Rock of Ages, Inc., is the largest integrated granite quarrier, manufacturer, and retailer of finished granite memorials and granite blocks for memorial use in North America. The firm reported a net loss for 2004 of $3.2 million. In 2004, the firm reported a pretax litigation settlement loss of $6.5 million, and management stated that, in its opinion, the litigation settlement loss did not reflect the current year’s operations because it was the first year in five years that the firm reported such a loss. Calculate pro forma earnings for 2004 excluding the settlement costs and speculate on management’s reasoning as to why it believes that pro forma earnings is a better measure of performance for Rock of Ages. State any assumptions you make in your calculations.