9. Leases

We lease certain vehicles, land, buildings, equipment and miscellaneous other items through operating rental agreements with varying terms, provisions and expiration dates.

Total lease expense recognized in the Consolidated Statements of Income was $18 million in 2013, $19 million in 2012, and $21 million in 2011. APS’s lease expense was $15 million in 2013, $16 million in 2012, and $18 million in 2011.

Estimated future minimum lease payments for Pinnacle West’s and APS’s operating leases, excluding purchased power agreements, are approximately as follows (dollars in millions):

Year	Pinnacle West Consolidated		APS
2014	$	20	$	17
2015	17		14
2016	6		5
2017	5		5
2018	4		4
Thereafter	59		59
Total future lease commitments	$	111	$	104

In 1986, APS entered into agreements with three separate lessor trust entities in order to sell and lease back interests in Palo Verde Unit 2 and related common facilities. These lessor trust entities have been deemed VIEs for which APS is the primary beneficiary. As the primary beneficiary, APS consolidated these lessor trust entities. The above lease disclosures exclude the impacts of these sale leaseback transactions, as lease accounting for these agreements is eliminated upon consolidation. See Note 19 for a discussion of VIEs.