Kinder Morgan, Inc.  Form 10-K 2 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ?
No ?
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ?
No ?
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ?
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).
Large accelerated filer ?
Accelerated filer ?
Non-accelerated filer ?
Smaller reporting company ?
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).
Yes ?
No ?
As of June 30, 2010, the registrant was a privately held company, and therefore the market value of its common equity held by nonaffiliates was zero.
As of February 16, 2011, the registrant had the following number of shares of common stock outstanding:
## Table 0 ##
EXPLANATORY NOTE Prior to the consummation of its February 2011 initial public offering, Kinder Morgan, Inc. , was a Delaware limited liability company named Kinder Morgan Holdco LLC whose unitholders became stockholders of Kinder Morgan, Inc.  upon the completion of its initial public offering.
Except as disclosed in the accompanying report, the consolidated financial statements and selected historical consolidated financial data and other historical financial information included in this report are those of Kinder Morgan Holdco LLC or its predecessor and their respective subsidiaries and do not give effect to the conversion.
Kinder Morgan Holdco LLC’s wholly owned subsidiary, Kinder Morgan, Inc. , who was not the registrant under our initial public offering, has changed its name to Kinder Morgan Kansas, Inc.
PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements 5.
VARIABLE INTEREST ENTITIES In the normal course of its activities, the Company enters into relationships with various special purpose entities and other entities that are deemed to be variable interest entities (“VIEs”).
A VIE is an entity that either (1) has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control the entity, the obligation to absorb the entity’s expected losses and the right to receive the entity’s expected residual returns) or (2) lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE.
If the Company determines that it stands to absorb a majority of the VIE’s expected losses or to receive a majority of the VIE’s expected residual returns, the Company would be deemed to be the VIE’s “primary beneficiary” and would be required to consolidate the VIE.
Consolidated Variable Interest Entities for which the Company is the Sponsor The Company is the sponsor of certain asset-backed investment vehicles (commonly referred to as collateralized debt obligations, or “CDOs”) and certain other vehicles for which the Company earns fee income for investment management services, including certain investment structures which the Company’s asset management business invests with other co-investors in investment funds referred to as feeder funds.
The Company sells or syndicates investments through these vehicles, principally as part of the proprietary investing activity of the Company’s asset management businesses.
Additionally, the Company may invest in debt or equity securities issued by these vehicles.
CDOs raise capital by issuing debt securities, and use the proceeds to purchase investments, typically interest-bearing financial instruments.
The Company analyzes these relationships to determine whether or not it absorbs the majority of expected losses or receives the majority of the expected residual returns, and thus is the primary beneficiary.
This analysis includes a review of the Company’s size and relative position in the capital structure and/or a review of cash flow projections driven by assumptions regarding the underlying collateral including default rate, recovery rate, deal call probability, reinvestment rates and fees and expenses.
The Company has not provided material financial or other support that was not contractually required to any VIE for which it is the sponsor.
The Company has determined that it is the primary beneficiary of certain VIEs that it sponsors, including one CDO and certain other investment structures, as it absorbs a majority of the expected losses or receives the majority of the expected residual returns.
The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of consolidated VIEs for which the Company is the sponsor are reported.
The creditors of these VIEs do not have recourse to the Company in excess of the assets contained within the VIE.
## Table 1 ##
The Company also consolidates a VIE whose beneficial interests are wholly owned by consolidated subsidiaries.
This VIE is not included in the table above and the Company does not currently intend to sell these beneficial interests to third parties.
Unconsolidated Variable Interest Entities for which the Company is the Sponsor The Company has also determined that it is not the primary beneficiary of certain VIEs that it sponsors, including certain CDOs and other investment structures, as it will not absorb a majority of the expected losses or receive the majority of the expected residual returns.
The Company’s maximum exposure to loss resulting from its relationship with unconsolidated VIEs it sponsors is limited to its investment in the VIEs, which was $380 million and $674 million at December 31, 2009 and 2008, respectively.
The Company’s maximum exposure to loss decreased from December 31, 2008, reflecting the redemption of a fixed income fund in 2009.
These investments are reflected in “Fixed maturities, available for sale” and “Other long-term investments.
” The fair value of assets held within these unconsolidated VIEs was $6,988 million as of December 31, 2009.
There are no liabilities associated with these unconsolidated VIEs on the Company’s balance sheet.
PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements 17.
SHARE-BASED PAYMENTS (continued) The total intrinsic value (i. e. , market price of the stock less the option exercise price) of employee stock options exercised during the years ended December 31, 2009, 2008 and 2007 was $11 million, $50 million and $224 million, respectively.
The total intrinsic value of non-employee options exercised during the years ended December 31, 2009, 2008 and 2007 was $0 million, $1 million and $6 million, respectively.
The weighted average remaining contractual term and the aggregate intrinsic value of stock options outstanding and exercisable as of December 31, 2009 is as follows:
## Table 2 ##
Restricted Stock Shares, Restricted Stock Units, and Performance Share Awards A restricted stock share represents a grant of Common Stock to employee and non-employee participants that is subject to certain transfer restrictions and forfeiture provisions for a specified period of time.
A restricted stock unit is an unfunded, unsecured right to receive a share of Common Stock at the end of a specified period of time, which is also subject to forfeiture and transfer restrictions.
Generally, the restrictions on restricted stock shares and restricted stock units will lapse on the third anniversary of the date of grant.
Restricted stock shares subject to the transfer restrictions and forfeiture provisions are considered nonvested shares and are not reflected as outstanding shares until the restrictions expire.
Performance shares are awards of units denominated in Common Stock.
The number of units is determined over the performance period, and may be adjusted based on the satisfaction of certain performance goals.
Performance share awards are payable in Common Stock.
A summary of the Company’s employee restricted stock shares, restricted stock units and performance shares is as follows:
## Table 3 ##
(1) Performance shares reflect the target awarded, reduced for cancellations and releases to date.
The actual number of shares to be awarded at the end of each performance period will range between 0% and 150% of the target for awards granted in 2007 and 2008, based upon a measure of the reported performance for the Company’s Financial Services Businesses relative to stated goals.
There were no performance shares granted in 2009.
(2) Represents the change in shares issued based upon the attainment of performance goals for the Company’s Financial Services Businesses.
The fair market value of employee share awards released for the years ended December 31, 2009, 2008 and 2007 was $34 million, $103 million and $167 million, respectively
Closed Block Business For the Closed Block Business, net realized investment gains in 2008 were $15 million, compared to net realized investment gains of $589 million in 2007.
Net realized losses on fixed maturity securities were $451 million in 2008, compared to net realized gains of $182 million in 2007, as set forth in the following table:
## Table 4 ##
(1) Amounts exclude credit related losses through sales of investments pursuant to our credit risk and portfolio management objectives.
Net gains on sales and maturities of fixed maturity securities of $278 million in 2008 were primarily due to sales related to our total return strategy.
Gross losses on sales and maturities of fixed maturity securities of $259 million in 2008 were primarily due to lower prices resulting from credit spread widening and liquidity concerns.
None of the gross losses on sales and maturities in 2008 related to assetbacked securities collateralized by sub-prime mortgages.
In light of the unprecedented current market conditions and in consideration of the potential impact on capital and tax positions, as discussed above, beginning in the fourth quarter of 2008 we curtailed our active trading policy, which resulted in a lower level of realized losses in this portfolio than might otherwise have been incurred.
Net gains on sales and maturities of fixed maturity securities of $205 million in 2007 were also primarily due to sales related to our total return strategy.
Gross losses on sales and maturities of fixed maturity securities of $262 million in 2007 included $11 million related to sales of asset-backed securities collateralized by sub-prime mortgages, primarily in the second half of 2007.
See “—General Account Investments—Fixed Maturity Securities—Asset-Backed Securities” for additional information regarding our exposure to sub-prime mortgages.
See below for additional information regarding the other-than-temporary impairments of fixed maturity securities in 2008 and 2007.
Net realized losses on equity securities were $441 million in 2008, of which net trading losses on sales of equity securities were $54 million, and other-than-temporary impairments were $387 million.
Net realized gains on equity securities were $337 million in 2007, of which net trading gains on equity securities were $369 million, partially offset by other-than-temporary impairments of $32 million.
Results for both periods reflect sales pursuant to our active management strategy.
See below for additional information regarding the otherthan-temporary impairments of equity securities in 2008 and 2007.
Net realized gains on derivatives were $958 million in 2008, compared to $61 million in 2007.
Derivative gains in 2008 primarily reflect net mark-to-market gains of $824 million on interest rate derivatives used to manage duration and net gains of $149 million on currency derivatives used to hedge foreign denominated investments.
Partially offsetting these gains are net losses of $105 million on embedded derivatives associated with certain externally managed investments in the European market.
Derivative gains in 2007 primarily reflect the impact of interest derivatives used to manage the duration of the fixed maturity investment portfolio partially offset by net losses on currency derivatives used to hedge foreign denominated investments.
Net realized losses on other investments were $51 million in 2008, including $22 million related to other-than-temporary impairments on joint ventures and partnerships.
Net realized gains on other investments were $9 million in 2007.
(1) Our enhanced short-term portfolio is used primarily to invest cash proceeds of securities lending and repurchase activities, commercial paper issuances and cash generated from certain trading and operating activities.
The investment policy statement of this portfolio requires that securities purchased for this portfolio have a remaining expected average life of 2 years or less when acquired.
(2) Included within the $4.3 billion of asset-backed securities collateralized by sub-prime mortgages as of December 31, 2009 are $0.5 billion of securities collateralized by second-lien exposures.
(3) As of December 31, 2009, includes the $(205) million impact of the bifurcated embedded derivative described below.
(4) As of December 31, 2009, includes collateralized debt obligations with amortized cost of $448 million and fair value of $431 million, with none secured by sub-prime mortgages.
Also includes asset-backed securities collateralized by education loans, equipment leases, timeshares, aircraft, and franchises.
(5) Excluded from the tables above are asset-backed securities held outside the general account in other entities and operations.
For additional information regarding asset-backed securities held outside the general account, see “—Invested Assets of Other Entities and Operations” below.
Also excluded from the table above are asset-backed securities classified as trading and carried at fair value.
See “—Trading Account Assets Supporting Insurance Liabilities” and “—Other Trading Account Assets” for additional information regarding these securities.
The tables above provide ratings as assigned by nationally recognized rating agencies as of December 31, 2009, including Standard & Poor’s, Moody’s, and Fitch.
In making our investment decisions, rather than relying solely on the rating agencies’ evaluations, we assign internal ratings to our asset-backed securities based upon our dedicated asset-backed securities unit’s independent evaluation of the underlying collateral and securitization structure, including any guarantees from monoline bond insurers.
The following table sets forth the percentage, based on amortized cost, of our asset-backed securities collateralized by sub-prime mortgages attributable to the Financial Services Businesses by lowest rating agency rating, as of the dates indicated.
Asset-Backed Securities Collateralized by Sub-prime Mortgages—Financial Services Businesses

Tables referenced above, in order (Table 0 first):
<table><tr><td>Class A common stock</td><td>597,213,410</td></tr><tr><td>Class B common stock</td><td>100,000,000</td></tr><tr><td>Class C common stock</td><td>2,462,927</td></tr><tr><td>Class P common stock</td><td>109,786,590</td></tr></table>
<table><tr><td></td><td colspan="2"> December 31,</td></tr><tr><td></td><td> 2009</td><td> 2008</td></tr><tr><td></td><td colspan="2"> (in millions)</td></tr><tr><td>Fixed maturities, available for sale</td><td>$68</td><td>$29</td></tr><tr><td>Trading account assets supporting insurance liabilities</td><td>7</td><td>—</td></tr><tr><td>Commercial mortgage and other loans</td><td>412</td><td>450</td></tr><tr><td>Other long-term investments</td><td>10</td><td>100</td></tr><tr><td>Cash and cash equivalents</td><td>44</td><td>1</td></tr><tr><td>Accrued investment income</td><td>2</td><td>2</td></tr><tr><td>Other assets</td><td>4</td><td>5</td></tr><tr><td>Separate account assets</td><td>38</td><td>91</td></tr><tr><td>Total assets of consolidated VIEs</td><td>$585</td><td>$678</td></tr><tr><td>Long-term debt</td><td>$413</td><td>$423</td></tr><tr><td>Other liabilities</td><td>—</td><td>1</td></tr><tr><td>Separate account liabilities</td><td>38</td><td>91</td></tr><tr><td>Total liabilities of consolidated VIEs</td><td>$451</td><td>$515</td></tr></table>
<table><tr><td></td><td colspan="4"> December 31, 2009</td></tr><tr><td></td><td colspan="2"> Employee Stock Options</td><td colspan="2"> Non-employee Stock Options</td></tr><tr><td></td><td> Weighted Average Remaining Contractual Term</td><td> Aggregate Intrinsic Value</td><td> Weighted Average Remaining Contractual Term</td><td> Aggregate Intrinsic Value</td></tr><tr><td></td><td> (in years)</td><td> (in millions)</td><td> (in years)</td><td> (in millions)</td></tr><tr><td>Outstanding</td><td>5.76</td><td>$166</td><td>4.68</td><td>$4</td></tr><tr><td>Vested and expected to vest</td><td>5.69</td><td>$158</td><td>4.61</td><td>$4</td></tr><tr><td>Exercisable</td><td>4.44</td><td>$80</td><td>3.75</td><td>$4</td></tr></table>
<table><tr><td></td><td>Restricted Stock Shares</td><td> Weighted Average Grant Date Fair Value</td><td>Restricted Stock Units</td><td> Weighted Average Grant Date Fair Value</td><td>Performance Shares-1</td><td> Weighted Average Grant Date Fair Value</td></tr><tr><td>Restricted at December 31, 2006</td><td>931,745</td><td>$44.95</td><td>2,475,000</td><td>$67.96</td><td>1,208,349</td><td>$56.99</td></tr><tr><td>Granted</td><td>—</td><td>—</td><td>832,530</td><td>91.90</td><td>307,604</td><td>91.75</td></tr><tr><td>Forfeited</td><td>-6,370</td><td>44.56</td><td>-315,213</td><td>79.19</td><td>-73,621</td><td>78.62</td></tr><tr><td>Performance adjustment-2</td><td>—</td><td>—</td><td>—</td><td>—</td><td>235,040</td><td>45.04</td></tr><tr><td>Released</td><td>-908,217</td><td>44.96</td><td>-198,956</td><td>58.84</td><td>-705,417</td><td>45.04</td></tr><tr><td>Restricted at December 31, 2007</td><td>17,158</td><td>44.37</td><td>2,793,361</td><td>74.47</td><td>971,955</td><td>72.13</td></tr><tr><td>Granted</td><td>—</td><td>—</td><td>1,056,755</td><td>68.17</td><td>397,067</td><td>69.76</td></tr><tr><td>Forfeited</td><td>-1,001</td><td>46.16</td><td>-120,026</td><td>79.60</td><td>-103,468</td><td>74.47</td></tr><tr><td>Performance adjustment-2</td><td>—</td><td>—</td><td>—</td><td>—</td><td>198,776</td><td>55.95</td></tr><tr><td>Released</td><td>-11,467</td><td>44.23</td><td>-865,348</td><td>58.12</td><td>-601,811</td><td>55.95</td></tr><tr><td>Restricted at December 31, 2008</td><td>4,690</td><td>44.33</td><td>2,864,742</td><td>76.87</td><td>862,519</td><td>78.28</td></tr><tr><td>Granted</td><td>—</td><td>—</td><td>3,655,941</td><td>25.61</td><td>—</td><td>—</td></tr><tr><td>Forfeited</td><td>—</td><td>—</td><td>-118,236</td><td>46.20</td><td>—</td><td>—</td></tr><tr><td>Performance adjustment-2</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-55,953</td><td>76.15</td></tr><tr><td>Released</td><td>-4,690</td><td>44.33</td><td>-1,208,434</td><td>76.00</td><td>-234,814</td><td>76.15</td></tr><tr><td>Restricted at December 31, 2009</td><td>—</td><td>$—</td><td>5,194,013</td><td>$41.69</td><td>571,752</td><td>$79.36</td></tr></table>
<table><tr><td></td><td colspan="2">Year Ended December 31,</td></tr><tr><td></td><td>2008</td><td>2007</td></tr><tr><td></td><td colspan="2">(in millions)</td></tr><tr><td> Realized investment gains (losses) - Fixed Maturity Securities—Closed Block Business</td><td></td><td></td></tr><tr><td>Gross realized investment gains:</td><td></td><td></td></tr><tr><td>Gross gains on sales and maturities</td><td>$537</td><td>$467</td></tr><tr><td>Private bond prepayment premiums</td><td>27</td><td>39</td></tr><tr><td>Total</td><td>564</td><td>506</td></tr><tr><td>Gross realized investment losses:</td><td></td><td></td></tr><tr><td>Gross losses on sales and maturities-1</td><td>-259</td><td>-262</td></tr><tr><td>Other-than-temporary impairments</td><td>-718</td><td>-48</td></tr><tr><td>Credit related losses on sales</td><td>-38</td><td>-14</td></tr><tr><td>Total</td><td>-1,015</td><td>-324</td></tr><tr><td>Realized investment gains (losses), net—Fixed Maturity Securities</td><td>$-451</td><td>$182</td></tr><tr><td>Net gains (losses) on sales and maturities—Fixed Maturity Investments(1)</td><td>$278</td><td>$205</td></tr></table>

Question: What's the sum of all Aggregate Intrinsic Value that are positive in 2009 for Employee Stock Options ? (in million)
Answer: 404
Reasoning program: add(166,158), add(#0,80)