Alcoa 2009 Annual Report Download - page 34

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.
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 rate 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, 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.
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 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 that we may acquire in the future. Alcoa’s results of operations or liquidity in a particular period
could be affected by certain health, safety or environmental matters, including remediation costs and damages related
to several sites. Additionally, evolving regulatory standards and expectations can result in increased litigation and/or
increased costs, all of which can have a material and adverse effect on earnings and cash flows.
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