Arconic (ARNC) Financial Report Summaries

Risks

• The markets for our products are cyclical and are influenced by a number of factors, including global economic conditions, that could have a material adverse effect on our business, financial condition or results of operations.
• Our business, results of operations, financial condition, liquidity and cash flows have been, and in the future could be, materially adversely affected by the effects of widespread public health epidemics/pandemics.
• Climate change, and evolving customer and stakeholder expectations, legal, regulatory and policy requirements, and market dynamics driven by climate change, could adversely affect our business, financial condition or results of operations.
• Governments of countries in which we operate could nationalize or expropriate private enterprises, or otherwise change their policies regarding private enterprise, which could adversely impact the value of our operations in those countries.
• We are exposed to economic factors, including inflation, fluctuations in aluminum prices, foreign currency exchange rates and interest rates, and currency controls in the countries in which we operate.
• An adverse decline in the liability discount rate, lower-than-expected investment return on pension assets and other factors could affect our results of operations or amount of pension funding contributions in future periods.
• We face significant competition, which may have an adverse effect on profitability.
• We could be adversely affected by the loss of key customers, the impact of supply chain disruptions or other economic conditions on our key customers, or significant changes in the business or financial condition of our customers.
• Our customers may reduce their demand for aluminum products in favor of alternative materials.
• We may face challenges to our intellectual property rights which could adversely affect our reputation, business and competitive position, financial condition and results of operations.
• We could encounter manufacturing difficulties or other issues that impact product performance, quality or safety, which could affect our ability to supply customers or meet contractual obligations, reputation, business and financial condition and results of operations.
• Our business depends, in part, on our ability to meet increased customer demand successfully and to mitigate the impact of customer program cancellations, reductions and delays.
• A material disruption or limitation of our operations, particularly at one or more of our manufacturing facilities, could adversely affect our business.
• We may be unable to develop innovative new products or implement technology initiatives successfully.
• Our business could be adversely affected by increases in the cost or volatility in the availability of aluminum or other raw materials.
• We are dependent on a limited number of suppliers for a substantial portion of our primary and scrap aluminum and certain other raw materials essential to our operations.
• We may be unable to realize future targets or goals established for our business segments, or complete capital or other projects at the levels, projected costs or by the dates targeted.
• Our business and growth prospects may be negatively impacted by limits in our capital expenditures.
• We may be unable to realize the expected benefits from acquisitions, divestitures, joint ventures and strategic alliances.
• A decline in our financial performance or outlook or a deterioration in our credit profile could negatively impact our access to the capital markets and commercial credit, reduce our liquidity, and increase our borrowing costs.
• Information technology system failures, cyber-attacks and security breaches may threaten the integrity of our intellectual property and 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 operations.
• If we fail to maintain an effective system of internal controls, we may not be able to accurately report financial results or prevent fraud.
• Labor disputes and difficulties retaining or hiring skilled employees could adversely affect our business, financial condition or results of operations.
• A failure to attract, retain or provide adequate succession plans for key personnel could adversely affect our operations and competitiveness.
• Failure to comply with domestic or international employment and related laws could result in penalties or costs that could have a material adverse effect on our business results.
• We may be exposed to significant legal proceedings, investigations or changes in U.S. federal, state, local or foreign laws, regulations or policies.
• We are exposed to environmental and safety risks and are subject to a broad range of health, safety and environmental laws and regulations, which may result in substantial costs and liabilities.
• We are subject to privacy and data security/protection laws in the jurisdictions in which we operate and may be exposed to substantial costs and liabilities associated with such laws and regulations.
• Unanticipated changes in our tax provisions or exposure to additional tax liabilities could affect our future profitability.
• We have significant debt obligations, and may in the future incur, additional debt obligations that could adversely affect our business and profitability and our ability to meet other obligations.
• Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond our control, could result in an event of default that could materially and adversely affect our business, financial condition, results of operations or cash flows.
• We have a limited history of operating as an independent company and our historical financial information may not be a reliable indicator of our future results.
• In connection with the Separation, we and Howmet have agreed to indemnify each other for certain liabilities. If we are required to pay under these indemnities to Howmet, our financial results could be negatively impacted. The Howmet indemnities may not be sufficient to hold us harmless from the full amount of liabilities for which Howmet has been allocated responsibility, and Howmet may not be able to satisfy its indemnification obligations in the future.
• Howmet may fail to perform under various transaction agreements that were executed as part of the Separation.
• If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, we, as well as Howmet and Howmet's stockholders, could be subject to significant tax liabilities, and, in certain circumstances, we could be required to indemnify Howmet for material taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement.
• We cannot be certain that an active trading market for our common stock will be sustained and our stock price may fluctuate significantly.
• Actions of activist shareholders could have an adverse effect on our business.
• Individual stockholders' percentage of ownership of our common stock may be diluted in the future.
• Anti-takeover provisions could enable us to resist a takeover attempt by a third party and limit the power of our stockholders.
• Our amended and restated certificate of incorporation designates the state courts within the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could discourage lawsuits against us and our directors and officers.