U. Receivables

Sale of Receivables Programs

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 originally provided for minimum funding of $50 up to a maximum of $250 for receivables sold. In May 2013, the arrangement was amended to increase the minimum and maximum funding to $200 and $500, respectively, and include two additional financial institutions. On March 30, 2012, Alcoa initially sold $304 of customer receivables in exchange for $50 in cash and $254 of deferred purchase price under this arrangement. Alcoa has received additional net cash funding of $200 ($1,258 in draws and $1,058 in repayments) since the program’s inception, including $40 ($710 in draws and $670 in repayments) and $5 ($388 in draws and $383 in repayments) in 2014 and 2013, respectively.

As of December 31, 2014 and 2013, the deferred purchase price receivable was $356 and $248, respectively, which was included in Other receivables on the accompanying Consolidated Balance Sheet. The deferred purchase price receivable is reduced as collections of the underlying receivables occur; however, as this is a revolving program, the sale of new receivables will result in an increase in the deferred purchase price receivable. The net change in the deferred purchase price receivable was reflected in the (Increase) decrease in receivables line item on the accompanying Statement of Consolidated Cash Flows. This activity is reflected as an operating cash flow because the related customer receivables are the result of an operating activity with an insignificant, short-term interest rate risk.

In 2014 and 2013, the gross cash outflows and inflows associated with the deferred purchase price receivable were $7,381 and $7,272, respectively, and $6,985 and $6,755, respectively. The gross amount of receivables sold and total cash collected under this program since its inception was $17,705 and $17,098, respectively. Alcoa services the customer receivables for the financial institutions at market rates; therefore, no servicing asset or liability was recorded.

Allowance for Doubtful Accounts

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


	Customer receivables									Other receivables
December 31,	2014			2013			2012			2014			2013			2012
Balance at beginning of year	$	20		$	39		$	46		$	47		$	74		$	79
Provision for doubtful accounts		2			3			2			8			29			9
Write off of uncollectible accounts		(3	)		(19	)		(8	)		(4	)		(39	)		(3	)
Recoveries of prior write-offs		(2	)		(3	)		(1	)		(7	)		(10	)		(6	)
Other		(3	)		-			-			(3	)		(7	)		(5	)
Balance at end of year	$	14		$	20		$	39		$	41		$	47		$	74