were included as part of the purchase price allocation of Pharmacia are recorded as a reduction of goodwill or as an expense to operations, as appropriate.

The majority of the restructuring costs related to employee terminations (see Notes to Consolidated Financial Statements— Note 5B, Merger-Related Costs: Restructuring Costs—Pharmacia). Through December 31, 2005, employee termination costs totaling $1.5 billion represent the approved reduction of the legacy Pharmacia work force by 12,768 employees mainly in corporate, manufacturing, distribution, sales and research. We notified affected individuals and 12,589 employees were terminated as of December 31, 2005. Employee termination costs include accrued severance benefits and costs associated with change-in-control provisions of certain Pharmacia employment contracts.

Restructuring Costs Associated with Legacy Pfizer

and Legacy Pharmacia — Expensed

Through December 31, 2005, we have recorded, in total, $1.3 billion of restructuring costs ($390 million recorded in 2005). These restructuring costs were associated with exiting certain activities of legacy Pfizer and legacy Pharmacia (from April 16, 2004), including severance, costs of vacating duplicative facilities, contract termination and other exit costs. At December 31, 2005, liabilities for restructuring costs incurred but not paid totaled $119 million and are included in Other current liabilities.

The majority of the restructuring costs related to employee terminations (see Notes to Consolidated Financial Statements— Note 5B, Merger-Related Costs: Restructuring Costs—Pharmacia). Through December 31, 2005, employee termination costs totaling $625 million ($108 million recorded in 2005) represent the approved reduction of the legacy Pfizer and legacy Pharmacia (from April 16, 2004) work force by 4,476 employees, mainly in corporate, manufacturing, distribution, sales and research. We notified affected individuals and 4,082 employees were terminated as of December 31, 2005. Employee termination costs include accrued severance benefits and costs associated with change-in- control provisions of certain Pharmacia employment contracts.

Adapting to Scale Initiative

In connection with the AtS productivity initiative, Pfizer management has performed a comprehensive review of our processes, organizations, systems and decision-making procedures, in a company-wide effort to improve performance and efficiency. We expect the costs associated with this multi-year effort to continue through 2008 and to total approximately $4 billion to $5 billion, on a pre-tax basis. The actions associated with the AtS productivity initiative will include restructuring charges, such as asset impairments, exit costs and severance costs (including any related impacts to our benefit plans, including settlements and curtailments) and associated implementation costs, such as accelerated depreciation charges, primarily associated with plant network optimization efforts, and expenses associated with system and process standardization and the expansion of shared services.

We incurred the following costs in connection with our AtS initiative, which was launched in the