part i / item 1A 12 Fluid Handling Item 1B. Unresolved Staff Comments. The markets for our Fluid Handling businesses’ products and serv- ices are fragmented and highly competitive. We compete against large and well established national and global companies, as well as smaller regional and local companies. While we compete based on technical expertise, timeliness of delivery, quality and reliability, the competitive influence of pricing has broadened as a result of the generally weaker global economy. Demand for most of our products and services depend on the level of new capital investment and planned maintenance expenditures by our customers. The level of capital expenditures by our customers depends in turn on general economic conditions, availability of credit and expectation of future market behavior. Additionally, volatility in commodity prices could negatively affect the level of these activities as could continued postponement of capital spending decisions or the delay or cancellation of projects. While we experienced a gradual continued recovery in 2012, orders in the fourth quarter of 2012 were weaker due to project delays, which could adversely affect our future operating results. In addition, to the extent we do not achieve tar- geted cost savings in connection with our 2012 repositioning actions, our operating results would also be adversely affected. None A portion of this segment’s business is subject to government rules and regulations. Failure to comply with these requirements might result in suspension or debarment from government contracting or subcontracting. Failure to comply with any of these regulations could result in civil and criminal, monetary and non-monetary penalties, disruptions to our business, limitations on our ability to export products and services, and damage to our reputation. In addition, at our foreign operations, reported results in U.S. dol- lar terms could be eroded by a weakening of currency of the respective businesses, particularly where we operate using the Euro, British Pound and Canadian Dollar. A number of factors could affect operating results of these busi- nesses. Lower sales and earnings could result if our businesses cannot maintain their cost competitiveness, encounter delays in introducing new products or fail to achieve their new product sales objectives. Results could decline because of an unanticipated decline in demand for the businesses’ products from the industrial machinery, oil and gas or heavy equipment industries. Controls