Alcoa 2013 Annual Report Download - page 48

include those associated with sovereign and private debt default, political instability, civil unrest, expropriation,
nationalization, renegotiation or nullification of existing agreements, mining leases and permits, commercial instability
caused by corruption, and changes in local government laws, regulations and policies, including those related to tariffs
and trade barriers, taxation, exchange controls, employment regulations and repatriation of earnings. While the impact
of these factors is difficult to predict, any one or more of them could adversely affect Alcoa’s business, financial
condition or operating results.
Alcoa could be adversely affected by changes in the business or financial condition of a significant customer or
customers.
A significant downturn or further deterioration in the business or financial condition of a key customer or customers
supplied by Alcoa could affect Alcoa’s results of operations in a particular period. Alcoa’s customers may experience
delays in the launch of new products, labor strikes, diminished liquidity or credit unavailability, weak demand for their
products, or other difficulties in their businesses. If Alcoa is not successful in replacing business lost from such
customers, profitability may be adversely affected.
Cyber attacks and security breaches may threaten the integrity of Alcoa’s intellectual property and other
sensitive information, disrupt our business operations, and result in reputational harm and other negative
consequences that could have a material adverse effect on our financial condition and results of operation.
Alcoa faces global cybersecurity threats, which may range from uncoordinated individual attempts to sophisticated and
targeted measures, known as advanced persistent threats, directed at the Company. Cyber attacks and security breaches
may include, but are not limited to, attempts to access information, computer viruses, denial of service and other
electronic security breaches.
We believe that Alcoa faces a heightened threat of cyber attacks due to the industries we serve, the locations of our
operations and our technological innovations. The Company has experienced cybersecurity attacks in the past,
including breaches of our information technology systems in which information was taken, and may experience them
in the future, potentially with more frequency or sophistication. Based on information known to date, past attacks have
not had a material impact on Alcoa’s financial condition or results of operations. However, due to the evolving nature
of cybersecurity threats, the scope and impact of any future incident cannot be predicted. While the Company
continually works to safeguard our systems and mitigate potential risks, there is no assurance that such actions will be
sufficient to prevent cyber attacks or security breaches that manipulate or improperly use our systems or networks,
compromise confidential or otherwise protected information, destroy or corrupt data, or otherwise disrupt our
operations. The occurrence of such events could negatively impact our reputation and our competitive position and
could result in litigation with third parties, regulatory action, loss of business, potential liability and increased
remediation costs, any of which could have a material adverse effect on our financial condition and results of
operations. In addition, such attacks or breaches could require significant management attention and resources, and
result in the diminution of the value of our investment in research and development.
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.
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