Regan Corporation reported the following 2017 income statement (in millions):

REGAN CORPORATON

Income statement for the year ended September 30, 2017

Sales	$920,560
Cost of goods sold	634,820
Gross profit	285,740
Selling, general and administrative	115,320
Research and development expenses	46,550
Restructuring charge	37,260
Litigation settlement	29,650
Pension curtailment gain	(2,480	)
Other expenses, net	23,560
Total expenses	249,860
Operating profit	35,880
Interest expense	9,630
Gain on sale of long-term investments	(5,720	)
Income before taxes	31,970
Provision for income tax	11,830
Effect of change in accounting principle	22,410
Net income	$ (2,270	)

Footnotes to Regan Corporation's MD&A and financial statements disclose the following information:

1)	Restructuring charges include accruals for severance packages and losses on asset write-downs. The company does not anticipate further restructuring activity.
2)	A lawsuit related to product malfunctions was settled and ongoing lawsuits will not materially affect future income.
3)	Changes to the company's pension plan resulted in a one-time gain.
4)	Securities were sold during the year to fund the litigation settlement.
5)	Tax-law changes resulted in nondeductibility of certain expenses. The company anticipates a 37% tax rate for 2018 onward.

Required: What adjustments would you make to Regan Corporation's income statement before you started to forecast earnings for 2018? Prepare an adjusted income statement.

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