Derivatives and Other Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Detail for Level 1 and 3 Derivatives

The following tables present the detail for Level 1 and 3 derivatives (see additional Level 3 information in further tables below):

	June 30, 2023				December 31, 2022
	Assets		Liabilities		Assets		Liabilities
Level 1 derivative instruments	$	69	$	17	$	84	$	14
Level 3 derivative instruments		29		1,060		52		1,212
Total	$	98	$	1,077	$	136	$	1,226
Less: Current		93		165		134		200
Noncurrent	$	5	$	912	$	2	$	1,026

	2023					2022
Second quarter ended June 30,	Unrealized gain recognized in Other comprehensive loss		Realized gain (loss) reclassed from Other comprehensive loss to earnings			Unrealized gain recognized in Other comprehensive loss		Realized loss reclassed from Other comprehensive loss to earnings
Level 1 derivative instruments	$	42	$	28		$	332	$	(14	)
Level 3 derivative instruments		197		(58	)		850		(115	)
Noncontrolling and equity interest (Level 2)		2		3			2		—
Total	$	241	$	(27	)	$	1,184	$	(129	)

	2023					2022
Six months ended June 30,	Unrealized gain recognized in Other comprehensive loss		Realized gain (loss) reclassed from Other comprehensive loss to earnings			Unrealized gain recognized in Other comprehensive loss		Realized loss reclassed from Other comprehensive loss to earnings
Level 1 and 2 derivative instruments	$	31	$	44		$	99	$	(20	)
Level 3 derivative instruments		23		(110	)		13		(219	)
Noncontrolling and equity interest (Level 2)		—		2			9		(4	)
Total	$	54	$	(64	)	$	121	$	(243	)

Schedule of Outstanding Quantities of Derivative Instruments

The following table presents the outstanding quantities of derivative instruments classified as Level 1:

	Classification	June 30, 2023		June 30, 2022
Aluminum (in kmt)	Commodity buy forwards		187		162
Aluminum (in kmt)	Commodity sell forwards		206		448
Foreign currency (in millions of euro)	Foreign exchange buy forwards		86		75
Foreign currency (in millions of euro)	Foreign exchange sell forwards		18		—
Foreign currency (in millions of Norwegian krone)	Foreign exchange buy forwards		232		388
Foreign currency (in millions of Brazilian real)	Foreign exchange buy forwards		1,010		1,399

Schedule of Quantitative Information for Level 3 Derivative Contracts

The following table presents quantitative information related to the significant unobservable inputs described above for Level 3 derivative instruments (megawatt hours in MWh):

	June 30, 2023		Unobservable Input	Unobservable Input Range
Asset Derivatives
Financial contract (undesignated)	$	28	Interrelationship of forward energy price, LME forward price and the Consumer Price Index	Electricity (per MWh)	2023: $78.59 2023: $44.39
				LME (per mt)	2023: $2,121
					2023: $2,184
Power contract		1	MWh of energy needed to produce the forecasted mt of aluminum	LME (per mt)	2023: $2,121 2023: $2,148
				Midwest premium (per pound)	2023: $0.2405 2023: $0.2401
				Electricity	Rate of 2 million MWh per year
Total Asset Derivatives	$	29
Liability Derivatives
Power contract	$	180	MWh of energy needed to produce the forecasted mt of aluminum	LME (per mt)	2023: $2,121 2027: $2,637
				Electricity	Rate of 4 million MWh per year
Power contracts		880	MWh of energy needed to produce the forecasted mt of aluminum	LME (per mt)	2023: $2,121 2029: $2,822 2036: $3,118
				Midwest premium (per pound)	2023: $0.2405 2029: $0.2440 2036: $0.2440
				Electricity	Rate of 18 million MWh per year
Power contract (undesignated)		—	Estimated spread between the 30-year debt yield of Alcoa and the counterparty	Credit spread	1.37%: 30-year debt yield spread 6.48%: Alcoa (estimated) 5.11%: counterparty
Total Liability Derivatives	$	1,060

Schedule of Fair Values of Level 3 Derivative Instruments Recorded as Assets and Liabilities

The fair values of Level 3 derivative instruments recorded in the accompanying Consolidated Balance Sheet were as follows:

Asset Derivatives	June 30, 2023		December 31, 2022
Derivatives designated as hedging instruments:
Current—financial contract	$	—	$	20
Current—power contract		1		—
Total derivatives designated as hedging instruments	$	1	$	20
Derivatives not designated as hedging instruments:
Current—financial contract	$	28	$	32
Total derivatives not designated as hedging instruments	$	28	$	32
Total Asset Derivatives	$	29	$	52
Liability Derivatives
Derivatives designated as hedging instruments:
Current—power contracts	$	156	$	195
Noncurrent—power contracts		904		1,017
Total derivatives designated as hedging instruments	$	1,060	$	1,212
Total Liability Derivatives	$	1,060	$	1,212

Schedule of Reconciliation of Activity for Derivative Contracts

The following tables present the reconciliation of activity for Level 3 derivative instruments:

	Assets
Second quarter ended June 30, 2023	Power contracts			Financial contracts
April 1, 2023	$	2		$	56
Total gains or losses included in:
Sales (realized)		(4	)		—
Other expenses, net (unrealized/realized)		—			(9	)
Other comprehensive income (unrealized)		3			—
Settlements and other		—			(19	)
June 30, 2023	$	1		$	28
Change in unrealized gains or losses included in earnings    for derivative instruments held at June 30, 2023:
Other expenses, net	$	—		$	(9	)

	Liabilities
Second quarter ended June 30, 2023	Power contracts
April 1, 2023	$	1,316
Total gains or losses included in:
Sales (realized)		(62	)
Other comprehensive income (unrealized)		(194	)
June 30, 2023	$	1,060

	Assets
Six months ended June 30, 2023	Power contracts			Financial contracts
January 1, 2023	$	—		$	52
Total gains or losses included in:
Sales (realized)		(2	)		—
Cost of goods sold (realized)		—			(20	)
Other income, net (unrealized/realized)		—			17
Other comprehensive income (unrealized)		3			—
Settlements and other		—			(21	)
June 30, 2023	$	1		$	28
Change in unrealized gains or losses included in earnings    for derivative instruments held at June 30, 2023:
Other income, net	$	—		$	17

	Liabilities
Six months ended June 30, 2023	Power contracts
January 1, 2023	$	1,212
Total gains or losses included in:
Sales (realized)		(132	)
Other comprehensive income (unrealized)		(20	)
June 30, 2023	$	1,060

Schedule of Carrying Values and Fair Values of Other Financial Instruments

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

	June 30, 2023				December 31, 2022
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	990	$	990	$	1,363	$	1,363
Restricted cash		107		107		111		111
Short-term borrowings		10		10		—		—
Long-term debt due within one year		1		1		1		1
Long-term debt, less amount due within one year		1,808		1,756		1,806		1,744