Amortization clause samples

We note that your adjusted earnings and adjusted diluted EPS measures include an adjustment for “acquisition intangible amortization.” Excluding amortization of acquired intangible assets may result in non-GAAP measures that are based on individually tailored accounting principles. Please tell us how you considered Question 100.04 of the Non-GAAP C&DIs and why you believe these measures are useful to investors.

An acquisition will also increase the intangible assets and related amortization. Typically, identifiable intangible assets represent 20-40% of the purchase price of an acquisition. These assets usually have an estimated useful life of 1-10 years. As these assets reach the end of their useful lives, the decrease in intangible amortization is sizable and could cause GAAP earnings and EPS to increase without any significant changes in the business operations.

Additionally, while TSYS is including revenues related to acquisitions in its non-GAAP measures, the Company’s non-GAAP measures also include the cost of services directly related to those revenues. In measuring its performance and compensating its management, TSYS evaluates the Company’s results without acquisition intangible amortization. Amortization of acquisition intangible assets is an expense that is not allocated to TSYS’ operating segments and is not part of the evaluation of the performance of TSYS’ operating segments (Note 21 Segment Reporting, including Geographic Area Data and Major Customers). Consequently, the exclusion of the amortization of acquisition intangible assets from adjusted earnings and adjusted diluted EPS allows investors to align TSYS’ operating segment results (GAAP basis) with TSYS’ consolidated results (non-GAAP basis).

Depreciation and other amortization. Depreciation and other amortization increased $4.1million, or 10%, to $45.2million for the three months ended June30, 2017, as compared to $41.1 million for the three months ended June30, 2016, due to additional assets placed into service from recent capital expenditures.

X - DefinitionTabular disclosure of amortizable intangibles assets and intangible assets not subject to amortization, excluding goodwill, in total and by major class, including the gross carrying amount and accumulated amortization. A major class is composed of intangible assets that can be grouped together because they are similar, either by their nature or by their use in the operations of a company.

Depreciation and other amortization. Depreciation and other amortization increased $32.4 million, or 30%, to $142.1 million for the year ended December31, 2015, as compared to $109.7 million for the year ended December31, 2014, due to additional assets placed in service resulting from both the Conversant acquisition and recent capital expenditures.

Property and Equipment—Furniture, equipment, computer software and development, buildings and leasehold improvements are carried at cost, less accumulated depreciation and amortization. Land is carried at cost and is not depreciated. Depreciation and amortization for furniture, equipment and buildings, including capital leases, are computed on a straight-line basis, using estimated lives ranging from two to twenty-one years. Software development is capitalized in accordance with ASC350-40, “Intangibles – Goodwill and Other – Internal–Use Software,” and is amortized on a straight-line basis over the expected benefit period, which ranges from two to seven years. Leasehold improvements are amortized over the remaining lives of the respective leases or the remaining useful lives of the improvements, whichever is shorter. Long-lived assets are tested for impairment when events or conditions indicate that the carrying value of an asset may not be fully recoverable from future cash flows.

(c)Refinanced Optional Amortization.On any Business Day in the Revolving Period or the Controlled Amortization Period, Transferor may, with the consent of each affected Series 2009-VFN Noteholder, cause Servicer to provide notice to the Indenture Trustee and all of the Series 2009-VFN Noteholders at least five Business Days prior to any Business Day (the “Refinancing Date”) stating its intention to cause the Series 2009-VFN Notes to be prepaid in full or in part on the Refinancing Date by causing all or a portion of the Collateral Amount to be conveyed to one or more Persons (who may be the Noteholders of a new Series issued substantially contemporaneously with such prepayment) for a cash purchase price in an amount equal to the sum of (i) the Collateral Amount (or the portion thereof that is being conveyed), plus (ii) accrued and unpaid interest on the Collateral Amount (or the portion thereof that is being conveyed) through the Refinancing Date, plus (iii) any accrued and unpaid ClassA Non-Use Fees and Class A Additional Amounts in respect of the Collateral Amount (or portion thereof that is being conveyed) through the Refinancing Date. In the case of any such conveyance, the purchase price shall be deposited in the Collection Account and shall be distributed to the applicable Series 2009-VFN Noteholders on a pro rata basis in accordance with the ClassA Pro Rata Percentage, ClassM Pro Rata Percentage, ClassB Pro Rata Percentage and ClassC Pro Rata Percentage and, with respect to the ClassA Notes, based on the ClassA Ownership Group Percentage for each ClassA Ownership Group, on the Refinancing Date in accordance with the terms of this Indenture Supplement and the Indenture; provided that after giving effect to such conveyance and application of the purchase price (i) the ClassM Principal Balance shall not be less than the Required ClassM Principal Balance, (ii) the ClassB Principal Balance shall not be less than the Required ClassB Principal Balance, and (iii) the ClassC Principal Balance shall not be less than the Required ClassC Principal Balance.

(a) Organization; Authority and Qualification. If the Parties are an entity, they are duly organized, validly existing and in good standing under the laws of their respective jurisdiction of formation and have all requisite power and authority to enter into the Agreement and to carry out their obligations hereunder to consummate the Amortization. If any Party is a natural person, he or she is competent, not subject to any guardianship proceedings and does not require the consent of his or her spouse under applicable law to enter into the Agreement. The execution and delivery by the Parties of the Agreement, the performance by the Parties of its obligations hereunder and the consummation of the Amortization has been duly authorized by all requisite action on the part of the relevant Party and their stockholders or members, as applicable.

With respect to Characteristic 52, we recomputed the First Extension Fee Amount as the product of (i) the Outstanding Funded Amount (as defined below) and (ii) the First Extension Fee Percentage. The Outstanding Funded Amount shall mean (i) the sum of the Initial Funded Amount and the Future Funding to Date minus (ii) the Initial Term Total Amortization. This procedure was performed for only those Mortgage Assets with a First Extension Fee Percentage.

5. We note in your response to prior comment 28, your reference to the guidance in ASC 340-40-35-1 as the basis for your amortization policy. Explain to us your consideration of customer attrition when selecting the straight-line method of amortization. In this regard, it appears as a result of customer attrition, the greatest amount of goods and services would be transferred under a portfolio of customer contracts in the initial period and would subsequently decline as the number of customers decline.

1. We note your presentation of adjusted net income includes an adjustment for purchase accounting amortization. Please tell us how you determined that this adjustment does not substitute individually tailored recognition and measurement methods for those of GAAP. Refer to question 100.04 of the Division’s Non-GAAP Financial Measures Compliance and Disclosure Interpretations.

16.6 % Arconic’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. The Other line in the table above includes gains/losses on asset sales and other nonoperating items. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to Arconic’s operating performance and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.