Identifying Operating and Nonrecurring Income Components

Following is the The Dow Chemical Company income statement.

Following is the The Dow Chemical Company income statement. (5 millions) For Year Ended December 31 2017 2016 Net sales $62,484 $48,158 Cost of sales 50,414 37,640 Research and development expenses 2,110 1,584 Selling, general, and administrative expenses 4,021 2,956 Amortization ofintangibles 1,013 544 Restructuring, goodwill impairment and asset-related chargesnet 3,280 595 Integration and separation costs 1,101 349 Asbestos-related charge - 1,113 Equity in earnings of nonconsolidated afliates 764 4-42 Sundry income [expense)net 966 1,452 Interest expense and amortization of debt discount 1,082 858 Income from continuing operations before income taxes 1,193 4,413 Provision (Credit for income taxes on continuing operations) (476) 9 Income from continuing operations, net of tax 1,669 4,404 Loss from discontinued operations, net oftax (77) - Net income $1,592 $4,404 Required a. Identify the components in its statement that you would consider operating. b. Identify those components that you would consider nonrecurring. ($ millions) For Year Ended December 31 a. b. 2017 2016 Operating? Nonrecurring? Net sales $62,484 $48,158 Yes Yes Cost of sales 50,414 37,640 Yes Yes Research and development expenses 2, 110 1,584 Yes Yes Selling, general, and administrative expenses 4,021 2,956 Yes Yes Amortization of intangibles 1,013 544 Yes Yes Restructuring, goodwill impairment and asset-related charges-net 3,280 595 Yes Yes Integration and separation costs 1,101 349 Yes Yes Asbestos-related charge 1,113 Yes Yes Equity in earnings of nonconsolidated affiliates 764 442 Yes Yes Sundry income (expense)-net 966 1,452 Yes + > Yes Interest expense and amortization of debt discount 1,082 858 Yes Yes Income from continuing operations before income taxes 1,193 4,413 Provision (Credit for income taxes on continuing operations) (476) 9 Yes Yes Income from continuing operations, net of tax 1,669 4,404 Loss from discontinued operations, net of tax (77) Yes Yes Net income $1,592 $4,404c. Compute net operating profit after taxes (NOPAT) and net operating profit margin (NOPM) for each year. Assume a statutory tax rate of 25%. 2017 201 6 NOPAT {Round your answer to the nearest million dollar.) $ 2,404 at $ 5,048 x NOPM (Round your answer to one decimal place.) 3.8% x 10.5 % x