’s share is approximately $190 (R$350). Through March 31, 2009, the participants in the consortium were required to provide capital for their respective share of the project costs. In April 2009, the consortium obtained long-term financing for the estimated remaining costs of construction. At that time, the participants in this project were no longer required to provide capital for their share of the project costs. Instead, the participants were each required to guarantee (expires 2027) a portion of the consortium’s debt. In mid-2010, the capacity under the long-term financing arrangement was exhausted; therefore, the participants were once again required to begin providing capital for their share of the remaining costs. As of September 30, 2011, approximately $180 (R$340) of Alumínio’s commitment was expended on the project (includes both funds provided by Alumínio and Alumínio’s share of the long-term financing). Alumínio accounts for the Serra do Facão hydroelectric power project as an equity method investment and its total investment in this project was $106 (R$193) and $116 (R$195) at September 30, 2011 and December 31, 2010, respectively. Alcoa’s maximum exposure to loss on this project is approximately $220 (R$400), which represents Alumínio’s investment and guarantee of debt as of September 30, 2011.

In 2004, Alcoa acquired a 20% interest in a consortium, which subsequently purchased the Dampier to Bunbury Natural Gas Pipeline (DBNGP) in Western Australia, in exchange for an initial cash investment of $17 (A$24). The investment in the DBNGP was made in order to secure a competitively priced long-term supply of natural gas to Alcoa’s refineries in Western Australia. This investment was classified as an equity investment. Alcoa has made additional contributions of $141 (A$176), including $16 (A$16) in the 2011 nine-month period, and committed to invest an additional $10 (A$9) to be paid as the pipeline expands through 2011. In addition to its equity ownership, Alcoa has an agreement to purchase gas transmission services from the DBNGP. Alcoa’s maximum exposure to loss on the investment and the related contract is approximately $470 (A$480) as of September 30, 2011.

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I. Other Expenses (Income), Net

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Equity loss (income)	$	2		$	(2	)	$	(24	)	$	(10	)
Interest income		(5	)		(5	)		(16	)		(14	)
Foreign currency losses, net		35			21			5			23
Net (gain) loss from asset sales		—			(8	)		1			(8	)
Net (gain) loss on mark-to-market derivative contracts (P)		(14	)		42			(41	)		56
Other, net		13			(5	)		28			1
	$	31		$	43		$	(47	)	$	48

In the 2011 nine-month period, equity income included higher earnings from an investment in a natural gas pipeline in Australia due to the recognition of a discrete income tax benefit by the consortium (Alcoa World Alumina and Chemicals’ share of the benefit was $24).

J. Segment Information – The operating results of Alcoa’s reportable segments were as follows (differences between segment totals and consolidated totals are in Corporate):

	Alumina			Primary Metals			Flat- Rolled Products		Engineered Products and Solutions		Total
Third quarter ended September 30, 2011
Sales:
Third-party sales	$	879		$	2,124		$	1,974	$	1,373	$	6,350
Intersegment sales		751			798			48		—		1,597
Total sales	$	1,630		$	2,922		$	2,022	$	1,373	$	7,947
Profit and loss:
Equity income (loss)	$	2		$	(4	)	$	—	$	—	$	(2	)
Depreciation, depletion, and amortization		117			137			61		40		355
Income taxes		42			21			26		67		156
After-tax operating income (ATOI)		154			110			60		138		462
Third quarter ended September 30, 2010
Sales:
Third-party sales	$	717		$	1,688		$	1,645	$	1,173	$	5,223
Intersegment sales		506			589			46		—		1,141
Total sales	$	1,223		$	2,277		$	1,691	$	1,173	$	6,364
Profit and loss:
Equity income	$	1		$	—		$	—	$	1	$	2
Depreciation, depletion, and amortization		100			142			57		37		336
Income taxes		(22	)		(3	)		26		63		64
ATOI		70			78			66		114		328

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	Alumina		Primary Metals			Flat- Rolled Products		Engineered Products and Solutions		Total
Nine months ended September 30, 2011
Sales:
Third-party sales	$	2,615	$	6,249		$	5,951	$	3,990	$	18,805
Intersegment sales		2,107		2,559			179		—		4,845
Total sales	$	4,722	$	8,808		$	6,130	$	3,990	$	23,650
Profit and loss:
Equity income (loss)	$	27	$	(4	)	$	—	$	1	$	24
Depreciation, depletion, and amortization		332		420			179		119		1,050
Income taxes		146		129			94		201		570
ATOI		482		513			240		417		1,652
Nine months ended September 30, 2010
Sales:
Third-party sales	$	2,056	$	5,100		$	4,654	$	3,369	$	15,179
Intersegment sales		1,627		1,905			132		—		3,664
Total sales	$	3,683	$	7,005		$	4,786	$	3,369	$	18,843
Profit and loss:
Equity income	$	7	$	1		$	—	$	2	$	10
Depreciation, depletion, and amortization		299		431			173		116		1,019
Income taxes		46		15			72		142		275
ATOI		236		310			167		302		1,015

The following table reconciles total segment ATOI to consolidated net income (loss) attributable to Alcoa:

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Total segment ATOI	$	462		$	328		$	1,652		$	1,015
Unallocated amounts (net of tax):
Impact of LIFO		2			(2	)		(49	)		(19	)
Interest expense		(81	)		(91	)		(259	)		(245	)
Noncontrolling interests		(53	)		(48	)		(166	)		(104	)
Corporate expense		(76	)		(71	)		(219	)		(197	)
Restructuring and other charges		(7	)		1			(35	)		(142	)
Discontinued operations		—			—			(5	)		(8	)
Other		(75	)		(56	)		(117	)		(304	)
Consolidated net income (loss) attributable to Alcoa	$	172		$	61		$	802		$	(4	)

Items required to reconcile total segment ATOI to consolidated net income (loss) attributable to Alcoa include: the impact of LIFO inventory accounting; interest expense; noncontrolling interests; corporate expense (general administrative and selling expenses of operating the corporate headquarters and other global administrative facilities, along with depreciation and amortization on corporate-owned assets); restructuring and other charges; discontinued operations; and other items, including intersegment profit eliminations and other metal adjustments, differences between tax rates applicable to the segments and the consolidated effective tax rate, the results of the soft alloy extrusions business in Brazil, and other nonoperating items such as foreign currency transaction gains/losses and interest income.

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The following table details segment assets:

	September 30, 2011		December 31, 2010
Alumina	$	9,675	$	9,967
Primary Metals		12,222		11,947
Flat-Rolled Products		5,033		4,606
Engineered Products and Solutions		5,951		5,434
Total segment assets	$	32,881	$	31,954

K. Preferred and Common Stock – On January 24, 2011, Alcoa contributed 36,518,563 newly issued shares of its common stock to a master trust that holds the assets of certain U.S. defined benefit pension plans in a private placement transaction. These shares were valued at $16.43 per share (the closing price of Alcoa’s common stock on January 24, 2011), or $600 in the aggregate, and were issued to satisfy the estimated minimum required funding and to provide additional funding towards maintaining an approximately 80% funded status of Alcoa’s U.S. pension plans. On January 25, 2011, the 36,518,563 shares were registered under Alcoa’s then-current shelf registration statement dated March 10, 2008 (replaced by shelf registration statement dated February 18, 2011) for resale by the master trust, as selling stockholder. Alcoa is authorized to issue up to 1.8 billion shares of common stock. As of September 30, 2011, there were 1,177,906,557 common shares issued and 1,064,276,127 common shares outstanding.

L. Earnings Per Share – Basic earnings per share (EPS) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared and dividends and undistributed earnings allocated to participating securities, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding not classified as participating securities.

The information used to compute basic and diluted EPS attributable to Alcoa common shareholders was as follows (shares in millions):

	Third quarter  ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Income from continuing operations attributable to Alcoa common shareholders	$	172	$	61	$	807	$	4
Less: preferred stock dividends declared		1		1		2		2
Income from continuing operations available to common equity		171		60		805		2
Less: dividends and undistributed earnings allocated to participating securities		—		—		2		—
Income from continuing operations available to Alcoa common shareholders – basic		171		60		803		2
Add: interest expense related to convertible notes		8		—		22		—
Income from continuing operations available to Alcoa common shareholders – diluted	$	179	$	60	$	825	$	2
Average shares outstanding – basic		1,064		1,021		1,060		1,017
Effect of dilutive securities:
Stock options		7		5		8		5
Stock and performance awards		4		1		3		1
Convertible notes		89		—		89		—
Average shares outstanding – diluted		1,164		1,027		1,160		1,023

Participating securities are defined as unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) and are included in the computation of earnings per share pursuant to the two-class method. Prior to January 1, 2010, under Alcoa’s stock-based compensation programs, certain employees were granted stock and performance awards, which entitle those employees to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of Alcoa’s common stock. As such, these unvested stock and performance awards met the definition of a participating security. Under the two-class method, all earnings, whether distributed or undistributed, are allocated to each class of common stock and

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participating securities based on their respective rights to receive dividends. At September 30, 2011 and 2010, there were 2 million and 5 million such participating securities outstanding, respectively.

Effective January 1, 2010, new grants of stock and performance awards do not contain a nonforfeitable right to dividends during the vesting period. As a result, an employee will forfeit the right to dividends accrued on unvested awards if that person does not fulfill their service requirement during the vesting period. As such, these awards are not treated as participating securities in the EPS calculation as the employees do not have equivalent dividend rights as common shareholders. These awards are included in the EPS calculation utilizing the treasury stock method similar to stock options. At September 30, 2011 and 2010, there were 8 million and 3 million such awards outstanding, respectively.

In the 2010 third quarter and nine-month period, 89 million potential shares of common stock related to the convertible notes were not included in the computation of diluted EPS because the effect was anti-dilutive.

Options to purchase 27 million and 32 million shares of common stock at a weighted average exercise price of $23.98 and $27.51 per share were outstanding as of September 30, 2011 and 2010, respectively, but were not included in the computation of diluted EPS because they were anti-dilutive, as the exercise prices of the options were greater than the average market price of Alcoa’s common stock.

M. Income Taxes – The effective tax rate for the third quarter of 2011 and 2010 was 19.6% (provision on income) and 81.7% (benefit on income), respectively.

The rate for the 2011 third quarter differs from the U.S. federal statutory rate of 35% primarily due to foreign income taxed in lower rate jurisdictions and a $15 net discrete income tax benefit for various items, primarily attributable to adjustments made related to the filing of prior year tax returns in various jurisdictions and the reversal of a valuation allowance for capital losses now available to be used against future capital gains.

The rate for the 2010 third quarter differs by 116.7% from the U.S. federal statutory rate of 35% primarily due to a $41 discrete income tax benefit for the reversal of a valuation allowance as a result of previously restricted net operating losses of a foreign subsidiary now available, an $8 favorable impact for operational losses in certain foreign jurisdictions that are excluded from the estimated annual effective tax rate calculation (impact reversed by the end of 2010), and a $19 net discrete tax benefit for various other items.

The effective tax rate for the 2011 and 2010 nine-month periods was 25.3% (provision on income) and 46.0% (provision on income), respectively.

The rate for the 2011 nine-month period differs from the U.S. federal statutory rate of 35% primarily due to foreign income taxed in lower rate jurisdictions.

The rate for the 2010 nine-month period differs from the U.S. federal statutory rate of 35% primarily due to a $79 discrete income tax charge as a result of a change in the tax treatment of federal subsidies received related to prescription drug benefits provided under certain retiree health care benefit plans that were determined to be actuarially equivalent to Medicare Part D and a $19 discrete income tax charge based on settlement discussions of several matters with international taxing authorities (this amount represents a decrease to Alcoa’s unrecognized tax benefits), partially offset by the $41 discrete income tax benefit mentioned above, a $24 discrete income tax benefit related to a Canadian provincial tax law change permitting a tax return to be filed in U.S. dollars, and a $9 net discrete income tax benefit for various other items.

N. Accounts Receivables – Alcoa has two arrangements with third parties to sell certain customer receivables outright without recourse on a continuous basis. As of September 30, 2011, $206 of the sold receivables remain uncollected. Alcoa is servicing the customer receivables for the third parties at market rates; therefore, no servicing asset or liability was recorded.

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O. Pension and Other Postretirement Benefits – The components of net periodic benefit cost were as follows:

	Third quarter  ended September 30,						Nine months  ended September 30,
Pension benefits	2011			2010			2011			2010
Service cost	$	41		$	38		$	123		$	111
Interest cost		169			170			509			510
Expected return on plan assets		(202	)		(195	)		(605	)		(586	)
Amortization of prior service cost		5			4			14			12
Recognized net actuarial loss		63			46			187			135
Net periodic benefit cost	$	76		$	63		$	228		$	182
	Third quarter  ended September 30,						Nine months  ended September 30,
Other postretirement benefits	2011			2010			2011			2010
Service cost	$	5		$	5		$	13		$	15
Interest cost		40			44			119			131
Expected return on plan assets		(1	)		(2	)		(2	)		(5	)
Amortization of prior service benefit		(5	)		(4	)		(13	)		(11	)
Recognized net actuarial loss		7			8			20			24
Settlements		—			—			—			(3	)
Net periodic benefit cost	$	46		$	51		$	137		$	151

On January 24, 2011, Alcoa contributed newly issued shares (see Note K) of its common stock (valued at $600) to a master trust that holds the assets of certain U.S. defined benefit pension plans in a private placement transaction. These shares were issued to satisfy the estimated minimum required funding and to provide additional funding towards maintaining an approximately 80% funded status of Alcoa’s U.S. pension plans.

P. Derivatives and Other Financial Instruments

Derivatives

Alcoa is exposed to certain risks relating to its ongoing business operations, including financial, market, political, and economic risks. The following discussion provides information regarding Alcoa’s exposure to the risks of changing commodity prices, interest rates, and foreign currency exchange rates.

Alcoa’s commodity and derivative activities are subject to the management, direction, and control of the Strategic Risk Management Committee (SRMC). The SRMC is composed of the chief executive officer, the chief financial officer, and other officers and employees that the chief executive officer selects. The SRMC reports to the Board of Directors on the scope of its activities.

The aluminum, energy, interest rate, and foreign exchange contracts are held for purposes other than trading. They are used primarily to mitigate uncertainty and volatility, and to cover underlying exposures. Alcoa is not involved in trading activities for energy, weather derivatives, or other nonexchange commodity trading activities.

24

The fair values of outstanding derivative contracts recorded as assets in the accompanying Consolidated Balance Sheet were as follows:

Asset Derivatives	September 30, 2011		December 31, 2010
Derivatives designated as hedging instruments:
Prepaid expenses and other current assets:
Aluminum contracts	$	9	$	48
Foreign exchange contracts		1		2
Interest rate contracts		8		19
Other noncurrent assets:
Aluminum contracts		9		22
Energy contracts		40		9
Interest rate contracts		41		62
Total derivatives designated as hedging instruments	$	108	$	162
Derivatives not designated as hedging instruments*:
Prepaid expenses and other current assets:
Aluminum contracts	$	1	$	3
Other noncurrent assets:
Aluminum contracts		5		—
Foreign exchange contracts		—		1
Total derivatives not designated as hedging instruments	$	6	$	4
Less margin held:
Prepaid expenses and other current assets:
Aluminum contracts	$	—	$	4
Interest rate contracts		5		13
Other noncurrent assets:
Interest rate contracts		15		2
Sub-total	$	20	$	19
Total Asset Derivatives	$	94	$	147

* See the “Other” section within Note P for additional information on Alcoa’s purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies.

The fair values of outstanding derivative contracts recorded as liabilities in the accompanying Consolidated Balance Sheet were as follows:

Liability Derivatives	September 30, 2011		December 31, 2010
Derivatives designated as hedging instruments:
Other current liabilities:
Aluminum contracts	$	90	$	89
Other noncurrent liabilities and deferred credits:
Aluminum contracts		554		647
Total derivatives designated as hedging instruments	$	644	$	736
Derivatives not designated as hedging instruments*:
Other current liabilities:
Aluminum contracts	$	43	$	52
Energy contracts		—		62
Other noncurrent liabilities and deferred credits:
Aluminum contracts		24		33
Embedded credit derivative		33		23
Foreign currency contracts		1		—
Total derivatives not designated as hedging instruments	$	101	$	170
Less margin posted:
Other current liabilities:

25

Aluminum contracts	$	8	$	4
Energy contracts		—		37
Sub-total	$	8	$	41
Total Liability Derivatives	$	737	$	865

* See the “Other” section within Note P for additional information on Alcoa’s purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies.

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 (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) 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.

The following section describes the valuation methodologies used by Alcoa to measure derivative contracts at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified. Where appropriate, the description includes details of the valuation models, the key inputs to those models, and any significant assumptions.

Derivative contracts are valued using quoted market prices and significant other observable and unobservable inputs. Such financial instruments consist of aluminum, energy, interest rate, and foreign exchange contracts. The fair values for the majority of these derivative contracts are based upon current quoted market prices. These financial instruments are typically exchange-traded and are generally classified within Level 1 or Level 2 of the fair value hierarchy depending on whether the exchange is deemed to be an active market or not.

For certain derivative contracts whose fair values are based upon trades in liquid markets, such as interest rate swaps, valuation model inputs can generally be verified and valuation techniques do not involve significant management judgment. The fair values of such financial instruments are generally classified within Level 2 of the fair value hierarchy.

Alcoa has other derivative contracts that do not have observable market quotes. For these financial instruments, management uses significant other observable inputs (e.g., information concerning time premiums and volatilities for certain option type embedded derivatives and regional premiums for aluminum contracts). For periods beyond the term of quoted market prices for aluminum, Alcoa uses a model that estimates the long-term price of aluminum based on anticipated changes in worldwide supply and demand. 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).

26

The following table presents Alcoa’s derivative contract assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy (there were no transfers in or out of Levels 1 and 2 during the periods presented):

	September 30, 2011			December 31, 2010
Assets:
Level 1	$	18		$	76
Level 2		50			81
Level 3		46			9
Margin held*		(20	)		(19	)
Total	$	94		$	147
Liabilities:
Level 1	$	68		$	35
Level 2		57			83
Level 3		620			788
Margin posted*		(8	)		(41	)
Total	$	737		$	865

* Margin held represents cash collateral received related to interest rate contracts included in Level 2 and margin posted represents cash collateral paid related to aluminum contracts included in Level 1. At December 31, 2010, margin held also represents cash collateral received related to aluminum contracts included in Level 1 and margin posted also represents cash collateral paid related to energy contracts included in Level 3. Alcoa elected to net the margin held and posted against the fair value amounts recognized for derivative instruments executed with the same counterparties under master netting arrangements.

Financial instruments classified as Level 3 in the fair value hierarchy represent derivative contracts in which management has used at least one significant unobservable input in the valuation model. The following table presents a reconciliation of activity for such derivative contracts on a net basis:

	Third quarter ended September 30, 2011			Nine months ended September 30, 2011
Balance at beginning of period	$	796		$	779
Total gains or losses (realized and unrealized) included in:
Sales – (decrease)		(14	)		(51	)
Cost of goods sold – (increase)		(4	)		(15	)
Other expenses (income), net – (increase)		(3	)		(37	)
Other comprehensive loss – (increase)		(196	)		(97	)
Purchases, sales, issuances, and settlements*		(5	)		(5	)
Transfers into and (or) out of Level 3*		—			—
Balance at end of period	$	574		$	574
Total gains or losses included in earnings attributable to the change in unrealized gains or losses relating to derivative contracts still held at September 30, 2011:
Sales	$	—		$	—
Cost of goods sold		—			—
Other expenses (income), net – (increase)		(13	)		(10	)

* During the 2011 third quarter, there was an issuance of a Level 3 financial instrument related to a natural gas supply contract (see below). There were no purchases, sales, or settlements of Level 3 financial instruments. Additionally, there were no transfers of financial instruments into or out of Level 3.

As reflected in the table above, the net unrealized loss on derivative contracts using Level 3 valuation techniques was $574 as of September 30, 2011. This loss was mainly attributed to embedded derivatives in power contracts that index the price of power to the London Metal Exchange (LME) price of aluminum. These embedded derivatives are primarily valued using observable market prices. However, due to the length of the contracts, the valuation model also requires management to estimate the long-term price of aluminum based upon anticipated changes in worldwide supply and demand. The embedded derivatives have been designated as hedges of forward sales of aluminum and their realized gains and losses were included in Sales on the accompanying Statement of Consolidated Operations.

27

During the 2011 third quarter, Alcoa entered into a six-year natural gas supply contract, which has an LME-linked ceiling. This contract 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. At inception, this contract had a fair value of $5. Unrealized gains and losses from this contract were included in Other expenses (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 gas purchases are made under the contract.

Also, included within Level 3 measurements are derivative financial instruments that hedge the cost of electricity. Transactions involving on-peak power are observable as there is an active market. However, there are certain off-peak times when there is not an actively traded market for electricity. Therefore, management utilizes market prices, historical relationships, and various forecast services to determine the fair value. Management utilizes these same valuation techniques for an existing power contract associated with a smelter in the U.S. that no longer qualified for the normal purchase normal sale exception under derivative accounting in late 2009. Unrealized gains and losses for this physical power contract were included in Other expenses (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. Additionally, a financial contract related to the same U.S. smelter utilized by management to hedge the price of electricity of the aforementioned power contract no longer qualified for cash flow hedge accounting near the end of 2009. Realized gains and losses of this financial contract were included in Cost of goods sold on the accompanying Statement of Consolidated Operations, while unrealized gains and losses were included in Other expenses (income), net on the accompanying Statement of Consolidated Operations. Both the physical power contract and the financial contract related to this U.S. smelter expired in September 2011.

Additionally, Alcoa has contracts to hedge the anticipated power requirements at two smelters in Australia. These derivatives hedge forecasted power purchases through December 2036. Beyond the term where market information is available, management has developed a forward curve, for valuation purposes, based on independent consultant market research. The effective portion of gains and losses on these contracts were recorded in Other comprehensive (loss) income on the accompanying Consolidated Balance Sheet until the designated hedge periods begin in 2014 and 2016. Once the hedge periods begin, realized gains and losses will be recorded in Cost of goods sold.

Furthermore, an embedded derivative in a power contract that indexes the difference between the long-term debt ratings of Alcoa and the counterparty from any of the three major credit rating agencies is included in Level 3. Management uses market prices, historical relationships, and forecast services to determine fair value. Realized gains and losses for this embedded derivative were included in Other expenses (income), net on the accompanying Statement of Consolidated Operations.

Fair Value Hedges

For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. The gain or loss on the hedged items are included in the same line items as the loss or gain on the related derivative contracts as follows (there were no contracts that ceased to qualify as a fair value hedge in any of the periods presented):

Derivatives in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
		Third quarter  ended September 30,						Nine months  ended September 30,
		2011			2010			2011			2010
Aluminum contracts	Sales	$	(100	)	$	101		$	(78	)	$	7
Interest rate contracts	Interest expense		5			43			58			79
Total		$	(95	)	$	144		$	(20	)	$	86
Hedged Items in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in Earnings on Hedged Items	Amount of Gain or (Loss) Recognized in Earnings on Hedged Items
		Third quarter  ended September 30,						Nine months ended September 30,
		2011			2010			2011			2010
Aluminum contracts	Sales	$	102		$	(94	)	$	76		$	(8	)
Interest rate contracts	Interest expense		(5	)		(15	)		(25	)		(51	)

28

Total $ 97 $ (109 )  $ 51 $ (59 ) 

Aluminum. Alcoa is a leading global producer of primary aluminum and fabricated aluminum products. As a condition of sale, customers often require Alcoa to enter into long-term, fixed-price commitments. These commitments expose Alcoa to the risk of fluctuating aluminum prices between the time the order is committed and the time that the order is shipped. Alcoa’s aluminum commodity risk management policy is to manage, principally through the use of futures and contracts, the aluminum price risk associated with a portion of its firm commitments. These contracts cover known exposures, generally within three years. As of September 30, 2011, Alcoa had 310 kmt of aluminum futures designated as fair value hedges. The effects of this hedging activity will be recognized over the designated hedge periods in 2011 to 2013.

Interest Rates. Alcoa uses interest rate swaps to help maintain a strategic balance between fixed- and floating-rate debt and to manage overall financing costs. As of September 30, 2011, the Company had pay floating, receive fixed interest rate swaps that were designated as fair value hedges. These hedges effectively convert the interest rate from fixed to floating on $515 of debt through 2018. In the 2011 second quarter, Alcoa terminated interest rate swaps with a notional amount of $550 in conjunction with the early retirement of the related debt (see Note G). At the time of termination, the swaps were “in-the-money” resulting in a gain of $33, which was recorded in Interest expense on the accompanying Statement of Consolidated Operations.

Cash Flow Hedges

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

Derivatives in Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)												Location of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)*												Location of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)**
	Third quarter ended September 30,						Nine months ended September 30,							Third quarter ended September 30,						Nine months ended September 30,							Third quarter ended September 30,					Nine months ended September 30,
	2011			2010			2011			2010				2011			2010			2011			2010				2011		2010			2011		2010
Aluminum contracts	$	145		$	(247	)	$	53		$	(13	)	Sales	$	(30	)	$	(19	)	$	(106	)	$	(83	)	Other expenses (income), net	$	4	$	(2	)	$	4	$	1
Energy contracts		6			1			14			(12	)	Cost of goods sold		(2	)		(7	)		(8	)		(18	)	Other expenses (income), net		—		—			—		—
Energy contracts		—			(6	)		—			(7	)	Other expenses (income), net		—			—			—			—		Other expenses (income), net		—		—			—		—
Foreign exchange contracts		2			4			4			(3	)	Sales		2			(2	)		4			(6	)	Other expenses (income), net		—		—			—		—
Interest rate contracts		(2	)		—			(2	)		—		Interest expense		(2	)		—			(2	)		—		Other expenses (income), net		—		—			—		—
Interest rate contracts		(2	)		—			(4	)		—		Other expenses (income), net		—			—			(2	)		—		Other expenses (income), net		—		—			—		—
Total	$	149		$	(248	)	$	65		$	(35	)		$	(32	)	$	(28	)	$	(114	)	$	(107	)		$	4	$	(2	)	$	4	$	1

* Assuming market rates remain constant with the rates at September 30, 2011, a loss of $22 is expected to be recognized in earnings over the next 12 months.

** For both the third quarter and nine months ended September 30, 2011, the amount of gain or (loss) recognized in earnings represents $(1) related to the ineffective portion of the hedging relationships. There was also $5 recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for both the third quarter and nine months ended September 30, 2011. For the third quarter and nine months ended September 30, 2010, the amount of gain or (loss) recognized in earnings related to the ineffective portion of the hedging relationships.

29

Aluminum and Energy. Alcoa anticipates the continued requirement to purchase aluminum and other commodities, such as electricity, natural gas, and fuel oil, for its operations. Alcoa enters into futures and forward contracts to reduce volatility in the price of these commodities. Alcoa has also entered into power supply and other contracts that contain pricing provisions related to the LME aluminum price. The LME-linked pricing features are considered embedded derivatives. A majority of these embedded derivatives have been designated as cash flow hedges of future sales of aluminum.

Also, Alcoa has contracts to hedge the anticipated power requirements at two smelters in Australia. These derivatives hedge forecasted power purchases through December 2036.

Interest Rates. Alcoa had no outstanding cash flow hedges of interest rate exposures as of September 30, 2011. An investment accounted for on the equity method by Alcoa has entered into interest rate contracts, which are designated as cash flow hedges. Alcoa’s share of the activity of these cash flow hedges is reflected in the table above.

Foreign Exchange. Alcoa is subject to exposure from fluctuations in foreign currency exchange rates. These contracts may be used from time to time to hedge the variability in cash flows from the forecasted payment or receipt of currencies other than the functional currency. These contracts cover periods consistent with known or expected exposures through 2011.

Alcoa had the following outstanding forward contracts that were entered into to hedge forecasted transactions:

	September 30, 2011		December 31, 2010
Aluminum contracts (kmt)		1,237		1,285
Energy contracts (electricity - megawatt hours)		100,578,295		100,578,295
Foreign exchange contracts	$	5	$	20

Other

Alcoa has also entered into certain derivatives to minimize its price risk related to other customer sales and pricing arrangements. Alcoa has not qualified these contracts for hedge accounting treatment and, therefore, the fair value gains and losses on these contracts are recorded in earnings as follows:

Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
		Third quarter  ended September 30,						Nine months  ended September 30,
		2011			2010			2011			2010
Aluminum contracts	Sales	$	(10	)	$	7		$	(9	)	$	3
Aluminum contracts	Other expenses (income), net		18			(33	)		7			(18	)
Embedded credit derivative	Other expenses (income), net		(13	)		1			(10	)		(8	)
Energy contract	Other expenses (income), net		16			(12	)		47			(31	)
Foreign exchange contracts	Other expenses (income), net		(7	)		2			(3	)		1
Total		$	4		$	(35	)	$	32		$	(53	)

The embedded credit derivative relates to a power contract that indexes the difference between the long-term debt ratings of Alcoa and the counterparty from any of the three major credit rating agencies. If the counterparty’s lowest credit rating is greater than one rating category above Alcoa’s credit ratings, an independent investment banker would be consulted to determine a hypothetical interest rate for both parties. The two interest rates would be netted and the resulting difference would be multiplied by Alcoa’s equivalent percentage of the outstanding principal of the counterparty’s debt obligation as of December 31st of the year preceding the calculation date. This differential would be added to the cost of power in the period following the calculation date.

The energy contract is associated with a smelter in the U.S. for a power contract that no longer qualified for the normal purchase normal sale exception and a financial contract that no longer qualified as a hedge under derivative accounting in late 2009. Alcoa’s obligations under the contracts expired in September 2011.

30

Alcoa has a forward contract to purchase $56 (C$58) to mitigate the foreign currency risk related to a Canadian-denominated loan due in 2014. All other foreign exchange contracts were entered into and settled within each of the periods presented.

Material Limitations

The disclosures with respect to commodity prices, interest rates, and foreign currency exchange risk do not take into account the underlying commitments or anticipated transactions. If the underlying items were included in the analysis, the gains or losses on the futures contracts may be offset. Actual results will be determined by a number of factors that are not under Alcoa’s control and could vary significantly from those factors disclosed.

Alcoa is exposed to credit loss in the event of nonperformance by counterparties on the above instruments, as well as credit or performance risk with respect to its hedged customers’ commitments. Although nonperformance is possible, Alcoa does not anticipate nonperformance by any of these parties. Contracts are with creditworthy counterparties and are further supported by cash, treasury bills, or irrevocable letters of credit issued by carefully chosen banks. In addition, various master netting arrangements are in place with counterparties to facilitate settlement of gains and losses on these contracts.

Other Financial Instruments

The carrying values and fair values of Alcoa’s other financial instruments were as follows:

	September 30, 2011				December 31, 2010
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	1,332	$	1,332	$	1,543	$	1,543
Restricted cash		1		1		1		1
Noncurrent receivables		23		23		23		23
Available-for-sale securities		93		93		93		93
Short-term borrowings		57		57		92		92
Commercial paper		107		107		—		—
Long-term debt due within one year		489		489		231		231
Long-term debt, less amount due within one year		8,658		9,138		8,842		9,882

The following methods were used to estimate the fair values of other financial instruments:

Cash and cash equivalents, Restricted cash, Short-term borrowings, Commercial paper, and Long-term debt due within one year. The carrying amounts approximate fair value because of the short maturity of the instruments.

Noncurrent receivables. The fair value of noncurrent receivables was based on anticipated cash flows, which approximates carrying value.

Available-for-sale securities. The fair value of such securities was based on quoted market prices. These financial instruments consist of exchange-traded fixed income and equity securities, which are carried at fair value and were classified in Level 1 of the fair value hierarchy.

Long-term debt, less amount due within one year. The fair value was based on quoted market prices for public debt and on interest rates that are currently available to Alcoa for issuance of debt with similar terms and maturities for non-public debt.

Q. Subsequent Events – Management evaluated all activity of Alcoa and concluded that no subsequent events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in the Notes to the Consolidated Financial Statements, except as follows in relation to Alcoa’s investment in a joint venture in Saudi Arabia (see the Investments section of Note H).

In October 2011, the refining and mining company of the joint venture entered into project financing totaling $992, of which $249 represents Alcoa World Alumina and Chemicals’ (AWAC) 25.1% interest in the refining and mining company. In conjunction with the financing, Alcoa, on behalf of AWAC, issued a guarantee to the lenders in the event that the refining and mining company defaults on its debt service requirements through June 2019 (Ma’aden issued a similar guarantee for its 74.9% interest). Alcoa’s guarantee for the refining and mining company covers total debt service requirements of $30 in principal and up to a maximum of approximately $12 in interest per year (based on projected interest rates). In the event Alcoa would be required to make payments under the guarantee, 40% of such amount would be contributed to Alcoa by Alumina Limited, consistent with its ownership interest in AWAC.

31

Report of Independent Registered Public Accounting Firm*

To the Shareholders and Board of Directors of Alcoa Inc.

We have reviewed the accompanying consolidated balance sheet of Alcoa Inc. and its subsidiaries (Alcoa) as of September 30, 2011, and the related statements of consolidated operations, changes in consolidated equity, and consolidated comprehensive (loss) income for each of the three-month and nine-month periods ended September 30, 2011 and 2010, and the statement of consolidated cash flows for the nine-month periods ended September 30, 2011 and 2010. These consolidated interim financial statements are the responsibility of Alcoa’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2010, and the related statements of consolidated operations, changes in consolidated equity, consolidated comprehensive income (loss), and consolidated cash flows for the year then ended (not presented herein), and in our report dated February 17, 2011, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2010, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

Pittsburgh, Pennsylvania

October 20, 2011

* This report should not be considered a “report” within the meanings of Sections 7 and 11 of the Securities Act of 1933 and the independent registered public accounting firm’s liability under Section 11 does not extend to it.

32

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(dollars in millions, except per share amounts and ingot prices; production and shipments in thousands of metric tons [kmt])

Results of Operations

Selected Financial Data:

	Third quarter  ended September 30,				Nine months  ended September 30,
	2011		2010		2011			2010
Sales	$	6,419	$	5,287	$	18,962		$	15,361
Amounts attributable to Alcoa common shareholders:
Income from continuing operations	$	172	$	61	$	807		$	4
Loss from discontinued operations		—		—		(5	)		(8	)
Net income (loss)	$	172	$	61	$	802		$	(4	)
Earnings per share attributable to Alcoa common shareholders:
Diluted – Income from continuing operations	$	0.15	$	0.06	$	0.71		$	—
Diluted – Net income (loss)		0.15		0.06		0.71			(0.01	)
Shipments of alumina (kmt)		2,256		2,423		6,840			6,813
Shipments of aluminum products (kmt)		1,277		1,223		3,757			3,539
Alcoa’s average realized price per metric ton of aluminum	$	2,689	$	2,261	$	2,734		$	2,300

Income from continuing operations attributable to Alcoa was $172, or $0.15 per diluted share, in the 2011 third quarter compared with $61, or $0.06 per share, in the 2010 third quarter. The improvement of $111 was primarily the result of the following: higher realized prices for alumina and aluminum; stronger volumes in the midstream and downstream segments; and a net favorable change in mark-to-market derivative contracts; partially offset by continued rising input costs; net unfavorable foreign currency movements; and the absence of various discrete income tax benefits.

Income from continuing operations attributable to Alcoa was $807, or $0.71 per share, in the 2011 nine-month period compared with $4, or $0.00 per share, in the 2010 nine-month period. The improvement of $803 was primarily the result of the following: higher realized prices for alumina and aluminum; stronger volumes in the midstream and downstream segments; the absence of charges for the permanent shutdown and planned demolition of certain U.S. structures; and a net favorable change in mark-to-market derivative contracts; somewhat offset by continued rising input costs and net unfavorable foreign currency movements.

Net income attributable to Alcoa for the 2011 third quarter was $172, or $0.15 per share, compared with $61, or $0.06 per share, for the same period in 2010, and Net income for the 2011 nine-month period was $802, or $0.71 per share, compared with a Net loss of $4, or $0.01 per share, for the corresponding period in 2010.

In the 2011 nine-month period, Net income included a loss from discontinued operations of $3 due to an additional loss related to the wire harness and electrical portion (divested in June 2009) of the Electrical and Electronic Solutions (EES) business as a result of a negotiated preliminary settlement related to claims filed in 2010 against Alcoa by Platinum Equity in an insolvency proceeding in Germany and $2 due to an additional loss related to both the wire harness and electrical portion and the electronics portion (divested in December 2009) of the EES business for a number of small post-closing and other adjustments.

In the 2010 nine-month period, Net loss included a loss from discontinued operations of $6 due to an additional loss related to the wire harness and electrical portion of the EES business as a result of a contract settlement with a former customer of this business and $2 due to an additional loss related to the electronics portion of the EES business for the settling of working capital, which was not included in the divestiture transaction.

Sales for the 2011 third quarter and nine-month period increased $1,132, or 21%, and $3,601, or 23%, respectively, compared with the same periods in 2010. The improvement in both periods was mainly driven by a continued rise in realized prices for alumina and aluminum and higher volumes in virtually all businesses in the midstream and downstream segments.

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Cost of goods sold (COGS) as a percentage of Sales was 82.4% in the 2011 third quarter and 80.4% in the 2011 nine-month period compared with 83.5% in the 2010 third quarter and 82.3% in the 2010 nine-month period. In both periods, the percentage was positively impacted by the previously mentioned higher realized prices and volumes, partially offset by net unfavorable foreign currency movements due to a weaker U.S. dollar and continued higher energy and other input costs.

Selling, general administrative, and other expenses (SG&A) increased $29 and $80 in the 2011 third quarter and nine-month period, respectively, compared with the corresponding periods in 2010. The increase in both periods was primarily driven by higher labor, selling and marketing, and travel expenses. In the 2011 third quarter, lower bad debt expense slightly offset these higher expenses. In the 2011 nine-month period, transaction and professional fees related to the acquisition of an aerospace fastener business and the absence of a net reduction in the allowance for doubtful accounts also contributed to the increase. SG&A as a percentage of Sales declined from 4.4% in the 2010 third quarter to 4.1% in the 2011 third quarter, and from 4.4% in the 2010 nine-month period to 4.0% in the 2011 nine-month period.

Restructuring and other charges were $9 ($5 after-tax and noncontrolling interests) and $49 ($26 after-tax and noncontrolling interests) in the 2011 third quarter and nine-month period, respectively.

In the 2011 third quarter, Restructuring and other charges included $18 ($11 after-tax and noncontrolling interests) for the layoff of approximately 150 employees (70 in the Flat-Rolled Products segment, 40 in the Primary Metals segment, 30 in the Alumina segment, and 10 in Corporate); a net charge of $1 (less than $1 after-tax) for other small items; and $10 ($6 after-tax) for the reversal of previously recorded layoff reserves, primarily related to a change in plans for Alcoa’s aluminum powder facility in Rockdale, TX.

In the 2011 nine-month period, Restructuring and other charges included $31 ($19 after-tax and noncontrolling interests) for the layoff of approximately 630 employees (420 in the Flat-Rolled Products segment, 110 in the Primary Metals segment, 60 in the Alumina segment, 30 in the Engineered Products and Solutions segment, and 10 in Corporate); $20 ($8 after-tax and noncontrolling interests) for a litigation matter related to the former St. Croix location; an $8 ($5 after-tax) charge for an adjustment to the fair value of the one remaining foil location classified as held for sale due to foreign currency movements; a net charge of $4 ($3 after-tax) for other small items; and $14 ($9 after-tax) for the reversal of previously recorded layoff reserves, primarily related to a change in plans for Alcoa’s aluminum powder facility in Rockdale, TX.

Restructuring and other charges were $2 (a credit of $1 after-tax and noncontrolling interests) and $219 ($138 after-tax and noncontrolling interests) in the 2010 third quarter and nine-month period, respectively.

In the 2010 third quarter, Restructuring and other charges included $3 ($2 after-tax and noncontrolling interests) for the layoff of approximately 30 employees (20 in the Primary Metals segment and 10 in Corporate); $8 ($5 after-tax) in net charges related to divested and to be divested businesses (Global Foil, Packaging and Consumer, and Transportation Products Europe) for, among other items, working capital adjustments and a tax indemnification; $1 ($1 after-tax and noncontrolling interests) in net charges for various other exit costs; and $10 ($9 after-tax) for the reversal of previously recorded layoff reserves, including a portion of those related to the Portovesme smelter in Italy due to the execution of a new power agreement.

In the 2010 nine-month period, Restructuring and other charges included $128 ($81 after-tax and noncontrolling interests) in asset impairments and $46 ($29 after-tax and noncontrolling interests) in other exit costs related to the permanent shutdown and planned demolition of certain idled structures at five U.S. locations (see below); $39 ($26 after-tax and noncontrolling interests) for the layoff of approximately 830 employees (625 in the Engineered Products and Solutions segment; 80 in the Primary Metals segment; 25 in the Flat-Rolled Products segment; 10 in the Alumina segment; and 90 in Corporate); $22 ($14 after-tax) in net charges related to divested and to be divested businesses (Automotive Castings, Global Foil, Transportation Products Europe, and Packaging and Consumer) for, among other items, the settlement of a contract with a former customer, foreign currency movements, working capital adjustments, and a tax indemnification; $9 ($7 after-tax) in net charges for various other exit costs; and $25 ($19 after-tax) for the reversal of previously recorded layoff reserves.

In the 2010 first quarter, management approved the permanent shutdown and demolition of the following structures, each of which was previously temporarily idled for different reasons: the Eastalco smelter located in Frederick, MD (capacity of 195 kmt-per-year); the smelter located in Badin, NC (capacity of 60 kmt-per-year); an aluminum fluoride plant in Point Comfort, TX; a paste plant and cast house in Massena, NY; and one potline at the smelter in Warrick, IN (capacity of 40 kmt-per-year). This decision was made after a comprehensive strategic analysis was performed to determine the best course of action for each facility. Factors leading to this decision included then-current market fundamentals,

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cost competitiveness, other existing idle capacity, required future capital investment, and restart costs, as well as the elimination of ongoing holding costs. The asset impairments of $128 represent the write off of the remaining book value of properties, plants, and equipment related to these facilities. Additionally, remaining inventories, mostly operating supplies, were written down to their net realizable value resulting in a charge of $8 ($5 after-tax and noncontrolling interests), which was recorded in Cost of goods sold. The other exit costs of $46 represent $30 ($19 after-tax and noncontrolling interests) in asset retirement obligations and $14 ($9 after-tax) in environmental remediation, both triggered by the decision to permanently shutdown and demolish these structures, and $2 ($1 after-tax and noncontrolling interests) in other related costs.

Alcoa does not include Restructuring and other charges in the results of its reportable segments. The pretax impact of allocating such charges to segment results would have been as follows:

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Alumina	$	6		$	—		$	32		$	13
Primary Metals		(6	)		(7	)		(4	)		145
Flat-Rolled Products		5			—			7			(7	)
Engineered Products and Solutions		(2	)		—			1			22
Segment total		3			(7	)		36			173
Corporate		6			9			13			46
Total restructuring and other charges	$	9		$	2		$	49		$	219

As of September 30, 2011, approximately 170 of the 630 employees associated with 2011 restructuring programs, approximately 760 of the 880 employees associated with 2010 restructuring programs, and approximately 5,600 of the 6,000 employees associated with 2009 restructuring programs were terminated. The remaining terminations for a portion of the 2011 restructuring programs and all of the 2010 and 2009 restructuring programs are expected to be completed by the end of 2011. In the 2011 third quarter and nine-month period, cash payments of $11 and $14, respectively, were made against the layoff reserves related to the 2011 restructuring programs; $2 and $6, respectively, were made against the layoff reserves related to the 2010 restructuring programs; and $2 and $11, respectively, were made against the layoff reserves related to the 2009 restructuring programs.

Interest expense declined $14, or 10%, and rose $23, or 6%, in the 2011 third quarter and nine-month period, respectively, compared to the corresponding periods in 2010. The decrease in the 2011 third quarter was due to the absence of a $14 net charge related to the early retirement of various outstanding notes ($42 in purchase premiums paid partially offset by a $28 gain for “in-the-money” interest rate swaps). The increase in the 2011 nine-month period was mostly caused by a $41 net charge related to the early retirement of various outstanding notes ($74 in purchase premiums paid partially offset by a $33 gain for “in-the-money” interest rate swaps), somewhat offset by the absence of the previously mentioned $14 net charge.

Other expenses, net was $31 in the 2011 third quarter compared to $43 in the 2010 third quarter and Other income, net was $47 in the 2011 nine-month period compared with Other expenses, net of $48 in the 2010 nine-month period. In the 2011 third quarter, the change was mainly the result of a net favorable change of $56 in mark-to-market derivative contracts and lower deferred compensation as a result of a decline in plan performance, mostly offset by a decrease in the cash surrender value of company-owned life insurance and net foreign currency losses. In the 2011 nine-month period, the change was principally driven by a net favorable change of $97 in mark-to-market derivative contracts and higher equity income from an investment in a natural gas pipeline in Australia due to the recognition of a discrete income tax benefit by the consortium (Alcoa World Alumina and Chemicals’ share of the benefit was $24), slightly offset by a decrease in the cash surrender value of company-owned life insurance.

The effective tax rate for the third quarter of 2011 and 2010 was 19.6% (provision on income) and 81.7% (benefit on income), respectively.

The rate for the 2011 third quarter differs from the U.S. federal statutory rate of 35% primarily due to foreign income taxed in lower rate jurisdictions and a $15 net discrete income tax benefit for various items, primarily attributable to adjustments made related to the filing of prior year tax returns in various

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jurisdictions and the reversal of a valuation allowance for capital losses now available to be used against future capital gains.

The rate for the 2010 third quarter differs by 116.7% from the U.S. federal statutory rate of 35% primarily due to a $41 discrete income tax benefit for the reversal of a valuation allowance as a result of previously restricted net operating losses of a foreign subsidiary now available, an $8 favorable impact for operational losses in certain foreign jurisdictions that are excluded from the estimated annual effective tax rate calculation (impact reversed by the end of 2010), and a $19 net discrete tax benefit for various other items.

The effective tax rate for the 2011 and 2010 nine-month periods was 25.3% (provision on income) and 46.0% (provision on income), respectively.

The rate for the 2011 nine-month period differs from the U.S. federal statutory rate of 35% primarily due to foreign income taxed in lower rate jurisdictions.

The rate for the 2010 nine-month period differs from the U.S. federal statutory rate of 35% primarily due to a $79 discrete income tax charge as a result of a change in the tax treatment of federal subsidies received related to prescription drug benefits provided under certain retiree health care benefit plans that were determined to be actuarially equivalent to Medicare Part D and a $19 discrete income tax charge based on settlement discussions of several matters with international taxing authorities (this amount represents a decrease to Alcoa’s unrecognized tax benefits), partially offset by the $41 discrete income tax benefit mentioned above, a $24 discrete income tax benefit related to a Canadian provincial tax law change permitting a tax return to be filed in U.S. dollars, and a $9 net discrete income tax benefit for various other items.

Net income attributable to noncontrolling interests for the 2011 third quarter and nine-month period increased $5 and $62, respectively, compared with the corresponding periods in 2010. The increase in both periods was primarily due to higher earnings at Alcoa World Alumina and Chemicals (AWAC), which is owned 60% by Alcoa and 40% by Alumina Limited. The improved earnings at AWAC were mainly driven by higher realized prices, mostly offset in the third quarter comparison and partially offset in the nine-month comparison by continued higher input costs and net unfavorable foreign currency movements due to a weaker U.S. dollar.

Segment Information

Alumina

	Third quarter  ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Alumina production (kmt)		4,140		4,047		12,308		11,803
Third-party alumina shipments (kmt)		2,256		2,423		6,840		6,813
Third-party sales	$	879	$	717	$	2,615	$	2,056
Intersegment sales		751		506		2,107		1,627
Total sales	$	1,630	$	1,223	$	4,722	$	3,683
After-tax operating income (ATOI)	$	154	$	70	$	482	$	236

Alumina production increased 2% and 4% in the 2011 third quarter and nine-month period, respectively, compared with the corresponding periods in 2010. The increase in both periods was mainly driven by higher production at the São Luís (Brazil) refinery (the ramp-up of the expanded capacity began in late 2009 and continued throughout 2010 and into 2011).

Third-party sales for the Alumina segment rose 23% in the 2011 third quarter and 27% in the 2011 nine-month period compared with the same periods in 2010. In both periods, the improvement was primarily due to a 30% (third quarter) and 26% (nine months) increase in realized prices, driven by improved contractual LME-based pricing, movement to alumina index pricing, and benefits from improved spot prices. Also in the 2011 third quarter, a 7% decline in volumes was mostly offset by favorable foreign currency movements due to a stronger Australian dollar.

Intersegment sales increased 48% and 30% in the 2011 third quarter and nine-month period, respectively, compared to the corresponding periods in prior year, mostly due to higher realized prices and increased demand from the Primary Metals segment.

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ATOI for this segment improved 120% in the 2011 third quarter and 104% in the 2011 nine-month period compared to the same periods in 2010. The increase in both periods was primarily the result of the previously mentioned higher realized prices, partially offset by continued higher input costs, especially fuel oil and caustic, and net unfavorable foreign currency movements due to a weaker U.S. dollar.

In the fourth quarter of 2011, productivity improvements are expected, while caustic costs will continue to inflate. Also, fuel oil costs are expected to temper.

Primary Metals

	Third quarter  ended September 30,				Nine months  ended September 30,
	2011		2010		2011		2010
Aluminum production (kmt)		964		891		2,813		2,673
Third-party aluminum shipments (kmt)		754		708		2,176		2,102
Alcoa’s average realized price per metric ton of aluminum	$	2,689	$	2,261	$	2,734	$	2,300
Third-party sales	$	2,124	$	1,688	$	6,249	$	5,100
Intersegment sales		798		589		2,559		1,905
Total sales	$	2,922	$	2,277	$	8,808	$	7,005
ATOI	$	110	$	78	$	513	$	310

At September 30, 2011, Alcoa had 644 kmt of idle capacity on a base capacity of 4,518 kmt. In the 2011 third quarter, idle capacity did not change compared to June 30, 2011.

Aluminum production was up 8% and 5% in the 2011 third quarter and nine-month period, respectively, compared with the corresponding periods in 2010. In both periods, the improvement was primarily due to the restarted capacity at Massena East, NY (125 kmt-per-year), Ferndale, WA (Intalco: 47 kmt-per-year (11 kmt more than previously announced)), and Wenatchee, WA (43 kmt-per-year), as well as higher production at the Avilés (Spain) smelter (in June 2010 production was halted as a result of torrential flooding). The full restarts of the mentioned U.S. capacity will be achieved by the end of 2011. These restarts are expected to increase aluminum production by 140 kmt during 2011 and by 215 kmt on an annual basis thereafter and are occurring to help meet anticipated growth in aluminum demand and to meet obligations outlined in power agreements with energy providers.

Third-party sales for the Primary Metals segment improved 26% in the 2011 third quarter and 23% in the 2011 nine-month period compared with the same periods in 2010. The increase in both periods was mostly the result of a 19% (third quarter and nine months) rise in realized prices, driven by 15% (third quarter) and 18% (nine months) higher LME prices, and higher volumes, largely attributable to the previously mentioned restarted U.S. capacity. Also contributing to the increase in the 2011 nine-month period were favorable foreign currency movements due to a stronger euro.

Intersegment sales increased 35% and 34% in the 2011 third quarter and nine-month period, respectively, compared to the corresponding periods in 2010, mainly as a result of an increase in realized prices, driven by the higher LME, and higher buy/resell activity. In the 2011 nine-month period, increased demand from the midstream and downstream segments also contributed positively to the increase.

ATOI for this segment improved 41% in the 2011 third quarter and 65% in the 2011 nine-month period compared to the same periods in 2010. In both periods, the increase was primarily due to the previously mentioned improvement in realized prices and net productivity improvements, mostly offset in the quarter and partially offset in the nine months by continued higher costs for alumina, carbon, energy, and other inputs, and net unfavorable foreign currency movements due to a weaker U.S. dollar.

In the fourth quarter of 2011, net productivity improvements are anticipated while carbon price inflation is expected to continue. Higher energy costs are also expected, particularly in Norway and the U.S. due to the traditionally higher-priced upcoming winter season and a planned outage at the Rockdale, TX power plant, respectively.

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Flat-Rolled Products

	Third quarter  ended September 30,				Nine months  ended September 30,
	2011		2010		2011		2010
Third-party aluminum shipments (kmt)		454		448		1,373		1,247
Third-party sales	$	1,974	$	1,645	$	5,951	$	4,654
Intersegment sales		48		46		179		132
Total sales	$	2,022	$	1,691	$	6,130	$	4,786
ATOI	$	60	$	66	$	240	$	167

Third-party sales for the Flat-Rolled Products segment increased 20% and 28% in the 2011 third quarter and nine-month period, respectively, compared with the corresponding periods in 2010. The improvement in both periods was principally the result of continued better pricing, higher volumes across most businesses, and favorable foreign currency movements, mainly due to a stronger euro. In both periods, higher volumes were primarily attributable to the packaging, commercial transportation, and aerospace markets. Mostly offsetting the improved volumes in the 2011 third quarter were volume declines related to the distribution and industrial products markets and slightly offsetting the higher volumes in the 2011 nine-month period were volume decreases related to the industrial products markets.

ATOI for this segment declined 9% in the 2011 third quarter and improved 44% in the 2011 nine-month period compared to the same periods in 2010. In the 2011 third quarter, the decrease was mostly due to higher labor and other input costs and net unfavorable foreign currency movements due to a weaker U.S. dollar, partially offset by the previously mentioned volume impacts and net productivity improvements. In the 2011 nine-month period, the improvement in profitability was primarily driven by the previously mentioned volume and pricing impacts and net productivity improvements, partially offset by higher labor and other input costs.

In the fourth quarter of 2011, demand will remain strong in the aerospace market, but normal seasonal declines are expected in the packaging market. Weakness in markets across Europe is expected to continue, while net productivity improvements are anticipated.

Engineered Products and Solutions

	Third quarter  ended September 30,				Nine months  ended September 30,
	2011		2010		2011		2010
Third-party aluminum shipments (kmt)		56		51		168		147
Third-party sales	$	1,373	$	1,173	$	3,990	$	3,369
ATOI	$	138	$	114	$	417	$	302

On March 9, 2011, Alcoa completed an acquisition of the aerospace fastener business of TransDigm Group Inc. for $240. This business is a leading global designer, producer, and supplier of highly engineered aircraft components, with three locations (one in the state of California and two in the United Kingdom) that employ a combined 400 people. Specifically, this business provides a wide variety of high-strength, high temperature nickel alloy specialty engine fasteners, airframe bolts, and slotted entry bearings. In 2010, this business generated sales of $61. The assets and liabilities of this business were included in the Engineered Products and Solutions segment as of March 31, 2011; this business’ results of operations were included in this segment beginning March 9, 2011.

Third-party sales for the Engineered Products and Solutions segment improved 17% and 18% in the 2011 third quarter and nine-month period, respectively, compared with the corresponding periods in 2010, principally due to higher volumes across all businesses, especially related to the aerospace and commercial transportation markets. Additionally, in both periods, favorable foreign currency movements due to a stronger euro and sales from two acquisitions (the building and construction business acquired in July 2010 ($8 (quarter) and $43 (nine months)) and the newly acquired fastener business mentioned above ($18 (quarter) and $39 (nine months))) were positive impacts. Slightly offsetting the positive

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contributions in the 2011 nine-month period was the absence of sales related to the April 2010 divestiture of the Transportation Products Europe business ($28).

ATOI for this segment improved 21% in the 2011 third quarter and 38% in the 2011 nine-month period compared to the same periods in 2010. In both periods, the increase was mainly the result of the previously mentioned volume impacts, somewhat offset by unfavorable price/product mix. In the 2011 nine-month period, net productivity improvements across most businesses were also a positive contributor to ATOI.

In the fourth quarter of 2011, incremental improvements are anticipated in all end markets, except for the commercial transportation market in Europe and the building and construction market in both Europe and North America. Also, net productivity improvements and share gains through innovation are expected to continue.

Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa

Items required to reconcile total segment ATOI to consolidated net income (loss) attributable to Alcoa include: the impact of LIFO inventory accounting; interest expense; noncontrolling interests; corporate expense (general administrative and selling expenses of operating the corporate headquarters and other global administrative facilities, along with depreciation and amortization on corporate-owned assets); restructuring and other charges; discontinued operations; and other items, including intersegment profit eliminations and other metal adjustments, differences between tax rates applicable to the segments and the consolidated effective tax rate, the results of the soft alloy extrusions business in Brazil, and other nonoperating items such as foreign currency transaction gains/losses and interest income.

The following table reconciles total segment ATOI to consolidated net income (loss) attributable to Alcoa:

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Total segment ATOI	$	462		$	328		$	1,652		$	1,015
Unallocated amounts (net of tax):
Impact of LIFO		2			(2	)		(49	)		(19	)
Interest expense		(81	)		(91	)		(259	)		(245	)
Noncontrolling interests		(53	)		(48	)		(166	)		(104	)
Corporate expense		(76	)		(71	)		(219	)		(197	)
Restructuring and other charges		(7	)		1			(35	)		(142	)
Discontinued operations		—			—			(5	)		(8	)
Other		(75	)		(56	)		(117	)		(304	)
Consolidated net income (loss) attributable to Alcoa	$	172		$	61		$	802		$	(4	)

The significant changes in the reconciling items between total segment ATOI and consolidated net income (loss) attributable to Alcoa for the 2011 third quarter and nine-month period compared with the corresponding periods in 2010 (unless otherwise noted) consisted of:

• a change in the Impact of LIFO (nine months) due to higher prices for alumina and metal, both of which were driven by a rise in LME prices, and rising input costs;

• a decrease in Interest expense (third quarter), principally caused by the absence of a $9 net charge related to the early retirement of various outstanding notes ($27 in purchase premiums paid partially offset by an $18 gain for “in-the-money” interest rate swaps), and an increase in Interest expense (nine months), primarily the result of a $27 net charge related to the early retirement of various outstanding notes ($48 in purchase premiums paid partially offset by a $21 gain for “in-the-money” interest rate swaps), somewhat offset by the absence of the previously-mentioned $9 net charge;

• an increase in Noncontrolling interests (nine months), mainly due to higher earnings at AWAC, principally driven by higher realized prices, partially offset by continued higher input costs and net unfavorable foreign currency movements due to a weaker U.S. dollar;

• a decline in Restructuring and other charges (nine months), mostly due to the absence of asset impairments and other exit costs related to the permanent shutdown and planned demolition of certain idled structures at five U.S. locations; and

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• a change in Other (third quarter), mainly driven by a difference of $45 in discrete income tax items, a decrease in the cash surrender value of company-owned life insurance, and net foreign currency losses, mostly offset by the difference between the consolidated effective tax rate and the estimated tax rates applicable to the segments and a net favorable change of $36 in mark-to-market derivative contracts, and a change in Other (nine months), primarily due to the difference between the consolidated effective tax rate and the estimated tax rates applicable to the segments, a net favorable change of $63 in mark-to-market derivative contracts, and a difference of $37 in discrete income tax items.

Environmental Matters

See the Environmental Matters section of Note H to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

Liquidity and Capital Resources

Cash From Operations

Cash provided from operations was $1,051 in the 2011 nine-month period compared with $891 in the same period of 2010. The improvement of $160 was principally due to significantly better operating results, partially offset by a higher net cash outflow associated with working capital of $189 and higher pension contributions of $147.

The major components of the higher net cash outflow in working capital were as follows: a smaller outflow of $52 in receivables, primarily related to the receipt of $132 more from the sale of customer receivables, partially offset by higher sales; an additional outflow of $512 in inventories, mostly due to higher production as a result of increased demand and continued rising input costs; a smaller inflow of $23 in prepaid expenses and other current assets; an additional inflow of $155 in accounts payable, trade, principally the result of higher purchasing needs and timing of vendor payments; a lower outflow of $189 in accrued expenses, mostly related to fewer cash payments for restructuring programs; and a lower inflow of $50 in taxes, including income taxes, mainly due to the absence of a $347 federal income tax refund for the carryback of Alcoa’s 2009 net loss to prior tax years, mostly offset by higher income taxes due to Alcoa’s improved operating results.

The higher pension contributions were principally driven by cash contributions made to U.S. pension plans towards maintaining an approximately 80% funded status.

Financing Activities

Cash provided from financing activities was $13 in the 2011 nine-month period, an improvement of $764 compared with cash used for financing activities of $751 in the corresponding period of 2010.

The source of cash in the 2011 nine-month period was primarily due to $1,254 in additions to long-term debt, $1,248 of which was for the issuance of 5.40% Notes due 2021; and a change of $107 in commercial paper; mostly offset by $1,122 in payments on long-term debt, principally related to $881 for the early retirement of all of the 5.375% Notes due 2013 and a portion of the 6.00% Notes due 2013, $189 for previous borrowings on the loans supporting the São Luís refinery expansion and Juruti bauxite mine development in Brazil, and $45 for a loan associated with the Samara, Russia facility; net cash distributed to noncontrolling interests of $117, all of which relates to Alumina Limited’s share of AWAC; and $98 in dividends paid to shareholders.

In the 2010 nine-month period, the use of cash was primarily due to $1,587 in payments on long-term debt, mostly related to $511 for the repayment of 7.375% Notes due 2010 as scheduled, $825 for the early retirement of all of the 6.50% Notes due 2011 and a portion of the 6.00% Notes due 2012 and 5.375% Notes due 2013, and $230 related to previous borrowings on the loans supporting the São Luís refinery expansion and Juruti bauxite mine development; $94 in dividends paid to shareholders; $66 in acquisitions of noncontrolling interests, mainly the result of the $60 paid to redeem the convertible securities of a subsidiary that were held by Alcoa’s former partner related to the joint venture in Saudi Arabia; a change of $57 in short-term borrowings; and net cash paid to noncontrolling interests of $33, all of which relates to Alumina Limited’s share of AWAC; partially offset by $1,082 in additions to long-term debt, $998 for the issuance of 6.150% Notes due 2020 and $74 related to borrowings under the loans that support the Estreito hydroelectric power project in Brazil.

On July 25, 2011, Alcoa entered into a Five-Year Revolving Credit Agreement (the “Credit Agreement”) with a syndicate of lenders and issuers named therein. The Credit Agreement provides a $3,750 senior unsecured revolving credit facility (the “Credit Facility”), the proceeds of which are to be used to provide working capital or for other general corporate purposes of Alcoa, including support of

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Alcoa’s commercial paper program. Subject to the terms and conditions of the Credit Agreement, Alcoa may from time to time request increases in lender commitments under the Credit Facility, not to exceed $500 in aggregate principal amount, and may also request the issuance of letters of credit, subject to a letter of credit sublimit of $1,000 under the Credit Facility.

The Credit Facility matures on July 25, 2016, unless extended or earlier terminated in accordance with the provisions of the Credit Agreement. Alcoa may make two one-year extension requests during the term of the Credit Facility, with any extension being subject to the lender consent requirements set forth in the Credit Agreement. Under the provisions of the Credit Agreement, Alcoa will pay a fee of 0.25% (based on Alcoa’s long-term debt ratings as of September 30, 2011) of the total commitment per annum to maintain the Credit Facility.

The Credit Facility is unsecured and amounts payable under it will rank pari passu with all other unsecured, unsubordinated indebtedness of Alcoa. Borrowings under the Credit Facility may be denominated in U.S. dollars or euros. Loans will bear interest at a base rate or a rate equal to LIBOR, plus, in each case, an applicable margin based on the credit ratings of Alcoa’s outstanding senior unsecured long-term debt. The applicable margin on base rate loans and LIBOR loans will be 0.50% and 1.50% per annum, respectively, based on Alcoa’s long-term debt ratings as of September 30, 2011. Loans may be prepaid without premium or penalty, subject to customary breakage costs.

The Credit Facility replaces Alcoa’s Five-Year Revolving Credit Agreement, dated as of October 2, 2007 (the “Former Credit Agreement”), which was scheduled to mature on October 2, 2012. The Former Credit Agreement, which had a total capacity (excluding the commitment of Lehman Commercial Paper Inc.) of $3,275 and was undrawn, was terminated effective July 25, 2011.

The Credit Agreement includes covenants substantially similar to those in the Former Credit Agreement, including, among others, (a) a leverage ratio, (b) limitations on Alcoa’s ability to incur liens securing indebtedness for borrowed money, (c) limitations on Alcoa’s ability to consummate a merger, consolidation or sale of all or substantially all of its assets, and (d) limitations on Alcoa’s ability to change the nature of its business.

The obligation of Alcoa to pay amounts outstanding under the Credit Facility may be accelerated upon the occurrence of an “Event of Default” as defined in the Credit Agreement. Such Events of Default include, among others, (a) Alcoa’s failure to pay the principal of, or interest on, borrowings under the Credit Facility, (b) any representation or warranty of Alcoa in the Credit Agreement proving to be materially false or misleading, (c) Alcoa’s breach of any of its covenants contained in the Credit Agreement, and (d) the bankruptcy or insolvency of Alcoa.

There were no amounts outstanding under the Credit Facility at September 30, 2011 and no amounts were borrowed under the Credit Facility during the 2011 third quarter.

Alcoa’s cost of borrowing and ability to access the capital markets are affected not only by market conditions but also by the short- and long-term debt ratings assigned to Alcoa’s debt by the major credit rating agencies.

On April 12, 2011, Standard and Poor’s Ratings Services (S&P) affirmed the following ratings for Alcoa: long-term debt at BBB- and short-term debt at A-3. Additionally, S&P changed the current outlook from negative to stable.

On March 2, 2011, Moody’s Investors Service (Moody’s) confirmed the following ratings for Alcoa: long-term debt at Baa3 and short-term debt at Prime-3. Additionally, Moody’s changed the current outlook from negative to stable. On September 7, 2011, Moody’s affirmed the ratings and outlook published in its March 2, 2011 report.

On February 22, 2011, Fitch Ratings (Fitch) affirmed the following ratings for Alcoa: long-term debt at BBB- and short-term debt at F3. Additionally, Fitch changed the current outlook from negative to stable.

Investing Activities

Cash used for investing activities was $1,269 in the 2011 nine-month period compared with $798 in the 2010 nine-month period, resulting in an increase in cash used of $471.

In the 2011 nine-month period, the use of cash was mainly due to $801 in capital expenditures, 33% of which related to growth projects, including the Estreito hydroelectric power project and Juruti bauxite mine development; $239 (net of cash acquired) for the acquisition of an aerospace fastener business; and $216 in additions to investments, mostly for the contributions of $165 related to the aluminum complex joint venture in Saudi Arabia and of $16 related to the natural gas pipeline consortium in Australia.

The use of cash in the 2010 nine-month period was mainly due to $650 in capital expenditures, 54% of which related to growth projects, including the Estreito hydroelectric power project, Juruti bauxite mine development, and São Luís refinery expansion; and $224 in additions to investments, mostly for the purchase of $122 in fixed income and equity securities held by Alcoa’s captive insurance company and contributions of $75 related to the aluminum complex joint venture in Saudi Arabia; and $72 for

41

acquisitions, principally related to the purchase of a new building and construction systems business; slightly offset by $138 in sales of investments, virtually all of which related to the sale of fixed income and equity securities held by Alcoa’s captive insurance company.

Recently Adopted and Recently Issued Accounting Guidance

See Note B to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

Forward-Looking Statements

This report contains statements that relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “hopes,” “outlook,” “plans,” “projects,” “should,” “targets,” “will,” or other words of similar meaning. All statements that reflect Alcoa’s expectations, assumptions, or projections about the future other than statements of historical fact are forward-looking statements, including, without limitation, forecasts concerning global demand for aluminum, end market conditions or other trend projections, anticipated financial results or operating performance, and statements about Alcoa’s strategies, objectives, goals, targets, outlook, and business and financial prospects. Forward-looking statements are subject to a number of known and unknown risks, uncertainties, and other factors and are not guarantees of future performance. Actual results, performance, or outcomes may differ materially from those expressed in or implied by those forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) material adverse changes in aluminum industry conditions, including global supply and demand conditions and fluctuations in London Metal Exchange-based prices for primary aluminum, alumina, and other products, and fluctuations in index-based and spot prices for alumina; (b) global economic and financial market conditions generally, including the risk of another global economic downturn and uncertainties regarding the effects of sovereign debt issues or government intervention into the markets to address economic conditions; (c) unfavorable changes in the markets served by Alcoa, including automotive and commercial transportation, aerospace, building and construction, distribution, packaging, oil and gas, defense, and industrial gas turbine; (d) the impact of changes in foreign currency exchange rates on costs and results, particularly the Australian dollar, Brazilian real, Canadian dollar, euro, and Norwegian kroner; (e) increases in energy costs, including electricity, natural gas, and fuel oil, or the unavailability or interruption of energy supplies; (f) increases in the costs of other raw materials, including caustic soda or carbon products; (g) Alcoa’s inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of operations anticipated from its cash sustainability, productivity improvement, and other initiatives; (h) Alcoa’s inability to realize expected benefits from newly constructed, expanded or acquired facilities or from international joint ventures as planned and by targeted completion dates, including the joint venture in Saudi Arabia or the upstream operations in Brazil; (i) political, economic, and regulatory risks in the countries in which Alcoa operates or sells products, including unfavorable changes in laws and governmental policies, civil unrest, and other events beyond Alcoa’s control; (j) the outcome of contingencies, including legal proceedings, government investigations, and environmental remediation; (k) the outcome of negotiations with, and the business or financial condition of, key customers, suppliers, and business partners; (l) changes in tax rates or benefits; and (m) the other risk factors summarized in Alcoa’s Form 10-K, including under Part I, Item 1A, for the year ended December 31, 2010 and the following sections of this report: Note H and the Derivatives section of Note P to the Consolidated Financial Statements and the discussion included above under Segment Information. Alcoa disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.

42

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

See the Derivatives section of Note P to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

43

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Alcoa’s Chief Executive Officer and Chief Financial Officer have evaluated the company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of the end of the period covered by this report, and they have concluded that these controls and procedures are effective.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the third quarter of 2011, that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Mine Safety

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is included in Exhibit 99 of this report, which is incorporated herein by reference.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(c) Issuer Purchases of Equity Securities:

Period	Total Number of Shares Purchased (a)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of  Publicly Announced Repurchase Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 - January 31, 2011		2,582	$	16.52		—		—
February 1 - February 28, 2011		2,462	$	17.32		—		—
March 1 - March 31, 2011		—		—		—		—
Total for quarter ended March 31, 2011		5,044	$	16.91		—		—
April 1 - April 30, 2011		—		—		—		—
May 1 - May 31, 2011		—		—		—		—
June 1 - June 30, 2011		—		—		—		—
Total for quarter ended June 30, 2011		—		—		—		—
July 1 - July 31, 2011		—		—		—		—
August 1 - August 31, 2011		—		—		—		—
September 1 - September 30, 2011		—		—		—		—
Total for quarter ended September 30, 2011		—		—		—		—

(a) This column includes the deemed surrender of existing shares of Alcoa common stock to the Company by stock-based compensation plan participants to satisfy the exercise price of employee stock options at the time of exercise. These surrendered shares are not part of any publicly announced share repurchase program.

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Item 6. Exhibits.

10.	Five-Year Revolving Credit Agreement, dated as of July 25, 2011, among Alcoa Inc., the Lenders and Issuers named therein, Citibank, N.A., as Administrative Agent for the Lenders and Issuers, and JPMorgan Chase Bank, N.A., as Syndication Agent, incorporated by reference to Exhibit 10 to the Company’s Current Report on Form 8-K dated July 28, 2011
12.	Computation of Ratio of Earnings to Fixed Charges
15.	Letter regarding unaudited interim financial information
31.	Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.	Mine Safety
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Alcoa Inc.
October 20, 2011	By /s/ CHARLES D. MCLANE, JR.
Date	Charles D. McLane, Jr.
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)
October 20, 2011	By /s/ GRAEME W. BOTTGER
Date	Graeme W. Bottger
	Vice President and Controller
	(Principal Accounting Officer)

48

EXHIBIT INDEX

10.	Five-Year Revolving Credit Agreement, dated as of July 25, 2011, among Alcoa Inc., the Lenders and Issuers named therein, Citibank, N.A., as Administrative Agent for the Lenders and Issuers, and JPMorgan Chase Bank, N.A., as Syndication Agent, incorporated by reference to Exhibit 10 to the Company’s Current Report on Form 8-K dated July 28, 2011
12.	Computation of Ratio of Earnings to Fixed Charges
15.	Letter regarding unaudited interim financial information
31.	Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.	Mine Safety
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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EX-12

Exhibit 12

Alcoa and subsidiaries

Computation of Ratio of Earnings to Fixed Charges

(in millions, except ratio)

Nine months ended September 30,	2011
Earnings:
Income from continuing operations before income taxes	$	1,302
Noncontrolling interests’ share of earnings of majority-owned subsidiaries without fixed charges		—
Equity income		(106	)
Fixed charges added to earnings		432
Distributed income of less than 50 percent-owned persons		78
Amortization of capitalized interest:
Consolidated		32
Proportionate share of 50 percent-owned persons		—
Total earnings	$	1,738
Fixed Charges:
Interest expense:
Consolidated	$	399
Proportionate share of 50 percent-owned persons		—
	$	399
Amount representative of the interest factor in rents:
Consolidated	$	33
Proportionate share of 50 percent-owned persons		—
	$	33
Fixed charges added to earnings	$	432
Interest capitalized:
Consolidated	$	80
Proportionate share of 50 percent-owned persons		—
	$	80
Preferred stock dividend requirements of majority-owned subsidiaries		—
Total fixed charges	$	512
Ratio of earnings to fixed charges		3.4

EX-15

Exhibit 15

October 20, 2011

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

RE: Alcoa Inc.

Commissioners:

We are aware that our report dated October 20, 2011, on our review of interim financial information of Alcoa Inc. and its subsidiaries (Alcoa) for the three- and nine-month periods ended September 30, 2011 and 2010 and included in Alcoa’s quarterly report on Form 10-Q for the quarter ended September 30, 2011 is incorporated by reference in its Registration Statements on Form S-3 (No. 333-172327), Form S-4 (No. 333-141419), and Form S-8 (Nos. 33-60305, 333-27903, 333-62663, 333-79575, 333-32516, 333-36208, 333-37740, 333-39708, 333-106411, 333-128445, 333-146330, 333-153369, 333-155668, 333-159123, 333-168428, and 333-170801).

Very truly yours,

/s/ PricewaterhouseCoopers LLP

Pittsburgh, Pennsylvania

EX-31

Exhibit 31

Certifications

I, Klaus Kleinfeld, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Alcoa Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 20, 2011

/s/ KLAUS KLEINFELD
Name:	Klaus Kleinfeld
Title:	Chairman and Chief Executive Officer

I, Charles D. McLane, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Alcoa Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 20, 2011

/s/ CHARLES D. MCLANE, JR.
Name:	Charles D. McLane, Jr.
Title:	Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Alcoa Inc., a Pennsylvania corporation (the “Company”), does hereby certify that:

The Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 20, 2011	/s/ KLAUS KLEINFELD
	Name:	Klaus Kleinfeld
	Title:	Chairman and Chief Executive Officer
Date: October 20, 2011	/s/ CHARLES D. MCLANE, JR.
	Name:	Charles D. McLane, Jr.
	Title:	Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-Q and shall not be considered filed as part of the Form 10-Q.

EX-99

Exhibit 99

MINE SAFETY

At Alcoa, management strives to work safely in a manner that protects and promotes the health and well-being of the Company’s employees, contractors, and the communities in which Alcoa operates because it is fundamentally the right thing to do. Despite uncertainties and economic challenges, Alcoa remains committed to living its values and managing risks accordingly. In 2010, 48% of Alcoa’s global locations reported no recordable injuries, and 82% reported zero lost workdays. In Alcoa’s 2010 Employee Global Voices Survey, “I work in an environment that promotes safety” led all positive responses (82%) by employees participating in the survey.

Alcoa’s health and safety systems are anchored by committed people who are actively engaged and effectively support a safe work environment, safe work methods, and overall production system stability. Each day, people at all levels proactively monitor and intervene to defend against weaknesses that develop in Alcoa’s safety systems by identifying potential hazards and error-likely situations and responding to eliminate or control them.

In the table below there are disclosures involving the Point Comfort, TX alumina refinery. All citations have been or are being addressed. None constituted an imminent danger.

Dodd-Frank Act Disclosure of Mine Safety and Health Administration Safety Data

Certain of Alcoa’s U.S. facilities are subject to regulation by the Mine Safety and Health Administration (MSHA) under the U.S. Federal Mine Safety and Health Act of 1977 (the “Mine Act”). The MSHA inspects these facilities on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. Whenever the MSHA issues a citation or order, it also generally proposes a civil penalty, or fine, related to the alleged violation. Citations or orders can be contested and appealed, and as part of that process, are often reduced in severity and amount, and are sometimes dismissed.

Management believes the following mine safety disclosures meet the requirements of section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). However, as of the date of this report, the U.S. Securities and Exchange Commission (the “SEC”) has not issued final rules and regulations under these provisions; therefore, it is possible that any final rules adopted by the SEC will require disclosures to be presented in a different form.

Mine Safety Data. The table and other data below present mine safety information related to Alcoa’s U.S. facilities subject to MSHA regulation, as required by section 1503(a)(1) of the Dodd-Frank Act. The following data reflects citations and orders received from the MSHA during the third quarter and nine months ended September 30, 2011, as reflected in the MSHA system on September 30, 2011, and the proposed penalties received from the MSHA during such period.

Third quarter ended September 30, 2011	§104(3)		§104(b)(4)		§104(d)(5)		§110(b)(2)(6)		§107(a)(7)		Proposed Penalties(8)
Mine or Operation(1):
Point Comfort, TX Alumina Refinery(2)		8		—		2		—		—	$	9,887
Nine months ended September 30, 2011	§104(3)		§104(b)(4)		§104(d)(5)		§110(b)(2)(6)		§107(a)(7)		Proposed Penalties(8)
Mine or Operation(1):
Point Comfort, TX Alumina Refinery(2)		14		—		2		—		—	$	46,212

(1) The MSHA assigns an identification number to each mine or operation and may or may not assign separate identification numbers to related facilities. The information provided in this table is presented by mine or operation rather than the MSHA identification number because that is how Alcoa manages and operates its business, and management believes that this presentation is more useful to investors.

(2) Under the Interagency Agreement dated March 29, 1979 between the MSHA, the U.S. Department of Labor, and The Occupational Safety and Health Administration, alumina refineries (such as Alcoa’s Point Comfort facility) are subject to MSHA jurisdiction.

(3) Represents the total number of citations issued under section 104 of the Mine Act, for violations of mandatory health or safety standards that could significantly and substantially contribute to a serious injury if left unabated. This includes the citations listed under the column headed §104(d).

(4) Represents the total number of orders issued under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period prescribed by the MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until the MSHA determines that the violation has been abated.

(5) Represents the total number of citations and orders issued under section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards.

(6) Represents the total number of flagrant violations identified under section 110(b)(2) of the Mine Act.

(7) Represents the total number of imminent danger orders issued under section 107(a) of the Mine Act.

(8) Amounts represent the total dollar value of proposed assessments received.

During the third quarter and nine months ended September 30, 2011, Alcoa had no mining related fatalities, and none of the Company’s mining operations received written notice from the MSHA of a pattern of, or the potential to have a pattern of, violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under section 104(e) of the Mine Act.

The Federal Mine Safety and Health Review Commission (the “Commission”) is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. As of September 30, 2011, Alcoa has a total of 22 matters pending before the Commission, all relating to the Point Comfort facility. These concern citations, orders or proposed assessments issued by the MSHA during 2011 (8) and 2010 (14).

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Segment Information (Schedule Of Operating Results Of Reportable Segments) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Third-party sales	$ 6,350	$ 5,223	$ 18,805	$ 15,179
Intersegment sales	1,597	1,141	4,845	3,664
Total sales	7,947	6,364	23,650	18,843
Equity income (loss)	(2)	2	24	10
Depreciation, depletion, and amortization	355	336	1,050	1,019
Income taxes	156	64	570	275
After-tax operating income (ATOI)	462	328	1,652	1,015
Alumina [Member]
Third-party sales	879	717	2,615	2,056
Intersegment sales	751	506	2,107	1,627
Total sales	1,630	1,223	4,722	3,683
Equity income (loss)	2	1	27	7
Depreciation, depletion, and amortization	117	100	332	299
Income taxes	42	(22)	146	46
After-tax operating income (ATOI)	154	70	482	236
Primary Metals [Member]
Third-party sales	2,124	1,688	6,249	5,100
Intersegment sales	798	589	2,559	1,905
Total sales	2,922	2,277	8,808	7,005
Equity income (loss)	(4)		(4)	1
Depreciation, depletion, and amortization	137	142	420	431
Income taxes	21	(3)	129	15
After-tax operating income (ATOI)	110	78	513	310
Flat-Rolled Products [Member]
Third-party sales	1,974	1,645	5,951	4,654
Intersegment sales	48	46	179	132
Total sales	2,022	1,691	6,130	4,786
Depreciation, depletion, and amortization	61	57	179	173
Income taxes	26	26	94	72
After-tax operating income (ATOI)	60	66	240	167
Engineered Products and Solutions [Member]
Third-party sales	1,373	1,173	3,990	3,369
Total sales	1,373	1,173	3,990	3,369
Equity income (loss)		1	1	2
Depreciation, depletion, and amortization	40	37	119	116
Income taxes	67	63	201	142
After-tax operating income (ATOI)	$ 138	$ 114	$ 417	$ 302

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Consolidated Balance Sheet (USD $) In Millions	Sep. 30, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 1,332	$ 1,543
Receivables from customers, less allowances of $39 in 2011 and $45 in 2010	1,915	1,565
Other receivables	386	326
Inventories (F)	3,172	2,562
Prepaid expenses and other current assets	865	873
Total current assets	7,670	6,869
Properties, plants, and equipment	37,343	37,446
Less: accumulated depreciation, depletion, and amortization	17,872	17,285
Properties, plants, and equipment, net	19,471	20,161
Goodwill	5,271	5,119
Investments	1,521	1,340
Deferred income taxes	3,060	3,184
Other noncurrent assets	2,527	2,521
Assets held for sale (C)	78	99
Total assets	39,598	39,293
LIABILITIES
Short-term borrowings	57	92
Commercial paper	107
Accounts payable, trade	2,480	2,322
Accrued compensation and retirement costs	956	929
Taxes, including income taxes	510	461
Other current liabilities	1,024	1,201
Long-term debt due within one year	489	231
Total current liabilities	5,623	5,236
Long-term debt, less amount due within one year	8,658	8,842
Accrued pension benefits (O)	2,081	2,923
Accrued other postretirement benefits	2,555	2,615
Other noncurrent liabilities and deferred credits	2,373	2,560
Liabilities of operations held for sale (C)	25	31
Total liabilities	21,315	22,207
COMMITMENTS AND CONTINGENCIES (H)
EQUITY
Preferred stock	55	55
Common stock (K)	1,178	1,141
Additional capital (K)	7,545	7,087
Retained earnings	11,820	11,149
Treasury stock, at cost	(3,954)	(4,146)
Accumulated other comprehensive loss	(1,725)	(1,675)
Total Alcoa shareholders' equity	14,919	13,611
Noncontrolling interests	3,364	3,475
Total equity	18,283	17,086
Total liabilities and equity	$ 39,598	$ 39,293

XML

Consolidated Balance Sheet (Parenthetical) (USD $) In Millions	Sep. 30, 2011	Dec. 31, 2010
Consolidated Balance Sheet
Receivables from customers, allowances	$ 39	$ 45

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Preferred And Common Stock (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended
	Jan. 25, 2011	Jan. 24, 2011	Sep. 30, 2011
Preferred And Common Stock
Common stock contributed to pension plans	36,518,563	36,518,563
Common stock contributed to pension plan, price per share		$ 16.43
Common stock contributed to pension plan, aggregate price		$ 600
Common shares authorized			1,800,000,000
Common shares issued			1,177,906,557
Common share outstanding			1,064,276,127
Funded status of U.S. pension plan		80.00%

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Pension And Other Postretirement Benefits

9 Months Ended

Sep. 30, 2011

Pension And Other Postretirement Benefits

Pension And Other Postretirement Benefits

O. Pension and Other Postretirement Benefits – The components of net periodic benefit cost were as follows:

	Third quarter  ended September 30,						Nine months  ended September 30,
Pension benefits	2011			2010			2011			2010
Service cost	$	41		$	38		$	123		$	111
Interest cost		169			170			509			510
Expected return on plan assets		(202	)		(195	)		(605	)		(586	)
Amortization of prior service cost		5			4			14			12
Recognized net actuarial loss		63			46			187			135
Net periodic benefit cost	$	76		$	63		$	228		$	182
	Third quarter  ended September 30,						Nine months  ended September 30,
Other postretirement benefits	2011			2010			2011			2010
Service cost	$	5		$	5		$	13		$	15
Interest cost		40			44			119			131
Expected return on plan assets		(1	)		(2	)		(2	)		(5	)
Amortization of prior service benefit		(5	)		(4	)		(13	)		(11	)
Recognized net actuarial loss		7			8			20			24
Settlements		—			—			—			(3	)
Net periodic benefit cost	$	46		$	51		$	137		$	151

On January 24, 2011, Alcoa contributed newly issued shares (see Note K) of its common stock (valued at $600) to a master trust that holds the assets of certain U.S. defined benefit pension plans in a private placement transaction. These shares were issued to satisfy the estimated minimum required funding and to provide additional funding towards maintaining an approximately 80% funded status of Alcoa's U.S. pension plans.

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2011	Oct. 14, 2011
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Trading Symbol	aa
Entity Registrant Name	ALCOA INC
Entity Central Index Key	0000004281
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,064,303,727

XML

Commitments And Contingencies (Investments) (Details) In Millions, unless otherwise specified	9 Months Ended					12 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended			9 Months Ended					12 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended	6 Months Ended		12 Months Ended			9 Months Ended		12 Months Ended				12 Months Ended
	Sep. 30, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2004	Sep. 30, 2011 Non Current Liabilities and Deferred Credits [Member] USD ($)	Dec. 31, 2010 Non Current Liabilities and Deferred Credits [Member] USD ($)	Dec. 31, 2010 Smelting and Rolling Mill Companies [Member] USD ($)	Sep. 30, 2011 Ma'aden Joint Venture [Member]	Sep. 30, 2011 Alcoa Joint Venture [Member] USD ($)	Sep. 30, 2011 Alcoa Joint Venture [Member] USD ($)	Sep. 30, 2011 Alcoa Joint Venture [Member] SAR	Dec. 31, 2010 Alcoa Joint Venture [Member] USD ($)	Sep. 30, 2011 Brazilian Real [Member]	Sep. 30, 2011 Barra Grande [Member]	Sep. 30, 2011 Machadinho [Member]	Sep. 30, 2011 Machadinho and Barra Grande [Member] BRL MWH	Sep. 30, 2011 Machadinho and Barra Grande [Member] USD ($)	Dec. 31, 2010 Machadinho and Barra Grande [Member] BRL	Dec. 31, 2010 Machadinho and Barra Grande [Member] USD ($)	Mar. 31, 2010 Estreito Project [Member] USD ($)	Mar. 31, 2010 Estreito Project [Member] BRL	Sep. 30, 2011 Estreito Project [Member] BRL MWH	Sep. 30, 2011 Estreito Project [Member] USD ($)	Dec. 31, 2006 Estreito Project [Member] Alcoa Aluminio [Member]	Jun. 30, 2011 Serra do Facao Project [Member] USD ($)	Jun. 30, 2011 Serra do Facao Project [Member] BRL MWH	Dec. 31, 2010 Serra do Facao Project [Member] USD ($)	Dec. 31, 2010 Serra do Facao Project [Member] BRL	Dec. 31, 2006 Serra do Facao Project [Member] Alcoa Aluminio [Member]	Sep. 30, 2011 Dampier to Bunbry Natural Gas Pipeline (DBNGP) [Member] USD ($)	Sep. 30, 2011 Dampier to Bunbry Natural Gas Pipeline (DBNGP) [Member] AUD	Dec. 31, 2004 Dampier to Bunbry Natural Gas Pipeline (DBNGP) [Member] USD ($)	Dec. 31, 2004 Dampier to Bunbry Natural Gas Pipeline (DBNGP) [Member] AUD	Dec. 31, 2011 Dampier to Bunbry Natural Gas Pipeline (DBNGP) [Member] AUD	Dec. 31, 2011 Dampier to Bunbry Natural Gas Pipeline (DBNGP) [Member] USD ($)	Dec. 31, 2006 Alcoa Aluminio [Member]	Sep. 30, 2011 Alcoa Aluminio [Member] USD ($) MWH	Sep. 30, 2011 Alcoa Aluminio [Member] BRL	Dec. 31, 2010 Alcoa [Member] USD ($)
Ownership interest in joint venture at fair market value							74.90%		25.10%
Capital investment	$ 1,521	$ 1,340				$ 4,000		$ 10,800	$ 10,800	40,500
Amount invested by Alcoa and Aluminum Financing Limited								1,100	1,100
Amount invested by Alcoa and Aluminum Financing Limited, over year	4
Capital investment commitment paid-to-date								325	325															180	340
Capital investment commitment paid in period								13	165
Duration of sharing capital commitment, in years															30	30
Power self sufficiency												70.00%			40.00%	40.00%
Investment in SPPL as an equity method investment								461	461		285
Guarantee issued on behalf of smelting and rolling mill companies				8	8																																	1,004
Ownership interest issued as a guarantee for smelting and rolling companies							74.90%			25.10%
Debt service requirements, principal						108
Debt service requirements, interest						50
Investment percentage													42.18%	30.99%
Total energy demand															690	690
Total investment in project															487	266	461	274
Aluminio's share of Serra do Facao																								190	350
Additional acquired share																							6.41%
Increase in estimated cost to complete Estreito project																			720	1,300
Aluminio's share of Estreito project																					1,250	680
Estimated project costs																					4,900	2,700		550	1,000
Total investment in Serra do Facao																								106	193	116	195
Percent interest in a consortium																												34.97%							25.49%
Assured energy																								65	65											38	38
Energy capacity installed																					280	280
Assured power from installed capacity																					150	150
Initial cash investment																															17	24
Additional contributions																													16	16	141	176
Additional amount committed to invest																																	9	10
Amount contributed																																				620	1,100
Alcoa's maximum exposure to loss in projects															570	$ 310													$ 470	480						$ 220	400
Interest in consortium			20.00%

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Discontinued Operations And Assets Held For Sale (Tables)

9 Months Ended

Sep. 30, 2011

Schedule Of Major Classes Of Assets And Liabilities Of Operations Held For Sale

	September 30, 2011		December 31, 2010
Assets:
Receivables	$	29	$	28
Inventories		22		22
Properties, plants, and equipment		21		35
Other assets		6		14
Assets held for sale	$	78	$	99
Liabilities:
Accounts payable, trade	$	8	$	10
Accrued expenses		17		21
Liabilities of operations held for sale	$	25	$	31

Income Statement [Member]

Discontinued Operations And Assets Held For Sale

	Third quarter  ended September 30,				Nine months  ended September 30,
	2011		2010		2011			2010
Sales	$	—	$	—	$	—		$	—
Loss from operations before income taxes	$	—	$	—	$	(7	)	$	(13	)
Benefit for income taxes		—		—		2			5
Loss from discontinued operations	$	—	$	—	$	(5	)	$	(8	)

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Commitments And Contingencies (Environmental Matters) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended		9 Months Ended	3 Months Ended	1 Months Ended		3 Months Ended	12 Months Ended		12 Months Ended
	Sep. 30, 2011	Sep. 30, 2011	Dec. 31, 2010	Sep. 30, 2011 Recurring Costs of Managing Hazardous Substances and Environmental Programs [Member]	Sep. 30, 2011 Various Sites [Member]	Nov. 30, 2008 Grasse River [Member]	Jun. 30, 2003 Grasse River [Member]	Sep. 30, 2011 Grasse River [Member]	Dec. 31, 2010 Grasse River [Member]	Mar. 24, 2010 Grasse River [Member]	Dec. 31, 2005 East St. Louis Site [Member]	Dec. 31, 2009 Fusina Site [Member]	Dec. 31, 2009 Portovesme Site [Member]
Number of cleanup locations		more than 100
Remediation reserve balance	$ 327	$ 327	$ 333
Remediation reserve balance, classified as a current liability	34	34	31
Remediation reserve increase		6			2	40			2		15	12	3
Remediation reserve adjustment										17
Payments related to remediation expenses applied against the reserve	5	13
Percentage of cost of goods sold				2.00%
Recommended capping remedy, minimum								20
Recommended capping remedy, maximum								100
Translation adjustment functional to reporting currency	$ (2)	$ 1
Frequency of sediment erosion from winter river ice formation and breakup, in years							10

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Restructuring And Other Charges

9 Months Ended

Sep. 30, 2011

Restructuring And Other Charges

Restructuring And Other Charges

D. Restructuring and Other Charges – In the third quarter and nine-month period of 2011, Alcoa recorded Restructuring and other charges of $9 ($5 after-tax and noncontrolling interests) and $49 ($26 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2011 third quarter included $18 ($11 after-tax and noncontrolling interests) for the layoff of approximately 150 employees (70 in the Flat-Rolled Products segment, 40 in the Primary Metals segment, 30 in the Alumina segment, and 10 in Corporate); a net charge of $1 (less than $1 after-tax) for other small items; and $10 ($6 after-tax) for the reversal of previously recorded layoff reserves, primarily related to a change in plans for Alcoa's aluminum powder facility in Rockdale, TX.

In the 2011 nine-month period, Restructuring and other charges included $31 ($19 after-tax and noncontrolling interests) for the layoff of approximately 630 employees (420 in the Flat-Rolled Products segment, 110 in the Primary Metals segment, 60 in the Alumina segment, 30 in the Engineered Products and Solutions segment, and 10 in Corporate); $20 ($8 after-tax and noncontrolling interests) for a litigation matter related to the former St. Croix location (see the Litigation section of Note H); an $8 ($5 after-tax) charge for an adjustment to the fair value of the one remaining foil location classified as held for sale due to foreign currency movements; a net charge of $4 ($3 after-tax) for other small items; and $14 ($9 after-tax) for the reversal of previously recorded layoff reserves, primarily related to a change in plans for Alcoa's aluminum powder facility in Rockdale, TX.

In the third quarter and nine-month period of 2010, Alcoa recorded Restructuring and other charges of $2 (a credit of $1 after-tax and noncontrolling interests) and $219 ($138 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2010 third quarter included $3 ($2 after-tax and noncontrolling interests) for the layoff of approximately 30 employees (20 in the Primary Metals segment and 10 in Corporate); $8 ($5 after-tax) in net charges related to divested and to be divested businesses (Global Foil, Packaging and Consumer, and Transportation Products Europe) for, among other items, working capital adjustments and a tax indemnification; $1 ($1 after-tax and noncontrolling interests) in net charges for various other exit costs; and $10 ($9 after-tax) for the reversal of previously recorded layoff reserves, including a portion of those related to the Portovesme smelter in Italy due to the execution of a new power agreement (see the European Commission Matters section of Note H).

In the 2010 nine-month period, Restructuring and other charges included $128 ($81 after-tax and noncontrolling interests) in asset impairments and $46 ($29 after-tax and noncontrolling interests) in other exit costs related to the permanent shutdown and planned demolition of certain idled structures at five U.S. locations (see below); $39 ($26 after-tax and noncontrolling interests) for the layoff of approximately 830 employees (625 in the Engineered Products and Solutions segment; 80 in the Primary Metals segment; 25 in the Flat-Rolled Products segment; 10 in the Alumina segment; and 90 in Corporate); $22 ($14 after-tax) in net charges related to divested and to be divested businesses (Automotive Castings, Global Foil, Transportation Products Europe, and Packaging and Consumer) for, among other items, the settlement of a contract with a former customer, foreign currency movements, working capital adjustments, and a tax indemnification; $9 ($7 after-tax) in net charges for various other exit costs; and $25 ($19 after-tax) for the reversal of previously recorded layoff reserves.

In the 2010 first quarter, management approved the permanent shutdown and demolition of the following structures, each of which was previously temporarily idled for different reasons: the Eastalco smelter located in Frederick, MD (capacity of 195 kmt-per-year); the smelter located in Badin, NC (capacity of 60 kmt-per-year); an aluminum fluoride plant in Point Comfort, TX; a paste plant and cast house in Massena, NY; and one potline at the smelter in Warrick, IN (capacity of 40 kmt-per-year). This decision was made after a comprehensive strategic analysis was performed to determine the best course of action for each facility. Factors leading to this decision included then-current market fundamentals, cost competitiveness, other existing idle capacity, required future capital investment, and restart costs, as well as the elimination of ongoing holding costs. The asset impairments of $128 represent the write off of the remaining book value of properties, plants, and equipment related to these facilities. Additionally, remaining inventories, mostly operating supplies, were written down to their net realizable value resulting in a charge of $8 ($5 after-tax and noncontrolling interests), which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other exit costs of $46 represent $30 ($19 after-tax and noncontrolling interests) in asset retirement obligations and $14 ($9 after-tax) in environmental remediation, both triggered by the decision to permanently shutdown and demolish these structures, and $2 ($1 after-tax and noncontrolling interests) in other related costs.

Alcoa does not include Restructuring and other charges in the results of its reportable segments. The pretax impact of allocating such charges to segment results would have been as follows:

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Alumina	$	6		$	—		$	32		$	13
Primary Metals		(6	)		(7	)		(4	)		145
Flat-Rolled Products		5			—			7			(7	)
Engineered Products and Solutions		(2	)		—			1			22
Segment total		3			(7	)		36			173
Corporate		6			9			13			46
Total restructuring and other charges	$	9		$	2		$	49		$	219

As of September 30, 2011, approximately 170 of the 630 employees associated with 2011 restructuring programs, approximately 760 of the 880 employees associated with 2010 restructuring programs, and approximately 5,600 of the 6,000 employees associated with 2009 restructuring programs were terminated. The remaining terminations for a portion of the 2011 restructuring programs and all of the 2010 and 2009 restructuring programs are expected to be completed by the end of 2011. In the 2011 third quarter and nine-month period, cash payments of $11 and $14, respectively, were made against the layoff reserves related to the 2011 restructuring programs; $2 and $6, respectively, were made against the layoff reserves related to the 2010 restructuring programs; and $2 and $11, respectively, were made against the layoff reserves related to the 2009 restructuring programs.

Activity and reserve balances for restructuring charges were as follows:

	Layoff costs			Other exit costs			Total
Reserve balances at December 31, 2009	$	160		$	66		$	226
2010:
Cash payments		(93	)		(15	)		(108	)
Restructuring charges		43			53			96
Other*		(57	)		(41	)		(98	)
Reserve balances at December 31, 2010		53			63			116
2011:
Cash payments		(32	)		(6	)		(38	)
Restructuring charges		31			1			32
Other*		(13	)		—			(13	)
Reserve balances at September 30, 2011	$	39		$	58		$	97

* Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In 2010, Other for other exit costs also included a reclassification of the following restructuring charges: $30 in asset retirement and $14 in environmental obligations, as these liabilities are included in Alcoa's separate reserves for asset retirement obligations and environmental remediation, respectively.

The remaining reserves are expected to be paid in cash during 2011, with the exception of approximately $60 to $65, which is expected to be paid over the next several years for ongoing site remediation work, special termination benefit payments, and lease termination costs.

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Restructuring And Other Charges (Tables)

9 Months Ended

Sep. 30, 2011

Restructuring And Other Charges

Pro Forma Restructuring And Other Charges By Reportable Segment, Pretax

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Alumina	$	6		$	—		$	32		$	13
Primary Metals		(6	)		(7	)		(4	)		145
Flat-Rolled Products		5			—			7			(7	)
Engineered Products and Solutions		(2	)		—			1			22
Segment total		3			(7	)		36			173
Corporate		6			9			13			46
Total restructuring and other charges	$	9		$	2		$	49		$	219

Activity And Reserve Balances For Restructuring Charges

	Layoff costs			Other exit costs			Total
Reserve balances at December 31, 2009	$	160		$	66		$	226
2010:
Cash payments		(93	)		(15	)		(108	)
Restructuring charges		43			53			96
Other*		(57	)		(41	)		(98	)
Reserve balances at December 31, 2010		53			63			116
2011:
Cash payments		(32	)		(6	)		(38	)
Restructuring charges		31			1			32
Other*		(13	)		—			(13	)
Reserve balances at September 30, 2011	$	39		$	58		$	97

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Inventories (Carrying Value Of Major Inventory Components) (Details) (USD $) In Millions	Sep. 30, 2011	Dec. 31, 2010
Inventories
Finished goods	$ 592	$ 470
Work-in-process	1,042	814
Bauxite and alumina	697	621
Purchased raw materials	571	401
Operating supplies	270	256
Inventories, total	$ 3,172	$ 2,562

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Restructuring And Other Charges (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended		3 Months Ended	9 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended	3 Months Ended			9 Months Ended		3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	9 Months Ended		12 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended				9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Jun. 30, 2011	Sep. 30, 2011	Sep. 30, 2010	Dec. 31, 2010	Dec. 31, 2009	Sep. 30, 2010 Foreign Currency Movements [Member]	Sep. 30, 2011 Foreign Currency Movements [Member]	Sep. 30, 2010 Foreign Currency Movements [Member]	Sep. 30, 2010 Other Exit Costs [Member]	Jun. 30, 2010 Other Exit Costs [Member]	Sep. 30, 2011 Other Exit Costs [Member]	Sep. 30, 2010 Other Exit Costs [Member]	Dec. 31, 2010 Other Exit Costs [Member]	Sep. 30, 2011 Restructuring Programs, 2011 [Member]	Sep. 30, 2011 Litigation Matter [Member]	Sep. 30, 2011 Litigation Matter [Member]	Dec. 31, 2009 Restructuring Programs, 2009 [Member]	Sep. 30, 2011 Restructuring Programs, 2010 [Member]	Sep. 30, 2010 Asset Impairments [Member]	Sep. 30, 2011 Other Restructuring Charges [Member]	Sep. 30, 2011 Other Restructuring Charges [Member]	Sep. 30, 2011 Reversal of Prior Periods' Layoff Reserves [Member]	Sep. 30, 2010 Reversal of Prior Periods' Layoff Reserves [Member]	Jun. 30, 2010 Reversal of Prior Periods' Layoff Reserves [Member]	Sep. 30, 2011 Reversal of Prior Periods' Layoff Reserves [Member]	Sep. 30, 2010 Reversal of Prior Periods' Layoff Reserves [Member]	Mar. 31, 2010 Asset Retirement Obligations [Member]	Dec. 31, 2010 Asset Retirement Obligations [Member]	Mar. 31, 2010 Environmental Remediation [Member]	Dec. 31, 2010 Environmental Remediation [Member]	Sep. 30, 2010 Layoff Costs [Member]	Sep. 30, 2011 Layoff Costs [Member]	Sep. 30, 2010 Layoff Costs [Member]	Dec. 31, 2010 Layoff Costs [Member]	Mar. 31, 2010 Permanent Shutdown and Planned Demolition of Idled Structures [Member]	Sep. 30, 2010 Permanent Shutdown and Planned Demolition of Idled Structures [Member]	Mar. 31, 2010 Permanent Shutdown and Planned Demolition of Idled Structures [Member] Frederick, MD [Member] MT	Mar. 31, 2010 Permanent Shutdown and Planned Demolition of Idled Structures [Member] Badin, NC [Member] MT	Mar. 31, 2010 Permanent Shutdown and Planned Demolition of Idled Structures [Member] Comfort, TX [Member] MT	Sep. 30, 2011 Restructuring Programs (Layoffs), 2011 [Member]	Sep. 30, 2011 Restructuring Programs (Layoffs), 2011 [Member]	Sep. 30, 2011 Restructuring Programs (Layoffs), 2010 [Member]	Sep. 30, 2011 Restructuring Programs (Layoffs), 2010 [Member]	Sep. 30, 2011 Restructuring Programs (Layoffs), 2009 [Member]	Sep. 30, 2011 Restructuring Programs (Layoffs), 2009 [Member]	Sep. 30, 2010 Engineered Products and Solutions [Member]	Sep. 30, 2011 Flat-Rolled Products [Member]	Sep. 30, 2011 Flat-Rolled Products [Member]	Sep. 30, 2010 Flat-Rolled Products [Member]	Sep. 30, 2010 Corporate [Member]	Sep. 30, 2010 Corporate [Member]	Sep. 30, 2011 Primary Metals [Member]	Sep. 30, 2010 Primary Metals [Member]	Sep. 30, 2011 Primary Metals [Member]	Sep. 30, 2010 Primary Metals [Member]	Sep. 30, 2011 Alumina [Member]	Sep. 30, 2010 Alumina [Member]
Restructuring and other charges	$ 9	$ 2		$ 49	$ 219			$ 8		$ 22	$ 1			$ 9			$ 18	$ 31			$ 128	$ 1	$ 4	$ 10		$ 10		$ 25					$ 3	$ 8	$ 39
Restructuring and other charges, after tax and noncontrolling interests	5	1		26	138			5	5	14		1		7				8			81	1	3	6	9		9	19		30		14	2	19	26
Number of employees associated with layoff costs	150	30		630	830																																											625	70	420	25	10	90	40	20	110	80	30	10
Other asset impairment charges																																					128
Other exit costs																													30		14						46	46
Other exit costs, after tax and noncontrolling interests																													19		9							29
Other restructuring activities																																					2
Other restructuring activities, after tax and noncontrolling interests																																					1
Cash payments				38		108							6		15																			32		93						11	14	2	6	2	11
Reduction in production - result of market conditions, in kmt																																							195.000	60.000
Expansion of production plan included in asset impairment, kmt																																									40.000
Estimated decrease in number of employees due to restructuring							6,000									170			5,600	760																							630		880
Inventory write-down - permanent shutdown and planned demolition of idled structures																																					8
Inventory write-down, after tax and non-controlling interests																																					5
Minimum amount of cash payments expected to be paid beyond the end of the current annual period			60
Maximum amount of cash payments expected to be paid beyond the end of the current annual period			$ 65

XML

Subsequent Events

9 Months Ended

Sep. 30, 2011

Subsequent Events

Subsequent Events

Q. Subsequent Events – Management evaluated all activity of Alcoa and concluded that no subsequent events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in the Notes to the Consolidated Financial Statements, except as follows in relation to Alcoa's investment in a joint venture in Saudi Arabia (see the Investments section of Note H).

In October 2011, the refining and mining company of the joint venture entered into project financing totaling $992, of which $249 represents Alcoa World Alumina and Chemicals' (AWAC) 25.1% interest in the refining and mining company. In conjunction with the financing, Alcoa, on behalf of AWAC, issued a guarantee to the lenders in the event that the refining and mining company defaults on its debt service requirements through June 2019 (Ma'aden issued a similar guarantee for its 74.9% interest). Alcoa's guarantee for the refining and mining company covers total debt service requirements of $30 in principal and up to a maximum of approximately $12 in interest per year (based on projected interest rates). In the event Alcoa would be required to make payments under the guarantee, 40% of such amount would be contributed to Alcoa by Alumina Limited, consistent with its ownership interest in AWAC.

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Other Expenses (Income), Net

9 Months Ended

Sep. 30, 2011

Other Expenses (Income), Net

Other Expenses (Income), Net

I. Other Expenses (Income), Net

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Equity loss (income)	$	2		$	(2	)	$	(24	)	$	(10	)
Interest income		(5	)		(5	)		(16	)		(14	)
Foreign currency losses, net		35			21			5			23
Net (gain) loss from asset sales		—			(8	)		1			(8	)
Net (gain) loss on mark-to-market derivative contracts (P)		(14	)		42			(41	)		56
Other, net		13			(5	)		28			1
	$	31		$	43		$	(47	)	$	48

In the 2011 nine-month period, equity income included higher earnings from an investment in a natural gas pipeline in Australia due to the recognition of a discrete income tax benefit by the consortium (Alcoa World Alumina and Chemicals' share of the benefit was $24).

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Statement Of Consolidated Comprehensive (Loss) Income (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Net income (loss)	$ 225	$ 109	$ 968	$ 100
Other comprehensive (loss) income, net of tax:
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits	63	30	162	(8)
Foreign currency translation adjustments	(1,459)	1,137	(556)	593
Unrealized (losses) gains on available-for-sale securities:
Unrealized holding (losses) gains	(2)	1	(1)	(1)
Net amount reclassified to earnings				2
Net change in unrealized (losses) gains on available-for-sale securities	(2)	1	(1)	1
Unrecognized gains (losses) on derivatives (P):
Net change from periodic revaluations	150	(250)	71	(35)
Net amount reclassified to earnings	33	28	115	107
Net unrecognized gains (losses) on derivatives	183	(222)	186	72
Total Other comprehensive (loss) income, net of tax	(1,215)	946	(209)	658
Comprehensive (loss) income	(990)	1,055	759	758
Alcoa Inc. [Member]
Net income (loss)	172	61	802	(4)
Other comprehensive (loss) income, net of tax:
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits	62	29	158	(11)
Foreign currency translation adjustments	(1,108)	895	(386)	342
Unrealized (losses) gains on available-for-sale securities:
Unrealized holding (losses) gains	(2)	1	(1)	(1)
Net amount reclassified to earnings				2
Net change in unrealized (losses) gains on available-for-sale securities	(2)	1	(1)	1
Unrecognized gains (losses) on derivatives (P):
Net change from periodic revaluations	149	(248)	65	(35)
Net amount reclassified to earnings	32	28	114	107
Net unrecognized gains (losses) on derivatives	181	(220)	179	72
Total Other comprehensive (loss) income, net of tax	(867)	705	(50)	404
Comprehensive (loss) income	(695)	766	752	400
Non-Controlling Interests [Member]
Net income (loss)	53	48	166	104
Other comprehensive (loss) income, net of tax:
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits	1	1	4	3
Foreign currency translation adjustments	(351)	242	(170)	251
Unrealized (losses) gains on available-for-sale securities:
Unrealized holding (losses) gains
Net amount reclassified to earnings
Net change in unrealized (losses) gains on available-for-sale securities
Unrecognized gains (losses) on derivatives (P):
Net change from periodic revaluations	1	(2)	6
Net amount reclassified to earnings	1		1
Net unrecognized gains (losses) on derivatives	2	(2)	7
Total Other comprehensive (loss) income, net of tax	(348)	241	(159)	254
Comprehensive (loss) income	$ (295)	$ 289	$ 7	$ 358

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Discontinued Operations And Assets Held For Sale (Narrative) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Jun. 30, 2011 Electronics Portion [Member]	Sep. 30, 2011 Electronics Portion [Member]	Sep. 30, 2010 Electronics Portion [Member]	Sep. 30, 2011 Wire Harness and Electrical Portion [Member]	Sep. 30, 2010 Wire Harness and Electrical Portion [Member]
Loss from discontinued operations (C)			$ (5)	$ (8)	$ 3	$ 3	$ 2	$ 2	$ 6
Loss from operations before income taxes			$ (7)	$ (13)	$ 5	$ 5	$ 4	$ 2	$ 9

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Inventories

9 Months Ended

Sep. 30, 2011

Inventories

Inventories

F. Inventories

	September 30, 2011		December 31, 2010
Finished goods	$	592	$	470
Work-in-process		1,042		814
Bauxite and alumina		697		621
Purchased raw materials		571		401
Operating supplies		270		256
	$	3,172	$	2,562

At September 30, 2011 and December 31, 2010, the total amount of inventories valued on a last in, first out (LIFO) basis was 37% and 36%, respectively. If valued on an average-cost basis, total inventories would have been $818 and $742 higher at September 30, 2011 and December 31, 2010, respectively.

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Preferred And Common Stock

9 Months Ended

Sep. 30, 2011

Preferred And Common Stock

Preferred And Common Stock

K. Preferred and Common Stock – On January 24, 2011, Alcoa contributed 36,518,563 newly issued shares of its common stock to a master trust that holds the assets of certain U.S. defined benefit pension plans in a private placement transaction. These shares were valued at $16.43 per share (the closing price of Alcoa's common stock on January 24, 2011), or $600 in the aggregate, and were issued to satisfy the estimated minimum required funding and to provide additional funding towards maintaining an approximately 80% funded status of Alcoa's U.S. pension plans. On January 25, 2011, the 36,518,563 shares were registered under Alcoa's then-current shelf registration statement dated March 10, 2008 (replaced by shelf registration statement dated February 18, 2011) for resale by the master trust, as selling stockholder. Alcoa is authorized to issue up to 1.8 billion shares of common stock. As of September 30, 2011, there were 1,177,906,557 common shares issued and 1,064,276,127 common shares outstanding.

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Debt

9 Months Ended

Sep. 30, 2011

Debt

Debt

G. Debt – In April 2011, Alcoa completed a public debt offering under its existing shelf registration statement (dated February 18, 2011) for $1,250 of 5.40% Notes due 2021 (the "2021 Notes"). Alcoa received $1,241 in net proceeds from the public debt offering reflecting an original issue discount and payment of financing costs. The net proceeds were used for the early retirement of $881 in outstanding notes (see below), early repayment of $101 in outstanding loans related to the bauxite mine development in Brazil, and the remainder was used for general corporate purposes. The original issue discount and financing costs were deferred and are being amortized to interest expense over the term of the 2021 Notes. Interest on the 2021 Notes will be paid semi-annually in April and October, commencing October 2011. Alcoa has the option to redeem the 2021 Notes, as a whole or in part, at any time or from time to time, on at least 30 days, but not more than 60 days, prior notice to the holders of the 2021 Notes at a redemption price specified in the 2021 Notes. The 2021 Notes are subject to repurchase upon the occurrence of a change in control repurchase event (as defined in the 2021 Notes) at a repurchase price in cash equal to 101% of the aggregate principal amount of the 2021 Notes repurchased, plus any accrued and unpaid interest on the 2021 Notes repurchased. The 2021 Notes rank pari passu with Alcoa's other unsecured senior unsubordinated indebtedness.

In May 2011, Alcoa completed the following tender offers: (i) any and all of its 5.375% Notes due 2013 (the "5.375% Notes") and (ii) up to $400 of its 6.00% Notes due 2013 (the "6.00% Notes" and collectively with the 5.375% Notes, the "Notes"). Upon expiration of the tender offers, $269 and $328 of the aggregate outstanding principal amount of the 5.375% Notes and 6.00% Notes, respectively, were validly tendered and accepted. Additionally in May 2011, subsequent to the expiration of the tender offer for the 5.375% Notes, Alcoa elected to call for redemption the remaining outstanding principal of $284 under the provisions of the 5.375% Notes. The total cash paid to the holders of the tendered 5.375% Notes and 6.00% Notes and the called 5.375% Notes was $972, which consisted of $881 in debt principal, $74 in purchase premiums, and $17 in accrued and unpaid interest from the respective last interest payment dates up to, but not including, the respective settlement dates. The $74 was recorded in Interest expense on the accompanying Statement of Consolidated Operations. The 6.00% Notes have a remaining outstanding principal of $422.

In conjunction with the early retirement of the 5.375% Notes, Alcoa terminated interest rate swaps with a notional amount totaling $550. These swaps were accounted for as fair value hedges and were used to convert the stated interest rate of the 5.375% Notes from fixed to floating. At the time of termination, the swaps were "in-the-money" resulting in a gain of $33, which was recorded in Interest expense on the accompanying Statement of Consolidated Operations.

On July 25, 2011, Alcoa entered into a Five-Year Revolving Credit Agreement (the "Credit Agreement") with a syndicate of lenders and issuers named therein. The Credit Agreement provides a $3,750 senior unsecured revolving credit facility (the "Credit Facility"), the proceeds of which are to be used to provide working capital or for other general corporate purposes of Alcoa, including support of Alcoa's commercial paper program. Subject to the terms and conditions of the Credit Agreement, Alcoa may from time to time request increases in lender commitments under the Credit Facility, not to exceed $500 in aggregate principal amount, and may also request the issuance of letters of credit, subject to a letter of credit sublimit of $1,000 under the Credit Facility.

The Credit Facility matures on July 25, 2016, unless extended or earlier terminated in accordance with the provisions of the Credit Agreement. Alcoa may make two one-year extension requests during the term of the Credit Facility, with any extension being subject to the lender consent requirements set forth in the Credit Agreement. Under the provisions of the Credit Agreement, Alcoa will pay a fee of 0.25% (based on Alcoa's long-term debt ratings as of September 30, 2011) of the total commitment per annum to maintain the Credit Facility.

The Credit Facility is unsecured and amounts payable under it will rank pari passu with all other unsecured, unsubordinated indebtedness of Alcoa. Borrowings under the Credit Facility may be denominated in U.S. dollars or euros. Loans will bear interest at a base rate or a rate equal to LIBOR, plus, in each case, an applicable margin based on the credit ratings of Alcoa's outstanding senior unsecured long-term debt. The applicable margin on base rate loans and LIBOR loans will be 0.50% and 1.50% per annum, respectively, based on Alcoa's long-term debt ratings as of September 30, 2011. Loans may be prepaid without premium or penalty, subject to customary breakage costs.

The Credit Facility replaces Alcoa's Five-Year Revolving Credit Agreement, dated as of October 2, 2007 (the "Former Credit Agreement"), which was scheduled to mature on October 2, 2012. The Former Credit Agreement, which had a total capacity (excluding the commitment of Lehman Commercial Paper Inc.) of $3,275 and was undrawn, was terminated effective July 25, 2011.

The Credit Agreement includes covenants substantially similar to those in the Former Credit Agreement, including, among others, (a) a leverage ratio, (b) limitations on Alcoa's ability to incur liens securing indebtedness for borrowed money, (c) limitations on Alcoa's ability to consummate a merger, consolidation or sale of all or substantially all of its assets, and (d) limitations on Alcoa's ability to change the nature of its business.

The obligation of Alcoa to pay amounts outstanding under the Credit Facility may be accelerated upon the occurrence of an "Event of Default" as defined in the Credit Agreement. Such Events of Default include, among others, (a) Alcoa's failure to pay the principal of, or interest on, borrowings under the Credit Facility, (b) any representation or warranty of Alcoa in the Credit Agreement proving to be materially false or misleading, (c) Alcoa's breach of any of its covenants contained in the Credit Agreement, and (d) the bankruptcy or insolvency of Alcoa.

There were no amounts outstanding under the Credit Facility at September 30, 2011 and no amounts were borrowed under the Credit Facility during the 2011 third quarter.

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Pension And Other Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2011

Pension And Other Postretirement Benefits

Components Of Net Periodic Benefit Cost

	Third quarter  ended September 30,						Nine months  ended September 30,
Pension benefits	2011			2010			2011			2010
Service cost	$	41		$	38		$	123		$	111
Interest cost		169			170			509			510
Expected return on plan assets		(202	)		(195	)		(605	)		(586	)
Amortization of prior service cost		5			4			14			12
Recognized net actuarial loss		63			46			187			135
Net periodic benefit cost	$	76		$	63		$	228		$	182
	Third quarter  ended September 30,						Nine months  ended September 30,
Other postretirement benefits	2011			2010			2011			2010
Service cost	$	5		$	5		$	13		$	15
Interest cost		40			44			119			131
Expected return on plan assets		(1	)		(2	)		(2	)		(5	)
Amortization of prior service benefit		(5	)		(4	)		(13	)		(11	)
Recognized net actuarial loss		7			8			20			24
Settlements		—			—			—			(3	)
Net periodic benefit cost	$	46		$	51		$	137		$	151

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Acquisitions And Divestitures

9 Months Ended

Sep. 30, 2011

Acquisitions And Divestitures

Acquisitions And Divestitures

E. Acquisitions and Divestitures – On March 9, 2011, Alcoa completed an acquisition of the aerospace fastener business of TransDigm Group Inc. for $240. This business is a leading global designer, producer, and supplier of highly engineered aircraft components, with three locations (one in the state of California and two in the United Kingdom) that employ a combined 400 people. Specifically, this business provides a wide variety of high-strength, high temperature nickel alloy specialty engine fasteners, airframe bolts, and slotted entry bearings. In 2010, this business generated sales of $61. The assets and liabilities of this business were included in the Engineered Products and Solutions segment as of March 31, 2011; this business' results of operations were included in this segment beginning March 9, 2011. Based on the preliminary purchase price allocation, goodwill of $213 was recorded for this transaction. In the second and third quarter of 2011, the initial goodwill amount was reduced by $53 and $13, respectively, due to purchase price allocation adjustments of the estimated fair value of the acquired business. Approximately $60 of goodwill is estimated to be deductible for income tax purposes. The final allocation of the purchase price will be based on valuation and other studies, including environmental and other contingent liabilities, which are expected to be completed by the end of 2011. Other intangible assets may be identified as a result of the final valuation. This acquisition is part of a strategic plan to accelerate the growth of Alcoa's fastener business, while adding efficiencies, broadening the existing technology base, and expanding product offerings to better serve customers and increase shareholder value. Pro forma results of Alcoa, assuming this acquisition was made at the beginning of the earliest period presented, would not have been materially different from the results reported.

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Segment Information (Schedule Of Reconciliation Of Segment Assets) (Details) (USD $) In Millions	Sep. 30, 2011	Dec. 31, 2010
Total segment assets	$ 39,598	$ 39,293
Alumina [Member]
Total segment assets	9,675	9,967
Primary Metals [Member]
Total segment assets	12,222	11,947
Flat-Rolled Products [Member]
Total segment assets	5,033	4,606
Engineered Products and Solutions [Member]
Total segment assets	5,951	5,434
Alcoa [Member]
Total segment assets	$ 32,881	$ 31,954

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Statement Of Changes In Consolidated Equity (USD $) In Millions	Preferred Stock [Member]	Common Stock [Member]	Additional Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Loss [Member]	Non-Controlling Interests [Member]	Total
Beginning balance at Jun. 30, 2010	$ 55	$ 1,141	$ 7,091	$ 10,892	$ (4,177)	$ (2,393)	$ 3,116	$ 15,725
Net (loss) income				61			48	109
Other comprehensive (loss) income						705	241	946
Cash dividends declared:
Preferred				(1)				(1)
Common				(30)				(30)
Stock-based compensation			20					20
Common stock issued: compensation plans			(17)		6			(11)
Distributions							(41)	(41)
Contributions							61	61
Ending balance at Sep. 30, 2010	55	1,141	7,094	10,922	(4,171)	(1,688)	3,425	16,778
Beginning balance at Dec. 31, 2009	55	1,097	6,608	11,020	(4,268)	(2,092)	3,100	15,520
Net (loss) income				(4)			104	100
Other comprehensive (loss) income						404	254	658
Cash dividends declared:
Preferred				(2)				(2)
Common				(92)				(92)
Stock-based compensation			70					70
Common stock issued: compensation plans			(118)		97			(21)
Issuance of common stock		44	556					600
Distributions							(154)	(154)
Contributions							125	125
Purchase of equity from noncontrolling interest			(2)				(4)	(6)
Other			(20)					(20)
Ending balance at Sep. 30, 2010	55	1,141	7,094	10,922	(4,171)	(1,688)	3,425	16,778
Beginning balance at Dec. 31, 2010	55	1,141	7,087	11,149	(4,146)	(1,675)	3,475	17,086
Net (loss) income				802			166	968
Other comprehensive (loss) income						(50)	(159)	(209)
Cash dividends declared:
Preferred				(2)				(2)
Common				(129)				(129)
Stock-based compensation			70					70
Common stock issued: compensation plans			(175)		192			17
Issuance of common stock		37	563					600
Distributions							(253)	(253)
Contributions							136	136
Other							(1)	(1)
Ending balance at Sep. 30, 2011	55	1,178	7,545	11,820	(3,954)	(1,725)	3,364	18,283
Beginning balance at Jun. 30, 2011	55	1,178	7,522	11,714	(3,959)	(858)	3,717	19,369
Net (loss) income				172			53	225
Other comprehensive (loss) income						(867)	(348)	(1,215)
Cash dividends declared:
Preferred				(1)				(1)
Common				(65)				(65)
Stock-based compensation			25					25
Common stock issued: compensation plans			(2)		5			3
Distributions							(66)	(66)
Contributions							8	8
Ending balance at Sep. 30, 2011	$ 55	$ 1,178	$ 7,545	$ 11,820	$ (3,954)	$ (1,725)	$ 3,364	$ 18,283

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Basis Of Presentation

9 Months Ended

Sep. 30, 2011

Basis Of Presentation

Basis Of Presentation

A. Basis of Presentation – The interim Consolidated Financial Statements of Alcoa Inc. and its subsidiaries ("Alcoa" or the "Company") are unaudited. These Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the Company's results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2010 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). This Form 10-Q report should be read in conjunction with Alcoa's Annual Report on Form 10-K for the year ended December 31, 2010, which includes all disclosures required by GAAP.

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Restructuring And Other Charges (Activity And Reserve Balances For Restructuring Charges) (Details) (USD $) In Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2011		Dec. 31, 2010		Dec. 31, 2009
Cash payments	$ (38)		$ (108)
Restructuring charges	32		96
Other	(13)	[1]	(98)	[1]
Restructuring reserve balance	97		116		226
Layoff Costs [Member]
Cash payments	(32)		(93)
Restructuring charges	31		43
Other	(13)	[1]	(57)	[1]
Restructuring reserve balance	39		53		160
Other Exit Costs [Member]
Cash payments	(6)		(15)
Restructuring charges	1		53
Other			(41)	[1]
Restructuring reserve balance	$ 58		$ 63		$ 66

[1] Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In 2010, Other for other exit costs also included a reclassification of the following restructuring charges: $30 in asset retirement and $14 in environmental obligations, as these liabilities are included in Alcoa's separate reserves for asset retirement obligations and environmental remediation, respectively.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2011

Earnings Per Share

Reconciliation Of Information Used To Compute Basic And Diluted EPS

	Third quarter  ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Income from continuing operations attributable to Alcoa common shareholders	$	172	$	61	$	807	$	4
Less: preferred stock dividends declared		1		1		2		2
Income from continuing operations available to common equity		171		60		805		2
Less: dividends and undistributed earnings allocated to participating securities		—		—		2		—
Income from continuing operations available to Alcoa common shareholders – basic		171		60		803		2
Add: interest expense related to convertible notes		8		—		22		—
Income from continuing operations available to Alcoa common shareholders – diluted	$	179	$	60	$	825	$	2
Average shares outstanding – basic		1,064		1,021		1,060		1,017
Effect of dilutive securities:
Stock options		7		5		8		5
Stock and performance awards		4		1		3		1
Convertible notes		89		—		89		—
Average shares outstanding – diluted		1,164		1,027		1,160		1,023

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Pension And Other Postretirement Benefits (Details) (USD $) In Millions, unless otherwise specified		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Jan. 24, 2011	Sep. 30, 2011 Pension Benefits [Member]	Sep. 30, 2010 Pension Benefits [Member]	Sep. 30, 2011 Pension Benefits [Member]	Sep. 30, 2010 Pension Benefits [Member]	Sep. 30, 2011 Other Post-Retirement Benefits [Member]	Sep. 30, 2010 Other Post-Retirement Benefits [Member]	Sep. 30, 2011 Other Post-Retirement Benefits [Member]	Sep. 30, 2010 Other Post-Retirement Benefits [Member]
Service cost		$ 41	$ 38	$ 123	$ 111	$ 5	$ 5	$ 13	$ 15
Interest cost		169	170	509	510	40	44	119	131
Expected return on plan assets		(202)	(195)	(605)	(586)	(1)	(2)	(2)	(5)
Amortization of prior service cost		5	4	14	12	(5)	(4)	(13)	(11)
Recognized net actuarial loss		63	46	187	135	7	8	20	24
Settlements									(3)
Net periodic benefit cost		76	63	228	182	46	51	137	151
Contributed newly issued shares of common stock	$ 600
Funded status of U.S. pension plan	80.00%

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Derivatives And Other Financial Instruments (Fair Value Of Outstanding Derivative Contracts Recorded As Assets) (Details) (USD $) In Millions	Sep. 30, 2011		Dec. 31, 2010
Fair value asset derivatives	$ 94		$ 147
Prepaid Expenses And Other Current Assets [Member] | Derivatives Designated As Hedging Instruments [Member] | Aluminum Contracts [Member]
Fair value asset derivatives	9		48
Prepaid Expenses And Other Current Assets [Member] | Derivatives Designated As Hedging Instruments [Member] | Foreign Exchange Contracts [Member]
Fair value asset derivatives	1		2
Prepaid Expenses And Other Current Assets [Member] | Derivatives Designated As Hedging Instruments [Member] | Interest Rate Contracts [Member]
Fair value asset derivatives	8		19
Prepaid Expenses And Other Current Assets [Member] | Margins Held [Member] | Aluminum Contracts [Member]
Fair value asset derivatives			4
Prepaid Expenses And Other Current Assets [Member] | Margins Held [Member] | Interest Rate Contracts [Member]
Fair value asset derivatives	5		13
Prepaid Expenses And Other Current Assets [Member] | Derivatives Not Designated As Hedging Instruments [Member] | Aluminum Contracts [Member]
Fair value asset derivatives	1	[1]	3	[1]
Other Noncurrent Assets [Member]
Fair value asset derivatives	20		19
Other Noncurrent Assets [Member] | Derivatives Designated As Hedging Instruments [Member] | Aluminum Contracts [Member]
Fair value asset derivatives	9		22
Other Noncurrent Assets [Member] | Derivatives Designated As Hedging Instruments [Member] | Energy Contract [Member]
Fair value asset derivatives	40		9
Other Noncurrent Assets [Member] | Derivatives Designated As Hedging Instruments [Member] | Interest Rate Contracts [Member]
Fair value asset derivatives	41		62
Other Noncurrent Assets [Member] | Derivatives Not Designated As Hedging Instruments [Member] | Aluminum Contracts [Member]
Fair value asset derivatives	5	[1]
Other Noncurrent Assets [Member] | Derivatives Not Designated As Hedging Instruments [Member] | Foreign Exchange Contracts [Member]
Fair value asset derivatives			1	[1]
Other Noncurrent Assets [Member] | Interest Rate Contracts [Member]
Fair value asset derivatives	15		2
Derivatives Designated As Hedging Instruments [Member]
Fair value asset derivatives	108		162
Derivatives Not Designated As Hedging Instruments [Member]
Fair value asset derivatives	$ 6	[1]	$ 4	[1]

[1] See the "Other" section within Note P for additional information on Alcoa's purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies.

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Segment Information (Schedule Of Reconciliation Of Total Segment ATOI To Consolidated Net Income (Loss)) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Total segment ATOI	$ 462	$ 328	$ 1,652	$ 1,015
Interest expense	(125)	(139)	(399)	(376)
Noncontrolling interests	(53)	(48)	(166)	(104)
Discontinued operations			(5)	(8)
Consolidated net income (loss) attributable to Alcoa	172	61	802	(4)
Unallocated Amounts [Member]
Impact of LIFO	2	(2)	(49)	(19)
Interest expense	(81)	(91)	(259)	(245)
Noncontrolling interests	(53)	(48)	(166)	(104)
Corporate expense	(76)	(71)	(219)	(197)
Restructuring and other charges	(7)	1	(35)	(142)
Discontinued operations			(5)	(8)
Other	$ (75)	$ (56)	$ (117)	$ (304)

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Derivatives And Other Financial Instruments (Gain Or Loss On Hedged Items) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	$ (95)	$ 144	$ (20)	$ 86
Amount of Gain or (Loss) Recognized in Earnings on Hedged Items	97	(109)	51	(59)
Sales [Member] | Aluminum Contracts [Member]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	(100)	101	(78)	7
Amount of Gain or (Loss) Recognized in Earnings on Hedged Items	102	(94)	76	(8)
Interest Expense [Member] | Interest Rate Contracts [Member]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	5	43	58	79
Amount of Gain or (Loss) Recognized in Earnings on Hedged Items	$ (5)	$ (15)	$ (25)	$ (51)

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Recently Adopted And Recently Issued Accounting Guidance

9 Months Ended

Sep. 30, 2011

Recently Adopted And Recently Issued Accounting Guidance

Recently Adopted And Recently Issued Accounting Guidance

B. Recently Adopted and Recently Issued Accounting Guidance

Adopted

On January 1, 2011, Alcoa adopted changes issued by the Financial Accounting Standards Board (FASB) to revenue recognition for multiple-deliverable arrangements. These changes require separation of consideration received in such arrangements by establishing a selling price hierarchy (not the same as fair value) for determining the selling price of a deliverable, which will be based on available information in the following order: vendor-specific objective evidence, third-party evidence, or estimated selling price; eliminate the residual method of allocation and require that the consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the arrangement to each deliverable on the basis of each deliverable's selling price; require that a vendor determine its best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis; and expand the disclosures related to multiple-deliverable revenue arrangements. The adoption of these changes had no impact on the Consolidated Financial Statements, as Alcoa does not currently have any such arrangements with its customers.

On January 1, 2011, Alcoa adopted changes issued by the FASB to the classification of certain employee share-based payment awards. These changes clarify that there is not an indication of a condition that is other than market, performance, or service if an employee share-based payment award's exercise price is denominated in the currency of a market in which a substantial portion of the entity's equity securities trade and differs from the functional currency of the employer entity or payroll currency of the employee. An employee share-based payment award is required to be classified as a liability if the award does not contain a market, performance, or service condition. Prior to this guidance, Alcoa did not consider the difference between the currency denomination of an employee share-based payment award's exercise price and the functional currency of the employer entity or payroll currency of the employee in determining the proper classification of the share-based payment award. The adoption of these changes had no impact on the Consolidated Financial Statements.

On January 1, 2011, Alcoa adopted changes issued by the FASB to disclosure requirements for fair value measurements. Specifically, the changes require a reporting entity to disclose, in the reconciliation of fair value measurements using significant unobservable inputs (Level 3), separate information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). These changes were applied to the disclosures in the Derivatives section of Note P to the Consolidated Financial Statements.

On January 1, 2011, Alcoa adopted changes issued by the FASB to the testing of goodwill for impairment. These changes require an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if it is more likely than not (more than 50%) that a goodwill impairment exists based on qualitative factors. This will result in the elimination of an entity's ability to assert that such a reporting unit's goodwill is not impaired and additional testing is not necessary despite the existence of qualitative factors that indicate otherwise. Based on the most recent impairment review of Alcoa's goodwill (2010 fourth quarter), the adoption of these changes had no impact on the Consolidated Financial Statements.

On January 1, 2011, Alcoa adopted changes issued by the FASB to the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Also, the existing supplemental pro forma disclosures were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The adoption of these changes had no impact on the Consolidated Financial Statements.

Issued

In May 2011, the FASB issued changes to conform existing guidance regarding fair value measurement and disclosure between GAAP and International Financial Reporting Standards. These changes both clarify the FASB's intent about the application of existing fair value measurement and disclosure requirements and amend certain principles or requirements for measuring fair value or for disclosing information about fair value measurements. The clarifying changes relate to the application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity's shareholders' equity, and disclosure of quantitative information about unobservable inputs used for Level 3 fair value measurements. The amendments relate to measuring the fair value of financial instruments that are managed within a portfolio; application of premiums and discounts in a fair value measurement; and additional disclosures concerning the valuation processes used and sensitivity of the fair value measurement to changes in unobservable inputs for those items categorized as Level 3, a reporting entity's use of a nonfinancial asset in a way that differs from the asset's highest and best use, and the categorization by level in the fair value hierarchy for items required to be measured at fair value for disclosure purposes only. These changes become effective for Alcoa on January 1, 2012. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements.

In June 2011, the FASB issued changes to the presentation of comprehensive income. These changes give an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements; the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity was eliminated. The items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income were not changed. Additionally, no changes were made to the calculation and presentation of earnings per share. These changes become effective for Alcoa on January 1, 2012. Management is currently evaluating these changes to determine which option will be chosen for the presentation of comprehensive income. Other than the change in presentation, management has determined these changes will not have an impact on the Consolidated Financial Statements.

In September 2011, the FASB issued changes to the testing of goodwill for impairment. These changes provide an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that the fair value of a reporting unit is less than its carrying amount. Such qualitative factors may include the following: macroeconomic conditions; industry and market considerations; cost factors; overall financial performance; and other relevant entity-specific events. If an entity elects to perform a qualitative assessment and determines that an impairment is more likely than not, the entity is then required to perform the existing two-step quantitative impairment test, otherwise no further analysis is required. An entity also may elect not to perform the qualitative assessment and, instead, go directly to the two-step quantitative impairment test. These changes become effective for Alcoa for any goodwill impairment test performed on January 1, 2012 or later, although early adoption is permitted. Management performs a review of Alcoa's goodwill in the fourth quarter of each calendar year and plans to early adopt these changes effective for its review of goodwill in the fourth quarter of 2011. As these changes should not affect the outcome of the impairment analysis of a reporting unit, management has determined these changes will not have an impact on the Consolidated Financial Statements.

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Inventories (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2011	Dec. 31, 2010
Inventories
Percentage of inventories valued on LIFO basis	37.00%	36.00%
Total inventory valued at average cost basis	$ 818	$ 742

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Inventories (Tables)

9 Months Ended

Sep. 30, 2011

Inventories

Carrying Value Of Major Inventory Components

	September 30, 2011		December 31, 2010
Finished goods	$	592	$	470
Work-in-process		1,042		814
Bauxite and alumina		697		621
Purchased raw materials		571		401
Operating supplies		270		256
	$	3,172	$	2,562

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Derivatives And Other Financial Instruments (Outstanding Forward Contracts That Were Entered Into Hedge Forcasted Transactions) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2011	Dec. 31, 2010
Aluminum contracts (kmt)	1,237	1,285
Energy Contract [Member]
Electricity (megawatt hours)	100,578,295	100,578,295
Foreign exchange contracts	$ 5	$ 20

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Derivatives And Other Financial Instruments (Derivative Contract Assets And Liabilities That Are Measured And Recognized At Fair Value On Recurring Basis) (Details) (USD $) In Millions	Sep. 30, 2011		Dec. 31, 2010
Fair value asset derivatives	$ 94		$ 147
Fair value liability derivatives	737		865
Level 1 [Member]
Fair value asset derivatives	18		76
Level 1 [Member]
Fair value liability derivatives	68		35
Level 2 [Member]
Fair value asset derivatives	50		81
Level 2 [Member]
Fair value liability derivatives	57		83
Level 3 [Member]
Fair value liability derivatives	620		788
Level 3 [Member]
Fair value asset derivatives	46		9
Margin Held [Member]
Fair value asset derivatives	(20)	[1]	(19)	[1]
Margin Posted [Member]
Fair value liability derivatives	(8)	[1]	(41)	[1]
Alcoa [Member]
Fair value asset derivatives	94		147
Fair value liability derivatives	$ 737		$ 865

[1] Margin held represents cash collateral received related to interest rate contracts included in Level 2 and margin posted represents cash collateral paid related to aluminum contracts included in Level 1. At December 31, 2010, margin held also represents cash collateral received related to aluminum contracts included in Level 1 and margin posted also represents cash collateral paid related to energy contracts included in Level 3. Alcoa elected to net the margin held and posted against the fair value amounts recognized for derivative instruments executed with the same counterparties under master netting arrangements.

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Derivatives And Other Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2011

Derivatives And Other Financial Instruments

Fair Value Of Outstanding Derivative Contracts Recorded As Assets

Asset Derivatives	September 30, 2011		December 31, 2010
Derivatives designated as hedging instruments:
Prepaid expenses and other current assets:
Aluminum contracts	$	9	$	48
Foreign exchange contracts		1		2
Interest rate contracts		8		19
Other noncurrent assets:
Aluminum contracts		9		22
Energy contracts		40		9
Interest rate contracts		41		62
Total derivatives designated as hedging instruments	$	108	$	162
Derivatives not designated as hedging instruments*:
Prepaid expenses and other current assets:
Aluminum contracts	$	1	$	3
Other noncurrent assets:
Aluminum contracts		5		—
Foreign exchange contracts		—		1
Total derivatives not designated as hedging instruments	$	6	$	4
Less margin held:
Prepaid expenses and other current assets:
Aluminum contracts	$	—	$	4
Interest rate contracts		5		13
Other noncurrent assets:
Interest rate contracts		15		2
Sub-total	$	20	$	19
Total Asset Derivatives	$	94	$	147

* See the "Other" section within Note P for additional information on Alcoa's purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies.

Fair Value Of Outstanding Derivative Contracts Recorded As Liabilities

Liability Derivatives	September 30, 2011		December 31, 2010
Derivatives designated as hedging instruments:
Other current liabilities:
Aluminum contracts	$	90	$	89
Other noncurrent liabilities and deferred credits:
Aluminum contracts		554		647
Total derivatives designated as hedging instruments	$	644	$	736
Derivatives not designated as hedging instruments*:
Other current liabilities:
Aluminum contracts	$	43	$	52
Energy contracts		—		62
Other noncurrent liabilities and deferred credits:
Aluminum contracts		24		33
Embedded credit derivative		33		23
Foreign currency contracts		1		—
Total derivatives not designated as hedging instruments	$	101	$	170
Less margin posted:
Other current liabilities:
Aluminum contracts	$	8	$	4
Energy contracts		—		37
Sub-total	$	8	$	41
Total Liability Derivatives	$	737	$	865

* See the "Other" section within Note P for additional information on Alcoa's purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies.

Derivative Contract Assets And Liabilities That Are Measured And Recognized At Fair Value On A Recurring Basis

	September 30, 2011			December 31, 2010
Assets:
Level 1	$	18		$	76
Level 2		50			81
Level 3		46			9
Margin held*		(20	)		(19	)
Total	$	94		$	147
Liabilities:
Level 1	$	68		$	35
Level 2		57			83
Level 3		620			788
Margin posted*		(8	)		(41	)
Total	$	737		$	865

* Margin held represents cash collateral received related to interest rate contracts included in Level 2 and margin posted represents cash collateral paid related to aluminum contracts included in Level 1. At December 31, 2010, margin held also represents cash collateral received related to aluminum contracts included in Level 1 and margin posted also represents cash collateral paid related to energy contracts included in Level 3. Alcoa elected to net the margin held and posted against the fair value amounts recognized for derivative instruments executed with the same counterparties under master netting arrangements.

Reconciliation Of Activity For Derivative Contracts On A Net Basis

	Third quarter ended September 30, 2011			Nine months ended September 30, 2011
Balance at beginning of period	$	796		$	779
Total gains or losses (realized and unrealized) included in:
Sales – (decrease)		(14	)		(51	)
Cost of goods sold – (increase)		(4	)		(15	)
Other expenses (income), net – (increase)		(3	)		(37	)
Other comprehensive loss – (increase)		(196	)		(97	)
Purchases, sales, issuances, and settlements*		(5	)		(5	)
Transfers into and (or) out of Level 3*		—			—
Balance at end of period	$	574		$	574
Total gains or losses included in earnings attributable to the change in unrealized gains or losses relating to derivative contracts still held at September 30, 2011:
Sales	$	—		$	—
Cost of goods sold		—			—
Other expenses (income), net – (increase)		(13	)		(10	)

* During the 2011 third quarter, there was an issuance of a Level 3 financial instrument related to a natural gas supply contract (see below). There were no purchases, sales, or settlements of Level 3 financial instruments. Additionally, there were no transfers of financial instruments into or out of Level 3.

Gain Or Loss On Hedged Items

Derivatives in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
		Third quarter  ended September 30,						Nine months  ended September 30,
		2011			2010			2011			2010
Aluminum contracts	Sales	$	(100	)	$	101		$	(78	)	$	7
Interest rate contracts	Interest expense		5			43			58			79
Total		$	(95	)	$	144		$	(20	)	$	86
Hedged Items in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in Earnings on Hedged Items	Amount of Gain or (Loss) Recognized in Earnings on Hedged Items
		Third quarter  ended September 30,						Nine months ended September 30,
		2011			2010			2011			2010
Aluminum contracts	Sales	$	102		$	(94	)	$	76		$	(8	)
Interest rate contracts	Interest expense		(5	)		(15	)		(25	)		(51	)
Total		$	97		$	(109	)	$	51		$	(59	)

Gains And Losses On Derivatives

	Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)												Location of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)*												Location of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)**
	Third quarter ended September 30,						Nine months ended September 30,							Third quarter ended September 30,						Nine months ended September 30,							Third quarter ended September 30,					Nine months ended September 30,
	2011			2010			2011			2010				2011			2010			2011			2010				2011		2010			2011		2010
Aluminum contracts	$	145		$	(247	)	$	53		$	(13	)	Sales	$	(30	)	$	(19	)	$	(106	)	$	(83	)	Other expenses (income), net	$	4	$	(2	)	$	4	$	1
Energy contracts		6			1			14			(12	)	Cost of goods sold		(2	)		(7	)		(8	)		(18	)	Other expenses (income), net		—		—			—		—
Energy contracts		—			(6	)		—			(7	)	Other expenses (income), net		—			—			—			—		Other expenses (income), net		—		—			—		—
Foreign exchange contracts		2			4			4			(3	)	Sales		2			(2	)		4			(6	)	Other expenses (income), net		—		—			—		—
Interest rate contracts		(2	)		—			(2	)		—		Interest expense		(2	)		—			(2	)		—		Other expenses (income), net		—		—			—		—
Interest rate contracts		(2	)		—			(4	)		—		Other expenses (income), net		—			—			(2	)		—		Other expenses (income), net		—		—			—		—
Total	$	149		$	(248	)	$	65		$	(35	)		$	(32	)	$	(28	)	$	(114	)	$	(107	)		$	4	$	(2	)	$	4	$	1

* Assuming market rates remain constant with the rates at September 30, 2011, a loss of $22 is expected to be recognized in earnings over the next 12 months.

** For both the third quarter and nine months ended September 30, 2011, the amount of gain or (loss) recognized in earnings represents $(1) related to the ineffective portion of the hedging relationships. There was also $5 recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for both the third quarter and nine months ended September 30, 2011. For the third quarter and nine months ended September 30, 2010, the amount of gain or (loss) recognized in earnings related to the ineffective portion of the hedging relationships.

Outstanding Forward Contracts That Were Entered Into Hedge Forcasted Transactions

	September 30, 2011		December 31, 2010
Aluminum contracts (kmt)		1,237		1,285
Energy contracts (electricity - megawatt hours)		100,578,295		100,578,295
Foreign exchange contracts	$	5	$	20

Fair Value Gains And Losses On Derivatives Contracts

Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
		Third quarter  ended September 30,						Nine months  ended September 30,
		2011			2010			2011			2010
Aluminum contracts	Sales	$	(10	)	$	7		$	(9	)	$	3
Aluminum contracts	Other expenses (income), net		18			(33	)		7			(18	)
Embedded credit derivative	Other expenses (income), net		(13	)		1			(10	)		(8	)
Energy contract	Other expenses (income), net		16			(12	)		47			(31	)
Foreign exchange contracts	Other expenses (income), net		(7	)		2			(3	)		1
Total		$	4		$	(35	)	$	32		$	(53	)

Carrying Value And Fair Values Of Other Financial Instruments

	September 30, 2011				December 31, 2010
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	1,332	$	1,332	$	1,543	$	1,543
Restricted cash		1		1		1		1
Noncurrent receivables		23		23		23		23
Available-for-sale securities		93		93		93		93
Short-term borrowings		57		57		92		92
Commercial paper		107		107		—		—
Long-term debt due within one year		489		489		231		231
Long-term debt, less amount due within one year		8,658		9,138		8,842		9,882

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Acquisitions And Divestitures (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended	12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Jun. 30, 2011 TransDigm Group Inc. [Member]	Dec. 31, 2010 TransDigm Group Inc. [Member]
Business acquisition cost			$ 240
Number of employees			400
Goodwill acquired			213
Purchase price allocation adjustments	(13.0)	(53.0)
Sales generated in last annual period prior to divestiture				61
Amount of goodwill estimated to be deductible for income tax purposes	$ 60.0

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2011

Segment Information

Schedule Of Operating Results Of Reportable Segments

	Alumina			Primary Metals			Flat- Rolled Products		Engineered Products and Solutions		Total
Third quarter ended September 30, 2011
Sales:
Third-party sales	$	879		$	2,124		$	1,974	$	1,373	$	6,350
Intersegment sales		751			798			48		—		1,597
Total sales	$	1,630		$	2,922		$	2,022	$	1,373	$	7,947
Profit and loss:
Equity income (loss)	$	2		$	(4	)	$	—	$	—	$	(2	)
Depreciation, depletion, and amortization		117			137			61		40		355
Income taxes		42			21			26		67		156
After-tax operating income (ATOI)		154			110			60		138		462
Third quarter ended September 30, 2010
Sales:
Third-party sales	$	717		$	1,688		$	1,645	$	1,173	$	5,223
Intersegment sales		506			589			46		—		1,141
Total sales	$	1,223		$	2,277		$	1,691	$	1,173	$	6,364
Profit and loss:
Equity income	$	1		$	—		$	—	$	1	$	2
Depreciation, depletion, and amortization		100			142			57		37		336
Income taxes		(22	)		(3	)		26		63		64
ATOI		70			78			66		114		328
Nine months ended September 30, 2011
Sales:
Third-party sales	$	2,615		$	6,249		$	5,951	$	3,990	$	18,805
Intersegment sales		2,107			2,559			179		—		4,845
Total sales	$	4,722		$	8,808		$	6,130	$	3,990	$	23,650
Profit and loss:
Equity income (loss)	$	27		$	(4	)	$	—	$	1	$	24
Depreciation, depletion, and amortization		332			420			179		119		1,050
Income taxes		146			129			94		201		570
ATOI		482			513			240		417		1,652
Nine months ended September 30, 2010
Sales:
Third-party sales	$	2,056		$	5,100		$	4,654	$	3,369	$	15,179
Intersegment sales		1,627			1,905			132		—		3,664
Total sales	$	3,683		$	7,005		$	4,786	$	3,369	$	18,843
Profit and loss:
Equity income	$	7		$	1		$	—	$	2	$	10
Depreciation, depletion, and amortization		299			431			173		116		1,019
Income taxes		46			15			72		142		275
ATOI		236			310			167		302		1,015

Schedule Of Reconciliation Of Total Segment ATOI To Consolidated Net Income (Loss)

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Total segment ATOI	$	462		$	328		$	1,652		$	1,015
Unallocated amounts (net of tax):
Impact of LIFO		2			(2	)		(49	)		(19	)
Interest expense		(81	)		(91	)		(259	)		(245	)
Noncontrolling interests		(53	)		(48	)		(166	)		(104	)
Corporate expense		(76	)		(71	)		(219	)		(197	)
Restructuring and other charges		(7	)		1			(35	)		(142	)
Discontinued operations		—			—			(5	)		(8	)
Other		(75	)		(56	)		(117	)		(304	)
Consolidated net income (loss) attributable to Alcoa	$	172		$	61		$	802		$	(4	)

Schedule Of Reconciliation Of Segment Assets

	September 30, 2011		December 31, 2010
Alumina	$	9,675	$	9,967
Primary Metals		12,222		11,947
Flat-Rolled Products		5,033		4,606
Engineered Products and Solutions		5,951		5,434
Total segment assets	$	32,881	$	31,954

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Segment Information

9 Months Ended

Sep. 30, 2011

Segment Information

Segment Information

J. Segment Information – The operating results of Alcoa's reportable segments were as follows (differences between segment totals and consolidated totals are in Corporate):

	Alumina			Primary Metals			Flat- Rolled Products		Engineered Products and Solutions		Total
Third quarter ended September 30, 2011
Sales:
Third-party sales	$	879		$	2,124		$	1,974	$	1,373	$	6,350
Intersegment sales		751			798			48		—		1,597
Total sales	$	1,630		$	2,922		$	2,022	$	1,373	$	7,947
Profit and loss:
Equity income (loss)	$	2		$	(4	)	$	—	$	—	$	(2	)
Depreciation, depletion, and amortization		117			137			61		40		355
Income taxes		42			21			26		67		156
After-tax operating income (ATOI)		154			110			60		138		462
Third quarter ended September 30, 2010
Sales:
Third-party sales	$	717		$	1,688		$	1,645	$	1,173	$	5,223
Intersegment sales		506			589			46		—		1,141
Total sales	$	1,223		$	2,277		$	1,691	$	1,173	$	6,364
Profit and loss:
Equity income	$	1		$	—		$	—	$	1	$	2
Depreciation, depletion, and amortization		100			142			57		37		336
Income taxes		(22	)		(3	)		26		63		64
ATOI		70			78			66		114		328
Nine months ended September 30, 2011
Sales:
Third-party sales	$	2,615		$	6,249		$	5,951	$	3,990	$	18,805
Intersegment sales		2,107			2,559			179		—		4,845
Total sales	$	4,722		$	8,808		$	6,130	$	3,990	$	23,650
Profit and loss:
Equity income (loss)	$	27		$	(4	)	$	—	$	1	$	24
Depreciation, depletion, and amortization		332			420			179		119		1,050
Income taxes		146			129			94		201		570
ATOI		482			513			240		417		1,652
Nine months ended September 30, 2010
Sales:
Third-party sales	$	2,056		$	5,100		$	4,654	$	3,369	$	15,179
Intersegment sales		1,627			1,905			132		—		3,664
Total sales	$	3,683		$	7,005		$	4,786	$	3,369	$	18,843
Profit and loss:
Equity income	$	7		$	1		$	—	$	2	$	10
Depreciation, depletion, and amortization		299			431			173		116		1,019
Income taxes		46			15			72		142		275
ATOI		236			310			167		302		1,015

The following table reconciles total segment ATOI to consolidated net income (loss) attributable to Alcoa:

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Total segment ATOI	$	462		$	328		$	1,652		$	1,015
Unallocated amounts (net of tax):
Impact of LIFO		2			(2	)		(49	)		(19	)
Interest expense		(81	)		(91	)		(259	)		(245	)
Noncontrolling interests		(53	)		(48	)		(166	)		(104	)
Corporate expense		(76	)		(71	)		(219	)		(197	)
Restructuring and other charges		(7	)		1			(35	)		(142	)
Discontinued operations		—			—			(5	)		(8	)
Other		(75	)		(56	)		(117	)		(304	)
Consolidated net income (loss) attributable to Alcoa	$	172		$	61		$	802		$	(4	)

Items required to reconcile total segment ATOI to consolidated net income (loss) attributable to Alcoa include: the impact of LIFO inventory accounting; interest expense; noncontrolling interests; corporate expense (general administrative and selling expenses of operating the corporate headquarters and other global administrative facilities, along with depreciation and amortization on corporate-owned assets); restructuring and other charges; discontinued operations; and other items, including intersegment profit eliminations and other metal adjustments, differences between tax rates applicable to the segments and the consolidated effective tax rate, the results of the soft alloy extrusions business in Brazil, and other nonoperating items such as foreign currency transaction gains/losses and interest income.

The following table details segment assets:

	September 30, 2011		December 31, 2010
Alumina	$	9,675	$	9,967
Primary Metals		12,222		11,947
Flat-Rolled Products		5,033		4,606
Engineered Products and Solutions		5,951		5,434
Total segment assets	$	32,881	$	31,954

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Income Taxes
The effective tax rate	19.60%	81.70%	25.30%	46.00%
Difference in effective income tax rate		116.70%
U.S. federal statutory rate	35.00%	35.00%	35.00%	35.00%
Discrete income tax benefit	$ 15.0
Discrete income tax benefit (charge)		41		(79)
Discrete income tax charge based on settlement discussions of several matters with international taxing authorities				19
Income tax impact for operational losses related to certain foreign jurisdictions that are excluded from the estimated annual effective tax rate calculation		8
Net discrete tax benefits for various other items		19		9
Discrete income tax benefit related to a Canadian provincial tax law change				$ 24

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Derivatives And Other Financial Instruments (Fair Value Of Outstanding Derivative Contracts Recorded As Liabilities) (Details) (USD $) In Millions	Sep. 30, 2011		Dec. 31, 2010
Fair value liability derivatives	$ 737		$ 865
Other Current Liabilities [Member] | Derivatives Designated As Hedging Instruments [Member] | Aluminum Contracts [Member]
Fair value liability derivatives	90		89
Other Current Liabilities [Member] | Derivatives Not Designated As Hedging Instruments [Member] | Aluminum Contracts [Member]
Fair value liability derivatives	43	[1]	52	[1]
Other Current Liabilities [Member] | Derivatives Not Designated As Hedging Instruments [Member] | Energy Contract [Member]
Fair value liability derivatives			62	[1]
Other Current Liabilities [Member] | Aluminum Contracts [Member]
Fair value liability derivatives	8		4
Other Current Liabilities [Member] | Energy Contract [Member]
Fair value liability derivatives			37
Other Noncurrent Liabilities [Member]
Fair value liability derivatives	8		41
Other Noncurrent Liabilities [Member] | Derivatives Designated As Hedging Instruments [Member] | Aluminum Contracts [Member]
Fair value liability derivatives	554		647
Other Noncurrent Liabilities [Member] | Derivatives Not Designated As Hedging Instruments [Member] | Aluminum Contracts [Member]
Fair value liability derivatives	24	[1]	33	[1]
Other Noncurrent Liabilities [Member] | Derivatives Not Designated As Hedging Instruments [Member] | Embedded Credit Derivative [Member]
Fair value liability derivatives	33	[1]	23	[1]
Other Noncurrent Liabilities [Member] | Derivatives Not Designated As Hedging Instruments [Member] | Foreign Exchange Contracts [Member]
Fair value liability derivatives	1	[1]
Derivatives Designated As Hedging Instruments [Member]
Fair value liability derivatives	644		736
Derivatives Not Designated As Hedging Instruments [Member]
Fair value liability derivatives	$ 101	[1]	$ 170	[1]

[1] See the "Other" section within Note P for additional information on Alcoa's purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies.

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Discontinued Operations And Assets Held For Sale

9 Months Ended

Sep. 30, 2011

Discontinued Operations And Assets Held For Sale

Discontinued Operations And Assets Held For Sale

C. Discontinued Operations and Assets Held for Sale – For the third quarter and nine months ended September 30, 2011 and 2010, there were no active businesses classified as discontinued operations. Activity of discontinued operations in all periods presented represents post-closing and other adjustments related to divested businesses previously classified as discontinued operations.

The following table details selected financial information of discontinued operations:

	Third quarter  ended September 30,				Nine months  ended September 30,
	2011		2010		2011			2010
Sales	$	—	$	—	$	—		$	—
Loss from operations before income taxes	$	—	$	—	$	(7	)	$	(13	)
Benefit for income taxes		—		—		2			5
Loss from discontinued operations	$	—	$	—	$	(5	)	$	(8	)

In the 2011 nine-month period, discontinued operations included an additional loss of $3 ($5 pretax) related to the wire harness and electrical portion (divested in June 2009) of the Electrical and Electronic Solutions (EES) business as a result of a negotiated preliminary settlement related to claims filed in 2010 against Alcoa by Platinum Equity in an insolvency proceeding in Germany and an additional loss of $2 ($2 pretax) related to both the wire harness and electrical portion and the electronics portion (divested in December 2009) of the EES business for a number of small post-closing and other adjustments. In the 2010 nine-month period, discontinued operations included an additional loss of $6 ($9 pretax) related to the wire harness and electrical portion of the EES business as a result of a contract settlement with a former customer of this business and an additional loss of $2 ($4 pretax) related to the electronics portion of the EES business for the settling of working capital, which was not included in the divestiture transaction.

For both periods presented in the accompanying Consolidated Balance Sheet, the assets and liabilities of operations classified as held for sale included the Global Foil business (one remaining plant located in Brazil), the electronics portion of the EES business (working capital components), and the Hawesville, KY automotive casting facility.

The major classes of assets and liabilities of operations held for sale were as follows:

	September 30, 2011		December 31, 2010
Assets:
Receivables	$	29	$	28
Inventories		22		22
Properties, plants, and equipment		21		35
Other assets		6		14
Assets held for sale	$	78	$	99
Liabilities:
Accounts payable, trade	$	8	$	10
Accrued expenses		17		21
Liabilities of operations held for sale	$	25	$	31

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Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes

Income Taxes

M. Income Taxes – The effective tax rate for the third quarter of 2011 and 2010 was 19.6% (provision on income) and 81.7% (benefit on income), respectively.

The rate for the 2011 third quarter differs from the U.S. federal statutory rate of 35% primarily due to foreign income taxed in lower rate jurisdictions and a $15 net discrete income tax benefit for various items, primarily attributable to adjustments made related to the filing of prior year tax returns in various jurisdictions and the reversal of a valuation allowance for capital losses now available to be used against future capital gains.

The rate for the 2010 third quarter differs by 116.7% from the U.S. federal statutory rate of 35% primarily due to a $41 discrete income tax benefit for the reversal of a valuation allowance as a result of previously restricted net operating losses of a foreign subsidiary now available, an $8 favorable impact for operational losses in certain foreign jurisdictions that are excluded from the estimated annual effective tax rate calculation (impact reversed by the end of 2010), and a $19 net discrete tax benefit for various other items.

The effective tax rate for the 2011 and 2010 nine-month periods was 25.3% (provision on income) and 46.0% (provision on income), respectively.

The rate for the 2011 nine-month period differs from the U.S. federal statutory rate of 35% primarily due to foreign income taxed in lower rate jurisdictions.

The rate for the 2010 nine-month period differs from the U.S. federal statutory rate of 35% primarily due to a $79 discrete income tax charge as a result of a change in the tax treatment of federal subsidies received related to prescription drug benefits provided under certain retiree health care benefit plans that were determined to be actuarially equivalent to Medicare Part D and a $19 discrete income tax charge based on settlement discussions of several matters with international taxing authorities (this amount represents a decrease to Alcoa's unrecognized tax benefits), partially offset by the $41 discrete income tax benefit mentioned above, a $24 discrete income tax benefit related to a Canadian provincial tax law change permitting a tax return to be filed in U.S. dollars, and a $9 net discrete income tax benefit for various other items.

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Derivatives And Other Financial Instruments (Gains And Losses On Derivatives) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	$ 149	$ (248)	$ 65	$ (35)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	(32)	(28)	(114)	(107)	[1]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	4	(2)	4	1	[2]
Amount of loss expected to be recognized into earnings over the next 12 months			22
Loss recognized in earnings related to the amount excluded from the assessment of hedge effectiveness	(1)		(1)
Gain recognized in earnings related to the amount excluded from the assessment of hedge effectiveness	5		5
Interest Expense [Member] | Interest Rate Contracts [Member]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	(2)		(2)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	(2)		(2)		[1]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)					[2]
Sales [Member] | Aluminum Contracts [Member]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	145	(247)	53	(13)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	(30)	(19)	(106)	(83)	[1]
Sales [Member] | Foreign Exchange Contracts [Member]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	2	4	4	(3)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	2	(2)	4	(6)	[1]
Cost of Goods Sold [Member] | Energy Contract [Member]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	6	1	14	(12)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	(2)	(7)	(8)	(18)	[1]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)					[2]
Other Expenses (Income), Net [Member] | Aluminum Contracts [Member]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	4	(2)	4	1	[2]
Other Expenses (Income), Net [Member] | Energy Contract [Member]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)		(6)		(7)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)					[1]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)					[2]
Other Expenses (Income), Net [Member] | Foreign Exchange Contracts [Member]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)					[2]
Other Expenses (Income), Net [Member] | Interest Rate Contracts [Member]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	(2)		(4)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)			(2)		[1]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)					[2]

[1] Assuming market rates remain constant with the rates at September 30, 2011, a loss of $22 is expected to be recognized in earnings over the next 12 months.

[2] For both the third quarter and nine months ended September 30, 2011, the amount of gain or (loss) recognized in earnings represents $(1) related to the ineffective portion of the hedging relationships. There was also $5 recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for both the third quarter and nine months ended September 30, 2011. For the third quarter and nine months ended September 30, 2010, the amount of gain or (loss) recognized in earnings related to the ineffective portion of the hedging relationships.

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Derivatives And Other Financial Instruments (Reconciliation Of Activity For Derivative Contracts On Net Basis) (Details) (Level 3 [Member], USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011		Sep. 30, 2011
Level 3 [Member]
Balance at beginning of period	$ 796		$ 779
Sales - (decrease)	(14)		(51)
Cost of goods sold - (increase)	(4)		(15)
Other expenses (income), net - (increase)	(3)		(37)
Other comprehensive loss - (increase)	(196)		(97)
Purchases, sales, issuances, and settlements	(5)	[1]	(5)	[1]
Transfers into and (or) out of Level 3		[1]		[1]
Balance at end of period	574		574
Sales
Cost of goods sold
Other expenses (income), net - (increase)	$ (13)		$ (10)

[1] During the 2011 third quarter, there was an issuance of a Level 3 financial instrument related to a natural gas supply contract (see below). There were no purchases, sales, or settlements of Level 3 financial instruments. Additionally, there were no transfers of financial instruments into or out of Level 3.

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Restructuring And Other Charges (Pro Forma Restructuring And Other Charges By Reportable Segments, Pretax) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Restructuring and other charges	$ 9	$ 2	$ 49	$ 219
Alumina [Member]
Restructuring and other charges	6		32	13
Primary Metals [Member]
Restructuring and other charges	(6)	(7)	(4)	145
Flat-Rolled Products [Member]
Restructuring and other charges	5		7	(7)
Engineered Products and Solutions [Member]
Restructuring and other charges	(2)		1	22
Segment Total [Member]
Restructuring and other charges	3	(7)	36	173
Corporate [Member]
Restructuring and other charges	$ 6	$ 9	$ 13	$ 46

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Other Expenses (Income), Net (Tables)

9 Months Ended

Sep. 30, 2011

Other Expenses (Income), Net

Schedule Of Other (Income) Expenses, Net

	Third quarter  ended September 30,						Nine months  ended September 30,
	2011			2010			2011			2010
Equity loss (income)	$	2		$	(2	)	$	(24	)	$	(10	)
Interest income		(5	)		(5	)		(16	)		(14	)
Foreign currency losses, net		35			21			5			23
Net (gain) loss from asset sales		—			(8	)		1			(8	)
Net (gain) loss on mark-to-market derivative contracts (P)		(14	)		42			(41	)		56
Other, net		13			(5	)		28			1
	$	31		$	43		$	(47	)	$	48

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Statement Of Consolidated Cash Flows (USD $) In Millions	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
CASH FROM OPERATIONS
Net income	$ 968	$ 100
Adjustments to reconcile net income to cash from operations:
Depreciation, depletion, and amortization	1,113	1,080
Deferred income taxes	(78)	62
Equity income, net of dividends	(28)	(25)
Restructuring and other charges (D)	49	219
Net loss (gain) from investing activities - asset sales (I)	1	(8)
Loss from discontinued operations (C)	5	8
Stock-based compensation	70	70
Excess tax benefits from stock-based payment arrangements	(6)	(1)
Other	35	121
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
(Increase) in receivables	(415)	(467)
(Increase) in inventories	(606)	(94)
Decrease in prepaid expenses and other current assets	11	34
Increase in accounts payable, trade	171	16
(Decrease) in accrued expenses	(195)	(384)
Increase in taxes, including income taxes	117	167
Pension contributions	(217)	(70)
(Increase) in noncurrent assets	(96)	(56)
Increase in noncurrent liabilities	160	136
(Increase) in net assets held for sale (C)	(2)	(24)
CASH PROVIDED FROM CONTINUING OPERATIONS	1,057	884
CASH (USED FOR) PROVIDED FROM DISCONTINUED OPERATIONS	(6)	7
CASH PROVIDED FROM OPERATIONS	1,051	891
FINANCING ACTIVITIES
Net change in short-term borrowings	(36)	(57)
Net change in commercial paper	107
Additions to long-term debt (G)	1,254	1,082
Debt issuance costs	(17)	(5)
Payments on long-term debt (G)	(1,122)	(1,587)
Proceeds from exercise of employee stock options	36	8
Excess tax benefits from stock-based payment arrangements	6	1
Dividends paid to shareholders	(98)	(94)
Distributions to noncontrolling interests	(253)	(154)
Contributions from noncontrolling interests	136	121
Acquisitions of noncontrolling interests		(66)
CASH PROVIDED FROM (USED FOR) FINANCING ACTIVITIES	13	(751)
INVESTING ACTIVITIES
Capital expenditures	(801)	(650)
Acquisitions, net of cash acquired (E)	(240)	(72)
Proceeds from the sale of assets and businesses	(6)	(6)
Additions to investments	(216)	(224)
Sales of investments	5	138
Other	(11)	16
CASH USED FOR INVESTING ACTIVITIES	(1,269)	(798)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(6)	20
Net change in cash and cash equivalents	(211)	(638)
Cash and cash equivalents at beginning of year	1,543	1,481
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 1,332	$ 843

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Accounts Receivables

9 Months Ended

Sep. 30, 2011

Accounts Receivables

Accounts Receivables

N. Accounts Receivables – Alcoa has two arrangements with third parties to sell certain customer receivables outright without recourse on a continuous basis. As of September 30, 2011, $206 of the sold receivables remain uncollected. Alcoa is servicing the customer receivables for the third parties at market rates; therefore, no servicing asset or liability was recorded.

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Debt (Details) (USD $)	1 Months Ended		3 Months Ended	9 Months Ended				6 Months Ended		1 Months Ended	9 Months Ended	1 Months Ended
	May 31, 2011	Apr. 30, 2011	Jun. 30, 2011	Sep. 30, 2011	Oct. 31, 2011	Jul. 25, 2011	May 31, 2011 Maximum [Member] 6% Notes, Due 2013 [Member]	Jun. 30, 2011 Maximum [Member] 5.4% Notes, Due 2021	Jun. 30, 2011 Minimum [Member] 5.4% Notes, Due 2021	May 31, 2011 5.375% Notes, Due 2013 [Member]	Sep. 30, 2011 5.375% Notes, Due 2013 [Member]	May 31, 2011 6% Notes, Due 2013 [Member]	Apr. 30, 2011 5.4% Notes, Due 2021
Amount of public debt offering				$ 515,000,000									$ 1,250,000,000
Interest rate on notes issued										5.375%		6.00%	5.40%
Debt instrument maturity period										2013		2013	2021
Net proceeds from the public debt offering													1,241,000,000
Early retirement of outstanding notes		101,000,000											881,000,000
Notice period for debt redemption, in days								60.0	30.0
Repurchase of notes													101.00%
Aggregate outstanding principal amount					30,000,000	500				269,000,000		328,000,000
Remaining outstanding debt of Alcoa										284,000,000
Cash paid for redemption of outstanding debt	972,000,000
Principal amount of debt	881,000,000						400,000,000
Purchase premium	74,000,000
Accrued and unpaid interest	17,000,000
Remaining outstanding debt												422,000,000
Interest rate swaps, notional amount			550,000,000								550,000,000
Gain on termination of interest rate swaps			33,000,000								33,000,000
Debt instrument fee amount				0.25%
Applicable margin on base rate loans, minimum				0.50%
Applicable margin base rate loans, maximum				1.50%
Unsecured revolving credit				3,750
Debt Instrument, Principal Outstanding					30,000,000	500				269,000,000		328,000,000
Letter of limit sublimit						1,000
Undrawn and terminated amount						$ 3,275

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Derivatives And Other Financial Instruments

9 Months Ended

Sep. 30, 2011

Derivatives And Other Financial Instruments

Derivatives And Other Financial Instruments

P. Derivatives and Other Financial Instruments

Derivatives

Alcoa is exposed to certain risks relating to its ongoing business operations, including financial, market, political, and economic risks. The following discussion provides information regarding Alcoa's exposure to the risks of changing commodity prices, interest rates, and foreign currency exchange rates.

Alcoa's commodity and derivative activities are subject to the management, direction, and control of the Strategic Risk Management Committee (SRMC). The SRMC is composed of the chief executive officer, the chief financial officer, and other officers and employees that the chief executive officer selects. The SRMC reports to the Board of Directors on the scope of its activities.

The aluminum, energy, interest rate, and foreign exchange contracts are held for purposes other than trading. They are used primarily to mitigate uncertainty and volatility, and to cover underlying exposures. Alcoa is not involved in trading activities for energy, weather derivatives, or other nonexchange commodity trading activities.

The fair values of outstanding derivative contracts recorded as assets in the accompanying Consolidated Balance Sheet were as follows:

Asset Derivatives	September 30, 2011		December 31, 2010
Derivatives designated as hedging instruments:
Prepaid expenses and other current assets:
Aluminum contracts	$	9	$	48
Foreign exchange contracts		1		2
Interest rate contracts		8		19
Other noncurrent assets:
Aluminum contracts		9		22
Energy contracts		40		9
Interest rate contracts		41		62
Total derivatives designated as hedging instruments	$	108	$	162
Derivatives not designated as hedging instruments*:
Prepaid expenses and other current assets:
Aluminum contracts	$	1	$	3
Other noncurrent assets:
Aluminum contracts		5		—
Foreign exchange contracts		—		1
Total derivatives not designated as hedging instruments	$	6	$	4
Less margin held:
Prepaid expenses and other current assets:
Aluminum contracts	$	—	$	4
Interest rate contracts		5		13
Other noncurrent assets:
Interest rate contracts		15		2
Sub-total	$	20	$	19
Total Asset Derivatives	$	94	$	147

* See the "Other" section within Note P for additional information on Alcoa's purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies.

The fair values of outstanding derivative contracts recorded as liabilities in the accompanying Consolidated Balance Sheet were as follows:

Liability Derivatives	September 30, 2011		December 31, 2010
Derivatives designated as hedging instruments:
Other current liabilities:
Aluminum contracts	$	90	$	89
Other noncurrent liabilities and deferred credits:
Aluminum contracts		554		647
Total derivatives designated as hedging instruments	$	644	$	736
Derivatives not designated as hedging instruments*:
Other current liabilities:
Aluminum contracts	$	43	$	52
Energy contracts		—		62
Other noncurrent liabilities and deferred credits:
Aluminum contracts		24		33
Embedded credit derivative		33		23
Foreign currency contracts		1		—
Total derivatives not designated as hedging instruments	$	101	$	170
Less margin posted:
Other current liabilities:
Aluminum contracts	$	8	$	4
Energy contracts		—		37
Sub-total	$	8	$	41
Total Liability Derivatives	$	737	$	865

* See the "Other" section within Note P for additional information on Alcoa's purpose for entering into derivatives not designated as hedging instruments and its overall risk management strategies.

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 (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) 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.

The following section describes the valuation methodologies used by Alcoa to measure derivative contracts at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified. Where appropriate, the description includes details of the valuation models, the key inputs to those models, and any significant assumptions.

Derivative contracts are valued using quoted market prices and significant other observable and unobservable inputs. Such financial instruments consist of aluminum, energy, interest rate, and foreign exchange contracts. The fair values for the majority of these derivative contracts are based upon current quoted market prices. These financial instruments are typically exchange-traded and are generally classified within Level 1 or Level 2 of the fair value hierarchy depending on whether the exchange is deemed to be an active market or not.

For certain derivative contracts whose fair values are based upon trades in liquid markets, such as interest rate swaps, valuation model inputs can generally be verified and valuation techniques do not involve significant management judgment. The fair values of such financial instruments are generally classified within Level 2 of the fair value hierarchy.

Alcoa has other derivative contracts that do not have observable market quotes. For these financial instruments, management uses significant other observable inputs (e.g., information concerning time premiums and volatilities for certain option type embedded derivatives and regional premiums for aluminum contracts). For periods beyond the term of quoted market prices for aluminum, Alcoa uses a model that estimates the long-term price of aluminum based on anticipated changes in worldwide supply and demand. 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).

The following table presents Alcoa's derivative contract assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy (there were no transfers in or out of Levels 1 and 2 during the periods presented):

	September 30, 2011			December 31, 2010
Assets:
Level 1	$	18		$	76
Level 2		50			81
Level 3		46			9
Margin held*		(20	)		(19	)
Total	$	94		$	147
Liabilities:
Level 1	$	68		$	35
Level 2		57			83
Level 3		620			788
Margin posted*		(8	)		(41	)
Total	$	737		$	865

* Margin held represents cash collateral received related to interest rate contracts included in Level 2 and margin posted represents cash collateral paid related to aluminum contracts included in Level 1. At December 31, 2010, margin held also represents cash collateral received related to aluminum contracts included in Level 1 and margin posted also represents cash collateral paid related to energy contracts included in Level 3. Alcoa elected to net the margin held and posted against the fair value amounts recognized for derivative instruments executed with the same counterparties under master netting arrangements.

Financial instruments classified as Level 3 in the fair value hierarchy represent derivative contracts in which management has used at least one significant unobservable input in the valuation model. The following table presents a reconciliation of activity for such derivative contracts on a net basis:

	Third quarter ended September 30, 2011			Nine months ended September 30, 2011
Balance at beginning of period	$	796		$	779
Total gains or losses (realized and unrealized) included in:
Sales – (decrease)		(14	)		(51	)
Cost of goods sold – (increase)		(4	)		(15	)
Other expenses (income), net – (increase)		(3	)		(37	)
Other comprehensive loss – (increase)		(196	)		(97	)
Purchases, sales, issuances, and settlements*		(5	)		(5	)
Transfers into and (or) out of Level 3*		—			—
Balance at end of period	$	574		$	574
Total gains or losses included in earnings attributable to the change in unrealized gains or losses relating to derivative contracts still held at September 30, 2011:
Sales	$	—		$	—
Cost of goods sold		—			—
Other expenses (income), net – (increase)		(13	)		(10	)

* During the 2011 third quarter, there was an issuance of a Level 3 financial instrument related to a natural gas supply contract (see below). There were no purchases, sales, or settlements of Level 3 financial instruments. Additionally, there were no transfers of financial instruments into or out of Level 3.

As reflected in the table above, the net unrealized loss on derivative contracts using Level 3 valuation techniques was $574 as of September 30, 2011. This loss was mainly attributed to embedded derivatives in power contracts that index the price of power to the London Metal Exchange (LME) price of aluminum. These embedded derivatives are primarily valued using observable market prices. However, due to the length of the contracts, the valuation model also requires management to estimate the long-term price of aluminum based upon anticipated changes in worldwide supply and demand. The embedded derivatives have been designated as hedges of forward sales of aluminum and their realized gains and losses were included in Sales on the accompanying Statement of Consolidated Operations.

During the 2011 third quarter, Alcoa entered into a six-year natural gas supply contract, which has an LME-linked ceiling. This contract 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. At inception, this contract had a fair value of $5. Unrealized gains and losses from this contract were included in Other expenses (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 gas purchases are made under the contract.

Also, included within Level 3 measurements are derivative financial instruments that hedge the cost of electricity. Transactions involving on-peak power are observable as there is an active market. However, there are certain off-peak times when there is not an actively traded market for electricity. Therefore, management utilizes market prices, historical relationships, and various forecast services to determine the fair value. Management utilizes these same valuation techniques for an existing power contract associated with a smelter in the U.S. that no longer qualified for the normal purchase normal sale exception under derivative accounting in late 2009. Unrealized gains and losses for this physical power contract were included in Other expenses (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. Additionally, a financial contract related to the same U.S. smelter utilized by management to hedge the price of electricity of the aforementioned power contract no longer qualified for cash flow hedge accounting near the end of 2009. Realized gains and losses of this financial contract were included in Cost of goods sold on the accompanying Statement of Consolidated Operations, while unrealized gains and losses were included in Other expenses (income), net on the accompanying Statement of Consolidated Operations. Both the physical power contract and the financial contract related to this U.S. smelter expired in September 2011.

Additionally, Alcoa has contracts to hedge the anticipated power requirements at two smelters in Australia. These derivatives hedge forecasted power purchases through December 2036. Beyond the term where market information is available, management has developed a forward curve, for valuation purposes, based on independent consultant market research. The effective portion of gains and losses on these contracts were recorded in Other comprehensive (loss) income on the accompanying Consolidated Balance Sheet until the designated hedge periods begin in 2014 and 2016. Once the hedge periods begin, realized gains and losses will be recorded in Cost of goods sold.

Furthermore, an embedded derivative in a power contract that indexes the difference between the long-term debt ratings of Alcoa and the counterparty from any of the three major credit rating agencies is included in Level 3. Management uses market prices, historical relationships, and forecast services to determine fair value. Realized gains and losses for this embedded derivative were included in Other expenses (income), net on the accompanying Statement of Consolidated Operations.

Fair Value Hedges

For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. The gain or loss on the hedged items are included in the same line items as the loss or gain on the related derivative contracts as follows (there were no contracts that ceased to qualify as a fair value hedge in any of the periods presented):

Derivatives in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
		Third quarter  ended September 30,						Nine months  ended September 30,
		2011			2010			2011			2010
Aluminum contracts	Sales	$	(100	)	$	101		$	(78	)	$	7
Interest rate contracts	Interest expense		5			43			58			79
Total		$	(95	)	$	144		$	(20	)	$	86
Hedged Items in Fair Value Hedging Relationships	Location of Gain or (Loss) Recognized in Earnings on Hedged Items	Amount of Gain or (Loss) Recognized in Earnings on Hedged Items
		Third quarter  ended September 30,						Nine months ended September 30,
		2011			2010			2011			2010
Aluminum contracts	Sales	$	102		$	(94	)	$	76		$	(8	)
Interest rate contracts	Interest expense		(5	)		(15	)		(25	)		(51	)
Total		$	97		$	(109	)	$	51		$	(59	)

Aluminum. Alcoa is a leading global producer of primary aluminum and fabricated aluminum products. As a condition of sale, customers often require Alcoa to enter into long-term, fixed-price commitments. These commitments expose Alcoa to the risk of fluctuating aluminum prices between the time the order is committed and the time that the order is shipped. Alcoa's aluminum commodity risk management policy is to manage, principally through the use of futures and contracts, the aluminum price risk associated with a portion of its firm commitments. These contracts cover known exposures, generally within three years. As of September 30, 2011, Alcoa had 310 kmt of aluminum futures designated as fair value hedges. The effects of this hedging activity will be recognized over the designated hedge periods in 2011 to 2013.

Interest Rates. Alcoa uses interest rate swaps to help maintain a strategic balance between fixed- and floating-rate debt and to manage overall financing costs. As of September 30, 2011, the Company had pay floating, receive fixed interest rate swaps that were designated as fair value hedges. These hedges effectively convert the interest rate from fixed to floating on $515 of debt through 2018. In the 2011 second quarter, Alcoa terminated interest rate swaps with a notional amount of $550 in conjunction with the early retirement of the related debt (see Note G). At the time of termination, the swaps were "in-the-money" resulting in a gain of $33, which was recorded in Interest expense on the accompanying Statement of Consolidated Operations.

Cash Flow Hedges

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

Derivatives in Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)												Location of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)*												Location of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)**
	Third quarter ended September 30,						Nine months ended September 30,							Third quarter ended September 30,						Nine months ended September 30,							Third quarter ended September 30,					Nine months ended September 30,
	2011			2010			2011			2010				2011			2010			2011			2010				2011		2010			2011		2010
Aluminum contracts	$	145		$	(247	)	$	53		$	(13	)	Sales	$	(30	)	$	(19	)	$	(106	)	$	(83	)	Other expenses (income), net	$	4	$	(2	)	$	4	$	1
Energy contracts		6			1			14			(12	)	Cost of goods sold		(2	)		(7	)		(8	)		(18	)	Other expenses (income), net		—		—			—		—
Energy contracts		—			(6	)		—			(7	)	Other expenses (income), net		—			—			—			—		Other expenses (income), net		—		—			—		—
Foreign exchange contracts		2			4			4			(3	)	Sales		2			(2	)		4			(6	)	Other expenses (income), net		—		—			—		—
Interest rate contracts		(2	)		—			(2	)		—		Interest expense		(2	)		—			(2	)		—		Other expenses (income), net		—		—			—		—
Interest rate contracts		(2	)		—			(4	)		—		Other expenses (income), net		—			—			(2	)		—		Other expenses (income), net		—		—			—		—
Total	$	149		$	(248	)	$	65		$	(35	)		$	(32	)	$	(28	)	$	(114	)	$	(107	)		$	4	$	(2	)	$	4	$	1

* Assuming market rates remain constant with the rates at September 30, 2011, a loss of $22 is expected to be recognized in earnings over the next 12 months.

** For both the third quarter and nine months ended September 30, 2011, the amount of gain or (loss) recognized in earnings represents $(1) related to the ineffective portion of the hedging relationships. There was also $5 recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for both the third quarter and nine months ended September 30, 2011. For the third quarter and nine months ended September 30, 2010, the amount of gain or (loss) recognized in earnings related to the ineffective portion of the hedging relationships.

Aluminum and Energy. Alcoa anticipates the continued requirement to purchase aluminum and other commodities, such as electricity, natural gas, and fuel oil, for its operations. Alcoa enters into futures and forward contracts to reduce volatility in the price of these commodities. Alcoa has also entered into power supply and other contracts that contain pricing provisions related to the LME aluminum price. The LME-linked pricing features are considered embedded derivatives. A majority of these embedded derivatives have been designated as cash flow hedges of future sales of aluminum.

Also, Alcoa has contracts to hedge the anticipated power requirements at two smelters in Australia. These derivatives hedge forecasted power purchases through December 2036.

Interest Rates. Alcoa had no outstanding cash flow hedges of interest rate exposures as of September 30, 2011. An investment accounted for on the equity method by Alcoa has entered into interest rate contracts, which are designated as cash flow hedges. Alcoa's share of the activity of these cash flow hedges is reflected in the table above.

Foreign Exchange. Alcoa is subject to exposure from fluctuations in foreign currency exchange rates. These contracts may be used from time to time to hedge the variability in cash flows from the forecasted payment or receipt of currencies other than the functional currency. These contracts cover periods consistent with known or expected exposures through 2011.

Alcoa had the following outstanding forward contracts that were entered into to hedge forecasted transactions:

	September 30, 2011		December 31, 2010
Aluminum contracts (kmt)		1,237		1,285
Energy contracts (electricity - megawatt hours)		100,578,295		100,578,295
Foreign exchange contracts	$	5	$	20

Other

Alcoa has also entered into certain derivatives to minimize its price risk related to other customer sales and pricing arrangements. Alcoa has not qualified these contracts for hedge accounting treatment and, therefore, the fair value gains and losses on these contracts are recorded in earnings as follows:

Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
		Third quarter  ended September 30,						Nine months  ended September 30,
		2011			2010			2011			2010
Aluminum contracts	Sales	$	(10	)	$	7		$	(9	)	$	3
Aluminum contracts	Other expenses (income), net		18			(33	)		7			(18	)
Embedded credit derivative	Other expenses (income), net		(13	)		1			(10	)		(8	)
Energy contract	Other expenses (income), net		16			(12	)		47			(31	)
Foreign exchange contracts	Other expenses (income), net		(7	)		2			(3	)		1
Total		$	4		$	(35	)	$	32		$	(53	)

The embedded credit derivative relates to a power contract that indexes the difference between the long-term debt ratings of Alcoa and the counterparty from any of the three major credit rating agencies. If the counterparty's lowest credit rating is greater than one rating category above Alcoa's credit ratings, an independent investment banker would be consulted to determine a hypothetical interest rate for both parties. The two interest rates would be netted and the resulting difference would be multiplied by Alcoa's equivalent percentage of the outstanding principal of the counterparty's debt obligation as of December 31st of the year preceding the calculation date. This differential would be added to the cost of power in the period following the calculation date.

The energy contract is associated with a smelter in the U.S. for a power contract that no longer qualified for the normal purchase normal sale exception and a financial contract that no longer qualified as a hedge under derivative accounting in late 2009. Alcoa's obligations under the contracts expired in September 2011.

Alcoa has a forward contract to purchase $56 (C$58) to mitigate the foreign currency risk related to a Canadian-denominated loan due in 2014. All other foreign exchange contracts were entered into and settled within each of the periods presented.

Material Limitations

The disclosures with respect to commodity prices, interest rates, and foreign currency exchange risk do not take into account the underlying commitments or anticipated transactions. If the underlying items were included in the analysis, the gains or losses on the futures contracts may be offset. Actual results will be determined by a number of factors that are not under Alcoa's control and could vary significantly from those factors disclosed.

Alcoa is exposed to credit loss in the event of nonperformance by counterparties on the above instruments, as well as credit or performance risk with respect to its hedged customers' commitments. Although nonperformance is possible, Alcoa does not anticipate nonperformance by any of these parties. Contracts are with creditworthy counterparties and are further supported by cash, treasury bills, or irrevocable letters of credit issued by carefully chosen banks. In addition, various master netting arrangements are in place with counterparties to facilitate settlement of gains and losses on these contracts.

Other Financial Instruments

The carrying values and fair values of Alcoa's other financial instruments were as follows:

	September 30, 2011				December 31, 2010
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	1,332	$	1,332	$	1,543	$	1,543
Restricted cash		1		1		1		1
Noncurrent receivables		23		23		23		23
Available-for-sale securities		93		93		93		93
Short-term borrowings		57		57		92		92
Commercial paper		107		107		—		—
Long-term debt due within one year		489		489		231		231
Long-term debt, less amount due within one year		8,658		9,138		8,842		9,882

The following methods were used to estimate the fair values of other financial instruments:

Cash and cash equivalents, Restricted cash, Short-term borrowings, Commercial paper, and Long-term debt due within one year. The carrying amounts approximate fair value because of the short maturity of the instruments.

Noncurrent receivables. The fair value of noncurrent receivables was based on anticipated cash flows, which approximates carrying value.

Available-for-sale securities. The fair value of such securities was based on quoted market prices. These financial instruments consist of exchange-traded fixed income and equity securities, which are carried at fair value and were classified in Level 1 of the fair value hierarchy.

Long-term debt, less amount due within one year. The fair value was based on quoted market prices for public debt and on interest rates that are currently available to Alcoa for issuance of debt with similar terms and maturities for non-public debt.

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Derivatives And Other Financial Instruments (Carrying Value And Fair Values Of Other Financial Instruments) (Details) (USD $) In Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2011	Dec. 31, 2010
Cash And Cash Equivalents [Member]
Carrying value	$ 1,332	$ 1,543
Fair value	1,332	1,543
Restricted Cash [Member]
Carrying value	1	1
Fair value	1	1
Noncurrent Receivables [Member]
Carrying value	23	23
Fair value	23	23
Available-For-Sale Securities [Member]
Carrying value	93	93
Fair value	93	93
Short-Term Borrowings [Member]
Carrying value	57	92
Fair value	57	92
Commercial Paper [Member]
Carrying value	107
Fair value	107
Long-Term Debt Due Within One Year [Member]
Carrying value	489	231
Fair value	489	231
Long-Term Debt, Less Amount Due In One Year [Member]
Carrying value	8,658	8,842
Fair value	$ 9,138	$ 9,882

XML

Statement Of Changes In Consolidated Equity (Parenthetical) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Statement Of Changes In Consolidated Equity
Preferred stock, dividends per share	$ 1.8750	$ 0.9375	$ 3.7500	$ 2.8125
Common stock, dividends per share	$ 0.06	$ 0.03	$ 0.12	$ 0.09

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2011

Commitments And Contingencies

Commitments And Contingencies

H. Commitments and Contingencies

Litigation

On February 27, 2008, Alcoa Inc. received notice that Aluminium Bahrain B.S.C. (Alba) had filed suit against Alcoa Inc. and Alcoa World Alumina LLC (collectively, "Alcoa"), and others, in the U.S. District Court for the Western District of Pennsylvania (the "Court"), Civil Action number 08-299, styled Aluminium Bahrain B.S.C. v. Alcoa Inc., Alcoa World Alumina LLC, William Rice, and Victor Phillip Dahdaleh. The complaint alleges that certain Alcoa entities and their agents, including Victor Phillip Dahdaleh, have engaged in a conspiracy over a period of 15 years to defraud Alba. The complaint further alleges that Alcoa and its employees or agents (1) illegally bribed officials of the government of Bahrain and (or) officers of Alba in order to force Alba to purchase alumina at excessively high prices, (2) illegally bribed officials of the government of Bahrain and (or) officers of Alba and issued threats in order to pressure Alba to enter into an agreement by which Alcoa would purchase an equity interest in Alba, and (3) assigned portions of existing supply contracts between Alcoa and Alba for the sole purpose of facilitating alleged bribes and unlawful commissions. The complaint alleges that Alcoa and the other defendants violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and committed fraud. Alba's complaint seeks compensatory, consequential, exemplary, and punitive damages, rescission of the 2005 alumina supply contract, and attorneys' fees and costs. Alba seeks treble damages with respect to its RICO claims.

On February 26, 2008, Alcoa Inc. had advised the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) that it had recently become aware of these claims, had already begun an internal investigation, and intended to cooperate fully in any investigation that the DOJ or the SEC may commence. On March 17, 2008, the DOJ notified Alcoa that it had opened a formal investigation and Alcoa has been cooperating with the government.

In response to a motion filed by the DOJ on March 27, 2008, the Court ordered the suit filed by Alba to be administratively closed and that all discovery be stayed to allow the DOJ to fully conduct an investigation without the interference and distraction of ongoing civil litigation. The Court further ordered that the case will be reopened at the close of the DOJ's investigation. The Company is unable to reasonably predict an outcome or to estimate a range of reasonably possible loss with respect to any or all of the above matters.

In November 2006, in Curtis v. Alcoa Inc., Civil Action No. 3:06cv448 (E.D. Tenn.), a class action was filed by plaintiffs representing approximately 13,000 retired former employees of Alcoa or Reynolds Metals Company and spouses and dependants of such retirees alleging violation of the Employee Retirement Income Security Act (ERISA) and the Labor-Management Relations Act by requiring plaintiffs, beginning January 1, 2007, to pay health insurance premiums and increased co-payments and co-insurance for certain medical procedures and prescription drugs. Plaintiffs alleged these changes to their retiree health care plans violated their rights to vested health care benefits. Plaintiffs additionally alleged that Alcoa had breached its fiduciary duty to plaintiffs under ERISA by misrepresenting to them that their health benefits would never change. Plaintiffs sought injunctive and declaratory relief, back payment of benefits, and attorneys' fees. Alcoa had consented to treatment of plaintiffs' claims as a class action. During the fourth quarter of 2007, following briefing and argument, the court ordered consolidation of the plaintiffs' motion for preliminary injunction with trial, certified a plaintiff class, bifurcated and stayed the plaintiffs' breach of fiduciary duty claims, struck the plaintiffs' jury demand, but indicated it would use an advisory jury, and set a trial date of September 17, 2008. In August 2008, the court set a new trial date of March 24, 2009 and, subsequently, the trial date was moved to September 22, 2009. In June 2009, the court indicated that it would not use an advisory jury at trial. Trial in the matter was held over eight days commencing September 22, 2009 and ending on October 1, 2009 in federal court in Knoxville, TN before the Honorable Thomas Phillips, U.S. District Court Judge. At the conclusion of evidence, the court set a post-hearing briefing schedule for submission of proposed findings of fact and conclusions of law by the parties and for replies to the same. Post trial briefing was submitted on December 4, 2009.

On March 9, 2011, the court issued a judgment order dismissing plaintiffs' lawsuit in its entirety with prejudice for the reasons stated in its Findings of Fact and Conclusions of Law. On March 23, 2011, plaintiffs filed a motion for clarification and/or amendment of the judgment order, which seeks, among other things, a declaration that plaintiffs' retiree benefits are vested subject to an annual cap and an injunction preventing Alcoa, prior to 2017, from modifying the plan design to which plaintiffs are subject or changing the premiums and deductibles that plaintiffs must pay. Also on March 23, 2011, plaintiffs filed a motion for award of attorney's fees and expenses. Alcoa filed its opposition to both motions on April 11, 2011. The time for plaintiffs to appeal from the court's March 9, 2011 judgment will not begin until the court disposes of these motions.

On April 23, 2004, St. Croix Renaissance Group, L.L.L.P. (SCRG), Brownfield Recovery Corp., and Energy Answers Corporation of Puerto Rico (collectively referred to as "Plaintiffs") filed a suit against St. Croix Alumina L.L.C. and Alcoa World Alumina, LLC (collectively referred to as "Alcoa") in the Territorial Court of the Virgin Islands, Division of St. Croix for claims related to the sale of Alcoa's former St. Croix alumina refinery to Plaintiffs. Alcoa thereafter removed the case to federal court and after a several year period of discovery and motion practice, a jury trial on the matter took place in St. Croix from January 11, 2011 to January 20, 2011. The jury returned a verdict in favor of Plaintiffs and awarded damages as described: on a claim of breaches of warranty, the jury awarded $13; on the same claim, the jury awarded punitive damages in the amount of $6; and on a negligence claim for property damage, the jury awarded $10. Plaintiffs filed a motion seeking pre-judgment interest on the jury award. On February 17, 2011, Alcoa filed post-trial motions seeking judgment notwithstanding the verdict or, in the alternative, a new trial. On May 31, 2011, the court granted Alcoa's motion for judgment regarding Plaintiffs' $10 negligence award and denied the remainder of Alcoa's motions. Additionally, the court awarded Plaintiffs pre-judgment interest of $2 on the breach of warranty award. As a result of the court's post-trial decisions, Alcoa recorded a charge of $20 in the 2011 second quarter (See Note D). On June 14, 2011, Alcoa filed a notice of appeal with the U.S. Court of Appeals for the Third Circuit regarding Alcoa's denied post-trial motions. On June 22, 2011, SCRG filed a notice of cross appeal with the Third Circuit Court related to certain pre-trial decisions of the court and of the court's post-trial ruling on the negligence claim.

In addition to the litigation discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against Alcoa, including those pertaining to environmental, product liability, and safety and health matters. While the amounts claimed 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 financial position, liquidity, or results of operations in a particular period could be materially affected by certain contingencies. However, based on facts currently available, management believes that the disposition of matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position, liquidity, or the results of operations of the Company.

European Commission Matters

In July 2006, the European Commission (EC) announced that it had opened an investigation to establish whether an extension of the regulated electricity tariff granted by Italy to some energy-intensive industries complies with European Union (EU) state aid rules. The Italian power tariff extended the tariff that was in force until December 31, 2005 through November 19, 2009 (Alcoa has been incurring higher power costs at its smelters in Italy subsequent to the tariff end date). The extension was originally through 2010, but the date was changed by legislation adopted by the Italian Parliament effective on August 15, 2009. Prior to expiration of the tariff in 2005, Alcoa had been operating in Italy for more than 10 years under a power supply structure approved by the EC in 1996. That measure provided a competitive power supply to the primary aluminum industry and was not considered state aid from the Italian Government. The EC's announcement expressed concerns about whether Italy's extension of the tariff beyond 2005 was compatible with EU legislation and potentially distorted competition in the European market of primary aluminum, where energy is an important part of the production costs.

On November 19, 2009, the EC announced a decision in this matter stating that the extension of the tariff by Italy constituted unlawful state aid, in part, and, therefore, the Italian Government is to recover a portion of the benefit Alcoa received since January 2006 (including interest). The amount of this recovery will be based on a calculation that is being prepared by the Italian Government. Pending formal notification from the Italian Government, Alcoa estimates that a payment in the range of $300 to $500 will be required (the timing of such payment is uncertain). In late 2009, after discussions with legal counsel and reviewing the bases on which the EC decided, including the different considerations cited in the EC decision regarding Alcoa's two smelters in Italy, Alcoa recorded a charge of $250, including $20 to write off a receivable from the Italian Government for amounts due under the now expired tariff structure. On April 19, 2010, Alcoa filed an appeal of this decision with the General Court of the EU. Alcoa will pursue all substantive and procedural legal steps available to annul the EC's decision. On May 22, 2010, Alcoa also filed with the General Court a request for injunctive relief to suspend the effectiveness of the decision, but, on July 12, 2010, the General Court denied such request. On September 10, 2010, Alcoa appealed the July 12, 2010 decision to the European Court of Justice (ECJ).

On March 23, 2011, the EC announced that it has decided to refer the Italian Government to the ECJ for failure to comply with the EC's November 19, 2009 decision.

As a result of the EC's November 19, 2009 decision, management had contemplated ceasing operations at its Italian smelters due to uneconomical power costs. In February 2010, management agreed to continue to operate its smelters in Italy for up to six months while a long-term solution to address increased power costs could be negotiated.

Also in February 2010, the Italian Government issued a decree, which was converted into law by the Italian Parliament in March 2010, to provide interruptibility rights to certain industrial customers who were willing to be subject to temporary interruptions in the supply of power (i.e. compensation for power interruptions when grids are overloaded) over a three-year period. Alcoa applied for and was granted such rights (expiring on December 31, 2012) related to its Portovesme smelter. In May 2010, the EC stated that, based on their review of the validity of the decree, the interruptibility rights should not be considered state aid. On July 29, 2010, Alcoa executed a new power agreement effective September 1, 2010 through December 31, 2012 for the Portovesme smelter, replacing the short-term, market-based power contract that was in effect since early 2010.

Additionally in May 2010, Alcoa and the Italian Government agreed to a temporary idling of the Fusina smelter. As of September 30, 2010, the Fusina smelter was fully curtailed (44 kmt-per-year).

Separately, on November 29, 2006, Alcoa filed an appeal before the General Court (formerly the European Court of First Instance) seeking the annulment of the EC's decision to open an investigation alleging that such decision did not follow the applicable procedural rules. On March 25, 2009, the General Court denied Alcoa's appeal. On May 29, 2009, Alcoa appealed the March 25, 2009 ruling before the ECJ. The hearing of the May 29, 2009 appeal was held on June 24, 2010. On July 21, 2011, the ECJ denied Alcoa's appeal.

In January 2007, the EC announced that it had opened an investigation to establish whether the regulated electricity tariffs granted by Spain comply with EU state aid rules. At the time the EC opened its investigation, Alcoa had been operating in Spain for more than nine years under a power supply structure approved by the Spanish Government in 1986, an equivalent tariff having been granted in 1983. The investigation is limited to the year 2005 and is focused both on the energy-intensive consumers and the distribution companies. The investigation provided 30 days to any interested party to submit observations and comments to the EC. With respect to the energy-intensive consumers, the EC opened the investigation on the assumption that prices paid under the tariff in 2005 were lower than a pool price mechanism, therefore being, in principle, artificially below market conditions. Alcoa submitted comments in which the company provided evidence that prices paid by energy-intensive consumers were in line with the market, in addition to various legal arguments defending the legality of the Spanish tariff system. It is Alcoa's understanding that the Spanish tariff system for electricity is in conformity with all applicable laws and regulations, and therefore no state aid is present in the tariff system. While Alcoa does not believe that an unfavorable decision is probable, management has estimated that the total potential impact from an unfavorable decision could be approximately $100 (€70) pretax. Also, while Alcoa believes that any additional cost would only be assessed for the year 2005, it is possible that the EC could extend its investigation to later years. If the EC's investigation concludes that the regulated electricity tariffs for industries are unlawful, Alcoa will have an opportunity to challenge the decision in the EU courts.

Environmental Matters

Alcoa continues to participate in environmental assessments and cleanups at a number of locations (more than 100). 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 or damages 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 and damages. The liability can change substantially due to factors such as the nature and extent of contamination, changes in remedial requirements, and technological changes, among others.

Alcoa's remediation reserve balance was $327 and $333 at September 30, 2011 and December 31, 2010 (of which $34 and $31 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 2011 third quarter and nine-month period, the remediation reserve was increased by $2 and $6, respectively, associated with a number of sites. The changes to the remediation reserve were recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. Payments related to remediation expenses applied against the reserve were $5 and $13 in the 2011 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 2011 third quarter and nine-month period, the change in the reserve also reflects a decrease of $2 and an increase of $1, respectively, due to the effects of foreign currency translation.

Included in annual operating expenses are the recurring costs of managing hazardous substances and environmental programs. These costs are estimated to be approximately 2% of cost of goods sold.

The following discussion provides details regarding the current status of certain significant reserves related to current or former Alcoa sites. It is possible that Alcoa's financial position, liquidity, or results of operations, in a particular period, could be materially affected by matters relating to these sites. However, based on facts currently available, management believes that adequate reserves have been provided and that the disposition of these matters will not have a materially adverse effect on the financial position, liquidity, or the results of operations of the Company.

Massena West, NY—Alcoa has been conducting investigations and studies of the Grasse River, adjacent to Alcoa's Massena plant site, under a 1989 order from the U.S. Environmental Protection Agency (EPA) issued under CERCLA. Sediments and fish in the river contain varying levels of polychlorinated biphenyls (PCBs).

Alcoa submitted various Analysis of Alternatives Reports to the EPA starting in 1998 through 2002 that reported the results of river and sediment studies, potential alternatives for remedial actions related to the PCB contamination, and additional information requested by the EPA.

In June 2003, the EPA requested that Alcoa gather additional field data to assess the potential for sediment erosion from winter river ice formation and breakup. The results of these additional studies, submitted in a report to the EPA in April 2004, suggest that this phenomenon has the potential to occur approximately every 10 years and may impact sediments in certain portions of the river under all remedial scenarios. The EPA informed Alcoa that a final remedial decision for the river could not be made without substantially more information, including river pilot studies on the effects of ice formation and breakup on each of the remedial techniques. Alcoa submitted to the EPA, and the EPA approved, a Remedial Options Pilot Study (ROPS) to gather this information. The scope of this study included sediment removal and capping, the installation of an ice control structure, and significant monitoring.

From 2004 through 2008, Alcoa completed the work outlined in the ROPS. In November 2008, Alcoa submitted an update to the EPA incorporating the new information obtained from the ROPS related to the feasibility and costs associated with various capping and dredging alternatives, including options for ice control. As a result, Alcoa increased the reserve associated with the Grasse River by $40 for the estimated costs of a proposed ice control remedy and for partial settlement of potential damages of natural resources.

In late 2009, the EPA requested that Alcoa submit a complete revised Analysis of Alternatives Report in March 2010 to address questions and comments from the EPA and various stakeholders. On March 24, 2010, Alcoa submitted the revised report, which included an expanded list of proposed remedial alternatives, as directed by the EPA. Alcoa increased the reserve associated with the Grasse River by $17 to reflect an increase in the estimated costs of the Company's recommended capping alternative as a result of changes in scope that occurred due to the questions and comments from the EPA and various stakeholders. While the EPA reviews the revised report, Alcoa will continue with its on-going monitoring and field studies activities. In late 2010, Alcoa increased the reserve by $2 based on the most recent estimate of costs expected to be incurred for on-going monitoring and field studies activities as the EPA continues its review during 2011.

The ultimate selection of a remedy may result in additional liability. Alternatives analyzed in the most recent Analysis of Alternatives report that are equally effective as the recommended capping remedy range in additional estimated costs between $20 and $100. As such, Alcoa may be required to record a subsequent reserve adjustment at the time the EPA's Record of Decision is issued.

Sherwin, TX—In connection with the sale of the Sherwin alumina refinery, which was required to be divested as part of the Reynolds merger in 2000, Alcoa agreed to retain responsibility for the remediation of the then existing environmental conditions, as well as a pro rata share of the final closure of the active waste disposal areas, which remain in use. Alcoa's share of the closure costs is proportional to the total period of operation of the active waste disposal areas. Alcoa estimated its liability for the active disposal areas by making certain assumptions about the period of operation, the amount of material placed in the area prior to closure, and the appropriate technology, engineering, and regulatory status applicable to final closure. The most probable cost for remediation was reserved.

East St. Louis, IL—In response to questions regarding environmental conditions at the former East St. Louis operations, Alcoa and the City of East St. Louis, the owner of the site, entered into an administrative order with the EPA in December 2002 to perform a remedial investigation and feasibility study of an area used for the disposal of bauxite residue from historic alumina refining operations. A draft feasibility study was submitted to the EPA in April 2005. The feasibility study included remedial alternatives that ranged from no further action to significant grading, stabilization, and water management of the bauxite residue disposal areas. As a result, Alcoa increased the environmental reserve for this location by $15 in 2005. The EPA's ultimate selection of a remedy could result in additional liability. Alcoa may be required to record a subsequent reserve adjustment at the time the EPA's Record of Decision is issued.

Fusina and Portovesme, Italy—In 1996, Alcoa acquired the Fusina smelter and rolling operations and the Portovesme smelter, both of which are owned by Alcoa's subsidiary Alcoa Trasformazioni S.r.l., from Alumix, an entity owned by the Italian Government. At the time of the acquisition, Alumix indemnified Alcoa for pre-existing environmental contamination at the sites. In 2004, the Italian Ministry of Environment (MOE) issued orders to Alcoa Trasformazioni S.r.l. and Alumix for the development of a clean-up plan related to soil contamination in excess of allowable limits under legislative decree and to institute emergency actions and pay natural resource damages. Alcoa Trasformazioni S.r.l. appealed the orders and filed suit against Alumix, among others, seeking indemnification for these liabilities under the provisions of the acquisition agreement. In 2009, Ligestra S.r.l., Alumix's successor, and Alcoa Trasformazioni S.r.l. agreed to a stay on the court proceedings while investigations were conducted and negotiations advanced towards a possible settlement. In December 2009, Alcoa Trasformazioni S.r.l. and Ligestra S.r.l. reached an agreement for settlement of the liabilities related to Fusina while negotiations continue related to Portovesme. The agreement outlines 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 is contingent upon final acceptance of the remediation project by the MOE. As a result of entering into this agreement, Alcoa increased the reserve by $12 for Fusina. Additionally, due to new information derived from the site investigations conducted at Portovesme, Alcoa increased the reserve by $3 in 2009.

Investments

Alcoa has an investment in a joint venture for the development, construction, ownership, and operation of an integrated aluminum complex (bauxite mine, alumina refinery, aluminum smelter, and rolling mill) in Saudi Arabia. The joint venture is owned 74.9% by the Saudi Arabian Mining Company (known as "Ma'aden") and 25.1% by Alcoa and consists of three separate companies as follows: one each for the mine and refinery, the smelter, and the rolling mill. Alcoa accounts for its investment in the joint venture under the equity method. Capital investment in the project is expected to total approximately $10,800 (SAR 40.5 billion). Alcoa's equity investment in the joint venture will be approximately $1,100 over a four-year period, and Alcoa will be responsible for its pro rata share of the joint venture's project financing. Alcoa has contributed $325, including $13 and $165 in the 2011 third quarter and nine-month period, respectively, towards the $1,100 commitment. As of September 30, 2011 and December 31, 2010, the carrying value of Alcoa's investment in this project was $461 and $285, respectively.

In late 2010, the smelting and rolling mill companies entered into project financing totaling $4,000, of which $1,004 represents Alcoa's share (the equivalent of Alcoa's 25.1% interest in the smelting and rolling mill companies). In conjunction with the financing, Alcoa issued guarantees on behalf of the smelting and rolling mill companies to the lenders in the event that such companies default on their debt service requirements through June 2017 and December 2018, respectively, (Ma'aden issued similar guarantees for its 74.9% interest). Alcoa's guarantees for the smelting and rolling mill companies cover total debt service requirements of $108 in principal and up to a maximum of approximately $50 in interest per year (based on projected interest rates). At September 30, 2011 and December 31, 2010, the fair value of the guarantees was $8 and was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. Under the project financing, a downgrade of Alcoa's credit ratings below investment grade by at least two agencies would require Alcoa to provide a letter of credit or fund an escrow account for a portion or all of Alcoa's remaining equity commitment to the joint venture project in Saudi Arabia.

Alcoa Alumínio (Alumínio), a wholly-owned subsidiary of Alcoa, is a participant in several hydroelectric power construction projects in Brazil for purposes of increasing its energy self-sufficiency and providing a long-term, low-cost source of power for its facilities. Two of these projects, Machadinho and Barra Grande, were completed in 2002 and 2006, respectively.

Alumínio committed to taking a share of the output of the Machadinho and Barra Grande projects each for 30 years at cost (including cost of financing the project). In the event that other participants in either one of these projects fail to fulfill their financial responsibilities, Alumínio may be required to fund a portion of the deficiency. In accordance with the respective agreements, if Alumínio funds any such deficiency, its participation and share of the output from the respective project will increase proportionately.

With Machadinho and Barra Grande, Alumínio's current power self-sufficiency is approximately 40% (will be approximately 70% once the hydroelectric power projects described below are completed and operating at full capacity), to meet a total energy demand of approximately 690 megawatts from Brazilian primary plants. Alumínio accounts for the Machadinho and Barra Grande hydroelectric projects as equity method investments. Alumínio's investment participation in these projects is 30.99% for Machadinho and 42.18% for Barra Grande. Its total investment in these projects was $266 (R$487) and $274 (R$461) at September 30, 2011 and December 31, 2010, respectively. Alcoa's maximum exposure to loss on these completed projects is approximately $310 (R$570), which represents Alumínio's investments in both projects and guarantee of debt for only Machadinho as of September 30, 2011.

In early 2006, Alumínio acquired an additional 6.41% share in the Estreito hydroelectric power project, reaching 25.49% of total participation in the consortium. This additional share entitles Alumínio to 38 megawatts of assured energy. Alumínio's share of the project is estimated to have installed capacity of approximately 280 megawatts and assured power of approximately 150 megawatts. In December 2006, the consortium obtained the environmental installation license, after completion of certain socioeconomic and cultural impact studies as required by a governmental agency. Construction began in early 2007 and is expected to be completed in 2012 (start-up of the facility began in April 2011 with full capacity expected to be reached in 2012). In early 2010, the consortium approved an increase of approximately $720 (R$1,300) in estimated costs to complete the Estreito project as a result of currency, inflation, and the price and scope of construction, among other factors. Total estimated project costs are approximately $2,700 (R$4,900) and Alumínio's share is approximately $680 (R$1,250). As of September 30, 2011, approximately $620 (R$1,100) of Alumínio's commitment was expended on the project.

Construction began on the Serra do Facão hydroelectric power project in early 2007 and was completed in the first half of 2011 (this facility is operating at full capacity). Alumínio's share of the Serra do Facão project is 34.97% and entitles Alumínio to approximately 65 megawatts of assured power. Total estimated project costs are approximately $550 (R$1,000) and Alumínio's share is approximately $190 (R$350). Through March 31, 2009, the participants in the consortium were required to provide capital for their respective share of the project costs. In April 2009, the consortium obtained long-term financing for the estimated remaining costs of construction. At that time, the participants in this project were no longer required to provide capital for their share of the project costs. Instead, the participants were each required to guarantee (expires 2027) a portion of the consortium's debt. In mid-2010, the capacity under the long-term financing arrangement was exhausted; therefore, the participants were once again required to begin providing capital for their share of the remaining costs. As of September 30, 2011, approximately $180 (R$340) of Alumínio's commitment was expended on the project (includes both funds provided by Alumínio and Alumínio's share of the long-term financing). Alumínio accounts for the Serra do Facão hydroelectric power project as an equity method investment and its total investment in this project was $106 (R$193) and $116 (R$195) at September 30, 2011 and December 31, 2010, respectively. Alcoa's maximum exposure to loss on this project is approximately $220 (R$400), which represents Alumínio's investment and guarantee of debt as of September 30, 2011.

In 2004, Alcoa acquired a 20% interest in a consortium, which subsequently purchased the Dampier to Bunbury Natural Gas Pipeline (DBNGP) in Western Australia, in exchange for an initial cash investment of $17 (A$24). The investment in the DBNGP was made in order to secure a competitively priced long-term supply of natural gas to Alcoa's refineries in Western Australia. This investment was classified as an equity investment. Alcoa has made additional contributions of $141 (A$176), including $16 (A$16) in the 2011 nine-month period, and committed to invest an additional $10 (A$9) to be paid as the pipeline expands through 2011. In addition to its equity ownership, Alcoa has an agreement to purchase gas transmission services from the DBNGP. Alcoa's maximum exposure to loss on the investment and the related contract is approximately $470 (A$480) as of September 30, 2011.

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Earnings Per Share (Reconciliation Of Information Used To Compute Basic And Diluted EPS) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Earnings Per Share
Income from continuing operations attributable to Alcoa common shareholders	$ 172	$ 61	$ 807	$ 4
Less: preferred stock dividends declared	1	1	2	2
Income from continuing operations available to common equity	171	60	805	2
Less: dividends and undistributed earnings allocated to participating securities			2
Income from continuing operations available to Alcoa common shareholders - basic	171	60	803	2
Add: interest expense related to convertible notes	8		22
Income from continuing operations available to Alcoa common shareholders - diluted	$ 179	$ 60	$ 825	$ 2
Average shares outstanding - basic	1,064	1,021	1,060	1,017
Stock options	7	5	8	5
Stock and performance awards	4	1	3	1
Convertible notes	89		89
Average shares outstanding - diluted	1,164	1,027	1,160	1,023

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Derivatives And Other Financial Instruments (Narrative) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2011 USD ($)	Jun. 30, 2011 USD ($)	Sep. 30, 2011 USD ($)	Sep. 30, 2011 CAD	Sep. 30, 2011 Level 3 [Member] USD ($)	Jun. 30, 2011 Level 3 [Member] USD ($)	Dec. 31, 2010 Level 3 [Member] USD ($)
Net unrealized loss on derivative contracts					$ 574,000,000	$ 796,000,000	$ 779,000,000
Number of years of natural gas supply contract	6
Fair value of natural gas supply contract	5,000,000		5,000,000
Number of commodities subject to ceiling	2
Amount of aluminum designated as fair value hedges, kmt			310
Face amount of debt the hedges effectively convert from fixed to floating through 2018	515,000,000		515,000,000
Notional amount interest rate swaps		550,000,000
Gain on termination of interest rate swaps		33,000,000
Investment in foreign currency contract, foreign currency amount	$ 56,000,000		$ 56,000,000	58,000,000

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Subsequent Events (Details) (USD $)	1 Months Ended
	Oct. 31, 2011	Jul. 25, 2011
Project financing	$ 992,000,000
Debt instrument interest per year	12,000,000
Outstanding principal of debt	30,000,000	500
Alcoa World Alumina and Chemicals [Member]
Project financing	$ 249,000,000
Percentage interest	25.10%
Ma'aden Joint Venture [Member]
Percentage interest	74.90%
Aluminia Limited [Member]
Percentage interest	40.00%

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Recently Adopted And Recently Issued Accounting Guidance (Details)	9 Months Ended
	Sep. 30, 2011
Recently Adopted And Recently Issued Accounting Guidance
Percentage of goodwill impairment that exists based on qualitative factors minimum	50.00%

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Earnings Per Share

9 Months Ended

Sep. 30, 2011

Earnings Per Share

Earnings Per Share

L. Earnings Per Share – Basic earnings per share (EPS) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared and dividends and undistributed earnings allocated to participating securities, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding not classified as participating securities.

The information used to compute basic and diluted EPS attributable to Alcoa common shareholders was as follows (shares in millions):

	Third quarter  ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Income from continuing operations attributable to Alcoa common shareholders	$	172	$	61	$	807	$	4
Less: preferred stock dividends declared		1		1		2		2
Income from continuing operations available to common equity		171		60		805		2
Less: dividends and undistributed earnings allocated to participating securities		—		—		2		—
Income from continuing operations available to Alcoa common shareholders – basic		171		60		803		2
Add: interest expense related to convertible notes		8		—		22		—
Income from continuing operations available to Alcoa common shareholders – diluted	$	179	$	60	$	825	$	2
Average shares outstanding – basic		1,064		1,021		1,060		1,017
Effect of dilutive securities:
Stock options		7		5		8		5
Stock and performance awards		4		1		3		1
Convertible notes		89		—		89		—
Average shares outstanding – diluted		1,164		1,027		1,160		1,023

Participating securities are defined as unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) and are included in the computation of earnings per share pursuant to the two-class method. Prior to January 1, 2010, under Alcoa's stock-based compensation programs, certain employees were granted stock and performance awards, which entitle those employees to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of Alcoa's common stock. As such, these unvested stock and performance awards met the definition of a participating security. Under the two-class method, all earnings, whether distributed or undistributed, are allocated to each class of common stock and participating securities based on their respective rights to receive dividends. At September 30, 2011 and 2010, there were 2 million and 5 million such participating securities outstanding, respectively.

Effective January 1, 2010, new grants of stock and performance awards do not contain a nonforfeitable right to dividends during the vesting period. As a result, an employee will forfeit the right to dividends accrued on unvested awards if that person does not fulfill their service requirement during the vesting period. As such, these awards are not treated as participating securities in the EPS calculation as the employees do not have equivalent dividend rights as common shareholders. These awards are included in the EPS calculation utilizing the treasury stock method similar to stock options. At September 30, 2011 and 2010, there were 8 million and 3 million such awards outstanding, respectively.

In the 2010 third quarter and nine-month period, 89 million potential shares of common stock related to the convertible notes were not included in the computation of diluted EPS because the effect was anti-dilutive.

Options to purchase 27 million and 32 million shares of common stock at a weighted average exercise price of $23.98 and $27.51 per share were outstanding as of September 30, 2011 and 2010, respectively, but were not included in the computation of diluted EPS because they were anti-dilutive, as the exercise prices of the options were greater than the average market price of Alcoa's common stock.

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Statement Of Consolidated Operations (USD $) In Millions, except Per Share data	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Statement Of Consolidated Operations
Sales (J)	$ 6,419	$ 5,287	$ 18,962	$ 15,361
Cost of goods sold (exclusive of expenses below)	5,290	4,413	15,252	12,636
Selling, general administrative, and other expenses	261	232	759	679
Research and development expenses	47	40	136	124
Provision for depreciation, depletion, and amortization	376	358	1,112	1,079
Restructuring and other charges (D)	9	2	49	219
Interest expense	125	139	399	376
Other expenses (income), net (I)	31	43	(47)	48
Total costs and expenses	6,139	5,227	17,660	15,161
Income from continuing operations before income taxes	280	60	1,302	200
Provision (benefit) for income taxes (M)	55	(49)	329	92
Income from continuing operations	225	109	973	108
Loss from discontinued operations (C)			(5)	(8)
Net income	225	109	968	100
Less: Net income attributable to noncontrolling interests	53	48	166	104
NET INCOME (LOSS) ATTRIBUTABLE TO ALCOA	172	61	802	(4)
AMOUNTS ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS:
Income from continuing operations	172	61	807	4
Loss from discontinued operations			(5)	(8)
Net income (loss)	$ 172	$ 61	$ 802	$ (4)
Basic:
Income from continuing operations	$ 0.16	$ 0.06	$ 0.76
Loss from discontinued operations			$ (0.01)	$ (0.01)
Net income (loss)	$ 0.16	$ 0.06	$ 0.75	$ (0.01)
Diluted:
Income from continuing operations	$ 0.15	$ 0.06	$ 0.71
Loss from discontinued operations				$ (0.01)
Net income (loss)	$ 0.15	$ 0.06	$ 0.71	$ (0.01)
Dividends paid per common share	$ 0.03	$ 0.03	$ 0.09	$ 0.09

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Discontinued Operations And Assets Held For Sale (Financial Information Of Discontinued Operations) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Discontinued Operations And Assets Held For Sale
Sales
Loss from operations before income taxes			(7)	(13)
Benefit for income taxes			2	5
Loss from discontinued operations			$ (5)	$ (8)

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Other Expenses (Income), Net (Schedule Of Other (Income) Expenses, Net) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Other Expenses (Income), Net
Equity loss (income)	$ 2	$ (2)	$ (24)	$ (10)
Interest income	(5)	(5)	(16)	(14)
Foreign currency (gains) losses, net	35	21	5	23
Net (gain) loss from asset sales		(8)	1	(8)
Net (gain) loss on mark-to-market derivative contracts (P)	(14)	42	(41)	56
Other, net	13	(5)	28	1
Other (income) expenses, net	$ 31	$ 43	$ (47)	$ 48

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Accounts Receivables (Details) (USD $) In Millions	Sep. 30, 2011
Accounts Receivables
Sold receivables that remain uncollected	$ 206

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Derivatives And Other Financial Instruments (Fair Value Gains And Losses on Derivatives Contracts) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	$ 4	$ (35)	$ 32	$ (53)
Sales [Member] | Aluminum Contracts [Member]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	(10)	7	(9)	3
Other Expenses (Income), Net [Member] | Aluminum Contracts [Member]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	18	(33)	7	(18)
Other Expenses (Income), Net [Member] | Embedded Credit Derivative [Member]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	(13)	1	(10)	(8)
Other Expenses (Income), Net [Member] | Energy Contract [Member]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	16	(12)	47	(31)
Other Expenses (Income), Net [Member] | Foreign Exchange Contracts [Member]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	$ (7)	$ 2	$ (3)	$ 1

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Commitments And Contingencies (Litigation) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended		1 Months Ended	9 Months Ended	3 Months Ended
	Sep. 30, 2011	Feb. 27, 2008 Aluminium Bahrain V. Alcoa [Member]	Nov. 30, 2006 Curtis v. Alcoa [Member]	Sep. 30, 2011 Punitive Damages [Member]	Mar. 31, 2011 Negligence Claim for Property Damages [Member]	Jun. 30, 2011 Prejudgment Interest Breach Of Warranty Award [Member]	Mar. 31, 2011 Prejudgment Interest Breach Of Warranty Award [Member]
Period of alleged conspiracy, years		15
Retired former employees involved in class action			13,000
Jury award	$ 13			$ 6	$ 10		$ 2
Charge recorded due to post-trial decisions						$ 20

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Commitments And Contingencies (European Commission Matters) (Details) In Millions, unless otherwise specified		1 Months Ended		1 Months Ended
	Sep. 30, 2010	Jul. 31, 2006 Italian Government [Member]	Nov. 19, 2009 Italian Government [Member] USD ($)	Jan. 31, 2007 Spanish Government [Member]	Jan. 31, 2007 Tariffs Granted by Spain [Member] USD ($)	Jan. 31, 2007 Tariffs Granted by Spain [Member] EUR (€)
Number of years operating under a power supply structured		10		9
Italian government extended tariff charge, minimum			$ 300
Italian government extended tariff charge, maximum			500
Charge related to EC announcement			250
Write off of receivable			20
Amount of curtailment, in kmt-per-year	44
Days provided to submit observations and comments to the EC					30	30
Loss contingency, range of possible loss, maximum					$ 100	€ 70

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Earnings Per Share (Narrative) (Details) (USD $) In Millions, except Per Share data	3 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2011	Sep. 30, 2010
Participating securities outstanding		2	5
Convertible notes	89	89
Outstanding Stock Award [Member]
Participating securities outstanding, non forfeitable		8	3
Stock Options [Member]
Weighted average exercise price of options		$ 23.98	$ 27.51
Equity Unit Purchase Agreements [Member]
Number of anti-dilutive securities		27	32

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Discontinued Operations And Assets Held For Sale (Schedule Of Major Classes Of Assets And Liabilities Of Operations Held For Sale) (Details) (USD $) In Millions	Sep. 30, 2011	Dec. 31, 2010
Discontinued Operations And Assets Held For Sale
Receivables	$ 29	$ 28
Inventories	22	22
Properties, plants, and equipment	21	35
Other assets	6	14
Assets held for sale	78	99
Accounts payable, trade	8	10
Accrued expenses	17	21
Liabilities of operations held for sale	$ 25	$ 31