U. Receivables

Sale of Receivables Programs

In March 2012, Alcoa entered into an 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 originally provided for minimum funding of $50 up to a maximum of $250 for receivables sold. In May 2013, the arrangement was amended to increase the maximum funding to $500 and include two additional financial institutions. On March 30, 2012, 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 net cash funding of $5 ($388 in draws and $383 in repayments) and $155 ($160 in draws and $5 in repayments) in 2013 and 2012, respectively. As of December 31, 2013 and 2012, the deferred purchase price receivable was $248 and $18, respectively, which was included in Other receivables on the accompanying Consolidated Balance Sheet. The deferred purchase price receivable is reduced as collections of the underlying receivables occur; however, as this is a revolving program, the sale of new receivables will result in an increase in the deferred purchase price receivable. The net change in the deferred purchase price receivable was reflected in the (Increase) 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 2013 and 2012, the gross cash outflows and inflows associated with the deferred purchase price receivable were $6,985 and $6,755, respectively, and $3,339 and $3,321, respectively. The gross amount of receivables sold and total cash collected under this program since its inception was $10,324 and $9,866, respectively. Alcoa services the customer receivables for the financial institutions at market rates; therefore, no servicing asset or liability was recorded.

Alcoa had three other arrangements, each with a different financial institution, to sell certain customer receivables outright without recourse on a continuous basis. On March 22, 2013, Alcoa terminated these arrangements. All receivables sold under these arrangements were collected as of March 31, 2013. Alcoa serviced the customer receivables for the financial institutions 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,	2013			2012			2011			2013			2012			2011
Balance at beginning of year	$	39		$	46		$	46		$	74		$	79		$	87
Provision for doubtful accounts		3			2			19			29			9			7
Write off of uncollectible accounts		(19	)		(8	)		(14	)		(39	)		(3	)		(3	)
Recoveries of prior write-offs		(3	)		(1	)		(3	)		(10	)		(6	)		(5	)
Other		-			-			(2	)		(7	)		(5	)		(7	)
Balance at end of year	$	20		$	39		$	46		$	47		$	74		$	79