Derivatives and Other Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2024

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, 2024				December 31, 2023
	Assets		Liabilities		Assets		Liabilities
Level 1 derivative instruments	$	4	$	11	$	16	$	9
Level 3 derivative instruments		34		1,191		16		1,297
Total	$	38	$	1,202	$	32	$	1,306
Less: Current		38		251		29		214
Noncurrent	$	—	$	951	$	3	$	1,092

	2024						2023
Second quarter ended June 30,	Unrealized loss recognized in Other comprehensive loss			Realized gain (loss) reclassed from Other comprehensive loss to earnings			Unrealized gain recognized in Other comprehensive loss		Realized gain (loss) reclassed from Other comprehensive loss to earnings
Level 1 derivative instruments	$	(7	)	$	—		$	42	$	28
Level 3 derivative instruments		(146	)		(75	)		197		(58	)
Noncontrolling and equity interest (Level 2)		—			1			2		3
Total	$	(153	)	$	(74	)	$	241	$	(27	)

For the second quarter of 2024, the realized gains and losses on Level 1 cash flow hedges were immaterial. For the second quarter of 2023, the realized gain of $28 on Level 1 cash flow hedges was comprised of a $32 gain recognized in Sales and a $4 loss recognized in Cost of goods sold.

	2024						2023
Six months ended June 30,	Unrealized loss recognized in Other comprehensive loss			Realized gain (loss) reclassed from Other comprehensive loss to earnings			Unrealized gain recognized in Other comprehensive loss		Realized gain (loss) reclassed from Other comprehensive loss to earnings
Level 1 derivative instruments	$	(10	)	$	4		$	31	$	44
Level 3 derivative instruments		(26	)		(132	)		23		(110	)
Noncontrolling and equity interest (Level 2)		—			1			—		2
Total	$	(36	)	$	(127	)	$	54	$	(64	)

Schedule of Outstanding Quantities of Derivative Instruments

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

	Classification	June 30, 2024		June 30, 2023
Aluminum (in kmt)	Commodity buy forwards		133		187
Aluminum (in kmt)	Commodity sell forwards		80		206
Foreign currency (in millions of euro)	Foreign exchange buy forwards		61		86
Foreign currency (in millions of euro)	Foreign exchange sell forwards		16		18
Foreign currency (in millions of Norwegian krone)	Foreign exchange buy forwards		85		232
Foreign currency (in millions of Brazilian real)	Foreign exchange buy forwards		351		1,010
Foreign currency (in millions of Canadian dollar)	Foreign exchange buy forwards		22		—

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, 2024		Unobservable Input	Unobservable Input Range
Asset Derivatives
Financial contract (undesignated)	$	34	Interrelationship of forward energy price, LME forward price, and the Consumer Price Index	Electricity (per MWh)	2024: $93.52 2024: $40.54
				LME (per mt)	2024: $2,491
					2024: $2,562
Total Asset Derivatives	$	34
Liability Derivatives
Power contract	$	180	MWh of energy needed to produce the forecasted mt of aluminum	LME (per mt)	2024: $2,491 2027: $2,742
				Electricity	Rate of 4 million MWh per year
Power contracts		1,008	MWh of energy needed to produce the forecasted mt of aluminum	LME (per mt)	2024: $2,491 2029: $2,734 2036: $2,934
				Midwest premium (per pound)	2024: $0.1999 2029: $0.2365 2036: $0.2365
				Electricity	Rate of 18 million MWh per year
Power contract		2	MWh of energy needed to produce the forecasted mt of aluminum	LME (per mt)	2024: $2,491 2024: $2,524
				Midwest premium (per pound)	2024: $0.1999 2024: $0.2240
				Electricity	Rate of 2 million MWh per year
Power contract (undesignated)		1	Estimated spread between the 30-year debt yield of Alcoa and the counterparty	Credit spread	1.71%: 30-year debt yield spread 6.98%: Alcoa (estimated) 5.27%: counterparty
Total Liability Derivatives	$	1,191

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, 2024		December 31, 2023
Derivatives not designated as hedging instruments:
Current—financial contract	$	34	$	16
Total derivatives not designated as hedging instruments	$	34	$	16
Total Asset Derivatives	$	34	$	16
Liability Derivatives
Derivatives designated as hedging instruments:
Current—power contracts	$	245	$	210
Noncurrent—power contracts		945		1,087
Total derivatives designated as hedging instruments	$	1,190	$	1,297
Derivatives not designated as hedging instruments:
Noncurrent—embedded credit derivative		1		—
Total derivatives not designated as hedging instruments	$	1	$	—
Total Liability Derivatives	$	1,191	$	1,297

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, 2024	Financial contracts
April 1, 2024	$	12
Total gains or losses included in:
Other income, net (unrealized/realized)		55
Settlements and other		(33	)
June 30, 2024	$	34
Change in unrealized gains or losses included in earnings    for derivative instruments held at June 30, 2024:
Other income, net	$	55

	Liabilities
Second quarter ended June 30, 2024	Power contracts			Embedded credit derivative
April 1, 2024	$	1,120		$	—
Total gains or losses included in:
Sales (realized)		(76	)		—
Other expenses, net (unrealized/realized)		—			1
Other comprehensive income (unrealized)		146			—
June 30, 2024	$	1,190		$	1
Change in unrealized gains or losses included in earnings    for derivative instruments held at June 30, 2024:
Other expenses, net	$	—		$	1

	Assets
Six months ended June 30, 2024	Financial contracts
January 1, 2024	$	16
Total gains or losses included in:
Other income, net (unrealized/realized)		50
Settlements and other		(32	)
June 30, 2024	$	34
Change in unrealized gains or losses included in earnings    for derivative instruments held at June 30, 2024:
Other income, net	$	50

	Liabilities
Six months ended June 30, 2024	Power contracts			Embedded credit derivative
January 1, 2024	$	1,297		$	—
Total gains or losses included in:
Sales (realized)		(133	)		—
Other expenses, net (unrealized/realized)		—			1
Other comprehensive income (unrealized)		26			—
June 30, 2024	$	1,190		$	1
Change in unrealized gains or losses included in earnings    for derivative instruments held at June 30, 2024:
Other expenses, net	$	—		$	1

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, 2024				December 31, 2023
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	1,396	$	1,396	$	944	$	944
Restricted cash		97		97		103		103
Short-term borrowings		31		31		56		56
Long-term debt due within one year		79		79		79		79
Long-term debt, less amount due within one year		2,469		2,477		1,732		1,702