Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Components of (Loss) Income from Continuing Operations Before Income Taxes

The components of (loss) income from continuing operations before income taxes were as follows:


	2013			2012			2011
U.S.	$	(1,269	)	$	394		$	(98	)
Foreign		(547	)		(70	)		1,161
	$	(1,816	)	$	324		$	1,063

Schedule of Provision for Income Taxes on Income from Continuing Operations

The provision for income taxes on income from continuing operations consisted of the following:


	2013			2012			2011
Current:
Federal*	$	14		$	85		$	10
Foreign		235			167			427
State and local		1			9			(1	)
		250			261			436
Deferred:
Federal*		84			129			28
Foreign		95			(227	)		(211	)
State and local		(1	)		(1	)		2
		178			(99	)		(181	)
Total	$	428		$	162		$	255

*	Includes U.S. taxes related to foreign income

Reconciliation of U.S. Federal Statutory Rate to Alcoa's Effective Tax Rate for Continuing Operations

A reconciliation of the U.S. federal statutory rate to Alcoa’s effective tax rate for continuing operations was as follows (the effective tax rate for 2013 was a provision on a loss and for both 2012 and 2011 was a provision on income):


	2013			2012			2011
U.S. federal statutory rate		35.0	%		35.0	%		35.0	%
Taxes on foreign operations		(0.3	)		(0.1	)		(11.0	)
Permanent differences on restructuring and other charges and asset disposals		(0.8	)		10.8			-
Audit and other adjustments to prior years’ accruals		(0.9	)		3.5			(1.1	)
Noncontrolling interests		(3.1	)		3.8			0.8
Statutory tax rate and law changes		0.6			(0.4	)		0.8
Changes in valuation allowances		(23.2	)		15.2			2.3
Impairment of goodwill		(33.3	)		-			-
Amortization of goodwill related to intercompany stock sales/reorganizations		1.1			(7.7	)		(2.8	)
Change in legal structure of investments		-			(4.1	)		-
Interest income related to income tax positions		-			(1.3	)		(0.2	)
Company-owned life insurance/split-dollar net premiums		1.1			(3.9	)		(0.2	)
Other		0.2			(0.8	)		0.4
Effective tax rate		(23.6	)%		50.0	%		24.0	%

Schedule of Components of Net Deferred Tax Assets and Liabilities

The components of net deferred tax assets and liabilities were as follows:


	2013					2012
December 31,	Deferred tax assets			Deferred tax liabilities		Deferred tax assets			Deferred tax liabilities
Depreciation	$	185		$	1,150	$	104		$	1,015
Employee benefits		2,499			36		2,742			46
Loss provisions		437			14		368			17
Deferred income/expense		87			188		53			203
Tax loss carryforwards		2,229			-		2,186			-
Tax credit carryforwards		567			-		508			-
Derivatives and hedging activities		74			25		117			16
Other		310			261		324			297
		6,388			1,674		6,402			1,594
Valuation allowance		(1,804	)		-		(1,400	)		-
	$	4,584		$	1,674	$	5,002		$	1,594

Schedule of Expiration Periods of Deferred Tax Assets

The following table details the expiration periods of the deferred tax assets presented above:


December 31, 2013	Expires within 10 years			Expires within 11-20 years			No expiration*			Other*			Total
Tax loss carryforwards	$	377		$	898		$	954		$	-		$	2,229
Tax credit carryforwards		417			75			75			-			567
Other		-			-			498			3,094			3,592
Valuation allowance		(412	)		(843	)		(268	)		(281	)		(1,804	)
	$	382		$	130		$	1,259		$	2,813		$	4,584

Deferred tax assets with no expiration may still have annual limitations on utilization. Other represents deferred tax assets whose expiration is dependent upon the reversal of the underlying temporary difference. A substantial amount of Other relates to employee benefits that will become deductible for tax purposes over an extended period of time as contributions are made to employee benefit plans and payments are made to retirees.

Schedule of Changes in Valuation Allowance

The following table details the changes in the valuation allowance:


December 31,	2013			2012			2011
Balance at beginning of year	$	1,400		$	1,398		$	1,268
Increase to allowance		471			45			157
Release of allowance		(41	)		(31	)		(31	)
U.S. state tax apportionment and tax rate changes		(32	)		(17	)		6
Foreign currency translation		6			5			(2	)
Balance at end of year	$	1,804		$	1,400		$	1,398

Reconciliation of Unrecognized Tax Benefits (Excluding Interest and Penalties)

A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) was as follows:


December 31,	2013			2012			2011
Balance at beginning of year	$	66		$	51		$	46
Additions for tax positions of the current year		2			-			-
Additions for tax positions of prior years		11			39			13
Reductions for tax positions of prior years		(2	)		(7	)		(3	)
Settlements with tax authorities		(8	)		(18	)		(4	)
Expiration of the statute of limitations		(2	)		-			-
Foreign currency translation		(4	)		1			(1	)
Balance at end of year	$	63		$	66		$	51