Property and Equipment

12 Months Ended

Dec. 31, 2012

G. PROPERTY AND EQUIPMENT


	(In Millions) At December 31
	2012		2011
Land and improvements	$	150	$	183
Buildings		892		1,004
Machinery and equipment		2,189		2,159

		3,231		3,346
Less: Accumulated depreciation		1,802		1,779

Total	$	1,429	$	1,567

The Company leases certain equipment and plant facilities under noncancellable operating leases. Rental expense recorded in the consolidated statements of operations totaled approximately $96 million, $103 million and $111 million during 2012, 2011 and 2010, respectively. Future minimum lease payments at December 31, 2012 were approximately as follows: 2013 – $91 million; 2014 – $43 million; 2015 – $30 million; 2016 – $20 million; 2017 – $14 million; and 2018 and beyond – $62 million.

The Company leases operating facilities from certain related parties, primarily former owners (and in certain cases, current management personnel) of companies acquired. The Company recorded rental expense to such related parties of approximately $5 million, $5 million and $6 million in 2012, 2011 and 2010, respectively.

As a result of its business rationalization activities over the last several years, at December 31, 2012 and 2011, the Company was holding several facilities for sale, within the Cabinets and Related Products segment and the Other Specialty Products segment. At December 31, 2012 and 2011, the net book value of those facilities was approximately $14 million and $49 million, respectively, and approximates fair value. Fair value was estimated using a market approach, considering the estimated fair values for the other comparable buildings in the areas where the facilities are located, Level 3 inputs.

In the fourth quarter of 2012, the Company determined that the estimated fair value calculated for one business unit in the Cabinets and Related Products segment and one business unit in the Plumbing Products segment was lower than the net book value of each of those business units. The Company assessed the long-lived assets associated with these business units and determined that no impairment was necessary at December 31, 2012.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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