Regions Bank 2012 Annual Report Download - page 225

The approximate future minimum rental commitments as of December 31, 2012, 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)
2013 .................................................... $103 $ 28 $131
2014 .................................................... 98 26 124
2015 .................................................... 92 20 112
2016 .................................................... 85 12 97
2017 .................................................... 74 — 74
Thereafter ................................................ 397 — 397
$849 $ 86 $935
LEGAL CONTINGENCIES
Regions and its affiliates are subject to loss contingencies related to litigation and claims arising in the
ordinary course of business. Regions evaluates these contingencies based on information currently available,
including advice of counsel and assessment of available insurance coverage. Regions establishes accruals for
litigation and claims when a loss contingency is considered probable and the related amount is reasonably
estimable. Any accruals are periodically reviewed and may be adjusted as circumstances change. In addition, as
previously discussed, Regions has agreed to indemnify Raymond James for all legal matters resulting from pre-
closing activities in conjunction with the sale of Morgan Keegan and recorded an indemnification obligation at
fair value in the second quarter of 2012. The indemnification obligation had a carrying amount of $345 million
and an estimated fair value of $329 million as of December 31, 2012 (see Note 21). For certain matters, when
able to do so, Regions also estimates loss contingencies for possible litigation and claims, whether or not there is
an accrued probable loss. Where Regions is able to estimate such possible losses, Regions estimates that it is
reasonably possible it could incur losses, in excess of amounts accrued, in an aggregate amount up to
approximately $40 million as of December 31, 2012, with it also being reasonably possible that Regions could
incur no losses in excess of amounts accrued. The legal contingencies included in the reasonably possible
estimate include those that are subject to the indemnification agreement with Raymond James.
Assessments of litigation and claims exposures are difficult due to many factors that involve inherent
unpredictability. Those factors include the following: the varying stages of the proceedings, particularly in the
early stages; unspecified damages; damages other than compensatory such as punitive damages; multiple
defendants and jurisdictions; whether discovery has begun or not; and whether the claim involves a class-action.
There are numerous factors that result in a greater degree of complexity in class-action lawsuits as compared to
other types of litigation. Due to the many intricacies involved in class-action lawsuits at the early stages of these
matters, obtaining clarity on a reasonable estimate is difficult which may call into question its reliability. As a
result of some of these factors, Regions may be unable to estimate reasonably possible losses with respect to
some of the matters disclosed below. The aggregated estimated amount provided above therefore may not
include an estimate for every matter disclosed below.
Beginning in December 2007, 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. These cases have been consolidated into class-actions
and shareholder derivative actions for the open-end and closed-end Funds. The Funds were formerly managed by
Regions Investment Management, Inc. (“Regions Investment Management”). Regions Investment Management
no longer manages these Funds, which were transferred to Hyperion Brookfield Asset Management (“Hyperion”)
in 2008. Certain of the Funds have since been terminated by Hyperion. 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. Plaintiffs have requested equitable relief and unspecified monetary
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