Alcoa 2012 Annual Report Download - page 46

Company has experienced cybersecurity attacks in the past that attempted to gain unauthorized access to its information
systems to export company-sensitive data, and may experience them in the future, potentially with more frequency or
sophistication. Although its technology security measures have been able to prevent the majority of these attempts from
being successful, the Company is aware of breaches of its systems in which information from its servers has been taken.
The Company continues to investigate these incidents and, based on the information known to date, the Company does
not believe that the theft of the information is material to the Company. However, the impact of these and other such
attacks and the resulting damage may only be clear over time and after more intensive analysis. In addition, due to the
evolving nature of cybersecurity threats, the impact of any future incident cannot be predicted. While we continually work
to implement additional steps to safeguard our systems, there is no assurance that we can prevent future breaches. If Alcoa
is unable to detect or ward off attacks on its information systems or if an attack results in the theft of material company-
sensitive information, such as intellectual property, trade secrets, product development data and other business
development data, or if an attack results in a material disruption of its systems, Alcoa’s business, financial condition and
reputation may be materially adversely affected. Additionally, the Company has been subject to attempts to disrupt its
website through “denial of service” attacks. Although such attempts did not have a material negative impact on the
Company, no assurance can be given that future attempts will not impact the Company.
Alcoa may be exposed to significant legal proceedings, investigations or changes in U.S. federal, state or foreign
law, regulation or policy.
Alcoa’s results of operations or liquidity in a particular period could be affected by new or increasingly stringent laws,
regulatory requirements or interpretations, or outcomes of significant legal proceedings or investigations adverse to
Alcoa. The Company may experience a change in effective tax rates or become subject to unexpected or rising costs
associated with business operations or provision of health or welfare benefits to employees due to changes in laws,
regulations or policies. The Company is also subject to a variety of legal compliance risks. These risks include, among
other things, potential claims relating to product liability, health and safety, environmental matters, intellectual
property rights, government contracts, taxes, and compliance with U.S. and foreign export laws, anti-bribery laws,
competition laws and sales and trading practices. Alcoa could be subject to fines, penalties, damages (in certain cases,
treble damages), or suspension or debarment from government contracts.
While Alcoa believes it has adopted appropriate risk management and compliance programs to address and reduce
these risks, the global and diverse nature of its operations means that these risks will continue to exist, and additional
legal proceedings and contingencies may arise from time to time. In addition, various factors or developments can lead
the Company to change current estimates of liabilities or make such estimates for matters previously not susceptible of
reasonable estimates, such as a significant judicial ruling or judgment, a significant settlement, significant regulatory
developments or changes in applicable law. A future adverse ruling or settlement or unfavorable changes in laws,
regulations or policies, or other contingencies that the Company cannot predict with certainty could have a material
adverse effect on the Company’s results of operations or cash flows in a particular period. For additional information
regarding the legal proceedings involving the Company, see the discussion in Part I, Item 3. (Legal Proceedings), of
this report and in Note N to the Consolidated Financial Statements in Part II, Item 8. (Financial Statements and
Supplementary Data).
Alcoa is subject to a broad range of health, safety and environmental laws and regulations in the jurisdictions in
which it operates and may be exposed to substantial costs and liabilities associated with such laws and
regulations.
Alcoa’s operations worldwide are subject to numerous complex and increasingly stringent health, safety and
environmental laws and regulations. The costs of complying with such laws and regulations, including participation in
assessments and cleanups of sites, as well as internal voluntary programs, are significant and will continue to be so for
the foreseeable future. Environmental laws may impose cleanup liability on owners and occupiers of contaminated
property, including past or divested properties, regardless of whether the owners and occupiers caused the
contamination or whether the activity that caused the contamination was lawful at the time it was conducted.
Environmental matters for which we may be liable may arise in the future at our present sites, where no problem is
currently known, at previously owned sites, sites previously operated by us, sites owned by our predecessors or sites
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