Regions Bank 2009 Annual Report Download - page 193

The approximate future minimum rental commitments as of December 31, 2009, for all non-cancelable
leases with initial or remaining terms of one year or more are shown in the following table. Included in these
amounts are all renewal options reasonably assured of being exercised.
Premises Equipment Total
(In millions)
2010 ............................................................. $ 139 $ 4 $ 143
2011 ............................................................. 124 4 128
2012 ............................................................. 114 2 116
2013 ............................................................. 103 — 103
2014 ............................................................. 91 — 91
Thereafter ......................................................... 573 — 573
$1,144 $ 10 $1,154
Sale-leaseback transaction—In 2005, Regions sold 111 properties to a third party with an agreement to
lease back a portion of 99 of these properties. The remaining 12 properties were not leased back by Regions. Of
the 99 properties that included a leaseback, 20 of the properties qualified for sale-leaseback accounting. The
other 79 properties included lease terms that require lease payments that are significantly more heavily weighted
toward the early years of the fifteen-year lease term (approximately 60% in excess of the calculated straight-line
rental amount). This constituted additional collateral or financing to the buyer-lessor and effectively resulted in
Regions having a continuing involvement in these 79 properties, requiring Regions to account for these
properties as a financing arrangement. Accordingly, the properties continue to be reflected on the Company’s
balance sheet and depreciated based on their current carrying value. Proceeds of $83.1 million attributable to
these properties were reflected as a financing obligation with monthly rental payments due, reflected as a
component of principal reduction and interest expense at the Company’s incremental borrowing rate. The
approximate total future minimum rental commitment as of December 31, 2009, for all leases related to this
transaction is $63.4 million, including $8.4 million in 2010, $5.2 million in 2011, $5.4 million in 2012, $5.5
million in 2013 and $5.6 million in 2014.
LEGAL
Regions and its affiliates are subject to litigation, including the litigation discussed below, and claims
arising in the ordinary course of business. Punitive damages are routinely claimed in these cases. Regions
continues to be concerned about the general trend in litigation involving large damage awards against financial
service company defendants. Regions evaluates these contingencies based on information currently available,
including advice of counsel and assessment of available insurance coverage. Although it is not possible to predict
the ultimate resolution or financial liability with respect to these litigation contingencies, management is
currently of the opinion that the outcome of pending and threatened litigation would not have a material effect on
Regions’ consolidated financial position or results of operations, except to the extent indicated in the discussion
below.
Regions and certain of its affiliates have been named in class-action lawsuits filed in federal and state courts
on behalf of investors who purchased shares of certain Regions Morgan Keegan Select Funds (the “Funds”) and
shareholders of Regions. The Funds were formerly managed by Morgan Asset Management, Inc. The complaints
contain various allegations, including claims that the Funds and the defendants misrepresented or failed to
disclose material facts relating to the activities of the Funds. No class has been certified, and at this stage of the
lawsuits Regions cannot determine the probability of a material adverse result or reasonably estimate a range of
potential exposures, if any. However, it is possible that an adverse resolution of these matters may be material to
Regions’ consolidated financial position or results of operations.
Certain of the shareholders in these Funds and other interested parties have entered into arbitration
proceedings and individual civil claims, in lieu of participating in the class actions. Although it is not possible to
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