U. Receivables

Sale of Receivables Programs

Alcoa has three arrangements, each with a different financial institution, to sell certain customer receivables outright without recourse on a continuous basis. As of December 31, 2012, sold receivables, which were derecognized from the accompanying Consolidated Balance Sheet, in the amount of $37 under the three arrangements combined were uncollected. Alcoa services the customer receivables for the financial institutions at market rates; therefore, no servicing asset or liability was recorded.

On March 30, 2012, Alcoa finalized a one-year arrangement with a financial institution to sell certain customer receivables without recourse on a revolving basis. The sale of such receivables is completed through the use of a bankruptcy remote special purpose entity, which is a consolidated subsidiary of Alcoa. This arrangement provides for minimum funding of $50 up to a maximum of $250 for receivables sold. Alcoa initially sold $304 of customer receivables in exchange for $50 in cash and $254 of deferred purchase price under this arrangement. Alcoa received additional cash funding of $155 throughout 2012. As of December 31, 2012, the deferred purchase price receivable was $18, which was included in Other receivables on the accompanying Consolidated Balance Sheet. The deferred purchase price receivable is reduced as collections of the underlying receivables occur; however, as this is a revolving program, the sale of new receivables will result in an increase in the deferred purchase price receivable. The net change in the deferred purchase price receivable was reflected in the Decrease in receivables line item on the accompanying Statement of Consolidated Cash Flows. This activity is reflected as an operating cash flow because the related customer receivables are the result of an operating activity with an insignificant, short-term interest rate risk. In 2012, the gross cash outflows and inflows associated with the deferred purchase price receivable were $3,339 and $3,321, respectively. The gross amount of receivables sold and total cash collections under this program since its inception was $3,339 and $3,116, respectively. Alcoa services the customer receivables for the financial institution at market rates; therefore, no servicing asset or liability was recorded.

Allowance for Doubtful Accounts

The following table details the changes in the allowance for doubtful accounts related to customer receivables and other receivables:


	Customer receivables						Other receivables
December 31,	2012			2011			2012			2011
Balance at beginning of year	$	46		$	46		$	79		$	87
Provision for doubtful accounts		2			19			9			7
Write off of uncollectible accounts		(8	)		(14	)		(3	)		(3	)
Recoveries of prior write-offs		(1	)		(3	)		(6	)		(5	)
Other		-			(2	)		(5	)		(7	)
Balance at end of year	$	39		$	46		$	74		$	79