Answer: $3.0 billion.

## Explanation **Calculation of recurring/core pretax earnings:** **Given:** - Profit before tax: $2.0 billion - Non-recurring expenses: $0.6B + $0.4B = $1.0 billion **Formula:** Recurring pretax earnings = Reported profit before tax + Non-recurring expenses **Calculation:** $2.0 billion (reported profit) + $1.0 billion (non-recurring expenses) = $3.0 billion **Why add back non-recurring expenses:** - Non-recurring expenses (acquisition, divestiture, restructuring) are one-time items - To get core/recurring earnings, we need to remove the impact of these non-recurring items - Adding them back to reported profit gives us the earnings that would have been reported without these one-time charges **Conclusion:** The company's recurring or core pretax earnings is $3.0 billion.

Author: LeetQuiz Editorial Team