what is layout variable ?

I read that template.php has a condition statement

  // 3 columns
  if ($vars['layout'] == 'both') {
    $vars['left_classes'] = 'col-left span-6';
    $vars['right_classes'] = 'col-right span-6 last';
    $vars['center_classes'] = 'col-center span-12';
    $vars['body_classes'] .= ' col-3 ';
  }
  // 2 columns
  else if ($vars['layout'] != 'none') {
    // left column & center
    if ($vars['layout'] == 'left') {
      $vars['left_classes'] = 'col-left span-6';
      $vars['center_classes'] = 'col-center span-18 last';
    }
    // right column & center
    else if ($vars['layout'] == 'right') {
      $vars['right_classes'] = 'col-right span-6 last';
      $vars['center_classes'] = 'col-center span-18';
    }
    $vars['body_classes'] .= ' col-2 ';
  }
  // 1 column
  else {

    $vars['center_classes'] = 'col-center span-24';
    $vars['body_classes'] .= ' col-1 ';
  }

But....where to declare the $layout variable ?