4281--2/18/2010--ALCOA

related topics

{cost, regulation, environmental}

{cost, operation, labor}

{capital, credit, financial}

{condition, economic, financial}

{acquisition, growth, future}

{operation, international, foreign}

{cost, contract, operation}

{regulation, change, law}

Recovery from the 2008 - 2009 global economic downturn and related disruptions in the financial markets, and their impact on the aluminum industry and Alcoa, are uncertain. Alcoa could be materially adversely affected by declines in aluminum prices. A reduction in demand (or a lack of increased demand) for aluminum by China or a combined number of other countries may negatively impact Alcoa s results. Alcoa s operations consume substantial amounts of energy; profitability may decline if energy costs rise or if energy supplies are interrupted. Alcoa s profitability could be adversely affected by increases in the cost of raw materials or by significant lag effects for decreases in commodity - or LME - linked costs. Alcoa is exposed to fluctuations in foreign currency exchange rates and interest rates, as well as inflation, and other economic factors in the countries in which it operates. Alcoa may not be able to successfully implement or realize expected benefits from its growth projects or its portfolio streamlining strategy. Joint ventures and other strategic alliances may not be successful. Further metals industry consolidation could impact Alcoa s business. Failure to maintain investment grade credit ratings will increase Alcoa s cost of borrowing and could further adversely affect Alcoa s access to the capital markets. Alcoa could be adversely affected by the failure of financial institutions to fulfill their commitments under committed credit facilities. Alcoa may not be able to successfully realize expected short-term benefits from changes in its pricing strategy for the aluminum can sheet market. Alcoa s global operations are exposed to political and economic risks, commercial instability and events beyond its control in the countries in which it operates. Alcoa could be adversely affected by changes in the business or financial condition of a significant customer or customers. Alcoa may be exposed to significant legal proceedings, investigations or changes in U.S. federal, state or foreign law, regulation or policy. 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. Climate change, climate change legislation or regulations and greenhouse effects may adversely impact Alcoa s operations and markets. Alcoa could be required to make additional contributions to its defined benefit pension plans as a result of adverse changes in interest rates and the capital markets. Union disputes and other employee relations issues could adversely affect Alcoa s financial results. Alcoa s human resource talent pool may not be adequate to support the company s growth. Alcoa may not realize expected benefits from its productivity and cost-reduction initiatives. Alcoa may not be able to successfully develop and implement technology initiatives. Alcoa s business and growth prospects may be negatively impacted by reductions in its capital expenditures. Unexpected events may increase Alcoa s cost of doing business or disrupt Alcoa s operations.

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4281--2/18/2010--ALCOA_INC