by approximately $29 million. As a sensitivity measure, holding all other assumptions constant, the effect of a one-percentage-point decline in the return-on- assets assumption would be an increase in our 2006 U.S. qualified pension plan pre-tax expense of approximately $71 million.

The following table shows the expected versus actual rate of return on plan assets for the U.S. qualified pension plans:

The discount rate used in calculating our U.S. pension benefit obligations at December 31, 2005, is 5.8%, which represents a 0.2 percentage-point decline from our December 31, 2004, rate of 6.0%. The discount rate for our U.S. defined benefit and postretirement plans is based on a yield curve constructed from a portfolio of high quality corporate bonds rated AA or better for which the timing and amount of cash flows approximate the estimated payouts of the plans. For our international plans, the discount rates are set by benchmarking against investment grade corporate bonds rated AA or better. Holding all other assumptions constant, the effect of this 0.2 percentage-point decrease in the discount rate assumption is an increase in our 2006 U.S. qualified pension plan pre-tax expense of approximately $25 million and an increase in the U.S. qualified pension plans’ projected benefit obligations at December 31, 2005, of approximately $220 million.

Acquisitions and Dispositions

Pharmacia Acquisition

On April 16, 2003, we acquired Pharmacia in a stock-for-stock transaction valued at approximately $56 billion. For the year ended December 31, 2003, about 71⁄2 months of results of operations of Pharmacia’s international operations (which conformed to Pfizer’s international operations fiscal year end of November 30th) and about 81/2 months of results of operations of Pharmacia’s U.S. operations were included in our consolidated financial statements.

Our operating results for the years ended December 31, 2005 and 2004, reflect the impact of the acquisition of Pharmacia throughout the entire period, as compared to the year ended December 31, 2003, which reflects the impact of the acquisition of Pharmacia from April 16, 2003.

The impact of purchase accounting relating to the Pharmacia acquisition resulted in a number of significant non-cash charges to the income statement for the years ended December 31, 2005, 2004 and 2003. The non-cash charges for 2005 and 2004 include incremental amortization of about $3.3 billion relating to intangible assets adjusted to fair value. The non-cash charges in 2003 include non-recurring IPR&D ($5.1 billion); incremental cost of sales (non-recurring $2.7 billion) from the sale of acquired inventory adjusted to fair value; and incremental amortization ($2.3 billion) of tangible and intangible assets adjusted to fair value. See also the discussions under the heading “Merger-Related In-Process Research and Development Charges” in the “Costs and Expenses” section of this Financial Review.

In connection with the acquisition, we took actions to integrate and restructure the Pharmacia operations in order to increase our profitability through cost savings and operating efficiencies. To achieve the savings, we incurred