Alcoa 2015 Annual Report Download - page 57

BB+ but revised Alcoa’s outlook to positive. On September 30, 2015, Fitch placed these ratings on “ratings watch
positive” based on Alcoa’s plan to separate into two publicly-traded companies.
There can be no assurance that one or more of these or other rating agencies will not take negative actions with respect
to Alcoa’s ratings. Increased debt levels, adverse aluminum market or macroeconomic conditions, a deterioration in the
Company’s debt protection metrics, a contraction in the Company’s liquidity, or other factors could potentially trigger
such actions. A rating agency may lower, suspend or withdraw entirely a rating or place it on negative outlook or watch
if, in that rating agency’s judgment, circumstances so warrant.
A downgrade of Alcoa’s credit ratings by one or more rating agencies could adversely impact the market price of
Alcoa’s securities; adversely affect existing financing (for example, a downgrade by Standard and Poor’s or a further
downgrade by Moody’s would subject Alcoa to higher costs under Alcoa’s Five-Year Revolving Credit Agreement and
certain of its other revolving credit facilities); limit access to the capital (including commercial paper) or credit markets
or otherwise adversely affect the availability of other new financing on favorable terms, if at all; result in more
restrictive covenants in agreements governing the terms of any future indebtedness that the Company incurs; increase
the cost of borrowing or fees on undrawn credit facilities; result in vendors or counterparties seeking collateral or
letters of credit from Alcoa; or otherwise impair Alcoa’s business, financial condition and results of operations.
Cyber attacks and security breaches may threaten the integrity of Alcoa’s intellectual property and other
sensitive information, disrupt its business operations, and result in reputational harm and other negative
consequences that could have a material adverse effect on its financial condition and results of operations.
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.
The Company believes that it faces a heightened threat of cyber attacks due to the industries it serves, the locations of
its operations and its technological innovations. The Company has experienced cybersecurity attacks in the past,
including breaches of its 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 its 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 its systems or networks,
compromise confidential or otherwise protected information, destroy or corrupt data, or otherwise disrupt its
operations. The occurrence of such events could negatively impact Alcoa’s reputation and its 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 its 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 the Company’s investment in research and development.
Joint ventures and other strategic alliances may not be successful.
Alcoa participates in joint ventures and has formed strategic alliances and may enter into other similar arrangements in
the future. For example, in December 2009, Alcoa formed a joint venture with Ma’aden, the Saudi Arabian Mining
Company, to develop a fully integrated aluminum complex (including a bauxite mine, alumina refinery, aluminum
smelter and rolling mill) in the Kingdom of Saudi Arabia. Although the Company has, in connection with the Saudi
Arabia joint venture and its other existing joint ventures and strategic alliances, sought to protect its interests, joint
ventures and strategic alliances inherently involve special risks. Whether or not Alcoa holds majority interests or
maintains operational control in such arrangements, its partners may:
• have economic or business interests or goals that are inconsistent with or opposed to those of the Company;
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