Cost of Goods Sold ("COGS. $ 2.6 $ 2.6 $ 2.0 The following pro forma adjustments (increase)/decrease cost of goods sold: MillerCoors' beer purchases from MCBC (1) 4.6 3.0 MCBC beer purchases from MillerCoors (1) 9.9 12.2 9.3 31.4 Depreciation (2) (18.2) (6.0) (6.7) (5.5) MillerCoors' royalties paid to SABMiller (3) 3.7 4.4 4.8 12.9 Policy reclassification (4) $ 15.3 $ 19.5 $ 18.2 $ 53.0 Historical charges recorded for pallets (5) 2.2 2.4 2.4 7.0 Total pro forma adjustment to COGS
Cost of Goods Sold ("COGS. COGS consists of those standard manufacturing costs routinely included in COGS as defined by U.S. GAAP, including the cost of raw materials, manufacturing labor and related manufacturing overhead. COGS also includes manufacturing variances typically included in COGS under U.S. GAAP. Additionally, COGS includes costs, such as royalties, milestones and license fees, paid to third parties including those currently owed to [***] and [***]. In calculating COGS, the Parties shall use the same assumptions, allocations and calculations as each uses in preparing its publicly reported financial statements and shall allocate to cost categories in a manner consistent across all pharmaceutical product lines without discrimination against Isis products versus Genzyme and its Affiliates’ internal products or other products licensed from Third Parties. Notwithstanding the foregoing, COGS does not include costs that are applicable to manufacturing buildings, space or equipment that will not be used to support the manufacturing process during the Firm Order period or that are projected to be underutilized in the manufacturing process due to lower planned capacity versus normal plant capacity. Additionally, COGS does not include the cost of worn-out facilities or equipment, previously used in manufacturing but no longer in operation, or the cost of scrapping and abandoning such assets. Expense items related to the manufacturing operations that are of a non-recurring nature such as equipment or facility design changes, alterations, disassembly, moving, reinstallation and reassembly of machinery and equipment will be included in the cost of capital projects and amortized into COGS according to the Parties amortization practices under U.S. GAAP. Further, the Parties anticipate that Genzyme will build manufacturing capability to manufacture API for commercial supply. If Genzyme does not do so, and a third party is required to manufacture API the portions of API cost reasonably calculated to represent profit and amortization of facility and equipment will not be included in Program Costs. To the extent that Isis manufactures API for the initial launch of the Product, COGS will be Isis’ fully burdened cost, as calculated on an annual basis and described in the term sheet under “Manufacture of Product”. Sales & Marketing Expenses (S&M) S&M expenses include costs necessary to market, distribute and sell the Product. This category includes costs such as those for advertising, marketi...
