Net Property and Lease Commitments

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NET PROPERTY AND LEASE COMMITMENTS

Net Property

Net property includes land, buildings and land improvements, machinery and equipment, special tools, and other assets that we use in our normal operations.  These assets are recorded at cost, net of accumulated depreciation and impairments.  We capitalize new assets when we expect to use the asset for more than one year.  Routine maintenance and repair costs are expensed when incurred.

Property and equipment are depreciated primarily using the straight-line method over the estimated useful life of the asset.  Useful lives range from 3 years to 36 years.  The estimated useful lives generally are 14.5 years for machinery and equipment, 3 years for software (8 years for mainframe and client based software), 30 years for land improvements, and 36 years for buildings.  Special tools generally are amortized over the expected life of a product program using a straight-line method.  If the expected production volumes for major product programs associated with the tools decline significantly, we accelerate the amortization reflecting the rate of decline.

Net property was as follows (in millions):

Automotive Sector	December 31, 2012			December 31, 2011
Land	$	423		$	384
Buildings and land improvements	10,249			10,129
Machinery, equipment and other	35,040			34,363
Software	1,813			1,917
Construction in progress	1,783			1,311
Total land, plant and equipment and other	49,308			48,104
Accumulated depreciation	(32,835		)	(32,874		)
Net land, plant and equipment and other	16,473			15,230
Special tools, net of amortization	8,340			6,999
Total Automotive sector	24,813			22,229
Financial Services sector (a)	129			142
Total Company	$	24,942		$	22,371

__________

(a) Included in Financial Services other assets on our sector balance sheet.

Automotive sector property-related expenses for the years ended December 31 were as follows (in millions):

	2012		2011		2010
Depreciation and other amortization	$	1,794	$	1,759	$	1,956
Amortization of special tools	1,861		1,774		1,920
Total	$	3,655	$	3,533	$	3,876
Maintenance and rearrangement	$	1,352	$	1,431	$	1,397

Conditional Asset Retirement Obligations

We accrue for costs related to legal obligations to perform certain activities in connection with the retirement, abandonment, or disposal of our assets for which the fair value can be reasonably estimated.These conditional asset retirement obligations relate to the estimated costs for asbestos abatement and removal of polychlorinated biphenyl ("PCB").

Asbestos abatement costs were estimated using site-specific surveys where available and a per/square foot estimate where surveys were unavailable. PCB removal costs were based on historical removal costs per transformer and applied to transformers identified by a PCB transformer global survey we conducted.

NOTE 13.  NET PROPERTY AND LEASE COMMITMENTS (Continued)

The liability for our conditional asset retirement obligations which are recorded in Accrued liabilities and deferred revenue was as follows (in millions):

	December 31, 2012			December 31, 2011
Beginning balance	$	266		$	331
Liabilities settled	(8		)	(6		)
Revisions to estimates	9			(59		)
Ending balance	$	267		$	266

Lease Commitments

We lease land, buildings, and equipment under agreements that expire over various contractual periods. Minimum non-cancelable operating lease commitments at December 31, 2012 were as follows (in millions):

	2013		2014		2015		2016		2017		Thereafter		Total
Automotive sector	$	217	$	189	$	144	$	98	$	74	$	172	$	894
Financial Services sector	52		41		34		31		22		24		204
Total Company	$	269	$	230	$	178	$	129	$	96	$	196	$	1,098

Operating lease expense for the years ended December 31 was as follows (in millions):

	2012		2011		2010
Automotive sector	$	404	$	416	$	475
Financial Services sector	106		124		136
Total Company	$	510	$	540	$	611