American International Group, Inc.  and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations Continued
## Table 0 ##
(a) In 2006, sales inducement assets were reclassified to Other assets in the consolidated balance sheet.
All periods have been adjusted to reflect this reclassification.
(b) In 2006, all other amortization for Domestic Life Insurance & Retirement Services includes $136 million of negative amortization related to changes in estimates from conversion of actuarial systems, which is substantially offset by related adjustments in incurred policy losses and benefits in the consolidated statement of income.
AIG’s variable annuity earnings will be affected by changes in recoverability, which involves estimating the future profitability of market returns because separate account revenues, primarily current business.
This review also involves significant managecomposed of mortality and expense charges and asset manage- ment judgment.
If the actual emergence of future profitability were ment fees, are a function of asset values.
to be substantially lower than estimated, AIG’s results of DAC for both insurance-oriented and investment-oriented prod- operations could be significantly affected in future periods.
ucts as well as retirement services products is reviewed for
At December 31, 2017, total reinsurance recoverable assets were $33.0 billion.
These assets include general reinsurance paid losses recoverable of $1.4 billion, ceded loss reserves of $26.9 billion including reserves for incurred but not reported (IBNR) claims, and ceded reserves for unearned premiums of $3.1 billion, as well as life reinsurance recoverable of $1.6 billion.
The methods used to estimate IBNR and to establish the resulting ultimate losses involve projecting the frequency and severity of losses over multiple years.
These methods are continually reviewed and updated by management.
Any adjustments are reflected in income.
We believe that the amount recorded for ceded loss reserves at December 31, 2017 reflects a reasonable estimate of the ultimate losses recoverable.
Actual losses may, however, differ from the reserves currently ceded.
The Reinsurance Credit Department (RCD) conducts periodic detailed assessments of the financial strength and condition of current and potential reinsurers, both foreign and domestic.
The RCD monitors both the financial condition of reinsurers as well as the total reinsurance recoverable ceded to reinsurers, and sets limits with regard to the amount and type of exposure we are willing to take with reinsurers.
As part of these assessments, we attempt to identify whether a reinsurer is appropriately licensed, assess its financial capacity and liquidity, and evaluate the local economic and financial environment in which a foreign reinsurer operates.
The RCD reviews the nature of the risks ceded and the need for measures, including collateral to mitigate credit risk.
For example, in our treaty reinsurance contracts, we frequently include provisions that require a reinsurer to post collateral or use other measures to reduce exposure when a referenced event occurs.
Furthermore, we limit our unsecured exposure to reinsurers through the use of credit triggers such as insurer financial strength rating downgrades, declines in regulatory capital, or relevant risk-based capital (RBC) ratios fall below certain levels.
We also set maximum limits for reinsurance recoverable exposure, which in some cases is the recoverable amount plus an estimate of the maximum potential exposure from unexpected events for a reinsurer.
In addition, credit executives within ERM review reinsurer exposures and credit limits and approve reinsurer credit limits above specified levels.
Finally, even where we conclude that uncollateralized credit risk is acceptable, we require collateral from active reinsurance counterparties where it is necessary for our subsidiaries to recognize the reinsurance recoverable assets for statutory accounting purposes.
At December 31, 2017, we held $20.5 billion of collateral, in the form of funds withheld, securities in reinsurance trust accounts and/or irrevocable letters of credit, in support of reinsurance recoverable assets from unaffiliated reinsurers.
We believe that no exposure to a single reinsurer represents an inappropriate concentration of risk to AIG, nor is our business substantially dependent upon any single reinsurance contract.
The following table presents information for each reinsurer representing in excess of five percent of our total reinsurance recoverable assets:
## Table 1 ##
(a) The financial strength ratings reflect the ratings of the various reinsurance subsidiaries of the companies listed as of February 8, 2018.
(b) Total reinsurance assets include both Property Casualty and Life and Retirement reinsurance recoverable.
(c) Excludes collateral held in excess of applicable treaty balances.
(d) Includes $13.2 billion recoverable under the 2011 retroactive asbestos reinsurance transaction and the 2017 Adverse Development Reinsurance agreement.
At December 31, 2017, we had no significant reinsurance recoverable due from any individual reinsurer that was financially troubled.
Reinsurer capital levels continued to increase in 2017, thereby increasing the industry?s underwriting capacity, which resulted in continued competition and lower rates for 2018 renewals.
Reduced profitability associated with lower rates could potentially result in reduced capacity or rating downgrades for some reinsurers.
The RCD, in conjunction with the credit executives within ERM, reviews these developments, monitors compliance with credit triggers that may require the reinsurer to post collateral, and seeks to use other appropriate means to mitigate any material risks arising from these developments.
For further discussion of reinsurance recoverable see Critical Accounting Estimates ?
Reinsurance Assets
Years Ended December 31,
## Table 2 ##
(a) - Data presented for 2005 represents the per day results of operations from July 1, 2005.
(b) - Statistics relate to our natural gas gathering and processing business.
Operating results - We began consolidating our investment in ONEOK Partners as of January 1, 2006, in accordance with EITF 04-5.
We elected to use the prospective method, which results in our consolidated financial results and operating information including data for the legacy ONEOK Partners operations beginning January 1, 2006.
For additional information, see “Significant Accounting Policies” in Note A of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.   Net margin increased by $52.3 million in 2007, compared with 2006, primarily due to the following: ?
increased performance of ONEOK Partners’ natural gas liquids businesses, which benefited primarily from new supply connections that increased volumes gathered, transported, fractionated and sold, ?
higher NGL product price spreads and higher isomerization price spreads in ONEOK Partners’ natural gas liquids gathering and fractionation business, ?
the incremental net margin related to the acquisition of assets from Kinder Morgan in October 2007 in ONEOK Partners’ natural gas liquids pipelines business, and ?
increased storage margins in ONEOK Partners’ natural gas pipelines business, that was partially offset by ?
decreased natural gas processing and transportation margins in ONEOK Partners’ natural gas businesses resulting primarily from lower throughput, higher fuel costs and lower natural gas volumes processed as a result of various contract terminations.
Operating costs increased by $11.6 million during 2007, compared with 2006, primarily due to higher employee-related costs and the incremental operating expenses associated with the assets acquired from Kinder Morgan, partially offset by lower litigation costs.
Depreciation and amortization decreased by $8.3 million during 2007, compared with 2006, primarily due to a goodwill and asset impairment charge of $12.0 million recorded in the second quarter of 2006 related to Black Mesa Pipeline.
Gain on sale of assets decreased by $113.5 million during 2007, compared with 2006, primarily due to the $113.9 million gain on the sale of a 20 percent partnership interest in Northern Border Pipeline recorded in the second quarter of 2006.
Equity earnings from investments for 2007 and 2006 primarily include earnings from ONEOK Partners’ interest in Northern Border Pipeline.
The decrease of $6.0 million during 2007, compared with 2006, is primarily due to the decrease in ONEOK Partners’ share of Northern Border Pipeline’s earnings from 70 percent in the first quarter of 2006 to 50 percent beginning in the second quarter of 2006.
See page 75 for discussion of the disposition of the 20 percent partnership interest in Northern Border Pipeline.
Allowance for equity funds used during construction increased for 2007, compared with 2006, due to ONEOK Partners’ capital projects, which are discussed beginning on page 31.

<table><tr><td></td><td colspan="3"> 2006</td><td colspan="3">2005</td></tr><tr><td><i>(in millions)</i></td><td>DAC</td><td>VOBA</td><td>Total</td><td>DAC</td><td>VOBA</td><td>Total</td></tr><tr><td>Domestic Life Insurance & Retirement Services:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Balance at beginning of year<i><sup>(a)</sup></i></td><td>$9,599</td><td>$869</td><td>$10,468</td><td>$8,214</td><td>$836</td><td>$9,050</td></tr><tr><td>Acquisition costs deferred</td><td>1,832</td><td>—</td><td>1,832</td><td>1,840</td><td>—</td><td>1,840</td></tr><tr><td>Amortization (charged) or credited to operating income:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Related to realized capital gains (losses)</td><td>77</td><td>16</td><td>93</td><td>45</td><td>3</td><td>48</td></tr><tr><td>Related to unlocking future assumptions</td><td>-40</td><td>-5</td><td>-45</td><td>-15</td><td>—</td><td>-15</td></tr><tr><td>All other amortization<i><sup>(b)</sup></i></td><td>-1,387</td><td>-81</td><td>-1,468</td><td>-1,399</td><td>-85</td><td>-1,484</td></tr><tr><td>Related to change in unrealized gains (losses) on securities</td><td>744</td><td>34</td><td>778</td><td>904</td><td>112</td><td>1,016</td></tr><tr><td>Increase (decrease) due to foreign exchange</td><td>-1</td><td>—</td><td>-1</td><td>10</td><td>3</td><td>13</td></tr><tr><td>Balance at end of year</td><td>$10,824</td><td>$833</td><td>$11,657</td><td>$9,599</td><td>$869</td><td>$10,468</td></tr><tr><td>Foreign Life Insurance & Retirement Services:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Balance at beginning of year<i><sup>(a)</sup></i></td><td>$16,360</td><td>$1,278</td><td>$17,638</td><td>$14,349</td><td>$1,681</td><td>$16,030</td></tr><tr><td>Acquisition costs deferred</td><td>4,991</td><td>—</td><td>4,991</td><td>4,673</td><td>—</td><td>4,673</td></tr><tr><td>Amortization (charged) or credited to operating income:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Related to realized capital gains (losses)</td><td>4</td><td>1</td><td>5</td><td>-1</td><td>-1</td><td>-2</td></tr><tr><td>Related to unlocking future assumptions</td><td>87</td><td>15</td><td>102</td><td>93</td><td>—</td><td>93</td></tr><tr><td>All other amortization</td><td>-2,214</td><td>-185</td><td>-2,399</td><td>-1,764</td><td>-204</td><td>-1,968</td></tr><tr><td>Related to change in unrealized gains (losses) on securities</td><td>-127</td><td>-5</td><td>-132</td><td>-47</td><td>8</td><td>-39</td></tr><tr><td>Increase (decrease) due to foreign exchange</td><td>904</td><td>44</td><td>948</td><td>-943</td><td>-206</td><td>-1,149</td></tr><tr><td>Balance at end of year</td><td>$20,005</td><td>$1,148</td><td>$21,153</td><td>$16,360</td><td>$1,278</td><td>$17,638</td></tr><tr><td>Total Life Insurance & Retirement Services:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Balance at beginning of year<i><sup>(a)</sup></i></td><td>$25,959</td><td>$2,147</td><td>$28,106</td><td>$22,563</td><td>$2,517</td><td>$25,080</td></tr><tr><td>Acquisition costs deferred</td><td>6,823</td><td>—</td><td>6,823</td><td>6,513</td><td>—</td><td>6,513</td></tr><tr><td>Amortization (charged) or credited to operating income:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Related to realized capital gains (losses)</td><td>81</td><td>17</td><td>98</td><td>44</td><td>2</td><td>46</td></tr><tr><td>Related to unlocking future assumptions</td><td>47</td><td>10</td><td>57</td><td>78</td><td>—</td><td>78</td></tr><tr><td>All other amortization</td><td>-3,601</td><td>-266</td><td>-3,867</td><td>-3,163</td><td>-289</td><td>-3,452</td></tr><tr><td>Related to change in unrealized gains (losses) on securities</td><td>617</td><td>29</td><td>646</td><td>857</td><td>120</td><td>977</td></tr><tr><td>Increase (decrease) due to foreign exchange</td><td>903</td><td>44</td><td>947</td><td>-933</td><td>-203</td><td>-1,136</td></tr><tr><td>Balance at end of year</td><td>$30,829</td><td>$1,981</td><td>$32,810</td><td>$25,959</td><td>$2,147</td><td>$28,106</td></tr></table>
<table><tr><td> At December 31, 2017</td><td></td><td rowspan="2">A.M. Best Rating<sup>(a)</sup></td><td rowspan="2">Gross Reinsurance Assets</td><td></td><td rowspan="2">Percent of Reinsurance Assets (b)</td><td></td><td rowspan="2">Uncollateralized Reinsurance Assets</td></tr><tr><td><i>(in millions)</i></td><td>S&P Rating<sup>(a)</sup></td><td></td><td>Collateral Held (c)</td></tr><tr><td> Reinsurer:</td><td> </td><td> </td><td></td><td> </td><td></td><td></td><td></td></tr><tr><td>Berkshire Hathaway Group of Companies</td><td> AA+</td><td> A++</td><td>$13,707</td><td><sup>(d)</sup></td><td>41.5%</td><td>$13,265</td><td>$442</td></tr><tr><td>Swiss Reinsurance Group of Companies</td><td> AA-</td><td> A+</td><td>$4,341</td><td> </td><td>13.1%</td><td>$2,371</td><td>$1,970</td></tr></table>
<table><tr><td></td><td>Years Ended December 31,</td></tr><tr><td>Operating Information</td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td>Natural gas gathered<i>(BBtu/d)</i></td><td>1,171</td><td>1,168</td><td>1,077</td></tr><tr><td>Natural gas processed<i>(BBtu/d)</i></td><td>621</td><td>988</td><td>1,117</td></tr><tr><td>Natural gas transported<i>(MMcf/d)</i></td><td>3,579</td><td>3,634</td><td>1,333</td></tr><tr><td>Natural gas sales<i>(BBtu/d)</i></td><td>281</td><td>302</td><td>334</td></tr><tr><td>Natural gas liquids gathered<i>(MBbl/d)</i></td><td>228</td><td>206</td><td>191(a)</td></tr><tr><td>Natural gas liquids sales<i>(MBbl/d)</i></td><td>231</td><td>207</td><td>207</td></tr><tr><td>Natural gas liquids fractionated<i>(MBbl/d)</i></td><td>356</td><td>313</td><td>292(a)</td></tr><tr><td>Natural gas liquids transported<i>(MBbl/d)</i></td><td>299</td><td>200</td><td>187(a)</td></tr><tr><td>Capital expenditures<i>(Thousands of dollars)</i></td><td>$709,858</td><td>$201,746</td><td>$56,255</td></tr><tr><td>Conway-to-Mount Belvieu OPIS average spread Ethane/Propane mixture (<i>$/gallon)</i></td><td>$0.06</td><td>$0.05</td><td>$0.05</td></tr><tr><td>Realized composite NGL sales prices (<i>$/gallon)</i>(b)</td><td>$1.06</td><td>$0.93</td><td>$0.89</td></tr><tr><td>Realized condensate sales price (<i>$/Bbl)</i>(b)</td><td>$67.35</td><td>$57.84</td><td>$52.69</td></tr><tr><td>Realized natural gas sales price (<i>$/MMBtu)</i>(b)</td><td>$6.21</td><td>$6.31</td><td>$7.30</td></tr><tr><td>Realized gross processing spread (<i>$/MMBtu)</i>(b)</td><td>$5.21</td><td>$5.05</td><td>$2.77</td></tr></table>

Question: Which year is Foreign Life Insurance & Retirement Services: Acquisition costs deferred the highest?
Answer: 2006