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 provides for minimum funding of $200 up to a maximum of $500 for receivables sold. 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 for receivables sold ($1,258 in draws and $1,058 in repayments) since the program’s inception (no draws or repayments occurred in 2015), including $40 ($710 in draws and $670 in repayments) in 2014.

As of December 31, 2015 and 2014, the deferred purchase price receivable was $249 and $356, 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 Decrease (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.

In 2015 and 2014, the gross cash outflows and inflows associated with the deferred purchase price receivable were $6,893 and $7,001, respectively, and $7,381 and $7,272, respectively. The gross amount of receivables sold and total cash collected under this program since its inception was $24,598 and $24,099 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,	2015			2014			2013			2015			2014			2013
Balance at beginning of year	$	14		$	20		$	39		$	41		$	47		$	74
Provision for doubtful accounts		5			2			3			8			8			29
Write off of uncollectible accounts		(4	)		(3	)		(19	)		(2	)		(4	)		(39	)
Recoveries of prior write-offs		-			(2	)		(3	)		1			(7	)		(10	)
Other		(2	)		(3	)		-			1			(3	)		(7	)
Balance at end of year	$	13		$	14		$	20		$	49		$	41		$	47