This practice note introduces key financial definitions found in high-yield indentures, with a particular focus on how they are derived from the income statement and used in the negative covenants. The defined terms in any agreement are considered to be the building blocks upon which the rest of the agreement is based, particularly when it comes to the negative covenants in a high-yield bond indenture. This practice note will also discuss certain items within the financial definitions that company and underwriter's counsel often focus on as they review and negotiate the negative covenants in the typical high-yield indenture. Finally, it will discuss generally accepted accounting principles (GAAP) and the manner in which high-yield indentures typically regulate the issuer's accounting principles. This short introduction should not be considered a substitute for the careful review of proposed defined terms and their use in an indenture's covenants as these provisions are often ...