The information below is adapted from AT&T’s reported results for a recent decade of earnings disclosures and shows total revenue and pretax income (in millions). The pretax income numbers include special pretax restructuring charges, as given in the last column.

                                        Total            Pretax            Special

                        Year       Revenue         Income           Charges

                        20x0       $41,842         $2,681             $(3,500)

                        20x1        42,960           6,246                       

                        20x2        43,780           6,577                       

                        20x3        46,000           7,409                       

                        20x4        48,455           5,184              (3,000)

                        20x5        50,546           8,763                       

                        20x6        51,319           6,968                       

                        20x7        53,223           7,487              (2,514)

                        20x8        62,600         10,859              (1,506)

                        20x9        65,981           4,277              (7,029)

1. Compute pretax operating income before special restructuring charges, as would be more helpful to a financial analyst.
2. Prepare a graph to compare the trend in reported pretax income with the trends of revenues and adjusted income computed in part a.
3. Discuss which set of operating income data is most relevant for analyzing the firm and suggest how you might incorporate the nonrecurring charges in your analysis.