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 June 30, 2014

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 July 18, 2014, 1,176,322,578 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)

	Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Sales (J)	$	5,836		$	5,849		$	11,290		$	11,682
Cost of goods sold (exclusive of expenses below)		4,765			4,933			9,260			9,780
Selling, general administrative, and other expenses		245			254			481			505
Research and development expenses		50			46			101			91
Provision for depreciation, depletion, and amortization		349			362			689			723
Restructuring and other charges (D)		110			244			571			251
Interest expense		105			118			225			233
Other expenses (income), net (I)		5			19			30			(8	)
Total costs and expenses		5,629			5,976			11,357			11,575
Income (loss) before income taxes		207			(127	)		(67	)		107
Provision for income taxes (L)		78			21			1			85
Net income (loss)		129			(148	)		(68	)		22
Less: Net loss attributable to noncontrolling interests		(9	)		(29	)		(28	)		(8	)
NET INCOME (LOSS) ATTRIBUTABLE TO ALCOA	$	138		$	(119	)	$	(40	)	$	30
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS (K):
Basic	$	0.12		$	(0.11	)	$	(0.04	)	$	0.03
Diluted	$	0.12		$	(0.11	)	$	(0.04	)	$	0.03
Dividends paid per common share	$	0.03		$	0.03		$	0.06		$	0.06

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

2

Alcoa and subsidiaries

Statement of Consolidated Comprehensive Income (Loss) (unaudited)

(in millions)

	Alcoa						Noncontrolling Interests						Total
	Second quarter ended June 30,						Second quarter ended June 30,						Second quarter ended June 30,
	2014			2013			2014			2013			2014			2013
Net income (loss)	$	138		$	(119	)	$	(9	)	$	(29	)	$	129		$	(148	)
Other comprehensive income (loss), net of tax (C):
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits		14			61			1			2			15			63
Foreign currency translation adjustments		141			(603	)		59			(249	)		200			(852	)
Net change in unrealized gains on available-for-sale securities		1			(3	)		—			—			1			(3	)
Net change in unrecognized losses on cash flow hedges		(23	)		71			(8	)		(2	)		(31	)		69
Total Other comprehensive income (loss), net of tax		133			(474	)		52			(249	)		185			(723	)
Comprehensive income (loss)	$	271		$	(593	)	$	43		$	(278	)	$	314		$	(871	)

	Six months ended     June 30,						Six months ended   June 30,						Six months ended   June 30,
	2014			2013			2014			2013			2014			2013
Net (loss) income	$	(40	)	$	30		$	(28	)	$	(8	)	$	(68	)	$	22
Other comprehensive income (loss), net of tax (C):
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits		91			156			1			3			92			159
Foreign currency translation adjustments		390			(719	)		146			(233	)		536			(952	)
Net change in unrealized gains on available-for-sale securities		1			(2	)		—			—			1			(2	)
Net change in unrecognized losses on cash flow hedges		9			184			(6	)		—			3			184
Total Other comprehensive income (loss), net of tax		491			(381	)		141			(230	)		632			(611	)
Comprehensive income (loss)	$	451		$	(351	)	$	113		$	(238	)	$	564		$	(589	)

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

3

Alcoa and subsidiaries

Consolidated Balance Sheet (unaudited)

(in millions)

	June 30, 2014			December 31, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	1,183		$	1,437
Receivables from customers, less allowances of $21 in 2014 and $20 in 2013 (M)		1,381			1,221
Other receivables (M)		671			597
Inventories (F)		3,227			2,705
Prepaid expenses and other current assets		925			1,009
Total current assets		7,387			6,969
Properties, plants, and equipment		37,897			36,866
Less: accumulated depreciation, depletion, and amortization		20,286			19,227
Properties, plants, and equipment, net		17,611			17,639
Goodwill		3,435			3,415
Investments		1,979			1,907
Deferred income taxes		3,243			3,184
Other noncurrent assets		2,654			2,628
Total assets	$	36,309		$	35,742
LIABILITIES
Current liabilities:
Short-term borrowings (G)	$	133		$	57
Commercial paper		223			—
Accounts payable, trade		3,023			2,960
Accrued compensation and retirement costs		937			1,013
Taxes, including income taxes		351			376
Other current liabilities		1,088			1,044
Long-term debt due within one year (G)		87			655
Total current liabilities		5,842			6,105
Long-term debt, less amount due within one year		7,612			7,607
Accrued pension benefits		3,020			3,183
Accrued other postretirement benefits		2,244			2,354
Other noncurrent liabilities and deferred credits		2,885			2,971
Total liabilities		21,603			22,220
CONTINGENCIES AND COMMITMENTS (H)
EQUITY
Alcoa shareholders’ equity:
Preferred stock		55			55
Common stock (G)		1,267			1,178
Additional capital (G)		7,635			7,509
Retained earnings		9,163			9,272
Treasury stock, at cost		(3,275	)		(3,762	)
Accumulated other comprehensive loss (C)		(3,168	)		(3,659	)
Total Alcoa shareholders’ equity		11,677			10,593
Noncontrolling interests		3,029			2,929
Total equity		14,706			13,522
Total liabilities and equity	$	36,309		$	35,742

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

4

Alcoa and subsidiaries

Statement of Consolidated Cash Flows (unaudited)

(in millions)

	Six months ended June 30,
	2014			2013
CASH FROM OPERATIONS
Net (loss) income	$	(68	)	$	22
Adjustments to reconcile net (loss) income to cash from operations:
Depreciation, depletion, and amortization		690			724
Deferred income taxes		(133	)		(58	)
Equity income, net of dividends		68			23
Restructuring and other charges (C)		571			251
Net gain from investing activities – asset sales (I)		(29	)		(6	)
Stock-based compensation		49			46
Excess tax benefits from stock-based payment arrangements		(2	)		—
Other		43			27
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
(Increase) in receivables		(225	)		(375	)
(Increase) in inventories		(457	)		(175	)
(Increase) decrease in prepaid expenses and other current assets		(13	)		37
Increase in accounts payable, trade		26			299
(Decrease) in accrued expenses		(349	)		(353	)
(Decrease) increase in taxes, including income taxes		(52	)		40
Pension contributions		(282	)		(181	)
(Increase) in noncurrent assets		(13	)		(48	)
Increase in noncurrent liabilities		143			171
CASH (USED FOR) PROVIDED FROM OPERATIONS		(33	)		444
FINANCING ACTIVITIES
Net change in short-term borrowings (original maturities of three months or less)		77			4
Net change in commercial paper		223			—
Additions to debt (original maturities greater than three months) (G)		1,131			1,202
Debt issuance costs		(10	)		—
Payments on debt (original maturities greater than three months) (G)		(1,149	)		(1,647	)
Proceeds from exercise of employee stock options		97			1
Excess tax benefits from stock-based payment arrangements		2			—
Dividends paid to shareholders		(69	)		(66	)
Distributions to noncontrolling interests		(55	)		(27	)
Contributions from noncontrolling interests		44			12
CASH PROVIDED FROM (USED FOR) FINANCING ACTIVITIES		291			(521	)
INVESTING ACTIVITIES
Capital expenditures		(467	)		(521	)
Proceeds from the sale of assets and businesses		1			5
Additions to investments		(106	)		(159	)
Sales of investments		34			—
Net change in restricted cash		3			105
Other		9			9
CASH USED FOR INVESTING ACTIVITIES		(526	)		(561	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		14			(21	)
Net change in cash and cash equivalents		(254	)		(659	)
Cash and cash equivalents at beginning of year		1,437			1,861
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,183		$	1,202

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

5

Alcoa and subsidiaries

Statement of Changes in Consolidated Equity (unaudited)

(in millions, except per-share amounts)

	Alcoa Shareholders
	Preferred stock		Common stock		Additional capital			Retained earnings			Treasury stock			Accumulated other comprehensive loss			Non- controlling interests			Total equity
Balance at March 31, 2013	$	55	$	1,178	$	7,508		$	11,805		$	(3,816	)	$	(3,309	)	$	3,353		$	16,774
Net loss		—		—		—			(119	)		—			—			(29	)		(148	)
Other comprehensive loss		—		—		—			—			—			(474	)		(249	)		(723	)
Cash dividends declared:
Preferred @ $0.9375 per share		—		—		—			—			—			—			—			—
Common @ $0.03 per share		—		—		—			(33	)		—			—			—			(33	)
Stock-based compensation		—		—		23			—			—			—			—			23
Common stock issued: compensation plans		—		—		(7	)		—			4			—			—			(3	)
Distributions		—		—		—			—			—			—			(28	)		(28	)
Contributions		—		—		—			—			—			—			(3	)		(3	)
Other		—		—		—			—			—			—			(1	)		(1	)
Balance at June 30, 2013	$	55	$	1,178	$	7,524		$	11,653		$	(3,812	)	$	(3,783	)	$	3,043		$	15,858
Balance at March 31, 2014	$	55	$	1,267	$	7,704		$	9,061		$	(3,395	)	$	(3,301	)	$	2,983		$	14,374
Net income (loss)		—		—		—			138			—			—			(9	)		129
Other comprehensive income		—		—		—			—			—			133			52			185
Cash dividends declared:
Preferred @ $0.9375 per share		—		—		—			—			—			—			—			—
Common @ $0.03 per share		—		—		—			(36	)		—			—			—			(36	)
Stock-based compensation		—		—		24			—			—			—			—			24
Common stock issued: compensation plans		—		—		(93	)		—			120			—			—			27
Distributions		—		—		—			—			—			—			(20	)		(20	)
Contributions		—		—		—			—			—			—			24			24
Other		—		—		—			—			—			—			(1	)		(1	)
Balance at June 30, 2014	$	55	$	1,267	$	7,635		$	9,163		$	(3,275	)	$	(3,168	)	$	3,029		$	14,706

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

6

Alcoa and subsidiaries

Statement of Changes in Consolidated Equity (unaudited), continued

(in millions, except per-share amounts)

	Alcoa Shareholders
	Preferred stock		Common stock		Additional capital			Retained earnings			Treasury stock			Accumulated other comprehensive loss			Non- controlling interests			Total equity
Balance at December 31, 2012	$	55	$	1,178	$	7,560		$	11,689		$	(3,881	)	$	(3,402	)	$	3,324		$	16,523
Net income (loss)		—		—		—			30			—			—			(8	)		22
Other comprehensive loss		—		—		—			—			—			(381	)		(230	)		(611	)
Cash dividends declared:
Preferred @ $1.875 per share		—		—		—			(1	)		—			—			—			(1	)
Common @ $0.06 per share		—		—		—			(65	)		—			—			—			(65	)
Stock-based compensation		—		—		46			—			—			—			—			46
Common stock issued: compensation plans		—		—		(82	)		—			69			—			—			(13	)
Distributions		—		—		—			—			—			—			(53	)		(53	)
Contributions		—		—		—			—			—			—			12			12
Other		—		—		—			—			—			—			(2	)		(2	)
Balance at June 30, 2013	$	55	$	1,178	$	7,524		$	11,653		$	(3,812	)	$	(3,783	)	$	3,043		$	15,858
Balance at December 31, 2013	$	55	$	1,178	$	7,509		$	9,272		$	(3,762	)	$	(3,659	)	$	2,929		$	13,522
Net loss		—		—		—			(40	)		—			—			(28	)		(68	)
Other comprehensive income		—		—		—			—			—			491			141			632
Cash dividends declared:
Preferred @ $1.875 per share		—		—		—			(1	)		—			—			—			(1	)
Common @ $0.06 per share		—		—		—			(68	)		—			—			—			(68	)
Stock-based compensation		—		—		49			—			—			—			—			49
Common stock issued: compensation plans		—		—		(409	)		—			487			—			—			78
Issuance of common stock (G)		—		89		486			—			—			—			—			575
Distributions		—		—		—			—			—			—			(55	)		(55	)
Contributions		—		—		—			—			—			—			44			44
Other		—		—		—			—			—			—			(2	)		(2	)
Balance at June 30, 2014	$	55	$	1,267	$	7,635		$	9,163		$	(3,275	)	$	(3,168	)	$	3,029		$	14,706

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 2013 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, 2013, which includes all disclosures required by GAAP.

B. Recently Adopted and Recently Issued Accounting Guidance

Adopted

On January 1, 2014, Alcoa adopted changes issued by the Financial Accounting Standards Board (FASB) to the accounting for obligations resulting from joint and several liability arrangements. These changes require an entity to measure such obligations for which the total amount of the obligation is fixed at the reporting date as the sum of (i) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors, and (ii) any additional amount the reporting entity expects to pay on behalf of its co-obligors. An entity will also be required to disclose the nature and amount of the obligation as well as other information about those obligations. Examples of obligations subject to these requirements are debt arrangements and settled litigation and judicial rulings. The adoption of these changes had no impact on the Consolidated Financial Statements, as Alcoa does not currently have any such arrangements.

On January 1, 2014, Alcoa adopted changes issued by the FASB to a parent entity’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. A parent entity is required to release any related cumulative foreign currency translation adjustment from accumulated other comprehensive income into net income in the following circumstances: (i) a parent entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided; (ii) a partial sale of an equity method investment that is a foreign entity; (iii) a partial sale of an equity method investment that is not a foreign entity whereby the partial sale represents a complete or substantially complete liquidation of the foreign entity that held the equity method investment; and (iv) the sale of an investment in a foreign entity. The adoption of these changes had no impact on the Consolidated Financial Statements. This guidance will need to be considered in the event Alcoa initiates any of the transactions described above.

On January 1, 2014, Alcoa adopted changes issued by the FASB to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. These changes require an entity to present an unrecognized tax benefit as a liability in the financial statements if (i) a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or (ii) the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset to settle any additional income taxes that would result from the disallowance of a tax position. Otherwise, an unrecognized tax benefit is required to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. Previously, there was diversity in practice as no explicit guidance existed. The adoption of these changes did not result in a significant impact on the Consolidated Financial Statements.

Issued

In April 2014, the FASB issued changes to reporting discontinued operations and disclosures of disposals of components of an entity. These changes require a disposal of a component to meet a higher threshold in order to be reported as a discontinued operation in an entity’s financial statements. The threshold is defined as a strategic shift that has, or will have, a major effect on an entity’s operations and financial results such as a disposal of a major geographical area or a major line of business. Additionally,

8

the following two criteria have been removed from consideration of whether a component meets the requirements for discontinued operations presentation: (i) the operations and cash flows of a disposal component have been or will be eliminated from the ongoing operations of an entity as a result of the disposal transaction, and (ii) an entity will not have any significant continuing involvement in the operations of the disposal component after the disposal transaction. Furthermore, equity method investments now may qualify for discontinued operations presentation. These changes also require expanded disclosures for all disposals of components of an entity, whether or not the threshold for reporting as a discontinued operation is met, related to profit or loss information and/or asset and liability information of the component. These changes become effective for Alcoa on January 1, 2015. Management has determined that the adoption of these changes will not have an immediate impact on the Consolidated Financial Statements. This guidance will need to be considered in the event Alcoa initiates a disposal transaction.

In May 2014, the FASB issued changes to the recognition of revenue from contracts with customers. These changes created a comprehensive framework for all entities in all industries to apply in the determination of when to recognize revenue, and, therefore, supersede virtually all existing revenue recognition requirements and guidance. This framework is expected to result in less complex guidance in application while providing a consistent and comparable methodology for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. These changes become effective for Alcoa on January 1, 2017. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements.

C. Accumulated Other Comprehensive Loss

The following table details the activity of the four components that comprise Accumulated other comprehensive (loss) income for both Alcoa’s shareholders and noncontrolling interests:

	Alcoa						Noncontrolling Interests
	Second quarter ended June 30,						Second quarter ended June 30,
	2014			2013			2014			2013
Pension and other postretirement benefits
Balance at beginning of period	$	(3,455	)	$	(3,968	)	$	(51	)	$	(76	)
Other comprehensive income:
Unrecognized net actuarial loss and prior service cost/benefit		(80	)		(38	)		—			—
Tax benefit		28			17			—			—
Total Other comprehensive loss before reclassifications, net of tax		(52	)		(21	)		—			—
Amortization of net actuarial loss and prior service cost/benefit(1)		101			128			1			4
Tax expense(2)		(35	)		(46	)		—			(2	)
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		66			82			1			2

9

Total Other comprehensive income		14			61			1			2
Balance at end of period	$	(3,441	)	$	(3,907	)	$	(50	)	$	(74	)
Foreign currency translation
Balance at beginning of period	$	428		$	1,031		$	(23	)	$	273
Other comprehensive income (loss)(3)		141			(603	)		59			(249	)
Balance at end of period	$	569		$	428		$	36		$	24
Available-for-sale securities
Balance at beginning of period	$	2		$	4		$	—		$	—
Other comprehensive income (loss)(4)		1			(3	)		—			—
Balance at end of period	$	3		$	1		$	—		$	—
Cash flow hedges (O)
Balance at beginning of period	$	(276	)	$	(376	)	$	—		$	(3	)
Other comprehensive (loss) income:
Net change from periodic revaluations		(32	)		85			(12	)		(3	)
Tax benefit (expense)		4			(16	)		4			1
Total Other comprehensive (loss) income before reclassifications, net of tax		(28	)		69			(8	)		(2	)
Net amount reclassified to earnings:
Aluminum contracts(5)		6			—			—			—
Foreign exchange contracts(5)		(1	)		—			—			—
Interest rate contracts(6)		1			1			—			—
Sub-total		6			1			—			—
Tax (expense) benefit(2)		(1	)		1			—			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		5			2			—			—
Total Other comprehensive (loss) income		(23	)		71			(8	)		(2	)
Balance at end of period	$	(299	)	$	(305	)	$	(8	)	$	(5	)
	Alcoa						Noncontrolling Interests
	Six months ended     June 30,						Six months ended   June 30,
	2014			2013			2014			2013
Pension and other postretirement benefits
Balance at beginning of period	$	(3,532	)	$	(4,063	)	$	(51	)	$	(77	)
Other comprehensive income:
Unrecognized net actuarial loss and prior service cost/benefit		(63	)		(27	)		—			—
Tax benefit		25			14			—			—
Total Other comprehensive loss before reclassifications, net of tax		(38	)		(13	)		—			—
Amortization of net actuarial loss and prior service cost/benefit(1)		199			260			2			5
Tax expense(2)		(70	)		(91	)		(1	)		(2	)
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		129			169			1			3
Total Other comprehensive income		91			156			1			3
Balance at end of period	$	(3,441	)	$	(3,907	)	$	(50	)	$	(74	)

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Foreign currency translation
Balance at beginning of period	$	179		$	1,147		$	(110	)	$	257
Other comprehensive income (loss)(3)		390			(719	)		146			(233	)
Balance at end of period	$	569		$	428		$	36		$	24
Available-for-sale securities
Balance at beginning of period	$	2		$	3		$	—		$	—
Other comprehensive income (loss)(4)		1			(2	)		—			—
Balance at end of period	$	3		$	1		$	—		$	—
Cash flow hedges (O)
Balance at beginning of period	$	(308	)	$	(489	)	$	(2	)	$	(5	)
Other comprehensive income (loss):
Net change from periodic revaluations		4			221			(9	)		—
Tax expense		(4	)		(45	)		3			—
Total Other comprehensive income (loss) before reclassifications, net of tax		—			176			(6	)		—
Net amount reclassified to earnings:
Aluminum contracts(5)		11			7			—			—
Foreign exchange contracts(5)		(1	)		—			—			—
Interest rate contracts(6)		1			1			—			—
Sub-total		11			8			—			—
Tax expense(2)		(2	)		—			—			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		9			8			—			—
Total Other comprehensive income (loss)		9			184			(6	)		—
Balance at end of period	$	(299	)	$	(305	)	$	(8	)	$	(5	)

⁽¹⁾  These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note N).

⁽²⁾  These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations.

⁽³⁾  In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings.

⁽⁴⁾  In all periods presented, unrealized and realized gains and losses related to these securities were immaterial. Realized gains and losses were included in Other expenses (income), net on the accompanying Statement of Consolidated Operations.

⁽⁵⁾  These amounts were included in Sales on the accompanying Statement of Consolidated Operations.

⁽⁶⁾  These amounts were included in Interest expense on the accompanying Statement of Consolidated Operations.

⁽⁷⁾  A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 1 through 6.

D. Restructuring and Other Charges – In the second quarter and six-month period of 2014, Alcoa recorded Restructuring and other charges of $110 ($54 after-tax and noncontrolling interests) and $571 ($328 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2014 second quarter included $107 ($51 after-tax and noncontrolling interest) for exit costs related to decisions to permanently shut down and demolish two smelters and two rolling mills (see below) and $3 ($3 after-tax) for other miscellaneous items, including layoff costs for the separation of approximately 75 employees (30 in the Global Rolled Products segment, 30 in Corporate, and 15 in the other three segments combined).

In the 2014 six-month period, Restructuring and other charges included $443 ($240 after-tax and noncontrolling interest) for exit costs related to decisions to permanently shut down and demolish two smelters and two rolling mills (see below); $68 ($44 after-tax and noncontrolling interest) for the temporary curtailment of two smelters and a related production slowdown at one refinery (see below); $33 ($26 after-tax) for asset impairments related to prior capitalized costs for a modernization project at a smelter in Canada that is no longer being pursued; $17 ($11 after-tax) for layoff costs, including the separation of approximately 245 employees (115 in the Engineered Products and Solutions segment, 30 in the Global Rolled Products segment, 10 in the Alumina and Primary Metals segments combined, and 90 in Corporate); $17 ($11 after-tax) of charges for other miscellaneous items; and $7 ($4 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

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In the 2014 first quarter, management approved the permanent shutdown and demolition of the remaining capacity (84,000 metric-tons-per-year) at the Massena East smelter in New York and the full capacity (190,000 metric-tons-per-year) at the Point Henry smelter in Australia. The capacity at Massena East was fully shut down by the end of the first quarter of 2014 and the Point Henry smelter is expected to be shut down in August 2014. Demolition and remediation activities related to both the Massena East and Point Henry smelters will begin in the second half of 2014 and are expected to be completed by the end of 2020 and 2018, respectively.

The decisions on the Massena East and Point Henry smelters are part of a 15-month review of 460,000 metric tons of smelting capacity initiated by management in the 2013 second quarter for possible curtailment. Through this review, management determined that the remaining capacity of the Massena East smelter was no longer competitive and the Point Henry smelter has no prospect of becoming financially viable. Management also initiated the temporary curtailment of the remaining capacity (62,000 metric-tons-per-year) at the Poços de Caldas smelter and additional capacity (85,000 metric-tons-per-year) at the São Luís smelter, both in Brazil. These curtailments were completed by the end of May 2014. As a result of these curtailments, production at the Poços de Caldas refinery was reduced (200,000 metric-tons-per-year), which was completed by the end of the 2014 second quarter.

Also in the 2014 first quarter, management approved the permanent shutdown of Alcoa’s two rolling mills in Australia, Point Henry and Yennora. This decision was made due to the significant impact of excess can sheet capacity in both Australia and Asia. The two rolling mills have a combined can sheet capacity of 200,000 metric-tons-per-year and will be closed by the end of 2014. Demolition and remediation activities related to the two rolling mills will begin in 2015 and are expected to be completed by the end of 2018.

In the second quarter and six-month period of 2014, costs related to the shutdown and curtailment actions included $4 and $137, respectively, for the layoff of approximately 1,830 employees (1,230 in the Primary Metals segment, 470 in the Global Rolled Products segment, 90 in the Alumina segment, and 40 in Corporate); accelerated depreciation of $91 and $150, respectively, related to the three facilities in Australia as they continue to operate during 2014; and $10 and $133, respectively, in other exit costs. Additionally, the costs in the 2014 six-month period also include asset impairments of $91, representing the write-off of the remaining book value of all related properties, plants, and equipment. Furthermore in the six-month period of 2014, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value resulting in a charge of $34 ($20 after-tax and noncontrolling interest), respectively, which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other exit costs of $133 in the 2014 six-month period represent $55 in asset retirement obligations and $38 in environmental remediation, both triggered by the decisions to permanently shut down and demolish the aforementioned structures in the U.S. and Australia, and $40 in other related costs, including supplier and customer contract-related costs. Additional charges of approximately $110 are expected to be recognized throughout the remainder of 2014 related to these shutdown actions in Australia.

In the second quarter and six-month period of 2013, Alcoa recorded Restructuring and other charges of $244 ($170 after-tax and noncontrolling interests) and $251 ($175 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2013 second quarter included $103 ($62 after noncontrolling interest) related to a legal matter; $86 ($70 after-tax) for exit costs related to the permanent shutdown and demolition of certain structures at two non-U.S. locations (see below); $29 ($19 after-tax) for asset impairments and related costs for retirements of previously idled structures; $24 ($18 after-tax and noncontrolling interests) for the layoff of approximately 470 employees (190 in the Global Rolled Products segment, 180 in the Engineered Products and Solutions segment, 55 in the Primary Metals segment, and 45 in Corporate); a charge of $4 ($2 after-tax) for other miscellaneous items; and $2 ($1 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2013 six-month period, Restructuring and other charges included $218 ($151 after-tax and noncontrolling interests) for the previously mentioned legal matter, exit costs at two non-U.S. locations, and retirements of previously idled structures combined; $27 ($20 after-tax and noncontrolling interests) for layoff costs, including the separation of approximately 530 employees (190 in the Global Rolled Products segment, 180 in the Engineered Products and Solutions segment, 115 in the Primary Metals segment, and 45 in Corporate) and a pension plan settlement charge related to previously separated employees; a charge of $8 ($5 after-tax) for other miscellaneous items; and $2 ($1 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2013 second quarter, management approved the permanent shutdown and demolition of (i) two potlines (capacity of 105,000 metric-tons-per-year) that utilize Soderberg technology at the smelter located in Baie Comeau, Québec, Canada (remaining capacity of 280,000 metric-tons-per-year composed of two prebake potlines) and (ii) the smelter located in Fusina, Italy (capacity of 44,000 metric-

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tons-per-year). The two Soderberg lines at Baie Comeau were fully shut down by the end of September 2013 while the Fusina smelter was previously temporarily idled in 2010. Demolition and remediation activities related to the two Soderberg lines and the Fusina smelter began in the fourth quarter of 2013 and are expected to be completed by the end of 2015 and 2017, respectively.

The decision on the two Soderberg lines was part of a 15-month review of 460,000 metric tons of smelting capacity initiated by management earlier in the 2013 second quarter for possible curtailment (announced on May 1, 2013), while the decision on the Fusina smelter was in addition to the capacity being reviewed. Factors leading to both decisions were in general focused on achieving sustained competitiveness and included, among others: lack of an economically viable, long-term power solution (Italy); changed market fundamentals; other existing idle capacity; and restart costs.

In both the second quarter and six-month period of 2013, exit costs related to these actions included accelerated depreciation of $23 (Baie Comeau) and asset impairments of $14 (Fusina) representing the write-off of the remaining book value of all related properties, plants, and equipment, and $49 in other exit costs. Additionally, in both the second quarter and six-month period of 2013, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value resulting in a charge of $7 ($5 after-tax), which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other exit costs of $49 represent $44 in asset retirement obligations and $5 in environmental remediation, both triggered by the decisions to permanently shut down and demolish these structures.

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:

	Second quarter ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Alumina	$	—	$	—	$	7	$	—
Primary Metals		84		94		415		94
Global Rolled Products		23		7		113		10
Engineered Products and Solutions		—		19		4		22
Segment total		107		120		539		126
Corporate		3		124		32		125
Total restructuring and other charges	$	110	$	244	$	571	$	251

As of June 30, 2014, approximately 745 of the 2,075 employees associated with 2014 restructuring programs and approximately 1,350 of the 1,660 employees associated with 2013 restructuring programs were separated. The remaining separations for the 2014 and 2013 restructuring programs are expected to be completed by the end of 2014.

In the 2014 second quarter and six-month period, cash payments of $22 and $23, respectively, were made against the layoff reserves related to the 2014 restructuring programs and $8 and $32, respectively, were made against the layoff reserves related to the 2013 restructuring programs.

Activity and reserve balances for restructuring charges were as follows:

	Layoff costs			Other exit costs			Total
Reserve balances at December 31, 2012	$	59		$	52		$	111
2013:
Cash payments		(63	)		(11	)		(74	)
Restructuring charges		201			85			286
Other*		(101	)		(84	)		(185	)
Reserve balances at December 31, 2013		96			42			138
2014:
Cash payments		(61	)		(6	)		(67	)
Restructuring charges		154			140			294
Other*		(5	)		(132	)		(137	)
Reserve balances at June 30, 2014	$	184		$	44		$	228

* Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2014 six-month period, Other for other exit costs also included a reclassification of the following restructuring charges: $55 in asset retirement and $42 in environmental obligations, as these liabilities are included in Alcoa’s separate reserves for asset retirement obligations and environmental remediation (see Note H), respectively. In 2013, Other for layoff costs also included a reclassification of $92 in pension costs, as this obligation was included in Alcoa’s separate liability for pension obligations. Also in

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2013, Other for other exit costs also included a reclassification of the following restructuring charges: $58 in asset retirement and $12 in environmental obligations, as these liabilities were 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 2014, with the exception of approximately $40 to $45, which is expected to be paid over the next several years for lease termination costs, ongoing site remediation work, and special separation benefit payments.

E. Acquisitions and Divestitures – On June 25, 2014, Alcoa signed a definitive agreement to acquire Firth Rixson, a global leader in aerospace jet engine components, from Oak Hill Capital Partners for $2,850. The purchase price is composed of $2,350 in cash and $500 of Alcoa common stock with a potential earn-out of $150. The common stock component is equivalent to 36,523,010 shares at a per share price of $13.69, as determined in the agreement. Also on June 25, 2014, Alcoa entered into a commitment with a financial institution for a 364-day senior unsecured bridge term loan facility in the amount of $2,500 for the purpose of financing all or a portion of the cash consideration for this acquisition and to pay fees and expenses incurred in connection therewith. The purpose of this acquisition is to strengthen Alcoa’s aerospace business and position the Company to capture additional aerospace growth with a broader range of high-growth, value-add jet engine components. The transaction is subject to customary conditions and regulatory approvals and is expected to close by the end of 2014. At that time, Firth Rixson will be included within Alcoa’s Engineered Products and Solutions segment.

F. Inventories

	June 30, 2014		December 31, 2013
Finished goods	$	688	$	578
Work-in-process		1,077		828
Bauxite and alumina		642		581
Purchased raw materials		584		474
Operating supplies		236		244
	$	3,227	$	2,705

At June 30, 2014 and December 31, 2013, the total amount of inventories valued on a last in, first out (LIFO) basis was $1,445 and $1,169, respectively. If valued on an average-cost basis, total inventories would have been $714 and $691 higher at June 30, 2014 and December 31, 2013, respectively.

G. Debt – In the first quarter of 2014, holders of $575 principal amount of Alcoa’s 5.25% Convertible Notes due March 15, 2014 (the “Notes”) exercised their option to convert the Notes into 89 million shares of Alcoa common stock. The conversion rate for the Notes was 155.4908 shares of Alcoa’s common stock per $1,000 (in whole dollars) principal amount of notes, equivalent to a conversion price of $6.43 per share. The difference between the $575 principal amount of the Notes and the $89 par value of the issued shares increased Additional capital on the accompanying Consolidated Balance Sheet. This transaction was not reflected in the accompanying Statement of Consolidated Cash Flows as it represents a noncash financing activity.

At the end of 2013, Alcoa had ten revolving credit facilities (excluding Alcoa’s Five-Year Revolving Credit Facility), each with a different financial institution, providing a combined capacity of $1,190 and expiration dates ranging from February 2014 through December 2015. A credit facility ($150 capacity) that was due to expire in February 2014 was extended to March 2015 in the first quarter of 2014. Another credit facility ($150 capacity) expired in March 2014 (a new agreement with the same financial institution was entered into in April 2014 and the new facility expires in March 2016). Also in the first quarter of 2014, Alcoa entered into an eleventh revolving credit agreement, providing a $50 credit facility with an expiration date of February 2016.

The purpose of any borrowings under all eleven arrangements is to provide for working capital requirements and for other general corporate purposes. The covenants contained in all eleven arrangements are the same as Alcoa’s Five-Year Revolving Credit Agreement (see the Credit Facilities section of Note K to the Consolidated Financial Statements included in Alcoa’s 2013 Form 10-K).

During the first and second quarters of 2014, Alcoa borrowed and repaid $620 and $510, respectively, under these credit arrangements. The weighted-average interest rate and weighted-average days outstanding of the respective borrowings during the first and second quarters of 2014 were 1.53% and 1.55%, respectively, and 49 days and 84 days, respectively.

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H. Contingencies and Commitments

Contingencies

Litigation

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 dependents 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, and bifurcated and stayed the plaintiffs’ breach of fiduciary duty claims. 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.

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 sought, 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 attorneys’ fees and expenses. On June 11, 2012, the court issued its memorandum and order denying plaintiffs’ motion for clarification and/or amendment to the original judgment order. On July 6, 2012, plaintiffs filed a notice of appeal of the court’s March 9, 2011 judgment. On July 12, 2012, the trial court stayed Alcoa’s motion for assessment of costs pending resolution of plaintiffs’ appeal. The appeal was docketed in the United States Court of Appeals for the Sixth Circuit as case number 12-5801. On August 29, 2012, the trial court dismissed plaintiffs’ motion for attorneys’ fees without prejudice to refiling the motion following the resolution of the appeal at the Sixth Circuit Court of Appeals. On May 9, 2013, the Sixth Circuit Court of Appeals issued an opinion affirming the trial court’s denial of plaintiffs’ claims for lifetime, uncapped retiree healthcare benefits. Plaintiffs filed a petition for rehearing on May 22, 2013 to which Alcoa filed a response on June 7, 2013. On September 12, 2013, the Sixth Circuit Court of Appeals denied plaintiffs’ petition for rehearing. The trial court is now considering Alcoa’s request for an award of costs, which had been stayed pending resolution of the appeal, and the plaintiffs’ request for attorneys’ fees, which had been dismissed without prejudice to refiling following resolution of the appeal. On December 17, 2013 the United States Supreme Court docketed the plaintiffs’ petition for writ of certiorari to the Sixth Circuit Court of Appeals as Charles Curtis, et al., Individually and on Behalf of All Others Similarly Situated, Petitioners v. Alcoa Inc., et al., Docket No.13-728. Alcoa’s opposition to this petition was filed on January 16, 2014 and Petitioners filed their reply on January 29, 2014.

On February 24, 2014, the Supreme Court denied plaintiffs’ petition. The Supreme Court’s refusal to hear the matter ends the substantive litigation and affirms Alcoa’s collectively bargained cap on the Company’s contributions to union retiree medical costs. In the second quarter of 2014, the parties agreed to dismiss their respective petitions for fees and costs. The case is expected to be dismissed in its entirety at some point in time during the remainder of 2014.

Before 2002, Alcoa purchased power in Italy in the regulated energy market and received a drawback of a portion of the price of power under a special tariff in an amount calculated in accordance with a published resolution of the Italian Energy Authority, Energy Authority Resolution n. 204/1999 (“204/1999”). In 2001, the Energy Authority published another resolution, which clarified that the drawback would be calculated in the same manner, and in the same amount, in either the regulated or unregulated market. At the beginning of 2002, Alcoa left the regulated energy market to purchase energy in the unregulated market. Subsequently, in 2004, the Energy Authority introduced regulation no. 148/2004 which set forth a different method for calculating the special tariff that would result in a different drawback for the regulated and unregulated markets. Alcoa challenged the new regulation in the Administrative Court of Milan and received a favorable judgment in 2006. Following this ruling, Alcoa continued to receive the power price drawback in accordance with the original calculation method, through 2009, when the European Commission declared all such special tariffs to be impermissible “state aid.” In 2010, the Energy Authority appealed the 2006 ruling to the Consiglio di Stato (final court of

15

appeal). On December 2, 2011, the Consiglio di Stato ruled in favor of the Energy Authority and against Alcoa, thus presenting the opportunity for the energy regulators to seek reimbursement from Alcoa of an amount equal to the difference between the actual drawback amounts received over the relevant time period, and the drawback as it would have been calculated in accordance with regulation 148/2004. On February 23, 2012, Alcoa filed its appeal of the decision of the Consiglio di Stato (this appeal was subsequently withdrawn in March 2013). On March 26, 2012, Alcoa received a letter from the agency (Cassa Conguaglio per il Settore Eletrico (CCSE)) responsible for making and collecting payments on behalf of the Energy Authority demanding payment in the amount of approximately $110 (€85), including interest. By letter dated April 5, 2012, Alcoa informed CCSE that it disputes the payment demand of CCSE since (i) CCSE was not authorized by the Consiglio di Stato decisions to seek payment of any amount, (ii) the decision of the Consiglio di Stato has been appealed (see above), and (iii) in any event, no interest should be payable. On April 29, 2012, Law No. 44 of 2012 (“44/2012”) came into effect, changing the method to calculate the drawback. On February 21, 2013, Alcoa received a revised request letter from CSSE demanding Alcoa’s subsidiary, Alcoa Trasformazioni S.r.l., make a payment in the amount of $97 (€76), including interest, which reflects a revised calculation methodology by CCSE and represents the high end of the range of reasonably possible loss associated with this matter of $0 to $97 (€76). Alcoa has rejected that demand and has formally challenged it through an appeal before the Administrative Court on April 5, 2013. The Administrative Court scheduled a hearing for December 19, 2013, which was subsequently postponed until April 17, 2014, and further postponed until June 19, 2014. On this date, the Administrative Court listened to Alcoa’s oral argument and expects to render a decision in this matter in the third quarter of 2014. At this time, the Company is unable to reasonably predict an outcome for this matter.

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 complied 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 had been incurring higher power costs at its smelters in Italy subsequent to the tariff end date through the end of 2012). 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 was to be based on a calculation prepared by the Italian Government (see below). 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 (€173), which included $20 (€14) to write off a receivable from the Italian Government for amounts due under the now expired tariff structure and $230 (€159) to establish a reserve. On April 19, 2010, Alcoa filed an appeal of this decision with the General Court of the EU (on July 8, 2014, Alcoa received notice that the General Court of the EU will announce its judgment of this appeal on October 16, 2014). Alcoa will pursue all substantive and procedural legal steps available to annul the EC’s decision. Prior to 2012, Alcoa was involved in other legal proceedings related to this matter that separately sought the annulment of the EC’s July 2006 decision to open an investigation alleging that such decision did not follow the applicable procedural rules and requested injunctive relief to suspend the effectiveness of the EC’s November 19, 2009 decision. However, the decisions by the General Court, and subsequent appeals to the European Court of Justice, resulted in the denial of these remedies.

In June 2012, Alcoa received formal notification from the Italian Government with a calculated recovery amount of $375 (€303); this amount was reduced by $65 (€53) for amounts owed by the Italian Government to Alcoa, resulting in a net payment request of $310 (€250). In a notice published in the Official Journal of the European Union on September 22, 2012, the EC announced that it had filed an action against the Italian Government on July 18, 2012 to compel it to collect the recovery amount (on October 17, 2013, the ECJ ordered Italy to so collect). On September 27, 2012, Alcoa received a request for payment in full of the $310 (€250) by October 31, 2012. Following discussions with the Italian Government regarding the timing of such payment, Alcoa paid the requested amount in five quarterly

16

installments of $69 (€50) beginning in October 2012 through December 2013. Notwithstanding the payments made, Alcoa’s estimate of the most probable loss of the ultimate outcome of this matter and the low end of the range of reasonably possible loss, which is $216 (€159) to $413 (€303), remains the $216 (€159) recorded in 2009 (the U.S. dollar amount reflects the effects of foreign currency movements since 2009). Alcoa no longer has a reserve for this matter; instead, Alcoa has a noncurrent asset reflecting the excess of the total of the five payments made to the Italian Government over the reserve recorded in 2009. At June 30, 2014, the noncurrent asset was $125 (€91). The full extent of the loss will not be known until the final judicial determination, which could be a period of several years.

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. Over a portion of this time, a long-term solution was not able to be reached related to the Fusina smelter, therefore, in May 2010, Alcoa and the Italian Government agreed to a temporary idling of the Fusina smelter. As of June 30, 2010, the Fusina smelter was fully curtailed (44,000 metric-tons-per-year). For the Portovesme smelter, Alcoa executed a new power agreement effective September 1, 2010 through December 31, 2012, replacing the short-term, market-based power contract that was in effect since early 2010. This new agreement along with interruptibility rights (i.e. compensation for power interruptions when grids are overloaded) granted to Alcoa for the Portovesme smelter provided additional time to negotiate a long-term solution (the EC had previously determined that the interruptibility rights were not considered state aid).

At the end of 2011, as part of a restructuring of Alcoa’s global smelting system, management decided to curtail operations at the Portovesme smelter during 2012 due to the uncertain prospects for viable, long-term power, along with rising raw materials costs and falling global aluminum prices (mid-2011 to late 2011). As of December 31, 2012, the Portovesme smelter was fully curtailed (150,000 metric-tons-per-year). This curtailment may lead to the permanent closure of the facility; however, Alcoa will keep the smelter in restart condition through the end of July 2014.

In June 2013, Alcoa decided to permanently shut down and demolish the Fusina smelter due to persistent uneconomical conditions (see Note D).

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 $95 (€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.

On February 4, 2014, the EC announced a decision in this matter stating that the electricity tariffs granted by Spain for year 2005 do not constitute unlawful state aid.

Environmental Matters

Alcoa participates in environmental assessments and cleanups at more than 100 locations. 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 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. 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.

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Alcoa’s remediation reserve balance was $571 and $509 at June 30, 2014 and December 31, 2013 (of which $76 and $48 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 2014 second quarter and six-month period, the remediation reserve was increased by $5 and $52, respectively. The change in the second quarter of 2014 was due to a charge of $3 related to the Portovesme location (see below) and a net charge of $2 associated with a number of other sites. The change in the six-month period of 2014 was due to a charge of $38 related to the planned demolition of certain structures at the Massena East, NY and Point Henry and Yennora, Australia locations (see Note D), the previously mentioned charge of $3, and a net charge of $11 associated with a number of other sites. Of the changes to the remediation reserve in the 2014 six-month period, $42 was recorded in Restructuring and other charges, including the aforementioned $38, while the remainder was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations.

Payments related to remediation expenses applied against the reserve were and $14 and $20 in the 2014 second quarter and six-month period, respectively. These amounts include expenditures currently mandated, as well as those not required by any regulatory authority or third party. In the 2014 second quarter and six-month period, the change in the reserve also reflects an increase of $15 and $30, respectively, due to, among other items, the effects of foreign currency translation and a reclassification of amounts included in other reserves within Other noncurrent liabilities and deferred credits on Alcoa’s Consolidated Balance Sheet as of December 31, 2013.

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.

Massena West, NY—Alcoa has an ongoing remediation project related to the Grasse River, which is adjacent to Alcoa’s Massena plant site. Many years ago, it was determined that sediments and fish in the river contain varying levels of polychlorinated biphenyls (PCBs). The project, which was selected by the U.S. Environmental Protection Agency (EPA) in a Record of Decision (ROD) issued in April 2013, is aimed at capping PCB contaminated sediments with concentration in excess of one part per million in the main channel of the river and dredging PCB contaminated sediments in the near-shore areas where total PCBs exceed one part per million. At June 30, 2014, the reserve balance associated with this matter was $241. Alcoa is in the planning and design phase, which is expected to take approximately two to three years from mid-2013, followed by the actual remediation fieldwork that is expected to take approximately four years. The majority of the project funding is expected to be spent between 2016 and 2020.

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 bauxite residue waste disposal areas (known as the Copano facility). Alcoa’s share of the closure costs is proportional to the total period of operation of the active waste disposal areas. At June 30, 2014, the reserve balance associated with Sherwin was $33. Approximately half of the project funding is expected to be spent between 2014 and 2019. The remainder is not expected to be spent in the foreseeable future as it is dependent upon the operating life of the active waste disposal areas.

East St. Louis, IL—Alcoa has an ongoing remediation project related to an area used for the disposal of bauxite residue from former alumina refining operations. The project, which was selected by the EPA in a ROD issued in July 2012, is aimed at implementing a soil cover over the affected area. On November 1, 2013, the Department of Justice lodged a consent decree on behalf of the EPA for Alcoa to conduct the work outlined in the ROD. This consent decree was entered as final in February 2014 by the Department of Justice. As a result, Alcoa began construction in March 2014; this project is expected to be completed by mid-2015. At June 30, 2014, the reserve balance associated with this matter was $22. The majority of the project funding is expected to be spent between 2014 and 2015.

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. (“Trasformazioni”), 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 and Protection of Land and Sea (MOE) issued orders to Trasformazioni 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. Trasformazioni 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. (“Ligestra”), Alumix’s successor, and Trasformazioni agreed to a stay of the court proceedings while investigations were conducted and negotiations advanced towards a possible settlement.

In December 2009, Trasformazioni and Ligestra reached an initial agreement for settlement of the liabilities related to Fusina while negotiations continued related to Portovesme. The agreement outlined

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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 in 2009 for Fusina. Based on comments received from the MOE and local and regional environmental authorities, Trasformazioni submitted a revised remediation plan in the first half of 2012; however, such revisions did not require any change to the existing reserve. In October 2013, the MOE approved the project submitted by Alcoa, resulting in no adjustment to the reserve.

In January 2014, in anticipation of Alcoa reaching a final administrative agreement with the MOE, Alcoa and Ligestra entered into a final agreement related to Fusina for allocation of payments to the MOE for emergency action and natural resource damages and the costs for the approved soil remediation project. The agreement resulted in Ligestra assuming 50% to 80% of all payments and remediation costs. On February 27, 2014, Alcoa and the MOE reached a final administrative agreement for conduct of work. The agreement includes both a soil and groundwater remediation project estimated to cost $33 (€24) and requires payments of $25 (€18) to the MOE for emergency action and natural resource damages. The remediation projects are slated to begin in the second half of 2014 and continue through the end of 2015. Based on the final agreement with Ligestra, Alcoa’s share of all costs and payments is $17 (€12), of which $9 (€6) related to the damages will be paid annually over a 10-year period, which began in April 2014, and was previously fully reserved.

Separately, in 2009, due to additional information derived from the site investigations conducted at Portovesme, Alcoa increased the reserve by $3. In November 2011, Trasformazioni and Ligestra reached an agreement for settlement of the liabilities related to Portovesme, similar to the one for Fusina. A proposed soil remediation project for Portovesme was formally presented to the MOE in June 2012. Neither the agreement with Ligestra nor the proposal to the MOE resulted in a change to the reserve for Portovesme. In November 2013, the MOE rejected the proposed soil remediation project and requested a revised project be submitted. In May 2014, Trasformazioni and Ligestra submitted a revised soil remediation project that addressed certain stakeholders’ concerns. Alcoa increased the reserve by $3 in the 2014 second quarter to reflect the estimated higher costs associated with the revised soil remediation project, as well as current operating and maintenance costs of the Portovesme site. The ultimate outcome of this matter may result in a change to the existing reserve for Portovesme.

Baie Comeau, Quebec, Canada—In August 2012, Alcoa presented an analysis of remediation alternatives to the Quebec Ministry of Sustainable Development, Environment, Wildlife and Parks (MDDEP), in response to a previous request, related to known PCBs and polycyclic aromatic hydrocarbons (PAHs) contained in sediments of the Anse du Moulin bay. As such, Alcoa increased the reserve for Baie Comeau by $25 in 2012 to reflect the estimated cost of Alcoa’s recommended alternative, consisting of both dredging and capping of the contaminated sediments. In July 2013, Alcoa submitted the Environmental Impact Assessment for the project to the MDDEP and this document is currently in the regulatory review process. The ultimate selection of a remedy may result in additional liability at the time the MDDEP issues a final decision.

Mosjøen, Norway—In September 2012, Alcoa presented an analysis of remediation alternatives to the Norwegian Environmental Agency (NEA) (formerly the Norwegian Climate and Pollution Agency, or “Klif”), in response to a previous request, related to known PAHs in the sediments located in the harbor and extending out into the fjord. As such, Alcoa increased the reserve for Mosjøen by $20 in 2012 to reflect the estimated cost of the baseline alternative for dredging of the contaminated sediments. The ultimate selection of a remedy may result in additional liability at the time the NEA issues a final decision.

Other

In September 2010, following a corporate income tax audit covering the 2003 through 2005 tax years, an assessment was received as a result of Spain’s tax authorities disallowing certain interest deductions claimed by a Spanish consolidated tax group owned by the Company. An appeal of this assessment in Spain’s Central Tax Administrative Court by the Company was denied in October 2013. In December 2013, the Company filed an appeal of the assessment in Spain’s National Court.

Additionally, following a corporate income tax audit of the same Spanish tax group for the 2006 through 2009 tax years, Spain’s tax authorities issued an assessment in July 2013 similarly disallowing certain interest deductions. In August 2013, the Company filed an appeal of this second assessment in Spain’s Central Tax Administrative Court.

The combined assessments total $330 (€242). The Company believes it has meritorious arguments to support its tax position and intends to vigorously litigate the assessments through Spain’s court system. However, in the event the Company is unsuccessful, a portion of the assessments may be offset with existing net operating losses available to the Spanish consolidated tax group. Additionally, it is

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possible that the Company may receive similar assessments for tax years subsequent to 2009. At this time, the Company is unable to reasonably predict an outcome for this matter.

In March 2013, Alcoa’s subsidiary, Alcoa World Alumina Brasil (AWAB), was notified by the Brazilian Federal Revenue Office (RFB) that approximately $110 (R$220) of value added tax credits previously claimed are being disallowed and a penalty of 50% assessed. Of this amount, AWAB received $41 (R$82) in cash in May 2012. The value added tax credits were claimed by AWAB for both fixed assets and export sales related to the Juruti bauxite mine and São Luís refinery expansion. The RFB has disallowed credits they allege belong to the consortium in which AWAB owns an interest and should not have been claimed by AWAB. Credits have also been disallowed as a result of challenges to apportionment methods used, questions about the use of the credits, and an alleged lack of documented proof. The assessment is currently in the administrative process, which could take approximately two years to complete. AWAB presented defense of its claim to the RFB on April 8, 2013. If AWAB is successful in the administrative process, the RFB would have no further recourse. If unsuccessful in this process, AWAB has the option to litigate at a judicial level. The estimated range of reasonably possible loss is $0 to $70 ($R155), whereby the maximum end of the range represents the sum of the portion of the disallowed credits applicable to the export sales and a 50% penalty of the gross amount disallowed. Additionally, the estimated range of disallowed credits related to AWAB’s fixed assets is $0 to $80 (R$175), which would increase the net carrying value of AWAB’s fixed assets if ultimately disallowed. It is management’s opinion that the allegations have no basis; however, at this time, management is unable to reasonably predict an outcome for this matter.

Between 2000 and 2002, Alcoa Alumínio (Alumínio) sold approximately 2,000 metric tons of metal per month from its Poços de Caldas facility, located in the State of Minas Gerais (the “State”), to Alfio, a customer also located in the State. Sales in the State were exempted from value-added tax (VAT) requirements. Alfio subsequently sold metal to customers outside of the State, but did not pay the required VAT on those transactions. In July 2002, Alumínio received an assessment from State auditors on the theory that Alumínio should be jointly and severally liable with Alfio for the unpaid VAT. In June 2003, the administrative tribunal found Alumínio liable, and Alumínio filed a judicial case in the State in February 2004 contesting the finding. In May 2005, the Court of First Instance found Alumínio solely liable, and a panel of a State appeals court confirmed this finding in April 2006. Alumínio filed a special appeal to the Superior Tribunal of Justice (STJ) in Brasilia (the federal capital of Brazil) later in 2006. In 2011, the STJ (through one of its judges) reversed the judgment of the lower courts, finding that Alumínio should neither be solely nor jointly and severally liable with Alfio for the VAT, which ruling was then appealed by the State. In June 2012, the STJ agreed to have the case reheard before a five-judge panel. A decision from this panel is pending, but additional appeals are likely. At June 30, 2014, the assessment totaled $57 (R$125), including penalties and interest. While the Company believes it has meritorious defenses, the Company is unable to reasonably predict an outcome.

In addition to the matters 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, safety and health, and tax matters. While the amounts claimed in these other matters 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 liquidity or results of operations in a particular period could be materially affected by one or more of these other matters. However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company.

Commitments

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, and Alcoa will be responsible for its pro rata share of the joint venture’s project financing. Alcoa has contributed $915, including $29 and $83 in the 2014 second quarter and six-month period, respectively,

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towards the $1,100 commitment. As of June 30, 2014 and December 31, 2013, the carrying value of Alcoa’s investment in this project was $968 and $951, respectively.

The smelting and rolling mill companies have project financing totaling $4,515, of which $1,133 represents Alcoa’s share (the equivalent of Alcoa’s 25.1% interest in the smelting and rolling mill companies). In conjunction with the financings, 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 $121 in principal and up to a maximum of approximately $60 in interest per year (based on projected interest rates). At June 30, 2014 and December 31, 2013, the combined fair value of the guarantees was $8 and $10, respectively, and was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet.

The mining and refining company has project financing totaling $1,992, of which $500 represents Alcoa World Alumina and Chemical’s (AWAC) 25.1% interest in the mining and refining company. Also, in January 2014, the mining and refining company entered into additional project financing totaling $240, of which $60 represents AWAC’s share. In conjunction with the financings, Alcoa, on behalf of AWAC, issued guarantees to the lenders in the event that the mining and refining company defaults on its debt service requirements through June 2019 (Ma’aden issued similar guarantees for its 74.9% interest). Alcoa’s guarantees for the mining and refining company cover total debt service requirements of $67 in principal and up to a maximum of approximately $30 in interest per year (based on projected interest rates). At June 30, 2014 and December 31, 2013, the combined fair value of the guarantees was $3 and $4, respectively, and was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. In the event Alcoa would be required to make payments under the guarantees, 40% of such amount would be contributed to Alcoa by Alumina Limited, consistent with its ownership interest in AWAC.

Under the project financings for both the smelting and rolling mill companies and the mining and refining company, 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. This requirement would be effective only if at the time of the second downgrade in Alcoa’s credit ratings below investment grade, Alcoa’s equity investment was below 67% of its equity commitment in any of the three joint venture companies (a second downgrade in Alcoa’s credit ratings occurred on April 11, 2014). As of March 31, 2014, Alcoa has contributed more than 67% of its equity commitment in each of the three joint venture companies.

Alumínio, a wholly-owned subsidiary of Alcoa, is a participant in four consortia that each owns a hydroelectric power project in Brazil. One of these projects is known as Estreito, which reached full capacity in March 2013. Alumínio’s investment in this project is 25.49%, which entitles Alumínio to approximately 150 megawatts of assured power. The Estreito consortium is an unincorporated joint venture, and, therefore, Alumínio’s share of the assets and liabilities of the consortium are reflected in the respective lines on the accompanying Consolidated Balance Sheet. Total estimated project costs are approximately $2,350 (R$5,170) and Alumínio’s share is approximately $600 (R$1,320). As of June 30, 2014, approximately $580 (R$1,270) of Alumínio’s commitment was expended on the project.

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, which is classified as an equity investment, was made in order to secure a competitively priced long-term supply of natural gas to Alcoa’s refineries in Western Australia. Alcoa has made additional contributions of $141 (A$176) for its share of the pipeline capacity expansion and other operational purposes of the consortium through September 2011. No further expansion of the pipeline’s capacity is planned at this time. In late 2011, the consortium initiated a three-year equity call plan to improve its capitalization structure. This plan requires Alcoa to contribute $40 (A$40), of which $32 (A$33) was made through June 30, 2014, including $1 (A$2) and $3 (A$4) in the 2014 second quarter and six-month period, respectively. In addition to its equity ownership, Alcoa has an agreement to purchase gas transmission services from the DBNGP. At June 30, 2014, Alcoa has an asset of $335 (A$356) representing prepayments made under the agreement for future gas transmission services. Alcoa’s maximum exposure to loss on the investment and the related contract is approximately $470 (A$500) as of June 30, 2014.

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I. Other Expenses (Income), Net

	Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Equity loss	$	30		$	10		$	68		$	22
Interest income		(6	)		(4	)		(10	)		(8	)
Foreign currency (gains) losses, net		(3	)		(5	)		5			(11	)
Net gain from asset sales		(2	)		(1	)		(29	)		(6	)
Net (gain) loss on mark-to-market derivative contracts (O)		(8	)		16			(3	)		(1	)
Other, net		(6	)		3			(1	)		(4	)
	$	5		$	19		$	30		$	(8	)

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			Global Rolled Products			Engineered Products and Solutions		Total
Second quarter ended June 30, 2014
Sales:
Third-party sales	$	761		$	1,659		$	1,860		$	1,502	$	5,782
Intersegment sales		480			718			44			—		1,242
Total sales	$	1,241		$	2,377		$	1,904		$	1,502	$	7,024
Profit and loss:
Equity loss	$	(7	)	$	(17	)	$	(6	)	$	—	$	(30	)
Depreciation, depletion, and amortization		100			129			58			41		328
Income taxes		12			30			23			102		167
After-tax operating income (ATOI)		38			97			79			204		418
Second quarter ended June 30, 2013
Sales:
Third-party sales	$	822		$	1,620		$	1,877		$	1,468	$	5,787
Intersegment sales		581			677			43			—		1,301
Total sales	$	1,403		$	2,297		$	1,920		$	1,468	$	7,088
Profit and loss:
Equity loss	$	(1	)	$	(7	)	$	(2	)	$	—	$	(10	)
Depreciation, depletion, and amortization		115			132			55			39		341
Income taxes		14			(25	)		32			94		115
ATOI		64			(32	)		79			193		304

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	Alumina			Primary Metals			Global Rolled Products			Engineered Products and Solutions		Total
Six months ended June 30, 2014
Sales:
Third-party sales	$	1,606		$	3,083		$	3,537		$	2,945	$	11,171
Intersegment sales		990			1,452			87			—		2,529
Total sales	$	2,596		$	4,535		$	3,624		$	2,945	$	13,700
Profit and loss:
Equity loss	$	(12	)	$	(45	)	$	(11	)	$	—	$	(68	)
Depreciation, depletion, and amortization		197			253			116			81		647
Income taxes		52			19			57			193		321
ATOI		130			82			138			393		743
Six months ended June 30, 2013
Sales:
Third-party sales	$	1,648		$	3,378		$	3,656		$	2,891	$	11,573
Intersegment sales		1,176			1,404			94			—		2,674
Total sales	$	2,824		$	4,782		$	3,750		$	2,891	$	14,247
Profit and loss:
Equity loss	$	—		$	(16	)	$	(6	)	$	—	$	(22	)
Depreciation, depletion, and amortization		224			267			112			79		682
Income taxes		28			(24	)		71			178		253
ATOI		122			7			160			366		655

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

	Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Total segment ATOI	$	418		$	304		$	743		$	655
Unallocated amounts (net of tax):
Impact of LIFO		(8	)		5			(15	)		3
Interest expense		(69	)		(76	)		(147	)		(151	)
Noncontrolling interests		9			29			28			8
Corporate expense		(70	)		(71	)		(137	)		(138	)
Restructuring and other charges		(77	)		(211	)		(398	)		(216	)
Other		(65	)		(99	)		(114	)		(131	)
Consolidated net income (loss) attributable to Alcoa	$	138		$	(119	)	$	(40	)	$	30

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, 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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K. Earnings Per Share – Basic earnings per share (EPS) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding.

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

	Second quarter ended June 30,					Six months ended June 30,
	2014		2013			2014			2013
Net income (loss) attributable to Alcoa common shareholders	$	138	$	(119	)	$	(40	)	$	30
Less: preferred stock dividends declared		—		—			1			1
Net income (loss) available to Alcoa common shareholders – basic		138		(119	)		(41	)		29
Add: interest expense related to convertible notes		—		—			—			—
Net income (loss) available to Alcoa common shareholders – diluted	$	138	$	(119	)	$	(41	)	$	29
Average shares outstanding – basic		1,173		1,069			1,137			1,069
Effect of dilutive securities:
Stock options		6		—			—			2
Stock and performance awards		10		—			—			8
Convertible notes		—		—			—			—
Average shares outstanding – diluted		1,189		1,069			1,137			1,079

In the first quarter of 2014, holders of the convertible notes exercised their option to convert the notes into 89 million shares of Alcoa common stock (see Note G). As a result, for the 2014 second quarter, these 89 million shares were outstanding for the entire period and were included in both basic and diluted average shares outstanding. For the 2014 six-month period, these 89 million shares were outstanding for a portion of the period equivalent to a weighted average of 56 million shares. The 56 million shares were included in both basic and diluted average shares outstanding for the 2014 six-month period. For the portion of the 2014 six-month period that the convertible notes were still outstanding debt, a weighted average of the 89 million share equivalents (33 million) would have been included only in the diluted average shares outstanding if their effect was dilutive.

In the 2014 six-month period, basic average shares outstanding and diluted average shares outstanding were the same because the effect of potential shares of common stock was anti-dilutive since Alcoa generated a net loss. As a result, 33 million share equivalents related to convertible notes (see above), 19 million stock awards, and 31 million stock options were not included in the computation of diluted EPS. Had Alcoa generated sufficient net income in the 2014 six-month period, 33 million, 10 million, and 6 million potential shares of common stock related to the convertible notes, stock awards, and stock options, respectively, would have been included in diluted average shares outstanding.

In the 2013 second quarter, basic average shares outstanding and diluted average shares outstanding were the same because the effect of potential shares of common stock was anti-dilutive since Alcoa generated a net loss. As a result, 89 million share equivalents related to convertible notes, 17 million stock awards, and 9 million stock options were not included in the computation of diluted EPS. Had Alcoa generated sufficient net income in the second quarter of 2013, 89 million, 8 million, and 1 million potential shares of common stock related to the convertible notes, stock awards, and stock options, respectively, would have been included in diluted average shares outstanding.

In the 2013 six-month period, 89 million share equivalents related to convertible notes were not included in the computation of diluted EPS because their effect was anti-dilutive.

Options to purchase 3 million and 48 million shares of common stock at a weighted average exercise price of $16.24 and $10.77 per share were outstanding as of June 30, 2014 and 2013, 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.

In June 2014, Alcoa entered into an agreement to purchase an aerospace jet engine components company. A portion of the purchase price will be paid in Alcoa common stock equivalent to 36,523,010 shares at a per share price of $13.69 (see Note E).

L. Income Taxes – The effective tax rate for the second quarter of 2014 and 2013 was 37.7% (provision on income) and 16.5% (provision on a loss), respectively.

The rate for the 2014 second quarter differs from the U.S. federal statutory rate of 35% primarily due to the U.S. tax impact of deemed distributions from otherwise lower tax rate foreign jurisdictions and operational income of certain foreign subsidiaries taxed in lower rate jurisdictions, mostly

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offset by a $20 favorable impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized (partial reversal of the 2014 first quarter impact).

The rate for the 2013 second quarter differs (by (51.5) percentage points) from the U.S. federal statutory rate of 35% primarily due to a $103 nondeductible charge for a legal matter, restructuring charges related to operations in Canada (benefit at a lower tax rate) and Italy (no tax benefit) (see Note D), and a $10 discrete income tax charge related to prior year taxes in Spain and Australia.

The effective tax rate for the 2014 and 2013 six-month periods was 1.5% (provision on a loss) and 79.4% (provision on income), respectively.

The rate for the 2014 six-month period differs (by (36.5) percentage points) from the U.S. federal statutory rate of 35% primarily due to a $36 unfavorable impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized (impact is expected to reverse by the end of 2014).

The rate for the 2013 six-month period differs from the U.S. federal statutory rate of 35% primarily due to the previously mentioned $103 nondeductible charge, restructuring charges in Canada and Italy, and $10 discrete income tax charge, somewhat offset by a $19 discrete income tax benefit related to new U.S. tax legislation.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law and reinstated various expired or expiring temporary business tax provisions through 2013. Two specific temporary business tax provisions that expired in 2011 and impacted Alcoa are the look-through rule for payments between related controlled foreign corporations and the research and experimentation credit. The expiration of these two provisions resulted in Alcoa recognizing a higher income tax provision of $19 in 2012. As tax law changes are accounted for in the period of enactment, Alcoa recognized the previously mentioned discrete income tax benefit in the 2013 first quarter related to the 2012 tax year to reflect the extension of these provisions.

In December 2011, one of Alcoa’s subsidiaries in Brazil applied for a tax holiday related to its expanded mining and refining operations. During 2013, the application was amended and re-filed. The deadline for the Brazilian government to deny the application was July 11, 2014. Since Alcoa did not receive notice that its application was denied, the tax holiday took effect automatically on July 12, 2014. As a result, the tax rate for this subsidiary will decrease significantly (from 34% to 15%), resulting in future cash tax savings over the 10-year holiday period (retroactively effective as of January 1, 2013). Additionally, a portion of the subsidiary’s net deferred tax asset that reverses within the holiday period will be remeasured at the new lower tax rate in the 2014 third quarter. This remeasurement will result in a decrease to this subsidiary’s net deferred tax asset and a noncash charge to earnings of approximately $60.

M. Receivables – Alcoa has an arrangement with three financial institutions 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 $500 for receivables sold. The initial sale of receivables in March 2012 resulted in the setup of a deferred purchase price of $254. Alcoa has received net cash funding of $360 ($848 in draws and $488 in repayments) since the program’s inception, including $150 in the 2014 six-month period. As of June 30, 2014, the deferred purchase price receivable was $268, 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) 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. The gross amount of receivables sold and total cash collected under this program since its inception was $13,921 and $13,293, respectively. Alcoa services the customer receivables for the financial institutions at market rates; therefore, no servicing asset or liability was recorded.

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

	Second quarter ended June 30,						Six months ended June 30,
Pension benefits	2014			2013			2014			2013
Service cost	$	42		$	48		$	83		$	99
Interest cost		159			151			319			303
Expected return on plan assets		(195	)		(198	)		(388	)		(396	)
Recognized net actuarial loss		98			124			195			247
Amortization of prior service cost		5			5			9			10
Settlement*		—			—			—			2
Net periodic benefit cost	$	109		$	130		$	218		$	265

* This amount was recorded in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D).

	Second quarter ended June 30,						Six months ended June 30,
Other postretirement benefits	2014			2013			2014			2013
Service cost	$	4		$	5		$	8		$	9
Interest cost		29			29			58			57
Recognized net actuarial loss		3			8			6			17
Amortization of prior service benefit		(4	)		(5	)		(9	)		(9	)
Net periodic benefit cost	$	32		$	37		$	63		$	74

On June 6, 2014, the United Steelworkers ratified a new five-year labor agreement covering approximately 6,100 employees at 10 U.S. locations; the previous labor agreement expired on May 15, 2014. In the 2014 second quarter and six-month period, as a result of the preparation for and ratification of the new agreement, Alcoa recognized $17 ($11 after-tax) and $18 ($12 after-tax), respectively, in Cost of goods sold on the accompanying Statement of Consolidated Operations for, among other items, business contingency costs and a one-time signing bonus for employees. Additionally, as a result of the provisions of the new labor agreement, a significant plan amendment was adopted by one of Alcoa’s U.S. pension plans. Accordingly, this plan was required to be remeasured, and through this process, the discount rate was updated from 4.80% at December 31, 2013 to 4.25% at May 31, 2014. The plan remeasurement resulted in an increase to both Alcoa’s pension liability of $100 and a combination of the plan’s unrecognized net actuarial loss and prior service cost (included in Accumulated other comprehensive loss) of $65 (after-tax). The plan remeasurement also resulted in a decrease to 2014 annual net periodic benefit cost of $13, of which $2 was recognized in the 2014 second quarter. The remaining $11 decrease will be recognized ratably over the second half of 2014.

O. 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), which is composed of the chief executive officer, the chief financial officer, and other officers and employees that the chief executive officer selects. The SRMC meets on a periodic basis to review derivative positions and strategy and reports to Alcoa’s 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.

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The fair values and corresponding classifications under the appropriate level of the fair value hierarchy of outstanding derivative contracts recorded as assets in the accompanying Consolidated Balance Sheet were as follows:

Asset Derivatives	Level	June 30, 2014		December 31, 2013
Derivatives designated as hedging instruments:
Prepaid expenses and other current assets:
Aluminum contracts	1	$	5	$	4
Aluminum contracts	3		7		9
Foreign exchange contracts	1		6		2
Interest rate contracts	2		9		9
Other noncurrent assets:
Aluminum contracts	3		17		16
Energy contracts	3		24		6
Interest rate contracts	2		21		23
Total derivatives designated as hedging instruments		$	89	$	69
Derivatives not designated as hedging instruments*:
Prepaid expenses and other current assets:
Aluminum contracts	3	$	116	$	149
Other noncurrent assets:
Aluminum contracts	3		141		175
Total derivatives not designated as hedging instruments		$	257	$	324
Less margin held**:
Prepaid expenses and other current assets:
Interest rate contracts	2	$	—	$	3
Total Asset Derivatives		$	346	$	390

* See the “Other” section within Note O 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.

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The fair values and corresponding classifications under the appropriate level of the fair value hierarchy of outstanding derivative contracts recorded as liabilities in the accompanying Consolidated Balance Sheet were as follows:

Liability Derivatives	Level	June 30, 2014		December 31, 2013
Derivatives designated as hedging instruments:
Other current liabilities:
Aluminum contracts	1	$	16	$	45
Aluminum contracts	3		26		23
Foreign exchange contracts	1		4		—
Other noncurrent liabilities and deferred credits:
Aluminum contracts	1		6		14
Aluminum contracts	3		396		387
Total derivatives designated as hedging instruments		$	448	$	469
Derivatives not designated as hedging instruments*:
Other current liabilities:
Aluminum contracts	1	$	2	$	4
Embedded credit derivative	3		2		2
Foreign exchange contracts	1		2		3
Other noncurrent liabilities and deferred credits:
Embedded credit derivative	3		12		19
Total derivatives not designated as hedging instruments		$	18	$	28
Less margin posted**:
Other current liabilities:
Aluminum contracts	1	$	9	$	18
Total Liability Derivatives		$	457	$	479

* See the “Other” section within Note O 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.

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The gross amounts of recognized derivative assets and liabilities and gross amounts offset in the accompanying Consolidated Balance Sheet were as follows:

	Assets						Liabilities
	June 30, 2014			December 31, 2013			June 30, 2014			December 31, 2013
Gross amounts recognized:
Aluminum contracts	$	42		$	40		$	52		$	81
Interest rate contracts		30			32			—			3
	$	72		$	72		$	52		$	84
Gross amounts offset:
Aluminum contracts*	$	(37	)	$	(36	)	$	(37	)	$	(36	)
Interest rate contracts**		—			(3	)		—			(3	)
	$	(37	)	$	(39	)	$	(37	)	$	(39	)
Net amounts presented in the Consolidated Balance Sheet:
Aluminum contracts	$	5		$	4		$	15		$	45
Interest rate contracts		30			29			—			—
	$	35		$	33		$	15		$	45

* The amounts under Assets and Liabilities as of June 30, 2014 and December 31, 2013 include $9 and $18, respectively, of margin posted with counterparties.

** The amounts under Assets and Liabilities as of December 31, 2013 represent margin held from the counterparty.

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. These valuation models are reviewed and tested at least on an annual basis.

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 through over-the-counter markets 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.

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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 by extrapolating the 10-year London Metal Exchange (LME) forward curve. 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). If a significant input that is unobservable in one period becomes observable in a subsequent period, the related asset or liability would be transferred to the appropriate level classification (1 or 2) in the period of such change.

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):

	June 30, 2014			December 31, 2013
Assets:
Level 1	$	11		$	6
Level 2		30			32
Level 3		305			355
Margin held		—			(3	)
Total	$	346		$	390
Liabilities:
Level 1	$	30		$	66
Level 2		—			—
Level 3		436			431
Margin posted		(9	)		(18	)
Total	$	457		$	479

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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 tables present a reconciliation of activity for such derivative contracts:

	Assets					Liabilities
Second quarter ended June 30, 2014	Aluminum contracts			Energy contracts		Aluminum contracts			Embedded credit derivative
Opening balance – March 31, 2014	$	326		$	11	$	384		$	20
Total gains or losses (realized and unrealized) included in:
Sales		—			—		(6	)		—
Cost of goods sold		(53	)		—		—			—
Other expenses, net		—			5		—			(6	)
Other comprehensive income		(9	)		7		44			—
Purchases, sales, issuances, and settlements*		—			—		—			—
Transfers into and/or out of Level 3*		—			—		—			—
Foreign currency translation		17			1		—			—
Closing balance – June 30, 2014	$	281		$	24	$	422		$	14
Change in unrealized gains or losses included in earnings for derivative contracts held at June 30, 2014:
Sales	$	—		$	—	$	—		$	—
Cost of goods sold		—			—		—			—
Other expenses, net		—			5		—			(6	)

* 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.

	Assets					Liabilities
Six months ended June 30, 2014	Aluminum contracts			Energy contracts		Aluminum contracts			Embedded credit derivative
Opening balance – January 1, 2014	$	349		$	6	$	410		$	21
Total gains or losses (realized and unrealized) included in:
Sales		—			—		(11	)		—
Cost of goods sold		(111	)		—		—			—
Other expenses, net		(1	)		5		—			(7	)
Other comprehensive income		—			12		23			—
Purchases, sales, issuances, and settlements*		—			—		—			—
Transfers into and/or out of Level 3*		—			—		—			—
Foreign currency translation		44			1		—			—
Closing balance – June 30, 2014	$	281		$	24	$	422		$	14
Change in unrealized gains or losses included in earnings for derivative contracts held at June 30, 2014:
Sales	$	—		$	—	$	—		$	—
Cost of goods sold		—			—		—			—
Other expenses, net		(1	)		5		—			(7	)

* 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.

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As reflected in the table above, the net unrealized loss on derivative contracts using Level 3 valuation techniques was $131 as of June 30, 2014. The unrealized loss related to aluminum contracts recognized as liabilities was mainly attributed to embedded derivatives in power contracts that index the price of power to the 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 an extrapolation of the 10-year LME forward curve. Significant increases or decreases in the actual LME price beyond 10 years would result in a higher or lower fair value measurement. An increase of actual LME price over the inputs used in the valuation model will result in a higher cost of power and a corresponding increase to the liability. The embedded derivatives have been designated as hedges of forward sales of aluminum and related realized gains and losses were included in Sales on the accompanying Statement of Consolidated Operations.

In July 2012, as provided for in the arrangements, management elected to modify the pricing for two existing power contracts, which end in 2014 and 2016 (see directly below), for Alcoa’s two smelters in Australia and the Point Henry rolling mill in Australia. These contracts contain an LME-linked embedded derivative, which previously was not recorded as an asset in Alcoa’s Consolidated Balance Sheet. Beginning on January 1, 2001, all derivative contracts were required to be measured and recorded at fair value on an entity’s balance sheet under GAAP; however, an exception existed for embedded derivatives upon meeting certain criteria. The LME-linked embedded derivative in these two contracts met such criteria at that time. Management’s election to modify the pricing of these contracts qualifies as a significant change to the contracts thereby requiring that the contracts now be evaluated under derivative accounting as if they were new contracts. As a result, Alcoa recorded a derivative asset in the amount of $596 with an offsetting liability (deferred credit) recorded in Other current and noncurrent liabilities. Unrealized gains and losses from the embedded derivative 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 as electricity purchases are made under the contracts. The deferred credit is recognized in Other expenses (income), net on the accompanying Statement of Consolidated Operations as power is received over the life of the contracts. The embedded derivative is valued using the probability and interrelationship of future LME prices, Australian dollar to U.S. dollar exchange rates, and the U.S. consumer price index. Significant increases or decreases in the LME price would result in a higher or lower fair value measurement. An increase in actual LME price over the inputs used in the valuation model will result in a higher cost of power and a decrease to the embedded derivative asset.

Also, included within Level 3 measurements is a derivative contract that will hedge the anticipated power requirements at Alcoa’s Portland smelter in Australia once the existing contract expires in 2016. This derivative hedges 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 this contract was recorded in Other comprehensive income on the accompanying Consolidated Balance Sheet until the designated hedge period begins in 2016. Once the hedge period begins, realized gains and losses will be recorded in Cost of goods sold. Significant increases or decreases in the power market may result in a higher or lower fair value measurement. Higher prices in the power market would cause the derivative asset to increase in value. Alcoa had a similar contract for its Point Henry smelter in Australia once the existing contract expires on July 31, 2014, but elected to terminate the new contract in early 2013. This election was available to Alcoa under the terms of the contract and was made due to a projection that suggested the contract would be uneconomical. Prior to termination, the new contract was accounted for in the same manner as the contract for the Portland smelter.

Additionally, Alcoa has 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. Any change in the interrelationship would result in a higher or lower fair value measurement. An LME ceiling was embedded into the contract price to protect against an increase in the price of oil without a corresponding increase in the price of LME. An increase in oil prices with no similar increase in the LME price would limit the increase of the price paid for natural gas. 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.

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. Significant increases or decreases in any of these inputs would result in a lower or

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higher fair value measurement. A wider credit spread between Alcoa and the counterparty would result in an increase of the future liability and a higher cost of power. Realized gains and losses for this embedded derivative were included in Cost of goods sold on the accompanying Statement of Consolidated Operations and unrealized gains and losses were included in Other expenses (income), net on the accompanying Statement of Consolidated Operations.

The following table presents quantitative information for Level 3 derivative contracts:

	Fair value at June 30, 2014		Valuation technique	Unobservable input	Range ($ in full amounts)
Assets:
Aluminum contract	$	—	Discounted cash flow	Interrelationship of future aluminum and oil prices	Aluminum: $1,871 per metric ton in 2014 to $2,141 per metric ton in 2018 Oil: $113 per barrel in 2014 to $99 per barrel in 2018
Aluminum contract		257	Discounted cash flow	Interrelationship of future aluminum prices, foreign currency exchange rates, and the U.S. consumer price index (CPI)	Aluminum: $1,858 per metric ton in 2014 to $2,019 per metric ton in 2016 Foreign currency: A$1 = $0.94 in 2014 to $0.90 in 2016 CPI: 1982 base year of 100 and 236 in 2014 to 248 in 2016
Aluminum contract		24	Discounted cash flow	Interrelationship of LME price to overall energy price	Aluminum: $1,846 per metric ton in 2014 to $2,183 per metric ton in 2019
Energy contracts		24	Discounted cash flow	Price of electricity beyond forward curve	$83 per megawatt hour in 2014 to $154 per megawatt hour in 2036
Liabilities:
Aluminum contracts		422	Discounted cash flow	Price of aluminum beyond forward curve	$2,453 per metric ton in 2023 to $2,594 per metric ton in 2027
Embedded credit derivative		14	Discounted cash flow	Credit spread between Alcoa and counterparty	0.73% to 1.61% (1.17% median)

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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
		Second quarter ended June 30,					Six months ended June 30,
		2014		2013			2014			2013
Aluminum contracts*	Sales	$	19	$	(59	)	$	(1	)	$	(130	)
Interest rate contracts	Interest expense		2		2			5			5
Total		$	21	$	(57	)	$	4		$	(125	)

* In the second quarter and six months ended June 30, 2014, the loss recognized in earnings includes a gain of $7 and a loss of $13, respectively, related to the ineffective portion of the hedging relationships. In both the second quarter and six months ended June 30, 2013, the loss recognized in earnings includes a gain of $4 related to the ineffective portion of the hedging relationships.

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
		Second quarter ended June 30,						Six months ended June 30,
		2014			2013			2014			2013
Aluminum contracts	Sales	$	(12	)	$	63		$	(12	)	$	134
Interest rate contracts	Interest expense		(2	)		(2	)		(5	)		(5	)
Total		$	(14	)	$	61		$	(17	)	$	129

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 June 30, 2014, Alcoa had 268,000 metric tons of aluminum futures designated as fair value hedges. The effects of this hedging activity will be recognized over the designated hedge periods in 2014 to 2018.

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 June 30, 2014, 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 $200 of debt through 2018.

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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.

																										Location of Gain or
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)*												(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)**
	Second quarter ended June 30,						Six months ended June 30,							Second quarter ended June 30,						Six months ended June 30,							Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013				2014			2013			2014			2013				2014			2013			2014			2013
Aluminum contracts	$	(42	)	$	74		$	(19	)	$	178		Sales	$	(5	)	$	(1	)	$	(9	)	$	(7	)	Other expenses (income), net	$	(1	)	$	(2	)	$	(1	)	$	(2	)
Energy contracts		13			(3	)		15			(1	)	Cost of goods sold		—			—			—			—		Other expenses (income), net		5			—			5			—
Foreign exchange contracts		—			(2	)		2			(2	)	Sales		1			—			1			—		Other expenses (income), net		—			—			—			—
Interest rate contracts		—			—			—			—		Interest expense		(1	)		(1	)		(1	)		(1	)	Other expenses (income), net		—			—			—			—
Interest rate contracts		1			—			2			1		Other expenses (income), net		—			—			—			—		Other expenses (income), net		—			—			—			—
Total	$	(28	)	$	69		$	—		$	176			$	(5	)	$	(2	)	$	(9	)	$	(8	)		$	4		$	(2	)	$	4		$	(2	)

* Assuming market rates remain constant with the rates at June 30, 2014, a loss of $16 is expected to be recognized in earnings over the next 12 months.

** For both the second quarter and six months ended June 30, 2014, the amount of gain or (loss) recognized in earnings represents $5 related to the ineffective portion of the hedging relationships. There was also $(1) recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for both the second quarter and six months ended June 30, 2014. For both the second quarter and six months ended June 30, 2013, there was no ineffectiveness related to the derivatives in cash flow hedging relationships. There was $(2) recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for both the second quarter and six months ended June 30, 2013.

Aluminum and Energy. Alcoa anticipates the continued requirement to purchase aluminum and other commodities, such as electricity and natural gas, for its operations. Alcoa enters into forwards, futures, and options 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 a contract to hedge the anticipated power requirements at its Portland smelter in Australia. This derivative hedges forecasted power purchases through December 2036. Prior to 2013, Alcoa had a similar contract for its Point Henry smelter in Australia but elected to terminate it under the terms of the contract (see additional information in description of Level 3 derivative contracts above).

Interest Rates. Alcoa had no outstanding cash flow hedges of interest rate exposures as of June 30, 2014. 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. 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 2015.

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

	June 30, 2014		December 31, 2013
Aluminum contracts (000 metric tons)		780		841
Energy contracts:
Electricity (megawatt hours)		59,409,328		59,409,328
Natural gas (million British thermal units)		20,200,000		19,980,000
Foreign exchange contracts	$	789	$	335

Other

Alcoa has certain derivative contracts that do not qualify 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
		Second quarter ended June 30,						Six months ended June 30,
		2014			2013			2014			2013
Aluminum contracts	Sales	$	1		$	(3	)	$	(4	)	$	(7	)
Aluminum contracts	Other expenses (income), net		(1	)		(7	)		(1	)		15
Embedded credit derivative	Other expenses (income), net		6			(7	)		7			(9	)
Foreign exchange contracts	Other expenses (income), net		3			(2	)		(3	)		(5	)
Total		$	9		$	(19	)	$	(1	)	$	(6	)

The aluminum contracts relate to derivatives (recognized in Sales) and embedded derivatives (recognized in Other expenses (income), net) entered into to minimize Alcoa’s price risk related to other customer sales and certain pricing arrangements.

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 31 of the year preceding the calculation date. This differential would be added to the cost of power in the period following the calculation date.

Alcoa has a forward contract to purchase $55 (C$58) to mitigate the foreign currency risk related to a Canadian-denominated loan due in August 2014. Also, in December 2013, Alcoa entered into a forward contract to purchase $231 (R$543) to mitigate the foreign currency risk associated with a potential future transaction denominated in Brazilian reais. This contract expired on March 31, 2014 and a loss of $4 was recognized in the 2014 six-month period. 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.

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Other Financial Instruments

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

	June 30, 2014				December 31, 2013
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	1,183	$	1,183	$	1,437	$	1,437
Restricted cash		15		15		18		18
Noncurrent receivables		19		19		19		19
Available-for-sale securities		125		125		119		119
Short-term borrowings		133		133		57		57
Commercial paper		223		223		—		—
Long-term debt due within one year		87		87		655		1,040
Long-term debt, less amount due within one year		7,612		8,271		7,607		7,863

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

Cash and cash equivalents, Restricted cash, Short-term borrowings, and Commercial paper. The carrying amounts approximate fair value because of the short maturity of the instruments. The fair value amounts for Cash and cash equivalents, Restricted cash, and Commercial paper were classified in Level 1, and Short-term borrowings were classified in Level 2.

Noncurrent receivables. The fair value of noncurrent receivables was based on anticipated cash flows, which approximates carrying value, and was classified in Level 2 of the fair value hierarchy.

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 due within one year and 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. The fair value amounts for all Long-term debt were classified in Level 2 of the fair value hierarchy.

P. 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.

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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 June 30, 2014, and the related statements of consolidated operations, consolidated comprehensive income (loss), and changes in consolidated equity for each of the three-month and six-month periods ended June 30, 2014 and 2013, and the statement of consolidated cash flows for the six-month periods ended June 30, 2014 and 2013. 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, 2013, and the related statements of consolidated operations, consolidated comprehensive loss, changes in consolidated equity, and consolidated cash flows for the year then ended (not presented herein), and in our report dated February 13, 2014, 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, 2013, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Pittsburgh, Pennsylvania

July 24, 2014

* 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.

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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:

	Second quarter ended June 30,					Six months ended June 30,
	2014		2013			2014			2013
Sales	$	5,836	$	5,849		$	11,290		$	11,682
Net income (loss) attributable to Alcoa common shareholders	$	138	$	(119	)	$	(40	)	$	30
Diluted earnings per share attributable to Alcoa common shareholders	$	0.12	$	(0.11	)	$	(0.04	)	$	0.03
Shipments of alumina (kmt)		2,361		2,328			5,010			4,785
Shipments of aluminum products (kmt)		1,217		1,268			2,373			2,492
Alcoa’s average realized price per metric ton of primary aluminum	$	2,291	$	2,237		$	2,246		$	2,318

Net income attributable to Alcoa was $138, or $0.12 per diluted share, in the 2014 second quarter compared with Net loss attributable to Alcoa of $119, or $0.11 per share, in the 2013 second quarter. The improvement in results of $257 was primarily the result of net productivity improvements, higher energy sales, and the absence of a charge for a legal matter. These positive impacts were partially offset by higher costs for most inputs and an unfavorable change in income taxes due to a change from a pretax loss to pretax income.

Net loss attributable to Alcoa was $40, or $0.04 per share, in the 2014 six-month period compared with Net income attributable to Alcoa of $30, or $0.03 per share, in the 2013 six-month period. The decline in results of $70 was primarily the result of higher restructuring charges related to capacity reductions, lower realized prices for aluminum and alumina, and higher costs for most inputs. These negative impacts were mostly offset by net productivity improvements, higher energy sales, net favorable foreign currency movements, the absence of a charge for a legal matter, and a favorable change in income taxes due to a change from pretax income to a pretax loss.

Sales were flat in the 2014 second quarter and declined $392, or 3%, in the 2014 six-month period compared to the same periods in 2013.

In the 2014 second quarter, lower primary aluminum volumes due to curtailed and shutdown smelter capacity and unfavorable product mix in the midstream segment were offset by higher energy sales resulting from excess power due to curtailed smelter capacity, higher volumes in the midstream and downstream segments, and an increase in the average realized price for aluminum.

The decrease in the 2014 six-month period was mainly caused by lower primary aluminum volumes, including those related to curtailed and shutdown smelter capacity; a decline in the average realized price for both aluminum and alumina, driven by lower London Metal Exchange (LME) prices; and unfavorable pricing and product mix in the midstream segment. These negative impacts were partially offset by higher volumes in all other segments and higher energy sales resulting from excess power due to curtailed smelter capacity.

Cost of goods sold (COGS) as a percentage of Sales was 81.6% in the 2014 second quarter and 82.0% in the 2014 six-month period compared with 84.3% in the 2013 second quarter and 83.7% in the 2013 six-month period.

In both periods, the percentage was positively impacted by net productivity improvements across all segments, the previously mentioned higher energy sales, lower costs for caustic and carbon, and the absence of costs related to a planned maintenance outage in 2013 at a power plant in Australia. These items were partially offset by higher costs for bauxite, labor, maintenance, and transportation, and costs related to a new labor agreement that covers employees at 10 locations in the United States (see below).

The percentage in the 2014 second quarter was also favorably impacted by an increase in the average realized price for aluminum, while the percentage in the 2014 six-month period was also unfavorably impacted by a decrease in realized prices for three of the four segments and write-offs of

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inventory related to the decisions to permanently shut down certain smelter and rolling mill capacity (difference of $27 – see Restructuring and other charges below).

On June 6, 2014, the United Steelworkers ratified a new five-year labor agreement covering approximately 6,100 employees at 10 U.S. locations; the previous labor agreement expired on May 15, 2014. In the 2014 second quarter and six-month period, as a result of the preparation for and ratification of the new agreement, Alcoa recognized $17 ($11 after-tax) and $18 ($12 after-tax), respectively, in Cost of goods sold for, among other items, business contingency costs and a one-time signing bonus for employees. Additionally, as a result of the provisions of the new labor agreement, a significant plan amendment was adopted by one of Alcoa’s U.S. pension plans. Accordingly, this plan was required to be remeasured, which resulted in a decrease to 2014 annual net periodic benefit cost of $13, of which $2 was recognized in the 2014 second quarter. The remaining $11 decrease will be recognized ratably over the second half of 2014.

Selling, general administrative, and other expenses (SG&A) decreased $9 and $24 in the 2014 second quarter and six-month period, respectively, compared to the corresponding periods in 2013. The decline in both periods was primarily driven by lower expenses for professional and legal fees and contract services, partially offset by higher labor costs and fees associated with a planned acquisition of an aerospace business ($13) (see Engineered Products and Solutions under Segment Information below). SG&A as a percentage of Sales decreased from 4.3% in the 2013 second quarter to 4.2% in the 2014 second quarter, and was unchanged at 4.3% in both the 2013 six-month period and the 2014 six-month period.

Restructuring and other charges were $110 ($54 after-tax and noncontrolling interests) and $571 ($328 after-tax and noncontrolling interests) in the 2014 second quarter and six-month period, respectively.

In the 2014 second quarter, Restructuring and other charges included $107 ($51 after-tax and noncontrolling interest) for exit costs related to decisions to permanently shut down and demolish two smelters and two rolling mills (see below) and $3 ($3 after-tax) for other miscellaneous items, including layoff costs for the separation of approximately 75 employees (30 in the Global Rolled Products segment, 30 in Corporate, and 15 in the other three segments combined).

In the 2014 six-month period, Restructuring and other charges included $443 ($240 after-tax and noncontrolling interest) for exit costs related to decisions to permanently shut down and demolish two smelters and two rolling mills (see below); $68 ($44 after-tax and noncontrolling interest) for the temporary curtailment of two smelters and a related production slowdown at one refinery (see below); $33 ($26 after-tax) for asset impairments related to prior capitalized costs for a modernization project at a smelter in Canada that is no longer being pursued; $17 ($11 after-tax) for layoff costs, including the separation of approximately 245 employees (115 in the Engineered Products and Solutions segment, 30 in the Global Rolled Products segment, 10 in the Alumina and Primary Metals segments combined, and 90 in Corporate); $17 ($11 after-tax) of charges for other miscellaneous items; and $7 ($4 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2014 first quarter, management approved the permanent shutdown and demolition of the remaining capacity (84 kmt-per-year) at the Massena East smelter in New York and the full capacity (190 kmt-per-year) at the Point Henry smelter in Australia. The capacity at Massena East was fully shut down by the end of the first quarter of 2014 and the Point Henry smelter is expected to be shut down in August 2014. Demolition and remediation activities related to both the Massena East and Point Henry smelters will begin in the second half of 2014 and are expected to be completed by the end of 2020 and 2018, respectively.

The decisions on the Massena East and Point Henry smelters are part of a 15-month review of 460 kmt of smelting capacity initiated by management in the 2013 second quarter for possible curtailment. Through this review, management determined that the remaining capacity of the Massena East smelter was no longer competitive and the Point Henry smelter has no prospect of becoming financially viable. Management also initiated the temporary curtailment of the remaining capacity (62 kmt-per-year) at the Poços de Caldas smelter and additional capacity (85 kmt-per-year) at the São Luís smelter, both in Brazil. These curtailments were completed by the end of May 2014. As a result of these curtailments, production at the Poços de Caldas refinery was reduced (200 kmt-per-year), which was completed by the end of the 2014 second quarter.

Also in the 2014 first quarter, management approved the permanent shutdown of Alcoa’s two rolling mills in Australia, Point Henry and Yennora. This decision was made due to the significant impact of excess can sheet capacity in both Australia and Asia. The two rolling mills have a combined can sheet capacity of 200 kmt-per-year and will be closed by the end of 2014. Demolition and remediation activities related to the two rolling mills will begin in 2015 and are expected to be completed by the end of 2018.

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In the 2014 second quarter and six-month period, costs related to the shutdown and curtailment actions included $4 and $137, respectively, for the layoff of approximately 1,830 employees (1,230 in the Primary Metals segment, 470 in the Global Rolled Products segment, 90 in the Alumina segment, and 40 in Corporate); accelerated depreciation of $91 and $150, respectively, related to the three facilities in Australia as they continue to operate during 2014; and $10 and $133, respectively, in other exit costs. Additionally, the costs in the 2014 six-month period also include asset impairments of $91, representing the write-off of the remaining book value of all related properties, plants, and equipment. Furthermore in the 2014 six-month period, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value resulting in a charge of $34 ($20 after-tax and noncontrolling interest), respectively, which was recorded in Cost of goods sold. The other exit costs of $133 in the 2014 six-month period represent $55 in asset retirement obligations and $38 in environmental remediation, both triggered by the decisions to permanently shut down and demolish the aforementioned structures in the U.S. and Australia, and $40 in other related costs, including supplier and customer contract-related costs. Additional charges of approximately $110 are expected to be recognized throughout the remainder of 2014 related to these shutdown actions in Australia.

Restructuring and other charges were $244 ($170 after-tax and noncontrolling interests) and $251 ($175 after-tax and noncontrolling interests) in the 2013 second quarter and six-month period, respectively.

In the 2013 second quarter, Restructuring and other charges included $103 ($62 after noncontrolling interest) related to a legal matter; $86 ($70 after-tax) for exit costs related to the permanent shutdown and demolition of certain structures at two non-U.S. locations (see below); $29 ($19 after-tax) for asset impairments and related costs for retirements of previously idled structures; $24 ($18 after-tax and noncontrolling interests) for the layoff of approximately 470 employees (190 in the Global Rolled Products segment, 180 in the Engineered Products and Solutions segment, 55 in the Primary Metals segment, and 45 in Corporate); a charge of $4 ($2 after-tax) for other miscellaneous items; and $2 ($1 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2013 six-month period, Restructuring and other charges included $218 ($151 after-tax and noncontrolling interests) for the previously mentioned legal matter, exit costs at two non-U.S. locations, and retirements of previously idled structures combined; $27 ($20 after-tax and noncontrolling interests) for layoff costs, including the separation of approximately 530 employees (190 in the Global Rolled Products segment, 180 in the Engineered Products and Solutions segment, 115 in the Primary Metals segment, and 45 in Corporate) and a pension plan settlement charge related to previously separated employees; a charge of $8 ($5 after-tax) for other miscellaneous items; and $2 ($1 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2013 second quarter, management approved the permanent shutdown and demolition of (i) two potlines (capacity of 105 kmt-per-year) that utilize Soderberg technology at the smelter located in Baie Comeau, Québec, Canada (remaining capacity of 280 kmt-per-year composed of two prebake potlines) and (ii) the smelter located in Fusina, Italy (capacity of 44 kmt-per-year). The two Soderberg lines at Baie Comeau were fully shut down by the end of September 2013 while the Fusina smelter was previously temporarily idled in 2010. Demolition and remediation activities related to the two Soderberg lines and the Fusina smelter began in the fourth quarter of 2013 and are expected to be completed by the end of 2015 and 2017, respectively.

The decision on the two Soderberg lines was part of a 15-month review of 460 kmt of smelting capacity initiated by management earlier in the 2013 second quarter for possible curtailment (announced on May 1, 2013), while the decision on the Fusina smelter was in addition to the capacity being reviewed. Factors leading to both decisions were in general focused on achieving sustained competitiveness and included, among others: lack of an economically viable, long-term power solution (Italy); changed market fundamentals; other existing idle capacity; and restart costs.

In both the 2013 second quarter and six-month period, exit costs related to these actions included accelerated depreciation of $23 (Baie Comeau) and asset impairments of $14 (Fusina) representing the write-off of the remaining book value of all related properties, plants, and equipment, and $49 in other exit costs. Additionally, in both the 2013 second quarter and six-month period, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value resulting in a charge of $7 ($5 after-tax), which was recorded in Cost of goods sold. The other exit costs of $49 represent $44 in asset retirement obligations and $5 in environmental remediation, both triggered by the decisions to permanently shut down and demolish these structures.

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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:

	Second quarter ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Alumina	$	—	$	—	$	7	$	—
Primary Metals		84		94		415		94
Global Rolled Products		23		7		113		10
Engineered Products and Solutions		—		19		4		22
Segment total		107		120		539		126
Corporate		3		124		32		125
Total restructuring and other charges	$	110	$	244	$	571	$	251

As of June 30, 2014, approximately 745 of the 2,075 employees associated with 2014 restructuring programs and approximately 1,350 of the 1,660 employees associated with 2013 restructuring programs were separated. The remaining separations for the 2014 and 2013 restructuring programs are expected to be completed by the end of 2014.

In the 2014 second quarter and six-month period, cash payments of $22 and $23, respectively, were made against the layoff reserves related to the 2014 restructuring programs and $8 and $32, respectively, were made against the layoff reserves related to the 2013 restructuring programs.

Interest expense declined $13, or 11%, in the 2014 second quarter and $8, or 3%, in the 2014 six-month period compared to the corresponding periods in 2013. In both periods, the decrease was principally the result of a 10% (second quarter) and an 8% (six months) lower average debt level, which was mostly attributable to lower outstanding long-term debt due to the June 2013 repayment of $422 in 6.00% Notes and the March 2014 extinguishment of $575 in 5.25% Convertible Notes, and lower amortization of debt-related costs due to the extinguishment of the aforementioned convertible notes. These positive impacts were partially offset in the 2014 second quarter and mostly offset in the 2014 six-month period by lower capitalized interest ($10 and $23, respectively).

Other expenses, net was $5 in the 2014 second quarter compared with $19 in the 2013 second quarter, and Other expenses, net was $30 in the 2014 six-month period compared to Other income, net of $8 in the 2013 six-month period.

The change in the 2014 second quarter was primarily due to a net favorable change in mark-to-market derivative contracts ($24), partially offset by a higher equity loss related to Alcoa’s share of the joint venture in Saudi Arabia due to start-up costs of the entire complex, including restart costs for one of the smelter potlines that was previously shut down due to a period of instability.

In the 2014 six-month period, the change was mainly the result of a higher equity loss related to Alcoa’s share of the joint venture in Saudi Arabia due to start-up costs of the entire complex, including restart costs for one of the smelter potlines that was previously shut down due to a period of instability, a net unfavorable change in mark-to-market derivative aluminum contracts ($16), and net unfavorable foreign currency movements ($16). These negative impacts were partially offset by a gain on the sale of a mining interest in Suriname ($28) and a net favorable change in other mark-to-market derivative contracts ($18).

The effective tax rate for the second quarter of 2014 and 2013 was 37.7% (provision on income) and 16.5% (provision on a loss), respectively.

The rate for the 2014 second quarter differs from the U.S. federal statutory rate of 35% primarily due to the U.S. tax impact of deemed distributions from otherwise lower tax rate foreign jurisdictions and operational income of certain foreign subsidiaries taxed in lower rate jurisdictions, mostly offset by a $20 favorable impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized (partial reversal of the 2014 first quarter impact).

The rate for the 2013 second quarter differs (by (51.5) percentage points) from the U.S. federal statutory rate of 35% primarily due to a $103 nondeductible charge for a legal matter, restructuring charges related to operations in Canada (benefit at a lower tax rate) and Italy (no tax benefit), and a $10 discrete income tax charge related to prior year taxes in Spain and Australia.

The effective tax rate for the 2014 and 2013 six-month periods was 1.5% (provision on a loss) and 79.4% (provision on income), respectively.

The rate for the 2014 six-month period differs (by (36.5) percentage points) from the U.S. federal statutory rate of 35% primarily due to a $36 unfavorable impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized (impact is

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expected to reverse by the end of 2014).

The rate for the 2013 six-month period differs from the U.S. federal statutory rate of 35% primarily due to the previously mentioned $103 nondeductible charge, restructuring charges in Canada and Italy, and $10 discrete income tax charge, somewhat offset by a $19 discrete income tax benefit related to new U.S. tax legislation.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law and reinstated various expired or expiring temporary business tax provisions through 2013. Two specific temporary business tax provisions that expired in 2011 and impacted Alcoa are the look-through rule for payments between related controlled foreign corporations and the research and experimentation credit. The expiration of these two provisions resulted in Alcoa recognizing a higher income tax provision of $19 in 2012. As tax law changes are accounted for in the period of enactment, Alcoa recognized the previously mentioned discrete income tax benefit in the 2013 first quarter related to the 2012 tax year to reflect the extension of these provisions.

In December 2011, one of Alcoa’s subsidiaries in Brazil applied for a tax holiday related to its expanded mining and refining operations. During 2013, the application was amended and re-filed. The deadline for the Brazilian government to deny the application was July 11, 2014. Since Alcoa did not receive notice that its application was denied, the tax holiday took effect automatically on July 12, 2014. As a result, the tax rate for this subsidiary will decrease significantly (from 34% to 15%), resulting in future cash tax savings over the 10-year holiday period (retroactively effective as of January 1, 2013). Additionally, a portion of the subsidiary’s net deferred tax asset that reverses within the holiday period will be remeasured at the new lower tax rate in the 2014 third quarter. This remeasurement will result in a decrease to this subsidiary’s net deferred tax asset and a noncash charge to earnings of approximately $60.

Net loss attributable to noncontrolling interests was $9 in the 2014 second quarter and $28 in the 2014 six-month period compared with $29 in the 2013 second quarter and $8 in the 2013 six-month period. The change in both periods was mostly due to the results of Alcoa World Alumina and Chemicals (AWAC), which is owned 60% by Alcoa and 40% by Alumina Limited. In the 2014 second quarter, AWAC generated a smaller loss compared to the same period in 2013 mainly driven by the absence of a $103 charge for a legal matter, partially offset by additional restructuring and other charges associated with management’s decision in the 2014 first quarter to permanently shut down the Point Henry smelter in Australia (see Restructuring and other charges above and Primary Metals under Segment Information below). AWAC generated a higher loss in the 2014 six-month period compared with the corresponding period in 2013 largely attributable to restructuring and other charges associated with the decision to permanently shut down the Point Henry smelter, partially offset by the absence of the previously mentioned charge for a legal matter.

In both the 2013 second quarter and six-month period, Alumina Limited’s share of the charge for a legal matter was included in Net loss attributable to noncontrolling interests at 40%. Subsequently, in the 2013 fourth quarter, Alumina Limited’s share of this charge was reduced to 15% based on a cost allocation agreement between Alcoa and Alumina Limited reached in 2012 as a result of meeting certain criteria at the time the legal matter was resolved in January 2014. Consequently, a credit of $26 was reflected in Net loss attributable to noncontrolling interests in the 2013 fourth quarter equivalent to the difference of Alumina Limited’s ownership interest and the stated percentage in the cost allocation agreement.

Segment Information

Alumina

	Second quarter ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Alumina production (kmt)		4,077		4,161		8,249		8,155
Third-party alumina shipments (kmt)		2,361		2,328		5,010		4,785
Alcoa’s average realized price per metric ton of alumina	$	318	$	347	$	316	$	339
Alcoa’s average cost per metric ton of alumina*	$	290	$	305	$	284	$	305
Third-party sales	$	761	$	822	$	1,606	$	1,648
Intersegment sales		480		581		990		1,176
Total sales	$	1,241	$	1,403	$	2,596	$	2,824
ATOI	$	38	$	64	$	130	$	122

* Includes all production-related costs, including raw materials consumed; conversion costs, such as labor, materials, and utilities; depreciation, depletion, and amortization; and plant administrative expenses.

Alumina production decreased 2% in the 2014 second quarter and increased 1% in the 2014 six-month period compared with the corresponding periods in 2013. The decline in the 2014 second quarter was largely attributable to lower production at the Point Comfort (TX) (weather-related interruption), Poços de Caldas (Brazil), and San

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Ciprian (Spain) refineries, somewhat offset by higher production at the refineries in Australia. In the 2014 six-month period, the improvement was due to higher production at every refinery in the global system, except for Poços de Caldas and San Ciprian. The Poços de Caldas refinery started to reduce production near the end of the 2014 first quarter in response to the decision to fully curtail the Poços de Caldas smelter by the end of May 2014 (see Primary Metals below). As a result, management reduced the alumina production at the Poços de Caldas refinery by approximately 200 kmt-per-year by the end of the 2014 second quarter.

Third-party sales for the Alumina segment declined 7% and 3% in the 2014 second quarter and six-month period, respectively, compared with the same periods in 2013. In both periods, the decrease was primarily due to a reduction in buy/resell activity, unfavorable foreign currency movements related to the revaluation of outstanding customer receivables in Australia, and an 8% (second quarter) and a 7% (six months) decline in average realized price. The negative impacts in the 2014 six-month period were partially offset by an improvement of 5% in volume. The change in average realized price was driven by a 6% (second quarter) and 11% (six months) lower average LME price for those customer shipments still linked to the LME (35%), mostly offset by higher alumina index/spot pricing for all other customer shipments (65%).

Intersegment sales decreased 17% in the 2014 second quarter and 16% in the 2014 six-month period compared to the corresponding periods in 2013 due to lower demand from the Primary Metals segment and lower realized price.

ATOI for this segment declined $26 in the 2014 second quarter and increased $8 in the 2014 six-month period compared to the same periods in 2013.

The decrease in the 2014 second quarter was principally driven by higher input costs, including natural gas (particularly higher prices in Australia), bauxite (mainly due to a new mining site in Suriname), and labor and maintenance; and the previously mentioned decline in average realized price. These negative impacts were partially offset by net favorable foreign currency movements due to a stronger U.S. dollar, especially against the Australian dollar, net productivity improvements, and lower costs for caustic.

In the 2014 six-month period, the improvement was primarily the result of net favorable foreign currency movements due to a stronger U.S. dollar, especially against the Australian dollar, net productivity improvements, lower costs for caustic, and a gain on the sale of a mining interest in Suriname ($18). These positive impacts were partially offset by higher input costs, including bauxite (mainly due to a new mining site in Suriname), natural gas (particularly higher prices in Australia), and labor and maintenance; and the previously mentioned decline in average realized price.

In the third quarter of 2014, alumina production is expected to increase at the refineries in Australia due to increased efficiencies, partially offset by the reduction at the Poços de Caldas refinery (see above). Also, net productivity improvements are anticipated while a higher equity loss related to the joint venture in Saudi Arabia due to the ramp-up of pre-operational activities and higher energy prices in Australia are expected.

Primary Metals

	Second quarter ended June 30,					Six months ended June 30,
	2014		2013			2014		2013
Aluminum production (kmt)		795		896			1,634		1,787
Third-party aluminum shipments (kmt)		638		693			1,255		1,398
Alcoa’s average realized price per metric ton of aluminum*	$	2,291	$	2,237		$	2,246	$	2,318
Alcoa’s average cost per metric ton of aluminum**	$	2,235	$	2,230		$	2,196	$	2,257
Third-party sales	$	1,659	$	1,620		$	3,083	$	3,378
Intersegment sales		718		677			1,452		1,404
Total sales	$	2,377	$	2,297		$	4,535	$	4,782
ATOI	$	97	$	(32	)	$	82	$	7

* Average realized price per metric ton of aluminum includes three elements: a) the underlying base metal component, based on quoted prices from the LME; b) the regional premium, which represents the incremental price over the base LME component that is associated with the physical delivery of metal to a particular region (e.g., the Midwest premium for metal sold in the

44

United States); and c) the product premium, which represents the incremental price for receiving physical metal in a particular shape (e.g., coil, billet, slab, rod, etc.) or alloy.

** Includes all production-related costs, including raw materials consumed; conversion costs, such as labor, materials, and utilities; depreciation and amortization; and plant administrative expenses.

At June 30, 2014, Alcoa had 803 kmt of idle capacity on a base capacity of 3,935 kmt. In the 2014 second quarter, idle capacity increased by 128 kmt compared to March 31, 2014 due to the temporary curtailment of 124 kmt combined at two smelters in Brazil (see below) and a 4 kmt pot adjustment in Spain. Base capacity declined 18 kmt between June 30, 2014 and March 31, 2014 due to the permanent closure of certain pots at a smelter in Australia (see below).

In May 2013, Alcoa announced that management will review 460 kmt of smelting capacity over a 15-month period for possible curtailment. This review is aimed at maintaining Alcoa’s competitiveness despite falling aluminum prices and will focus on the highest-cost smelting capacity and those plants that have long-term risk due to factors such as energy costs or regulatory uncertainty.

As part of this review during the remainder of 2013, management initiated the permanent shutdown of 146 kmt of combined capacity at the Baie Comeau smelter in Quebec, Canada and the Massena East smelter in New York, as well as a temporary curtailment of 131 kmt of combined capacity at the São Luís and Poços de Caldas smelters, both in Brazil. All of these actions were completed in 2013.

During the first quarter of 2014, management initiated three additional actions resulting in the permanent shutdown of an additional 274 kmt of capacity and the temporary curtailment of an additional 147 kmt of capacity.

The permanent shutdowns are comprised of the remaining capacity (84 kmt-per-year) at the Massena East smelter and the full capacity (190 kmt-per-year) at the Point Henry (Australia) smelter. The remaining capacity of the Massena East smelter represented two Soderberg potlines that were no longer competitive. This shutdown was completed by the end of the 2014 second quarter. For Point Henry, management determined that the smelter has no prospect of becoming financially viable. The shutdown of the Point Henry smelter will be completed in August 2014 (18 kmt of capacity was shutdown in the 2014 second quarter).

The temporary curtailments are comprised of the remaining capacity (62 kmt-per-year) at the Poços de Caldas smelter and additional capacity (85 kmt-per-year) at the São Luís smelter. The process of curtailing this additional capacity began in March 2014 and was completed by the end of May 2014.

See Restructuring and other charges under Results of Operations above for a description of the associated charges.

Aluminum production decreased 11% and 9% in the 2014 second quarter and six-month period, respectively, compared with the corresponding periods in 2013. In both periods, the decline was the result of lower production at the four smelters impacted by the 2013 and 2014 capacity reductions described above.

Third-party sales for the Primary Metals segment increased 2% in the 2014 second quarter and decreased 9% in the 2014 six-month period compared with the same periods in 2013.

The improvement in the 2014 second quarter was mainly attributable to higher energy sales resulting from excess power due to curtailed smelter capacity, primarily in Brazil, a 2% increase in average realized aluminum price, and higher buy/resell activity, partially offset by lower volumes due to the four smelters impacted by the 2013 and 2014 capacity reductions. The change in average realized price was driven by higher regional premiums, which increased by an average of 63% in the U.S. and 41% in Europe, somewhat offset by a 5% lower average LME price (on 15-day lag).

In the 2014 six-month period, the decline was mostly the result of lower volumes, including from the four smelters impacted by the 2013 and 2014 capacity reductions, and a 3% decrease in average realized aluminum price, somewhat offset by higher energy sales resulting from excess power due to curtailed smelter capacity, primarily in Brazil, and higher buy/resell activity. The change in average realized price was driven by a 10% lower average LME price (on 15-day lag), partially offset by higher regional premiums, which increased by an average of 66% in the U.S. and 30% in Europe.

Intersegment sales increased 6% and 3% in the 2014 second quarter and six-month period, respectively, compared to the corresponding periods in 2013 due to higher demand from the midstream business. The positive impact in the 2014 six-month period was partially offset by a decrease in realized price, driven by a lower LME price.

ATOI for this segment improved $129 in the 2014 second quarter and $75 in the 2014 six-month period compared to the same periods in 2013.

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The increase in the 2014 second quarter was principally due to net productivity improvements, the previously mentioned energy sales in Brazil, a higher average realized aluminum price, lower costs for alumina and carbon, and the absence of costs related to a planned maintenance outage in 2013 at a power plant in Australia.

In the 2014 six-month period, the improvement was primarily driven by the previously mentioned energy sales in Brazil; net productivity improvements; lower costs for alumina and carbon; net favorable foreign currency movements due to a stronger U.S. dollar against the Australian dollar, Brazilian real, and Canadian dollar; and the absence of costs related to a planned maintenance outage in 2013 at a power plant in Australia. These positive impacts were partially offset by a drop in the average realized aluminum price, a higher equity loss related to the joint venture in Saudi Arabia due to restart costs for one of the potlines (full restart was achieved in the 2014 second quarter) that was previously shut down due to a period of instability, as well as normal smelter start-up costs, and a write-off of inventory related to the decisions to permanently shut down the Point Henry and Massena East smelters ($14).

In the third quarter of 2014, aluminum production will decline due to the closure of the Point Henry and Massena East smelters and the curtailments of additional capacity at the smelters in Brazil (see above). Also, the average realized price will follow a 15-day lag to LME prices and is expected to benefit from higher regional and product premiums. Additionally, net productivity improvements are anticipated and higher energy sales resulting from excess power due to curtailed smelter capacity in Brazil is expected.

Global Rolled Products

	Second quarter ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Third-party aluminum shipments (kmt)		504		502		971		952
Alcoa’s average realized price per metric ton of aluminum	$	3,690	$	3,742	$	3,642	$	3,842
Third-party sales	$	1,860	$	1,877	$	3,537	$	3,656
Intersegment sales		44		43		87		94
Total sales	$	1,904	$	1,920	$	3,624	$	3,750
ATOI	$	79	$	79	$	138	$	160

In February 2014, management approved the permanent shutdown of Alcoa’s two rolling mills in Australia, Point Henry and Yennora. This decision was made due to the significant impact of excess can sheet capacity in both Australia and Asia. The two rolling mills have a combined can sheet capacity of 200 kmt-per-year and will be closed by the end of 2014. See Restructuring and other charges under Results of Operations above for a description of the associated charges.

Third-party sales for the Global Rolled Products segment decreased 1% and 3% in the 2014 second quarter and six-month period, respectively, compared with the corresponding periods in 2013.

The decline in the 2014 second quarter was mainly caused by unfavorable aerospace product mix and unfavorable foreign currency movements, due to a weaker Russian ruble and Australian dollar, partially offset by increased demand. Volume improvements occurred in most end markets, particularly commercial transportation and automotive, partially offset by lower demand in the packaging end market.

In the 2014 six-month period, the decrease was principally the result of unfavorable (i) pricing, mostly due to a decrease in metal prices overall and market pressures in the North American packaging end market, (ii) aerospace product mix, and (iii) foreign currency movements, due to a weaker Russian ruble and Australian dollar, somewhat offset by increased demand. Volume improvements were mostly due to the commercial transportation, automotive, and building and construction end markets.

ATOI for this segment was flat in the 2014 second quarter and declined $22 in the 2014 six-month period compared to the same periods in 2013.

In the 2014 second quarter, net productivity improvements across most businesses and lower costs for metal (lower LME levels partially offset by higher premiums) were offset by higher input costs, including labor, maintenance, and transportation, a larger equity loss due to start-up costs related to the rolling mill at the joint venture in Saudi Arabia, and costs (business continuity and contract specific) related to a new labor agreement that covers employees at three rolling mills in the United States ($4) (see Cost of goods sold under Results of Operations above).

The decrease in the 2014 six-month period was primarily driven by unfavorable pricing, principally related to market pressures in the North American packaging end market; higher input costs, including labor, maintenance, and transportation; a write-off of inventory related to the decision to permanently shut down the Point Henry and Yennora rolling mills ($9); a larger equity loss due to start-up

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costs related to the rolling mill at the joint venture in Saudi Arabia; and the previously mentioned costs related to a new labor agreement in the United States. These items were partially offset by net productivity improvements across all businesses and lower costs for metal (lower LME levels partially offset by higher premiums).

In the third quarter of 2014, demand in the automotive end market is expected to remain strong while pricing pressure in the packaging end market will continue. Also, net productivity improvements are anticipated and the automotive expansion at the Davenport, IA facility will ramp-up.

Engineered Products and Solutions

	Second quarter ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Third-party aluminum shipments (kmt)		62		58		120		113
Third-party sales	$	1,502	$	1,468	$	2,945	$	2,891
ATOI	$	204	$	193	$	393	$	366

On June 25, 2014, Alcoa signed a definitive agreement to acquire Firth Rixson, a global leader in aerospace jet engine components, from Oak Hill Capital Partners for $2,850. The purpose of this acquisition is to strengthen Alcoa’s aerospace business and position the Company to capture additional aerospace growth with a broader range of high-growth, value-add jet engine components. Alcoa expects to realize cost savings of more than $100 by 2019 due to synergies derived from purchasing and productivity improvements, optimizing internal metal supply, and leveraging Alcoa’s global shared services. This transaction is expected to be neutral to earnings in 2015 and accretive thereafter. Firth Rixson generated $1,000 in sales in 2013 and will be included within Alcoa’s Engineered Products and Solutions segment. The transaction is subject to customary conditions and regulatory approvals and is expected to close by the end of 2014.

Third-party sales for the Engineered Products and Solutions segment increased 2% in both the 2014 second quarter and six-month period compared with the corresponding periods in 2013, mostly due to higher volumes related to the commercial aerospace and commercial transportation end markets, partially offset by lower volumes in the industrial gas turbine and defense (aerospace-related) end markets.

ATOI for this segment improved $11 in the 2014 second quarter and $27 in the 2014 six-month period compared to the same periods in 2013, mainly the result of net productivity improvements across most businesses, partially offset by higher costs, primarily labor.

In the third quarter of 2014, the commercial aerospace end market is expected to remain strong. Also, continued net productivity improvements and share gains through innovation are anticipated.

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, 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 reconciles total segment ATOI to consolidated net income (loss) attributable to Alcoa:

	Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Total segment ATOI	$	418		$	304		$	743		$	655
Unallocated amounts (net of tax):
Impact of LIFO		(8	)		5			(15	)		3
Interest expense		(69	)		(76	)		(147	)		(151	)
Noncontrolling interests		9			29			28			8
Corporate expense		(70	)		(71	)		(137	)		(138	)
Restructuring and other charges		(77	)		(211	)		(398	)		(216	)
Other		(65	)		(99	)		(114	)		(131	)
Consolidated net income (loss) attributable to Alcoa	$	138		$	(119	)	$	(40	)	$	30

The significant changes in the reconciling items between total segment ATOI and consolidated net income (loss) attributable to Alcoa for the 2014 second quarter and six-month period compared with the corresponding periods in 2013 (unless otherwise noted) consisted of:

• a change in the Impact of LIFO, mostly due to higher prices for aluminum, driven by both higher LME levels and regional premiums (increase in price at June 30, 2014 indexed to December 31, 2013 compared to a decrease in price at June 30, 2013 indexed to December 31, 2012);

• a decrease in Interest expense, principally caused by a 10% (second quarter) and an 8% (six months) lower average debt level, which was mostly attributable to lower outstanding long-term debt due to the June 2013 repayment of $422 in 6.00% Notes and the March 2014 extinguishment of $575 in 5.25% Convertible Notes, and lower amortization of debt-related costs due to the extinguishment of the aforementioned convertible notes, partially offset in the 2014 second quarter and mostly offset in the 2014 six-month period by lower capitalized interest ($7 and $15, respectively);

• a change in Noncontrolling interests, due to the change in results at AWAC, principally driven by, in the 2014 second quarter, the absence of a charge for a legal matter, partially offset by additional restructuring and other charges associated with management’s decision in the 2014 first quarter to permanently shut down the Point Henry smelter in Australia; and in the 2014 six-month period, restructuring and other charges associated with the decision to permanently shut down the Point Henry smelter, partially offset by the absence of the previously mentioned charge for a legal matter;

• a decrease in Restructuring and other charges, in the 2014 second quarter, mostly caused by the absence of a charge for a legal matter ($103); and an increase in Restructuring and other charges, in the 2014 six-month period, primarily the result of higher costs related to decisions to permanently shut down and/or temporarily curtail refinery, smelter and/or rolling mill capacity, somewhat offset by the absence of the previously mentioned charge for a legal matter; and

• a change in Other, mostly driven by, in the 2014 second quarter, a favorable tax impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized ($19) and a net favorable change in mark-to-market derivative contracts ($16), partially offset by an unfavorable tax impact resulting from the difference between Alcoa’s consolidated estimated annual effective tax rate and the statutory rates applicable to restructuring and other charges ($24); and in the 2014 six-month period, a favorable tax impact resulting from the difference between Alcoa’s consolidated estimated annual effective tax rate and the statutory rates applicable to restructuring and other charges ($48) and a net favorable change in a number of discrete tax items ($23), partially offset by an unfavorable tax impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized ($40) and the absence of a discrete income tax benefit related to the American Taxpayer Relief Act of 2012 ($19).

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.

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Liquidity and Capital Resources

Cash From Operations

Cash used for operations was $33 in the 2014 six-month period compared with cash provided from operations of $444 in the same period of 2013. The decline in cash from operations of $477 was principally due to a negative change associated with working capital of $543 and higher pension contributions of $101, somewhat offset by higher operating results (net (loss) income plus net add-back for noncash transactions in earnings).

The components of the negative change in working capital were as follows: a favorable change of $150 in receivables, primarily related to higher net cash funding of $145 from a customer receivables sale program; a negative change of $282 in inventories, largely attributable to inventory build for (i) the ramp-up of automotive production at the Davenport, IA plant, (ii) overall sales expectations for the 2014 third quarter, (iii) business continuity planning related to the recently-completed labor negotiations in the United States, and (iv) customer requirements related to smelters that have been recently curtailed; an unfavorable change of $50 in prepaid expenses and other current assets, mostly due to a prepayment for metal purchases; a negative change of $273 in accounts payable, trade, principally the result of timing of payments; a positive change of $4 in accrued expenses, mainly caused by the absence of a $130 (€100) payment to the Italian government related to a November 2009 European Commission decision on electricity pricing for certain energy-intensive industries, offset by an $88 payment to the United States government due to the resolution of a legal matter and $42 in higher payments for layoff and other exit costs associated with restructuring actions; and an unfavorable change of $92 in taxes, including income taxes, mostly driven by a change from net income to a net loss.

The higher pension contributions were principally driven by special termination benefits of $86 for employees affected by the 2013 shutdown of capacity at a smelter in Canada.

Financing Activities

Cash provided from financing activities was $291 in the 2014 six-month period, an improvement of $812 compared with cash used for financing activities of $521 in the corresponding period of 2013.

The source of cash in the 2014 six-month period was primarily due to $1,131 in additions to debt, virtually all of which was the result of borrowings under certain revolving credit facilities (see below), a $300 change in commercial paper and short-term borrowings, and $97 in proceeds from employee exercises of 11.4 million stock options at a weighted average exercise price of $8.51 (not in millions). These items were mostly offset by $1,149 in payments on debt, mostly related to $1,130 for the repayment of borrowings under certain revolving credit facilities (see below) and $12 for previous borrowings on the loans supporting the Estreito hydroelectric power project in Brazil, and $69 in dividends paid to shareholders.

In the 2013 six-month period, the use of cash was primarily due to $1,647 in payments on debt, mainly related to $1,200 for the repayment of borrowings under certain credit facilities, a $422 early repayment of 6.00% Notes due July 2013, and $13 for previous borrowings on the loans supporting the Estreito hydroelectric power project in Brazil; $66 in dividends paid to shareholders; and net cash paid to noncontrolling interests of $15, most of which relates to Alumina Limited’s share of AWAC. These items were partially offset by $1,202 in additions to debt, virtually all of which was the result of borrowings under certain credit facilities.

At the end of 2013, Alcoa had ten revolving credit facilities (excluding Alcoa’s Five-Year Revolving Credit Facility), each with a different financial institution, providing a combined capacity of $1,190 and expiration dates ranging from February 2014 through December 2015. A credit facility ($150 capacity) that was due to expire in February 2014 was extended to March 2015 in the first quarter of 2014. Another credit facility ($150 capacity) expired in March 2014 (a new agreement with the same financial institution was entered into in April 2014 and the new facility expires in March 2016). Also in the first quarter of 2014, Alcoa entered into an eleventh revolving credit agreement, providing a $50 credit facility with an expiration date of February 2016.

The purpose of any borrowings under all eleven arrangements is to provide for working capital requirements and for other general corporate purposes. The covenants contained in all eleven arrangements are the same as Alcoa’s Five-Year Revolving Credit Agreement (see the Credit Facilities section of Note K to the Consolidated Financial Statements included in Alcoa’s 2013 Form 10-K).

During the first and second quarters of 2014, Alcoa borrowed and repaid $620 and $510, respectively, under these credit arrangements. The weighted-average interest rate and weighted-average days outstanding of the respective borrowings during the first and second quarters of 2014 were 1.53% and 1.55%, respectively, and 49 days and 84 days, respectively.

In the first quarter of 2014, holders of $575 principal amount of Alcoa’s 5.25% Convertible Notes due March 15, 2014 (the “Notes”) exercised their option to convert the Notes into 89 million shares of Alcoa common stock. The conversion rate for the Notes was 155.4908 shares of Alcoa’s common stock per

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$1,000 (in whole dollars) principal amount of notes, equivalent to a conversion price of $6.43 per share. The difference between the $575 principal amount of the Notes and the $89 par value of the issued shares increased Additional capital on the Consolidated Balance Sheet. This transaction was not reflected in the Statement of Consolidated Cash Flows as it represents a noncash financing activity.

In February 2014, Alcoa’s automatic shelf registration statement filed with the Securities and Exchange Commission expired. On July 11, 2014, Alcoa filed a new shelf registration statement for up to $5,000 of securities on an unallocated basis for future issuance.

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 May 29, 2013, Moody’s Investors Service (Moody’s) downgraded the following ratings for Alcoa: long-term debt from Baa3 to Ba1 and short-term debt from Prime-3 to Speculative Grade Liquidity Rating-1. Additionally, Moody’s changed the current outlook from rating under review to stable.

The following is a summary of Alcoa’s liquidity position as it relates to the ratings downgrade by Moody’s.

Cash and letters of credit. As a result of the ratings downgrade by Moody’s, certain power companies and counterparties to derivative contracts required Alcoa to post letters of credit and cash collateral, respectively, in the amount of $167 and $18, respectively, in June 2013. Since that time, the amount of letters of credit posted decreased by $3 and the amount of cash collateral posted declined to $9. Other vendors and third-parties may require Alcoa to post additional letters of credit and/or cash collateral in future periods.

Outstanding debt. Alcoa’s outstanding debt as of June 30, 2014 totaled $7,832 (excludes commercial paper – see below). There were no ramifications to Alcoa as a result of the ratings downgrade and interest payments and fees related to the outstanding debt remain unchanged.

Revolving credit facilities. Alcoa has a $3,750 revolving credit facility that expires in July 2017 and eleven other revolving credit facilities totaling $1,240. This $4,990 of borrowing capacity was also unaffected by the ratings downgrade, including the margins that would be applicable to any borrowings, and remains available for use by Alcoa at its discretion.

Commercial paper. During the period since the downgrade, Alcoa was able to issue the desired level of commercial paper to support operations without difficulty. At the time of the downgrade, the spreads on commercial paper increased slightly, however, by one to three basis points, which did not result in a significant change to Alcoa’s total interest costs. While Alcoa expects it can continue to issue commercial paper, there is no assurance about the amount or cost at which it could issue commercial paper.

On April 11, 2014, Fitch Ratings (Fitch) downgraded the following ratings for Alcoa: long-term debt from BBB- to BB+ and short-term debt from F3 to B. Additionally, Fitch changed the current outlook from negative to stable. As of June 30, 2014, this downgrade did not have a significant impact on Alcoa’s financing activities, including its ability to access the capital markets. The descriptions for outstanding debt and revolving credit facilities above remain unchanged as a result of the Fitch downgrade. Also, Alcoa is in full compliance with the project financing requirements for the Ma’aden-Alcoa joint venture project in Saudi Arabia, and does not need to post collateral as a result of the ratings downgrade.

On April 23, 2014, 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 maintained the current outlook as negative.

On June 26, 2014, Moody’s, Fitch, and S&P each issued statements that the respective ratings and outlook for Alcoa are not affected by Alcoa’s planned acquisition of an aerospace business, Firth Rixson, for $2,850 in cash and stock.

Investing Activities

Cash used for investing activities was $526 in the 2014 six-month period compared with $561 in the 2013 six-month period, resulting in a decrease in cash used of $35.

In the 2014 six-month period, the use of cash was mainly due to $467 in capital expenditures, 44% of which related to growth projects, including the automotive expansions at the Alcoa, TN and Davenport, IA fabrication plants and the aluminum-lithium capacity expansion at the Lafayette, IN plant; and $106 in additions to investments, including equity contributions of $82 related to the aluminum complex joint

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venture in Saudi Arabia; slightly offset by $34 in sales of investments, mostly related to $28 in proceeds from the sale of a mining interest in Suriname.

The use of cash in the 2013 six-month period was mainly due to $521 in capital expenditures, 39% of which related to growth projects, including the automotive expansion at the Davenport, IA fabrication plant, the aluminum-lithium capacity expansion at the Lafayette, IN plant, and the Estreito hydroelectric power project; and $159 in additions to investments, including equity contributions of $88 related to the aluminum complex joint venture in Saudi Arabia and the purchase of $30 in equities and fixed income securities held by Alcoa’s captive insurance company; slightly offset by a net change in restricted cash of $105, principally related to the release of funds to be used for capital expenditures of the automotive expansion at the Davenport, IA fabrication plant.

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,” “intends,” “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 aluminum industry growth or other trend projections, anticipated financial results or operating performance, targeted or planned schedules for completion and start-up of growth projects, statements regarding the proposed acquisition of the Firth Rixson business, including the expected benefits of the transaction, expected synergies, and expected timing of the closing of the transaction, 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, and premiums, as applicable, 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, 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 competitiveness and operations (including moving its alumina refining and aluminum smelting businesses down on the industry cost curves and increasing revenues and improving margins in its Global Rolled Products and Engineered Products and Solutions segments) anticipated from its restructuring programs, cash sustainability, productivity improvement, and other initiatives; (h) Alcoa’s inability to realize expected benefits, in each case as planned and by targeted completion dates, from sales of non-core assets, or from newly constructed, expanded, or acquired facilities, including facilities supplying auto sheet capacity or aluminum-lithium capacity, or from international joint ventures, including the joint venture in Saudi Arabia; (i) Alcoa’s failure to successfully implement, or to realize expected benefits from, new technologies, processes, equipment or innovative products, whether due to competitive developments, changes in the regulatory environment, trends and developments in the aerospace, metals engineering and manufacturing sectors, or other factors; (j) 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, imposition of sanctions, expropriation of assets, and other events beyond Alcoa’s control; (k) the outcome of contingencies, including legal proceedings, government investigations, and environmental remediation; (l) the outcome of negotiations with, the potential loss of, and the business or financial condition of, key customers, suppliers, and business partners; (m) adverse changes in tax rates or benefits; (n) adverse changes in discount rates or investment returns on pension assets; (o) the impact of cyber attacks and potential information technology or data security breaches; (p) unexpected events, unplanned outages, supply disruptions, or failure of equipment or processes to meet specifications; (q) risks associated with large infrastructure construction projects; (r) the risk that the Firth Rixson business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected, which could result in additional demands on Alcoa’s resources, systems, procedures and controls, disruption of its ongoing business and diversion of management’s attention from other business concerns; (s) failure to receive, delays in the receipt of, or unacceptable or burdensome conditions imposed in connection with, all required regulatory approvals and the satisfaction of the closing conditions to the proposed acquisition of the Firth Rixson business; (t) the potential failure to retain key employees of Alcoa or Firth Rixson as a result of the proposed transaction or during integration of the businesses; and (u) the other risk factors summarized in Alcoa’s Form 10-K, including under Part I,

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Item 1A, for the year ended December 31, 2013, Form 10-Q for the quarter ended March 31, 2014, and the following sections of this report: Note H and the Derivatives section of Note O to the Consolidated Financial Statements; the discussion included above under Segment Information; and the summary included above regarding Alcoa’s liquidity position under Liquidity and Capital Resources – Financing Activities. 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.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

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

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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 second quarter of 2014, 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.

Environmental Matters

As previously reported, in 1996, Alcoa acquired the Fusina, Italy smelter and rolling operations and the Portovesme, Italy smelter (both of which are owned by Alcoa’s subsidiary, Alcoa Trasformazioni S.r.l.) from Alumix, an entity owned by the Italian Government. Alcoa also acquired the extrusion plants located in Feltre and Bolzano, Italy. 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. On April 5, 2006, Alcoa Trasformazioni S.r.l.’s Fusina site was also sued by the MOE and Minister of Public Works (MOPW) in the Civil Court of Venice for an alleged liability for environmental damages, in parallel with the orders already issued by the MOE. Alcoa Trasformazioni S.r.l. appealed the orders, defended the civil case for environmental damages (which is still pending) and filed suit against Alumix, as discussed below. Similar issues also existed with respect to the Bolzano and Feltre plants, based on orders issued by local authorities in 2006. All the orders have been challenged in front of the Administrative Regional Courts, and all trials are still pending. However, in Bolzano the Municipality of Bolzano withdrew the order, and the Regional Administrative Tribunal of Veneto suspended the order in Feltre. Most, if not all, of the underlying activities occurred during the ownership of Alumix, the governmental entity that sold the Italian plants to Alcoa.

As noted above, in response to the 2006 civil suit by the MOE and MOPW, Alcoa Trasformazioni S.r.l. filed suit against Alumix claiming indemnification under the original acquisition agreement, but brought that suit in the Court of Rome due to jurisdictional rules. The Court of Rome has appointed an expert to assess the causes of the pollution. In June 2008, the parties (Alcoa and now Ligestra S.r.l. (Ligestra), the successor to Alumix) signed a preliminary agreement by which they have committed to pursue a settlement and asked for a suspension of the technical assessment during the negotiations. The Court of Rome accepted the request, and postponed the technical assessment, reserving its ability to fix the deadline depending on the development of negotiations. Alcoa and Ligestra agreed to a settlement in December 2008 with respect to the Feltre site. Ligestra paid the sum of 1.08 million Euros and Alcoa committed to clean up the site. Further postponements were granted by the Court of Rome, and the next hearing was fixed for April 22, 2014. In the meantime, Alcoa Trasformazioni S.r.l. and Ligestra reached a preliminary agreement for settlement of the liabilities related to Fusina, allocating 80% and 20% of the remediation costs to Ligestra and Alcoa, respectively. In January 2014, a final agreement with Ligestra was signed, and on February 5, 2014, Alcoa signed a final agreement with the MOE and MOPW settling all environmental issues at the Fusina site. As set out in the agreement between Alcoa and Ligestra, those two parties will share the remediation costs and environmental damages claimed by the MOE and MOPW. The remediation project filed by Alcoa and Ligestra has been approved by the MOE. To provide time for settlement with Ligestra, the MOE and Alcoa jointly requested and the Civil Court of Venice has granted a series of postponements of hearings in the Venice trial, assuming that the case will be closed. Following the settlement, the parties caused the Court to dismiss the proceedings.

Alcoa and Ligestra have signed a similar agreement relating to the Portovesme site. However, that agreement is contingent upon final acceptance of the proposed soil remediation project for Portovesme that was rejected by the MOE in the fourth quarter of 2013. Alcoa intends to submit a revised proposal in 2014. Alcoa is unable to reasonably predict an outcome or to estimate a range of reasonably possible loss beyond what is described in Note H to the Consolidated Financial Statements for several reasons. First, the MOE has approved the remediation plan for Fusina only and certain costs relating to the remediation are not yet fixed. In connection with the proposed plan for Portovesme, the Company understands that the MOE has substantial discretion in defining what must be managed under the Italian soils law. The availability of appropriate landfills must also be considered as well as the nature of these sites. As a result, the scope and cost of the final remediation plan remain uncertain for Portovesme. In addition, even though the plan was rejected by the MOE and the settlement with Ligestra relating to Portovesme has become void, Alcoa should be held responsible only for its share of pollution. However, the area is impacted by many sources of pollution, as well as historical pollution. Consequently, the allocation of liabilities would need a very complex technical evaluation by the authorities that has not yet been performed.

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As previously reported, by an amended complaint filed April 21, 2005, Alcoa Global Fasteners, Inc. was added as a defendant in Orange County Water District (OCWD) v. Northrop Corporation, et al., civil action 04cc00715 (Superior Court of California, County of Orange). OCWD alleges contamination or threatened contamination of a drinking water aquifer by Alcoa, certain of the entities that preceded Alcoa at the same locations as property owners and/or operators, and other current and former industrial and manufacturing businesses that operated in Orange County in past decades. OCWD seeks to recover the cost of aquifer remediation and attorney’s fees. Trial on statutory, non-jury claims commenced on February 10, 2012, and continued through September 2012 when the case was submitted to the court for decision. On December 11, 2012, the court issued its tentative ruling in the matter dismissing plaintiff OCWD’s remaining statutory claims against all defendants. The court’s tentative ruling also invited further briefing on the decision and it is subject to modification. On January 21, 2013, defendants filed a joint brief responding to ten specific questions posed by the court’s tentative ruling. The joint brief argued that the court should make further findings of fact and law in favor of the defendants in response to the ten questions. Alcoa Global Fasteners, Inc. also filed a separate brief on two of the questions arguing that the court should determine that it is neither a cause of ground water contamination nor a cause of plaintiffs’ incurred costs. Remaining in the case at this time are common law trespass and nuisance claims for a Phase II trial which has not been scheduled. OCWD has asserted a total remedy cost of at least $150 million plus attorneys’ fees; however, the amount in controversy at this stage is limited to sums already expended by the OCWD, approximately $4 million. The court has indicated that it is not likely to grant the OCWD’s request for declaratory relief as to future sums the OCWD expends. On February 28, 2013, the court held a hearing on its tentative Statement of Decision finding that OCWD had not met its burden on the element of causation and, following that hearing, on May 10, 2013, issued a supplemental tentative decision, finding that plaintiff had not met its burden of proof. On that date, the court ordered defendants to submit a proposed statement of decision, followed by filing of objections and counter-proposed statement of decision by the plaintiff and responses by the defendants. All filings were completed by September 23, 2013 at which time the matter was submitted to the court for final decision. On October 29, 2013, the court issued its final Statement of Decision (“SOD”) which resolved the statutory law liability claims of the Phase I trial favorably to Alcoa and the other Phase I trial defendants. The plaintiff and the trial defendants disagree on the consequences of the SOD and the Phase I trial on the remaining two tort claims of nuisance and trespass. On December 19, 2013, the court held a Case Management Conference and approved the parties’ proposed briefing schedule regarding remaining issues. On June 20, 2014, following full briefing by the parties, the trial court entered final judgment in favor of Alcoa and the other trial defendants on the remaining tort claims.

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Item 1A. Risk Factors.

Alcoa’s business, financial condition, or results of operations may be impacted by a number of factors. In addition to the factors discussed separately in this report, in Part I, Item 1A to Alcoa’s Annual Report on Form 10-K for the year ended December 31, 2013, and other reports filed by Alcoa with the Securities and Exchange Commission, the following risks, updated from and in addition to the Form 10-K, could affect Alcoa’s business, financial condition, or results of operations. Additional risks and uncertainties not currently known to Alcoa or that Alcoa currently deems to be immaterial also may materially adversely affect Alcoa’s business, financial condition, or results of operations.

Alcoa could be materially adversely affected by declines in aluminum prices, including global, regional and product-specific prices.

The overall price of primary aluminum consists of several components: 1) the underlying base metal component, which is typically based on quoted prices from the London Metal Exchange (LME); 2) the regional premium, which comprises the incremental price over the base LME component that is associated with the physical delivery of metal to a particular region (e.g., the Midwest premium for metal sold in the United States); and 3) the product premium, which represents the incremental price for receiving physical metal in a particular shape (e.g., coil, billet, slab, rod, etc.) or alloy. Each of the above three components has its own drivers of variability. The LME price is typically driven by macroeconomic factors, global supply and demand of aluminum (including expectations for growth and contraction and the level of global inventories), and financial investors. Regional premiums tend to vary based on the supply of and demand for metal in a particular region and associated transportation costs. Product premiums generally are a function of supply and demand for a given primary aluminum shape and alloy combination in a particular region. Speculative trading in aluminum and the influence of hedge funds and other financial institutions participating in commodity markets have also increased in recent years, contributing to higher levels of price volatility. In 2013, the LME price of aluminum reached a high of $2,123 per metric ton and a low of $1,695 per metric ton. Continued high LME inventories, or the release of substantial inventories into the market, could lead to a reduction in the price of aluminum. Declines in the LME price have had a negative impact on Alcoa’s results of operations. Additionally, Alcoa’s results could be adversely affected by decreases in regional premiums that participants in the physical metal market pay for immediate delivery of aluminum, which are part of the overall aluminum price. Although regional premiums have reached levels substantially higher than historical averages during 2013 and 2014, new LME warehousing rules (see risk factor entitled “New LME warehousing rules could cause aluminum prices to decrease.”) or other factors may cause these premiums to decrease, which would have a negative impact on our results of operations. A sustained weak LME aluminum pricing environment, deterioration in LME aluminum prices, or a decrease in regional premiums or product premiums could have a material, adverse effect on Alcoa’s business, financial condition, and results of operations or cash flow.

New LME warehousing rules could cause aluminum prices to decrease.

In 2013, the LME announced new rules scheduled to take effect on April 1, 2014 that would require LME warehouses, under certain conditions, to deliver out more aluminum than they take in. Although in March 2014 a court in the United Kingdom ruled that the LME’s consultation process in developing the new rules had been unfair and unlawful, if these rules (after appeal of the ruling or a revised consultation process) or similar new rules become effective, such rules could cause an increase in the supply of aluminum to enter the physical market and may cause regional delivery premiums, product premiums and LME aluminum prices to fall. Decreases in regional delivery and product premiums, decreases in LME aluminum prices and increases in the supply of aluminum could have a material adverse effect on Alcoa’s business, financial condition, and results of operations or cash flow.

A downgrade of Alcoa’s credit ratings could limit Alcoa’s ability to obtain future financing, increase its borrowing costs, increase the pricing of its credit facilities, adversely affect the market price of its securities, trigger letter of credit or other collateral postings, or otherwise impair its business, financial condition, and results of operations.

Standard and Poor’s Ratings Services currently rates Alcoa’s long-term debt BBB-, the lowest level of investment grade rating, with a negative ratings outlook (ratings and outlook were affirmed on April 23, 2014). In May 2013, Moody’s Investors Service downgraded Alcoa’s long-term debt rating from Baa3 to Ba1, which is below investment grade, and changed the outlook from rating under review to stable. In April 2014, Fitch Ratings downgraded Alcoa’s rating from BBB- to BB+, a below investment grade rating,

57

and changed the outlook from negative to stable. There can be no assurance that one or more of these or other rating agencies will not take further negative actions with respect to Alcoa’s ratings. Increased debt levels, adverse aluminum market or macroeconomic conditions, a deterioration in the Company’s debt protection metrics, a contraction in the Company’s liquidity, or other factors could potentially trigger such actions. A rating agency may lower, suspend or withdraw entirely a rating or place it on negative outlook or watch if, in that rating agency’s judgment, circumstances so warrant.

As a result of the Moody’s downgrade, certain counterparties have required Alcoa to post letters of credit or cash collateral, and the cost of issuance of commercial paper has increased. For more information regarding the effects of the Moody’s downgrade on the Company’s liquidity, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Financing Activities” in this report. We do not believe that the Fitch downgrade will have a significant impact on Alcoa’s financing activities. However, any further downgrade of Alcoa’s credit ratings by one or more rating agencies could adversely impact the market price of Alcoa’s securities, adversely affect existing financing (for example, a downgrade by Standard and Poor’s or a further downgrade by Moody’s would subject Alcoa to higher costs under Alcoa’s Five-Year Revolving Credit Agreement and certain of its other revolving credit facilities), limit access to the capital (including commercial paper) or credit markets or otherwise adversely affect the availability of other new financing on favorable terms, if at all, result in more restrictive covenants in agreements governing the terms of any future indebtedness that the Company incurs, increase the cost of borrowing or fees on undrawn credit facilities, result in vendors or counterparties seeking collateral or letters of credit from Alcoa, or otherwise impair Alcoa’s business, financial condition and results of operations.

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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, 2014		3,754	$	11.36		—		—
February 1 - February 28, 2014		—		—		—		—
March 1 – March 31, 2014		—		—		—		—
Total for quarter ended March 31, 2014		3,754	$	11.36		—		—
April 1 - April 30, 2014		—		—		—		—
May 1 - May 31, 2014		—		—		—		—
June 1 – June 30, 2014		—		—		—		—
Total for quarter ended June 30, 2014		—		—		—		—

(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 4. Mine Safety Disclosures.

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 and Item 104 of Securities and Exchange Commission Regulation S-K (17 CFR 229.104) is included in Exhibit 95 of this report, which is incorporated herein by reference.

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Item 6. Exhibits.

2.	Share Purchase Agreement, dated as of June 25, 2014, by and among Alcoa Inc., Alcoa IH Limited, FR Acquisition Corporation (US), Inc., FR Acquisitions Corporation (Europe) Limited, FR Acquisition Finance Subco (Luxembourg), S.à.r.l. and Oak Hill Capital Partners III, L.P. and Oak Hill Capital Management Partners III, L.P., collectively in their capacity as the Seller Representative, incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated June 27, 2014
10(a).	Earnout Agreement, dated as of June 25, 2014, by and among Alcoa Inc., FR Acquisition Finance Subco (Luxembourg), S.à.r.l. and Oak Hill Capital Partners III, L.P. and Oak Hill Capital Management Partners III, L.P., collectively in their capacity as the Seller Representative, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 27, 2014
10(b).	Commitment Letter, dated as of June 25, 2014, between Alcoa Inc. and Morgan Stanley Senior Funding, Inc., incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 27, 2014
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
95.	Mine Safety
99.	Joinder Agreement, dated as of July 14, 2014, by and among Alcoa Inc.; Morgan Stanley Senior Funding, Inc.; Morgan Stanley Bank, N.A.; Credit Suisse AG, Cayman Islands Branch; Citibank, N.A.; Goldman Sachs Bank USA; JPMorgan Chase Bank, N.A.; The Bank of Tokyo-Mitsubishi UFJ, Ltd.; BNP Paribas; Royal Bank of Canada; and The Royal Bank of Scotland plc
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.
July 24, 2014	By	/s/ WILLIAM F. OPLINGER
Date	William F. Oplinger
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)
July 24, 2014	By	/s/ ROBERT S. COLLINS
Date	Robert S. Collins
	Vice President and Controller
	(Principal Accounting Officer)

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EXHIBIT INDEX

2.	Share Purchase Agreement, dated as of June 25, 2014, by and among Alcoa Inc., Alcoa IH Limited, FR Acquisition Corporation (US), Inc., FR Acquisitions Corporation (Europe) Limited, FR Acquisition Finance Subco (Luxembourg), S.à.r.l. and Oak Hill Capital Partners III, L.P. and Oak Hill Capital Management Partners III, L.P., collectively in their capacity as the Seller Representative, incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated June 27, 2014
10(a).	Earnout Agreement, dated as of June 25, 2014, by and among Alcoa Inc., FR Acquisition Finance Subco (Luxembourg), S.à.r.l. and Oak Hill Capital Partners III, L.P. and Oak Hill Capital Management Partners III, L.P., collectively in their capacity as the Seller Representative, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 27, 2014
10(b).	Commitment Letter, dated as of June 25, 2014, between Alcoa Inc. and Morgan Stanley Senior Funding, Inc., incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 27, 2014
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
95.	Mine Safety
99.	Joinder Agreement, dated as of July 14, 2014, by and among Alcoa Inc.; Morgan Stanley Senior Funding, Inc.; Morgan Stanley Bank, N.A.; Credit Suisse AG, Cayman Islands Branch; Citibank, N.A.; Goldman Sachs Bank USA; JPMorgan Chase Bank, N.A.; The Bank of Tokyo-Mitsubishi UFJ, Ltd.; BNP Paribas; Royal Bank of Canada; and The Royal Bank of Scotland plc
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)

Six months ended June 30,	2014
Earnings:
Loss before income taxes	$	(67	)
Noncontrolling interests’ share of earnings of majority-owned subsidiaries without fixed charges		—
Equity loss		25
Fixed charges added to earnings		244
Distributed income of less than 50 percent-owned persons		43
Amortization of capitalized interest:
Consolidated		24
Proportionate share of 50 percent-owned persons		—
Total earnings	$	269
Fixed Charges:
Interest expense:
Consolidated	$	225
Proportionate share of 50 percent-owned persons		—
	$	225
Amount representative of the interest factor in rents:
Consolidated	$	19
Proportionate share of 50 percent-owned persons		—
	$	19
Fixed charges added to earnings	$	244
Interest capitalized:
Consolidated	$	27
Proportionate share of 50 percent-owned persons		—
	$	27
Preferred stock dividend requirements of majority-owned subsidiaries		—
Total fixed charges	$	271
Ratio of earnings to fixed charges		(A	)

(A) For the six months ended June 30, 2014, there was a deficiency in earnings of $2 to cover total fixed charges.

EX-15

Exhibit 15

July 24, 2014

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

RE: Alcoa Inc.

Commissioners:

We are aware that our report dated July 24, 2014, on our review of interim financial information of Alcoa Inc. and its subsidiaries (Alcoa) for the three- and six-month periods ended June 30, 2014 and 2013 and included in Alcoa’s quarterly report on Form 10-Q for the quarter ended June 30, 2014 is incorporated by reference in its Registration Statements on Form S-3 (No. 333-197371) 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, 333-170801, 333-182899, and 333-189882).

Very truly yours,

/s/ PricewaterhouseCoopers LLP

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: July 24, 2014	/s/ KLAUS KLEINFELD
	Name:	Klaus Kleinfeld
	Title:	Chairman and Chief Executive Officer

I, William F. Oplinger, 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: July 24, 2014	/s/ WILLIAM F. OPLINGER
	Name:	William F. Oplinger
	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 June 30, 2014 (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: July 24, 2014	/s/ KLAUS KLEINFELD
	Name:	Klaus Kleinfeld
	Title:	Chairman and
		Chief Executive Officer
Date: July 24, 2014	/s/ WILLIAM F. OPLINGER
	Name:	William F. Oplinger
	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-95

Exhibit 95

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 2013, 42.4% of Alcoa’s global locations reported no recordable injuries, and 84.2% reported zero lost workdays. In Alcoa’s 2013 Employee Global Voices Survey, “If I see a situation that is unsafe, I can stop work” received the highest overall rating (at 91% favorable) 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”).

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 quarter ended June 30, 2014, as reflected in the MSHA system on June 30, 2014, and the proposed penalties received from the MSHA during such period. ($ in full amounts)

Mine or Operating Name/MSHA Identification Number(1)	Section 104 S&S Citations(3) (#)		Section 104(b) Orders(4) (#)		Section 104(d) Citations and Orders(5) (#)		Section 110(b)(2) Violations(6) (#)		Section 107(a) Orders(7) (#)		Total Dollar Value of MSHA Assessments Proposed(8) ($)		Total Number of Mining Related Fatalities (#)		Received Notice of Pattern of Violations Under Section 104(e) (yes/no)	Received Notice of Potential to Have Pattern Under Section 104(e) (yes/no)	Legal Actions Pending as of Last Day of Period (#)		Legal Actions Initiated During Period (#)		Legal Actions Resolved During Period (#)
Point Comfort, TX Alumina Refinery(2)		24		—		8		—		—	$	274,524		—	no	no		8		3		1

(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 quarter ended June 30, 2014, 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 June 30, 2014, Alcoa has a total of eight matters pending before the Commission. All of these matters concern contests of citations or orders issued under section 104 of the Mine Act, along with the contests of the proposed penalties for each of these and were issued by the MSHA during 2013 (six cases) and 2014 (two case).

EX-99

Exhibit 99

EXECUTION VERSION

Morgan Stanley Senior Funding, Inc.

1585 Broadway

New York, New York 10036

Alcoa Inc.

390 Park Avenue

New York, New York 10022

Attention:	Mr. Peter Hong
	Vice President and Treasurer

July 14, 2014

Ladies and Gentlemen:

Project Diamond

Joinder Agreement to Commitment Letter

364-Day Bridge Facility

Reference is made to the Commitment Letter dated June 25, 2014 (together with the exhibits and annexes attached thereto, as modified hereby, the “Commitment Letter”) between Morgan Stanley Senior Funding, Inc. (“MSSF” and, in its capacity as a Commitment Party, the “Initial Commitment Party”) and Alcoa Inc. (the “Borrower”). Capitalized terms used but not defined herein are used with the meanings assigned to them in the Commitment Letter. This Joinder Agreement to Commitment Letter (this “Joinder Agreement”) is a “joinder agreement” contemplated by Section 2 of the Commitment Letter and sets forth the understanding and agreement of the parties hereto regarding the joinder of each party identified on the signature pages hereof as an “Additional Commitment Party” (collectively, the “Additional Commitment Parties” and together with the Initial Commitment Party, the “Commitment Parties”) to the Commitment Letter.

Each Additional Commitment Party (a) commits, on a several but not joint basis, on the terms and conditions set forth herein and in the Commitment Letter, to provide a portion of the Facility in a principal amount set forth adjacent to its name on Schedule I hereto (the “Commitment Schedule”) and (b) becomes a party to the Commitment Letter as a Commitment Party thereunder having such commitment, and being subject to all applicable obligations thereunder, with the same force and effect as if originally named therein as a Commitment Party. The commitment of each Commitment Party to provide a portion of the Facility under this Joinder Agreement or the Commitment Letter is referred to herein as its “Commitment” and collectively as the “Commitments”. The Commitment of each Additional Commitment Party is subject only to the applicable conditions set forth in Section 1 of the Commitment Letter and Exhibit B thereto. Upon the execution and delivery of this Joinder Agreement by the parties hereto, the Commitments of the Initial Commitment Party under the Commitment Letter (as in effect immediately prior to the execution hereof) shall, in accordance with the Commitment Letter, be reduced on a dollar-for-dollar basis by the aggregate amount of the Commitments of the Additional Commitment Parties, such that the Commitment of each Commitment Party shall be as set forth in the Commitment Schedule. Each of the parties hereto agrees that any reference to “us”, “we”, “our”, “Commitment Party” and “Lenders” in the Commitment Letter or the Fee Letter shall, from and after the execution of this Joinder Letter, include the Additional Commitment Party.

In connection with each Additional Commitment Party’s Commitment under this Joinder Agreement, it is agreed that such Additional Commitment Party (or such Additional Commitment Party’s applicable affiliate) will be granted the title or designation with respect to the Facility as set forth opposite such Additional Commitment Party’s name on the Commitment Schedule.

As consideration for the Commitments of each Additional Commitment Party, MSSF agrees to pay the fees to each Additional Commitment Party as agreed and set forth on a separate fee schedule (the “Fee Schedule”) provided by the Arranger to each Additional Commitment Party on the date hereof, to the extent that such fees have been received by the Arranger from the Borrower pursuant to the Fee Letter (it being understood that nothing herein shall be deemed to modify the Fee Letter or increase any fees that have been paid or are payable by the Borrower thereunder).

Each Additional Commitment Party agrees that the syndication of the Facility shall be managed by MSSF in its capacity as the Arranger on the terms set forth in the Commitment Letter. Each Additional Commitment Party acknowledges and agrees that it shall not engage, nor shall it authorize any person on its behalf to engage, in any secondary selling or any solicitation of offers to purchase loans or commitments with respect to the Facility until such time as the Arranger declares the primary syndication of the Facility to be complete. Furthermore, each Additional Commitment Party represents that its Commitment represents a commitment from such Additional Commitment Party only, and does not in any way include a commitment or other arrangement from any other unaffiliated institution.

Each party hereto agrees that each Additional Commitment Party shall be bound by the terms and conditions of the Commitment Letter, and shall have all the rights and obligations with respect to its Commitment, to the same extent as the same are applicable to the Initial Commitment Party, on a several and not joint basis; provided, however, that this paragraph shall not apply to, and the Additional Commitment Parties shall not have any rights or benefits with respect to, (a) roles or titles assigned to MSSF pursuant to the Commitment Letter, (b) the provisions of the Commitment Letter applicable to the Arranger and the Administrative Agent in their capacities as such and (c) any provisions of the Fee Letter.

This Joinder Agreement supersedes any commitment advice or similar letter executed by any Additional Commitment Party on or prior to the date hereof in connection with the Facility, which commitment advice or similar letter shall in each case terminate upon the effectiveness of this Joinder Agreement.

This Joinder Agreement may not be assigned by any party hereto without the prior written consent of each other party hereto (and any purported assignment without such consent shall be null and void); provided, however, that a Commitment Party may assign its Commitment only to the extent permitted by, and in accordance with, the terms of the Commitment Letter. This Joinder Agreement is intended to be solely for the benefit of the parties hereto (and the indemnified persons) and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto.

This Joinder Agreement may not be amended or waived except by an instrument in writing signed by the parties hereto. This Joinder Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Joinder Agreement by electronic transmission (including by facsimile or electronic .pdf) shall be effective as delivery of a manually executed counterpart hereof. This Joinder Agreement and the Commitment Letter constitute the entire agreement among the parties hereto with respect to the Additional Commitment Parties’ respective Commitments and the fee compensation with respect thereto. No individual has been authorized by any Additional Commitment Party or any of its respective affiliates to make any oral or written statements

2

that are inconsistent with this Joinder Agreement. Following the execution and delivery of this Joinder Agreement by each of the parties hereto, the Commitment Letter and this Joinder Agreement shall be construed as a single instrument to the extent necessary to give effect to the provisions hereof and thereof. Notwithstanding any provision hereof or of the Commitment Letter, it is agreed and understood that all obligations of each of the Commitment Parties, whether pursuant hereto or pursuant to the Commitment Letter, shall be several and not joint obligations.

This Joinder Agreement shall be governed by, and construed in accordance with, the law of the State of New York (and each Additional Commitment Party hereby expressly acknowledges and agrees that it shall be subject to Section 6 of the Commitment Letter as a party thereto); provided that the foregoing shall not modify the governing law provisions set forth in the Commitment Letter. Each party hereto hereby waives any right it may have to a trial by jury with respect to any claim, action, suit or proceeding arising out of or contemplated by this Joinder Agreement. Each party hereto hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the federal and New York State courts located in the City of New York, Borough of Manhattan (and appellate courts thereof) in connection with any dispute related to, contemplated by or arising out of this Joinder Agreement and agrees that any service of process, summons, notice or document by registered mail addressed to such party at its address on the first page hereof or, in the case of any Additional Commitment Party, on its signature page hereto, shall be effective service of process for any suit, action or proceeding relating to any such dispute. Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection to the laying of venue of any such suit, action or proceeding brought in any such court and agrees that any final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and may be enforced in other jurisdictions by suit upon the judgment or in any other manner provided by law.

This Joinder Agreement (including all of the terms of the Commitment Letter) and the other terms and conditions contained herein shall be subject to the same confidentiality provisions applicable to the Commitment Letter (with the Fee Schedule being deemed subject to the same confidentiality provisions as are applicable to the Fee Letter) as provided in Section 8 of the Commitment Letter and the confidentiality provisions contained in Section 8 of the Commitment Letter are incorporated herein by reference, mutatis mutandis; provided that all references therein to “this Commitment Letter” shall be deemed to refer to this Joinder Letter.

Each Additional Commitment Party acknowledges that it has, independently and without any reliance upon MSSF or any of its affiliates, or any of its officers, directors, employees, agents, advisors or representatives, and based on the financial statements of the Borrower and its consolidated subsidiaries and the Acquired Business and such other documents as it has deemed appropriate, made its own credit analysis and decision to provide a Commitment and enter into this Joinder Agreement.

Except as otherwise set forth in the Commitment Letter, the compensation, reimbursement, indemnification, confidentiality, jurisdiction, waiver of jury trial and governing law provisions contained herein or in the Commitment Letter shall remain in full force and effect regardless of whether the Credit Documentation shall be executed and delivered and notwithstanding the termination of this Joinder Agreement, the Commitment Letter, or each Commitment Party’s Commitment.

All Commitments of the Commitment Parties shall continue until the earliest to occur of (i) the execution and delivery of the Credit Documentation by all parties thereto, (ii) the Commitment Termination Date, if the Credit Documentation shall not have been executed and delivered by all parties thereto and (iii) the date of abandonment of the Acquisition or termination of the Borrower’s or Acquisition Sub’s obligations under the Acquisition Agreement to consummate the Acquisition.

3

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms hereof by returning to us an executed counterpart hereof.

Very truly yours,

[remainder of page intentionally left blank]

4

MORGAN STANLEY BANK, N.A.,
as an Additional Commitment Party
By:	/s/ Anish Shah
Name:	Anish Shah
Title:	Authorized Signatory
Address for notices:
1585 Broadway
New York, New York 10036

[SIGNATURE PAGE TO JOINDER AGREEMENT]

Credit Suisse AG, Cayman Islands Branch, as an Additional Commitment Party

By:	/s/ Alain Daoust
Name:	Alain Daoust
Title:	Authorized signatory
By:	/s/ Michael Spaight
Name:	Michael Spaight
Title:	Authorized signatory

Address for notices:
Credit Suisse AG, Cayman Islands Branch
Eleven Madison Avenue
NY, New York, 10010
Attention:	Alain Daoust, Corporate Banking Group

[SIGNATURE PAGE TO JOINDER AGREEMENT]

CITIBANK, N.A.,
as an Additional Commitment Party
By:	/s/ Carolyn Kee
Name:	Carolyn Kee
Title:	Vice President
Address for notices:
Gavaskar Selvaraj
1615 Brett Road, Building III
New Castle, DE 19072
Telephone: 201-472-4414
Fax: 646-274-5000
GlOriginationOps@citi.com
With Copy to:
Louis Virgo
227 West Monroe Street 25
Chicago, IL 60606
Telephone: 1-312-876-3277
Fax: 1-312-205-0210
Louis.virgo@citi.com

[SIGNATURE PAGE TO JOINDER AGREEMENT]

GOLDMAN SACHS BANK USA,
as an Additional Commitment Party
By:	/s/ Mark Walton
Name:	Mark Walton
Title:	Authorized Signatory
Address for notices:
Michelle Latzoni
c/o Goldman Sachs Bank USA
30 Hudson Street, 5th Floor
Jersey City, NJ 07302

[SIGNATURE PAGE TO JOINDER AGREEMENT]

JPMorgan Chase Bank, N.A.,
as an Additional Commitment Party
By:	/s/ Peter Predun
Name:	Peter Predun
Title:	Executive Director
Address for notices:

James Shender, 383 Madison Avenue, 24th floor, New York, NY, 10179

Tesfaye Anteneh, 500 Stanton Christiana Road, Ops 2, Floor 3, Newark, DE, 19713

[SIGNATURE PAGE TO JOINDER AGREEMENT]

The Bank of Tokyo-Mitsubishi UFJ, Ltd., as an Additional Commitment Party

By:	/s/ Ravneet Mumick
Name:	Ravneet Mumick
Title:	Director
Address for notices:
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
1251 Avenue of the Americas
New York, NY 10020-1104
Tel. 212-782-4000

[SIGNATURE PAGE TO JOINDER AGREEMENT]

BNP Paribas, as an Additional Commitment Party
By:	/s/ Nicolas Rabier
Name:	NICOLAS RABIER
Title:	Managing Director
By:	/s/ BRENDAN HENEGHAN
Name:	BRENDAN HENEGHAN
Title:	Director
Address for notices:
BNP Paribas
Attn: Gustavo Derqui/Loan Servicing Dept.
1981 Avenue Mcgill College
Montreal, Canada

[SIGNATURE PAGE TO JOINDER AGREEMENT]

ROYAL BANK OF CANADA,
as an Additional Commitment Party
By:	/s/ Ian C. Blaker
Name:	Ian C. Blaker
Title:	Authorized Signatory
Address for notices:
3 World Financial Center, 12th Floor
200 Vesey Street
New York, NY 10281

[SIGNATURE PAGE TO JOINDER AGREEMENT]

The Royal Bank of Scotland plc,
as an Additional Commitment Party
By:	/s/ Jeannine Pascal
Name:	Jeannine Pascal
Title:	Vice President
Address for notices:
Credit notices:
Jeannine Pascal
The Royal Bank of Scotland plc
600 Washington Blvd.
Stamford, CT 06901
Operations:
The Royal Bank of Scotland plc
Attn: Justin Hurst
4246 Riverboat Road
Taylorsville, UT 84123
Email: GBMUSOCLendingOperations@rbs.com

[SIGNATURE PAGE TO JOINDER AGREEMENT]

Accepted and agreed to as of the date first written above by:
MORGAN STANLEY SENIOR FUNDING, INC.
By:	/s/ Anish Shah
Name:	Anish Shah
Title:	Authorized Signatory

[SIGNATURE PAGE TO JOINDER AGREEMENT]

Accepted and agreed to as of the date first written above by:
ALCOA INC.
By:	/s/ Peter Hong
Name:	Peter Hong
Title:	Vice President and Treasurer

[SIGNATURE PAGE TO JOINDER AGREEMENT]

Schedule I

to Joinder Agreement to Commitment Letter

Commitments

Commitment Party	Commitment		Title
MORGAN STANLEY BANK, N.A.	$	1,000,000,000	Participant
MORGAN STANLEY SENIOR FUNDING, INC.	$	0	Sole Lead Arranger and Bookrunner
CREDIT SUISSE AG	$	624,000,000	Documentation Agent
CITIBANK, N.A.	$	140,000,000	Documentation Agent
GOLDMAN SACHS BANK USA	$	140,000,000	Documentation Agent
JPMORGAN CHASE BANK, N.A.	$	140,000,000	Documentation Agent
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.	$	114,000,000	Participant
BNP PARIBAS	$	114,000,000	Participant
ROYAL BANK OF CANADA	$	114,000,000	Participant
THE ROYAL BANK OF SCOTLAND PLC	$	114,000,000	Participant
		Total: $2,500,000,000

XML

Inventories - Schedule of Inventory Components (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Inventory Disclosure [Abstract]
Finished goods	$ 688	$ 578
Work-in-process	1,077	828
Bauxite and alumina	642	581
Purchased raw materials	584	474
Operating supplies	236	244
Inventories, total	$ 3,227	$ 2,705

XML

Derivatives and Other Financial Instruments - Schedule of Fair Values and Corresponding Level of Fair Value Hierarchy of Outstanding Derivative Contracts Recorded as Assets (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	$ 346	$ 390	$ 596
Level 1 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	11	6
Level 3 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	305	355
Level 2 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	30	32
Derivatives Designated as Hedging Instruments [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	89	69
Derivatives Designated as Hedging Instruments [Member] | Prepaid Expenses and Other Current Assets [Member] | Aluminum Contracts [Member] | Level 1 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	5	4
Derivatives Designated as Hedging Instruments [Member] | Prepaid Expenses and Other Current Assets [Member] | Aluminum Contracts [Member] | Level 3 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	7	9
Derivatives Designated as Hedging Instruments [Member] | Prepaid Expenses and Other Current Assets [Member] | Foreign Exchange Contracts [Member] | Level 1 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	6	2
Derivatives Designated as Hedging Instruments [Member] | Prepaid Expenses and Other Current Assets [Member] | Interest Rate Contracts [Member] | Level 2 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	9	9
Derivatives Designated as Hedging Instruments [Member] | Other Noncurrent Assets [Member] | Aluminum Contracts [Member] | Level 3 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	17	16
Derivatives Designated as Hedging Instruments [Member] | Other Noncurrent Assets [Member] | Interest Rate Contracts [Member] | Level 2 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	21	23
Derivatives Designated as Hedging Instruments [Member] | Other Noncurrent Assets [Member] | Energy Contracts [Member] | Level 3 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	24	6
Derivatives Not Designated as Hedging Instruments [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	257	324
Derivatives Not Designated as Hedging Instruments [Member] | Prepaid Expenses and Other Current Assets [Member] | Aluminum Contracts [Member] | Level 3 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	116	149
Derivatives Not Designated as Hedging Instruments [Member] | Other Noncurrent Assets [Member] | Aluminum Contracts [Member] | Level 3 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives	141	175
Margin Held [Member] | Prepaid Expenses and Other Current Assets [Member] | Interest Rate Contracts [Member] | Level 2 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair value asset derivatives		$ 3

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Earnings per Share - Reconciliation of Information Used to Compute Basic and Diluted EPS (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Earnings Per Share [Abstract]
Net income (loss) attributable to Alcoa common shareholders	$ 138	$ (119)	$ (40)	$ 30
Less: preferred stock dividends declared			1	1
Net income (loss) available to Alcoa common shareholders - basic	138	(119)	(41)	29
Add: interest expense related to convertible notes	0	0	0	0
Net income (loss) available to Alcoa common shareholders - diluted	$ 138	$ (119)	$ (41)	$ 29
Average shares outstanding - basic	1,173	1,069	1,137	1,069
Stock options	6			2
Stock and performance awards	10			8
Average shares outstanding - diluted	1,189	1,069	1,137	1,079

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Derivatives and Other Financial Instruments - Schedule of Fair Values and Corresponding Level of Fair Value Hierarchy of Outstanding Derivative Contracts Recorded as Liabilities (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Derivative [Line Items]
Fair value liability derivatives	$ 457	$ 479
Level 1 [Member]
Derivative [Line Items]
Fair value liability derivatives	30	66
Level 3 [Member]
Derivative [Line Items]
Fair value liability derivatives	436	431
Derivatives Designated as Hedging Instruments [Member]
Derivative [Line Items]
Fair value liability derivatives	448	469
Derivatives Designated as Hedging Instruments [Member] | Other Current Liabilities [Member] | Aluminum Contracts [Member] | Level 1 [Member]
Derivative [Line Items]
Fair value liability derivatives	16	45
Derivatives Designated as Hedging Instruments [Member] | Other Current Liabilities [Member] | Aluminum Contracts [Member] | Level 3 [Member]
Derivative [Line Items]
Fair value liability derivatives	26	23
Derivatives Designated as Hedging Instruments [Member] | Other Current Liabilities [Member] | Foreign Exchange Contracts [Member] | Level 1 [Member]
Derivative [Line Items]
Fair value liability derivatives	4
Derivatives Designated as Hedging Instruments [Member] | Other Noncurrent Liabilities and Deferred Credits [Member] | Aluminum Contracts [Member] | Level 1 [Member]
Derivative [Line Items]
Fair value liability derivatives	6	14
Derivatives Designated as Hedging Instruments [Member] | Other Noncurrent Liabilities and Deferred Credits [Member] | Aluminum Contracts [Member] | Level 3 [Member]
Derivative [Line Items]
Fair value liability derivatives	396	387
Derivatives Not Designated as Hedging Instruments [Member]
Derivative [Line Items]
Fair value liability derivatives	18	28
Derivatives Not Designated as Hedging Instruments [Member] | Other Current Liabilities [Member] | Aluminum Contracts [Member] | Level 1 [Member]
Derivative [Line Items]
Fair value liability derivatives	2	4
Derivatives Not Designated as Hedging Instruments [Member] | Other Current Liabilities [Member] | Foreign Exchange Contracts [Member] | Level 1 [Member]
Derivative [Line Items]
Fair value liability derivatives	2	3
Derivatives Not Designated as Hedging Instruments [Member] | Other Current Liabilities [Member] | Embedded Credit Derivative [Member] | Level 3 [Member]
Derivative [Line Items]
Fair value liability derivatives	2	2
Derivatives Not Designated as Hedging Instruments [Member] | Other Noncurrent Liabilities and Deferred Credits [Member] | Embedded Credit Derivative [Member] | Level 3 [Member]
Derivative [Line Items]
Fair value liability derivatives	12	19
Margin Posted [Member] | Other Current Liabilities [Member] | Aluminum Contracts [Member] | Level 1 [Member]
Derivative [Line Items]
Fair value liability derivatives	$ 9	$ 18

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Segment Information - Schedule of Operating Results of Alcoa's Reportable Segment (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Total sales	$ 5,836	$ 5,849	$ 11,290	$ 11,682
Equity loss	(30)	(10)	(68)	(22)
Depreciation, depletion, and amortization	328	341	647	682
Income taxes	167	115	321	253
After-tax operating income (ATOI)	418	304	743	655
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total sales	7,024	7,088	13,700	14,247
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Intersegment sales	1,242	1,301	2,529	2,674
Third-Party Sales [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Third-party sales	5,782	5,787	11,171	11,573
Alumina [Member]
Segment Reporting Information [Line Items]
Equity loss	(7)	(1)	(12)
Depreciation, depletion, and amortization	100	115	197	224
Income taxes	12	14	52	28
After-tax operating income (ATOI)	38	64	130	122
Alumina [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total sales	1,241	1,403	2,596	2,824
Alumina [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Intersegment sales	480	581	990	1,176
Alumina [Member] | Third-Party Sales [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Third-party sales	761	822	1,606	1,648
Primary Metals [Member]
Segment Reporting Information [Line Items]
Equity loss	(17)	(7)	(45)	(16)
Depreciation, depletion, and amortization	129	132	253	267
Income taxes	30	(25)	19	(24)
After-tax operating income (ATOI)	97	(32)	82	7
Primary Metals [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total sales	2,377	2,297	4,535	4,782
Primary Metals [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Intersegment sales	718	677	1,452	1,404
Primary Metals [Member] | Third-Party Sales [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Third-party sales	1,659	1,620	3,083	3,378
Global Rolled Products [Member]
Segment Reporting Information [Line Items]
Equity loss	(6)	(2)	(11)	(6)
Depreciation, depletion, and amortization	58	55	116	112
Income taxes	23	32	57	71
After-tax operating income (ATOI)	79	79	138	160
Global Rolled Products [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total sales	1,904	1,920	3,624	3,750
Global Rolled Products [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Intersegment sales	44	43	87	94
Global Rolled Products [Member] | Third-Party Sales [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Third-party sales	1,860	1,877	3,537	3,656
Engineered Products and Solutions [Member]
Segment Reporting Information [Line Items]
Depreciation, depletion, and amortization	41	39	81	79
Income taxes	102	94	193	178
After-tax operating income (ATOI)	204	193	393	366
Engineered Products and Solutions [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total sales	1,502	1,468	2,945	2,891
Engineered Products and Solutions [Member] | Third-Party Sales [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Third-party sales	$ 1,502	$ 1,468	$ 2,945	$ 2,891

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Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Pension and other postretirement benefits
Total Other comprehensive income	$ 15	$ 63	$ 92	$ 159
Foreign currency translation
Other comprehensive income (loss)	200	(852)	536	(952)
Available-for-sale securities
Other comprehensive income (loss)	1	(3)	1	(2)
Cash flow hedges (O)
Total Other comprehensive (loss) income	(31)	69	3	184
Alcoa [Member]
Pension and other postretirement benefits
Balance at beginning of period	(3,455)	(3,968)	(3,532)	(4,063)
Unrecognized net actuarial loss and prior service cost/benefit	(80)	(38)	(63)	(27)
Tax benefit	28	17	25	14
Total Other comprehensive loss before reclassifications, net of tax	(52)	(21)	(38)	(13)
Amortization of net actuarial loss and prior service cost/benefit	101	128	199	260
Tax expense	(35)	(46)	(70)	(91)
Total amount reclassified from Accumulated other comprehensive loss, net of tax	66	82	129	169
Total Other comprehensive income	14	61	91	156
Balance at end of period	(3,441)	(3,907)	(3,441)	(3,907)
Foreign currency translation
Balance at beginning of period	428	1,031	179	1,147
Other comprehensive income (loss)	141	(603)	390	(719)
Balance at end of period	569	428	569	428
Available-for-sale securities
Balance at beginning of period	2	4	2	3
Other comprehensive income (loss)	1	(3)	1	(2)
Balance at end of period	3	1	3	1
Cash flow hedges (O)
Balance at beginning of period	(276)	(376)	(308)	(489)
Net change from periodic revaluations	(32)	85	4	221
Tax benefit (expense)	4	(16)	(4)	(45)
Total Other comprehensive (loss) income before reclassifications, net of tax	(28)	69	0	176
Net amount reclassified to earnings	6	1	11	8
Tax (expense) benefit	(1)	1	(2)	0
Total amount reclassified from Accumulated other comprehensive loss, net of tax	5	2	9	8
Total Other comprehensive (loss) income	(23)	71	9	184
Balance at end of period	(299)	(305)	(299)	(305)
Alcoa [Member] | Aluminum Contracts [Member]
Cash flow hedges (O)
Net amount reclassified to earnings	6	0	11	7
Alcoa [Member] | Foreign Exchange Contracts [Member]
Cash flow hedges (O)
Net amount reclassified to earnings	(1)	0	(1)	0
Alcoa [Member] | Interest Rate Contracts [Member]
Cash flow hedges (O)
Net amount reclassified to earnings	1	1	1	1
Noncontrolling Interests [Member]
Pension and other postretirement benefits
Balance at beginning of period	(51)	(76)	(51)	(77)
Unrecognized net actuarial loss and prior service cost/benefit	0	0	0	0
Tax benefit	0	0	0	0
Total Other comprehensive loss before reclassifications, net of tax	0	0	0	0
Amortization of net actuarial loss and prior service cost/benefit	1	4	2	5
Tax expense		(2)	(1)	(2)
Total amount reclassified from Accumulated other comprehensive loss, net of tax	1	2	1	3
Total Other comprehensive income	1	2	1	3
Balance at end of period	(50)	(74)	(50)	(74)
Foreign currency translation
Balance at beginning of period	(23)	273	(110)	257
Other comprehensive income (loss)	59	(249)	146	(233)
Balance at end of period	36	24	36	24
Available-for-sale securities
Balance at beginning of period	0	0	0	0
Other comprehensive income (loss)	0	0	0	0
Balance at end of period	0	0	0	0
Cash flow hedges (O)
Balance at beginning of period	0	(3)	(2)	(5)
Net change from periodic revaluations	(12)	(3)	(9)	0
Tax benefit (expense)	4	1	3	0
Total Other comprehensive (loss) income before reclassifications, net of tax	(8)	(2)	(6)	0
Net amount reclassified to earnings	0	0	0	0
Tax (expense) benefit	0	0	0	0
Total amount reclassified from Accumulated other comprehensive loss, net of tax	0	0	0	0
Total Other comprehensive (loss) income	(8)	(2)	(6)	0
Balance at end of period	(8)	(5)	(8)	(5)
Noncontrolling Interests [Member] | Aluminum Contracts [Member]
Cash flow hedges (O)
Net amount reclassified to earnings	0	0	0	0
Noncontrolling Interests [Member] | Foreign Exchange Contracts [Member]
Cash flow hedges (O)
Net amount reclassified to earnings	0	0	0	0
Noncontrolling Interests [Member] | Interest Rate Contracts [Member]
Cash flow hedges (O)
Net amount reclassified to earnings	$ 0	$ 0	$ 0	$ 0

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Derivatives and Other Financial Instruments - Gross Amounts of Recognized Derivative Assets and Liabilities and Gross Amounts Offset in Accompanying Consolidated Balance Sheet (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Offsetting [Abstract]
Margin on derivative posted with counterparties	$ 9	$ 18

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2014

Equity [Abstract]

Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component

The following table details the activity of the four components that comprise Accumulated other comprehensive (loss) income for both Alcoa’s shareholders and noncontrolling interests:

	Alcoa						Noncontrolling Interests
	Second quarter ended June 30,						Second quarter ended June 30,
	2014			2013			2014			2013
Pension and other postretirement benefits
Balance at beginning of period	$	(3,455	)	$	(3,968	)	$	(51	)	$	(76	)
Other comprehensive income:
Unrecognized net actuarial loss and prior service cost/benefit		(80	)		(38	)		—			—
Tax benefit		28			17			—			—
Total Other comprehensive loss before reclassifications, net of tax		(52	)		(21	)		—			—
Amortization of net actuarial loss and prior service cost/benefit(1)		101			128			1			4
Tax expense(2)		(35	)		(46	)		—			(2	)
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		66			82			1			2
Total Other comprehensive income		14			61			1			2
Balance at end of period	$	(3,441	)	$	(3,907	)	$	(50	)	$	(74	)
Foreign currency translation
Balance at beginning of period	$	428		$	1,031		$	(23	)	$	273
Other comprehensive income (loss)(3)		141			(603	)		59			(249	)
Balance at end of period	$	569		$	428		$	36		$	24
Available-for-sale securities
Balance at beginning of period	$	2		$	4		$	—		$	—
Other comprehensive income (loss)(4)		1			(3	)		—			—
Balance at end of period	$	3		$	1		$	—		$	—
Cash flow hedges (O)
Balance at beginning of period	$	(276	)	$	(376	)	$	—		$	(3	)
Other comprehensive (loss) income:
Net change from periodic revaluations		(32	)		85			(12	)		(3	)
Tax benefit (expense)		4			(16	)		4			1
Total Other comprehensive (loss) income before reclassifications, net of tax		(28	)		69			(8	)		(2	)
Net amount reclassified to earnings:
Aluminum contracts(5)		6			—			—			—
Foreign exchange contracts(5)		(1	)		—			—			—
Interest rate contracts(6)		1			1			—			—
Sub-total		6			1			—			—
Tax (expense) benefit(2)		(1	)		1			—			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		5			2			—			—
Total Other comprehensive (loss) income		(23	)		71			(8	)		(2	)
Balance at end of period	$	(299	)	$	(305	)	$	(8	)	$	(5	)
	Alcoa						Noncontrolling Interests
	Six months ended     June 30,						Six months ended   June 30,
	2014			2013			2014			2013
Pension and other postretirement benefits
Balance at beginning of period	$	(3,532	)	$	(4,063	)	$	(51	)	$	(77	)
Other comprehensive income:
Unrecognized net actuarial loss and prior service cost/benefit		(63	)		(27	)		—			—
Tax benefit		25			14			—			—
Total Other comprehensive loss before reclassifications, net of tax		(38	)		(13	)		—			—
Amortization of net actuarial loss and prior service cost/benefit(1)		199			260			2			5
Tax expense(2)		(70	)		(91	)		(1	)		(2	)
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		129			169			1			3
Total Other comprehensive income		91			156			1			3
Balance at end of period	$	(3,441	)	$	(3,907	)	$	(50	)	$	(74	)
Foreign currency translation
Balance at beginning of period	$	179		$	1,147		$	(110	)	$	257
Other comprehensive income (loss)(3)		390			(719	)		146			(233	)
Balance at end of period	$	569		$	428		$	36		$	24
Available-for-sale securities
Balance at beginning of period	$	2		$	3		$	—		$	—
Other comprehensive income (loss)(4)		1			(2	)		—			—
Balance at end of period	$	3		$	1		$	—		$	—
Cash flow hedges (O)
Balance at beginning of period	$	(308	)	$	(489	)	$	(2	)	$	(5	)
Other comprehensive income (loss):
Net change from periodic revaluations		4			221			(9	)		—
Tax expense		(4	)		(45	)		3			—
Total Other comprehensive income (loss) before reclassifications, net of tax		—			176			(6	)		—
Net amount reclassified to earnings:
Aluminum contracts(5)		11			7			—			—
Foreign exchange contracts(5)		(1	)		—			—			—
Interest rate contracts(6)		1			1			—			—
Sub-total		11			8			—			—
Tax expense(2)		(2	)		—			—			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		9			8			—			—
Total Other comprehensive income (loss)		9			184			(6	)		—
Balance at end of period	$	(299	)	$	(305	)	$	(8	)	$	(5	)

⁽¹⁾  These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note N).

⁽²⁾  These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations.

⁽³⁾  In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings.

⁽⁴⁾  In all periods presented, unrealized and realized gains and losses related to these securities were immaterial. Realized gains and losses were included in Other expenses (income), net on the accompanying Statement of Consolidated Operations.

⁽⁵⁾  These amounts were included in Sales on the accompanying Statement of Consolidated Operations.

⁽⁶⁾  These amounts were included in Interest expense on the accompanying Statement of Consolidated Operations.

⁽⁷⁾  A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 1 through 6.

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 BusinessTaxProvision	Jun. 30, 2013	Dec. 31, 2012
Income Tax Contingency [Line Items]
Effective tax rate	37.70%	16.50%	1.50%	79.40%
U.S federal statutory rate	35.00%	35.00%	35.00%	35.00%
Operational losses in certain foreign jurisdictions	$ 20,000,000		$ 36,000,000
Tax benefit	78,000,000	21,000,000	1,000,000	85,000,000
Percentage of tax differences that reverse within end of 2014		(51.50%)	(36.50%)
Nondeductible charge		103,000,000		103,000,000
Number of specific temporary business tax provisions expired during the period			2
Tax provision due to two specific temporary business tax provision that expired in 2011					19,000,000
Foreign tax credits carry forward period			10 years
Maximum [Member]
Income Tax Contingency [Line Items]
Percentage of tax differences that reverse within end of 2014			34.00%
Minimum [Member]
Income Tax Contingency [Line Items]
Percentage of tax differences that reverse within end of 2014			15.00%
Italy [Member]
Income Tax Contingency [Line Items]
Tax benefit		0
Foreign Jurisdictions [Member]
Income Tax Contingency [Line Items]
Tax benefit	0		0
Spain and Australia Authority [Member]
Income Tax Contingency [Line Items]
Discrete income tax charge		10,000,000
U.S. [Member]
Income Tax Contingency [Line Items]
Discrete income tax charge				10,000,000
Discrete income tax benefit				19,000,000
Foreign Tax Authority [Member]
Income Tax Contingency [Line Items]
Decrease to the net deferred tax asset and noncash charge to earnings			$ 60,000,000

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Contingencies and Commitments - Additional Information (Detail) In Millions, unless otherwise specified	1 Months Ended									1 Months Ended					0 Months Ended
	Jul. 31, 2012 Plant	Jun. 30, 2012 USD ($) Installment	Jun. 30, 2012 EUR (€)	Mar. 26, 2012 USD ($)	Mar. 26, 2012 EUR (€)	Jun. 30, 2010 t	Feb. 21, 2013 Minimum [Member] USD ($)	Feb. 21, 2013 Maximum [Member] USD ($)	Feb. 21, 2013 Maximum [Member] EUR (€)	Nov. 30, 2006 Curtis v. Alcoa Inc. [Member] Person	Jun. 30, 2014 Alcoa [Member] USD ($)	Jun. 30, 2014 Alcoa [Member] EUR (€)	Feb. 21, 2013 Alcoa Trasformazioni [Member] USD ($)	Feb. 21, 2013 Alcoa Trasformazioni [Member] EUR (€)	Nov. 19, 2009 Italian Government [Member] USD ($) Plant	Nov. 19, 2009 Italian Government [Member] EUR (€) Plant	Dec. 31, 2012 Portovesme [Member] t
Loss Contingencies [Line Items]
Retired former employees involved in class action										13,000
Management estimate for maximum exposure from class action				$ 110	€ 85								$ 97	€ 76
Provision for contract losses							0	97	76
Charge related to European Commission announcement															250	173
Number of smelters	2														2	2
Write-off of receivable															20	14
Establishment reserve															230	159
Recovery amount		375	303
Reduction in recovery amount		65	53
Payments to Italian Government		310	250
Payments to Italian Government, installments amount		69	50
Number of installments, litigation payment		5	5
Litigation reserve		216	159								0
Range of reasonable possible loss, minimum		216	159
Range of reasonable possible loss, maximum		413	303
Noncurrent asset											$ 125	€ 91
Amount of curtailment, metric-tons-per-year						44,000											150,000

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Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	$ 110	$ 244	$ 571	$ 251
Other layoff cost including reclassification in pension cost			137		185
Asset Retirement Obligations [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges			55		58
Environmental Remediation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges			42		12
Pension Costs [Member]
Restructuring Cost and Reserve [Line Items]
Other layoff cost including reclassification in pension cost					$ 92

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Pension and Other Postretirement Benefits - Components of Net Periodic Benefit Cost (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 42	$ 48	$ 83	$ 99
Interest cost	159	151	319	303
Expected return on plan assets	(195)	(198)	(388)	(396)
Recognized net actuarial loss	98	124	195	247
Amortization of prior service cost (benefit)	5	5	9	10
Settlement				2
Net periodic benefit cost	109	130	218	265
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	4	5	8	9
Interest cost	29	29	58	57
Recognized net actuarial loss	3	8	6	17
Amortization of prior service cost (benefit)	(4)	(5)	(9)	(9)
Net periodic benefit cost	$ 32	$ 37	$ 63	$ 74

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Derivatives and Other Financial Instruments - Schedule of Fair Value Gains and Losses on Derivatives Contracts Recorded in Earnings (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	$ 9	$ (19)	$ (1)	$ (6)
Aluminum Contracts [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	1	(3)	(4)	(7)
Aluminum Contracts [Member] | Other Expenses (Income), Net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	(1)	(7)	(1)	15
Embedded Credit Derivative [Member] | Other Expenses (Income), Net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	6	(7)	7	(9)
Foreign Exchange Contracts [Member] | Other Expenses (Income), Net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	$ 3	$ (2)	$ (3)	$ (5)

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Derivatives and Other Financial Instruments - Schedule of Quantitative Information for Level 3 Derivative Contracts (Detail) (USD $)					6 Months Ended			6 Months Ended			6 Months Ended			6 Months Ended					6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2012	Jun. 30, 2014 Interrelationship of Future Aluminum and Oil Prices [Member] Aluminum Contracts [Member]	Jun. 30, 2014 Interrelationship of Future Aluminum and Oil Prices [Member] Aluminum Contracts [Member] Minimum [Member] Discounted Cash Flow [Member]	Jun. 30, 2014 Interrelationship of Future Aluminum and Oil Prices [Member] Aluminum Contracts [Member] Maximum [Member] Discounted Cash Flow [Member]	Jun. 30, 2014 Interrelationship of Future Aluminum Prices, Foreign Currency Exchange Rates, and U.S. Consumer Price Index [Member] Aluminum Contracts [Member]	Jun. 30, 2014 Interrelationship of Future Aluminum Prices, Foreign Currency Exchange Rates, and U.S. Consumer Price Index [Member] Aluminum Contracts [Member] Minimum [Member] Discounted Cash Flow [Member] Index	Jun. 30, 2014 Interrelationship of Future Aluminum Prices, Foreign Currency Exchange Rates, and U.S. Consumer Price Index [Member] Aluminum Contracts [Member] Maximum [Member] Discounted Cash Flow [Member] Index	Jun. 30, 2014 Interrelationship of LME Price to Overall Energy Price [Member] Aluminum Contracts [Member]	Jun. 30, 2014 Interrelationship of LME Price to Overall Energy Price [Member] Aluminum Contracts [Member] Minimum [Member] Discounted Cash Flow [Member]	Jun. 30, 2014 Interrelationship of LME Price to Overall Energy Price [Member] Aluminum Contracts [Member] Maximum [Member] Discounted Cash Flow [Member]	Jun. 30, 2014 Price of Electricity beyond Forward Curve [Member] Energy Contracts [Member]	Jun. 30, 2014 Price of Electricity beyond Forward Curve [Member] Energy Contracts [Member] Minimum [Member] Discounted Cash Flow [Member]	Jun. 30, 2014 Price of Electricity beyond Forward Curve [Member] Energy Contracts [Member] Maximum [Member] Discounted Cash Flow [Member]	Jun. 30, 2014 Price of Aluminum beyond Forward Curve [Member] Aluminum Contracts [Member] Minimum [Member] Discounted Cash Flow [Member]	Jun. 30, 2014 Price of Aluminum beyond Forward Curve [Member] Aluminum Contracts [Member] Maximum [Member] Discounted Cash Flow [Member]	Jun. 30, 2014 Credit Spread between Alcoa and Counterparty [Member] Embedded Credit Derivative [Member]	Jun. 30, 2014 Credit Spread between Alcoa and Counterparty [Member] Embedded Credit Derivative [Member] Minimum [Member] Discounted Cash Flow [Member]	Jun. 30, 2014 Credit Spread between Alcoa and Counterparty [Member] Embedded Credit Derivative [Member] Maximum [Member] Discounted Cash Flow [Member]	Jun. 30, 2014 Credit Spread between Alcoa and Counterparty [Member] Embedded Credit Derivative [Member] Median [Member] Discounted Cash Flow [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative Assets, Fair value	$ 346,000,000	$ 390,000,000	$ 596,000,000	$ 257,000,000			$ 24,000,000			$ 24,000,000			$ 422,000,000
Price of aluminum beyond forward curve																2,453	2,594
Derivative Liabilities, Fair value	457,000,000	479,000,000																14,000,000
Expected future aluminum prices					1,871	2,141		1,858	2,019		1,846	2,183
Maturity year of future aluminum price					2014	2018		2014	2016		2014	2019				2023	2027
Expected future oil prices					99	113
Percentage of credit spread																			0.73%	1.61%	1.17%
Price of electricity beyond forward curve														$ 83	$ 154
Maturity year of future oil price					2018	2014
Maturity date of electricity beyond forward curve														2014	2036
Foreign currency exchange rate								1
Foreign currency exchange rate								0.94	0.90
Foreign currency exchange rate expected year								2014	2016
Consumer price index base year									1982
Expected consumer price index								236	248
Consumer price index base									100
Expected consumer price index, Year								2014	2016

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Segment Information - Schedule of Segment ATOI to Consolidated Net Income (Loss) Attributable to Alcoa (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Total segment ATOI	$ 418	$ 304	$ 743	$ 655
Interest expense	(105)	(118)	(225)	(233)
Noncontrolling interests	(9)	(29)	(28)	(8)
Consolidated net income (loss) attributable to Alcoa	138	(119)	(40)	30
Unallocated Amounts (Net of Tax) [Member]
Segment Reporting Information [Line Items]
Impact of LIFO	(8)	5	(15)	3
Interest expense	(69)	(76)	(147)	(151)
Noncontrolling interests	9	29	28	8
Corporate expense	(70)	(71)	(137)	(138)
Restructuring and other charges	(77)	(211)	(398)	(216)
Other	$ (65)	$ (99)	$ (114)	$ (131)

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Basis of Presentation

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

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 2013 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, 2013, which includes all disclosures required by GAAP.

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Derivatives and Other Financial Instruments - Schedule of Gain or Loss on Hedged Items and Derivative Contracts (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	$ 21	$ (57)	$ 4	$ (125)
Amount of Gain or (Loss) Recognized in Earnings on Hedged Items	(14)	61	(17)	129
Aluminum Contracts [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	19	(59)	(1)	(130)
Amount of Gain or (Loss) Recognized in Earnings on Hedged Items	(12)	63	(12)	134
Interest Rate Contracts [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives	2	2	5	5
Amount of Gain or (Loss) Recognized in Earnings on Hedged Items	$ (2)	$ (2)	$ (5)	$ (5)

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Contingencies and Commitments - Additional Information - 1 (Detail) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended				6 Months Ended							6 Months Ended		3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended	12 Months Ended	3 Months Ended	6 Months Ended		6 Months Ended
	Jun. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Dec. 31, 2013 USD ($)	Jun. 30, 2012 USD ($)	Jun. 30, 2012 EUR (€)	Jun. 30, 2014 Minimum [Member]	Jun. 30, 2014 Maximum [Member]	Jun. 30, 2014 Recurring Costs of Managing Hazardous Substances and Environmental Programs [Member]	Jan. 31, 2007 Tariffs Granted by Spain [Member] USD ($)	Jan. 31, 2007 Tariffs Granted by Spain [Member] EUR (€)	Jun. 30, 2014 Massena West, NY [Member] USD ($)	Jun. 30, 2014 Sherwin, TX site [Member] USD ($)	Jun. 30, 2014 Sherwin, TX site [Member] Minimum [Member]	Jun. 30, 2014 Sherwin, TX site [Member] Maximum [Member]	Jun. 30, 2014 Grasse River [Member] USD ($)	Jun. 30, 2014 Grasse River [Member] USD ($)	Jun. 30, 2014 Massena East, Ny and Point Henry and Yennora, Australia [Member] USD ($)	Jun. 30, 2014 Portovesme [Member] USD ($)	Jun. 30, 2014 Portovesme [Member] USD ($)	Dec. 31, 2009 Portovesme [Member] USD ($)	Jun. 30, 2014 Other Sites [Member] USD ($)	Jun. 30, 2014 Other Sites [Member] USD ($)	Jun. 30, 2014 East St. Louis, IL Site [Member] USD ($)	Jun. 30, 2014 East St. Louis, IL Site [Member] Minimum [Member]	Jun. 30, 2014 East St. Louis, IL Site [Member] Maximum [Member]
Loss Contingencies [Line Items]
Loss contingency, range of possible loss, maximum				$ 413	€ 303				$ 95	€ 70
Number of cleanup locations		More than 100
Remediation reserve balance	571	571	509								241	33											22
Remediation reserve balance, classified as a current liability	76	76	48
Increase in remediation reserve		38													5	52		3		3
Remediation reserve adjustment		42															38	3	3		2	11
Payments related to remediation expenses applied against the reserve	14	20
Increase in reserves due to effects of foreign currency translation	$ 15	$ 30
Percentage of cost of goods sold								2.00%
Planning and design phase period						2 years	3 years
Actual remediation fieldwork period		4 years
Majority of the project funding period						2016	2020																	2014	2015
Guarantees, expiration date													2014	2019

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Schedule of Operating Results of Alcoa's Reportable Segments

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

	Alumina			Primary Metals			Global Rolled Products			Engineered Products and Solutions		Total
Second quarter ended June 30, 2014
Sales:
Third-party sales	$	761		$	1,659		$	1,860		$	1,502	$	5,782
Intersegment sales		480			718			44			—		1,242
Total sales	$	1,241		$	2,377		$	1,904		$	1,502	$	7,024
Profit and loss:
Equity loss	$	(7	)	$	(17	)	$	(6	)	$	—	$	(30	)
Depreciation, depletion, and amortization		100			129			58			41		328
Income taxes		12			30			23			102		167
After-tax operating income (ATOI)		38			97			79			204		418
Second quarter ended June 30, 2013
Sales:
Third-party sales	$	822		$	1,620		$	1,877		$	1,468	$	5,787
Intersegment sales		581			677			43			—		1,301
Total sales	$	1,403		$	2,297		$	1,920		$	1,468	$	7,088
Profit and loss:
Equity loss	$	(1	)	$	(7	)	$	(2	)	$	—	$	(10	)
Depreciation, depletion, and amortization		115			132			55			39		341
Income taxes		14			(25	)		32			94		115
ATOI		64			(32	)		79			193		304
Six months ended June 30, 2014
Sales:
Third-party sales	$	1,606		$	3,083		$	3,537		$	2,945	$	11,171
Intersegment sales		990			1,452			87			—		2,529
Total sales	$	2,596		$	4,535		$	3,624		$	2,945	$	13,700
Profit and loss:
Equity loss	$	(12	)	$	(45	)	$	(11	)	$	—	$	(68	)
Depreciation, depletion, and amortization		197			253			116			81		647
Income taxes		52			19			57			193		321
ATOI		130			82			138			393		743
Six months ended June 30, 2013
Sales:
Third-party sales	$	1,648		$	3,378		$	3,656		$	2,891	$	11,573
Intersegment sales		1,176			1,404			94			—		2,674
Total sales	$	2,824		$	4,782		$	3,750		$	2,891	$	14,247
Profit and loss:
Equity loss	$	—		$	(16	)	$	(6	)	$	—	$	(22	)
Depreciation, depletion, and amortization		224			267			112			79		682
Income taxes		28			(24	)		71			178		253
ATOI		122			7			160			366		655

Schedule of Segment ATOI to Consolidated Net Income (Loss) Attributable to Alcoa

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

	Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Total segment ATOI	$	418		$	304		$	743		$	655
Unallocated amounts (net of tax):
Impact of LIFO		(8	)		5			(15	)		3
Interest expense		(69	)		(76	)		(147	)		(151	)
Noncontrolling interests		9			29			28			8
Corporate expense		(70	)		(71	)		(137	)		(138	)
Restructuring and other charges		(77	)		(211	)		(398	)		(216	)
Other		(65	)		(99	)		(114	)		(131	)
Consolidated net income (loss) attributable to Alcoa	$	138		$	(119	)	$	(40	)	$	30

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Other Expenses (Income), Net (Tables)

6 Months Ended

Jun. 30, 2014

Other Income And Expenses [Abstract]

Schedule of Other Expenses (Income), Net

Other Expenses (Income), Net

	Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Equity loss	$	30		$	10		$	68		$	22
Interest income		(6	)		(4	)		(10	)		(8	)
Foreign currency (gains) losses, net		(3	)		(5	)		5			(11	)
Net gain from asset sales		(2	)		(1	)		(29	)		(6	)
Net (gain) loss on mark-to-market derivative contracts (O)		(8	)		16			(3	)		(1	)
Other, net		(6	)		3			(1	)		(4	)
	$	5		$	19		$	30		$	(8	)

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Derivatives and Other Financial Instruments - Gross Amounts of Recognized Derivative Assets and Liabilities and Gross Amounts Offset in Accompanying Consolidated Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Gross amounts recognized, Assets	$ 72	$ 72
Gross amounts offset, Assets	(37)	(39)
Net amounts presented in Consolidated Balance Sheet, Assets	35	33
Gross amounts recognized, Liabilities	52	84
Gross amounts offset, Liabilities	(37)	(39)
Net amounts presented in Consolidated Balance Sheet, Liabilities	15	45
Aluminum Contracts [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Gross amounts recognized, Assets	42	40
Gross amounts offset, Assets	(37)	(36)
Net amounts presented in Consolidated Balance Sheet, Assets	5	4
Gross amounts recognized, Liabilities	52	81
Gross amounts offset, Liabilities	(37)	(36)
Net amounts presented in Consolidated Balance Sheet, Liabilities	15	45
Interest Rate Contracts [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Gross amounts recognized, Assets	30	32
Gross amounts offset, Assets		(3)
Net amounts presented in Consolidated Balance Sheet, Assets	30	29
Gross amounts recognized, Liabilities		3
Gross amounts offset, Liabilities		(3)
Net amounts presented in Consolidated Balance Sheet, Liabilities	$ 0	$ 0

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Contingencies and Commitments - Additional Information - 2 (Detail) In Millions, unless otherwise specified	6 Months Ended								3 Months Ended	6 Months Ended	60 Months Ended			6 Months Ended		12 Months Ended		93 Months Ended		6 Months Ended								6 Months Ended				3 Months Ended		6 Months Ended		33 Months Ended		0 Months Ended	1 Months Ended				0 Months Ended					36 Months Ended	0 Months Ended		6 Months Ended	1 Months Ended		0 Months Ended			12 Months Ended			3 Months Ended	12 Months Ended
	Jun. 30, 2014 USD ($)	Jun. 30, 2014 EUR (€)	Jun. 30, 2012 USD ($)	Jun. 30, 2012 EUR (€)	Jun. 30, 2014 Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] USD ($)	Jun. 30, 2014 Maaden Alcoa Joint Venture Mine And Refinery Company [Member] USD ($)	Jan. 31, 2014 Maaden Alcoa Joint Venture Mine And Refinery Company [Member] USD ($)	Jun. 30, 2014 Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] USD ($)	Jun. 30, 2014 Maaden Alcoa Joint Venture [Member] USD ($)	Jun. 30, 2014 Maaden Alcoa Joint Venture [Member] USD ($) Agency	Jun. 30, 2014 Maaden Alcoa Joint Venture [Member] USD ($)	Mar. 31, 2014 Maaden Alcoa Joint Venture [Member]	Dec. 31, 2013 Maaden Alcoa Joint Venture [Member] USD ($)	Jun. 30, 2014 Maaden Alcoa Joint Venture Mine And Refinery Company [Member] USD ($)	Jan. 31, 2014 Maaden Alcoa Joint Venture Mine And Refinery Company [Member] USD ($)	Dec. 31, 2004 Dampier to Bunbury Natural Gas Pipeline [Member] USD ($)	Dec. 31, 2004 Dampier to Bunbury Natural Gas Pipeline [Member] AUD	Sep. 30, 2011 Dampier to Bunbury Natural Gas Pipeline [Member] USD ($)	Sep. 30, 2011 Dampier to Bunbury Natural Gas Pipeline [Member] AUD	Jun. 30, 2014 Maaden Alcoa Joint Venture [Member] USD ($) Entity	Jun. 30, 2014 Maaden Alcoa Joint Venture [Member] SAR	Jun. 30, 2014 Other Noncurrent Liabilities and Deferred Credits [Member] Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] USD ($)	Dec. 31, 2013 Other Noncurrent Liabilities and Deferred Credits [Member] Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] USD ($)	Jun. 30, 2014 Other Noncurrent Liabilities and Deferred Credits [Member] Maaden Alcoa Joint Venture Mine And Refinery Company [Member] USD ($)	Dec. 31, 2013 Other Noncurrent Liabilities and Deferred Credits [Member] Maaden Alcoa Joint Venture Mine And Refinery Company [Member] USD ($)	Jun. 30, 2014 State and Local Jurisdiction [Member] USD ($)	Jun. 30, 2014 State and Local Jurisdiction [Member] BRL	Jun. 30, 2014 Financial Guarantee [Member] Maaden Alcoa Joint Venture Smelter And Rolling Mill Companies [Member] USD ($)	Jun. 30, 2014 Financial Guarantee [Member] Maaden Alcoa Joint Venture Mine And Refinery Company [Member] USD ($)	Jun. 30, 2014 Estreito Project [Member] USD ($) MWh	Jun. 30, 2014 Estreito Project [Member] BRL	Jun. 30, 2014 Three-Year Equity Call Plan [Member] Dampier to Bunbury Natural Gas Pipeline [Member] USD ($)	Jun. 30, 2014 Three-Year Equity Call Plan [Member] Dampier to Bunbury Natural Gas Pipeline [Member] AUD	Jun. 30, 2014 Three-Year Equity Call Plan [Member] Dampier to Bunbury Natural Gas Pipeline [Member] USD ($)	Jun. 30, 2014 Three-Year Equity Call Plan [Member] Dampier to Bunbury Natural Gas Pipeline [Member] AUD	Jun. 30, 2014 Three-Year Equity Call Plan [Member] Dampier to Bunbury Natural Gas Pipeline [Member] USD ($)	Jun. 30, 2014 Three-Year Equity Call Plan [Member] Dampier to Bunbury Natural Gas Pipeline [Member] AUD	Apr. 08, 2013 Alcoa World Alumina Brasil [Member] BRL	Mar. 31, 2013 Alcoa World Alumina Brasil [Member] USD ($)	Mar. 31, 2013 Alcoa World Alumina Brasil [Member] BRL	May 31, 2012 Alcoa World Alumina Brasil [Member] USD ($)	May 31, 2012 Alcoa World Alumina Brasil [Member] BRL	Apr. 08, 2013 Alcoa World Alumina Brasil [Member] Minimum [Member] USD ($)	Apr. 08, 2013 Alcoa World Alumina Brasil [Member] Maximum [Member] USD ($)	Apr. 08, 2013 Alcoa World Alumina Brasil [Member] Fixed Assets [Member] BRL	Apr. 08, 2013 Alcoa World Alumina Brasil [Member] Fixed Assets [Member] Minimum [Member] USD ($)	Apr. 08, 2013 Alcoa World Alumina Brasil [Member] Fixed Assets [Member] Maximum [Member] USD ($)	Dec. 31, 2002 Alcoa Aluminio [Member] t	Feb. 27, 2014 Ligestra [Member] USD ($)	Feb. 27, 2014 Ligestra [Member] EUR (€)	Jun. 30, 2014 Ligestra [Member]	Jan. 31, 2014 Ligestra [Member] Minimum [Member]	Jan. 31, 2014 Ligestra [Member] Maximum [Member]	Feb. 27, 2014 Italian Ministry of Environment and Protection of Land and Sea[Member] USD ($)	Feb. 27, 2014 Italian Ministry of Environment and Protection of Land and Sea[Member] EUR (€)	Jun. 30, 2014 Maaden Company [Member] Maaden Alcoa Joint Venture [Member]	Dec. 31, 2009 Fusina [Member] USD ($)	Dec. 31, 2012 Baie Comeau [Member] USD ($)	Dec. 31, 2012 Mosjoen [Member] USD ($)	Jun. 30, 2014 Portovesme [Member] USD ($)	Dec. 31, 2009 Portovesme [Member] USD ($)
Loss Contingencies [Line Items]
Increase in remediation reserve	$ 38																																																								$ 12	$ 25	$ 20	$ 3	$ 3
Percentage of payments and remediation costs																																																				50.00%	80.00%
Soil remediation project, estimated cost																																																						33	24
Payments for emergency action and natural resource damages																																																						25	18
Costs and payments																																																	17	12
Costs and payments related to damages																																																	9	6
Payment period																																																			10 years
Total combined assessments	330	242																								57	125
Disallowed tax credits																																							110	220					175	0	80
Percentage of penalty of the gross disallowed amount																																							50.00%	50.00%
Value added tax receivable																																									41	82
Estimated range of reasonably possible loss, minimum																																						155					0	70
Administrative appeal, assessment period																																						2 years
Metal sold per month																																																2,000
Ownership interest issued as guarantee for Saudi Arabian Joint Venture																																																								74.90%
Investment percentage in Australian Project									25.10%	25.10%	25.10%					20.00%	20.00%
Number of companies in Saudi Arabian joint venture																				3	3
Amount invested by Alcoa and Aluminum Financing Limited										1,100										10,800	40,500															40	40
Additional contributions									29	83	915					17	24	141	176													1	2	3	4	32	33
Equity method investment, carrying value									968	968	968		951
Capital investment					4,515	1,992	240	1,133						500	60
Debt service requirements, principal																												121	67
Debt service requirements, interest maximum																												60	30
Guarantee issued on behalf of smelting and rolling mill companies																						8	10	3	4
Percentage of amount required to be contributed in the event Alcoa would be required to make payments under the guarantees														40.00%
Number of agencies needed to downgrade Alcoa's credit rating below investment grade in order to require Alcoa to provide a letter of credit or fund an escrow account										2
Minimum percentage of equity commitment required									67.00%	67.00%	67.00%	67.00%
Investment percentage in Brazilian project																														25.49%	25.49%
Assured power from installed capacity																														150	150
Estimated project costs																														2,350	5,170
Aluminio's share of project																														600	1,320
Commitment expended on the project																														580	1,270
Prepayments made under the agreement for future gas transmission services																																335	356	335	356	335	356
Alcoa's maximum exposure to loss in projects			$ 413	€ 303																												$ 470	500	$ 470	500	$ 470	500

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Reconciliation of Information Used to Compute Basic and Diluted EPS

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

	Second quarter ended June 30,					Six months ended June 30,
	2014		2013			2014			2013
Net income (loss) attributable to Alcoa common shareholders	$	138	$	(119	)	$	(40	)	$	30
Less: preferred stock dividends declared		—		—			1			1
Net income (loss) available to Alcoa common shareholders – basic		138		(119	)		(41	)		29
Add: interest expense related to convertible notes		—		—			—			—
Net income (loss) available to Alcoa common shareholders – diluted	$	138	$	(119	)	$	(41	)	$	29
Average shares outstanding – basic		1,173		1,069			1,137			1,069
Effect of dilutive securities:
Stock options		6		—			—			2
Stock and performance awards		10		—			—			8
Convertible notes		—		—			—			—
Average shares outstanding – diluted		1,189		1,069			1,137			1,079

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Pension and Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2014

Compensation And Retirement Disclosure [Abstract]

Components of Net Periodic Benefit Cost

The components of net periodic benefit cost were as follows:

	Second quarter ended June 30,						Six months ended June 30,
Pension benefits	2014			2013			2014			2013
Service cost	$	42		$	48		$	83		$	99
Interest cost		159			151			319			303
Expected return on plan assets		(195	)		(198	)		(388	)		(396	)
Recognized net actuarial loss		98			124			195			247
Amortization of prior service cost		5			5			9			10
Settlement*		—			—			—			2
Net periodic benefit cost	$	109		$	130		$	218		$	265

* This amount was recorded in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D).

	Second quarter ended June 30,						Six months ended June 30,
Other postretirement benefits	2014			2013			2014			2013
Service cost	$	4		$	5		$	8		$	9
Interest cost		29			29			58			57
Recognized net actuarial loss		3			8			6			17
Amortization of prior service benefit		(4	)		(5	)		(9	)		(9	)
Net periodic benefit cost	$	32		$	37		$	63		$	74

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Statement of Changes in Consolidated Equity (Parenthetical) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement Of Stockholders Equity [Abstract]
Preferred, dividends per share	$ 0.9375	$ 0.9375	$ 1.875	$ 1.875
Common stock, dividends per share	$ 0.03	$ 0.03	$ 0.06	$ 0.06

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Derivatives and Other Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule of Fair Values and Corresponding Level of Fair Value Hierarchy of Outstanding Derivative Contracts Recorded as Assets

The fair values and corresponding classifications under the appropriate level of the fair value hierarchy of outstanding derivative contracts recorded as assets in the accompanying Consolidated Balance Sheet were as follows:

Asset Derivatives	Level	June 30, 2014		December 31, 2013
Derivatives designated as hedging instruments:
Prepaid expenses and other current assets:
Aluminum contracts	1	$	5	$	4
Aluminum contracts	3		7		9
Foreign exchange contracts	1		6		2
Interest rate contracts	2		9		9
Other noncurrent assets:
Aluminum contracts	3		17		16
Energy contracts	3		24		6
Interest rate contracts	2		21		23
Total derivatives designated as hedging instruments		$	89	$	69
Derivatives not designated as hedging instruments*:
Prepaid expenses and other current assets:
Aluminum contracts	3	$	116	$	149
Other noncurrent assets:
Aluminum contracts	3		141		175
Total derivatives not designated as hedging instruments		$	257	$	324
Less margin held**:
Prepaid expenses and other current assets:
Interest rate contracts	2	$	—	$	3
Total Asset Derivatives		$	346	$	390

* See the “Other” section within Note O 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 and Corresponding Level of Fair Value Hierarchy of Outstanding Derivative Contracts Recorded as Liabilities

The fair values and corresponding classifications under the appropriate level of the fair value hierarchy of outstanding derivative contracts recorded as liabilities in the accompanying Consolidated Balance Sheet were as follows:

Liability Derivatives	Level	June 30, 2014		December 31, 2013
Derivatives designated as hedging instruments:
Other current liabilities:
Aluminum contracts	1	$	16	$	45
Aluminum contracts	3		26		23
Foreign exchange contracts	1		4		—
Other noncurrent liabilities and deferred credits:
Aluminum contracts	1		6		14
Aluminum contracts	3		396		387
Total derivatives designated as hedging instruments		$	448	$	469
Derivatives not designated as hedging instruments*:
Other current liabilities:
Aluminum contracts	1	$	2	$	4
Embedded credit derivative	3		2		2
Foreign exchange contracts	1		2		3
Other noncurrent liabilities and deferred credits:
Embedded credit derivative	3		12		19
Total derivatives not designated as hedging instruments		$	18	$	28
Less margin posted**:
Other current liabilities:
Aluminum contracts	1	$	9	$	18
Total Liability Derivatives		$	457	$	479

* See the “Other” section within Note O 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.

Gross Amounts of Recognized Derivative Assets and Liabilities and Gross Amounts Offset in Accompanying Consolidated Balance Sheet

The gross amounts of recognized derivative assets and liabilities and gross amounts offset in the accompanying Consolidated Balance Sheet were as follows:

	Assets						Liabilities
	June 30, 2014			December 31, 2013			June 30, 2014			December 31, 2013
Gross amounts recognized:
Aluminum contracts	$	42		$	40		$	52		$	81
Interest rate contracts		30			32			—			3
	$	72		$	72		$	52		$	84
Gross amounts offset:
Aluminum contracts*	$	(37	)	$	(36	)	$	(37	)	$	(36	)
Interest rate contracts**		—			(3	)		—			(3	)
	$	(37	)	$	(39	)	$	(37	)	$	(39	)
Net amounts presented in the Consolidated Balance Sheet:
Aluminum contracts	$	5		$	4		$	15		$	45
Interest rate contracts		30			29			—			—
	$	35		$	33		$	15		$	45

* The amounts under Assets and Liabilities as of June 30, 2014 and December 31, 2013 include $9 and $18, respectively, of margin posted with counterparties.

** The amounts under Assets and Liabilities as of December 31, 2013 represent margin held from the counterparty.

Schedule of Derivative Contract Assets and Liabilities Measured and Recognized at Fair Value on Recurring Basis

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):

	June 30, 2014			December 31, 2013
Assets:
Level 1	$	11		$	6
Level 2		30			32
Level 3		305			355
Margin held		—			(3	)
Total	$	346		$	390
Liabilities:
Level 1	$	30		$	66
Level 2		—			—
Level 3		436			431
Margin posted		(9	)		(18	)
Total	$	457		$	479

Schedule of Reconciliation of Activity for Derivative Contracts

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 tables present a reconciliation of activity for such derivative contracts:

	Assets					Liabilities
Second quarter ended June 30, 2014	Aluminum contracts			Energy contracts		Aluminum contracts			Embedded credit derivative
Opening balance – March 31, 2014	$	326		$	11	$	384		$	20
Total gains or losses (realized and unrealized) included in:
Sales		—			—		(6	)		—
Cost of goods sold		(53	)		—		—			—
Other expenses, net		—			5		—			(6	)
Other comprehensive income		(9	)		7		44			—
Purchases, sales, issuances, and settlements*		—			—		—			—
Transfers into and/or out of Level 3*		—			—		—			—
Foreign currency translation		17			1		—			—
Closing balance – June 30, 2014	$	281		$	24	$	422		$	14
Change in unrealized gains or losses included in earnings for derivative contracts held at June 30, 2014:
Sales	$	—		$	—	$	—		$	—
Cost of goods sold		—			—		—			—
Other expenses, net		—			5		—			(6	)

* 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.

	Assets					Liabilities
Six months ended June 30, 2014	Aluminum contracts			Energy contracts		Aluminum contracts			Embedded credit derivative
Opening balance – January 1, 2014	$	349		$	6	$	410		$	21
Total gains or losses (realized and unrealized) included in:
Sales		—			—		(11	)		—
Cost of goods sold		(111	)		—		—			—
Other expenses, net		(1	)		5		—			(7	)
Other comprehensive income		—			12		23			—
Purchases, sales, issuances, and settlements*		—			—		—			—
Transfers into and/or out of Level 3*		—			—		—			—
Foreign currency translation		44			1		—			—
Closing balance – June 30, 2014	$	281		$	24	$	422		$	14
Change in unrealized gains or losses included in earnings for derivative contracts held at June 30, 2014:
Sales	$	—		$	—	$	—		$	—
Cost of goods sold		—			—		—			—
Other expenses, net		(1	)		5		—			(7	)

* 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

The following table presents quantitative information for Level 3 derivative contracts:

	Fair value at June 30, 2014		Valuation technique	Unobservable input	Range ($ in full amounts)
Assets:
Aluminum contract	$	—	Discounted cash flow	Interrelationship of future aluminum and oil prices	Aluminum: $1,871 per metric ton in 2014 to $2,141 per metric ton in 2018 Oil: $113 per barrel in 2014 to $99 per barrel in 2018
Aluminum contract		257	Discounted cash flow	Interrelationship of future aluminum prices, foreign currency exchange rates, and the U.S. consumer price index (CPI)	Aluminum: $1,858 per metric ton in 2014 to $2,019 per metric ton in 2016 Foreign currency: A$1 = $0.94 in 2014 to $0.90 in 2016 CPI: 1982 base year of 100 and 236 in 2014 to 248 in 2016
Aluminum contract		24	Discounted cash flow	Interrelationship of LME price to overall energy price	Aluminum: $1,846 per metric ton in 2014 to $2,183 per metric ton in 2019
Energy contracts		24	Discounted cash flow	Price of electricity beyond forward curve	$83 per megawatt hour in 2014 to $154 per megawatt hour in 2036
Liabilities:
Aluminum contracts		422	Discounted cash flow	Price of aluminum beyond forward curve	$2,453 per metric ton in 2023 to $2,594 per metric ton in 2027
Embedded credit derivative		14	Discounted cash flow	Credit spread between Alcoa and counterparty	0.73% to 1.61% (1.17% median)

Schedule of Gain or Loss on Hedged Items and Derivative Contracts

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
		Second quarter ended June 30,					Six months ended June 30,
		2014		2013			2014			2013
Aluminum contracts*	Sales	$	19	$	(59	)	$	(1	)	$	(130	)
Interest rate contracts	Interest expense		2		2			5			5
Total		$	21	$	(57	)	$	4		$	(125	)

* In the second quarter and six months ended June 30, 2014, the loss recognized in earnings includes a gain of $7 and a loss of $13, respectively, related to the ineffective portion of the hedging relationships. In both the second quarter and six months ended June 30, 2013, the loss recognized in earnings includes a gain of $4 related to the ineffective portion of the hedging relationships.

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
		Second quarter ended June 30,						Six months ended June 30,
		2014			2013			2014			2013
Aluminum contracts	Sales	$	(12	)	$	63		$	(12	)	$	134
Interest rate contracts	Interest expense		(2	)		(2	)		(5	)		(5	)
Total		$	(14	)	$	61		$	(17	)	$	129

Schedule of Gains and Losses on Derivative Excluded from Assessment of Effectiveness Recognized in Current 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.

																										Location of Gain or
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)*												(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)**
	Second quarter ended June 30,						Six months ended June 30,							Second quarter ended June 30,						Six months ended June 30,							Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013				2014			2013			2014			2013				2014			2013			2014			2013
Aluminum contracts	$	(42	)	$	74		$	(19	)	$	178		Sales	$	(5	)	$	(1	)	$	(9	)	$	(7	)	Other expenses (income), net	$	(1	)	$	(2	)	$	(1	)	$	(2	)
Energy contracts		13			(3	)		15			(1	)	Cost of goods sold		—			—			—			—		Other expenses (income), net		5			—			5			—
Foreign exchange contracts		—			(2	)		2			(2	)	Sales		1			—			1			—		Other expenses (income), net		—			—			—			—
Interest rate contracts		—			—			—			—		Interest expense		(1	)		(1	)		(1	)		(1	)	Other expenses (income), net		—			—			—			—
Interest rate contracts		1			—			2			1		Other expenses (income), net		—			—			—			—		Other expenses (income), net		—			—			—			—
Total	$	(28	)	$	69		$	—		$	176			$	(5	)	$	(2	)	$	(9	)	$	(8	)		$	4		$	(2	)	$	4		$	(2	)

* Assuming market rates remain constant with the rates at June 30, 2014, a loss of $16 is expected to be recognized in earnings over the next 12 months.

** For both the second quarter and six months ended June 30, 2014, the amount of gain or (loss) recognized in earnings represents $5 related to the ineffective portion of the hedging relationships. There was also $(1) recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for both the second quarter and six months ended June 30, 2014. For both the second quarter and six months ended June 30, 2013, there was no ineffectiveness related to the derivatives in cash flow hedging relationships. There was $(2) recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for both the second quarter and six months ended June 30, 2013.

Schedule of Outstanding Forward Contracts that were Entered into Hedge Forecasted Transactions

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

	June 30, 2014		December 31, 2013
Aluminum contracts (000 metric tons)		780		841
Energy contracts:
Electricity (megawatt hours)		59,409,328		59,409,328
Natural gas (million British thermal units)		20,200,000		19,980,000
Foreign exchange contracts	$	789	$	335

Schedule of Fair Value Gains and Losses on Derivatives Contracts Recorded in Earnings

Alcoa has certain derivative contracts that do not qualify 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
		Second quarter ended June 30,						Six months ended June 30,
		2014			2013			2014			2013
Aluminum contracts	Sales	$	1		$	(3	)	$	(4	)	$	(7	)
Aluminum contracts	Other expenses (income), net		(1	)		(7	)		(1	)		15
Embedded credit derivative	Other expenses (income), net		6			(7	)		7			(9	)
Foreign exchange contracts	Other expenses (income), net		3			(2	)		(3	)		(5	)
Total		$	9		$	(19	)	$	(1	)	$	(6	)

Schedule of Carrying Values and Fair Values of Other Financial Instruments

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

	June 30, 2014				December 31, 2013
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	1,183	$	1,183	$	1,437	$	1,437
Restricted cash		15		15		18		18
Noncurrent receivables		19		19		19		19
Available-for-sale securities		125		125		119		119
Short-term borrowings		133		133		57		57
Commercial paper		223		223		—		—
Long-term debt due within one year		87		87		655		1,040
Long-term debt, less amount due within one year		7,612		8,271		7,607		7,863

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Inventories - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Inventory Disclosure [Abstract]
Inventories valued on a last in, first out (LIFO) basis	$ 1,445	$ 1,169
Total inventories valued on an average-cost basis	$ 714	$ 691

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Pension and Other Postretirement Benefits - Additional Information (Detail) (United Steelworkers Labor Agreement [Member], USD $) In Millions, unless otherwise specified	0 Months Ended		3 Months Ended	6 Months Ended
	Jun. 06, 2014	May 31, 2014	Jun. 30, 2014	Jun. 30, 2014	Jun. 06, 2014 Employees Location	May 31, 2014	Dec. 31, 2013
Defined Benefit Plan Disclosure [Line Items]
Term of labor agreement, in years	5 years
Number of employees covered by labor agreement					6,100
Number of locations affected by labor agreement					10
Pretax costs related to preparation for and ratification of new agreement			$ 17	$ 18
Labor agreement expired, date				May 15, 2014
After-tax costs related to preparation for and ratification of new agreement			11	12
Discount rate used to determine pension benefit obligation						4.25%	4.80%
Increase in pension liability, plan amendment		100
Accumulated increase in net actuarial loss after-tax, plan amendment				65
Annual decrease in net periodic benefit cost, plan amendment			2	13
Scenario, Forecast [Member]
Defined Benefit Plan Disclosure [Line Items]
Annual decrease in net periodic benefit cost, plan amendment				$ 11

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Statement of Consolidated Operations (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]
Sales (J)	$ 5,836	$ 5,849	$ 11,290	$ 11,682
Cost of goods sold (exclusive of expenses below)	4,765	4,933	9,260	9,780
Selling, general administrative, and other expenses	245	254	481	505
Research and development expenses	50	46	101	91
Provision for depreciation, depletion, and amortization	349	362	689	723
Restructuring and other charges (D)	110	244	571	251
Interest expense	105	118	225	233
Other expenses (income), net (I)	5	19	30	(8)
Total costs and expenses	5,629	5,976	11,357	11,575
Income (loss) before income taxes	207	(127)	(67)	107
Provision for income taxes (L)	78	21	1	85
Net income (loss)	129	(148)	(68)	22
Less: Net loss attributable to noncontrolling interests	(9)	(29)	(28)	(8)
NET INCOME (LOSS) ATTRIBUTABLE TO ALCOA	$ 138	$ (119)	$ (40)	$ 30
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS (K):
Basic	$ 0.12	$ (0.11)	$ (0.04)	$ 0.03
Diluted	$ 0.12	$ (0.11)	$ (0.04)	$ 0.03
Dividends paid per common share	$ 0.03	$ 0.03	$ 0.06	$ 0.06

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Other Expenses (Income), Net - Schedule of Other Expenses (Income), Net (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Other Income And Expenses [Abstract]
Equity loss	$ 30	$ 10	$ 68	$ 22
Interest income	(6)	(4)	(10)	(8)
Foreign currency (gains) losses, net	(3)	(5)	5	(11)
Net gain from asset sales	(2)	(1)	(29)	(6)
Net (gain) loss on mark-to-market derivative contracts	(8)	16	(3)	(1)
Other, net	(6)	3	(1)	(4)
Other (income) expenses, net	$ 5	$ 19	$ 30	$ (8)

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Statement of Consolidated Cash Flows (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FROM OPERATIONS
Net income (loss)	$ (68)	$ 22
Adjustments to reconcile net (loss) income to cash from operations:
Depreciation, depletion, and amortization	690	724
Deferred income taxes	(133)	(58)
Equity income, net of dividends	68	23
Restructuring and other charges (C)	571	251
Net gain from investing activities - asset sales (I)	(29)	(6)
Stock-based compensation	49	46
Excess tax benefits from stock-based payment arrangements	(2)
Other	43	27
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
(Increase) in receivables	(225)	(375)
(Increase) in inventories	(457)	(175)
(Increase) decrease in prepaid expenses and other current assets	(13)	37
Increase in accounts payable, trade	26	299
(Decrease) in accrued expenses	(349)	(353)
(Decrease) increase in taxes, including income taxes	(52)	40
Pension contributions	(282)	(181)
(Increase) in noncurrent assets	(13)	(48)
Increase in noncurrent liabilities	143	171
CASH (USED FOR) PROVIDED FROM OPERATIONS	(33)	444
FINANCING ACTIVITIES
Net change in short-term borrowings (original maturities of three months or less)	77	4
Net change in commercial paper	223
Additions to debt (original maturities greater than three months) (G)	1,131	1,202
Debt issuance costs	(10)
Payments on debt (original maturities greater than three months) (G)	(1,149)	(1,647)
Proceeds from exercise of employee stock options	97	1
Excess tax benefits from stock-based payment arrangements	2
Dividends paid to shareholders	(69)	(66)
Distributions to noncontrolling interests	(55)	(27)
Contributions from noncontrolling interests	44	12
CASH PROVIDED FROM (USED FOR) FINANCING ACTIVITIES	291	(521)
INVESTING ACTIVITIES
Capital expenditures	(467)	(521)
Proceeds from the sale of assets and businesses	1	5
Additions to investments	(106)	(159)
Sales of investments	34
Net change in restricted cash	3	105
Other	9	9
CASH USED FOR INVESTING ACTIVITIES	(526)	(561)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	14	(21)
Net change in cash and cash equivalents	(254)	(659)
Cash and cash equivalents at beginning of year	1,437	1,861
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 1,183	$ 1,202

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Derivatives and Other Financial Instruments - Schedule of Reconciliation of Activity for Derivative Contracts (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014
Aluminum Contracts [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, Assets, Beginning balance	$ 326	$ 349
Fair value measurement, Assets, Sales
Fair value measurement, Assets, Cost of goods sold	(53)	(111)
Fair value measurement, Assets, Other expenses, net		(1)
Fair value measurement, Assets, Other comprehensive income	(9)
Fair value measurement, Assets, Purchases, sales, issuances, and settlements
Fair value measurement, Assets, Transfers into and/or out of Level 3
Fair value measurement, Assets, Foreign currency translation	17	44
Fair value measurement, Assets, Ending balance	281	281
Fair value measurement, Assets, Sales
Fair value measurement, Assets, Cost of goods sold
Fair value measurement, Assets, Other expenses, net		(1)
Fair value measurement, Liabilities, Beginning balance	384	410
Fair value measurement, Liabilities, Sales	(6)	(11)
Fair value measurement, Liabilities, Cost of goods sold
Fair value measurement, Liabilities, Other income, net
Fair value measurement, Liabilities, Other comprehensive income	44	23
Fair value measurement, Liabilities, Purchases, sales, issuances, and settlements
Fair value measurement, Liabilities, Transfers into and/or out of Level 3
Fair value measurement, Liabilities, Foreign currency translation
Fair value measurement, Liabilities, Ending balance	422	422
Fair value measurement, Liabilities, Sales
Fair value measurement, Liabilities, Cost of goods sold
Fair value measurement, Liabilities, Other income, net
Embedded Credit Derivative [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, Liabilities, Beginning balance	20	21
Fair value measurement, Liabilities, Sales
Fair value measurement, Liabilities, Cost of goods sold
Fair value measurement, Liabilities, Other income, net	(6)	(7)
Fair value measurement, Liabilities, Other comprehensive income
Fair value measurement, Liabilities, Purchases, sales, issuances, and settlements
Fair value measurement, Liabilities, Transfers into and/or out of Level 3
Fair value measurement, Liabilities, Foreign currency translation
Fair value measurement, Liabilities, Ending balance	14	14
Fair value measurement, Liabilities, Sales
Fair value measurement, Liabilities, Cost of goods sold
Fair value measurement, Liabilities, Other income, net	(6)	(7)
Energy Contracts [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, Assets, Beginning balance	11	6
Fair value measurement, Assets, Sales
Fair value measurement, Assets, Cost of goods sold
Fair value measurement, Assets, Other expenses, net	5	5
Fair value measurement, Assets, Other comprehensive income	7	12
Fair value measurement, Assets, Purchases, sales, issuances, and settlements
Fair value measurement, Assets, Transfers into and/or out of Level 3
Fair value measurement, Assets, Foreign currency translation	1	1
Fair value measurement, Assets, Ending balance	24	24
Fair value measurement, Assets, Sales
Fair value measurement, Assets, Cost of goods sold
Fair value measurement, Assets, Other expenses, net	$ 5	$ 5

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Restructuring and Other Charges - Schedule of Restructuring and Other Charges by Reportable Segments, Pretax (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	$ 110	$ 244	$ 571	$ 251
Operating Segments [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	107	120	539	126
Corporate [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	3	124	32	125
Alumina [Member] | Operating Segments [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges			7
Primary Metals [Member] | Operating Segments [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	84	94	415	94
Global Rolled Products [Member] | Operating Segments [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	23	7	113	10
Engineered Products and Solutions [Member] | Operating Segments [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges		$ 19	$ 4	$ 22

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Derivatives and Other Financial Instruments - Schedule of Gains and Losses on Derivative Excluded from Assessment of Effectiveness Recognized in Current Earnings (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Offsetting [Abstract]
Amount of loss expected to be recognized into earnings over the next 12 months			$ 16
Earnings recognized in relation to ineffective portion of the hedging relationships	5	0	5	0
Amount of gain or (loss) recognized in earnings related amount excluded from the assessment of hedge effectiveness	$ (1)	$ (2)	$ (1)	$ (2)

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Pension and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2014

Compensation And Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits

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

	Second quarter ended June 30,						Six months ended June 30,
Pension benefits	2014			2013			2014			2013
Service cost	$	42		$	48		$	83		$	99
Interest cost		159			151			319			303
Expected return on plan assets		(195	)		(198	)		(388	)		(396	)
Recognized net actuarial loss		98			124			195			247
Amortization of prior service cost		5			5			9			10
Settlement*		—			—			—			2
Net periodic benefit cost	$	109		$	130		$	218		$	265

* This amount was recorded in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D).

	Second quarter ended June 30,						Six months ended June 30,
Other postretirement benefits	2014			2013			2014			2013
Service cost	$	4		$	5		$	8		$	9
Interest cost		29			29			58			57
Recognized net actuarial loss		3			8			6			17
Amortization of prior service benefit		(4	)		(5	)		(9	)		(9	)
Net periodic benefit cost	$	32		$	37		$	63		$	74

On June 6, 2014, the United Steelworkers ratified a new five-year labor agreement covering approximately 6,100 employees at 10 U.S. locations; the previous labor agreement expired on May 15, 2014. In the 2014 second quarter and six-month period, as a result of the preparation for and ratification of the new agreement, Alcoa recognized $17 ($11 after-tax) and $18 ($12 after-tax), respectively, in Cost of goods sold on the accompanying Statement of Consolidated Operations for, among other items, business contingency costs and a one-time signing bonus for employees. Additionally, as a result of the provisions of the new labor agreement, a significant plan amendment was adopted by one of Alcoa’s U.S. pension plans. Accordingly, this plan was required to be remeasured, and through this process, the discount rate was updated from 4.80% at December 31, 2013 to 4.25% at May 31, 2014. The plan remeasurement resulted in an increase to both Alcoa’s pension liability of $100 and a combination of the plan’s unrecognized net actuarial loss and prior service cost (included in Accumulated other comprehensive loss) of $65 (after-tax). The plan remeasurement also resulted in a decrease to 2014 annual net periodic benefit cost of $13, of which $2 was recognized in the 2014 second quarter. The remaining $11 decrease will be recognized ratably over the second half of 2014.

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Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
Restructuring reserve beginning balance	$ 138	$ 111
Cash payments	(67)	(74)
Restructuring charges	294	286
Other	(137)	(185)
Restructuring reserve ending balance	228	138
Layoff Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve beginning balance	96	59
Cash payments	(61)	(63)
Restructuring charges	154	201
Other	(5)	(101)
Restructuring reserve ending balance	184	96
Other Exit Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve beginning balance	42	52
Cash payments	(6)	(11)
Restructuring charges	140	85
Other	(132)	(84)
Restructuring reserve ending balance	$ 44	$ 42

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Subsequent Events

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

P. 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.

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Derivatives and Other Financial Instruments - Schedule of Carrying Values and Fair Values of Other Financial Instruments (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Carrying Value [Member]
Derivative [Line Items]
Cash and cash equivalents	$ 1,183	$ 1,437
Restricted cash	15	18
Noncurrent receivables	19	19
Available-for-sale securities	125	119
Short-term borrowings	133	57
Commercial paper	223
Long-term debt due within one year	87	655
Long-term debt, less amount due within one year	7,612	7,607
Fair Value [Member]
Derivative [Line Items]
Cash and cash equivalents	1,183	1,437
Restricted cash	15	18
Noncurrent receivables	19	19
Available-for-sale securities	125	119
Short-term borrowings	133	57
Commercial paper	223
Long-term debt due within one year	87	1,040
Long-term debt, less amount due within one year	$ 8,271	$ 7,863

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Statement of Changes in Consolidated Equity (USD $) In Millions, unless otherwise specified	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Loss [Member]	Noncontrolling Interests [Member]
Balance at Mar. 31, 2013	$ 16,774	$ 55	$ 1,178	$ 7,508	$ 11,805	$ (3,816)	$ (3,309)	$ 3,353
Net income (loss)	(148)				(119)			(29)
Other comprehensive income (loss)	(723)						(474)	(249)
Cash dividends declared:
Common share, value	(33)				(33)
Stock-based compensation	23			23
Common stock issued: compensation plans	(3)			(7)		4
Distributions	(28)							(28)
Contributions	(3)							(3)
Other	(1)							(1)
Balance at Jun. 30, 2013	15,858	55	1,178	7,524	11,653	(3,812)	(3,783)	3,043
Balance at Dec. 31, 2012	16,523	55	1,178	7,560	11,689	(3,881)	(3,402)	3,324
Net income (loss)	22				30			(8)
Other comprehensive income (loss)	(611)						(381)	(230)
Cash dividends declared:
Preferred share, value	(1)				(1)
Common share, value	(65)				(65)
Stock-based compensation	46			46
Common stock issued: compensation plans	(13)			(82)		69
Distributions	(53)							(53)
Contributions	12							12
Other	(2)							(2)
Balance at Jun. 30, 2013	15,858	55	1,178	7,524	11,653	(3,812)	(3,783)	3,043
Balance at Dec. 31, 2013	13,522	55	1,178	7,509	9,272	(3,762)	(3,659)	2,929
Net income (loss)	(68)				(40)			(28)
Other comprehensive income (loss)	632						491	141
Cash dividends declared:
Preferred share, value	(1)				(1)
Common share, value	(68)				(68)
Stock-based compensation	49			49
Common stock issued: compensation plans	78			(409)		487
Issuance of common stock (G)	575		89	486
Distributions	(55)							(55)
Contributions	44							44
Other	(2)							(2)
Balance at Jun. 30, 2014	14,706	55	1,267	7,635	9,163	(3,275)	(3,168)	3,029
Balance at Mar. 31, 2014	14,374	55	1,267	7,704	9,061	(3,395)	(3,301)	2,983
Net income (loss)	129				138			(9)
Other comprehensive income (loss)	185						133	52
Cash dividends declared:
Common share, value	(36)				(36)
Stock-based compensation	24			24
Common stock issued: compensation plans	27			(93)		120
Distributions	(20)							(20)
Contributions	24							24
Other	(1)							(1)
Balance at Jun. 30, 2014	$ 14,706	$ 55		$ 7,635	$ 9,163	$ (3,275)	$ (3,168)	$ 3,029

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Statement of Consolidated Comprehensive Income (Loss) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net income (loss)	$ 129	$ (148)	$ (68)	$ 22
Other comprehensive income (loss), net of tax (C):
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits	15	63	92	159
Foreign currency translation adjustments	200	(852)	536	(952)
Net change in unrealized gains on available-for-sale securities	1	(3)	1	(2)
Net change in unrecognized losses on cash flow hedges	(31)	69	3	184
Total Other comprehensive income (loss), net of tax	185	(723)	632	(611)
Comprehensive income (loss)	314	(871)	564	(589)
Alcoa [Member]
Net income (loss)	138	(119)	(40)	30
Other comprehensive income (loss), net of tax (C):
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits	14	61	91	156
Foreign currency translation adjustments	141	(603)	390	(719)
Net change in unrealized gains on available-for-sale securities	1	(3)	1	(2)
Net change in unrecognized losses on cash flow hedges	(23)	71	9	184
Total Other comprehensive income (loss), net of tax	133	(474)	491	(381)
Comprehensive income (loss)	271	(593)	451	(351)
Noncontrolling Interests [Member]
Net income (loss)	(9)	(29)	(28)	(8)
Other comprehensive income (loss), net of tax (C):
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits	1	2	1	3
Foreign currency translation adjustments	59	(249)	146	(233)
Net change in unrealized gains on available-for-sale securities	0	0	0	0
Net change in unrecognized losses on cash flow hedges	(8)	(2)	(6)	0
Total Other comprehensive income (loss), net of tax	52	(249)	141	(230)
Comprehensive income (loss)	$ 43	$ (278)	$ 113	$ (238)

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Other Expenses (Income), Net

6 Months Ended

Jun. 30, 2014

Other Income And Expenses [Abstract]

Other Expenses (Income), Net

I. Other Expenses (Income), Net

	Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Equity loss	$	30		$	10		$	68		$	22
Interest income		(6	)		(4	)		(10	)		(8	)
Foreign currency (gains) losses, net		(3	)		(5	)		5			(11	)
Net gain from asset sales		(2	)		(1	)		(29	)		(6	)
Net (gain) loss on mark-to-market derivative contracts (O)		(8	)		16			(3	)		(1	)
Other, net		(6	)		3			(1	)		(4	)
	$	5		$	19		$	30		$	(8	)

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 18, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
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		1,176,322,578

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Segment Information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

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			Global Rolled Products			Engineered Products and Solutions		Total
Second quarter ended June 30, 2014
Sales:
Third-party sales	$	761		$	1,659		$	1,860		$	1,502	$	5,782
Intersegment sales		480			718			44			—		1,242
Total sales	$	1,241		$	2,377		$	1,904		$	1,502	$	7,024
Profit and loss:
Equity loss	$	(7	)	$	(17	)	$	(6	)	$	—	$	(30	)
Depreciation, depletion, and amortization		100			129			58			41		328
Income taxes		12			30			23			102		167
After-tax operating income (ATOI)		38			97			79			204		418
Second quarter ended June 30, 2013
Sales:
Third-party sales	$	822		$	1,620		$	1,877		$	1,468	$	5,787
Intersegment sales		581			677			43			—		1,301
Total sales	$	1,403		$	2,297		$	1,920		$	1,468	$	7,088
Profit and loss:
Equity loss	$	(1	)	$	(7	)	$	(2	)	$	—	$	(10	)
Depreciation, depletion, and amortization		115			132			55			39		341
Income taxes		14			(25	)		32			94		115
ATOI		64			(32	)		79			193		304
Six months ended June 30, 2014
Sales:
Third-party sales	$	1,606		$	3,083		$	3,537		$	2,945	$	11,171
Intersegment sales		990			1,452			87			—		2,529
Total sales	$	2,596		$	4,535		$	3,624		$	2,945	$	13,700
Profit and loss:
Equity loss	$	(12	)	$	(45	)	$	(11	)	$	—	$	(68	)
Depreciation, depletion, and amortization		197			253			116			81		647
Income taxes		52			19			57			193		321
ATOI		130			82			138			393		743
Six months ended June 30, 2013
Sales:
Third-party sales	$	1,648		$	3,378		$	3,656		$	2,891	$	11,573
Intersegment sales		1,176			1,404			94			—		2,674
Total sales	$	2,824		$	4,782		$	3,750		$	2,891	$	14,247
Profit and loss:
Equity loss	$	—		$	(16	)	$	(6	)	$	—	$	(22	)
Depreciation, depletion, and amortization		224			267			112			79		682
Income taxes		28			(24	)		71			178		253
ATOI		122			7			160			366		655

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

	Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Total segment ATOI	$	418		$	304		$	743		$	655
Unallocated amounts (net of tax):
Impact of LIFO		(8	)		5			(15	)		3
Interest expense		(69	)		(76	)		(147	)		(151	)
Noncontrolling interests		9			29			28			8
Corporate expense		(70	)		(71	)		(137	)		(138	)
Restructuring and other charges		(77	)		(211	)		(398	)		(216	)
Other		(65	)		(99	)		(114	)		(131	)
Consolidated net income (loss) attributable to Alcoa	$	138		$	(119	)	$	(40	)	$	30

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, 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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Consolidated Balance Sheet (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 1,183	$ 1,437
Receivables from customers, less allowances of $21 in 2014 and $20 in 2013 (M)	1,381	1,221
Other receivables (M)	671	597
Inventories (F)	3,227	2,705
Prepaid expenses and other current assets	925	1,009
Total current assets	7,387	6,969
Properties, plants, and equipment	37,897	36,866
Less: accumulated depreciation, depletion, and amortization	20,286	19,227
Properties, plants, and equipment, net	17,611	17,639
Goodwill	3,435	3,415
Investments	1,979	1,907
Deferred income taxes	3,243	3,184
Other noncurrent assets	2,654	2,628
Total assets	36,309	35,742
Current liabilities:
Short-term borrowings (G)	133	57
Commercial paper	223
Accounts payable, trade	3,023	2,960
Accrued compensation and retirement costs	937	1,013
Taxes, including income taxes	351	376
Other current liabilities	1,088	1,044
Long-term debt due within one year (G)	87	655
Total current liabilities	5,842	6,105
Long-term debt, less amount due within one year	7,612	7,607
Accrued pension benefits	3,020	3,183
Accrued other postretirement benefits	2,244	2,354
Other noncurrent liabilities and deferred credits	2,885	2,971
Total liabilities	21,603	22,220
CONTINGENCIES AND COMMITMENTS (H)
Alcoa shareholders' equity:
Preferred stock	55	55
Common stock (G)	1,267	1,178
Additional capital (G)	7,635	7,509
Retained earnings	9,163	9,272
Treasury stock, at cost	(3,275)	(3,762)
Accumulated other comprehensive loss (C)	(3,168)	(3,659)
Total Alcoa shareholders' equity	11,677	10,593
Noncontrolling interests	3,029	2,929
Total equity	14,706	13,522
Total liabilities and equity	$ 36,309	$ 35,742

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Restructuring and Other Charges

6 Months Ended

Jun. 30, 2014

Restructuring And Related Activities [Abstract]

Restructuring and Other Charges

D. Restructuring and Other Charges – In the second quarter and six-month period of 2014, Alcoa recorded Restructuring and other charges of $110 ($54 after-tax and noncontrolling interests) and $571 ($328 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2014 second quarter included $107 ($51 after-tax and noncontrolling interest) for exit costs related to decisions to permanently shut down and demolish two smelters and two rolling mills (see below) and $3 ($3 after-tax) for other miscellaneous items, including layoff costs for the separation of approximately 75 employees (30 in the Global Rolled Products segment, 30 in Corporate, and 15 in the other three segments combined).

In the 2014 six-month period, Restructuring and other charges included $443 ($240 after-tax and noncontrolling interest) for exit costs related to decisions to permanently shut down and demolish two smelters and two rolling mills (see below); $68 ($44 after-tax and noncontrolling interest) for the temporary curtailment of two smelters and a related production slowdown at one refinery (see below); $33 ($26 after-tax) for asset impairments related to prior capitalized costs for a modernization project at a smelter in Canada that is no longer being pursued; $17 ($11 after-tax) for layoff costs, including the separation of approximately 245 employees (115 in the Engineered Products and Solutions segment, 30 in the Global Rolled Products segment, 10 in the Alumina and Primary Metals segments combined, and 90 in Corporate); $17 ($11 after-tax) of charges for other miscellaneous items; and $7 ($4 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2014 first quarter, management approved the permanent shutdown and demolition of the remaining capacity (84,000 metric-tons-per-year) at the Massena East smelter in New York and the full capacity (190,000 metric-tons-per-year) at the Point Henry smelter in Australia. The capacity at Massena East was fully shut down by the end of the first quarter of 2014 and the Point Henry smelter is expected to be shut down in August 2014. Demolition and remediation activities related to both the Massena East and Point Henry smelters will begin in the second half of 2014 and are expected to be completed by the end of 2020 and 2018, respectively.

The decisions on the Massena East and Point Henry smelters are part of a 15-month review of 460,000 metric tons of smelting capacity initiated by management in the 2013 second quarter for possible curtailment. Through this review, management determined that the remaining capacity of the Massena East smelter was no longer competitive and the Point Henry smelter has no prospect of becoming financially viable. Management also initiated the temporary curtailment of the remaining capacity (62,000 metric-tons-per-year) at the Poços de Caldas smelter and additional capacity (85,000 metric-tons-per-year) at the São Luís smelter, both in Brazil. These curtailments were completed by the end of May 2014. As a result of these curtailments, production at the Poços de Caldas refinery was reduced (200,000 metric-tons-per-year), which was completed by the end of the 2014 second quarter.

Also in the 2014 first quarter, management approved the permanent shutdown of Alcoa’s two rolling mills in Australia, Point Henry and Yennora. This decision was made due to the significant impact of excess can sheet capacity in both Australia and Asia. The two rolling mills have a combined can sheet capacity of 200,000 metric-tons-per-year and will be closed by the end of 2014. Demolition and remediation activities related to the two rolling mills will begin in 2015 and are expected to be completed by the end of 2018.

In the second quarter and six-month period of 2014, costs related to the shutdown and curtailment actions included $4 and $137, respectively, for the layoff of approximately 1,830 employees (1,230 in the Primary Metals segment, 470 in the Global Rolled Products segment, 90 in the Alumina segment, and 40 in Corporate); accelerated depreciation of $91 and $150, respectively, related to the three facilities in Australia as they continue to operate during 2014; and $10 and $133, respectively, in other exit costs. Additionally, the costs in the 2014 six-month period also include asset impairments of $91, representing the write-off of the remaining book value of all related properties, plants, and equipment. Furthermore in the six-month period of 2014, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value resulting in a charge of $34 ($20 after-tax and noncontrolling interest), respectively, which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other exit costs of $133 in the 2014 six-month period represent $55 in asset retirement obligations and $38 in environmental remediation, both triggered by the decisions to permanently shut down and demolish the aforementioned structures in the U.S. and Australia, and $40 in other related costs, including supplier and customer contract-related costs. Additional charges of approximately $110 are expected to be recognized throughout the remainder of 2014 related to these shutdown actions in Australia.

In the second quarter and six-month period of 2013, Alcoa recorded Restructuring and other charges of $244 ($170 after-tax and noncontrolling interests) and $251 ($175 after-tax and noncontrolling interests), respectively.

Restructuring and other charges in the 2013 second quarter included $103 ($62 after noncontrolling interest) related to a legal matter; $86 ($70 after-tax) for exit costs related to the permanent shutdown and demolition of certain structures at two non-U.S. locations (see below); $29 ($19 after-tax) for asset impairments and related costs for retirements of previously idled structures; $24 ($18 after-tax and noncontrolling interests) for the layoff of approximately 470 employees (190 in the Global Rolled Products segment, 180 in the Engineered Products and Solutions segment, 55 in the Primary Metals segment, and 45 in Corporate); a charge of $4 ($2 after-tax) for other miscellaneous items; and $2 ($1 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2013 six-month period, Restructuring and other charges included $218 ($151 after-tax and noncontrolling interests) for the previously mentioned legal matter, exit costs at two non-U.S. locations, and retirements of previously idled structures combined; $27 ($20 after-tax and noncontrolling interests) for layoff costs, including the separation of approximately 530 employees (190 in the Global Rolled Products segment, 180 in the Engineered Products and Solutions segment, 115 in the Primary Metals segment, and 45 in Corporate) and a pension plan settlement charge related to previously separated employees; a charge of $8 ($5 after-tax) for other miscellaneous items; and $2 ($1 after-tax and noncontrolling interests) for the reversal of a number of small layoff reserves related to prior periods.

In the 2013 second quarter, management approved the permanent shutdown and demolition of (i) two potlines (capacity of 105,000 metric-tons-per-year) that utilize Soderberg technology at the smelter located in Baie Comeau, Québec, Canada (remaining capacity of 280,000 metric-tons-per-year composed of two prebake potlines) and (ii) the smelter located in Fusina, Italy (capacity of 44,000 metric-tons-per-year). The two Soderberg lines at Baie Comeau were fully shut down by the end of September 2013 while the Fusina smelter was previously temporarily idled in 2010. Demolition and remediation activities related to the two Soderberg lines and the Fusina smelter began in the fourth quarter of 2013 and are expected to be completed by the end of 2015 and 2017, respectively.

The decision on the two Soderberg lines was part of a 15-month review of 460,000 metric tons of smelting capacity initiated by management earlier in the 2013 second quarter for possible curtailment (announced on May 1, 2013), while the decision on the Fusina smelter was in addition to the capacity being reviewed. Factors leading to both decisions were in general focused on achieving sustained competitiveness and included, among others: lack of an economically viable, long-term power solution (Italy); changed market fundamentals; other existing idle capacity; and restart costs.

In both the second quarter and six-month period of 2013, exit costs related to these actions included accelerated depreciation of $23 (Baie Comeau) and asset impairments of $14 (Fusina) representing the write-off of the remaining book value of all related properties, plants, and equipment, and $49 in other exit costs. Additionally, in both the second quarter and six-month period of 2013, remaining inventories, mostly operating supplies and raw materials, were written down to their net realizable value resulting in a charge of $7 ($5 after-tax), which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. The other exit costs of $49 represent $44 in asset retirement obligations and $5 in environmental remediation, both triggered by the decisions to permanently shut down and demolish these structures.

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:

	Second quarter ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Alumina	$	—	$	—	$	7	$	—
Primary Metals		84		94		415		94
Global Rolled Products		23		7		113		10
Engineered Products and Solutions		—		19		4		22
Segment total		107		120		539		126
Corporate		3		124		32		125
Total restructuring and other charges	$	110	$	244	$	571	$	251

As of June 30, 2014, approximately 745 of the 2,075 employees associated with 2014 restructuring programs and approximately 1,350 of the 1,660 employees associated with 2013 restructuring programs were separated. The remaining separations for the 2014 and 2013 restructuring programs are expected to be completed by the end of 2014.

In the 2014 second quarter and six-month period, cash payments of $22 and $23, respectively, were made against the layoff reserves related to the 2014 restructuring programs and $8 and $32, respectively, were made against the layoff reserves related to the 2013 restructuring programs.

Activity and reserve balances for restructuring charges were as follows:

	Layoff costs			Other exit costs			Total
Reserve balances at December 31, 2012	$	59		$	52		$	111
2013:
Cash payments		(63	)		(11	)		(74	)
Restructuring charges		201			85			286
Other*		(101	)		(84	)		(185	)
Reserve balances at December 31, 2013		96			42			138
2014:
Cash payments		(61	)		(6	)		(67	)
Restructuring charges		154			140			294
Other*		(5	)		(132	)		(137	)
Reserve balances at June 30, 2014	$	184		$	44		$	228

* Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2014 six-month period, Other for other exit costs also included a reclassification of the following restructuring charges: $55 in asset retirement and $42 in environmental obligations, as these liabilities are included in Alcoa’s separate reserves for asset retirement obligations and environmental remediation (see Note H), respectively. In 2013, Other for layoff costs also included a reclassification of $92 in pension costs, as this obligation was included in Alcoa’s separate liability for pension obligations. Also in 2013, Other for other exit costs also included a reclassification of the following restructuring charges: $58 in asset retirement and $12 in environmental obligations, as these liabilities were 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 2014, with the exception of approximately $40 to $45, which is expected to be paid over the next several years for lease termination costs, ongoing site remediation work, and special separation benefit payments.

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2014

Equity [Abstract]

Accumulated Other Comprehensive Loss

C. Accumulated Other Comprehensive Loss

The following table details the activity of the four components that comprise Accumulated other comprehensive (loss) income for both Alcoa’s shareholders and noncontrolling interests:

	Alcoa						Noncontrolling Interests
	Second quarter ended June 30,						Second quarter ended June 30,
	2014			2013			2014			2013
Pension and other postretirement benefits
Balance at beginning of period	$	(3,455	)	$	(3,968	)	$	(51	)	$	(76	)
Other comprehensive income:
Unrecognized net actuarial loss and prior service cost/benefit		(80	)		(38	)		—			—
Tax benefit		28			17			—			—
Total Other comprehensive loss before reclassifications, net of tax		(52	)		(21	)		—			—
Amortization of net actuarial loss and prior service cost/benefit(1)		101			128			1			4
Tax expense(2)		(35	)		(46	)		—			(2	)
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		66			82			1			2
Total Other comprehensive income		14			61			1			2
Balance at end of period	$	(3,441	)	$	(3,907	)	$	(50	)	$	(74	)
Foreign currency translation
Balance at beginning of period	$	428		$	1,031		$	(23	)	$	273
Other comprehensive income (loss)(3)		141			(603	)		59			(249	)
Balance at end of period	$	569		$	428		$	36		$	24
Available-for-sale securities
Balance at beginning of period	$	2		$	4		$	—		$	—
Other comprehensive income (loss)(4)		1			(3	)		—			—
Balance at end of period	$	3		$	1		$	—		$	—
Cash flow hedges (O)
Balance at beginning of period	$	(276	)	$	(376	)	$	—		$	(3	)
Other comprehensive (loss) income:
Net change from periodic revaluations		(32	)		85			(12	)		(3	)
Tax benefit (expense)		4			(16	)		4			1
Total Other comprehensive (loss) income before reclassifications, net of tax		(28	)		69			(8	)		(2	)
Net amount reclassified to earnings:
Aluminum contracts(5)		6			—			—			—
Foreign exchange contracts(5)		(1	)		—			—			—
Interest rate contracts(6)		1			1			—			—
Sub-total		6			1			—			—
Tax (expense) benefit(2)		(1	)		1			—			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		5			2			—			—
Total Other comprehensive (loss) income		(23	)		71			(8	)		(2	)
Balance at end of period	$	(299	)	$	(305	)	$	(8	)	$	(5	)
	Alcoa						Noncontrolling Interests
	Six months ended     June 30,						Six months ended   June 30,
	2014			2013			2014			2013
Pension and other postretirement benefits
Balance at beginning of period	$	(3,532	)	$	(4,063	)	$	(51	)	$	(77	)
Other comprehensive income:
Unrecognized net actuarial loss and prior service cost/benefit		(63	)		(27	)		—			—
Tax benefit		25			14			—			—
Total Other comprehensive loss before reclassifications, net of tax		(38	)		(13	)		—			—
Amortization of net actuarial loss and prior service cost/benefit(1)		199			260			2			5
Tax expense(2)		(70	)		(91	)		(1	)		(2	)
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		129			169			1			3
Total Other comprehensive income		91			156			1			3
Balance at end of period	$	(3,441	)	$	(3,907	)	$	(50	)	$	(74	)
Foreign currency translation
Balance at beginning of period	$	179		$	1,147		$	(110	)	$	257
Other comprehensive income (loss)(3)		390			(719	)		146			(233	)
Balance at end of period	$	569		$	428		$	36		$	24
Available-for-sale securities
Balance at beginning of period	$	2		$	3		$	—		$	—
Other comprehensive income (loss)(4)		1			(2	)		—			—
Balance at end of period	$	3		$	1		$	—		$	—
Cash flow hedges (O)
Balance at beginning of period	$	(308	)	$	(489	)	$	(2	)	$	(5	)
Other comprehensive income (loss):
Net change from periodic revaluations		4			221			(9	)		—
Tax expense		(4	)		(45	)		3			—
Total Other comprehensive income (loss) before reclassifications, net of tax		—			176			(6	)		—
Net amount reclassified to earnings:
Aluminum contracts(5)		11			7			—			—
Foreign exchange contracts(5)		(1	)		—			—			—
Interest rate contracts(6)		1			1			—			—
Sub-total		11			8			—			—
Tax expense(2)		(2	)		—			—			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		9			8			—			—
Total Other comprehensive income (loss)		9			184			(6	)		—
Balance at end of period	$	(299	)	$	(305	)	$	(8	)	$	(5	)

⁽¹⁾  These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note N).

⁽²⁾  These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations.

⁽³⁾  In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings.

⁽⁴⁾  In all periods presented, unrealized and realized gains and losses related to these securities were immaterial. Realized gains and losses were included in Other expenses (income), net on the accompanying Statement of Consolidated Operations.

⁽⁵⁾  These amounts were included in Sales on the accompanying Statement of Consolidated Operations.

⁽⁶⁾  These amounts were included in Interest expense on the accompanying Statement of Consolidated Operations.

⁽⁷⁾  A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 1 through 6.

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Derivatives and Other Financial Instruments

6 Months Ended

Jun. 30, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives and Other Financial Instruments

O. 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), which is composed of the chief executive officer, the chief financial officer, and other officers and employees that the chief executive officer selects. The SRMC meets on a periodic basis to review derivative positions and strategy and reports to Alcoa’s 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 and corresponding classifications under the appropriate level of the fair value hierarchy of outstanding derivative contracts recorded as assets in the accompanying Consolidated Balance Sheet were as follows:

Asset Derivatives	Level	June 30, 2014		December 31, 2013
Derivatives designated as hedging instruments:
Prepaid expenses and other current assets:
Aluminum contracts	1	$	5	$	4
Aluminum contracts	3		7		9
Foreign exchange contracts	1		6		2
Interest rate contracts	2		9		9
Other noncurrent assets:
Aluminum contracts	3		17		16
Energy contracts	3		24		6
Interest rate contracts	2		21		23
Total derivatives designated as hedging instruments		$	89	$	69
Derivatives not designated as hedging instruments*:
Prepaid expenses and other current assets:
Aluminum contracts	3	$	116	$	149
Other noncurrent assets:
Aluminum contracts	3		141		175
Total derivatives not designated as hedging instruments		$	257	$	324
Less margin held**:
Prepaid expenses and other current assets:
Interest rate contracts	2	$	—	$	3
Total Asset Derivatives		$	346	$	390

* See the “Other” section within Note O 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.

The fair values and corresponding classifications under the appropriate level of the fair value hierarchy of outstanding derivative contracts recorded as liabilities in the accompanying Consolidated Balance Sheet were as follows:

Liability Derivatives	Level	June 30, 2014		December 31, 2013
Derivatives designated as hedging instruments:
Other current liabilities:
Aluminum contracts	1	$	16	$	45
Aluminum contracts	3		26		23
Foreign exchange contracts	1		4		—
Other noncurrent liabilities and deferred credits:
Aluminum contracts	1		6		14
Aluminum contracts	3		396		387
Total derivatives designated as hedging instruments		$	448	$	469
Derivatives not designated as hedging instruments*:
Other current liabilities:
Aluminum contracts	1	$	2	$	4
Embedded credit derivative	3		2		2
Foreign exchange contracts	1		2		3
Other noncurrent liabilities and deferred credits:
Embedded credit derivative	3		12		19
Total derivatives not designated as hedging instruments		$	18	$	28
Less margin posted**:
Other current liabilities:
Aluminum contracts	1	$	9	$	18
Total Liability Derivatives		$	457	$	479

* See the “Other” section within Note O 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.

The gross amounts of recognized derivative assets and liabilities and gross amounts offset in the accompanying Consolidated Balance Sheet were as follows:

	Assets						Liabilities
	June 30, 2014			December 31, 2013			June 30, 2014			December 31, 2013
Gross amounts recognized:
Aluminum contracts	$	42		$	40		$	52		$	81
Interest rate contracts		30			32			—			3
	$	72		$	72		$	52		$	84
Gross amounts offset:
Aluminum contracts*	$	(37	)	$	(36	)	$	(37	)	$	(36	)
Interest rate contracts**		—			(3	)		—			(3	)
	$	(37	)	$	(39	)	$	(37	)	$	(39	)
Net amounts presented in the Consolidated Balance Sheet:
Aluminum contracts	$	5		$	4		$	15		$	45
Interest rate contracts		30			29			—			—
	$	35		$	33		$	15		$	45

* The amounts under Assets and Liabilities as of June 30, 2014 and December 31, 2013 include $9 and $18, respectively, of margin posted with counterparties.

** The amounts under Assets and Liabilities as of December 31, 2013 represent margin held from the counterparty.

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. These valuation models are reviewed and tested at least on an annual basis.

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 through over-the-counter markets 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 by extrapolating the 10-year London Metal Exchange (LME) forward curve. 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). If a significant input that is unobservable in one period becomes observable in a subsequent period, the related asset or liability would be transferred to the appropriate level classification (1 or 2) in the period of such change.

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):

	June 30, 2014			December 31, 2013
Assets:
Level 1	$	11		$	6
Level 2		30			32
Level 3		305			355
Margin held		—			(3	)
Total	$	346		$	390
Liabilities:
Level 1	$	30		$	66
Level 2		—			—
Level 3		436			431
Margin posted		(9	)		(18	)
Total	$	457		$	479

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 tables present a reconciliation of activity for such derivative contracts:

	Assets					Liabilities
Second quarter ended June 30, 2014	Aluminum contracts			Energy contracts		Aluminum contracts			Embedded credit derivative
Opening balance – March 31, 2014	$	326		$	11	$	384		$	20
Total gains or losses (realized and unrealized) included in:
Sales		—			—		(6	)		—
Cost of goods sold		(53	)		—		—			—
Other expenses, net		—			5		—			(6	)
Other comprehensive income		(9	)		7		44			—
Purchases, sales, issuances, and settlements*		—			—		—			—
Transfers into and/or out of Level 3*		—			—		—			—
Foreign currency translation		17			1		—			—
Closing balance – June 30, 2014	$	281		$	24	$	422		$	14
Change in unrealized gains or losses included in earnings for derivative contracts held at June 30, 2014:
Sales	$	—		$	—	$	—		$	—
Cost of goods sold		—			—		—			—
Other expenses, net		—			5		—			(6	)

* 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.

	Assets					Liabilities
Six months ended June 30, 2014	Aluminum contracts			Energy contracts		Aluminum contracts			Embedded credit derivative
Opening balance – January 1, 2014	$	349		$	6	$	410		$	21
Total gains or losses (realized and unrealized) included in:
Sales		—			—		(11	)		—
Cost of goods sold		(111	)		—		—			—
Other expenses, net		(1	)		5		—			(7	)
Other comprehensive income		—			12		23			—
Purchases, sales, issuances, and settlements*		—			—		—			—
Transfers into and/or out of Level 3*		—			—		—			—
Foreign currency translation		44			1		—			—
Closing balance – June 30, 2014	$	281		$	24	$	422		$	14
Change in unrealized gains or losses included in earnings for derivative contracts held at June 30, 2014:
Sales	$	—		$	—	$	—		$	—
Cost of goods sold		—			—		—			—
Other expenses, net		(1	)		5		—			(7	)

* 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.

As reflected in the table above, the net unrealized loss on derivative contracts using Level 3 valuation techniques was $131 as of June 30, 2014. The unrealized loss related to aluminum contracts recognized as liabilities was mainly attributed to embedded derivatives in power contracts that index the price of power to the 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 an extrapolation of the 10-year LME forward curve. Significant increases or decreases in the actual LME price beyond 10 years would result in a higher or lower fair value measurement. An increase of actual LME price over the inputs used in the valuation model will result in a higher cost of power and a corresponding increase to the liability. The embedded derivatives have been designated as hedges of forward sales of aluminum and related realized gains and losses were included in Sales on the accompanying Statement of Consolidated Operations.

In July 2012, as provided for in the arrangements, management elected to modify the pricing for two existing power contracts, which end in 2014 and 2016 (see directly below), for Alcoa’s two smelters in Australia and the Point Henry rolling mill in Australia. These contracts contain an LME-linked embedded derivative, which previously was not recorded as an asset in Alcoa’s Consolidated Balance Sheet. Beginning on January 1, 2001, all derivative contracts were required to be measured and recorded at fair value on an entity’s balance sheet under GAAP; however, an exception existed for embedded derivatives upon meeting certain criteria. The LME-linked embedded derivative in these two contracts met such criteria at that time. Management’s election to modify the pricing of these contracts qualifies as a significant change to the contracts thereby requiring that the contracts now be evaluated under derivative accounting as if they were new contracts. As a result, Alcoa recorded a derivative asset in the amount of $596 with an offsetting liability (deferred credit) recorded in Other current and noncurrent liabilities. Unrealized gains and losses from the embedded derivative 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 as electricity purchases are made under the contracts. The deferred credit is recognized in Other expenses (income), net on the accompanying Statement of Consolidated Operations as power is received over the life of the contracts. The embedded derivative is valued using the probability and interrelationship of future LME prices, Australian dollar to U.S. dollar exchange rates, and the U.S. consumer price index. Significant increases or decreases in the LME price would result in a higher or lower fair value measurement. An increase in actual LME price over the inputs used in the valuation model will result in a higher cost of power and a decrease to the embedded derivative asset.

Also, included within Level 3 measurements is a derivative contract that will hedge the anticipated power requirements at Alcoa’s Portland smelter in Australia once the existing contract expires in 2016. This derivative hedges 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 this contract was recorded in Other comprehensive income on the accompanying Consolidated Balance Sheet until the designated hedge period begins in 2016. Once the hedge period begins, realized gains and losses will be recorded in Cost of goods sold. Significant increases or decreases in the power market may result in a higher or lower fair value measurement. Higher prices in the power market would cause the derivative asset to increase in value. Alcoa had a similar contract for its Point Henry smelter in Australia once the existing contract expires on July 31, 2014, but elected to terminate the new contract in early 2013. This election was available to Alcoa under the terms of the contract and was made due to a projection that suggested the contract would be uneconomical. Prior to termination, the new contract was accounted for in the same manner as the contract for the Portland smelter.

Additionally, Alcoa has 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. Any change in the interrelationship would result in a higher or lower fair value measurement. An LME ceiling was embedded into the contract price to protect against an increase in the price of oil without a corresponding increase in the price of LME. An increase in oil prices with no similar increase in the LME price would limit the increase of the price paid for natural gas. 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.

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. Significant increases or decreases in any of these inputs would result in a lower or higher fair value measurement. A wider credit spread between Alcoa and the counterparty would result in an increase of the future liability and a higher cost of power. Realized gains and losses for this embedded derivative were included in Cost of goods sold on the accompanying Statement of Consolidated Operations and unrealized gains and losses were included in Other expenses (income), net on the accompanying Statement of Consolidated Operations.

The following table presents quantitative information for Level 3 derivative contracts:

	Fair value at June 30, 2014		Valuation technique	Unobservable input	Range ($ in full amounts)
Assets:
Aluminum contract	$	—	Discounted cash flow	Interrelationship of future aluminum and oil prices	Aluminum: $1,871 per metric ton in 2014 to $2,141 per metric ton in 2018 Oil: $113 per barrel in 2014 to $99 per barrel in 2018
Aluminum contract		257	Discounted cash flow	Interrelationship of future aluminum prices, foreign currency exchange rates, and the U.S. consumer price index (CPI)	Aluminum: $1,858 per metric ton in 2014 to $2,019 per metric ton in 2016 Foreign currency: A$1 = $0.94 in 2014 to $0.90 in 2016 CPI: 1982 base year of 100 and 236 in 2014 to 248 in 2016
Aluminum contract		24	Discounted cash flow	Interrelationship of LME price to overall energy price	Aluminum: $1,846 per metric ton in 2014 to $2,183 per metric ton in 2019
Energy contracts		24	Discounted cash flow	Price of electricity beyond forward curve	$83 per megawatt hour in 2014 to $154 per megawatt hour in 2036
Liabilities:
Aluminum contracts		422	Discounted cash flow	Price of aluminum beyond forward curve	$2,453 per metric ton in 2023 to $2,594 per metric ton in 2027
Embedded credit derivative		14	Discounted cash flow	Credit spread between Alcoa and counterparty	0.73% to 1.61% (1.17% median)

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
		Second quarter ended June 30,					Six months ended June 30,
		2014		2013			2014			2013
Aluminum contracts*	Sales	$	19	$	(59	)	$	(1	)	$	(130	)
Interest rate contracts	Interest expense		2		2			5			5
Total		$	21	$	(57	)	$	4		$	(125	)

* In the second quarter and six months ended June 30, 2014, the loss recognized in earnings includes a gain of $7 and a loss of $13, respectively, related to the ineffective portion of the hedging relationships. In both the second quarter and six months ended June 30, 2013, the loss recognized in earnings includes a gain of $4 related to the ineffective portion of the hedging relationships.

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
		Second quarter ended June 30,						Six months ended June 30,
		2014			2013			2014			2013
Aluminum contracts	Sales	$	(12	)	$	63		$	(12	)	$	134
Interest rate contracts	Interest expense		(2	)		(2	)		(5	)		(5	)
Total		$	(14	)	$	61		$	(17	)	$	129

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 June 30, 2014, Alcoa had 268,000 metric tons of aluminum futures designated as fair value hedges. The effects of this hedging activity will be recognized over the designated hedge periods in 2014 to 2018.

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 June 30, 2014, 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 $200 of debt through 2018.

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.

																										Location of Gain or
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)*												(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)**
	Second quarter ended June 30,						Six months ended June 30,							Second quarter ended June 30,						Six months ended June 30,							Second quarter ended June 30,						Six months ended June 30,
	2014			2013			2014			2013				2014			2013			2014			2013				2014			2013			2014			2013
Aluminum contracts	$	(42	)	$	74		$	(19	)	$	178		Sales	$	(5	)	$	(1	)	$	(9	)	$	(7	)	Other expenses (income), net	$	(1	)	$	(2	)	$	(1	)	$	(2	)
Energy contracts		13			(3	)		15			(1	)	Cost of goods sold		—			—			—			—		Other expenses (income), net		5			—			5			—
Foreign exchange contracts		—			(2	)		2			(2	)	Sales		1			—			1			—		Other expenses (income), net		—			—			—			—
Interest rate contracts		—			—			—			—		Interest expense		(1	)		(1	)		(1	)		(1	)	Other expenses (income), net		—			—			—			—
Interest rate contracts		1			—			2			1		Other expenses (income), net		—			—			—			—		Other expenses (income), net		—			—			—			—
Total	$	(28	)	$	69		$	—		$	176			$	(5	)	$	(2	)	$	(9	)	$	(8	)		$	4		$	(2	)	$	4		$	(2	)

* Assuming market rates remain constant with the rates at June 30, 2014, a loss of $16 is expected to be recognized in earnings over the next 12 months.

** For both the second quarter and six months ended June 30, 2014, the amount of gain or (loss) recognized in earnings represents $5 related to the ineffective portion of the hedging relationships. There was also $(1) recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for both the second quarter and six months ended June 30, 2014. For both the second quarter and six months ended June 30, 2013, there was no ineffectiveness related to the derivatives in cash flow hedging relationships. There was $(2) recognized in earnings related to the amount excluded from the assessment of hedge effectiveness for both the second quarter and six months ended June 30, 2013.

Aluminum and Energy. Alcoa anticipates the continued requirement to purchase aluminum and other commodities, such as electricity and natural gas, for its operations. Alcoa enters into forwards, futures, and options 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 a contract to hedge the anticipated power requirements at its Portland smelter in Australia. This derivative hedges forecasted power purchases through December 2036. Prior to 2013, Alcoa had a similar contract for its Point Henry smelter in Australia but elected to terminate it under the terms of the contract (see additional information in description of Level 3 derivative contracts above).

Interest Rates. Alcoa had no outstanding cash flow hedges of interest rate exposures as of June 30, 2014. 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. 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 2015.

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

	June 30, 2014		December 31, 2013
Aluminum contracts (000 metric tons)		780		841
Energy contracts:
Electricity (megawatt hours)		59,409,328		59,409,328
Natural gas (million British thermal units)		20,200,000		19,980,000
Foreign exchange contracts	$	789	$	335

Other

Alcoa has certain derivative contracts that do not qualify 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
		Second quarter ended June 30,						Six months ended June 30,
		2014			2013			2014			2013
Aluminum contracts	Sales	$	1		$	(3	)	$	(4	)	$	(7	)
Aluminum contracts	Other expenses (income), net		(1	)		(7	)		(1	)		15
Embedded credit derivative	Other expenses (income), net		6			(7	)		7			(9	)
Foreign exchange contracts	Other expenses (income), net		3			(2	)		(3	)		(5	)
Total		$	9		$	(19	)	$	(1	)	$	(6	)

The aluminum contracts relate to derivatives (recognized in Sales) and embedded derivatives (recognized in Other expenses (income), net) entered into to minimize Alcoa’s price risk related to other customer sales and certain pricing arrangements.

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 31 of the year preceding the calculation date. This differential would be added to the cost of power in the period following the calculation date.

Alcoa has a forward contract to purchase $55 (C$58) to mitigate the foreign currency risk related to a Canadian-denominated loan due in August 2014. Also, in December 2013, Alcoa entered into a forward contract to purchase $231 (R$543) to mitigate the foreign currency risk associated with a potential future transaction denominated in Brazilian reais. This contract expired on March 31, 2014 and a loss of $4 was recognized in the 2014 six-month period. 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:

	June 30, 2014				December 31, 2013
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	1,183	$	1,183	$	1,437	$	1,437
Restricted cash		15		15		18		18
Noncurrent receivables		19		19		19		19
Available-for-sale securities		125		125		119		119
Short-term borrowings		133		133		57		57
Commercial paper		223		223		—		—
Long-term debt due within one year		87		87		655		1,040
Long-term debt, less amount due within one year		7,612		8,271		7,607		7,863

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

Cash and cash equivalents, Restricted cash, Short-term borrowings, and Commercial paper. The carrying amounts approximate fair value because of the short maturity of the instruments. The fair value amounts for Cash and cash equivalents, Restricted cash, and Commercial paper were classified in Level 1, and Short-term borrowings were classified in Level 2.

Noncurrent receivables. The fair value of noncurrent receivables was based on anticipated cash flows, which approximates carrying value, and was classified in Level 2 of the fair value hierarchy.

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 due within one year and 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. The fair value amounts for all Long-term debt were classified in Level 2 of the fair value hierarchy.

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Earnings Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

K. Earnings Per Share – Basic earnings per share (EPS) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding.

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

	Second quarter ended June 30,					Six months ended June 30,
	2014		2013			2014			2013
Net income (loss) attributable to Alcoa common shareholders	$	138	$	(119	)	$	(40	)	$	30
Less: preferred stock dividends declared		—		—			1			1
Net income (loss) available to Alcoa common shareholders – basic		138		(119	)		(41	)		29
Add: interest expense related to convertible notes		—		—			—			—
Net income (loss) available to Alcoa common shareholders – diluted	$	138	$	(119	)	$	(41	)	$	29
Average shares outstanding – basic		1,173		1,069			1,137			1,069
Effect of dilutive securities:
Stock options		6		—			—			2
Stock and performance awards		10		—			—			8
Convertible notes		—		—			—			—
Average shares outstanding – diluted		1,189		1,069			1,137			1,079

In the first quarter of 2014, holders of the convertible notes exercised their option to convert the notes into 89 million shares of Alcoa common stock (see Note G). As a result, for the 2014 second quarter, these 89 million shares were outstanding for the entire period and were included in both basic and diluted average shares outstanding. For the 2014 six-month period, these 89 million shares were outstanding for a portion of the period equivalent to a weighted average of 56 million shares. The 56 million shares were included in both basic and diluted average shares outstanding for the 2014 six-month period. For the portion of the 2014 six-month period that the convertible notes were still outstanding debt, a weighted average of the 89 million share equivalents (33 million) would have been included only in the diluted average shares outstanding if their effect was dilutive.

In the 2014 six-month period, basic average shares outstanding and diluted average shares outstanding were the same because the effect of potential shares of common stock was anti-dilutive since Alcoa generated a net loss. As a result, 33 million share equivalents related to convertible notes (see above), 19 million stock awards, and 31 million stock options were not included in the computation of diluted EPS. Had Alcoa generated sufficient net income in the 2014 six-month period, 33 million, 10 million, and 6 million potential shares of common stock related to the convertible notes, stock awards, and stock options, respectively, would have been included in diluted average shares outstanding.

In the 2013 second quarter, basic average shares outstanding and diluted average shares outstanding were the same because the effect of potential shares of common stock was anti-dilutive since Alcoa generated a net loss. As a result, 89 million share equivalents related to convertible notes, 17 million stock awards, and 9 million stock options were not included in the computation of diluted EPS. Had Alcoa generated sufficient net income in the second quarter of 2013, 89 million, 8 million, and 1 million potential shares of common stock related to the convertible notes, stock awards, and stock options, respectively, would have been included in diluted average shares outstanding.

In the 2013 six-month period, 89 million share equivalents related to convertible notes were not included in the computation of diluted EPS because their effect was anti-dilutive.

Options to purchase 3 million and 48 million shares of common stock at a weighted average exercise price of $16.24 and $10.77 per share were outstanding as of June 30, 2014 and 2013, 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.

In June 2014, Alcoa entered into an agreement to purchase an aerospace jet engine components company. A portion of the purchase price will be paid in Alcoa common stock equivalent to 36,523,010 shares at a per share price of $13.69 (see Note E).

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Debt

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Debt

G. Debt – In the first quarter of 2014, holders of $575 principal amount of Alcoa’s 5.25% Convertible Notes due March 15, 2014 (the “Notes”) exercised their option to convert the Notes into 89 million shares of Alcoa common stock. The conversion rate for the Notes was 155.4908 shares of Alcoa’s common stock per $1,000 (in whole dollars) principal amount of notes, equivalent to a conversion price of $6.43 per share. The difference between the $575 principal amount of the Notes and the $89 par value of the issued shares increased Additional capital on the accompanying Consolidated Balance Sheet. This transaction was not reflected in the accompanying Statement of Consolidated Cash Flows as it represents a noncash financing activity.

At the end of 2013, Alcoa had ten revolving credit facilities (excluding Alcoa’s Five-Year Revolving Credit Facility), each with a different financial institution, providing a combined capacity of $1,190 and expiration dates ranging from February 2014 through December 2015. A credit facility ($150 capacity) that was due to expire in February 2014 was extended to March 2015 in the first quarter of 2014. Another credit facility ($150 capacity) expired in March 2014 (a new agreement with the same financial institution was entered into in April 2014 and the new facility expires in March 2016). Also in the first quarter of 2014, Alcoa entered into an eleventh revolving credit agreement, providing a $50 credit facility with an expiration date of February 2016.

The purpose of any borrowings under all eleven arrangements is to provide for working capital requirements and for other general corporate purposes. The covenants contained in all eleven arrangements are the same as Alcoa’s Five-Year Revolving Credit Agreement (see the Credit Facilities section of Note K to the Consolidated Financial Statements included in Alcoa’s 2013 Form 10-K).

During the first and second quarters of 2014, Alcoa borrowed and repaid $620 and $510, respectively, under these credit arrangements. The weighted-average interest rate and weighted-average days outstanding of the respective borrowings during the first and second quarters of 2014 were 1.53% and 1.55%, respectively, and 49 days and 84 days, respectively.

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Derivatives and Other Financial Instruments - Additional Information (Detail) In Millions, unless otherwise specified	1 Months Ended	6 Months Ended				6 Months Ended				1 Months Ended
	Jul. 31, 2012 Plant Contract	Jun. 30, 2014 USD ($) Contract t	Jun. 30, 2014 CAD	Dec. 31, 2013 USD ($)	Sep. 30, 2012 USD ($)	Jun. 30, 2014 Forward Contracts [Member] USD ($)	Jun. 30, 2014 Forward Contracts [Member] BRL	Jun. 30, 2014 Level 3 [Member] USD ($)	Dec. 31, 2013 Level 3 [Member] USD ($)	Jul. 31, 2012 Power Contract One [Member]	Jul. 31, 2012 Power Contract Two [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net unrealized loss on derivative contracts								$ 131
Other derivative contracts estimated term of quoted market prices, in years		10 years
Number of contracts	2
Power contracts maturity date										Jun. 30, 2014	Jun. 30, 2016
Number of smelters	2
Derivative asset amount		346		390	596			305	355
Power purchase period forecasted by derivative instrument		Through December 2036
Period of natural gas supply contract		6 years
Number of commodities involved for valuation of supply contract		2
Number of contracts ceased to qualify as fair value hedge		0
Amount of aluminum kmt designated as fair value hedges		268,000
Derivative designated as fair value hedge start period		2014
Derivative designated as fair value hedge end period		2018
Face amount of debt the hedges effectively convert from fixed to floating through 2018		200
Interest rate cash flow hedges		0
Forward contract to purchase to mitigate the foreign currency risk related to a Canadian/Brazilian-denominated loan due in 2014		55	58			231	543
Maturity date of forward contract		Aug. 31, 2014				Mar. 31, 2014	Mar. 31, 2014
Loss recognized on forward contract		$ 4

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Acquisitions and Divestitures

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Acquisitions and Divestitures

E. Acquisitions and Divestitures – On June 25, 2014, Alcoa signed a definitive agreement to acquire Firth Rixson, a global leader in aerospace jet engine components, from Oak Hill Capital Partners for $2,850. The purchase price is composed of $2,350 in cash and $500 of Alcoa common stock with a potential earn-out of $150. The common stock component is equivalent to 36,523,010 shares at a per share price of $13.69, as determined in the agreement. Also on June 25, 2014, Alcoa entered into a commitment with a financial institution for a 364-day senior unsecured bridge term loan facility in the amount of $2,500 for the purpose of financing all or a portion of the cash consideration for this acquisition and to pay fees and expenses incurred in connection therewith. The purpose of this acquisition is to strengthen Alcoa’s aerospace business and position the Company to capture additional aerospace growth with a broader range of high-growth, value-add jet engine components. The transaction is subject to customary conditions and regulatory approvals and is expected to close by the end of 2014. At that time, Firth Rixson will be included within Alcoa’s Engineered Products and Solutions segment.

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Inventories

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Inventories

F. Inventories

	June 30, 2014		December 31, 2013
Finished goods	$	688	$	578
Work-in-process		1,077		828
Bauxite and alumina		642		581
Purchased raw materials		584		474
Operating supplies		236		244
	$	3,227	$	2,705

At June 30, 2014 and December 31, 2013, the total amount of inventories valued on a last in, first out (LIFO) basis was $1,445 and $1,169, respectively. If valued on an average-cost basis, total inventories would have been $714 and $691 higher at June 30, 2014 and December 31, 2013, respectively.

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Contingencies and Commitments

6 Months Ended

Jun. 30, 2014

Commitments And Contingencies Disclosure [Abstract]

Contingencies and Commitments

H. Contingencies and Commitments

Contingencies

Litigation

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 dependents 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, and bifurcated and stayed the plaintiffs’ breach of fiduciary duty claims. 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.

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 sought, 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 attorneys’ fees and expenses. On June 11, 2012, the court issued its memorandum and order denying plaintiffs’ motion for clarification and/or amendment to the original judgment order. On July 6, 2012, plaintiffs filed a notice of appeal of the court’s March 9, 2011 judgment. On July 12, 2012, the trial court stayed Alcoa’s motion for assessment of costs pending resolution of plaintiffs’ appeal. The appeal was docketed in the United States Court of Appeals for the Sixth Circuit as case number 12-5801. On August 29, 2012, the trial court dismissed plaintiffs’ motion for attorneys’ fees without prejudice to refiling the motion following the resolution of the appeal at the Sixth Circuit Court of Appeals. On May 9, 2013, the Sixth Circuit Court of Appeals issued an opinion affirming the trial court’s denial of plaintiffs’ claims for lifetime, uncapped retiree healthcare benefits. Plaintiffs filed a petition for rehearing on May 22, 2013 to which Alcoa filed a response on June 7, 2013. On September 12, 2013, the Sixth Circuit Court of Appeals denied plaintiffs’ petition for rehearing. The trial court is now considering Alcoa’s request for an award of costs, which had been stayed pending resolution of the appeal, and the plaintiffs’ request for attorneys’ fees, which had been dismissed without prejudice to refiling following resolution of the appeal. On December 17, 2013 the United States Supreme Court docketed the plaintiffs’ petition for writ of certiorari to the Sixth Circuit Court of Appeals as Charles Curtis, et al., Individually and on Behalf of All Others Similarly Situated, Petitioners v. Alcoa Inc., et al., Docket No.13-728. Alcoa’s opposition to this petition was filed on January 16, 2014 and Petitioners filed their reply on January 29, 2014.

On February 24, 2014, the Supreme Court denied plaintiffs’ petition. The Supreme Court’s refusal to hear the matter ends the substantive litigation and affirms Alcoa’s collectively bargained cap on the Company’s contributions to union retiree medical costs. In the second quarter of 2014, the parties agreed to dismiss their respective petitions for fees and costs. The case is expected to be dismissed in its entirety at some point in time during the remainder of 2014.

Before 2002, Alcoa purchased power in Italy in the regulated energy market and received a drawback of a portion of the price of power under a special tariff in an amount calculated in accordance with a published resolution of the Italian Energy Authority, Energy Authority Resolution n. 204/1999 (“204/1999”). In 2001, the Energy Authority published another resolution, which clarified that the drawback would be calculated in the same manner, and in the same amount, in either the regulated or unregulated market. At the beginning of 2002, Alcoa left the regulated energy market to purchase energy in the unregulated market. Subsequently, in 2004, the Energy Authority introduced regulation no. 148/2004 which set forth a different method for calculating the special tariff that would result in a different drawback for the regulated and unregulated markets. Alcoa challenged the new regulation in the Administrative Court of Milan and received a favorable judgment in 2006. Following this ruling, Alcoa continued to receive the power price drawback in accordance with the original calculation method, through 2009, when the European Commission declared all such special tariffs to be impermissible “state aid.” In 2010, the Energy Authority appealed the 2006 ruling to the Consiglio di Stato (final court of appeal). On December 2, 2011, the Consiglio di Stato ruled in favor of the Energy Authority and against Alcoa, thus presenting the opportunity for the energy regulators to seek reimbursement from Alcoa of an amount equal to the difference between the actual drawback amounts received over the relevant time period, and the drawback as it would have been calculated in accordance with regulation 148/2004. On February 23, 2012, Alcoa filed its appeal of the decision of the Consiglio di Stato (this appeal was subsequently withdrawn in March 2013). On March 26, 2012, Alcoa received a letter from the agency (Cassa Conguaglio per il Settore Eletrico (CCSE)) responsible for making and collecting payments on behalf of the Energy Authority demanding payment in the amount of approximately $110 (€85), including interest. By letter dated April 5, 2012, Alcoa informed CCSE that it disputes the payment demand of CCSE since (i) CCSE was not authorized by the Consiglio di Stato decisions to seek payment of any amount, (ii) the decision of the Consiglio di Stato has been appealed (see above), and (iii) in any event, no interest should be payable. On April 29, 2012, Law No. 44 of 2012 (“44/2012”) came into effect, changing the method to calculate the drawback. On February 21, 2013, Alcoa received a revised request letter from CSSE demanding Alcoa’s subsidiary, Alcoa Trasformazioni S.r.l., make a payment in the amount of $97 (€76), including interest, which reflects a revised calculation methodology by CCSE and represents the high end of the range of reasonably possible loss associated with this matter of $0 to $97 (€76). Alcoa has rejected that demand and has formally challenged it through an appeal before the Administrative Court on April 5, 2013. The Administrative Court scheduled a hearing for December 19, 2013, which was subsequently postponed until April 17, 2014, and further postponed until June 19, 2014. On this date, the Administrative Court listened to Alcoa’s oral argument and expects to render a decision in this matter in the third quarter of 2014. At this time, the Company is unable to reasonably predict an outcome for this matter.

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 complied 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 had been incurring higher power costs at its smelters in Italy subsequent to the tariff end date through the end of 2012). 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 was to be based on a calculation prepared by the Italian Government (see below). 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 (€173), which included $20 (€14) to write off a receivable from the Italian Government for amounts due under the now expired tariff structure and $230 (€159) to establish a reserve. On April 19, 2010, Alcoa filed an appeal of this decision with the General Court of the EU (on July 8, 2014, Alcoa received notice that the General Court of the EU will announce its judgment of this appeal on October 16, 2014). Alcoa will pursue all substantive and procedural legal steps available to annul the EC’s decision. Prior to 2012, Alcoa was involved in other legal proceedings related to this matter that separately sought the annulment of the EC’s July 2006 decision to open an investigation alleging that such decision did not follow the applicable procedural rules and requested injunctive relief to suspend the effectiveness of the EC’s November 19, 2009 decision. However, the decisions by the General Court, and subsequent appeals to the European Court of Justice, resulted in the denial of these remedies.

In June 2012, Alcoa received formal notification from the Italian Government with a calculated recovery amount of $375 (€303); this amount was reduced by $65 (€53) for amounts owed by the Italian Government to Alcoa, resulting in a net payment request of $310 (€250). In a notice published in the Official Journal of the European Union on September 22, 2012, the EC announced that it had filed an action against the Italian Government on July 18, 2012 to compel it to collect the recovery amount (on October 17, 2013, the ECJ ordered Italy to so collect). On September 27, 2012, Alcoa received a request for payment in full of the $310 (€250) by October 31, 2012. Following discussions with the Italian Government regarding the timing of such payment, Alcoa paid the requested amount in five quarterly installments of $69 (€50) beginning in October 2012 through December 2013. Notwithstanding the payments made, Alcoa’s estimate of the most probable loss of the ultimate outcome of this matter and the low end of the range of reasonably possible loss, which is $216 (€159) to $413 (€303), remains the $216 (€159) recorded in 2009 (the U.S. dollar amount reflects the effects of foreign currency movements since 2009). Alcoa no longer has a reserve for this matter; instead, Alcoa has a noncurrent asset reflecting the excess of the total of the five payments made to the Italian Government over the reserve recorded in 2009. At June 30, 2014, the noncurrent asset was $125 (€91). The full extent of the loss will not be known until the final judicial determination, which could be a period of several years.

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. Over a portion of this time, a long-term solution was not able to be reached related to the Fusina smelter, therefore, in May 2010, Alcoa and the Italian Government agreed to a temporary idling of the Fusina smelter. As of June 30, 2010, the Fusina smelter was fully curtailed (44,000 metric-tons-per-year). For the Portovesme smelter, Alcoa executed a new power agreement effective September 1, 2010 through December 31, 2012, replacing the short-term, market-based power contract that was in effect since early 2010. This new agreement along with interruptibility rights (i.e. compensation for power interruptions when grids are overloaded) granted to Alcoa for the Portovesme smelter provided additional time to negotiate a long-term solution (the EC had previously determined that the interruptibility rights were not considered state aid).

At the end of 2011, as part of a restructuring of Alcoa’s global smelting system, management decided to curtail operations at the Portovesme smelter during 2012 due to the uncertain prospects for viable, long-term power, along with rising raw materials costs and falling global aluminum prices (mid-2011 to late 2011). As of December 31, 2012, the Portovesme smelter was fully curtailed (150,000 metric-tons-per-year). This curtailment may lead to the permanent closure of the facility; however, Alcoa will keep the smelter in restart condition through the end of July 2014.

In June 2013, Alcoa decided to permanently shut down and demolish the Fusina smelter due to persistent uneconomical conditions (see Note D).

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 $95 (€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.

On February 4, 2014, the EC announced a decision in this matter stating that the electricity tariffs granted by Spain for year 2005 do not constitute unlawful state aid.

Environmental Matters

Alcoa participates in environmental assessments and cleanups at more than 100 locations. 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 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. 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 $571 and $509 at June 30, 2014 and December 31, 2013 (of which $76 and $48 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 2014 second quarter and six-month period, the remediation reserve was increased by $5 and $52, respectively. The change in the second quarter of 2014 was due to a charge of $3 related to the Portovesme location (see below) and a net charge of $2 associated with a number of other sites. The change in the six-month period of 2014 was due to a charge of $38 related to the planned demolition of certain structures at the Massena East, NY and Point Henry and Yennora, Australia locations (see Note D), the previously mentioned charge of $3, and a net charge of $11 associated with a number of other sites. Of the changes to the remediation reserve in the 2014 six-month period, $42 was recorded in Restructuring and other charges, including the aforementioned $38, while the remainder was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations.

Payments related to remediation expenses applied against the reserve were and $14 and $20 in the 2014 second quarter and six-month period, respectively. These amounts include expenditures currently mandated, as well as those not required by any regulatory authority or third party. In the 2014 second quarter and six-month period, the change in the reserve also reflects an increase of $15 and $30, respectively, due to, among other items, the effects of foreign currency translation and a reclassification of amounts included in other reserves within Other noncurrent liabilities and deferred credits on Alcoa’s Consolidated Balance Sheet as of December 31, 2013.

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.

Massena West, NY—Alcoa has an ongoing remediation project related to the Grasse River, which is adjacent to Alcoa’s Massena plant site. Many years ago, it was determined that sediments and fish in the river contain varying levels of polychlorinated biphenyls (PCBs). The project, which was selected by the U.S. Environmental Protection Agency (EPA) in a Record of Decision (ROD) issued in April 2013, is aimed at capping PCB contaminated sediments with concentration in excess of one part per million in the main channel of the river and dredging PCB contaminated sediments in the near-shore areas where total PCBs exceed one part per million. At June 30, 2014, the reserve balance associated with this matter was $241. Alcoa is in the planning and design phase, which is expected to take approximately two to three years from mid-2013, followed by the actual remediation fieldwork that is expected to take approximately four years. The majority of the project funding is expected to be spent between 2016 and 2020.

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 bauxite residue waste disposal areas (known as the Copano facility). Alcoa’s share of the closure costs is proportional to the total period of operation of the active waste disposal areas. At June 30, 2014, the reserve balance associated with Sherwin was $33. Approximately half of the project funding is expected to be spent between 2014 and 2019. The remainder is not expected to be spent in the foreseeable future as it is dependent upon the operating life of the active waste disposal areas.

East St. Louis, IL—Alcoa has an ongoing remediation project related to an area used for the disposal of bauxite residue from former alumina refining operations. The project, which was selected by the EPA in a ROD issued in July 2012, is aimed at implementing a soil cover over the affected area. On November 1, 2013, the Department of Justice lodged a consent decree on behalf of the EPA for Alcoa to conduct the work outlined in the ROD. This consent decree was entered as final in February 2014 by the Department of Justice. As a result, Alcoa began construction in March 2014; this project is expected to be completed by mid-2015. At June 30, 2014, the reserve balance associated with this matter was $22. The majority of the project funding is expected to be spent between 2014 and 2015.

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. (“Trasformazioni”), 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 and Protection of Land and Sea (MOE) issued orders to Trasformazioni 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. Trasformazioni 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. (“Ligestra”), Alumix’s successor, and Trasformazioni agreed to a stay of the court proceedings while investigations were conducted and negotiations advanced towards a possible settlement.

In December 2009, Trasformazioni and Ligestra reached an initial agreement for settlement of the liabilities related to Fusina while negotiations continued related to Portovesme. The agreement outlined 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 in 2009 for Fusina. Based on comments received from the MOE and local and regional environmental authorities, Trasformazioni submitted a revised remediation plan in the first half of 2012; however, such revisions did not require any change to the existing reserve. In October 2013, the MOE approved the project submitted by Alcoa, resulting in no adjustment to the reserve.

In January 2014, in anticipation of Alcoa reaching a final administrative agreement with the MOE, Alcoa and Ligestra entered into a final agreement related to Fusina for allocation of payments to the MOE for emergency action and natural resource damages and the costs for the approved soil remediation project. The agreement resulted in Ligestra assuming 50% to 80% of all payments and remediation costs. On February 27, 2014, Alcoa and the MOE reached a final administrative agreement for conduct of work. The agreement includes both a soil and groundwater remediation project estimated to cost $33 (€24) and requires payments of $25 (€18) to the MOE for emergency action and natural resource damages. The remediation projects are slated to begin in the second half of 2014 and continue through the end of 2015. Based on the final agreement with Ligestra, Alcoa’s share of all costs and payments is $17 (€12), of which $9 (€6) related to the damages will be paid annually over a 10-year period, which began in April 2014, and was previously fully reserved.

Separately, in 2009, due to additional information derived from the site investigations conducted at Portovesme, Alcoa increased the reserve by $3. In November 2011, Trasformazioni and Ligestra reached an agreement for settlement of the liabilities related to Portovesme, similar to the one for Fusina. A proposed soil remediation project for Portovesme was formally presented to the MOE in June 2012. Neither the agreement with Ligestra nor the proposal to the MOE resulted in a change to the reserve for Portovesme. In November 2013, the MOE rejected the proposed soil remediation project and requested a revised project be submitted. In May 2014, Trasformazioni and Ligestra submitted a revised soil remediation project that addressed certain stakeholders’ concerns. Alcoa increased the reserve by $3 in the 2014 second quarter to reflect the estimated higher costs associated with the revised soil remediation project, as well as current operating and maintenance costs of the Portovesme site. The ultimate outcome of this matter may result in a change to the existing reserve for Portovesme.

Baie Comeau, Quebec, Canada—In August 2012, Alcoa presented an analysis of remediation alternatives to the Quebec Ministry of Sustainable Development, Environment, Wildlife and Parks (MDDEP), in response to a previous request, related to known PCBs and polycyclic aromatic hydrocarbons (PAHs) contained in sediments of the Anse du Moulin bay. As such, Alcoa increased the reserve for Baie Comeau by $25 in 2012 to reflect the estimated cost of Alcoa’s recommended alternative, consisting of both dredging and capping of the contaminated sediments. In July 2013, Alcoa submitted the Environmental Impact Assessment for the project to the MDDEP and this document is currently in the regulatory review process. The ultimate selection of a remedy may result in additional liability at the time the MDDEP issues a final decision.

Mosjøen, Norway—In September 2012, Alcoa presented an analysis of remediation alternatives to the Norwegian Environmental Agency (NEA) (formerly the Norwegian Climate and Pollution Agency, or “Klif”), in response to a previous request, related to known PAHs in the sediments located in the harbor and extending out into the fjord. As such, Alcoa increased the reserve for Mosjøen by $20 in 2012 to reflect the estimated cost of the baseline alternative for dredging of the contaminated sediments. The ultimate selection of a remedy may result in additional liability at the time the NEA issues a final decision.

Other

In September 2010, following a corporate income tax audit covering the 2003 through 2005 tax years, an assessment was received as a result of Spain’s tax authorities disallowing certain interest deductions claimed by a Spanish consolidated tax group owned by the Company. An appeal of this assessment in Spain’s Central Tax Administrative Court by the Company was denied in October 2013. In December 2013, the Company filed an appeal of the assessment in Spain’s National Court.

Additionally, following a corporate income tax audit of the same Spanish tax group for the 2006 through 2009 tax years, Spain’s tax authorities issued an assessment in July 2013 similarly disallowing certain interest deductions. In August 2013, the Company filed an appeal of this second assessment in Spain’s Central Tax Administrative Court.

The combined assessments total $330 (€242). The Company believes it has meritorious arguments to support its tax position and intends to vigorously litigate the assessments through Spain’s court system. However, in the event the Company is unsuccessful, a portion of the assessments may be offset with existing net operating losses available to the Spanish consolidated tax group. Additionally, it is possible that the Company may receive similar assessments for tax years subsequent to 2009. At this time, the Company is unable to reasonably predict an outcome for this matter.

In March 2013, Alcoa’s subsidiary, Alcoa World Alumina Brasil (AWAB), was notified by the Brazilian Federal Revenue Office (RFB) that approximately $110 (R$220) of value added tax credits previously claimed are being disallowed and a penalty of 50% assessed. Of this amount, AWAB received $41 (R$82) in cash in May 2012. The value added tax credits were claimed by AWAB for both fixed assets and export sales related to the Juruti bauxite mine and São Luís refinery expansion. The RFB has disallowed credits they allege belong to the consortium in which AWAB owns an interest and should not have been claimed by AWAB. Credits have also been disallowed as a result of challenges to apportionment methods used, questions about the use of the credits, and an alleged lack of documented proof. The assessment is currently in the administrative process, which could take approximately two years to complete. AWAB presented defense of its claim to the RFB on April 8, 2013. If AWAB is successful in the administrative process, the RFB would have no further recourse. If unsuccessful in this process, AWAB has the option to litigate at a judicial level. The estimated range of reasonably possible loss is $0 to $70 ($R155), whereby the maximum end of the range represents the sum of the portion of the disallowed credits applicable to the export sales and a 50% penalty of the gross amount disallowed. Additionally, the estimated range of disallowed credits related to AWAB’s fixed assets is $0 to $80 (R$175), which would increase the net carrying value of AWAB’s fixed assets if ultimately disallowed. It is management’s opinion that the allegations have no basis; however, at this time, management is unable to reasonably predict an outcome for this matter.

Between 2000 and 2002, Alcoa Alumínio (Alumínio) sold approximately 2,000 metric tons of metal per month from its Poços de Caldas facility, located in the State of Minas Gerais (the “State”), to Alfio, a customer also located in the State. Sales in the State were exempted from value-added tax (VAT) requirements. Alfio subsequently sold metal to customers outside of the State, but did not pay the required VAT on those transactions. In July 2002, Alumínio received an assessment from State auditors on the theory that Alumínio should be jointly and severally liable with Alfio for the unpaid VAT. In June 2003, the administrative tribunal found Alumínio liable, and Alumínio filed a judicial case in the State in February 2004 contesting the finding. In May 2005, the Court of First Instance found Alumínio solely liable, and a panel of a State appeals court confirmed this finding in April 2006. Alumínio filed a special appeal to the Superior Tribunal of Justice (STJ) in Brasilia (the federal capital of Brazil) later in 2006. In 2011, the STJ (through one of its judges) reversed the judgment of the lower courts, finding that Alumínio should neither be solely nor jointly and severally liable with Alfio for the VAT, which ruling was then appealed by the State. In June 2012, the STJ agreed to have the case reheard before a five-judge panel. A decision from this panel is pending, but additional appeals are likely. At June 30, 2014, the assessment totaled $57 (R$125), including penalties and interest. While the Company believes it has meritorious defenses, the Company is unable to reasonably predict an outcome.

In addition to the matters 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, safety and health, and tax matters. While the amounts claimed in these other matters 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 liquidity or results of operations in a particular period could be materially affected by one or more of these other matters. However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company.

Commitments

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, and Alcoa will be responsible for its pro rata share of the joint venture’s project financing. Alcoa has contributed $915, including $29 and $83 in the 2014 second quarter and six-month period, respectively, towards the $1,100 commitment. As of June 30, 2014 and December 31, 2013, the carrying value of Alcoa’s investment in this project was $968 and $951, respectively.

The smelting and rolling mill companies have project financing totaling $4,515, of which $1,133 represents Alcoa’s share (the equivalent of Alcoa’s 25.1% interest in the smelting and rolling mill companies). In conjunction with the financings, 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 $121 in principal and up to a maximum of approximately $60 in interest per year (based on projected interest rates). At June 30, 2014 and December 31, 2013, the combined fair value of the guarantees was $8 and $10, respectively, and was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet.

The mining and refining company has project financing totaling $1,992, of which $500 represents Alcoa World Alumina and Chemical’s (AWAC) 25.1% interest in the mining and refining company. Also, in January 2014, the mining and refining company entered into additional project financing totaling $240, of which $60 represents AWAC’s share. In conjunction with the financings, Alcoa, on behalf of AWAC, issued guarantees to the lenders in the event that the mining and refining company defaults on its debt service requirements through June 2019 (Ma’aden issued similar guarantees for its 74.9% interest). Alcoa’s guarantees for the mining and refining company cover total debt service requirements of $67 in principal and up to a maximum of approximately $30 in interest per year (based on projected interest rates). At June 30, 2014 and December 31, 2013, the combined fair value of the guarantees was $3 and $4, respectively, and was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. In the event Alcoa would be required to make payments under the guarantees, 40% of such amount would be contributed to Alcoa by Alumina Limited, consistent with its ownership interest in AWAC.

Under the project financings for both the smelting and rolling mill companies and the mining and refining company, 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. This requirement would be effective only if at the time of the second downgrade in Alcoa’s credit ratings below investment grade, Alcoa’s equity investment was below 67% of its equity commitment in any of the three joint venture companies (a second downgrade in Alcoa’s credit ratings occurred on April 11, 2014). As of March 31, 2014, Alcoa has contributed more than 67% of its equity commitment in each of the three joint venture companies.

Alumínio, a wholly-owned subsidiary of Alcoa, is a participant in four consortia that each owns a hydroelectric power project in Brazil. One of these projects is known as Estreito, which reached full capacity in March 2013. Alumínio’s investment in this project is 25.49%, which entitles Alumínio to approximately 150 megawatts of assured power. The Estreito consortium is an unincorporated joint venture, and, therefore, Alumínio’s share of the assets and liabilities of the consortium are reflected in the respective lines on the accompanying Consolidated Balance Sheet. Total estimated project costs are approximately $2,350 (R$5,170) and Alumínio’s share is approximately $600 (R$1,320). As of June 30, 2014, approximately $580 (R$1,270) of Alumínio’s commitment was expended on the project.

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, which is classified as an equity investment, was made in order to secure a competitively priced long-term supply of natural gas to Alcoa’s refineries in Western Australia. Alcoa has made additional contributions of $141 (A$176) for its share of the pipeline capacity expansion and other operational purposes of the consortium through September 2011. No further expansion of the pipeline’s capacity is planned at this time. In late 2011, the consortium initiated a three-year equity call plan to improve its capitalization structure. This plan requires Alcoa to contribute $40 (A$40), of which $32 (A$33) was made through June 30, 2014, including $1 (A$2) and $3 (A$4) in the 2014 second quarter and six-month period, respectively. In addition to its equity ownership, Alcoa has an agreement to purchase gas transmission services from the DBNGP. At June 30, 2014, Alcoa has an asset of $335 (A$356) representing prepayments made under the agreement for future gas transmission services. Alcoa’s maximum exposure to loss on the investment and the related contract is approximately $470 (A$500) as of June 30, 2014.

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Derivatives and Other Financial Instruments - Schedule of Gains and Losses on Derivative Excluded from Assessment of Effectiveness Recognized in Current Earnings (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	$ (28)	$ 69		$ 176
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	(5)	(2)	(9)	(8)
Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	4	(2)	4	(2)
Aluminum Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	(42)	74	(19)	178
Aluminum Contracts [Member] | Other Expenses (Income), Net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	(1)	(2)	(1)	(2)
Aluminum Contracts [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	(5)	(1)	(9)	(7)
Energy Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	13	(3)	15	(1)
Energy Contracts [Member] | Other Expenses (Income), Net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Earnings on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	5		5
Foreign Exchange Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)		(2)	2	(2)
Foreign Exchange Contracts [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	1		1
Interest Rate Contracts [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)	(1)	(1)	(1)	(1)
Interest Rate Contract 2 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	$ 1		$ 2	$ 1

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Derivatives and Other Financial Instruments - Schedule of Outstanding Forward Contracts that were Entered into Hedge Forecasted Transactions (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014 t	Dec. 31, 2013 t
Aluminum Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Aluminum contracts (000 metric tons)	780,000	841,000
Energy Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Electricity (megawatt hours)	59,409,328	59,409,328
Natural gas (million British thermal units)	20,200,000	19,980,000
Foreign Exchange Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Foreign exchange contracts	$ 789	$ 335

XML

Derivatives and Other Financial Instruments - Schedule of Gain or Loss on Hedged Items and Derivative Contracts (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain/loss recognized in earnings related to the ineffective portion of hedging relationships	$ 5	$ 0	$ 5	$ 0
Sales [Member] | Aluminum Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain/loss recognized in earnings related to the ineffective portion of hedging relationships	$ 7	$ 4	$ 13	$ 4

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Restructuring and Other Charges - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended		3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended					3 Months Ended	6 Months Ended	3 Months Ended				6 Months Ended	3 Months Ended	6 Months Ended		3 Months Ended		6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended	3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended		12 Months Ended	3 Months Ended	6 Months Ended		12 Months Ended	3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended		3 Months Ended		6 Months Ended	3 Months Ended		6 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Mar. 31, 2014 t	Jun. 30, 2013 Employees t Location	Jun. 30, 2014 Employees t	Jun. 30, 2013 Location Employees	Jun. 30, 2013 Global Rolled Products [Member] Employees	Jun. 30, 2014 Global Rolled Products [Member] Employees	Jun. 30, 2013 Global Rolled Products [Member] Employees	Jun. 30, 2013 Primary Metals [Member] Employees	Jun. 30, 2014 Primary Metals [Member] Employees	Jun. 30, 2013 Primary Metals [Member] Employees	Jun. 30, 2013 Engineered Products and Solutions [Member] Employees	Jun. 30, 2014 Engineered Products and Solutions [Member] Employees	Jun. 30, 2013 Engineered Products and Solutions [Member] Employees	Jun. 30, 2014 Global Rolled Products Segment [Member] Employees	Jun. 30, 2014 Alumina and Primary Metals Segments [Member] Employees	Jun. 30, 2014 Alumina [Member] Employees	Jun. 30, 2013 Baie Comeau [Member] t Potline	Jun. 30, 2013 Baie Comeau [Member]	Jun. 30, 2013 Quebec Canada [Member] t	Jun. 30, 2013 Fusina Italy [Member] t	Mar. 31, 2014 Fusina and Massena East [Member] t	Jun. 30, 2013 Fusina and Massena East [Member]	Jun. 30, 2013 Fusina and Massena East [Member]	Mar. 31, 2014 Point Henry Smelter [Member] t	Jun. 30, 2014 Pocos De Caldas Refinery [Member] t	Jun. 30, 2014 Australia [Member] Facilities	Jun. 30, 2014 Other Exit Costs [Member]	Jun. 30, 2013 Other Exit Costs [Member]	Jun. 30, 2014 Other Exit Costs [Member]	Jun. 30, 2013 Legal Matter [Member]	Jun. 30, 2013 Legal Matter [Member]	Jun. 30, 2013 Asset Impairment [Member]	Jun. 30, 2014 Asset Impairment [Member]	Jun. 30, 2013 Layoff Costs [Member]	Jun. 30, 2014 Layoff Costs [Member]	Jun. 30, 2013 Layoff Costs [Member]	Jun. 30, 2014 Layoff Costs [Member] Primary Metals [Member]	Jun. 30, 2014 Layoff Costs [Member] Primary Metals [Member]	Jun. 30, 2014 Other Miscellaneous Items [Member]	Jun. 30, 2013 Other Miscellaneous Items [Member]	Jun. 30, 2014 Other Miscellaneous Items [Member]	Jun. 30, 2013 Other Miscellaneous Items [Member]	Jun. 30, 2013 Small Layoff Reserves Related to Prior Periods [Member]	Jun. 30, 2014 Small Layoff Reserves Related to Prior Periods [Member]	Jun. 30, 2013 Small Layoff Reserves Related to Prior Periods [Member]	Jun. 30, 2014 Permanent Shutdown and Planned Demolition of Idled Structures [Member]	Jun. 30, 2013 Permanent Shutdown and Planned Demolition of Idled Structures [Member]	Jun. 30, 2014 Permanent Shutdown and Planned Demolition of Idled Structures [Member]	Jun. 30, 2013 Permanent Shutdown and Planned Demolition of Idled Structures [Member]	Jun. 30, 2013 Operating Supplies [Member]	Jun. 30, 2014 Operating Supplies [Member]	Jun. 30, 2013 Operating Supplies [Member]	Jun. 30, 2013 Asset Retirement Obligations [Member]	Jun. 30, 2014 Asset Retirement Obligations [Member]	Jun. 30, 2013 Asset Retirement Obligations [Member]	Dec. 31, 2013 Asset Retirement Obligations [Member]	Jun. 30, 2013 Environmental Remediation [Member]	Jun. 30, 2014 Environmental Remediation [Member]	Jun. 30, 2013 Environmental Remediation [Member]	Dec. 31, 2013 Environmental Remediation [Member]	Jun. 30, 2014 Smelter Curtailments [Member] Employees	Jun. 30, 2014 Smelter Curtailments [Member] Employees	Jun. 30, 2014 Supplier And Customer Contract [Member]	Jun. 30, 2014 Restructuring Programs Layoffs 2014 [Member] Employees	Jun. 30, 2014 Restructuring Programs Layoffs 2014 [Member] Employees	Jun. 30, 2014 Restructuring Programs Layoffs 2013 [Member] Employees	Jun. 30, 2014 Restructuring Programs Layoffs 2013 [Member] Employees	Jun. 30, 2014 Corporate [Member] Employees	Jun. 30, 2013 Corporate [Member] Employees	Jun. 30, 2014 Corporate [Member] Employees	Jun. 30, 2013 Corporate [Member] Employees	Jun. 30, 2014 Operating Segments [Member]	Jun. 30, 2013 Operating Segments [Member]	Jun. 30, 2014 Operating Segments [Member]	Jun. 30, 2013 Operating Segments [Member]	Jun. 30, 2014 Operating Segments [Member] Global Rolled Products [Member]	Jun. 30, 2013 Operating Segments [Member] Global Rolled Products [Member]	Jun. 30, 2014 Operating Segments [Member] Global Rolled Products [Member]	Jun. 30, 2013 Operating Segments [Member] Global Rolled Products [Member]	Jun. 30, 2014 Operating Segments [Member] Primary Metals [Member]	Jun. 30, 2013 Operating Segments [Member] Primary Metals [Member]	Jun. 30, 2014 Operating Segments [Member] Primary Metals [Member]	Jun. 30, 2013 Operating Segments [Member] Primary Metals [Member]	Jun. 30, 2013 Operating Segments [Member] Engineered Products and Solutions [Member]	Jun. 30, 2014 Operating Segments [Member] Engineered Products and Solutions [Member]	Jun. 30, 2013 Operating Segments [Member] Engineered Products and Solutions [Member]	Jun. 30, 2014 Operating Segments [Member] Global Rolled Products Segment [Member] Employees	Jun. 30, 2014 Operating Segments [Member] Other Segments [Member] Employees	Jun. 30, 2014 Operating Segments [Member] Alumina [Member]	Jun. 30, 2014 Rolling Mill [Member] Plant	Mar. 31, 2014 Rolling Mill [Member] Plant	Jun. 30, 2014 Rolling Mill [Member] Plant	Jun. 30, 2014 Smelter [Member] Plant	Jun. 30, 2014 Smelter [Member] Plant	Jun. 30, 2014 Refinery [Member] Smelter Curtailments [Member] Plant
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	$ 110		$ 244	$ 571	$ 251																							$ 107	$ 86	$ 443	$ 103	$ 218	$ 29	$ 33	$ 24	$ 17	$ 27	$ 4	$ 137	$ 3	$ 4	$ 17	$ 8	$ 2	$ 7	$ 2									$ 55		$ 58		$ 42		$ 12		$ 68						$ 3	$ 124	$ 32	$ 125	$ 107	$ 120	$ 539	$ 126	$ 23	$ 7	$ 113	$ 10	$ 84	$ 94	$ 415	$ 94	$ 19	$ 4	$ 22			$ 7
Restructuring and other charges, after-tax and noncontrolling interests	54		170	328	175																							51	70	240	62	151	19	26	18	11	20				2	11	5	1	4	1																	44
Number of plants permanently shut down and demolished																																																																																											2	2	2	2	2
Restructuring and other charges, after-tax																																								3
Number of employees associated with layoff costs			470		530	190		190	55		115	180	115	180	30	10																																														75	245						30	45	90	45																30	15
Number of plants temporarily curtailed																																																																																															2	1
Reduction in production - result of market conditions, in metric tons per year			460,000	460,000																		84,000			190,000	200,000
Remaining smelting capacity subject to review				62,000
Additional smelting capacity subject to review				85,000
Reduction in combined capacity		200,000
Number of employees associated with layoff costs				1,830			470			1,230							90																																																						40
Accelerated depreciation	91			150														23	23
Other exit costs																																															10	49	133	49				44	55	44		5	38	5				40
Other asset impairment charges				91																			14	14
Inventory write-down - permanent shutdown and planned demolition of idled structures																																																			7	34	7
Inventory write-down, after-tax and non-controlling interests																																																			5	20	5
Additional charges related to shutdown actions				110
Number of facilities accelerated depreciation write off																											3
Number of non-U.S. locations permanently shutdown and demolished			2		2
Number of potlines to be shutdown and demolished																		2
Reduction in production - result of market conditions, in mt per year																		105,000
Reduction in production - result of market conditions, in mt per year																				280,000	44,000
Capacity of lines under review period			15 months
Total number of employees already laid off																																																																	745	745	1,350	1,350
Number of positions separated																																																																		2,075		1,660
Cash payments made against the layoff reserves																																																																	22	23	8	32
Minimum amount of cash payments expected to be paid beyond the end of the current annual period				40
Maximum amount of cash payments expected to be paid beyond the end of the current annual period				$ 45

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Receivables - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	6 Months Ended
	Mar. 31, 2012	Jun. 30, 2014 Agreement
Schedule Of Financial Receivables [Line Items]
Number of arrangement with different financial institution to sell customer receivables		3
Net cash funding received in current period		$ 150
Deferred purchase price receivable	254	268
Net cash funding received		360
Amount of cash draws under arrangement		848
Amount of cash repayments under arrangement		488
Accounts receivables		13,921
Cash collections		13,293
Minimum [Member]
Schedule Of Financial Receivables [Line Items]
Funding of customer receivables sold		50
Maximum [Member]
Schedule Of Financial Receivables [Line Items]
Funding of customer receivables sold		$ 500

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Receivables

6 Months Ended

Jun. 30, 2014

Transfers And Servicing [Abstract]

Receivables

M. Receivables – Alcoa has an arrangement with three financial institutions 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 $500 for receivables sold. The initial sale of receivables in March 2012 resulted in the setup of a deferred purchase price of $254. Alcoa has received net cash funding of $360 ($848 in draws and $488 in repayments) since the program’s inception, including $150 in the 2014 six-month period. As of June 30, 2014, the deferred purchase price receivable was $268, 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) 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. The gross amount of receivables sold and total cash collected under this program since its inception was $13,921 and $13,293, respectively. Alcoa services the customer receivables for the financial institutions at market rates; therefore, no servicing asset or liability was recorded.

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Restructuring and Other Charges (Tables)

6 Months Ended

Jun. 30, 2014

Restructuring And Related Activities [Abstract]

Schedule of Restructuring and Other Charges by Reportable Segments, Pretax

The pretax impact of allocating such charges to segment results would have been as follows:

	Second quarter ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Alumina	$	—	$	—	$	7	$	—
Primary Metals		84		94		415		94
Global Rolled Products		23		7		113		10
Engineered Products and Solutions		—		19		4		22
Segment total		107		120		539		126
Corporate		3		124		32		125
Total restructuring and other charges	$	110	$	244	$	571	$	251

Activity and Reserve Balances for Restructuring Charges

Activity and reserve balances for restructuring charges were as follows:

	Layoff costs			Other exit costs			Total
Reserve balances at December 31, 2012	$	59		$	52		$	111
2013:
Cash payments		(63	)		(11	)		(74	)
Restructuring charges		201			85			286
Other*		(101	)		(84	)		(185	)
Reserve balances at December 31, 2013		96			42			138
2014:
Cash payments		(61	)		(6	)		(67	)
Restructuring charges		154			140			294
Other*		(5	)		(132	)		(137	)
Reserve balances at June 30, 2014	$	184		$	44		$	228

* Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In the 2014 six-month period, Other for other exit costs also included a reclassification of the following restructuring charges: $55 in asset retirement and $42 in environmental obligations, as these liabilities are included in Alcoa’s separate reserves for asset retirement obligations and environmental remediation (see Note H), respectively. In 2013, Other for layoff costs also included a reclassification of $92 in pension costs, as this obligation was included in Alcoa’s separate liability for pension obligations. Also in 2013, Other for other exit costs also included a reclassification of the following restructuring charges: $58 in asset retirement and $12 in environmental obligations, as these liabilities were included in Alcoa’s separate reserves for asset retirement obligations and environmental remediation, respectively.

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Earnings per Share - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended			3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 25, 2014	Jun. 30, 2014	Jun. 30, 2013	Mar. 31, 2014 5.25% Convertible Notes, Due 2014 [Member]	Jun. 30, 2014 5.25% Convertible Notes, Due 2014 [Member]	Jun. 30, 2013 Convertible Notes [Member]	Jun. 30, 2014 Convertible Notes [Member]	Jun. 30, 2013 Convertible Notes [Member]	Jun. 30, 2013 Stock Awards [Member]	Jun. 30, 2014 Stock Awards [Member]	Jun. 30, 2013 Stock Option [Member]	Jun. 30, 2014 Stock Option [Member]	Jun. 30, 2014 Equity Unit Purchase Agreements [Member]	Jun. 30, 2013 Equity Unit Purchase Agreements [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares, option exercised						89,000,000
Number of shares that become outstanding							89,000,000
Number of weighted average outstanding shares included in both basic and diluted shares							56,000,000
Weighted Average number of shares outstanding dilutive effect	6,000,000				2,000,000		89,000,000
Number of weighted average outstanding diluted shares	1,189,000,000	1,069,000,000		1,137,000,000	1,079,000,000		33,000,000
Number of anti-dilutive securities								89,000,000	33,000,000	89,000,000	17,000,000	19,000,000	9,000,000	31,000,000	3,000,000	48,000,000
Shares that would have been included in diluted earnings per share calculation								89,000,000	33,000,000		8,000,000	10,000,000	1,000,000	6,000,000
Weighted average exercise price of options													$ 10.77	$ 16.24
Number of common stock shares issued in a part of acquisition			36,523,010
Business acquisition common stock issued, price per share			$ 13.69

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Debt - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		12 Months Ended	3 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013 Revolving Credit Facility [Member] CreditFacility	Mar. 31, 2014 Revolving Credit Facility [Member] First Loans Agreement [Member]	Mar. 31, 2014 Revolving Credit Facility [Member] Second Loans Agreement [Member]	Mar. 31, 2014 Revolving Credit Facility [Member] Third Loans Agreement [Member]	Mar. 31, 2014 Revolving Credit Facility [Member] Eleventh Revolving Credit Facility Agreement [Member]	Mar. 31, 2014 5.25% Convertible Notes, Due 2014 [Member]
Debt Instrument [Line Items]
Principal amount of convertible notes								$ 575
Convertible notes, interest rate								5.25%
Convertible notes due date								Mar. 15, 2014
Number of shares, option exercised								89
Conversion rate, numerator								155.4908
Conversion rate, denominator								$ 1,000
Convertible notes, conversion price								$ 6.43
Par value of issued shares								$ 89
Number of revolving credit facility agreements			10
Outstanding borrowings			1,190	150	150		50
Revolving credit facility term start			2014-02
Revolving credit facility term end			2015-12
Line of credit facility, expiration date				2014-02	2014-03	2016-03	2016-02
Extended credit facility maturity date				2015-03
Line of credit facility, new agreement date						2014-04
Line of credit facility, borrowing	510	620
Line of credit facility, repayment	$ 510	$ 620
Weighted-average interest rate	1.55%	1.53%
Weighted-average maturity days	84 days	49 days

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Consolidated Balance Sheet (Parenthetical) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Statement Of Financial Position [Abstract]
Receivables from customers, allowance	$ 21	$ 20

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Recently Adopted and Recently Issued Accounting Guidance

6 Months Ended

Jun. 30, 2014

Accounting Changes And Error Corrections [Abstract]

Recently Adopted and Recently Issued Accounting Guidance

B. Recently Adopted and Recently Issued Accounting Guidance

Adopted

On January 1, 2014, Alcoa adopted changes issued by the Financial Accounting Standards Board (FASB) to the accounting for obligations resulting from joint and several liability arrangements. These changes require an entity to measure such obligations for which the total amount of the obligation is fixed at the reporting date as the sum of (i) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors, and (ii) any additional amount the reporting entity expects to pay on behalf of its co-obligors. An entity will also be required to disclose the nature and amount of the obligation as well as other information about those obligations. Examples of obligations subject to these requirements are debt arrangements and settled litigation and judicial rulings. The adoption of these changes had no impact on the Consolidated Financial Statements, as Alcoa does not currently have any such arrangements.

On January 1, 2014, Alcoa adopted changes issued by the FASB to a parent entity’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. A parent entity is required to release any related cumulative foreign currency translation adjustment from accumulated other comprehensive income into net income in the following circumstances: (i) a parent entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided; (ii) a partial sale of an equity method investment that is a foreign entity; (iii) a partial sale of an equity method investment that is not a foreign entity whereby the partial sale represents a complete or substantially complete liquidation of the foreign entity that held the equity method investment; and (iv) the sale of an investment in a foreign entity. The adoption of these changes had no impact on the Consolidated Financial Statements. This guidance will need to be considered in the event Alcoa initiates any of the transactions described above.

On January 1, 2014, Alcoa adopted changes issued by the FASB to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. These changes require an entity to present an unrecognized tax benefit as a liability in the financial statements if (i) a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or (ii) the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset to settle any additional income taxes that would result from the disallowance of a tax position. Otherwise, an unrecognized tax benefit is required to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. Previously, there was diversity in practice as no explicit guidance existed. The adoption of these changes did not result in a significant impact on the Consolidated Financial Statements.

Issued

In April 2014, the FASB issued changes to reporting discontinued operations and disclosures of disposals of components of an entity. These changes require a disposal of a component to meet a higher threshold in order to be reported as a discontinued operation in an entity’s financial statements. The threshold is defined as a strategic shift that has, or will have, a major effect on an entity’s operations and financial results such as a disposal of a major geographical area or a major line of business. Additionally, the following two criteria have been removed from consideration of whether a component meets the requirements for discontinued operations presentation: (i) the operations and cash flows of a disposal component have been or will be eliminated from the ongoing operations of an entity as a result of the disposal transaction, and (ii) an entity will not have any significant continuing involvement in the operations of the disposal component after the disposal transaction. Furthermore, equity method investments now may qualify for discontinued operations presentation. These changes also require expanded disclosures for all disposals of components of an entity, whether or not the threshold for reporting as a discontinued operation is met, related to profit or loss information and/or asset and liability information of the component. These changes become effective for Alcoa on January 1, 2015. Management has determined that the adoption of these changes will not have an immediate impact on the Consolidated Financial Statements. This guidance will need to be considered in the event Alcoa initiates a disposal transaction.

In May 2014, the FASB issued changes to the recognition of revenue from contracts with customers. These changes created a comprehensive framework for all entities in all industries to apply in the determination of when to recognize revenue, and, therefore, supersede virtually all existing revenue recognition requirements and guidance. This framework is expected to result in less complex guidance in application while providing a consistent and comparable methodology for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. These changes become effective for Alcoa on January 1, 2017. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements.

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Derivatives and Other Financial Instruments - Schedule of Derivative Contract Assets and Liabilities Measured and Recognized at Fair Value on Recurring Basis (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2012
Assets:
Fair value asset derivatives	$ 346	$ 390	$ 596
Liabilities:
Margin posted	(9)	(18)
Fair value liability derivatives	457	479
Level 1 [Member]
Assets:
Fair value asset derivatives	11	6
Liabilities:
Fair value liability derivatives	30	66
Level 2 [Member]
Assets:
Fair value asset derivatives	30	32
Liabilities:
Fair value liability derivatives
Level 3 [Member]
Assets:
Fair value asset derivatives	305	355
Liabilities:
Fair value liability derivatives	436	431
Margin Held [Member]
Assets:
Margin held		(3)
Margin Posted [Member]
Liabilities:
Margin posted	$ (9)	$ (18)

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Inventories (Tables)

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Schedule of Inventory Components

	June 30, 2014		December 31, 2013
Finished goods	$	688	$	578
Work-in-process		1,077		828
Bauxite and alumina		642		581
Purchased raw materials		584		474
Operating supplies		236		244
	$	3,227	$	2,705

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Acquisitions and Divestitures - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended	0 Months Ended
	Jun. 25, 2014	Jun. 25, 2014 Firth Rixson [Member]	Jun. 25, 2014 Firth Rixson [Member]
Business Acquisition [Line Items]
Business acquisition purchase price		$ 2,850
Cash paid for business acquisition		2,350
Value of common stock issued		500
Business acquisition potential earn-out			150
Common stock issued as part of acquisition	36,523,010	36,523,010
Business acquisition common stock issued, price per share	$ 13.69		$ 13.69
Business acquisition, unsecured bridge term loan			$ 2,500

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Income Taxes

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

L. Income Taxes – The effective tax rate for the second quarter of 2014 and 2013 was 37.7% (provision on income) and 16.5% (provision on a loss), respectively.

The rate for the 2014 second quarter differs from the U.S. federal statutory rate of 35% primarily due to the U.S. tax impact of deemed distributions from otherwise lower tax rate foreign jurisdictions and operational income of certain foreign subsidiaries taxed in lower rate jurisdictions, mostly offset by a $20 favorable impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized (partial reversal of the 2014 first quarter impact).

The rate for the 2013 second quarter differs (by (51.5) percentage points) from the U.S. federal statutory rate of 35% primarily due to a $103 nondeductible charge for a legal matter, restructuring charges related to operations in Canada (benefit at a lower tax rate) and Italy (no tax benefit) (see Note D), and a $10 discrete income tax charge related to prior year taxes in Spain and Australia.

The effective tax rate for the 2014 and 2013 six-month periods was 1.5% (provision on a loss) and 79.4% (provision on income), respectively.

The rate for the 2014 six-month period differs (by (36.5) percentage points) from the U.S. federal statutory rate of 35% primarily due to a $36 unfavorable impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized (impact is expected to reverse by the end of 2014).

The rate for the 2013 six-month period differs from the U.S. federal statutory rate of 35% primarily due to the previously mentioned $103 nondeductible charge, restructuring charges in Canada and Italy, and $10 discrete income tax charge, somewhat offset by a $19 discrete income tax benefit related to new U.S. tax legislation.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law and reinstated various expired or expiring temporary business tax provisions through 2013. Two specific temporary business tax provisions that expired in 2011 and impacted Alcoa are the look-through rule for payments between related controlled foreign corporations and the research and experimentation credit. The expiration of these two provisions resulted in Alcoa recognizing a higher income tax provision of $19 in 2012. As tax law changes are accounted for in the period of enactment, Alcoa recognized the previously mentioned discrete income tax benefit in the 2013 first quarter related to the 2012 tax year to reflect the extension of these provisions.

In December 2011, one of Alcoa’s subsidiaries in Brazil applied for a tax holiday related to its expanded mining and refining operations. During 2013, the application was amended and re-filed. The deadline for the Brazilian government to deny the application was July 11, 2014. Since Alcoa did not receive notice that its application was denied, the tax holiday took effect automatically on July 12, 2014. As a result, the tax rate for this subsidiary will decrease significantly (from 34% to 15%), resulting in future cash tax savings over the 10-year holiday period (retroactively effective as of January 1, 2013). Additionally, a portion of the subsidiary’s net deferred tax asset that reverses within the holiday period will be remeasured at the new lower tax rate in the 2014 third quarter. This remeasurement will result in a decrease to this subsidiary’s net deferred tax asset and a noncash charge to earnings of approximately $60.