Alcoa 2013 Annual Report Download - page 169
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The gross amounts of recognized derivative assets and liabilities and gross amounts offset in the accompanying
Consolidated Balance Sheet were as follows:
Assets Liabilities
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Gross amounts recognized:
Aluminum contracts $ 40 $ 72 $ 81 $ 69
Interest rate contracts 32 45 3 17
$ 72 $117 $ 84 $ 86
Gross amounts offset:
Aluminum contracts* $(36) $ (55) $(36) $(55)
Interest rate contracts** (3) (17) (3) (17)
$(39) $ (72) $(39) $(72)
Net amounts presented in the Consolidated
Balance Sheet:
Aluminum contracts $ 4 $ 17 $ 45 $ 14
Interest rate contracts 29 28 - -
$33 $ 45 $45 $14
* The amounts under Assets and Liabilities as of December 31, 2013 include $18 of margin posted with
counterparties. The amounts under Assets and Liabilities as of December 31, 2012 include $9 of margin held from
counterparties.
**The amounts under Assets and Liabilities as of December 31, 2013 and December 31, 2012 represent margin held
from the counterparty.
The following table shows the net fair values of outstanding derivative contracts at December 31, 2013 and the effect
on these amounts of a hypothetical change (increase or decrease of 10%) in the market prices or rates that existed at
December 31, 2013:
Fair value
asset/(liability)
Index change
of + / - 10%
Aluminum contracts $(102) $ 47
Embedded credit derivative (21) 2
Energy contracts 6 214
Foreign exchange contracts (1) 14
Interest rate contracts 29 1
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value hierarchy distinguishes between
(1) market participant assumptions developed based on market data obtained from independent sources (observable
inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best
information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad
levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are
described below:
• Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for
identical, unrestricted assets or liabilities.
153