Alcoa 2010 Annual Report Download - page 111

result, Alcoa accounted for its $1,200 investment in SPPL as an equity method investment. In 2008, Alcoa recorded
$14 in equity income, which represents Alcoa’s share of the semiannual dividends that SPPL received as a shareholder
of RTP. Also, Alcoa recorded an unrealized loss in other comprehensive income of $427 ($658 pretax) in 2008,
representing its share of SPPL’s total unrealized loss related to the decrease in fair value of the RTP shares, which are
accounted for as available-for-sale securities by SPPL.
On February 12, 2009, Alcoa and Chinalco entered into an agreement in which Chinalco redeemed the Note. Under
this agreement, Alcoa received $1,021 in cash in three installments over a six-month period ending July 31, 2009. This
amount was reflected in Sales of investments on the accompanying Statement of Consolidated Cash Flows. As a result
of this transaction, Alcoa realized a loss of $182 ($118 after-tax), which was reflected in Other income, net on the
accompanying Statement of Consolidated Operations, and reversed the unrealized loss that had been recognized in
Accumulated other comprehensive loss on the accompanying Consolidated Balance Sheet since the initial investment
was made.
Effective June 1, 2007, Alcoa completed the formation of a joint venture with Orkla’s SAPA Group (Sapa) combining
Alcoa’s soft alloy extrusion business (excluding three facilities each in the U.S. (separately sold or shutdown in 2007)
and Brazil) with Sapa’s Profiles extruded aluminum business. The new joint venture was named Sapa AB, and, as of
December 31, 2008, Alcoa’s ownership percentage in the joint venture was 45.45% and the carrying value of the
investment was $475 (reflects the adjustment discussed below). The equity income from Alcoa’s ownership share was
reflected in Corporate. Prior to June 1, 2007, the assets and liabilities of Alcoa’s soft alloy extrusion business were
classified as held for sale.
In December 2008, Alcoa entered into an agreement with Orkla to exchange their stakes in the Sapa AB and Elkem
joint ventures. As a result of this agreement, in 2008, Alcoa recorded a charge of $333 ($223 after-tax) in Restructuring
and other charges on the accompanying Statement of Consolidated Operations to adjust the carrying value of its
investment in Sapa AB to the estimated fair value (see Note D). This transaction was completed in March 2009 (see
Note F).
Other Investments. As of December 31, 2010 and 2009, Other investments included $93 and $105, respectively, in
exchange-traded fixed income and equity securities, which are classified as available-for-sale and are carried at fair
value with unrealized gains and losses recognized in other comprehensive income. Unrealized and realized gains and
losses related to these securities were immaterial in 2010 and 2009.
J. Other Noncurrent Assets
December 31, 2010 2009
Intangibles, net (E) $ 512 $ 590
Value-added tax receivable 495 385
Cash surrender value of life insurance 464 453
Prepaid gas transmission contract 332 288
Deferred mining costs, net 173 172
Unamortized debt expense 95 104
Fair value of derivative contracts (X) 92 85
Prepaid pension benefit (W) 84 94
Other 274 248
$2,521 $2,419
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