Item 3. LEGAL PROCEEDINGS.

From time to time, as a normal incident of the nature of businesses in which we are or were engaged, various claims or charges are asserted and litigation or arbitration is commenced by or against us arising from or related to matters, including, but not limited to: product liability; personal injury; patents, trademarks, trade secrets or other intellectual property; labor and employee disputes; commercial or contractual disputes; strategic acquisitions or divestitures; the prior sale or use of former products allegedly containing asbestos or other restricted materials; breach of warranty; environmental matters; or compliance with government procurement or related legal or regulatory requirements. Claimed amounts against us may be substantial, but may not bear any reasonable relationship to the merits of the claim or the extent of any real risk of court or arbitral awards. Although it is not always feasible to predict the outcome of these matters with certainty, it is reasonably possible that some lawsuits, claims or proceedings may be disposed of or decided unfavorably to us and in excess of the amounts currently accrued.

We are subject to numerous U.S. Federal, state, local and international environmental laws and regulatory requirements and are involved from time to time in investigations or litigation of various potential environmental

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issues. Due in part to the complexity and pervasiveness of these requirements, we are a party to or have property subject to various litigation, proceedings and remediation obligations. The extent of our financial exposure cannot be reasonably estimated in all cases.

For information regarding the matters discussed above, including material legal proceedings and contingencies, see “Item 1. Business — Governmental Regulations — Environmental Regulations” of this Report and Note 1: Significant Accounting Policies regarding our environmental expenditures and Note 25: Legal Proceedings and Contingencies included in our Notes to Consolidated Financial Statements.