Derivatives And Other Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2012

Derivatives And Other Financial Instruments [Abstract]

Schedule Of Fair Values Of Outstanding Derivative Contracts Recorded As Assets

Asset Derivatives	Level		March 31, 2012		December 31, 2011
Derivatives designated as hedging instruments:
Prepaid expenses and other current assets:
Aluminum contracts		1	$	39	$	51
Aluminum contracts		3		4		5
Interest rate contracts		2		5		8
Other noncurrent assets:
Aluminum contracts		1		6		6
Energy contracts		3		—		2
Interest rate contracts		2		39		37
Total derivatives designated as hedging instruments			$	93	$	109
Derivatives not designated as hedging instruments*:
Prepaid expenses and other current assets:
Aluminum contracts		2	$	1	$	1
Other noncurrent assets:
Aluminum contracts		3		4		5
Foreign exchange contracts		1		1		1
Total derivatives not designated as hedging instruments			$	6	$	7
Less margin held**:
Prepaid expenses and other current assets:
Aluminum contracts		1	$	—	$	7
Interest rate contracts		2		5		8
Other noncurrent assets:
Interest rate contracts		2		13		7
Sub-total			$	18	$	22
Total Asset Derivatives			$	81	$	94

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

** All margin held is in the form of cash and is valued under a Level 1 technique. The levels that correspond to the margin held in the table above reference the level of the corresponding asset for which it is held. Alcoa elected to net the margin held against the fair value amounts recognized for derivative instruments executed with the same counterparties under master netting arrangements.

Schedule Of Fair Values Of Outstanding Derivative Contracts Recorded As Liabilities

Liability Derivatives	Level		March 31, 2012		December 31, 2011
Derivatives designated as hedging instruments:
Other current liabilities:
Aluminum contracts		1	$	13	$	47
Aluminum contracts		3		38		32
Energy contracts		1		1		—
Other noncurrent liabilities and deferred credits:
Aluminum contracts		1		1		4
Aluminum contracts		3		636		570
Energy contracts		1		1		—
Energy contracts		3		10		—
Total derivatives designated as hedging instruments			$	700	$	653
Derivatives not designated as hedging instruments*:
Other current liabilities:
Aluminum contracts		1	$	6	$	12
Aluminum contracts		2		24		23
Other noncurrent liabilities and deferred credits:
Aluminum contracts		1		—		1
Aluminum contracts		2		23		21
Embedded credit derivative		3		28		28
Total derivatives not designated as hedging instruments			$	81	$	85
Less margin posted**:
Other current liabilities:
Aluminum contracts		1	$	—	$	1
Total Liability Derivatives			$	781	$	737

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

** All margin posted is in the form of cash and is valued under a Level 1 technique. The levels that correspond to the margin posted in the table above reference the level of the corresponding liability for which it is posted. Alcoa elected to net the margin posted against the fair value amounts recognized for derivative instruments executed with the same counterparties under master netting arrangements.

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

	March 31, 2012			December 31, 2011
Assets:
Level 1	$	46		$	57
Level 2		45			47
Level 3		8			12
Margin held		(18	)		(22	)
Total	$	81		$	94
Liabilities:
Level 1	$	22		$	64
Level 2		47			44
Level 3		712			630
Margin posted		—			(1	)
Total	$	781		$	737

Schedule Of Reconciliation Of Activity For Derivative Contracts

	Assets						Liabilities
	Aluminum contracts			Energy contracts			Aluminum contracts			Embedded credit derivative			Energy contracts
Opening balance – December 31, 2011	$	10		$	2		$	602		$	28		$	—
Total gains or losses (realized and unrealized) included in:
Sales – (decrease)		(3	)		—			(10	)		—			—
Other income, net – (increase)		(1	)		—			—			—			—
Other comprehensive income – decrease (increase)		2			(2	)		82			—			10
Purchases, sales, issuances, and settlements*		—			—			—			—			—
Transfers into and (or) out of Level 3*		—			—			—			—			—
Closing balance – March 31, 2012	$	8		$	—		$	674		$	28		$	10
Change in unrealized gains or losses included in earnings for derivative contracts held at March 31, 2012:
Sales	$	—		$	—		$	—		$	—		$	—
Cost of goods sold		—			—			—			—			—
Other income, net – (increase)		—			—			—			(1	)		—

* There were no purchases, sales, issuances or settlements of Level 3 financial instruments. Additionally, there were no transfers of financial instruments into or out of Level 3.

Schedule Of Quantitative Information For Level 3 Derivative Contracts

	Fair value at March 31, 2012		Valuation technique	Unobservable input	Range ($ in full amounts)
Assets:
Aluminum contract	$	4	Discounted cash flow	Interrelationship of future aluminum and oil prices	Aluminum: $2,152 - $2,605 per metric ton Oil: $91 - $120 per barrel
Liabilities:
Aluminum contracts		670	Discounted cash flow	Price of aluminum beyond forward curve	$2,793 per metric ton in 2022 to $3,057 per metric ton in 2027
Embedded credit derivative		28	Discounted cash flow	Credit spread between Alcoa and counterparty	1.64% - 2.02% (1.83%) median
Energy contracts		10	Discounted cash flow	Price of electricity beyond forward curve	$48 per megawatt hour in 2012 to $172 per megawatt hour in 2036

Schedule Of Gain Or Loss On Hedged Items And Derivative Contracts

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
		First quarter ended March 31,
		2012			2011
Aluminum contracts	Sales	$	36		$	49
Interest rate contracts	Interest expense		3			11
Total		$	39		$	60
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
		First quarter ended March 31,
		2012			2011
Aluminum contracts	Sales	$	(48	)	$	(52	)
Interest rate contracts	Interest expense		(3	)		(11	)
Total		$	(51	)	$	(63	)

Schedule Of Gains And Losses On Derivative Representing Either Hedge Ineffectiveness Or Hedge Components Excluded From 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)**
	First quarter ended March 31,							First quarter ended March 31,							First quarter ended March 31,
	2012			2011				2012			2011				2012		2011
Aluminum contracts	$	(79	)	$	(189	)	Sales	$	—		$	(38	)	Other income, net	$	7	$	1
Energy contracts		(5	)		—		Cost of goods sold		—			(3	)	Other income, net		—		—
Foreign exchange contracts		—			1		Sales		—			1		Other income, net		—		—
Interest rate contracts		2			—		Interest expense		—			—		Other income, net		—		—
Interest rate contracts		—			—		Other income, net		(1	)		—		Other income, net		—		—
Total	$	(82	)	$	(188	)		$	(1	)	$	(40	)		$	7	$	1

* Assuming market rates remain constant with the rates at March 31, 2012, a loss of $4 is expected to be recognized in earnings over the next 12 months.

** For the first quarter ended March 31, 2012 and 2011, the amount of gain or (loss) recognized in earnings represents $9 and $1, respectively, related to the ineffective portion of the hedging relationships. There was also $(2) recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for the first quarter ended March 31, 2012.

Schedule Of Outstanding Forward Contracts That Were Entered Into Hedge Forecasted Transactions

	March 31,		December 31,
	2012		2011
Aluminum contracts (kmt)		1,342		1,294
Energy contracts:
Electricity (megawatt hours)		100,578,295		100,578,295
Natural gas (million British thermal units)		18,540,000		—

Schedule Of Fair Value Gains And Losses On Derivatives Contracts Recorded In Earnings

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
			First quarter ended March 31,
			2012			2011
Aluminum contracts	Sales		$	3		$	3
Aluminum contracts	Other income, net			(7	)		(14	)
Embedded credit derivative	Other income, net			—			9
Energy contract	Other income, net			—			12
Foreign exchange contracts	Other income, net			1			2
Total			$	(3	)	$	12

Schedule Of Carrying Values And Fair Values Of Other Financial Instruments

	March 31, 2012				December 31, 2011
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	1,749	$	1,749	$	1,939	$	1,939
Restricted cash		34		34		25		25
Noncurrent receivables		21		21		30		30
Available-for-sale securities		84		84		92		92
Short-term borrowings		722		722		62		62
Commercial paper		275		275		224		224
Long-term debt due within one year		128		128		445		445
Long-term debt, less amount due within one year		8,618		9,518		8,640		9,274