Alcoa 2013 Annual Report Download - page 89

Contractual Obligations and Off-Balance Sheet Arrangements
Contractual Obligations. Alcoa is required to make future payments under various contracts, including long-term
purchase obligations, financing arrangements, and lease agreements. Alcoa also has commitments to fund its pension
plans, provide payments for other postretirement benefit plans, and fund capital projects. As of December 31, 2013, a
summary of Alcoa’s outstanding contractual obligations is as follows (these contractual obligations are grouped in the
same manner as they are classified in the Statement of Consolidated Cash Flows in order to provide a better
understanding of the nature of the obligations and to provide a basis for comparison to historical information):
Total 2014 2015-2016 2017-2018 Thereafter
Operating activities:
Energy-related purchase obligations $15,511 $1,490 $2,563 $2,826 $ 8,632
Raw material purchase obligations 6,389 1,839 1,017 726 2,807
Other purchase obligations 946 149 152 137 508
Operating leases 925 198 300 183 244
Interest related to total debt 4,159 461 873 807 2,018
Estimated minimum required pension funding 2,570 625 1,175 770 -
Other postretirement benefit payments 2,485 260 520 510 1,195
Layoff and other restructuring payments 138 107 29 2 -
Deferred revenue arrangements 164 13 36 36 79
Uncertain tax positions 74 - - - 74
Financing activities:
Total debt 8,300 715 60 1,824 5,701
Dividends to shareholders - - - - -
Investing activities:
Capital projects 1,094 612 412 38 32
Equity contributions 268 151 117 - -
Payments related to acquisitions - - - - -
Totals $43,023 $6,620 $7,254 $7,859 $21,290
Obligations for Operating Activities
Energy-related purchase obligations consist primarily of electricity and natural gas contracts with expiration dates
ranging from 1 year to 34 years. Raw material obligations consist mostly of bauxite (relates to Alcoa’s bauxite mine
interests in Guinea and Brazil), caustic soda, alumina, aluminum fluoride, calcined petroleum coke, cathode blocks,
and various metals with expiration dates ranging from less than 1 year to 19 years. Other purchase obligations consist
principally of freight for bauxite and alumina with expiration dates ranging from 1 to 18 years. Many of these purchase
obligations contain variable pricing components, and, as a result, actual cash payments may differ from the estimates
provided in the preceding table. Operating leases represent multi-year obligations for certain land and buildings,
alumina refinery process control technology, plant equipment, vehicles, and computer equipment.
Interest related to total debt is based on interest rates in effect as of December 31, 2013 and is calculated on debt with
maturities that extend to 2042. The effect of outstanding interest rate swaps, which are accounted for as fair value
hedges, was included in interest related to total debt. As of December 31, 2013, these hedges effectively convert the
interest rate from fixed to floating on $200 of debt through 2018. As the contractual interest rates for certain debt and
interest rate swaps are variable, actual cash payments may differ from the estimates provided in the preceding table.
Estimated minimum required pension funding and postretirement benefit payments are based on actuarial estimates
using current assumptions for discount rates, long-term rate of return on plan assets, rate of compensation increases,
and health care cost trend rates, among others. The minimum required contributions for pension funding are estimated
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