Derivatives and Other Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Detail for Level 1, 2 and 3 Derivatives

The following tables present the detail for Level 1, 2 and 3 derivatives (see additional Level 3 information in further tables below):

	June 30, 2020				December 31, 2019
	Assets		Liabilities		Assets		Liabilities
Level 1 and 2 derivative instruments	$	20	$	44	$	3	$	33
Level 3 derivative instruments		9		206		74		615
Total	$	29	$	250	$	77	$	648
Less: Current		24		47		59		67
Noncurrent	$	5	$	203	$	18	$	581

	Unrealized (loss) gain recognized in Other comprehensive (loss) income						Realized (loss) gain reclassed from Other comprehensive (loss) income to earnings
Second quarter ended June 30,	2020			2019			2020			2019
Level 1 and 2 derivative instruments	$	22		$	5		$	(1	)	$	(8	)
Level 3 derivative instruments		(536	)		80			(14	)		5
Noncontrolling and equity interest		1			(5	)		2			(7	)
Total	$	(513	)	$	80		$	(13	)	$	(10	)

	Unrealized gain (loss) recognized in Other comprehensive (loss) income						Realized (loss) gain reclassed from Other comprehensive (loss) income to earnings
Six months ended June 30,	2020			2019			2020			2019
Level 1 and 2 derivative instruments	$	(7	)	$	(3	)	$	(15	)	$	(12	)
Level 3 derivative instruments		331			(237	)		(22	)		36
Noncontrolling and equity interest		15			(32	)		(1	)		(25	)
Total	$	339		$	(272	)	$	(38	)	$	(1	)

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, 2020		Unobservable Input	Unobservable Input Range
Asset Derivatives
Financial contract	$	2	Interrelationship of	Electricity (per MWh)	2020: $32.29
			forward energy price and the Consumer Price Index		2021: $28.35
Total Asset Derivatives	$	2
Liability Derivatives
Power contract	$	147	MWh of energy needed	LME (per mt)	2020: $1,594
			to produce the forecasted		2027: $2,119
			mt of aluminum	Electricity	Rate of 4 million MWh per year
Power contracts		27	MWh of energy needed to produce the forecasted mt of aluminum	LME (per mt)	2020: $1,594 2029: $2,227 2036: $2,523
				Midwest premium (per pound)	2020: $0.0900 2029: $0.1500 2036: $0.1500
				Electricity	Rate of 11 million MWh per year
Power contract		1	MWh of energy needed to produce the forecasted mt of aluminum	LME (per mt)	2020: $1,594 2020: $1,616
				Midwest premium (per pound)	2020: $0.0900 2020: $0.1400
				Electricity	Rate of 2 million MWh per year
Power contract (undesignated)	24		Estimated spread between the 30-year debt yield of Alcoa and the counterparty	Credit spread	3.55%: 30-year debt yield spread 6.55%: Alcoa (estimated) 3.00%: counterparty
Total Liability Derivatives	$	199

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, 2020		December 31, 2019
Derivatives designated as hedging instruments:
Current—power contracts	$	4	$	—
Current—financial contract		4		57
Noncurrent—power contracts		1		—
Noncurrent—financial contract		—		17
Total derivatives designated as hedging instruments	$	9	$	74
Total Asset Derivatives	$	9	$	74
Liability Derivatives
Derivatives designated as hedging instruments:
Current—power contracts	$	15	$	47
Noncurrent—power contracts		165		551
Noncurrent—financial contract		2		—
Total derivatives designated as hedging instruments	$	182	$	598
Derivatives not designated as hedging instruments:
Current—power contracts	$	4	$	3
Noncurrent—power contracts		20		14
Total derivatives not designated as hedging instruments	$	24	$	17
Total Liability Derivatives	$	206	$	615

Schedule of Reconciliation of Activity for Derivative Contracts

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

	Assets						Liabilities
Second quarter ended June 30, 2020	Power contracts			Financial contract			Power contracts			Financial contract		Embedded credit derivative
April 1, 2020	$	461		$	6		$	113		$	2	$	28
Total gains or losses included in:
Sales (realized)		6			—			(1	)		—		—
Cost of goods sold (realized)		—			7			—			—		—
Other expenses (income), net (unrealized/realized)		—			—			—			—		(2	)
Other comprehensive (loss) income (unrealized)		(462	)		(7	)		67			—		—
Other		—			(2	)		1			—		(2	)
June 30, 2020	$	5		$	4		$	180		$	2	$	24
Change in unrealized gains or losses included in earnings    for derivative instruments held at June 30, 2020:
Other expenses (income), net	$	—		$	—		$	—		$	—	$	—

	Assets					Liabilities
Six months ended June 30, 2020	Power contracts		Financial contract			Power contracts			Financial contract		Embedded credit derivative
January 1, 2020	$	—	$	74		$	598		$	—	$	17
Total gains or losses included in:
Sales (realized)		5		—			(15	)		—		—
Cost of goods sold (realized)		—		2			—			—		—
Other expenses (income), net (unrealized/realized)		—		—			—			—		9
Other comprehensive (loss) income (unrealized)		—		(68	)		(401	)		2		—
Other		—		(4	)		(2	)		—		(2	)
June 30, 2020	$	5	$	4		$	180		$	2	$	24
Change in unrealized gains or losses included in earnings    for derivative instruments held at June 30, 2020:
Other expenses (income), net	$	—	$	—		$	—		$	—	$	11

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, 2020				December 31, 2019
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	965	$	965	$	879	$	879
Restricted cash		3		3		4		4
Long-term debt due within one year		1		1		1		1
Long-term debt, less amount due within one year		1,800		1,896		1,799		1,961