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Financial Instruments and Commodity Contracts (Tables)
 12 Months Ended
Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Fair values of financial instruments and commodity contracts
The following tables summarize the gross fair values of our financial instruments and commodity contracts as of March 31, 2017 and 2016 (in millions): 
 
 
March 31, 2017
 
 
Assets
 
Liabilities
 
Net Fair Value
 
 
Current
 
Noncurrent(A)
 
Current
 
Noncurrent(A)
 
Assets/(Liabilities)
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
Cash flow hedges
 
 
 
 
 
 
 
 
 
 
Aluminum contracts
 
$
—

 
$
—

 
$
(69
)
 
$
—

 
$
(69
)
Currency exchange contracts
 
26

 
1

 
(1
)
 
(3
)
 
23

Energy contracts
 
1

 
—

 
—

 
(9
)
 
(8
)
Total derivatives designated as hedging instruments
 
27

 
1

 
(70
)
 
(12
)
 
(54
)
Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Aluminum contracts
 
57

 
1

 
(68
)
 
(1
)
 
(11
)
Currency exchange contracts
 
29

 
—

 
(13
)
 
—

 
16

Total derivatives not designated as hedging instruments
 
86

 
1

 
(81
)
 
(1
)
 
5

Total derivative fair value
 
$
113

 
$
2

 
$
(151
)
 
$
(13
)
 
$
(49
)
 
 
 
March 31, 2016
 
 
Assets
 
Liabilities
 
Net Fair Value
 
 
Current
 
Noncurrent(A)
 
Current
 
Noncurrent(A)
 
Assets/(Liabilities)
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
Cash flow hedges
 
 
 
 
 
 
 
 
 
 
Aluminum contracts
 
$
10

 
$
—

 
$
(2
)
 
$
—

 
$
8

Currency exchange contracts
 
15

 
5

 
(3
)
 
(5
)
 
12

Energy contracts
 
—

 
—

 
(4
)
 
—

 
(4
)
Interest rate swaps
 
—

 
—

 
—

 
(1
)
 
(1
)
Net Investment hedges
 
 
 
 
 
 
 
 
 
 
Currency exchange contracts
 
—

 
—

 
(1
)
 
—

 
(1
)
Total derivatives designated as hedging instruments
 
25

 
5

 
(10
)
 
(6
)
 
14

Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Aluminum contracts
 
24

 
—

 
(26
)
 
—

 
(2
)
Currency exchange contracts
 
39

 
—

 
(39
)
 
(1
)
 
(1
)
Energy contracts
 
—

 
1

 
(10
)
 
—

 
(9
)
Total derivatives not designated as hedging instruments
 
63

 
1

 
(75
)
 
(1
)
 
(12
)
Total derivative fair value
 
$
88

 
$
6

 
$
(85
)
 
$
(7
)
 
$
2

 
(A)
The noncurrent portions of derivative assets and liabilities are included in “Other long-term assets-third parties” and in “Other long-term liabilities”, respectively, in the accompanying consolidated balance sheets.
Summary of gains (losses) associated with the change in the fair value derivative instruments recognized in "Other (income) expense, net"
The following table summarizes the amount of gain (loss) recognized on fair value hedges of metal price risk (in millions):
 
 
Amount of Gain (Loss)
Recognized on Changes in Fair Value
 
 
Year Ended March 31,
 
 
2017
 
2016
Fair value hedges of metal price risk
 
 
 
 
Derivative contracts
 
$
—

 
$
(2
)
Designated hedged items
 
—

 
2

Net ineffectiveness (A)
 
$
—

 
$
—


(A)
Effective portion is recorded in "Net sales" and net ineffectiveness in "Other expense (income), net". There was no amount excluded from the assessment of hedge effectiveness related to Fair Value Hedges.
The following table summarizes the gains (losses) associated with the change in fair value of derivative instruments not designated as hedges and the ineffectiveness of designated derivatives recognized in “Other expense (income), net” (in millions). Gains (losses) recognized in other line items in the consolidated statement of operations are separately disclosed within this footnote.

 
 
 
Year Ended March 31,
 
 
2017
 
2016
 
2015
Derivative instruments not designated as hedges
 
 
 
 
 
 
Aluminum contracts
 
$
(44
)
 
$
47

 
$
(31
)
Currency exchange contracts
 
40

 
(60
)
 
(5
)
Energy contracts (A)
 
8

 
3

 
2

Gain (loss) recognized in "Other expense (income), net"
 
4

 
(10
)
 
(34
)
Derivative instruments designated as hedges
 
 
 
 
 
 
(Loss) gain recognized in "Other expense (income), net" (B)
 
(25
)
 
17

 
19

Total (loss) gain recognized in "Other expense (income), net"
 
$
(21
)
 
$
7

 
$
(15
)
Balance sheet remeasurement currency exchange contract gains (losses)
 
$
35

 
$
(53
)
 
$
(13
)
Realized (losses) gains, net (C)
 
(61
)
 
64

 
(2
)
Unrealized gains (losses) on other derivative instruments, net
 
5

 
(4
)
 
—

Total (loss) gain recognized in "Other expense (income), net"
 
$
(21
)
 
$
7

 
$
(15
)
 
(A)
Includes amounts related to de-designated electricity swap, diesel fuel forward contracts and natural gas swaps not designated as hedges.
(B)
Amount includes: forward market premium/discount excluded from hedging relationship and ineffectiveness on designated aluminum and foreign currency capital expenditure contracts; releases to income from AOCI on balance sheet remeasurement contracts; and ineffectiveness of fair value hedges involving aluminum derivatives.
(C)
During the year ended March 31, 2017, the level of undesignated aluminum derivatives was higher due to the volatility in LME pricing. During the year ended March 31, 2016, the level of undesignated aluminum derivatives was higher due to the volatility in the local market premium component of our net selling prices, forward market premium/discount excluded from hedging relationship and ineffectiveness on designated aluminum and foreign currency capital expenditure contracts.
Summary of notional amount
The following table summarizes our notional amount (in kt).
 
 
 
March 31,
 
 
2017
 
2016
Hedge type
 
 
 
 
Purchase (sale)
 
 
 
 
Cash flow purchases
 
—

 
1

Cash flow sales
 
(391
)
 
(301
)
Not designated
 
(89
)
 
(76
)
Total, net
 
(480
)
 
(376
)
Summary of the impact on AOCI and earnings of derivative instruments designated as cash flow hedges
The following table summarizes the impact on AOCI and earnings of derivative instruments designated as cash flow and net investment hedges (in millions). Within the next twelve months, we expect to reclassify $43 million of losses from AOCI to earnings, before taxes.
 
 
 
Amount of Gain (Loss)
Recognized in OCI
(Effective Portion)
 
Amount of Gain (Loss)
Recognized in “Other (Income) Expense,  net” (Ineffective and
Excluded Portion)
 
 
Year Ended March 31,
 
Year Ended March 31,
 
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Cash flow hedging derivatives
 
 
 
 
 
 
 
 
 
 
 
 
Aluminum contracts
 
$
(137
)
 
$
84

 
$
(26
)
 
$
(27
)
 
$
17

 
$
24

Currency exchange contracts
 
48

 
(7
)
 
(44
)
 
2

 
1

 
(2
)
Energy contracts
 
(7
)
 
(5
)
 
(12
)
 
(1
)
 
(1
)
 
—

Interest rate swaps
 
—

 
(1
)
 
(1
)
 
—

 
—

 
—

Total cash flow hedging derivatives
 
(96
)
 
71

 
(83
)
 
(26
)
 
17

 
22

Net investment derivatives
 
 
 
 
 
 
 
 
 
 
 
 
Currency exchange contracts
 
—

 
(2
)
 
11

 
—

 
—

 
—

Total
 
$
(96
)
 
$
69

 
$
(72
)
 
$
(26
)
 
$
17

 
$
22



Gain (Loss) Reclassification
 
 
Amount of Gain (Loss)
Reclassified from AOCI into Income/(Expense)
(Effective Portion)
Year Ended March 31,
 
Location of Gain (Loss)
Reclassified from AOCI into
Earnings
Cash flow hedging derivatives
 
2017
 
2016
 
2015
 
 
Energy contracts (A)
 
$
(4
)
 
$
(5
)
 
$
(5
)
 
Other expense (income), net
Energy contracts (C)
 
(4
)
 
(10
)
 
—

 
Cost of goods sold (B)
Aluminum contracts
 
(55
)
 
83

 
(40
)
 
Cost of goods sold (B)
Aluminum contracts
 
(3
)
 
—

 
—

 
Net sales
Currency exchange contracts
 
18

 
(44
)
 
(14
)
 
Cost of goods sold (B)
Currency exchange contracts
 
2

 
(4
)
 
(1
)
 
Selling, general and administrative expenses
Currency exchange contracts
 
7

 
(9
)
 
18

 
Net sales
Currency exchange contracts
 
—

 
(1
)
 
(3
)
 
Other expense (income), net
Currency exchange contracts
 
—

 
—

 
7

 
Gain on assets held for sale, net
Currency exchange contracts
 
(1
)
 
(1
)
 
(1
)
 
Depreciation and amortization
Interest rate swaps
 
—

 
(1
)
 
—

 
Interest expense
Total
 
(40
)
 
8

 
(39
)
 
(Loss) income before income taxes
 
 
12

 
(19
)
 
8

 
Income tax benefit (provision)
 
 
$
(28
)
 
$
(11
)
 
$
(31
)
 
Net loss
 
(A)
Includes amounts related to de-designated electricity swap. AOCI related to this swap was amortized to income over the remaining term of the hedged item.
(B)
"Cost of goods sold" is exclusive of depreciation and amortization.
(C)
Includes amounts related to natural gas swaps.