10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-36132

PLAINS GP HOLDINGS, L.P.

(Exact name of registrant as specified in its charter)

Delaware	90-1005472
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

333 Clay Street, Suite 1600, Houston, Texas	77002
(Address of principal executive offices)	(Zip Code)

(713) 646-4100

(Registrant’s telephone number, including area code)

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.  x Yes  o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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).  x Yes  o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer  x	Smaller reporting company  o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  o Yes  x No

As of August 4, 2014, there were 136,046,637 Class A Shares outstanding.

PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Condensed Consolidated Balance Sheets: As of June 30, 2014 and December 31, 2013	3
Condensed Consolidated Statements of Operations: For the three and six months ended June 30, 2014 and 2013	4
Condensed Consolidated Statements of Comprehensive Income: For the three and six months ended June 30, 2014 and 2013	5
Condensed Consolidated Statements of Changes in Accumulated Other Comprehensive Income / (Loss): For the six months ended June 30, 2014 and 2013	5
Condensed Consolidated Statements of Cash Flows: For the six months ended June 30, 2014 and 2013	6
Condensed Consolidated Statements of Changes in Partners’ Capital / Members’ Equity: For the six months ended June 30, 2014 and 2013	7
Notes to the Condensed Consolidated Financial Statements:
1.   Organization and Basis of Consolidation and Presentation	8
2.   Recent Accounting Pronouncements	9
3.   Accounts Receivable	10
4.   Inventory, Linefill and Base Gas and Long-term Inventory	10
5.   Goodwill	11
6.   Debt	11
7.   Net Income Per Class A Share	12
8.   Partners’ Capital and Distributions	13
9.   Equity-Indexed Compensation Plans	14
10. Derivatives and Risk Management Activities	16
11. Commitments and Contingencies	22
12. Operating Segments	24
13. Related Party Transactions	26
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	43
Item 4. CONTROLS AND PROCEDURES	44
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS	46
Item 1A. RISK FACTORS	46
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	46
Item 3. DEFAULTS UPON SENIOR SECURITIES	46
Item 4. MINE SAFETY DISCLOSURES	46
Item 5. OTHER INFORMATION	46
Item 6. EXHIBITS	46
SIGNATURES	47

2

PART I. FINANCIAL INFORMATION

Item 1.UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

	June 30,			December 31,
	2014			2013
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	28		$	43
Trade accounts receivable and other receivables, net	3,730			3,637
Inventory	1,096			1,065
Other current assets	316			220
Total current assets	5,170			4,965
PROPERTY AND EQUIPMENT	13,451			12,514
Accumulated depreciation	(1,817		)	(1,673		)
Property and equipment, net	11,634			10,841
OTHER ASSETS
Goodwill	2,502			2,503
Linefill and base gas	895			798
Long-term inventory	287			251
Investments in unconsolidated entities	545			485
Other, net	1,561			1,610
Total assets	$	22,594		$	21,453
LIABILITIES AND PARTNERS’ CAPITAL
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	4,302		$	3,985
Short-term debt	763			1,113
Other current liabilities	359			315
Total current liabilities	5,424			5,413
LONG-TERM LIABILITIES
Senior notes, net of unamortized discount of $16 and $15, respectively	7,409			6,710
Long-term debt under credit facilities and other	531			520
Other long-term liabilities and deferred credits	546			531
Total long-term liabilities	8,486			7,761
COMMITMENTS AND CONTINGENCIES (NOTE 11)
PARTNERS’ CAPITAL
Class A Shareholders (136,046,637 and 133,833,637 shares outstanding, respectively)	1,046			1,035
Class B Shareholders (469,983,136 and 472,196,136 shares outstanding, respectively)	—			—
Noncontrolling interests	7,638			7,244
Total partners’ capital	8,684			8,279
Total liabilities and partners’ capital	$	22,594		$	21,453

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(unaudited)						(unaudited)
REVENUES
Supply and Logistics segment revenues	$	10,856		$	9,933		$	22,201		$	20,157
Transportation segment revenues	195			165			376			338
Facilities segment revenues	144			197			301			420
Total revenues	11,195			10,295			22,878			20,915
COSTS AND EXPENSES
Purchases and related costs	10,280			9,387			20,950			18,825
Field operating costs	360			343			696			684
General and administrative expenses	91			91			181			196
Depreciation and amortization	100			91			197			174
Total costs and expenses	10,831			9,912			22,024			19,879
OPERATING INCOME	364			383			854			1,036
OTHER INCOME/(EXPENSE)
Equity earnings in unconsolidated entities	23			11			44			23
Interest expense (net of capitalized interest of $10, $10, $22 and $19, respectively)	(85		)	(76		)	(166		)	(154		)
Other income/(expense), net	4			(1		)	2			(1		)
INCOME BEFORE TAX	306			317			734			904
Current income tax expense	(16		)	(8		)	(52		)	(53		)
Deferred income tax expense	(15		)	(10		)	(35		)	(17		)
NET INCOME	275			299			647			834
Net income attributable to noncontrolling interests	(260		)	(298		)	(618		)	(832		)
NET INCOME ATTRIBUTABLE TO PAGP	$	15		$	1		$	29		$	2
BASIC AND DILUTED NET INCOME PER CLASS A SHARE	$	0.11					$	0.21
BASIC AND DILUTED WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING	136						135

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(unaudited)						(unaudited)
Net income	$	275		$	299		$	647		$	834
Other comprehensive income/(loss)	91			(92		)	(45		)	(137		)
Comprehensive income	366			207			602			697
Comprehensive income attributable to noncontrolling interests	(351		)	(206		)	(573		)	(695		)
Comprehensive income attributable to PAGP	$	15		$	1		$	29		$	2

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

ACCUMULATED OTHER COMPREHENSIVE INCOME / (LOSS)

(in millions)

	Derivative			Translation
	Instruments			Adjustments			Total
	(unaudited)
Balance at December 31, 2013	$	(77	)	$	(20	)	$	(97	)
Reclassification adjustments	10			—			10
Deferred loss on cash flow hedges, net of tax	(51		)	—			(51		)
Currency translation adjustments	—			(4		)	(4		)
Total period activity	(41		)	(4		)	(45		)
Balance at June 30, 2014	$	(118	)	$	(24	)	$	(142	)
	Derivative			Translation
	Instruments			Adjustments			Total
	(unaudited)
Balance at December 31, 2012	$	(121	)	$	200		$	79
Reclassification adjustments	(16		)	—			(16		)
Deferred gain on cash flow hedges, net of tax	63			—			63
Currency translation adjustments	—			(184		)	(184		)
Total period activity	47			(184		)	(137		)
Balance at June 30, 2013	$	(74	)	$	16		$	(58	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	Six Months Ended June 30,
	2014			2013
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	647		$	834
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	197			174
Equity-indexed compensation expense	68			78
Inventory valuation adjustments	37			—
Deferred income tax expense	35			17
Gain on sales of linefill and base gas	(8		)	(3		)
Gain on foreign currency revaluation	(5		)	(5		)
Settlement of terminated interest rate hedging instruments	(7		)	—
Equity earnings in unconsolidated entities, net of distributions	7			(1		)
Other	5			—
Changes in assets and liabilities, net of acquisitions	(22		)	240
Net cash provided by operating activities	954			1,334
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid in connection with acquisitions, net of cash acquired	(2		)	(31		)
Additions to property, equipment and other	(918		)	(785		)
Cash received for sales of linefill and base gas	23			14
Cash paid for purchases of linefill and base gas	(140		)	(24		)
Investment in unconsolidated entities	(67		)	(112		)
Proceeds from sales of assets	3			3
Other investing activities	—			3
Net cash used in investing activities	(1,101		)	(932		)
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments under PAA senior secured hedged inventory facility (Note 6)	—			(85		)
Net repayments under PAA senior unsecured revolving credit facility (Note 6)	—			(65		)
Net repayments under PNG credit agreement	—			(36		)
Net borrowings under AAP revolving credit facility (Note 6)	11			3
Net repayments under PAA commercial paper program (Note 6)	(344		)	—
Proceeds from the issuance of PAA senior notes (Note 6)	698			—
Net proceeds from the issuance of common units by subsidiaries (Note 8)	444			354
Contributions from noncontrolling interests related to the issuance of common units by subsidiaries	—			5
Distributions paid to noncontrolling interests (Note 8)	(626		)	(579		)
Distributions paid to Class A shareholders (Note 8)	(40		)	—
Distributions paid to members	—			(2		)
Other financing activities	(11		)	(1		)
Net cash provided by/(used in) financing activities	132			(406		)
Effect of translation adjustment on cash	—			(3		)
Net decrease in cash and cash equivalents	(15		)	(7		)
Cash and cash equivalents, beginning of period	43			25
Cash and cash equivalents, end of period	$	28		$	18
Cash paid for:
Interest, net of amounts capitalized	$	166		$	148
Income taxes, net of amounts refunded	$	104		$	18

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL / MEMBERS’ EQUITY

(in millions)

	Partners’ Capital
	(Excluding Noncontrolling Interests)											Total
	Class A				Class B				Noncontrolling			Partners’
	Shares	Amount			Shares		Amount		Interests			Capital
	(unaudited)
Balance at December 31, 2013	133.8	$	1,035		472.2		$	—	$	7,244		$	8,279
Net income	—	29			—		—		618			647
Distributions	—	(40		)	—		—		(626		)	(666		)
Transfer of ownership interest in connection with AAP unit exchanges (Note 8)	2.2	(1		)	(2.2	)	—		1			—
Deferred tax asset	—	23			—		—		—			23
Issuance of common units by subsidiaries	—	—			—		—		444			444
Issuance of PAA common units under LTIP, net of units tendered by employees to satisfy tax withholding obligations	—	—			—		—		(18		)	(18		)
Equity-indexed compensation expense	—	—			—		—		23			23
Distribution equivalent right payments	—	—			—		—		(3		)	(3		)
Other comprehensive loss	—	—			—		—		(45		)	(45		)
Balance at June 30, 2014	136.0	$	1,046		470.0		$	—	$	7,638		$	8,684

	Members’ Equity (Excluding Noncontrolling Interests)			Noncontrolling Interests			Total Members’ Equity
	(unaudited)
Balance at December 31, 2012	$	—		$	6,968		$	6,968
Net income	2			832			834
Distributions	(2		)	(579		)	(581		)
Issuance of common units by subsidiaries	—			354			354
Contributions from noncontrolling interests related to the issuance of common units by subsidiaries				7			7
Issuance of PAA common units under LTIP, net of units tendered by employees to satisfy tax withholding obligations	—			(11		)	(11		)
Equity-indexed compensation expense	—			20			20
Distribution equivalent right payments	—			(3		)	(3		)
Other comprehensive loss	—			(137		)	(137		)
Balance at June 30, 2013	$	—		$	7,451		$	7,451

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1—Organization and Basis of Consolidation and Presentation

Organization

Plains GP Holdings, L.P. (“PAGP”) is a Delaware limited partnership formed on July 17, 2013 to own an interest in the general partner and incentive distribution rights (“IDRs”) of Plains All American Pipeline, L.P (“PAA”), a publicly traded Delaware limited partnership. PAGP has elected to be treated as a corporation for U.S. federal income tax purposes.

We completed our initial public offering (“IPO”) on October 21, 2013. Immediately prior to our IPO, certain owners of Plains AAP, L.P. (“AAP”) sold a portion of their interests in AAP to us, resulting in our ownership of Class A units of AAP (“AAP units”), which represent limited partnership interests in AAP. As of June 30, 2014, we owned 136,046,637 AAP units (representing an approximate 22.4% limited partner interest in AAP). AAP is a Delaware limited partnership that directly owns all of PAA’s IDRs and indirectly owns the 2% general partner interest in PAA. AAP is the sole member of PAA GP LLC (“PAA GP”), a Delaware limited liability company that directly holds the 2% general partner interest in PAA. Also, through a series of transactions prior to our IPO with Plains GP Holdings LLC (our general partner), a Delaware limited liability company, and the owners of Plains All American GP LLC (“GP LLC”), a Delaware limited liability company formed on May 2, 2001, GP LLC’s general partner interest in AAP became a non-economic interest, and we became the owner of a 100% managing member interest in GP LLC. See “Basis of Consolidation and Presentation” below for the resulting accounting impacts.

GP LLC manages the business and affairs of PAA and AAP. Except for certain matters relating to PAA that require the approval of the limited partners of PAA, and certain matters relating to AAP that require the approval of the limited partners of AAP or of us as the sole member of GP LLC, either pursuant to the governing documents of PAA, AAP or GP LLC, or as may be required by non-waivable provisions of applicable law, GP LLC has full and complete authority, power and discretion to manage and control the business, affairs and property of PAA and AAP, to make all decisions regarding those matters and to perform any and all other acts or activities customary or incident to the management of PAA and AAP’s business, including the execution of contracts and management of litigation. GP LLC employs all domestic officers and personnel involved in the operation and management of PAA and AAP.  PAA’s Canadian officers and personnel are employed by Plains Midstream Canada ULC (“PMC”).

PAA is a publicly traded master limited partnership that owns and operates midstream energy infrastructure and provides logistics services for crude oil, natural gas liquids (“NGL”), natural gas and refined products. The term NGL includes ethane and natural gasoline products as well as products commonly referred to as liquefied petroleum gas (“LPG”), such as propane and butane. When used in this Form 10-Q, NGL refers to all NGL products including LPG. PAA owns an extensive network of pipeline transportation, terminalling, storage, and gathering assets in key crude oil and NGL producing basins and transportation corridors and at major market hubs in the United States and Canada. Our business activities are conducted through three operating segments: (i) Transportation, (ii) Facilities and (iii) Supply and Logistics. See Note 12 for further discussion of our operating segments.

As used in this Form 10-Q and unless the context suggests otherwise (taking into account the fact that PAGP has no operating activities apart from those conducted by PAA and its subsidiaries), the terms “PAGP,” “Partnership,” “Plains,” “we,” “us,” “our,” “ours” and similar terms refer to PAGP and its consolidated subsidiaries.

Definitions

Additional defined terms are used in this Form 10-Q and shall have the meanings indicated below:

AOCI	=	Accumulated other comprehensive income
Bcf	=	Billion cubic feet
Btu	=	British thermal unit
CAD	=	Canadian dollar
DERs	=	Distribution equivalent rights
EBITDA	=	Earnings before interest, taxes, depreciation and amortization
FASB	=	Financial Accounting Standards Board
GAAP	=	Generally accepted accounting principles in the United States
ICE	=	IntercontinentalExchange
LIBOR	=	London Interbank Offered Rate
LTIP	=	Long-term incentive plan

8

Mcf	=	Thousand cubic feet
NGL	=	Natural gas liquids including ethane, natural gasoline, products, propane and butane
NYMEX	=	New York Mercantile Exchange
PLA	=	Pipeline loss allowance
PNG	=	PAA Natural Gas Storage, L.P.
SEC	=	Securities and Exchange Commission
USD	=	United States dollar
White Cliffs	=	White Cliffs Pipeline, LLC
WTI	=	West Texas Intermediate

Basis of Consolidation and Presentation

The accompanying unaudited condensed consolidated interim financial statements and notes thereto should be read in conjunction with our 2013 Annual Report on Form 10-K. The financial statements have been prepared in accordance with the instructions for interim reporting as set forth by the SEC. All adjustments (consisting only of normal recurring adjustments) that in the opinion of management were necessary for a fair statement of the results for the interim periods have been reflected.  All significant intercompany transactions have been eliminated in consolidation. Certain reclassifications have been made to information from previous years to conform to the current presentation. The condensed consolidated balance sheet data as of December 31, 2013 was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the three and six months ended June 30, 2014 should not be taken as indicative of results to be expected for the entire year. These financials include PAGP and all of our wholly owned subsidiaries and those entities that we control. Under GAAP, we consolidate PAA, AAP and GP LLC. Amounts associated with the interests in these entities not owned by us are reflected in our results of operations as net income attributable to noncontrolling interests and in our balance sheet partners’ capital section as noncontrolling interests.

For periods prior to our IPO, the accompanying condensed consolidated financial statements reflect the financial statements of GP LLC, the predecessor of PAGP, and are based on the historical ownership percentages of GP LLC and AAP. These financial statements, to the extent they relate to periods prior to our IPO, have been prepared from the separate financial records maintained by GP LLC and may not necessarily be indicative of the actual results of operations that might have occurred if PAGP had operated separately during those periods.

Subsequent events have been evaluated through the financial statements issuance date and have been included in the following footnotes where applicable.

Note 2—Recent Accounting Pronouncements

Other than as discussed below and in our 2013 Annual Report on Form 10-K, no new accounting pronouncements have become effective or have been issued during the six months ended June 30, 2014 that are of significance or potential significance to us.

In May 2014, the FASB issued guidance regarding the recognition of revenue from contracts with customers with the underlying principle that an entity will recognize revenue to reflect amounts expected to be received in exchange for the provision of goods and services to customers upon the transfer of those goods or services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and the related cash flows. This guidance becomes effective for interim and annual periods beginning after December 15, 2016 and can be adopted either with a full retrospective approach or a modified retrospective approach with a cumulative-effect adjustment as of the date of adoption. We are currently evaluating which transition approach to apply and the effect that adopting this guidance will have on our financial position, results of operations and cash flows.

In April 2014, the FASB issued guidance that modifies the criteria under which assets to be disposed of are evaluated to determine if such assets qualify as a discontinued operation and requires new disclosures for both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. This guidance is effective prospectively for annual and interim reporting periods beginning after December 15, 2014. Early adoption is permitted but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issue. We are currently evaluating the provisions of this authoritative guidance and assessing its impact, but do not believe our adoption will have a material impact on our financial position, results of operations or cash flows.

9

In March 2013, the FASB issued guidance regarding the release of cumulative translation adjustments into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. This guidance became effective for interim and annual periods beginning after December 15, 2013. We adopted this guidance on January 1, 2014. Our adoption did not have a material impact on our financial position, results of operations or cash flows.

Note 3—Accounts Receivable

Our accounts receivable are primarily from purchasers and shippers of crude oil and, to a lesser extent, purchasers of NGL and natural gas storage. These purchasers include, but are not limited to, refiners, producers, marketing and trading companies and financial institutions that are active in the physical and financial commodity markets. The majority of our accounts receivable relate to our crude oil supply and logistics activities that can generally be described as high volume and low margin activities, in many cases involving exchanges of crude oil volumes.

To mitigate credit risk related to our accounts receivable, we have in place a rigorous credit review process.  We closely monitor market conditions in order to make a determination with respect to the amount, if any, of credit to be extended to any given customer and the form and amount of financial performance assurances we require. Such financial assurances are commonly provided to us in the form of advance cash payments, standby letters of credit or parental guarantees. As of June 30, 2014 and December 31, 2013, we had received approximately $157 million and $117 million, respectively, of advance cash payments from third parties to mitigate credit risk. Furthermore, as of June 30, 2014 and December 31, 2013, we had received approximately $384 million and $426 million, respectively, of standby letters of credit to support obligations due from third parties, a portion of which applies to future business. In addition, in an effort to mitigate credit risk, a significant portion of our transactions with counterparties are settled on a net-cash basis. Further, we enter into netting agreements (contractual agreements that allow us to offset receivables and payables with those counterparties against each other on our balance sheet) for a majority of such arrangements.

We review all outstanding accounts receivable balances on a monthly basis and record a reserve for amounts that we expect will not be fully recovered. We do not apply actual balances against the reserve until we have exhausted substantially all collection efforts. At June 30, 2014 and December 31, 2013, substantially all of our accounts receivable (net of allowance for doubtful accounts) were less than 30 days past their scheduled invoice date. Our allowance for doubtful accounts receivable totaled approximately $5 million at both June 30, 2014 and December 31, 2013. Although we consider our allowance for doubtful accounts receivable to be adequate, actual amounts could vary significantly from estimated amounts.

Note 4—Inventory, Linefill and Base Gas and Long-term Inventory

Inventory, linefill and base gas and long-term inventory consisted of the following as of the dates indicated (barrels and natural gas volumes in thousands and carrying value in millions):

	June 30, 2014						December 31, 2013
	Volumes	Unit of Measure	Carrying Value		Price/Unit (1)		Volumes	Unit of Measure	Carrying Value		Price/Unit (1)
Inventory
Crude oil	6,233	barrels	$	579	$	92.89	6,951	barrels	$	540	$	77.69
NGL	10,591	barrels	444		$	41.92	8,061	barrels	352		$	43.67
Natural gas	10,824	Mcf	50		$	4.62	40,505	Mcf	150		$	3.70
Other	N/A		23		N/A		N/A		23		N/A
Inventory subtotal			1,096						1,065
Linefill and base gas
Crude oil	11,211	barrels	713		$	63.60	10,966	barrels	679		$	61.92
NGL	1,214	barrels	56		$	46.13	1,341	barrels	62		$	46.23
Natural gas	26,612	Mcf	126		$	4.73	16,615	Mcf	57		$	3.43
Linefill and base gas subtotal			895						798
Long-term inventory
Crude oil	2,712	barrels	220		$	81.12	2,498	barrels	202		$	80.86
NGL	1,681	barrels	67		$	39.86	1,161	barrels	49		$	42.20
Long-term inventory subtotal			287						251
Total			$	2,278					$	2,114

10

(1)Price per unit of measure represents a weighted average associated with various grades, qualities and locations. Accordingly, these prices may not coincide with any published benchmarks for such products.

At the end of each reporting period, we assess the carrying value of our inventory and make any adjustments necessary to reduce the carrying value to the applicable net realizable value. We recorded a charge of approximately $37 million during the six months ended June 30, 2014 related to the writedown of our natural gas inventory that was purchased in conjunction with managing natural gas storage deliverability requirements during the extended period of severe cold weather in the first quarter of 2014. This adjustment is a component of “Purchases and related costs” in our accompanying condensed consolidated statements of operations.

Note 5—Goodwill

The table below reflects our goodwill by segment and changes during the period indicated (in millions):

	Transportation			Facilities		Supply and Logistics		Total
Balance at December 31, 2013	$	878		$	1,162	$	463	$	2,503
Foreign currency translation adjustments	(1		)	—		—		(1		)
Balance at June 30, 2014	$	877		$	1,162	$	463	$	2,502

We completed our annual goodwill impairment test as of June 30, 2014 and determined that there was no impairment of goodwill.

Note 6—Debt

Debt consisted of the following as of the dates indicated (in millions):

	June 30,		December 31,
	2014		2013
SHORT-TERM DEBT
PAA commercial paper notes, bearing a weighted-average interest rate of 0.29% and 0.33%, respectively (1)	$	760	$	1,109
Other	3		4
Total short-term debt	763		1,113
LONG-TERM DEBT
PAA senior notes, net of unamortized discounts of $16 and $15, respectively (2)	7,409		6,710
Credit Facilities and Other:
AAP term loan, bearing a weighted-average interest rate of 1.8% and 1.9%, respectively	500		500
AAP senior secured revolving credit facility, bearing a weighted-average interest rate of 1.7% and 2.2%, respectively	26		15
Other	5		5
Total long-term debt	7,940		7,230
Total debt (3)	$	8,703	$	8,343

(1)PAA commercial paper notes are backstopped by the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility, which mature in August 2018 and August 2016, respectively; as such, any borrowings under the PAA commercial paper program reduce the available capacity under these facilities. At June 30, 2014 and December 31, 2013, we classified $760 million and $1.1 billion, respectively, of borrowings under the PAA commercial paper program as short-term. These borrowings are primarily designated as working capital borrowings, must be repaid within one year and are primarily for hedged NGL and crude oil inventory and NYMEX and ICE margin deposits.

(2)As of June 30, 2014, we have classified PAA’s $150 million, 5.25% senior notes due June 2015 as long-term based on the ability and intent to refinance them on a long-term basis.

(3)PAA’s fixed-rate senior notes had a face value of approximately $7.4 billion and $6.7 billion at June 30, 2014 and December 31, 2013, respectively. We estimated the aggregate fair value of these notes as of June 30, 2014 and December 31, 2013 to be approximately $8.2 billion and $7.2 billion, respectively. PAA’s fixed-rate senior notes are traded among institutions, and these trades are routinely published by a reporting service. Our determination of fair value is based on reported trading activity near quarter end. We estimate that the carrying value of outstanding borrowings under credit facilities and agreements and commercial paper program approximates fair value as interest rates reflect current market rates. The fair value estimates for both the senior notes and credit facilities are based upon observable market data and are classified within Level 2 of the fair value hierarchy. See Note 10 for additional discussion of the fair value hierarchy.

11

Borrowings and Repayments

Total borrowings under credit agreements and the commercial paper program for the six months ended June 30, 2014 and 2013 were approximately $34.6 billion and $7.6 billion, respectively. Total repayments under credit agreements and the commercial paper program for the six months ended June 30, 2014 and 2013 were approximately $34.9 billion and $7.8 billion, respectively. The variance in total gross borrowings and repayments is impacted by various business and financial factors including, but not limited to, the timing, average term and method of general partnership borrowing activities.

Letters of Credit

In connection with our supply and logistics activities, we provide certain suppliers with irrevocable standby letters of credit to secure our obligation for the purchase of crude oil, NGL and natural gas. Additionally, we issue letters of credit to support insurance programs and construction activities. At June 30, 2014 and December 31, 2013 we had outstanding letters of credit of approximately $38 million and $41 million, respectively.

PAA Senior Notes Issuance

On April 23, 2014, PAA completed the issuance of $700 million, 4.70% senior notes due 2044 at a public offering price of 99.734%. Interest payments are due on June 15 and December 15 of each year, commencing on December 15, 2014. In anticipation of the issuance of these senior notes, PAA entered into $250 million notional principal amount of U.S. treasury locks in March and April 2014 to hedge the treasury rate portion of the interest rate on a portion of the notes. PAA terminated these treasury locks in April 2014. See Note 10 for additional disclosure.

Note 7—Net Income Per Class A Share

Basic net income per Class A share is determined by dividing net income attributable to PAGP by the weighted average number of outstanding Class A shares during the period. Class B shares do not share in the earnings of the Partnership. Accordingly, basic and diluted net income per Class B share has not been presented.

Diluted net income per Class A share is determined by dividing net income attributable to PAGP by the weighted average number of outstanding diluted Class A shares during the period. For purposes of calculating diluted net income per Class A share, both the net income attributable to PAGP and the weighted average number of outstanding diluted Class A shares consider the impact of possible future exchanges of (i) AAP units and the associated Class B shares into our Class A shares and (ii) certain Class B units of AAP (referred to herein as “AAP Management Units”) into our Class A shares. In addition, the calculation of the weighted average number of outstanding diluted Class A shares considers the effect of potentially dilutive awards under the Plains GP Holdings, L.P. Long-Term Incentive Plan (the “PAGP LTIP”).

All AAP Management Units that have satisfied the applicable performance condition are considered potentially dilutive. Exchanges of potentially dilutive AAP units and AAP Management Units are assumed to have occurred at the beginning of the period and the incremental income attributable to PAGP resulting from the assumed exchanges is representative of the incremental income that would have been attributable to PAGP if the assumed exchanges occurred on that date. Our PAGP LTIP awards that contemplate the issuance of Class A Shares are considered dilutive unless (i) vesting occurs only upon the satisfaction of a performance condition and (ii) that performance condition has yet to be satisfied. PAGP LTIP awards that are deemed to be dilutive are reduced by a hypothetical share repurchase based on the remaining unamortized fair value, as prescribed by the treasury stock method in guidance issued by the FASB. All outstanding PAGP LTIP awards as of June 30, 2014 are dilutive.

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For the three and six months ended June 30, 2014, the possible exchange of any AAP units and certain AAP Management Units would have had an antidilutive effect on net income per Class A share. For the same periods, our PAGP LTIP awards are dilutive; however, there are less than 0.1 million dilutive LTIP awards, which amount is not large enough to change the presentation of weighted average shares outstanding or net income per Class A share. The following table illustrates the calculation of basic net income per Class A share and diluted net income per Class A share for the three and six months ended June 30, 2014 (amounts in millions, except per share data):

	Three Months Ended		Six Months Ended
	June 30, 2014		June 30, 2014
Basic and Diluted Net Income per Class A Share
Net income attributable to PAGP	$	15	$	29
Basic and diluted weighted average number of Class A shares outstanding	136		135
Basic and diluted net income per Class A share	$	0.11	$	0.21

Note 8—Partners’ Capital and Distributions

Distributions

The following table details the distributions paid to Class A shareholders during or pertaining to the first six months of 2014 (in millions, except per share data):

Date Declared	Distribution Date	Distributions to Class A Shareholders		Distributions per Class A Share (2)
July 8, 2014	August 14, 2014 (1)	$	25	$	0.18340
April 7, 2014	May 15, 2014	$	23	$	0.17055
January 9, 2014	February 14, 2014	$	17	$	0.12505

(1)Payable to shareholders of record at the close of business on August 1, 2014, for the period April 1, 2014 through June 30, 2014.

(2)The distribution per Class A share paid on February 14, 2014 was prorated for the partial quarter following the closing of our IPO on October 21, 2013.

Units Outstanding

Exchange Rights. Holders of AAP units and their permitted transferees each have the right to exchange all or a portion of their AAP units into Class A shares at an exchange ratio of one Class A share for each AAP unit exchanged (referred to herein as their “Exchange Right”). This Exchange Right may be exercised only if, simultaneously therewith, an equal number of Class B shares and general partner units are transferred by the exercising party to us. For additional information regarding Exchange Rights, see Note 10 to our Consolidated Financial Statements included in Part IV of our 2013 Annual Report on Form 10-K. During the six months ended June 30, 2014, certain holders of AAP units and their permitted transferees exercised their Exchange Right, which resulted in the exchange of AAP units, general partner units and our Class B shares for our Class A shares. The following table reflects the impact of such Exchange Right exercises on our Class A and Class B shares outstanding:

	Class B Shares		Class A Shares
Balance at December 31, 2013	472,196,136		133,833,637
Shares (exchanged)/issued in connection with Exchange Right exercises	(2,213,000	)	2,213,000
Balance at June 30, 2014	469,983,136		136,046,637

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Consolidated Subsidiaries

Sales of Common Units by Subsidiaries

PAA Continuous Offering Program.  During the six months ended June 30, 2014, PAA sold an aggregate of approximately 8.1 million common units under its continuous offering program, generating proceeds of approximately $444 million, net of offering costs.

Noncontrolling Interests in Subsidiaries

As of June 30, 2014, noncontrolling interests in subsidiaries consisted of the following: (i) a 98% limited partner interest in PAA, (ii) an approximate 78% limited partner interest in AAP that consists of Class A units and AAP Management Units (a profits interest) and (iii) a 25% interest in SLC Pipeline LLC.

Subsidiary Distributions

PAA Distributions. The following table details the distributions to PAA’s partners paid during or pertaining to the first six months of 2014, net of incentive distribution reductions (in millions, except per unit data):

		Distributions to PAA’s Partners								Distributions
		Limited		AAP						per limited
Date Declared	Distribution Date	Partners		Incentive		2%		Total		partner unit
July 8, 2014	August 14, 2014 (1)	$	238	$	117	$	5	$	360	$	0.6450
April 7, 2014	May 15, 2014	$	229	$	110	$	5	$	344	$	0.6300
January 9, 2014	February 14, 2014	$	221	$	102	$	5	$	328	$	0.6150

(1)Payable to unitholders of record at the close of business on August 1, 2014, for the period April 1, 2014 through June 30, 2014.

During the six months ended June 30, 2014, distributions of approximately $1 million were paid to noncontrolling interests in SLC Pipeline LLC.

AAP Distributions. The following table details the distributions to AAP’s partners paid during or pertaining to the first six months of 2014 (in millions):

						Distributions to AAP’s Partners
	Distributions received		Cash					Noncontrolling
Distribution Date	by AAP from PAA		Reserves			Total		Interests		PAGP
August 14, 2014 (1)	$	122	$	(3	)	$	119	$	94	$	25
May 15, 2014	$	115	$	(4	)	$	111	$	88	$	23
February 14, 2014 (2)	$	107	$	(3	)	$	104	$	87	$	17

(1)Payable to unitholders of record at the close of business on August 1, 2014, for the period April 1, 2014 through June 30, 2014.

(2)The distribution paid by AAP on February 14, 2014 was prorated as of the date of the consummation of our IPO, such that the owners of AAP prior to our IPO received the portion of the distribution attributable to the period prior to our IPO, and the owners of AAP at the date of record of January 31, 2014, including us, received the portion of the distribution attributable to the period beginning on the date of the IPO through the end of the fourth quarter of 2013.

Note 9—Equity-Indexed Compensation Plans

We refer to the PAGP LTIP, PAA LTIPs and AAP Management Units collectively as our “Equity-indexed compensation plans.” For additional discussion of our equity-indexed compensation plans and awards, see Note 15 to our Consolidated Financial Statements included in Part IV of our 2013 Annual Report on Form 10-K.

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In connection with our IPO in October 2013, our general partner adopted the PAGP LTIP, which is intended to align the interests of employees and directors with those of our shareholders by providing such employees and directors incentive compensation awards that reward achievement of targeted distribution levels and other business objectives. The PAGP LTIP provides for awards of options, restricted shares, phantom shares and share appreciation rights. Certain awards may also include distribution equivalent rights (“DERs”), which, subject to applicable vesting criteria, entitle the grantee to a cash payment equal to the cash distribution paid on an outstanding Class A share. The PAGP LTIP authorizes the issuance of up to 10 million Class A shares deliverable upon vesting. In February 2014, an aggregate of 83,200 phantom Class A shares were issued to our directors, resulting in expense of less than $1 million for the six months ended June 30, 2014.  These awards will vest annually in 25% increments, beginning in February 2015, and have an automatic re-grant feature such that as they vest, an equivalent amount is granted.

Equity-indexed compensation activity for PAA and PAGP LTIP awards is summarized in the following table (units and shares in millions):

			Weighted Average			Weighted Average
			Grant Date			Grant Date
	PAA Units (1)		Fair Value per Unit		PAGP Shares (1)	Fair Value per Share
Outstanding at December 31, 2013	8.4		$	36.97	—	$	—
Granted	0.9		$	46.61	0.1	$	27.84
Vested (2)	(1.8	)	$	25.39	—	$	—
Cancelled or forfeited	(0.3	)	$	38.88	—	$	—
Outstanding at June 30, 2014	7.2		$	41.05	0.1	$	27.84

(1)Amounts do not include AAP Management Units.

(2)Approximately 0.6 million PAA common units were issued, net of tax withholding of 0.3 million units, during the six months ended June 30, 2014 in connection with the settlement of vested awards. The remaining PAA awards that vested during the six months ended June 30, 2014 of approximately 0.9 million units were settled in cash.

AAP Management Units

The following table contains a summary of AAP Management Units (in millions):

	Reserved for Future Grants		Outstanding	Outstanding Units Earned	Grant Date Fair Value Of Outstanding AAP Management Units (1)
Balance at December 31, 2013	3.5		48.6	47.0	$	51
Granted	(0.4	)	0.4	—	11
Earned	N/A		N/A	0.8	N/A
Balance at June 30, 2014	3.1		49.0	47.8	$	62

(1)Of the grant date fair value, approximately $4 million was recognized as expense during the six months ended June 30, 2014. Of the $62 million grant date fair value, approximately $52 million had been recognized through June 30, 2014.

Other Consolidated Equity-Indexed Compensation Information

The table below summarizes the expense recognized and the value of vesting (settled both in PAA common units and cash) related to our equity-indexed compensation plans and includes both liability-classified and equity-classified awards (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Equity-indexed compensation expense	$	34	$	27	$	68	$	78
LTIP unit-settled vestings	$	44	$	46	$	51	$	46
LTIP cash-settled vestings	$	51	$	60	$	52	$	60
DER cash payments	$	2	$	2	$	4	$	4

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Note 10—Derivatives and Risk Management Activities

We identify the risks that underlie our core business activities and use risk management strategies to mitigate those risks when we determine that there is value in doing so.  Our policy is to use derivative instruments for risk management purposes and not for the purpose of speculating on hydrocarbon commodity (referred to herein as “commodity”) price changes.  We use various derivative instruments to (i) manage our exposure to commodity price risk as well as to optimize our profits, (ii) manage our exposure to interest rate risk and (iii) manage our exposure to currency exchange rate risk.  Our commodity risk management policies and procedures are designed to help ensure that our hedging activities address our risks by monitoring our derivative positions, as well as physical volumes, grades, locations, delivery schedules and storage capacity.  Our interest rate and currency exchange rate risk management policies and procedures are designed to monitor our derivative positions and ensure that those positions are consistent with our objectives and approved strategies.  When we apply hedge accounting, our policy is to formally document all relationships between hedging instruments and hedged items, as well as our risk management objectives for undertaking the hedge.  This process includes specific identification of the hedging instrument and the hedged transaction, the nature of the risk being hedged and how the hedging instrument’s effectiveness will be assessed.  Both at the inception of the hedge and on an ongoing basis, we assess whether the derivatives used in a transaction are highly effective in offsetting changes in cash flows or the fair value of hedged items.

Commodity Price Risk Hedging

Our core business activities involve certain commodity price-related risks that we manage in various ways, including through the use of derivative instruments.  Our policy is to (i) only purchase inventory for which we have a market, (ii) structure our sales contracts so that price fluctuations do not materially affect our operating income and (iii) not acquire and hold physical inventory or derivatives for the purpose of speculating on commodity price changes.  The material commodity-related risks inherent in our business activities can be divided into the following general categories:

Commodity Purchases and Sales — In the normal course of our operations, we purchase and sell commodities.  We use derivatives to manage the associated risks and to optimize profits.  As of June 30, 2014, net derivative positions related to these activities included:

·An average of 210,100 barrels per day net long position (total of 6.5 million barrels) associated with our crude oil purchases, which was unwound ratably during July 2014 to match monthly average pricing.

·A net short spread position averaging approximately 21,300 barrels per day (total of 14.3 million barrels), which hedges a portion of our anticipated crude oil lease gathering purchases through June 2016.  These derivatives are time spreads consisting of offsetting purchases and sales between two different months.  Our use of these derivatives does not expose us to outright price risk.

·An average of 2,800 barrels per day (total of 0.8 million barrels) of butane/WTI spread positions, which hedge specific butane sales contracts that are priced as a percentage of WTI through March 2015.

·An average of 19,300 barrels per day (total of 1.8 million barrels) of WTI/Brent crude oil grade spread positions through September 2014. These derivatives allow us to lock in grade basis differentials where we are hedging anticipated purchases of crude oil based on a WTI index and hedging anticipated sales of crude oil based on a Brent index. Our use of these derivatives does not expose us to outright price risk.

·A long position of approximately 4.1 Bcf through April 2016 related to anticipated base gas requirements.

·A short position of approximately 10.7 Bcf through February 2015 related to anticipated sales of natural gas inventory.

·A net short position of approximately 7.6 million barrels through December 2015 related to the anticipated sales of our crude oil, NGL and refined products inventory.

Pipeline Loss Allowance Oil — As is common in the pipeline transportation industry, our tariffs incorporate a loss allowance factor that is intended to offset losses due to evaporation, measurement and other losses in transit.  We utilize derivative instruments to hedge a portion of the anticipated sales of the allowance oil that is to be collected under our tariffs.  As of June 30, 2014, our PLA hedges included a net short position for an average of approximately 1,600 barrels per day (total of 1.5 million barrels) through December 2016 and a long call option position of approximately 0.7 million barrels through December 2016.

16

Natural Gas Processing/NGL Fractionation — As part of our supply and logistics activities, we purchase natural gas for processing and NGL mix for fractionation, and we sell the resulting individual specification products (including ethane, propane, butane and condensate).  In conjunction with these activities, we hedge the price risk associated with the purchase of the natural gas and the subsequent sale of the individual specification products.  As of June 30, 2014, we had a long natural gas position of approximately 31.3 Bcf through December 2016, a short propane position of approximately 5.2 million barrels through December 2016, a short butane position of approximately 1.5 million barrels through December 2016 and a short WTI position of approximately 0.6 million barrels through December 2016. In addition, we had a long power position of 0.6 million megawatt hours which hedges a portion of our power supply requirements at our natural gas processing and fractionation plants through December 2016.

To the extent they qualify and we decide to make the election, all of our commodity derivatives where we elect hedge accounting are designated as cash flow hedges.  We have determined that substantially all of our physical purchase and sale agreements qualify for the normal purchase normal sale scope exception.  Physical commodity contracts that meet the definition of a derivative but are ineligible, or not designated, for the normal purchase normal sale scope exception are recorded on the balance sheet at fair value, with changes in fair value recognized in earnings.

Interest Rate Risk Hedging

We use interest rate derivatives to hedge interest rate risk associated with anticipated debt issuances and outstanding debt instruments.  The derivative instruments we use to manage this risk consist primarily of interest rate swaps and treasury locks.  As of June 30, 2014, AOCI includes deferred losses of approximately $101 million that relate to open and terminated interest rate derivatives that were designated for hedge accounting.  The terminated interest rate derivatives were cash-settled in connection with the issuance or refinancing of debt agreements.  The deferred loss related to these instruments is being amortized to interest expense over the terms of the hedged debt instruments.

PAA has entered into forward starting interest rate swaps to hedge the underlying benchmark interest rate related to forecasted debt issuances through 2015.  The following table summarizes the terms of these forward starting interest rate swaps as of June 30, 2014 (notional amounts in millions):

Hedged Transaction	Number and Types of Derivatives Employed	Notional Amount		Expected Termination Date	Average Rate Locked	Accounting Treatment
Anticipated debt offering	10 forward starting swaps (30-year)	$	250	6/15/2015	3.60%	Cash flow hedge

In anticipation of PAA’s April 2014 issuance of senior notes, PAA entered into an aggregate of five treasury lock agreements in March and April 2014 for a combined notional amount of $250 million at a locked in rate of 3.64%. The treasury locks were designated as cash flow hedges, thus changes in fair value are deferred in AOCI.  In connection with PAA’s April 2014 senior notes issuance, these treasury locks were terminated prior to maturity for an aggregate cash payment of approximately $7 million.  The effective portion of the treasury locks was deferred in AOCI and will be amortized to interest expense over the life of the senior notes.

Currency Exchange Rate Risk Hedging

Because a significant portion of our Canadian business is conducted in CAD and, at times, a portion of our debt is denominated in CAD, we use foreign currency derivatives to minimize the risks of unfavorable changes in exchange rates.  These instruments include foreign currency exchange contracts and forwards.

As of June 30, 2014, our outstanding foreign currency derivatives include derivatives we use to (i) hedge currency exchange risk associated with USD-denominated commodity purchases and sales in Canada and (ii) hedge currency exchange risk created by the use of USD-denominated commodity derivatives to hedge commodity price risk associated with CAD-denominated commodity purchases and sales.

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The following table summarizes our open forward exchange contracts as of June 30, 2014 (in millions):

		USD		CAD			Average Exchange Rate USD to CAD
Forward exchange contracts that exchange CAD for USD:
	2014	$	273	$	292		$1.00 - $1.07
	2015	77		82			$1.00 - $1.07
		$	350	$	374		$1.00 - $1.07
Forward exchange contracts that exchange USD for CAD:
	2014	$	273	$	297		$1.00 - $1.09
	2015	77		84			$1.00 - $1.09
		$	350	$	381		$1.00 - $1.09
Net position by currency:
	2014	$	—	$	(5	)
	2015	—		(2		)
		$	—	$	(7	)

Summary of Financial Impact

We record all open derivatives on the balance sheet as either assets or liabilities measured at fair value. Changes in the fair value of derivatives are recognized currently in earnings unless specific hedge accounting criteria are met.  For derivatives that qualify as cash flow hedges, changes in fair value of the effective portion of the hedges are deferred in AOCI and recognized in earnings in the periods during which the underlying physical transactions are recognized in earnings. Derivatives that do not qualify for hedge accounting and the portion of cash flow hedges that are not highly effective in offsetting changes in cash flows of the hedged items are recognized in earnings each period.  Cash settlements associated with our derivative activities are reflected as cash flows from operating activities in our condensed consolidated statements of cash flows.

A summary of the impact of our derivative activities recognized in earnings for the three and six months ended June 30, 2014 and 2013 is as follows (in millions):

	Three Months Ended June 30, 2014										Three Months Ended June 30, 2013
	Derivatives in Hedging Relationships										Derivatives in Hedging Relationships
Location of gain/(loss)	Gain/(loss) reclassified from AOCI into income			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge		Total			Gain/(loss) reclassified from AOCI into income (1)			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge		Total
Commodity Derivatives
Supply and Logistics segment revenues	$	12		$	—	$	—	$	12		$	21		$	—	$	21	$	42
Facilities segment revenues	—			—		—		—			(9		)	—		—		(9		)
Field operating costs	—			—		—		—			—			—		4		4
Interest Rate Derivatives
Interest expense	(1		)	—		—		(1		)	(2		)	—		—		(2		)
Foreign Currency Derivatives
Supply and Logistics segment revenues	—			—		9		9			—			—		—		—
Other income/(expense), net	—			—		—		—			1			—		—		1
Total Gain/(Loss) on Derivatives Recognized in Net Income	$	11		$	—	$	9	$	20		$	11		$	—	$	25	$	36

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	Six Months Ended June 30, 2014											Six Months Ended June 30, 2013
	Derivatives in Hedging Relationships											Derivatives in Hedging Relationships
Location of gain/(loss)	Gain/(loss) reclassified from AOCI into income			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge			Total			Gain/(loss) reclassified from AOCI into income (1)			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge		Total
Commodity Derivatives
Supply and Logistics segment revenues	$	(8	)	$	—	$	—		$	(8	)	$	29		$	—	$	59	$	88
Facilities segment revenues	—			—		—			—			(12		)	—		—		(12		)
Field operating costs	—			—		(1		)	(1		)	—			—		5		5
Interest Rate Derivatives
Interest expense	(2		)	—		—			(2		)	(3		)	—		—		(3		)
Foreign Currency Derivatives
Other income/(expense), net	—			—		—			—			2			—		—		2
Total Gain/(Loss) on Derivatives Recognized in Net Income	$	(10	)	$	—	$	(1	)	$	(11	)	$	16		$	—	$	64	$	80

(1)During the three months ended June 30, 2013 we reclassified gains of approximately $1 million and $1 million from AOCI to Supply and Logistics segment revenues and Facilities segment revenues, respectively, as a result of anticipated hedged transactions that are probable of not occurring. During the six months ended June 30, 2013, we reclassified gains of approximately $3 million and $1 million from AOCI to Supply and Logistics segment revenues and Facilities segment revenues, respectively, as a result of anticipated hedged transactions that are probable of not occurring. During the three and six months ended June 30, 2014, all of our hedged transactions were probable of occurring.

The following table summarizes the derivative assets and liabilities on our condensed consolidated balance sheet on a gross basis as of June 30, 2014 (in millions):

	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
	Location	Fair Value		Location	Fair Value
Derivatives designated as hedging instruments:
Commodity derivatives	Other current assets	$	7	Other current assets	$	(4	)
	Other long-term assets	1
Interest rate derivatives	Other current assets	1		Other current liabilities	(8		)
Total derivatives designated as hedging instruments		$	9		$	(12	)
Derivatives not designated as hedging instruments:
Commodity derivatives	Other current assets	$	76	Other current assets	$	(56	)
	Other long-term assets	2		Other long-term assets	(1		)
	Other long-term liabilities	1		Other current liabilities	(1		)
				Other long-term liabilities	(5		)
Foreign currency derivatives	Other current assets	6
Total derivatives not designated as hedging instruments		$	85		$	(63	)
Total derivatives		$	94		$	(75	)

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The following table summarizes the derivative assets and liabilities on our condensed consolidated balance sheet on a gross basis as of December 31, 2013 (in millions):

	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
	Location	Fair Value		Location	Fair Value
Derivatives designated as hedging instruments:
Commodity derivatives	Other current assets	$	36	Other current assets	$	(24	)
	Other long-term assets	5
Interest rate derivatives	Other long-term assets	26
Total derivatives designated as hedging instruments		$	67		$	(24	)
Derivatives not designated as hedging instruments:
Commodity derivatives	Other current assets	$	60	Other current assets	$	(117	)
	Other long-term assets	5		Other long-term assets	(6		)
	Other current liabilities	1		Other current liabilities	(5		)
				Other long-term liabilities	(1		)
Foreign currency derivatives				Other current liabilities	(4		)
Total derivatives not designated as hedging instruments		$	66		$	(133	)
Total derivatives		$	133		$	(157	)

Our derivative transactions are governed through ISDA (International Swaps and Derivatives Association) master agreements and clearing brokerage agreements. These agreements include stipulations regarding the right of set off in the event that we or our counterparty default on our performance obligations. If a default were to occur, both parties have the right to net amounts payable and receivable into a single net settlement between parties.

Our accounting policy is to offset derivative assets and liabilities executed with the same counterparty when a master netting arrangement exists.  Accordingly, we also offset derivative assets and liabilities with amounts associated with cash margin.  Our exchange-traded derivatives are transacted through clearing brokerage accounts and are subject to margin requirements as established by the respective exchange.  On a daily basis, our account equity (consisting of the sum of our cash balance and the fair value of our open derivatives) is compared to our initial margin requirement resulting in the payment or return of variation margin. As of June 30, 2014, we had a net broker receivable of approximately $66 million (consisting of initial margin of $54 million increased by $12 million of variation margin that had been posted by us).  As of December 31, 2013, we had a net broker receivable of approximately $161 million (consisting of initial margin of $85 million increased by $76 million of variation margin that had been posted by us).

The following tables present information about derivatives and financial assets and liabilities that are subject to offsetting, including enforceable master netting arrangements at June 30, 2014 and December 31, 2013 (in millions):

	June 30, 2014						December 31, 2013
	Derivative			Derivative			Derivative			Derivative
	Asset Positions			Liability Positions			Asset Positions			Liability Positions
Netting Adjustments:
Gross position - asset/(liability)	$	94		$	(75	)	$	133		$	(157	)
Netting adjustment	(62		)	62			(148		)	148
Cash collateral paid/(received)	66			—			161			—
Net position - asset/(liability)	$	98		$	(13	)	$	146		$	(9	)
Balance Sheet Location After Netting Adjustments:
Other current assets	$	96		$	—		$	116		$	—
Other long-term assets	2			—			30			—
Other current liabilities	—			(9		)	—			(8		)
Other long-term liabilities	—			(4		)	—			(1		)
	$	98		$	(13	)	$	146		$	(9	)

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As of June 30, 2014, there was a net loss of approximately $118 million deferred in AOCI including tax effects.  The deferred net loss recorded in AOCI is expected to be reclassified to future earnings contemporaneously with (i) the earnings recognition of the underlying hedged commodity transaction or (ii) interest expense accruals associated with underlying debt instruments. Of the total net loss deferred in AOCI at June 30, 2014, we expect to reclassify a net loss of approximately $4 million to earnings in the next twelve months.  The remaining deferred loss of approximately $114 million is expected to be reclassified to earnings through 2045. A portion of these amounts are based on market prices as of June 30, 2014; thus, actual amounts to be reclassified will differ and could vary materially as a result of changes in market conditions.

The net deferred gain/(loss), including tax effects, recognized in AOCI for derivatives for the three and six months ended June 30, 2014 and 2013 are as follows (in millions):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014			2013		2014			2013
Commodity derivatives, net	$	—		$	3	$	(12	)	$	11
Interest rate derivatives, net	(19		)	32		(39		)	52
Total	$	(19	)	$	35	$	(51	)	$	63

At June 30, 2014 and December 31, 2013, none of our outstanding derivatives contained credit-risk related contingent features that would result in a material adverse impact to us upon any change in our credit ratings.  Although we may be required to post margin on our cleared derivatives as described above, we do not require our non-cleared derivative counterparties to post collateral with us.

Recurring Fair Value Measurements

Derivative Financial Assets and Liabilities

The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 (in millions):

	Fair Value as of June 30, 2014										Fair Value as of December 31, 2013
Recurring Fair Value Measures (1)	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3			Total
Commodity derivatives	$	28	$	(9	)	$	1	$	20		$	16	$	(59	)	$	(3	)	$	(46	)
Interest rate derivatives	—		(7		)	—		(7		)	—		26			—			26
Foreign currency derivatives	—		6			—		6			—		(4		)	—			(4		)
Total net derivative asset/(liability)	$	28	$	(10	)	$	1	$	19		$	16	$	(37	)	$	(3	)	$	(24	)

(1)Derivative assets and liabilities are presented above on a net basis but do not include related cash margin deposits.

Level 1

Level 1 of the fair value hierarchy includes exchange-traded commodity derivatives such as futures and options.  The fair value of exchange-traded commodity derivatives is based on unadjusted quoted prices in active markets.

Level 2

Level 2 of the fair value hierarchy includes exchange-cleared commodity derivatives and over-the-counter commodity, interest rate and foreign currency derivatives that are traded in active markets.  In addition, it includes certain physical commodity contracts.  The fair value of these derivatives is based on broker price quotations which are corroborated with market observable inputs.

Level 3

Level 3 of the fair value hierarchy includes certain physical commodity contracts.  The fair value of our level 3 physical commodity contracts is based on a valuation model utilizing broker-quoted forward commodity prices, and timing estimates, which involve management judgment. The significant unobservable inputs used in the fair value measurement of our level 3 derivatives are forward prices obtained from brokers.  A significant increase or decrease in these forward prices could result in a material change in fair value to our level 3 derivatives.

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Rollforward of Level 3 Net Asset

The following table provides a reconciliation of changes in fair value of the beginning and ending balances for our derivatives classified as level 3 (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014			2013
Beginning Balance	$	1	$	1	$	(3	)	$	4
Unrealized gains/(losses):
Included in earnings (1)	—		1		—			1
Included in other comprehensive income	—		—		—			—
Settlements	—		—		3			(3		)
Derivatives entered into during the period	—		2		1			2
Transfers out of level 3	—		—		—			—
Ending Balance	$	1	$	4	$	1		$	4
Change in unrealized gains/(losses) included in earnings relating to level 3 derivatives still held at the end of the periods	$	1	$	3	$	1		$	3

(1)We reported unrealized gains and losses associated with level 3 commodity derivatives in our condensed consolidated statements of operations as Supply and Logistics segment revenues.

Note 11—Commitments and Contingencies

Litigation

General.  In the ordinary course of business, we are involved in various legal proceedings. To the extent we are able to assess the likelihood of a negative outcome for these proceedings, our assessments of such likelihood range from remote to probable.  If we determine that a negative outcome is probable and the amount of loss is reasonably estimable, we accrue the estimated amount.  We do not believe that the outcome of these legal proceedings, individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows.  Although we believe that our operations are presently in material compliance with applicable requirements, as we acquire and incorporate additional assets it is possible that the EPA or other governmental entities may seek to impose fines, penalties or performance obligations on us (or on a portion of our operations) as a result of any past noncompliance whether such noncompliance initially developed before or after our acquisition.

Pemex Exploración y Producción v. Big Star Gathering Ltd L.L.P. et al (the “Big Star Lawsuit”) and Pemex Exploración y Producción v. Murphy Energy et al (the “Murphy Lawsuit”). In two cases filed in the Texas Southern District Court in May 2011 and April 2012, Pemex Exploración y Producción (“PEP”) alleges that certain parties stole condensate from pipelines and gathering stations and conspired with U.S. companies (primarily in Texas) to import and market the stolen condensate.  PEP does not allege that Plains was part of any conspiracy, but that it dealt in the condensate only after it had been obtained by others and resold to Plains Marketing, L.P.  PEP seeks actual damages, attorney’s fees, and statutory penalties from Plains Marketing, L.P.  In February 2013, the Court granted Plains Marketing, L.P.’s motion to be dismissed from the Murphy Lawsuit. In October 2013, the Court issued an order in the Big Star Lawsuit granting summary judgment in favor of Plains Marketing, L.P. with respect to all of PEP’s remaining claims against Plains Marketing, L.P. In February 2014, the Court affirmed its order granting summary judgment in favor of Plains Marketing, L.P. in the Big Star Lawsuit, denied PEP’s motion for reconsideration, severed the case against Plains from the other defendants and issued a final judgment dismissing all claims against Plains. The time for PEP to appeal the final judgment in both cases has lapsed. Plains’ motion to sever Plains from the remainder of the defendants in the Murphy Lawsuit in order to obtain a final judgment has been granted.

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In the Matter of Rancho LPG Holdings LLC, Respondent.  In May 2014, Rancho LPG Holdings LLC (“Rancho”), a wholly owned subsidiary of PAA, entered into a Consent Agreement and Final Order (“Consent Agreement”) with the EPA regarding alleged violations of certain risk management plan regulations under the federal Clean Air Act at Rancho’s LPG storage facility in San Pedro, California.  The allegations, which Rancho disputed, arose from inspections of the facility by the EPA during 2010 and 2011.  Pursuant to the Consent Agreement, Rancho agreed to pay a civil penalty of $260,000; however, no injunctive relief was sought by the EPA.  Further, the Rancho facility was determined, as of the date of the Consent Agreement, to be in full compliance with the regulations that were the subject of the alleged violations.

Environmental

General.  Although we believe that our efforts to enhance our leak prevention and detection capabilities have produced positive results, we have experienced (and likely will experience future) releases of hydrocarbon products into the environment from our pipeline, rail and storage operations. These releases can result from unpredictable man-made or natural forces and may reach surface water bodies, groundwater aquifers or other sensitive environments. Whether current or past, damages and liabilities associated with any such releases from our assets may substantially affect our business.

At June 30, 2014, our estimated undiscounted reserve for environmental liabilities totaled approximately $92 million, of which approximately $13 million was classified as short-term and approximately $79 million was classified as long-term. At December 31, 2013, our estimated undiscounted reserve for environmental liabilities totaled approximately $93 million, of which approximately $11 million was classified as short-term and approximately $82 million was classified as long-term. The short- and long-term environmental liabilities referenced above are reflected in “Accounts payable and accrued liabilities” and “Other long-term liabilities and deferred credits,” respectively, on our condensed consolidated balance sheets. At June 30, 2014 and December 31, 2013, we had recorded receivables totaling approximately $8 million and $10 million, respectively, for amounts probable of recovery under insurance and from third parties under indemnification agreements, which are predominantly reflected in “Trade accounts receivable and other receivables, net” on our condensed consolidated balance sheets.

In some cases, the actual cash expenditures may not occur for three years or longer. Our estimates used in these reserves are based on information currently available to us and our assessment of the ultimate outcome. Among the many uncertainties that impact our estimates are the necessary regulatory approvals for, and potential modification of, our remediation plans, the limited amount of data available upon initial assessment of the impact of soil or water contamination, changes in costs associated with environmental remediation services and equipment and the possibility of existing legal claims giving rise to additional liabilities. Therefore, although we believe that the reserve is adequate, costs incurred may be in excess of the reserve and may potentially have a material adverse effect on our financial condition, results of operations or cash flows.

Rainbow Pipeline Release. During April 2011, we experienced a crude oil release of approximately 28,000 barrels of crude oil on a remote section of our Rainbow Pipeline located in Alberta, Canada.  Since the release and through June 30, 2014, we spent approximately $70 million, before insurance recoveries, in connection with site clean-up, reclamation and remediation activities, and as of June 30, 2014, we did not have any material outstanding liabilities or insurance receivables relating to this release. On February 26, 2013, the Alberta Energy Regulator (“AER”) issued four enforcement actions against PMC for failure to comply with certain regulatory requirements in connection with the release, including requirements related to operations and maintenance procedures, leak detection and response, backfill and compaction procedures and emergency response plan testing.  PMC has taken and continues to take appropriate actions necessary to respond to and comply with the enforcement actions set forth in the report, including the implementation of additional risk assessment procedures and other actions designed to minimize the risk that similar incidents occur in the future and enhance the effectiveness of PMC’s response to any such future incidents.  In addition, on April 23, 2013, the Alberta Crown Prosecutor filed charges under the Alberta Environmental Protection and Enhancement Act against PMC relating to the release.  PMC settled these charges in July 2014 for $450,000 CAD.

Rangeland Pipeline Release. During June 2012, we experienced a crude oil release on a section of our Rangeland Pipeline located near Sundre, Alberta, Canada.  Approximately 3,000 barrels were released into the Red Deer River and were contained downstream in the Gleniffer Reservoir. Remediation activities in the reservoir area were completed by June 30, 2012, remediation of the remaining impacted areas of government-owned lands was completed by September 30, 2012 and interim closure, in respect of those lands, was received from the applicable regulatory agencies.  A long-term monitoring plan has been developed and implemented in accordance with regulatory requirements. Through June 30, 2014, we spent approximately $47 million, before insurance recoveries, in connection with site clean-up, reclamation and remediation activities. On July 4, 2013, the AER issued four enforcement actions against PMC citing failure to inspect water crossings, failure to complete an engineering assessment to determine suitability of continued operation of the Rangeland Pipeline, failure to maintain updated emergency response plans, and failure to conduct regular public awareness programs.  In addition, on May 30, 2014, the Alberta Crown Prosecutor and Public Prosecution Services of Canada filed charges under the Alberta Environmental Protection and Enhancement Act and Canadian Federal Fisheries Act against PMC relating to the release. PMC settled all of such charges in July 2014 for an aggregate of $850,000 CAD.

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Bay Springs Pipeline Release. During February 2013, we experienced a crude oil release of approximately 120 barrels on a portion of one of our pipelines near Bay Springs, Mississippi. Most of the released oil was contained within our pipeline right of way, but some of the released oil entered a nearby waterway where it was contained with booms.  The EPA has issued an administrative order requiring us to take various actions in response to the release, including remediation, reporting and other actions. We have satisfied the requirements of the administrative order; however, we may be subjected to a civil penalty. The aggregate cost to clean up and remediate the site was approximately $6 million.

Kemp River Pipeline Release. During May and June 2013, two separate releases were discovered on our Kemp River pipeline in Northern Alberta, Canada that, in the aggregate, resulted in the release of approximately 700 barrels of condensate and light crude oil.  Clean-up and remediation activities are being conducted in cooperation with the applicable regulatory agencies.  AER’s final investigation is not complete. To date, no charges, fines or penalties have been assessed against PMC with respect to these releases; however, it is possible that fines or penalties may be assessed against PMC in the future. We estimate that the aggregate clean-up and remediation costs associated with these releases will be approximately $15 million. Through June 30, 2014, we spent approximately $8 million in connection with clean-up and remediation activities.

Note 12—Operating Segments

We manage our operations through three operating segments: (i) Transportation, (ii) Facilities and (iii) Supply and Logistics. Our Chief Operating Decision Maker (our Chief Executive Officer) evaluates segment performance based on measures including segment profit and maintenance capital investment. We define segment profit as revenues and equity earnings in unconsolidated entities less (i) purchases and related costs, (ii) field operating costs and (iii) segment general and administrative expenses. Each of the items above excludes depreciation and amortization. Maintenance capital consists of capital expenditures for the replacement of partially or fully depreciated assets in order to maintain the operating and/or earnings capacity of our existing assets.

The following table reflects certain financial data for each segment for the periods indicated (in millions):

	Transportation		Facilities		Supply and Logistics		Total
Three Months Ended June 30, 2014
Revenues (1):
External Customers	$	195	$	144	$	10,856	$	11,195
Intersegment (2)	217		133		4		354
Total revenues of reportable segments	$	412	$	277	$	10,860	$	11,549
Equity earnings in unconsolidated entities	$	23	$	—	$	—	$	23
Segment profit (3) (4)	$	221	$	134	$	133	$	488
Maintenance capital	$	42	$	5	$	1	$	48
Three Months Ended June 30, 2013
Revenues:
External Customers	$	165	$	197	$	9,933	$	10,295
Intersegment (2)	200		151		1		352
Total revenues of reportable segments	$	365	$	348	$	9,934	$	10,647
Equity earnings in unconsolidated entities	$	11	$	—	$	—	$	11
Segment profit (3) (4)	$	160	$	149	$	176	$	485
Maintenance capital	$	23	$	11	$	5	$	39

	Transportation		Facilities		Supply and Logistics		Total
Six Months Ended June 30, 2014
Revenues (1):
External Customers	$	376	$	301	$	22,201	$	22,878
Intersegment (2)	422		275		27		724
Total revenues of reportable segments	$	798	$	576	$	22,228	$	23,602
Equity earnings in unconsolidated entities	$	44	$	—	$	—	$	44
Segment profit (3) (4)	$	427	$	288	$	382	$	1,097
Maintenance capital	$	76	$	15	$	4	$	95
Six Months Ended June 30, 2013
Revenues:
External Customers	$	338	$	420	$	20,157	$	20,915
Intersegment (2)	394		283		1		678
Total revenues of reportable segments	$	732	$	703	$	20,158	$	21,593
Equity earnings in unconsolidated entities	$	23	$	—	$	—	$	23
Segment profit (3) (4)	$	323	$	300	$	610	$	1,233
Maintenance capital	$	55	$	18	$	9	$	82

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(1)Effective January 1, 2014, our natural gas sales and costs, primarily attributable to the activities performed by our natural gas storage commercial optimization group, are reported in the Supply and Logistics segment. Such items were previously reported in the Facilities segment.

(2)Segment revenues and purchases and related costs include intersegment amounts. Intersegment sales are conducted at posted tariff rates, rates similar to those charged to third parties or rates that we believe approximate market. For further discussion, see “Analysis of Operating Segments” under Item 7 of our 2013 Annual Report on Form 10-K.

(3)Supply and Logistics segment profit includes interest expense (related to hedged inventory purchases) of approximately $5 million for each of the three months ended June 30, 2014 and 2013 and approximately $7 million and $10 million for the six months ended June 30, 2014 and 2013, respectively.

(4)The following table reconciles segment profit to net income attributable to PAGP (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Segment profit	$	488		$	485		$	1,097		$	1,233
Unallocated general and administrative expenses	(1		)	—			(2		)	—
Depreciation and amortization	(100		)	(91		)	(197		)	(174		)
Interest expense, net	(85		)	(76		)	(166		)	(154		)
Other income/(expense), net	4			(1		)	2			(1		)
Income before tax	306			317			734			904
Income tax expense	(31		)	(18		)	(87		)	(70		)
Net income	275			299			647			834
Net income attributable to noncontrolling interests	(260		)	(298		)	(618		)	(832		)
Net income attributable to PAGP	$	15		$	1		$	29		$	2

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Note 13—Related Party Transactions

See Note 14 to our Consolidated Financial Statements included in Part IV of our 2013 Annual Report on Form 10-K for a complete discussion of our related party transactions.

Occidental Petroleum Corporation

As of June 30, 2014, a subsidiary of Occidental Petroleum Corporation (“Oxy”) owned approximately 25% of the limited partner interests in AAP and had a representative on the board of directors of GP LLC and our general partner. During the three and six months ended June 30, 2014 and 2013, we recognized sales and transportation revenues and purchased petroleum products from companies affiliated with Oxy. These transactions were conducted at posted tariff rates or prices that we believe approximate market. See detail below (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Revenues	$	351	$	424	$	443	$	694
Purchases and related costs	$	209	$	214	$	468	$	375

We currently have a netting arrangement with Oxy. Our gross receivable and payable amounts with affiliates of Oxy were as follows (in millions):

	June 30,		December 31,
	2014		2013
Trade accounts receivable and other receivables	$	460	$	133
Accounts payable	$	321	$	181

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Item 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

The following discussion is intended to provide investors with an understanding of our financial condition and results of our operations, including periods prior to the closing of our IPO on October 21, 2013. Such analysis should be read in conjunction with our historical Consolidated Financial Statements and accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations as presented in our 2013 Annual Report on Form 10-K. For more detailed information regarding the basis of presentation for the following financial information, see the condensed consolidated financial statements and related notes that are contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Our discussion and analysis includes the following:

·Executive Summary

·Acquisitions and Internal Growth Projects

·Results of Operations

·Liquidity and Capital Resources

·Off-Balance Sheet Arrangements

·Recent Accounting Pronouncements

·Critical Accounting Policies and Estimates

·Forward-Looking Statements

Executive Summary

Company Overview

We are a Delaware limited partnership formed on July 17, 2013 to own an interest in the general partner and IDRs of PAA, a publicly traded Delaware limited partnership. Although we were formed as a limited partnership, we have elected to be taxed as a corporation for United States federal income tax purposes. As of June 30, 2014, we owned an approximate 22.4% limited partner interest in AAP, a Delaware limited partnership that directly owns all of PAA’s IDRs and indirectly owns the 2% general partner interest in PAA. AAP is the sole member of PAA GP, a Delaware limited liability company that directly holds the 2% general partner interest in PAA.

Since we are the managing member of and control GP LLC, which in turn effectively controls PAA, we reflect our ownership in PAA and its subsidiaries on a consolidated basis in accordance with GAAP.  Accordingly, our financial results are combined with those of GP LLC and PAA as well as with their subsidiaries. As such, our results of operations as discussed below do not differ materially from the results of operations of PAA.

PAA owns and operates midstream energy infrastructure and provides logistics services for crude oil, NGL, natural gas and refined products. PAA owns an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and NGL producing basins and transportation corridors and at major market hubs in the United States and Canada.

Overview of Operating Results, Capital Investments and Significant Activities

During the first six months of 2014, net income was approximately $647 million, as compared to net income of approximately $834 million recognized during the first six months of 2013.  This decrease was primarily driven by less favorable crude oil market conditions experienced during the 2014 period, most notably during the comparative first quarter period,

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which provided fewer opportunities for above-baseline crude oil margins in our Supply and Logistics segment. In addition, our Facilities and Supply and Logistics segments were negatively impacted by costs incurred in our natural gas storage activities to manage deliverability requirements in conjunction with the severe cold weather experienced during the first several months of 2014. However, such decreases were partially offset by favorable results from our Transportation segment, largely due to the continued increase in North American crude oil production and our related, recently completed internal growth projects.

Acquisitions and Internal Growth Projects

The following table summarizes our capital expenditures for acquisitions, internal growth projects and maintenance capital for the periods indicated (in millions):

	Six Months Ended
	June 30,
	2014		2013
Acquisition capital	$	2	$	1
Internal growth projects	1,012		830
Maintenance capital	95		82
Total	$	1,109	$	913

Internal Growth Projects

The following table summarizes our more notable projects in progress during 2014 and the forecasted expenditures for the year ending December 31, 2014 (in millions):

Projects	2014
Permian Basin Area Projects	$480
Cactus Pipeline	350
Rail Terminal Projects (1)	220
Ft. Sask Facility Projects / NGL Line	135
Western Oklahoma Extension	80
Eagle Ford JV Project	65
Mississippian Lime Pipeline	50
White Cliffs Expansion	40
Line 63 Reactivation	35
Natural Gas Storage Expansions	35
Other Projects	460
	$1,950
Potential Adjustments for Timing / Scope Refinement (2)	-$100 + $100
Total Projected Expansion Capital Expenditures	$1,850 - $2,050

(1)Includes projects located in or near Bakersfield, CA; Carr, CO; Van Hook, ND; and Kerrobert, Canada.

(2)Potential variation to current capital costs estimates may result from changes to project design, final cost of materials and labor and timing of incurrence of costs due to uncontrollable factors such as permits, regulatory approvals and weather.

Results of Operations

Analysis of Operating Segments

We manage our operations through three operating segments: (i) Transportation, (ii) Facilities and (iii) Supply and Logistics. Our Chief Operating Decision Maker (our Chief Executive Officer) evaluates such segment performance based on a variety of measures including segment profit, segment volumes, segment profit per barrel and maintenance capital investment. See Note 18 to our Consolidated Financial Statements included in Part IV of our 2013 Annual Report on Form 10-K for further discussion of how we evaluate segment profit.

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The following table sets forth an overview of our consolidated financial results calculated in accordance with GAAP (in millions, except per share amounts):

	Three Months Ended June 30,						Favorable/ (Unfavorable) Variance					Six Months Ended June 30,						Favorable/ (Unfavorable) Variance
	2014			2013			$			%		2014			2013			$			%
Transportation segment profit	$	221		$	160		$	61		38	%	$	427		$	323		$	104		32	%
Facilities segment profit	134			149			(15		)	(10	)%	288			300			(12		)	(4	)%
Supply and Logistics segment profit	133			176			(43		)	(24	)%	382			610			(228		)	(37	)%
Total segment profit	488			485			3			1	%	1,097			1,233			(136		)	(11	)%
Unallocated general and administrative expenses	(1		)	—			(1		)	N/A		(2		)	—			(2		)	N/A
Depreciation and amortization	(100		)	(91		)	(9		)	(10	)%	(197		)	(174		)	(23		)	(13	)%
Interest expense, net	(85		)	(76		)	(9		)	(12	)%	(166		)	(154		)	(12		)	(8	)%
Other income/(expense), net	4			(1		)	5			500	%	2			(1		)	3			300	%
Income tax expense	(31		)	(18		)	(13		)	(72	)%	(87		)	(70		)	(17		)	(24	)%
Net income	275			299			(24		)	(8	)%	647			834			(187		)	(22	)%
Net income attributable to noncontrolling interests	(260		)	(298		)	38			13	%	(618		)	(832		)	214			26	%
Net income attributable to PAGP	$	15		$	1		$	14		1,400	%	$	29		$	2		$	27		1,350	%
Net income attributable to PAGP:
Basic and diluted net income per Class A share	$	0.11		N/A			N/A			N/A		$	0.21		N/A			N/A			N/A
Basic and diluted weighted average number of Class A shares outstanding	136			N/A			N/A			N/A		135			N/A			N/A			N/A

Transportation Segment

Our Transportation segment operations generally consist of fee-based activities associated with transporting crude oil and NGL on pipelines, gathering systems, trucks and barges. The Transportation segment generates revenue through a combination of tariffs, third-party leases of pipeline capacity and other transportation fees.

The following table sets forth operating results from our Transportation segment for the periods indicated:

							Favorable/											Favorable/
	Three Months Ended						(Unfavorable)					Six Months Ended						(Unfavorable)
Operating Results (1)	June 30,						Variance					June 30,						Variance
(in millions, except per barrel data)	2014			2013			$			%		2014			2013			$			%
Revenues
Tariff activities	$	356		$	310		$	46		15	%	$	691		$	629		$	62		10	%
Trucking	56			55			1			2	%	107			103			4			4	%
Total Transportation revenues	412			365			47			13	%	798			732			66			9	%
Costs and Expenses
Trucking costs	(41		)	(39		)	(2		)	(5	)%	(78		)	(74		)	(4		)	(5	)%
Field operating costs (excluding equity-indexed compensation expense)	(137		)	(138		)	1			1	%	(265		)	(270		)	5			2	%
Equity-indexed compensation expense - operations	(5		)	(4		)	(1		)	(25	)%	(10		)	(13		)	3			23	%
Segment general and administrative expenses (2)(excluding equity- indexed compensation expense)	(21		)	(26		)	5			19	%	(43		)	(49		)	6			12	%
Equity-indexed compensation expense - general and administrative	(10		)	(9		)	(1		)	(11	)%	(19		)	(26		)	7			27	%
Equity earnings in unconsolidated entities	23			11			12			109	%	44			23			21			91	%
Segment profit	$	221		$	160		$	61		38	%	$	427		$	323		$	104		32	%
Maintenance capital	$	42		$	23		$	(19	)	(83	)%	$	76		$	55		$	(21	)	(38	)%
Segment profit per barrel	$	0.62		$	0.49		$	0.13		27	%	$	0.61		$	0.49		$	0.12		24	%

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			Favorable/						Favorable/
	Three Months Ended		(Unfavorable)				Six Months Ended		(Unfavorable)
Average Daily Volumes	June 30,		Variance				June 30,		Variance
(in thousands of barrels per day) (3)	2014	2013	Volumes		%		2014	2013	Volumes		%
Tariff activities
Crude Oil Pipelines
All American	38	38	—		—	%	36	39	(3	)	(8	)%
Bakken Area Systems	145	130	15		12	%	138	127	11		9	%
Basin / Mesa	714	680	34		5	%	729	702	27		4	%
Capline	121	158	(37	)	(23	)%	123	157	(34	)	(22	)%
Eagle Ford Area Systems	209	74	135		182	%	199	61	138		226	%
Line 63 / Line 2000	106	108	(2	)	(2	)%	116	113	3		3	%
Manito	44	46	(2	)	(4	)%	44	46	(2	)	(4	)%
Mid-Continent Area Systems	360	282	78		28	%	338	287	51		18	%
Permian Basin Area Systems	759	548	211		39	%	759	513	246		48	%
Rainbow	108	125	(17	)	(14	)%	114	124	(10	)	(8	)%
Rangeland	65	56	9		16	%	67	62	5		8	%
Salt Lake City Area Systems	130	131	(1	)	(1	)%	131	133	(2	)	(2	)%
South Saskatchewan	58	33	25		76	%	61	46	15		33	%
White Cliffs	24	21	3		14	%	24	21	3		14	%
Other	745	739	6		1	%	703	737	(34	)	(5	)%
NGL Pipelines
Co-Ed	55	51	4		8	%	56	54	2		4	%
Other	123	165	(42	)	(25	)%	119	186	(67	)	(36	)%
Refined Products Pipelines	—	110	(110	)	(100	)%	—	105	(105	)	(100	)%
Tariff activities total	3,804	3,495	309		9	%	3,757	3,513	244		7	%
Trucking	127	108	19		18	%	129	109	20		18	%
Transportation segment total	3,931	3,603	328		9	%	3,886	3,622	264		7	%

(1)Revenues and costs and expenses include intersegment amounts.

(2)Segment general and administrative expenses reflect direct costs attributable to each segment and an allocation of other expenses to the segments. The proportional allocations by segment require judgment by management and are based on the business activities that exist during each period.

(3)Volumes associated with assets employed through acquisitions and internal growth projects represent total volumes (attributable to our interest) for the number of days we employed the assets divided by the number of days in the period.

Tariffs and other fees on our pipeline systems vary by receipt point and delivery point. The segment profit generated by our tariff and other fee-related activities depends on the volumes transported on the pipeline and the level of the tariff and other fees charged as well as the fixed and variable field costs of operating the pipeline. Revenue from our pipeline capacity leases generally reflects a negotiated amount.

The following is a discussion of items impacting Transportation segment profit and segment profit per barrel for the periods indicated.

Operating Revenues and Volumes. As noted in the table above, our total Transportation segment revenues, net of trucking costs, and volumes increased for both the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013. Our Transportation segment results for the comparative periods were impacted by the following:

·North American Crude Oil Production and Related Expansion Projects — The increase in North American crude oil production has had a favorable impact on volumes and revenues on our existing pipeline systems and has also provided opportunities for midstream infrastructure development in production growth areas. The resulting increases in volumes for the three and six months ended June 30, 2014 over the comparable 2013 periods were most notably on our Permian Basin, Eagle Ford and Mid-Continent Area Systems and our Basin and Mesa pipelines. We estimate that increased production combined with our recently completed internal growth projects increased revenues by over $25 million and $50 million for the three and six months ended June 30, 2014, respectively, compared to the three and six months ended June 30, 2013.

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·Loss Allowance Revenue — As is common in the industry, our tariffs incorporate a loss allowance factor that is intended to offset losses due to evaporation, measurement and other losses in transit.  We value the variance of allowance volumes to actual losses at the estimated net realizable value (including the impact of gains and losses from derivative-related activities) at the time the variance occurred and the result is recorded as either an increase or decrease to tariff revenues.  The loss allowance revenue increased by approximately $20 million and $30 million, respectively, for the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013 driven primarily by higher volumes, as well as a higher average realized price per barrel (including the impact of gains and losses from derivative-related activities).

·Rate Changes — Revenues on our pipelines are impacted by various rate changes that may occur during the period. These primarily include the indexing of rates on our FERC regulated pipelines, rate increases or decreases on our intrastate and Canadian pipelines or other negotiated rate changes. We estimate that the net impact of rate changes on our pipelines increased revenues by approximately $11 million and $18 million for the three and six months ended June 30, 2014, respectively, compared to the three and six months ended June 30, 2013.

·Sale of Refined Products Pipelines — We sold certain refined products pipeline systems and related assets in July 2013 and November 2013. As we did not own these assets during the three and six months ended June 30, 2014, our revenues were lower by approximately $10 million and $20 million, respectively, and volumes were lower by 110,000 and 105,000 barrels per day, respectively, as compared to the three and six months ended June 30, 2013.

·Foreign Exchange Impact — Revenues and expenses from our Canadian based subsidiaries, which use the Canadian dollar as their functional currency, are translated at the prevailing average exchange rates for each month. The average CAD to USD exchange rates for the three months ended June 30, 2014 and 2013 were $1.09 CAD: $1.00 USD and $1.02 CAD: $1.00 USD, respectively. The average CAD to USD exchange rates for the six months ended June 30, 2014 and 2013 were $1.10 CAD: $1.00 USD and $1.02 CAD: $1.00 USD, respectively. Therefore, revenues from our Canadian pipeline systems and trucking operations were unfavorably impacted by approximately $6 million and $15 million for the three and six months ended June 30, 2014, respectively, compared to the three and six months ended June 30, 2013 due to the depreciation of the Canadian dollar relative to the U.S. dollar.

Additional noteworthy volume and revenue variances on our pipelines for the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013 were (i) decreased volumes and revenues on certain of our NGL pipelines due to (a) the discontinuation of an agreement in 2014 to transport volumes on a pipeline and (b) the impact of netting joint venture related volumes to our share on a pipeline during 2014, which did not affect revenues, (ii) decreased volumes and revenues on the Capline pipeline due to refinery turnaround in the first half of 2014, (iii) increased volumes and revenues on our Rangeland, South Saskatchewan and Co-Ed pipelines, as these pipelines were shut down during a portion of the second quarter of 2013 due to high river flow rates and flooding in the surrounding area and (iv) a net decrease in volumes on our crude oil pipelines included in “Other” in the table above for the six month comparable period, a majority of which was related to (a) pipelines subject to long-term lease commitments with annual service payments whereby volumes may fluctuate, but such fluctuations did not have a meaningful impact on revenue and (b) pipelines impacted by third-party connection shut-downs and line repairs, which also did not have a significant impact on revenues for the period, partially offset by incremental volumes and revenues from our Gulf Coast pipeline, which was placed into service in April 2014.

Field Operating Costs. Field operating costs (excluding equity-indexed compensation expenses) decreased during the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013 due to higher environmental remediation costs in 2013, partially offset by increases due to (i) a change in classification of certain costs from General and Administrative expenses, and (ii) a general increase in expenses due to growth.

General and Administrative Expenses.  General and administrative expenses (excluding equity-indexed compensation expenses) decreased during the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013 primarily due to (i) a change in classification of certain costs to Field Operating Costs and (ii) higher costs in 2013 associated with the sale of certain refined products pipeline systems and related assets.

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Maintenance Capital. Maintenance capital consists of capital expenditures for the replacement of partially or fully depreciated assets in order to maintain the operating and/or earnings capacity of our existing assets.  The increase in maintenance capital for the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013 is primarily due to increased investments on integrity-related projects.

Equity-Indexed Compensation Expense. On a consolidated basis across all segments, equity-indexed compensation expense increased for the three months ended June 30, 2014 compared to the same period in 2013, primarily due to the impact of the increase in PAA’s unit price during the period compared to a decrease in PAA’s unit price for the same period in 2013.

Consolidated equity-indexed compensation expense decreased for the six months ended June 30, 2014 compared to the same period in 2013, primarily due to a less significant impact of the increase in PAA’s unit price during the six months ended June 30, 2014 compared to the same period in 2013. See Note 15 to our Consolidated Financial Statements included in Part IV of our 2013 Annual Report on Form 10-K for additional information regarding our equity-indexed compensation plans.

Equity Earnings in Unconsolidated Entities. The favorable variance in equity earnings in unconsolidated entities for the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013 was largely due to increased throughput on the Eagle Ford joint venture pipeline as a result of increased production, as discussed above.

Facilities Segment

Our Facilities segment operations generally consist of fee-based activities associated with providing storage, terminalling and throughput services for crude oil, refined products, NGL and natural gas, as well as NGL fractionation and isomerization services and natural gas and condensate processing services. The Facilities segment generates revenue through a combination of month-to-month and multi-year agreements and processing arrangements.

The following table sets forth operating results from our Facilities segment for the periods indicated:

							Favorable/											Favorable/
	Three Months Ended						(Unfavorable)					Six Months Ended						(Unfavorable)
Operating Results (1)	June 30,						Variance					June 30,						Variance
(in millions, except per barrel data)	2014			2013			$			%		2014			2013			$			%
Revenues	$	277		$	262		$	15		6	%	$	576		$	529		$	47		9	%
Natural gas sales (2)	—			86			(86		)	(100	)%	—			174			(174		)	(100	)%
Storage related costs (natural gas related)	(12		)	(3		)	(9		)	(300	)%	(38		)	(9		)	(29		)	(322	)%
Natural gas sales costs (2)	—			(80		)	80			100	%	—			(165		)	165			100	%
Field operating costs (excluding equity-indexed compensation expense)	(106		)	(94		)	(12		)	(13	)%	(204		)	(180		)	(24		)	(13	)%
Equity-indexed compensation expense - operations	(2		)	—			(2		)	N/A		(2		)	(1		)	(1		)	(100	)%
Segment general and administrative expenses (3)(excluding equity- indexed compensation expense)	(16		)	(16		)	—			—	%	(29		)	(32		)	3			9	%
Equity-indexed compensation expense - general and administrative	(7		)	(6		)	(1		)	(17	)%	(15		)	(16		)	1			6	%
Segment profit	$	134		$	149		$	(15	)	(10	)%	$	288		$	300		$	(12	)	(4	)%
Maintenance capital	$	5		$	11		$	6		55	%	$	15		$	18		$	3		17	%
Segment profit per barrel	$	0.37		$	0.41		$	(0.04	)	(10	)%	$	0.40		$	0.42		$	(0.02	)	(5	)%

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			Favorable/						Favorable/
	Three Months Ended		(Unfavorable)				Six Months Ended		(Unfavorable)
	June 30,		Variance				June 30,		Variance
Volumes (4)	2014	2013	Volumes		%		2014	2013	Volumes		%
Crude oil, refined products and NGL terminalling and storage (average monthly capacity in millions of barrels)	94	95	(1	)	(1	)%	95	94	1		1	%
Rail load / unload volumes (average volumes in thousands of barrels per day)	224	231	(7	)	(3	)%	227	223	4		2	%
Natural gas storage (average monthly capacity in billions of cubic feet)	97	97	—		—	%	97	95	2		2	%
NGL fractionation (average volumes in thousands of barrels per day)	86	90	(4	)	(4	)%	89	95	(6	)	(6	)%
Facilities segment total (average monthly volumes in millions of barrels) (5)	120	121	(1	)	(1	)%	121	120	1		1	%

(1)Revenues and costs and expenses include intersegment amounts.

(2)Effective January 1, 2014, our natural gas sales and costs, primarily attributable to the activities performed by our natural gas storage commercial optimization group, are reported in the Supply and Logistics segment.

(3)Segment general and administrative expenses reflect direct costs attributable to each segment and an allocation of other expenses to the segments.  The proportional allocations by segment require judgment by management and are based on the business activities that exist during each period.

(4)Volumes associated with assets employed through acquisitions and internal growth projects represent total volumes for the number of months we employed the assets divided by the number of months in the period.

(5)Facilities segment total is calculated as the sum of: (i) crude oil, refined products and NGL terminalling and storage capacity; (ii) rail load and unload volumes multiplied by the number of days in the period and divided by the number of months in the period; (iii) natural gas storage capacity divided by 6 to account for the 6:1 mcf of gas to crude Btu equivalent ratio and further divided by 1,000 to convert to monthly volumes in millions; and (iv) NGL fractionation volumes multiplied by the number of days in the period and divided by the number of months in the period.

The following is a discussion of items impacting Facilities segment profit and segment profit per barrel for the periods indicated.

Operating Revenues and Volumes.  As noted in the table above, our Facilities segment revenues, less storage related costs, for the three months ended June 30, 2014 were in line with our results as compared to the same period of 2013, while our segment revenues, less storage related costs, increased slightly for the six months ended June 30, 2014 compared to the six months ended June 30, 2013. Total volumes were relatively consistent over the periods presented. The significant variances in revenues between the comparative periods are discussed below:

·NGL Fractionation, NGL Storage and Natural Gas Processing Activities —Increases in revenues from our NGL fractionation and storage and natural gas processing activities of approximately $5 million and $21 million, respectively, for the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013, were largely driven by higher facility fee revenues due to rate increases at certain of our storage and fractionation facilities.

These increases in NGL revenues include estimated unfavorable foreign currency impacts of approximately $5 million and $11 million for the three and six months ended June 30, 2014, respectively, as compared to the three and six months ended June 30, 2013 due to the depreciation of the Canadian dollar relative to the U.S. dollar. The average CAD to USD exchange rates for the three months ended June 30, 2014 and 2013 were $1.09 CAD: $1.00 USD and $1.02 CAD: $1.00 USD, respectively. The average CAD to USD exchange rates for the six months ended June 30, 2014 and 2013 were $1.10 CAD: $1.00 USD and $1.02 CAD: $1.00 USD, respectively.

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·Natural Gas Storage Operations — Net revenues from our natural gas storage operations decreased by approximately $9 million and $21 million, respectively, for the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013. The decrease for the three-month 2014 period was primarily due to decreased storage rates on contracts that renewed or replaced expiring contracts. The six-month 2014 period was further unfavorably impacted by costs incurred in our natural gas storage activities to manage deliverability requirements in conjunction with the extended period of severe cold weather experienced during the first several months of 2014.

·Rail Terminals —Revenues from rail load and unload activities increased by approximately $3 million for the six months ended June 30, 2014 compared to the same period in 2013, respectively. This increase was primarily due to new rail terminals that came online in the fourth quarter of 2013, partially offset by the unfavorable impact of rail congestion and weather-related issues at certain of our terminals. For the three month comparable period, the increase in revenues from the new rail terminals was offset by decreased volumes into our St. James facility as well as the unfavorable impact of congestion, resulting in relatively consistent revenues for the three months ended June 30, 2014 compared to the three months ended June 30, 2013.

·Crude Oil Storage and Condensate Processing Activities —Increased revenues from our crude oil storage and condensate processing activities of approximately $4 million and $5 million, respectively, for the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013 were largely driven by the start-up and subsequent expansion of our Eagle Ford processing facility and increased throughput and expansions at certain of our Mid-Continent and Gulf Coast storage facilities. However, such results were partially offset by reduced revenues from storage facilities in California and the East Coast due to decreased demand, as well as the reclassification of certain of our Canadian storage facilities to our Transportation segment during the second quarter of 2014.

Field Operating Costs. Field operating costs (excluding equity-indexed compensation expenses) increased during the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013 due to (i) a change in classification of certain costs from General and Administrative expenses, (ii) increased utility costs due primarily to higher power and gas prices and (iii) increased maintenance and repairs costs.

General and Administrative Expenses. General and administrative expenses (excluding equity-indexed compensation expenses) remained relatively consistent for the three months ended June 30, 2014 compared to the three months ended June 30, 2013 and decreased during the comparative six-month periods. These results reflect the net impact of a decrease in general and administrative expenses due to a change in classification of certain costs to Field Operating Costs during the 2014 periods partially offset by increased expenses resulting from overall growth in the segment.

Equity-Indexed Compensation Expense. On a consolidated basis across all segments, equity-indexed compensation expense increased for the three months ended June 30, 2014 over the comparable 2013 period, and decreased for the six months ended June 30, 2014 compared to the six months ended June 30, 2013.  See the discussion regarding such variances under “— Transportation Segment” above.  Also, see Note 15 to our Consolidated Financial Statements included in Part IV of our 2013 Annual Report on Form 10-K for additional information regarding our equity-indexed compensation plans.

Supply and Logistics Segment

Our revenues from supply and logistics activities reflect the sale of gathered and bulk-purchased crude oil, as well as sales of NGL volumes purchased from suppliers and natural gas sales attributable to the activities performed by our natural gas storage commercial optimization group. We do not anticipate that future changes in revenues resulting from variances in commodity prices will be a primary driver of segment profit. Generally, we expect our segment profit to increase or decrease directionally with (i) increases or decreases in our Supply and Logistics segment volumes (which consist of lease gathering crude oil purchase volumes, NGL sales volumes and waterborne cargos), (ii) demand for lease gathering services we provide producers and (iii) the overall volatility and strength or weakness of market conditions and the allocation of our assets among our various risk management strategies. In addition, the execution of our risk management strategies in conjunction with our assets can provide upside in certain markets.

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The following table sets forth operating results from our Supply and Logistics segment for the periods indicated:

							Favorable/											Favorable/
	Three Months Ended						(Unfavorable)					Six Months Ended						(Unfavorable)
Operating Results (1) (2)	June 30,						Variance					June 30,						Variance
(in millions, except per barrel data)	2014			2013			$			%		2014			2013			$			%
Revenues	$	10,860		$	9,934		$	926		9	%	$	22,228		$	20,158		$	2,070		10	%
Purchases and related costs (3)	(10,578		)	(9,614		)	(964		)	(10	)%	(21,553		)	(19,249		)	(2,304		)	(12	)%
Field operating costs (excluding equity- indexed compensation expense)	(112		)	(109		)	(3		)	(3	)%	(218		)	(224		)	6			3	%
Equity-indexed compensation expense - operations	(1		)	(1		)	—			—	%	(2		)	(2		)	—			—	%
Segment general and administrative expenses (4)(excluding equity- indexed compensation expense)	(27		)	(27		)	—			—	%	(53		)	(53		)	—			—	%
Equity-indexed compensation expense - general and administrative	(9		)	(7		)	(2		)	(29	)%	(20		)	(20		)	—			—	%
Segment profit	$	133		$	176		$	(43	)	(24	)%	$	382		$	610		$	(228	)	(37	)%
Maintenance capital	$	1		$	5		$	4		80	%	$	4		$	9		$	5		56	%
Segment profit per barrel	$	1.37		$	1.89		$	(0.52	)	(28	)%	$	1.89		$	3.11		$	(1.22	)	(39	)%
							Favorable/											Favorable/
	Three Months Ended						(Unfavorable)					Six Months Ended						(Unfavorable)
Average Daily Volumes	June 30,						Variance					June 30,						Variance
(in thousands of barrels per day)	2014			2013			Volumes			%		2014			2013			Volumes			%
Crude oil lease gathering purchases	931			853			78			9	%	912			855			57			7	%
NGL sales	139			160			(21		)	(13	)%	205			221			(16		)	(7	)%
Waterborne cargos	—			7			(7		)	(100	)%	—			6			(6		)	(100	)%
Supply and Logistics segment total	1,070			1,020			50			5	%	1,117			1,082			35			3	%

(1)Revenues and costs include intersegment amounts.

(2)Prior to January 1, 2014, natural gas sales revenues and costs attributable to the activities performed by our natural gas storage commercial optimization group were reported in the Facilities segment.

(3)Purchases and related costs include interest expense (related to hedged inventory purchases) of approximately $5 million and $7 million for the three and six months ended June 30, 2014 and approximately $5 million and $10 million for the three and six months ended June 30, 2013, respectively.

(4)Segment general and administrative expenses reflect direct costs attributable to each segment and an allocation of other expenses to the segments.  The proportional allocations by segment require judgment by management and are based on the business activities that exist during each period.

The NYMEX West Texas Intermediate benchmark price of crude oil ranged from approximately $99 to $108 per barrel and $86 to $99 per barrel during the three months ended June 30, 2014 and 2013, respectively, and from $91 to $108 per barrel and $86 to $99 per barrel during the six months ended June 30, 2014 and 2013, respectively. Because the commodities that we buy and sell are generally indexed to the same pricing indices for both the sales and purchases, revenues and costs related to purchases will fluctuate with market prices. However, the margins related to those sales and purchases will not necessarily have a corresponding increase or decrease. The absolute amount of our revenues and purchases increased for the three and six months ended June 30, 2014 relative to the comparative periods, primarily resulting from increases in crude oil volumes in 2014, as well as increases in prices, primarily during the comparative three-month period.

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Generally, we expect a base level of earnings from our Supply and Logistics segment from the assets employed by this segment. This base level may be optimized and enhanced when there is a high level of market volatility, favorable basis differentials and/or a steep contango or backwardated market structure. Also, our NGL marketing operations are sensitive to weather-related demand, particularly during the approximate five-month peak heating season of November through March, and temperature differences from period-to-period may have a significant effect on NGL demand and thus our financial performance.

The following is a discussion of items impacting Supply and Logistics segment profit and segment profit per barrel for the periods indicated.

Operating Revenues and Volumes. Our Supply and Logistics segment revenues, net of purchases and related costs, excluding gains and losses from certain derivative activities (see the “Impact from Certain Derivative Activities” section below), were relatively consistent for the three months ended June 30, 2014 compared to the three months ended June 30, 2013, while such results decreased year-over-year for the six month comparative periods presented. The following factors impacted revenues and volumes in the comparative periods:

·North American Crude Oil Production and Related Market Economics - The significant increase in oil and liquids-rich gas production growth in North America has generally created regional supply and demand imbalances, due to the lack of sufficient infrastructure to support the movement of such production, which increased certain crude oil location differentials. The lack of existing pipeline takeaway capacity and associated logistical challenges has created market conditions that provided opportunities to capture above-baseline margins in our supply and logistics activities over the last few years.

The favorable impact of widening differentials in the second quarter of 2014 led to an increase in net revenues from our crude oil supply and logistics activities for the three months ended June 30, 2014 compared to the three months ended June 30, 2103. Net revenues from our crude oil supply and logistics activities decreased for the six months ended June 30, 2014 compared to the six months ended June 30, 2013, as there were fewer opportunities to capture above-baseline margins.

We believe the fundamentals of our business remain strong as lease-gathered volumes for the three and six month periods ended June 30, 2014 increased by 9% and 7%, respectively, as compared to volumes in the same three and six month periods in 2013. However, as the midstream infrastructure continues to be developed, we believe a normalization of margins will continue to occur as the logistics challenges are addressed.  (See Items 1 and 2 “Business and Properties—Description of Segments and Associated Assets—Supply and Logistics Segment—Impact of Commodity Price Volatility and Dynamic Market Conditions on Our Business Model” included in Part I of our 2013 Annual Report on Form 10-K for further discussion regarding our business model, including diversification and utilization of our asset base among varying demand- and supply-driven markets.)

·NGL Marketing Operations — Revenues and volumes from our NGL marketing operations decreased during the three and six months ended June 30, 2014 as compared to the three and six months ended June 30, 2013. These decreases were driven by (i) less favorable market conditions, most notably during the second quarter of 2014, (ii) higher costs during the 2014 periods, primarily due to increased facility fees, and (iii) lower butane supply during the three months ended June 30, 2014.

·Natural Gas Storage Commercial Optimization - Our natural gas storage commercial optimization activities for the six months ended June 30, 2014 were unfavorably impacted by costs incurred to manage deliverability requirements in conjunction with the extended period of severe cold weather experienced during the first quarter of 2014.

Impact from Certain Derivative Activities. The mark-to-market valuation of certain of our derivative activities impacted our net revenues as shown in the table below (in millions):

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2014			2013		Variance			2014		2013		Variance
Gains/(losses) from certain derivative activities (1)	$	(15	)	$	27	$	(42	)	$	51	$	51	$	—

(1)Includes mark-to-market and other gains and losses resulting from certain derivative instruments that are related to underlying activities in future periods or the reversal of mark-to-market gains and losses from the prior period. These amounts are reduced by the net impact of inventory valuation adjustments attributable to inventory hedged by the related derivative and gains recognized in later periods on physical sales of inventory that was previously written down. See Note 10 to our condensed consolidated financial statements for a comprehensive discussion regarding our derivatives and risk management activities.

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Field Operating Costs.  The increase in field operating costs (excluding equity-indexed compensation expenses) for the three months ended June 30, 2014 compared to the three months ended June 30, 2013 was primarily due to an increase in trucking costs associated with higher crude oil lease gathered volumes.

Field operating costs (excluding equity-indexed compensation expenses) decreased for the six months ended June 30, 2014 compared to the six months ended June 30, 2013 primarily due to a decrease in third-party transportation costs in the first quarter of 2014 as compared to the first quarter of 2013.

Equity-Indexed Compensation Expense. On a consolidated basis across all segments, equity-indexed compensation expense increased for the three months ended June 30, 2014 over the comparable 2013 period, and decreased for the six months ended June 30, 2014 compared to the six months ended June 30, 2013.  See the discussion regarding such variances under “— Transportation Segment” above.  Also, see Note 15 to our Consolidated Financial Statements included in Part IV of our 2013 Annual Report on Form 10-K for additional information regarding our equity-indexed compensation plans.

Other Income and Expenses

Depreciation and Amortization

Depreciation and amortization expense increased by approximately $9 million and $23 million for the three and six months ended June 30, 2014, respectively, over the three and six months ended June 30, 2013. These increases in depreciation and amortization expense in the 2014 periods over the comparable 2013 periods were primarily due to an acceleration of depreciation on certain pipeline assets to reflect a change in their estimated useful lives, as well as various internal growth projects completed since June 30, 2013.

Interest Expense

Interest expense increased by approximately $9 million and $12 million for the three and six months ended June 30, 2014, respectively, over the three and six months ended June 30, 2013 as a result of higher average debt outstanding during the 2014 periods, primarily due to (i) PAA’s August 2013 issuance of $700 million, 3.85% senior notes and (ii) PAA’s April 2014 issuance of $700 million, 4.70% senior notes, partially offset by the maturity of PAA’s $250 million, 5.63% senior notes in December 2013.

Other Income/(Expense), Net

Other income/(expense), net in each of the periods presented was primarily comprised of foreign currency gains or losses related to revaluations of CAD-denominated interest receivables associated with our intercompany notes and the impact of related foreign currency hedges.

Income Tax Expense

Income tax expense increased by approximately $13 million for the three months ended June 30, 2014, compared to the three months ended June 30, 2013, primarily due to the tax expense of the amortization of the deferred tax asset created in connection with our IPO, as well as an increase in income tax expense by PAA, primarily as a result of higher year over year Canadian tax expense.

Income tax expense increased by approximately $17 million for the six months ended June 30, 2014, compared to the six months ended June 30, 2013, primarily due to the tax expense of the amortization of the deferred tax asset created in connection with our IPO.

Liquidity and Capital Resources

General

On a consolidated basis, our primary sources of liquidity are (i) cash flow from operating activities, (ii) borrowings under the PAA commercial paper program or the credit facilities and (iii) funds received from PAA’s sales of equity and debt securities. Our primary cash requirements include, but are not limited to (i) ordinary course of business uses, such as the payment of amounts related to the purchase of crude oil, NGL and other products and other expenses and interest payments on outstanding debt, (ii) expansion and maintenance activities, (iii) acquisitions of assets or businesses, (iv) repayment of principal on long-term debt and (v) distributions to our Class A shareholders and noncontrolling interests. We generally expect to fund our short-term cash requirements through cash flow generated from operating activities and/or borrowings under the PAA commercial paper program or the credit facilities. In addition, we generally expect to fund long-term needs, such as those resulting from expansion activities or acquisitions and refinancing long-term debt, through a variety of sources (either separately or in combination), which may include the sources mentioned above as funding for short-term needs, and/or the issuance of additional PAA equity or debt securities. As of June 30,

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2014, we had a working capital deficit of approximately $254 million and approximately $2.3 billion of liquidity available to meet our ongoing operating, investing and financing needs as noted below (in millions):

	As of June 30, 2014
Availability under PAA senior unsecured revolving credit facility (1)	$	1,586
Availability under PAA senior secured hedged inventory facility (1)	1,376
Less: Amounts outstanding under PAA commercial paper program	(760		)
Subtotal	2,202
Availability under AAP senior secured revolving credit facility	49
Cash and cash equivalents	28
Total	$	2,279

(1)Represents availability prior to giving effect to amounts outstanding under the PAA commercial paper program. Borrowings under the PAA commercial paper program reduce available capacity under the facility.

We believe that we have, and will continue to have, the ability to access the PAA commercial paper program and credit facilities, which we use to meet our short-term cash needs.  We believe that our financial position remains strong and we have sufficient liquidity; however, extended disruptions in the financial markets and/or energy price volatility that adversely affect our business may have a materially adverse effect on our financial condition, results of operations or cash flows. Also, see “Risk Factors” in Item 1A of our 2013 Annual Report on Form 10-K for further discussion regarding such risks that may impact our liquidity and capital resources. Usage of the PAA credit facilities, which provide the backstop for the PAA commercial paper program, and the AAP credit facility is subject to ongoing compliance with covenants. As of June 30, 2014, PAA and AAP were in compliance with all such covenants.

Cash Flow from Operating Activities

For a comprehensive discussion of the primary drivers of cash flow from operating activities, including the impact of varying market conditions and the timing of settlement of our derivative activities, see “Liquidity and Capital Resources-Cash Flow from Operating Activities” under Item 7 of our 2013 Annual Report on Form 10-K.

Net cash provided by operating activities for the first six months of 2014 was approximately $954 million, primarily resulting from earnings from our operations. Additionally, we decreased our inventory levels (including margin balances required as part of our hedging activities) that were funded by our short-term debt, resulting in a positive impact on our cash provided by operating activities.

Net cash provided by operating activities for the first six months of 2013 of approximately $1.3 billion also resulted primarily from earnings from our operations. In addition, we decreased the amount of our inventory during the first half of 2013, primarily due to the sale of NGL inventory related to product demand caused by increases in (i) heating requirements during the extended 2013 winter season, (ii) export activity that reduced overall product availability in the market and (iii) petrochemical demand, as well as the sale of crude oil inventory that had been stored during the contango market.  The net proceeds received from liquidation of such inventory during the quarter were used to repay borrowings under our credit facilities and favorably impacted our cash flow from operating activities.

Acquisitions and Capital Expenditures

In addition to operating needs discussed above, we also use cash for acquisition activities and internal growth projects. We have made and will continue to make capital expenditures for acquisitions, expansion capital and maintenance capital.

2014 Capital Expansion Projects.  See “—Acquisitions and Internal Growth Projects” for detail of our projected capital expenditures for the year ending December 31, 2014. We expect the majority of funding for our 2014 capital program will be provided by borrowings under the PAA commercial paper program, credit facilities and cash flow in excess of partnership distributions, as well as through our access to the capital markets for equity and debt as we deem necessary.

Acquisitions.  The price of acquisitions includes cash paid, assumed liabilities and net working capital items. Because of the non-cash items included in the total price of the acquisition and the timing of certain cash payments, the net cash paid may differ significantly from the total price of the acquisitions completed during the period. Historically, we have financed acquisitions primarily with cash generated by operations and the financing activities discussed below.

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Equity and Debt Financing Activities

On a consolidated basis, our financing activities primarily relate to funding acquisitions, internal capital projects and refinancing our debt maturities, as well as short-term working capital and hedged inventory borrowings related to our NGL business and contango market activities. Our financing activities have primarily consisted of PAA equity offerings, PAA senior notes offerings and borrowings and repayments under the PAA commercial paper program or credit facilities, as well as payments to our Class A shareholders and noncontrolling interests.

PAA Registration Statements.  PAA periodically accesses the capital markets for both equity and debt financing. PAA has filed with the SEC a universal shelf registration statement that, subject to effectiveness at the time of use, allows PAA to issue up to an aggregate of $2.0 billion of debt or equity securities (“Traditional Shelf”). All issuances of equity securities associated with PAA’s continuous offering program, as discussed further below, have been issued pursuant to the Traditional Shelf. At June 30, 2014, PAA had approximately $1.0 billion of unsold securities available under the Traditional Shelf. PAA also has access to a universal shelf registration statement (“WKSI Shelf”), which provides it with the ability to offer and sell an unlimited amount of debt and equity securities, subject to market conditions and capital needs.

PAA Continuous Offering Program. During the six months ended June 30, 2014, PAA issued an aggregate of approximately 8.1 million common units under its continuous offering program, generating net proceeds of approximately $444 million. The net proceeds from these sales were used for general partnership purposes.

Credit Agreements, Commercial Paper Program and Indentures. The PAA credit agreements (which impact the ability to access the PAA commercial paper program because they provide the backstop that supports PAA’s short-term credit ratings) the AAP credit agreement and the indentures governing PAA’s senior notes contain cross-default provisions. A default under the credit agreements would permit the lenders to accelerate the maturity of the outstanding debt. As long as PAA and AAP are in compliance with the provisions in the credit agreements, their ability to make distributions of available cash is not restricted. PAA and AAP were in compliance with the covenants contained in the credit agreements and indentures as of June 30, 2014.

On a consolidated basis, during the six months ended June 30, 2014 and 2013 we had net repayments on the credit agreements and PAA commercial paper program of approximately $333 million and $183 million, respectively. The net repayments during both periods resulted primarily from cash flow from operating activities, including sales of inventory that was liquidated during the periods, as well as cash received from PAA’s debt and equity activities.

In April 2014, PAA completed the issuance of $700 million, 4.70% senior notes due 2044 at a public offering price of 99.734%. Interest payments are due on June 15 and December 15 of each year, commencing on December 15, 2014. The net proceeds from this offering of approximately $691 million, after deducting the underwriting discount and offering expenses, were used to repay outstanding borrowings under the PAA commercial paper program and for general partnership purposes.

Distributions Paid to Our Class A Shareholders and Noncontrolling Interests

Distributions to our Class A shareholders.  We distribute 100% of our available cash within 55 days after the end of each quarter to Class A shareholders of record. Available cash is generally defined as all of our cash and cash equivalents on hand at the end of each quarter less reserves established in the discretion of our general partner for future requirements. On August 14, 2014, we will pay a quarterly distribution of $0.18340 per Class A share. See Note 8 to our condensed consolidated financial statements for details of distributions paid. Also, see Item 5. “Market for Registrant’s Shares, Related Shareholder Matters and Issuer Purchases of Equity Securities-Cash Distribution Policy” included in our 2013 Annual Report on Form 10-K for additional discussion on distributions.

Distributions to noncontrolling interests.  Distributions to noncontrolling interests represent amounts paid on interests in consolidated entities that are not owned by us. During the six months ended June 30, 2014 and 2013 we paid distributions of approximately $626 million and $579 million, respectively, to noncontrolling interests.

We believe that we have sufficient liquid assets, cash flow from operating activities and borrowing capacity under credit agreements to meet our financial commitments, debt service obligations, contingencies and anticipated capital expenditures. We are, however, subject to business and operational risks that could adversely affect our cash flow. A prolonged material decrease in our cash flows would likely produce an adverse effect on our borrowing capacity.

Contingencies

For a discussion of contingencies that may impact us, see Note 11 to our condensed consolidated financial statements.

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Commitments

Contractual Obligations.  In the ordinary course of doing business, we purchase crude oil and NGL from third parties under contracts, the majority of which range in term from thirty-day evergreen to five years with a limited number of contracts extending up to approximately ten years. We establish a margin for these purchases by entering into various types of physical and financial sale and exchange transactions through which we seek to maintain a position that is substantially balanced between purchases on the one hand and sales and future delivery obligations on the other. In addition, we enter into similar contractual obligations in conjunction with our natural gas operations. The table below includes purchase obligations related to these activities. Where applicable, the amounts presented represent the net obligations associated with our counterparties (including giving effect to netting buy/sell contracts and those subject to a net settlement arrangement). We do not expect to use a significant amount of internal capital to meet these obligations, as the obligations will be funded by corresponding sales to entities that we deem creditworthy or who have provided credit support we consider adequate.

The following table includes our best estimate of the amount and timing of these payments as well as others due under the specified contractual obligations as of June 30, 2014 (in millions):

	Remainder of 2014		2015		2016		2017		2018		2019 and Thereafter		Total
Long-term debt, including related interest payments (1)	$	198	$	937	$	543	$	738	$	1,434	$	8,888	$	12,738
Leases (2)	76		143		135		112		88		416		970
Other obligations (3)	122		125		89		62		45		221		664
Subtotal	396		1,205		767		912		1,567		9,525		14,372
Crude oil, natural gas, NGL and other purchases (4)	7,310		7,111		6,303		4,898		2,766		8,151		36,539
Total	$	7,706	$	8,316	$	7,070	$	5,810	$	4,333	$	17,676	$	50,911

(1)Includes debt service payments, interest payments due on PAA’s senior notes, interest payments on long-term borrowings outstanding under the AAP credit agreement and the commitment fee on assumed available capacity under the PAA revolving credit facilities. Although there may be short-term borrowings under the PAA revolving credit facilities and commercial paper program, we historically repay and borrow at varying amounts. As such, we have included only the maximum commitment fee (as if no short-term borrowings were outstanding on the facilities or commercial paper program) in the amounts above.

(2)Leases are primarily for (i) surface rentals, (ii) office rent, (iii) pipeline assets and (iv) trucks, trailers and railcars.

(3)Includes (i) other long-term liabilities, (ii) storage, processing and transportation agreements and (iii) commitments related to capital expansion projects, including projected contributions for our share of the capital spending of our equity-method investments. Excludes a non-current liability of approximately $4 million related to derivative activity included in Crude oil, natural gas, NGL and other purchases.

(4)Amounts are primarily based on estimated volumes and market prices based on average activity during June 2014. The actual physical volume purchased and actual settlement prices will vary from the assumptions used in the table. Uncertainties involved in these estimates include levels of production at the wellhead, weather conditions, changes in market prices and other conditions beyond our control.

Letters of Credit.  In connection with supply and logistics activities, we provide certain suppliers with irrevocable standby letters of credit to secure our obligation for the purchase of crude oil, NGL and natural gas. Additionally, we issue letters of credit to support insurance programs and construction activities. At June 30, 2014 and December 31, 2013, we had outstanding letters of credit of approximately $38 million and $41 million, respectively.

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Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements as defined by Item 303 of Regulation S-K.

Recent Accounting Pronouncements

See Note 2 to our condensed consolidated financial statements.

Critical Accounting Policies and Estimates

For additional discussion regarding our critical accounting policies and estimates, see “Critical Accounting Policies and Estimates” under Item 7 of our 2013 Annual Report on Form 10-K.

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FORWARD-LOOKING STATEMENTS

All statements included in this report, other than statements of historical fact, are forward-looking statements, including but not limited to statements incorporating the words “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend” and “forecast,” as well as similar expressions and statements regarding our business strategy, plans and objectives for future operations.  The absence of such words, expressions or statements, however, does not mean that the statements are not forward-looking.  Any such forward-looking statements reflect our current views with respect to future events, based on what we believe to be reasonable assumptions.  Certain factors could cause actual results or outcomes to differ materially from the results or outcomes anticipated in the forward-looking statements.  The most important of these factors include, but are not limited to:

·our ability to pay distributions to our Class A shareholders;

·our expected receipt of, and amounts of, distributions from AAP;

·failure to implement or capitalize, or delays in implementing or capitalizing, on planned internal growth projects;

·unanticipated changes in crude oil market structure, grade differentials and volatility (or lack thereof);

·environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves;

·declines in the volume of crude oil, refined product and NGL shipped, processed, purchased, stored, fractionated and/or gathered at or through the use of our facilities, whether due to declines in production from existing oil and gas reserves, failure to develop or slowdown in the development of additional oil and gas reserves or other factors;

·fluctuations in refinery capacity in areas supplied by our mainlines and other factors affecting demand for various grades of crude oil, refined products and natural gas and resulting changes in pricing conditions or transportation throughput requirements;

·the occurrence of a natural disaster, catastrophe, terrorist attack or other event, including attacks on our electronic and computer systems;

·weather interference with business operations or project construction, including the impact of extreme weather events or conditions;

·tightened capital markets or other factors that increase our cost of capital or limit our access to capital;

·maintenance of PAA’s credit rating and ability to receive open credit from our suppliers and trade counterparties;

·continued creditworthiness of, and performance by, our counterparties, including financial institutions and trading companies with which we do business;

·the currency exchange rate of the Canadian dollar;

·the availability of, and our ability to consummate, acquisition or combination opportunities;

·the successful integration and future performance of acquired assets or businesses and the risks associated with operating in lines of business that are distinct and separate from our historical operations;

·shortages or cost increases of supplies, materials or labor;

·the effectiveness of our risk management activities;

·our ability to obtain debt or equity financing on satisfactory terms to fund additional acquisitions, expansion projects, working capital requirements and the repayment or refinancing of indebtedness;

·the impact of current and future laws, rulings, governmental regulations, accounting standards and statements, and related interpretations;

·non-utilization of our assets and facilities;

·the effects of competition;

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·increased costs or lack of availability of insurance;

·fluctuations in the debt and equity markets, including the price of PAA’s units at the time of vesting under its long-term incentive plans;

·risks related to the development and operation of our facilities, including our ability to satisfy our contractual obligations to our customers at our facilities;

·factors affecting demand for natural gas and natural gas storage services and rates;

·general economic, market or business conditions and the amplification of other risks caused by volatile financial markets, capital constraints and pervasive liquidity concerns; and

·other factors and uncertainties inherent in the transportation, storage, terminalling and marketing of crude oil and refined products, as well as in the storage of natural gas and the processing, transportation, fractionation, storage and marketing of natural gas liquids.

Other factors described herein, as well as factors that are unknown or unpredictable, could also have a material adverse effect on future results.  Please read “Risk Factors” discussed in Item 1A of our 2013 Annual Report on Form 10-K.  Except as required by applicable securities laws, we do not intend to update these forward-looking statements and information.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, including (i) commodity price risk, (ii) interest rate risk and (iii) currency exchange rate risk.  We use various derivative instruments to manage such risks and, in certain circumstances, to realize incremental margin during volatile market conditions.  Our risk management policies and procedures are designed to help ensure that our hedging activities address our risks by monitoring our exchange-cleared and over-the-counter positions, as well as physical volumes, grades, locations, delivery schedules and storage capacity.  We have a risk management function that has direct responsibility and authority for our risk policies, related controls around commercial activities and certain aspects of corporate risk management.  Our risk management function also approves all new risk management strategies through a formal process. The following discussion addresses each category of risk.

Commodity Price Risk

We use derivative instruments to hedge commodity price risk associated with the following commodities:

·Crude oil and refined products

We utilize crude oil and refined products derivatives to hedge commodity price risk inherent in our Supply and Logistics and Transportation segments.  Our objectives for these derivatives include hedging anticipated purchases and sales, stored inventory, and storage capacity utilization.  We manage these exposures with various instruments including exchange-traded and over-the-counter futures, forwards, swaps and options.

·Natural gas

We utilize natural gas derivatives to hedge commodity price risk inherent in our Supply and Logistics and Facilities segments.  Our objectives for these derivatives include hedging anticipated purchases and sales and managing our anticipated base gas requirements.  We manage these exposures with various instruments including exchange-traded futures, swaps and options.

·NGL

We utilize NGL derivatives, primarily butane and propane derivatives, to hedge commodity price risk inherent in our Supply and Logistics segment. Our objectives for these derivatives include hedging anticipated purchases and sales.  We manage these exposures with various instruments including exchange-traded and over-the-counter futures, forwards, swaps and options.

See Note 10 to our condensed consolidated financial statements for further discussion regarding our hedging strategies and objectives.

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Our policy is to (i) purchase only product for which we have a market, (ii) hedge our purchase and sales contracts so that price fluctuations do not materially affect our operating income and (iii) not acquire and hold physical inventory or other derivative instruments for the purpose of speculating on outright commodity price changes, as these activities could expose us to significant losses.

The fair value of our commodity derivatives and the change in fair value as of June 30, 2014 that would be expected from a 10% price increase or decrease is shown in the table below (in millions):

			Effect of 10%			Effect of 10%
	Fair Value		Price Increase			Price Decrease
Crude oil and related products	$	8	$	20		$	(12	)
Natural gas	4		$	10		$	(10	)
NGL and other	8		$	(45	)	$	45
Total fair value	$	20

The fair values presented in the table above reflect the sensitivity of the derivative instruments only and do not include the effect of the underlying hedged commodity.  Price-risk sensitivities were calculated by assuming an across-the-board 10% increase or decrease in price regardless of term or historical relationships between the contractual price of the instruments and the underlying commodity price.  In the event of an actual 10% change in near-term commodity prices, the fair value of our derivative portfolio would typically change less than that shown in the table as changes in near-term prices are not typically mirrored in delivery months further out.

Interest Rate Risk

Our use of variable rate debt and any forecasted issuances of fixed rate debt expose us to interest rate risk. Therefore, from time to time we use interest rate derivatives to hedge interest rate risk associated with anticipated debt issuances and, in certain cases, outstanding debt instruments.  All of our senior notes are fixed rate notes and thus are not subject to interest rate risk. The majority of our variable rate debt at June 30, 2014, approximately $1.3 billion, is subject to interest rate re-sets, which range from one week to three months. The average interest rate of approximately 0.9% is based upon rates in effect during the first six months ended June 30, 2014. The fair value of our interest rate derivatives is a liability of approximately $7 million as of June 30, 2014. A 10% increase in the forward LIBOR curve as of June 30, 2014 would result in an increase of approximately $17 million to the fair value of our interest rate derivatives. A 10% decrease in the forward LIBOR curve as of June 30, 2014 would result in a decrease of approximately $17 million to the fair value of our interest rate derivatives. See Note 10 to our condensed consolidated financial statements for a discussion of our interest rate risk hedging activities.

Currency Exchange Rate Risk

We use foreign currency derivatives to hedge foreign currency exchange rate risk associated with our exposure to fluctuations in the USD-to-CAD exchange rate. Because a significant portion of our Canadian business is conducted in CAD and, at times, a portion of our debt is denominated in CAD, we use certain financial instruments to minimize the risks of unfavorable changes in exchange rates. These instruments include foreign currency exchange contracts, forwards and options. The fair value of our foreign currency derivatives is an asset of approximately $6 million as of June 30, 2014. A 10% increase in the exchange rate (USD-to-CAD) would result in a decrease of approximately $27 million to the fair value of our foreign currency derivatives. A 10% decrease in the exchange rate (USD-to-CAD) would result in an increase of approximately $27 million to the fair value of our foreign currency derivatives. See Note 10 to our condensed consolidated financial statements for a discussion of our currency exchange rate risk hedging.

Item 4.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain written disclosure controls and procedures, which we refer to as our “DCP.” Our DCP is designed to ensure that information required to be disclosed by us in reports that we file under the Securities Exchange Act of 1934 (the “Exchange Act”) is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii)  accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required disclosure.

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Applicable SEC rules require an evaluation of the effectiveness of the design and operation of our DCP. Management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our DCP as of the end of the period covered by this report, and has found our DCP to be effective in providing reasonable assurance of the timely recording, processing, summarization and reporting of information, and in accumulation and communication of information to management to allow for timely decisions with regard to required disclosure.

Changes in Internal Control over Financial Reporting

In addition to the information concerning our DCP, we are required to disclose certain changes in internal control over financial reporting. Although we have made various enhancements to our controls, there have been no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Certifications

The certifications of our Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) are filed with this report as Exhibits 31.1 and 31.2. The certifications of our Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350 are furnished with this report as Exhibits 32.1 and 32.2.

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PART II. OTHER INFORMATION

Item 1.LEGAL PROCEEDINGS

The information required by this item is included under the caption “Litigation” in Note 11 to our condensed consolidated financial statements, and is incorporated herein by reference thereto.

Item  1A.RISK FACTORS

For a discussion regarding our risk factors, see Item 1A of our 2013 Annual Report on Form 10-K.  Those risks and uncertainties are not the only ones facing us and there may be additional matters of which we are unaware or that we currently consider immaterial.  All of those risks and uncertainties could adversely affect our business, financial condition and/or results of operations.

Item  2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In connection with our IPO and related transactions, the former owners of Plains All American GP LLC (the “Legacy Owners”) acquired the following interests (collectively, the “Stapled Interests”):  (i) AAP units representing an economic limited partner interest in Plains AAP, L.P. (“AAP”); (ii) general partner units representing a non-economic membership interest in PAA GP Holdings LLC (“GP Holdings”), our general partner; and (iii) Class B shares representing a non-economic limited partner interest in us.  The Legacy Owners and any permitted transferees of their Stapled Interests have the right to exchange (the “Exchange Right”) all or a portion of such Stapled Interests for an equivalent number of Class A shares.  In connection with the exercise of the Exchange Right, the Stapled Interests are transferred to us and the applicable Class B shares are canceled.  Although we issue one Class A share for each Stapled Interest that is exchanged, we also receive one AAP unit and one general partner unit.  As a result, the exercise by Legacy Owners of the Exchange Right is not dilutive.  During the three months ended June 30, 2014, certain Legacy Owners exercised the Exchange Right, which resulted in the issuance of additional Class A shares.  The following table reflects such Exchange Right exercises and related issuances of Class A shares:

	AAP Units, General Partner Units and Class B Shares		Class A Shares
Balance at March 31, 2014	470,196,136		135,833,637
Shares (exchanged)/issued in connection with Exchange Right exercises	(213,000	)	213,000
Balance at June 30, 2014	469,983,136		136,046,637

The issuance of Class A shares in connection with the exercise of the Exchange Rights was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof.

Item  3.DEFAULTS UPON SENIOR SECURITIES

None.

Item  4.MINE SAFETY DISCLOSURES

None.

Item  5.OTHER INFORMATION

None.

Item 6.EXHIBITS

The exhibits listed on the accompanying Exhibit Index are filed or incorporated by reference as part of this report, and such Exhibit Index is incorporated herein by reference.

46

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PLAINS GP HOLDINGS, L.P.
	By:	PAA GP HOLDINGS LLC, its general partner
Date: August 12, 2014
	By:	/s/ Greg L. Armstrong
		Greg L. Armstrong, Chairman of the Board,
		Chief Executive Officer and Director
		(Principal Executive Officer)
Date: August 12, 2014
	By:	/s/ Al Swanson
		Al Swanson, Executive Vice President and
		Chief Financial Officer
		(Principal Financial Officer)
Date: August 12, 2014
	By:	/s/ Chris Herbold
		Chris Herbold, Vice President- Accounting and
		Chief Accounting Officer
		(Principal Accounting Officer)

47

EXHIBIT INDEX

3.1	—	Certificate of Limited Partnership of Plains GP Holdings, L.P. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 (333-190227) filed July 29, 2013).
3.2	—	Amended and Restated Limited Partnership Agreement of Plains GP Holdings, L.P. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed October 25, 2013).
3.3	—	Certificate of Formation of PAA GP Holdings LLC (incorporated by reference to Exhibit 3.3 to the Registration Statement on Form S-1 (333-190227) filed July 29, 2013).
3.4	—	Amended and Restated Limited Liability Company Agreement of PAA GP Holdings LLC (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed October 25, 2013).
3.5	—	Amendment No. 1 to Amended and Restated Limited Liability Company Agreement of PAA GP Holdings LLC, dated as of December 31, 2013 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed December 31, 2013).
3.6	—	Fourth Amended and Restated Agreement of Limited Partnership of Plains All American Pipeline, L.P. dated as of May 17, 2012 (incorporated by reference to Exhibit 3.1 to PAA’s Current Report on Form 8-K filed May 23, 2012).
3.7	—	Amendment No. 1 dated October 1, 2012 to the Fourth Amended and Restated Agreement of Limited Partnership of Plains All American Pipeline, L.P. (incorporated by reference to Exhibit 3.1 to PAA’s Current Report on Form 8-K filed October 2, 2012).
3.8	—	Amendment No. 2 dated December 31, 2013 to the Fourth Amended and Restated Agreement of Limited Partnership of Plains All American Pipeline, L.P. (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed December 31, 2013).
3.9	—	Sixth Amended and Restated Limited Liability Company Agreement of Plains All American GP LLC dated October 21, 2013 (incorporated by reference to Exhibit 3.4 to the Current Report on Form 8-K filed October 25, 2013).
3.10	—	Seventh Amended and Restated Limited Partnership Agreement of Plains AAP, L.P. dated October 21, 2013 (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed October 25, 2013).
3.11	—	Amendment No. 1 dated December 31, 2013 to Seventh Amended and Restated Limited Partnership Agreement of Plains AAP, L.P. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed December 31, 2013).
3.12	—	Limited Liability Company Agreement of PAA GP LLC dated December 28, 2007 (incorporated by reference to Exhibit 3.3 to PAA’s Current Report on Form 8-K filed January 4, 2008).
4.1	—	Indenture dated September 25, 2002 among Plains All American Pipeline, L.P., PAA Finance Corp. and Wachovia Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002).
4.2	—	Fourth Supplemental Indenture (Series A and Series B 5.875% Senior Notes due 2016) dated August 12, 2004 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and Wachovia Bank, National Association, as trustee (incorporated by reference to Exhibit 4.5 to PAA’s Registration Statement on Form S-4, File No. 333-121168).
4.3	—	Fifth Supplemental Indenture (Series A and Series B 5.25% Senior Notes due 2015) dated May 27, 2005 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and Wachovia Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed May 31, 2005).

4.4	—	Sixth Supplemental Indenture (Series A and Series B 6.70% Senior Notes due 2036) dated May 12, 2006 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and Wachovia Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed May 12, 2006).
4.5	—	Ninth Supplemental Indenture (Series A and Series B 6.125% Senior Notes due 2017) dated October 30, 2006 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed October 30, 2006).
4.6	—	Tenth Supplemental Indenture (Series A and Series B 6.650% Senior Notes due 2037) dated October 30, 2006 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to PAA’s Current Report on Form 8-K filed October 30, 2006).
4.7	—	Thirteenth Supplemental Indenture (Series A and Series B 6.5% Senior Notes due 2018) dated April 23, 2008 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed April 23, 2008).
4.8	—	Fifteenth Supplemental Indenture (8.75% Senior Notes due 2019) dated April 20, 2009 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed April 20, 2009).
4.9	—	Seventeenth Supplemental Indenture (5.75% Senior Notes due 2020) dated September 4, 2009 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed September 4, 2009).
4.10	—	Eighteenth Supplemental Indenture (3.95% Senior Notes due 2015) dated July 14, 2010 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed July 13, 2010).
4.11	—	Nineteenth Supplemental Indenture (5.00% Senior Notes due 2021) dated January 14, 2011 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed January 11, 2011).
4.12	—	Twentieth Supplemental Indenture (3.65% Senior Notes due 2022) dated March 22, 2012 among Plains All American Pipeline, L.P., PAA Finance Corp and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed March 26, 2012).
4.13	—	Twenty-First Supplemental Indenture (5.15% Senior Notes due 2042) dated March 22, 2012 among Plains All American Pipeline, L.P., PAA Finance Corp and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.3 to PAA’s Current Report on Form 8-K filed March 26, 2012).
4.14	—	Twenty-Second Supplemental Indenture (2.85% Senior Notes due 2023) dated December 10, 2012, by and among Plains All American Pipeline, L.P., PAA Finance Corp., and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed December 12, 2012).
4.15	—	Twenty-Third Supplemental Indenture (4.30% Senior Notes due 2043) dated December 10, 2012, by and among Plains All American Pipeline, L.P., PAA Finance Corp., and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.3 to PAA’s Current Report on Form 8-K filed December 12, 2012).

4.16	—	Twenty-Fourth Supplemental Indenture (3.85% Senior Notes due 2023) dated August 15, 2013, by and among Plains All American Pipeline, L.P., PAA Finance Corp., and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed August 15, 2013).
4.17	—	Twenty-Fifth Supplemental Indenture (4.70% Senior Notes due 2044) dated April 23, 2014, by and among Plains All American Pipeline, L.P., PAA Finance Corp., and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed April 29, 2014).
10.1	—	Form of LTIP Grant Letter (PAGP Audit Committee Members) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).
12.1 †	—	Computation of Ratio of Earnings to Fixed Charges
31.1 †	—	Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a).
31.2 †	—	Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a).
32.1 ††	—	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350
32.2 ††	—	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350
101.INS††	—	XBRL Instance Document
101.SCH††	—	XBRL Taxonomy Extension Schema Document
101.CAL††	—	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF††	—	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB††	—	XBRL Taxonomy Extension Label Linkbase Document
101.PRE††	—	XBRL Taxonomy Extension Presentation Linkbase Document

†Filed herewith.

††Furnished herewith.

EX-12.1

Exhibit 12.1

STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(in millions, except ratio data)

	Six Months Ended
	June 30,			Year Ended December 31,
	2014			2013			2012			2011			2010			2009
EARNINGS (1)
Pre-tax income from continuing operations before noncontrolling interest and income from equity investees	$	690		$	1,416		$	1,135		$	1,019		$	499		$	559
add: Fixed charges	223			430			387			334			331			292
add: Distributed income of equity investees	51			55			40			23			9			7
add: Amortization of capitalized interest	2			3			2			2			1			1
less: Capitalized interest	(22		)	(38		)	(36		)	(25		)	(16		)	(12		)
Total Earnings	$	944		$	1,866		$	1,528		$	1,353		$	824		$	847
FIXED CHARGES (1)
Interest expensed and capitalized (2)	$	195		$	377		$	343		$	304		$	291		$	256
Amortization of debt expense	4			10			10			10			8			7
Portion of rent expense related to interest (33.33%)	24			43			34			20			32			29
Total Fixed Charges	$	223		$	430		$	387		$	334		$	331		$	292
RATIO OF EARNINGS TO FIXED CHARGES (3)	4.24		x	4.34		x	3.95		x	4.05		x	2.49		x	2.90		x

(1)For purposes of computing the ratio of earnings to fixed charges, “earnings” consists of pre-tax income from continuing operations before income from equity investees plus fixed charges (excluding capitalized interest), distributed income of equity investees and amortization of capitalized interest. “Fixed charges” represents interest incurred (whether expensed or capitalized), amortization of debt expense (including discounts and premiums relating to indebtedness) and the portion of rental expense on leases deemed to be the equivalent of interest.

(2)Includes interest costs attributable to borrowings for hedged inventory purchases of $7 million for the six months ended June 30, 2014 and $30 million, $12 million, $20 million, $17 million and $11 million for the years ended December 31, 2013, 2012, 2011, 2010 and 2009, respectively.

(3)Ratios may not recalculate due to rounding.

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Greg L. Armstrong, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Plains GP Holdings, L.P.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 12, 2014

/s/ Greg L. Armstrong

Greg L. Armstrong

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Al Swanson, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Plains GP Holdings, L.P.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 12, 2014

/s/ Al Swanson

Al Swanson

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF

CHIEF EXECUTIVE OFFICER

OF PLAINS GP HOLDINGS, L.P.

PURSUANT TO 18 U.S.C. 1350

I, Greg L. Armstrong, Chief Executive Officer of Plains GP Holdings, L.P. (the “Company”), hereby certify that:

(i)            the accompanying report on Form 10-Q for the period ended June 30, 2014 and filed with the Securities and Exchange Commission on the date hereof (the “Report”) by the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii)           the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Greg L. Armstrong

Name: Greg L. Armstrong

Date: August 12, 2014

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF

CHIEF FINANCIAL OFFICER

OF PLAINS GP HOLDINGS, L.P.

PURSUANT TO 18 U.S.C. 1350

I, Al Swanson, Chief Financial Officer of Plains GP Holdings, L.P. (the “Company”), hereby certify that:

(i)            the accompanying report on Form 10-Q for the period ended June 30, 2014 and filed with the Securities and Exchange Commission on the date hereof (the “Report”) by the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii)           the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Al Swanson

Name: Al Swanson

Date: August 12, 2014

XML

Partners' Capital and Distributions (Details) (Class A Shares, USD $) In Millions, except Per Share data, unless otherwise specified	0 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended
	Aug. 14, 2014 Second Quarter Distribution Subsequent Event	Jun. 30, 2014 Second Quarter Distribution Subsequent Event	May 15, 2014 First Quarter Distribution	Jun. 30, 2014 First Quarter Distribution	Feb. 14, 2014 Fourth quarter distribution	Jun. 30, 2014 Fourth quarter distribution
Partners Capital and Distribution
Date Declared		Jul. 08, 2014		Apr. 07, 2014		Jan. 09, 2014
Distribution Date		Aug. 14, 2014		May 15, 2014		Feb. 14, 2014
Distributions to Class A shareholders	$ 25		$ 23		$ 17
Distribution per Class A share (in dollars per share)	$ 0.18340		$ 0.17055		$ 0.12505
Shareholders of record, date		Aug. 01, 2014

XML

Related Party Transactions (Details) (Oxy, USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Oxy
Related party transaction
Related party ownership of subsidiary (as a percent)	25.00%		25.00%
Revenues	$ 351	$ 424	$ 443	$ 694
Purchases and related costs	209	214	468	375
Trade accounts receivable and other receivables, gross	460		460		133
Accounts payable, gross	$ 321		$ 321		$ 181

XML

Derivatives and Risk Management Activities (Details 6) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Derivative Asset Positions
Gross Position - Asset	$ 94	$ 133
Netting Adjustment	(62)	(148)
Cash Collateral Paid	66	161
Net Position - Asset	98	146
Derivative Liability Positions
Gross Position - Liability	(75)	(157)
Netting Adjustment	62	148
Net Position - Liability	(13)	(9)
Other current assets
Derivative Asset Positions
Net Position - Asset	96	116
Other long-term assets
Derivative Asset Positions
Net Position - Asset	2	30
Other current liabilities
Derivative Liability Positions
Net Position - Liability	(9)	(8)
Other long-term liabilities
Derivative Liability Positions
Net Position - Liability	$ (4)	$ (1)

XML

Derivatives and Risk Management Activities (Details 4) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Impact of derivative activities recognized in earnings
Total	$ 20	$ 36	$ (11)	$ 80
Commodity Derivatives | Supply and Logistics segment revenues
Impact of derivative activities recognized in earnings
Total	12	42	(8)	88
Commodity Derivatives | Facilities segment revenues
Impact of derivative activities recognized in earnings
Total		(9)		(12)
Commodity Derivatives | Field Operating costs
Impact of derivative activities recognized in earnings
Total		4	(1)	5
Interest Rate Derivatives | Interest expense
Impact of derivative activities recognized in earnings
Total	(1)	(2)	(2)	(3)
Foreign Currency Derivatives | Supply and Logistics segment revenues
Impact of derivative activities recognized in earnings
Total	9
Foreign Currency Derivatives | Other income/(expense), net
Impact of derivative activities recognized in earnings
Total		1		2
Derivatives designated as hedging instruments
Impact of derivative activities recognized in earnings
Amount of gain/(loss) reclassified from AOCI into income	11	11	(10)	16
Derivatives designated as hedging instruments | Commodity Derivatives | Supply and Logistics segment revenues
Impact of derivative activities recognized in earnings
Amount of gain/(loss) reclassified from AOCI into income	12	21	(8)	29
Derivatives designated as hedging instruments | Commodity Derivatives | Facilities segment revenues
Impact of derivative activities recognized in earnings
Amount of gain/(loss) reclassified from AOCI into income		(9)		(12)
Derivatives designated as hedging instruments | Interest Rate Derivatives | Interest expense
Impact of derivative activities recognized in earnings
Amount of gain/(loss) reclassified from AOCI into income	(1)	(2)	(2)	(3)
Derivatives designated as hedging instruments | Foreign Currency Derivatives | Other income/(expense), net
Impact of derivative activities recognized in earnings
Amount of gain/(loss) reclassified from AOCI into income		1		2
Derivatives designated as hedging instruments | Hedged Transactions probable of not occurring | Supply and Logistics segment revenues
Impact of derivative activities recognized in earnings
Amount of gain/(loss) reclassified from AOCI into income		1		3
Derivatives designated as hedging instruments | Hedged Transactions probable of not occurring | Facilities segment revenues
Impact of derivative activities recognized in earnings
Amount of gain/(loss) reclassified from AOCI into income		1		1
Derivatives not designated as hedging instruments
Impact of derivative activities recognized in earnings
Total	9	25	(1)	64
Derivatives not designated as hedging instruments | Commodity Derivatives | Supply and Logistics segment revenues
Impact of derivative activities recognized in earnings
Total		21		59
Derivatives not designated as hedging instruments | Commodity Derivatives | Field Operating costs
Impact of derivative activities recognized in earnings
Total		4	(1)	5
Derivatives not designated as hedging instruments | Foreign Currency Derivatives | Supply and Logistics segment revenues
Impact of derivative activities recognized in earnings
Total	$ 9

XML

Accounts Receivable (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Accounts Receivable
Advance cash payments received from third parties to mitigate credit risk	$ 157	$ 117
Standby letters of credit	384	426
Substantially all accounts receivable, net, maximum age of balances past their scheduled invoice date	30 days	30 days
Allowance for doubtful accounts receivable	$ 5	$ 5

XML

Debt (Tables)

6 Months Ended

Jun. 30, 2014

Debt

Components of debt

Debt consisted of the following as of the dates indicated (in millions):

	June 30,		December 31,
	2014		2013
SHORT-TERM DEBT
PAA commercial paper notes, bearing a weighted-average interest rate of 0.29% and 0.33%, respectively (1)	$	760	$	1,109
Other	3		4
Total short-term debt	763		1,113
LONG-TERM DEBT
PAA senior notes, net of unamortized discounts of $16 and $15, respectively (2)	7,409		6,710
Credit Facilities and Other:
AAP term loan, bearing a weighted-average interest rate of 1.8% and 1.9%, respectively	500		500
AAP senior secured revolving credit facility, bearing a weighted-average interest rate of 1.7% and 2.2%, respectively	26		15
Other	5		5
Total long-term debt	7,940		7,230
Total debt (3)	$	8,703	$	8,343

(1) PAA commercial paper notes are backstopped by the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility, which mature in August 2018 and August 2016, respectively; as such, any borrowings under the PAA commercial paper program reduce the available capacity under these facilities. At June 30, 2014 and December 31, 2013, we classified $760 million and $1.1 billion, respectively, of borrowings under the PAA commercial paper program as short-term. These borrowings are primarily designated as working capital borrowings, must be repaid within one year and are primarily for hedged NGL and crude oil inventory and NYMEX and ICE margin deposits.

(2) As of June 30, 2014, we have classified PAA’s $150 million, 5.25% senior notes due June 2015 as long-term based on the ability and intent to refinance them on a long-term basis.

(3) PAA’s fixed-rate senior notes had a face value of approximately $7.4 billion and $6.7 billion at June 30, 2014 and December 31, 2013, respectively. We estimated the aggregate fair value of these notes as of June 30, 2014 and December 31, 2013 to be approximately $8.2 billion and $7.2 billion, respectively. PAA’s fixed-rate senior notes are traded among institutions, and these trades are routinely published by a reporting service. Our determination of fair value is based on reported trading activity near quarter end. We estimate that the carrying value of outstanding borrowings under credit facilities and agreements and commercial paper program approximates fair value as interest rates reflect current market rates. The fair value estimates for both the senior notes and credit facilities are based upon observable market data and are classified within Level 2 of the fair value hierarchy. See Note 10 for additional discussion of the fair value hierarchy.

XML

Commitments and Contingencies (Details) (USD $)		1 Months Ended
	Apr. 30, 2012 Pemex Exploracion y Produccion (PEP) case	May 31, 2014 Alleged violations of risk management plan regulations under the federal Clean Air Act Rancho
Loss Contingencies
Total number of cases filed	2
Amount of civil penalty agreed to		$ (260,000)

XML

Equity-Indexed Compensation Plans (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended				1 Months Ended	6 Months Ended				83 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 PAGP LTIP	Jun. 30, 2014 PAGP LTIP Class A Shares	Feb. 28, 2014 PAGP LTIP Class A Shares Directors	Jun. 30, 2014 PAGP LTIP Class A Shares Directors Maximum	Jun. 30, 2014 PAGP LTIP Class A Shares Directors PAGP LTIP Awards Vesting Annually	Jun. 30, 2014 PAA LTIP	Jun. 30, 2014 AAP Management Units	Jun. 30, 2014 AAP Management Units
Equity-indexed Compensation Plans
Authorized grants (in shares)						10,000,000
Shares issued to directors							83,200
Outstanding (in shares or units)
Outstanding at beginning of period (in shares or units)										8,400,000
Granted (in shares or units)					100,000					900,000
Vested (in shares or units)										(1,800,000)
Cancelled or forfeited (in shares or units)										(300,000)
Outstanding at end of period (in shares or units)					100,000					7,200,000
Weighted Average Grant Date Fair Value per share or unit
Outstanding at beginning of period (in dollars per share or unit)										$ 36.97
Granted (in dollars per share or unit)					$ 27.84					$ 46.61
Vested (in dollars per share or unit)										$ 25.39
Cancelled or forfeited (in dollars per share or unit)										$ 38.88
Outstanding at end of period (in dollars per share or unit)					$ 27.84					$ 41.05
Units issued in connection with the settlement of vested awards, net of tax withholding (in units)										600,000
Units withheld for taxes (in units)										300,000
Vested awards settled in cash (in units)										900,000
Reserved for Future Grants
Reserved for future grants outstanding, beginning balance (in units)											3,500,000
Granted (in units)											(400,000)
Reserved for future grants outstanding, ending balance (in units)											3,100,000	3,100,000
Outstanding
Outstanding at the beginning of the period (in units)											48,600,000
Granted (in units)											400,000
Outstanding at the ending of the period (in units)											49,000,000	49,000,000
Outstanding Units Earned
Outstanding Units Earned, beginning balance (in units)											47,000,000
Units earned (in units)											800,000
Outstanding Units Earned, end balance (in units)											47,800,000	47,800,000
Grant Date Fair Value of Outstanding AAP Management Units:
Grant Date Fair Value of Outstanding AAP Management Units, beginning balance											$ 51
Units granted											11
Grant Date Fair Value of Outstanding AAP Management Units, ending balance											62	62
Other Consolidated Equity-Indexed Compensation Information
Equity-indexed compensation expense	34	27	68	78				1			4	52
LTIP unit-settled vestings	44	46	51	46
LTIP cash-settled vestings	51	60	52	60
DER cash payments	$ 2	$ 2	$ 4	$ 4
Percentage increment of vesting of awards									25.00%

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Debt (Details 2) (USD $)				6 Months Ended
	Apr. 23, 2014 Treasury locks entered into in anticipation of issuance of 4.70% senior notes due 2044 PAA	Jun. 30, 2014 Letters of credit	Dec. 31, 2013 Letters of credit	Jun. 30, 2014 Credit agreements and PAA commercial paper program	Jun. 30, 2013 Credit agreements and PAA commercial paper program	Jun. 30, 2014 PAA senior notes	Dec. 31, 2013 PAA senior notes	Jun. 30, 2014 PAA senior notes Level 2	Dec. 31, 2013 PAA senior notes Level 2	Apr. 23, 2014 4.70% senior notes due 2044
Debt
Debt instrument face value						$ 7,400,000,000	$ 6,700,000,000			$ 700,000,000
Debt instrument fair value								8,200,000,000	7,200,000,000
Total borrowings				34,600,000,000	7,600,000,000
Total repayments				34,900,000,000	7,800,000,000
Outstanding letters of credit		38,000,000	41,000,000
Debt instrument, interest rate (as a percent)										4.70%
Percentage of face value at which senior notes are sold										99.734%
Notional amount of derivatives	$ 250,000,000

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Operating Segments (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 segment	Jun. 30, 2013
Operating segment information
Operating segments number			3
Revenues:
Revenues	$ 11,195	$ 10,295	$ 22,878	$ 20,915
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments
Equity earnings in unconsolidated entities	23	11	44	23
Segment profit	488	485	1,097	1,233
Maintenance capital	48	39	95	82
Transportation
Revenues:
Revenues	195	165	376	338
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments
Equity earnings in unconsolidated entities	23	11	44	23
Segment profit	221	160	427	323
Maintenance capital	42	23	76	55
Facilities
Revenues:
Revenues	144	197	301	420
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments
Segment profit	134	149	288	300
Maintenance capital	5	11	15	18
Supply and Logistics
Revenues:
Revenues	10,856	9,933	22,201	20,157
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments
Segment profit	133	176	382	610
Maintenance capital	1	5	4	9
Interest expense related to hedged inventory	5	5	7	10
Operating Segments
Revenues:
Revenues	11,549	10,647	23,602	21,593
Operating Segments | Transportation
Revenues:
Revenues	412	365	798	732
Operating Segments | Facilities
Revenues:
Revenues	277	348	576	703
Operating Segments | Supply and Logistics
Revenues:
Revenues	10,860	9,934	22,228	20,158
Intersegment
Revenues:
Revenues	(354)	(352)	(724)	(678)
Intersegment | Transportation
Revenues:
Revenues	(217)	(200)	(422)	(394)
Intersegment | Facilities
Revenues:
Revenues	(133)	(151)	(275)	(283)
Intersegment | Supply and Logistics
Revenues:
Revenues	$ (4)	$ (1)	$ (27)	$ (1)

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Derivatives and Risk Management Activities (Details 5) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014 contract	Jun. 30, 2013	Jun. 30, 2014 contract	Jun. 30, 2013	Dec. 31, 2013 contract
Derivatives disclosures
Asset Derivatives Fair Value	$ 94		$ 94		$ 133
Liability Derivatives Fair Value	(75)		(75)		(157)
Net gain/(loss) deferred in AOCI	(118)		(118)
Net gain/(loss) expected to be reclassified to earnings in next 12 months			(4)
Gain/(loss) expected to be reclassified to earnings through 2045			(114)
Net deferred gain/(loss) recognized in AOCI on derivatives (effective portion)	(19)	35	(51)	63
Broker receivable	66		66		161
Initial margin	54		54		85
Variation margin posted/(returned)			12		76
Number of outstanding derivatives containing credit-risk related contingent features	0		0		0
Derivative credit-risk related contingent features			none of our outstanding derivatives contained credit-risk related contingent features that would result in a material adverse impact to us upon any change in our credit ratings
Commodity Derivatives
Derivatives disclosures
Net deferred gain/(loss) recognized in AOCI on derivatives (effective portion)		3	(12)	11
Interest Rate Derivatives
Derivatives disclosures
Net deferred gain/(loss) recognized in AOCI on derivatives (effective portion)	(19)	32	(39)	52
Derivatives designated as hedging instruments
Derivatives disclosures
Asset Derivatives Fair Value	9		9		67
Liability Derivatives Fair Value	(12)		(12)		(24)
Derivatives designated as hedging instruments | Commodity Derivatives | Other current assets
Derivatives disclosures
Asset Derivatives Fair Value	7		7		36
Liability Derivatives Fair Value	(4)		(4)		(24)
Derivatives designated as hedging instruments | Commodity Derivatives | Other long-term assets
Derivatives disclosures
Asset Derivatives Fair Value	1		1		5
Derivatives designated as hedging instruments | Interest Rate Derivatives | Other current assets
Derivatives disclosures
Asset Derivatives Fair Value	1		1
Derivatives designated as hedging instruments | Interest Rate Derivatives | Other long-term assets
Derivatives disclosures
Asset Derivatives Fair Value					26
Derivatives designated as hedging instruments | Interest Rate Derivatives | Other current liabilities
Derivatives disclosures
Liability Derivatives Fair Value	(8)		(8)
Derivatives not designated as hedging instruments
Derivatives disclosures
Asset Derivatives Fair Value	85		85		66
Liability Derivatives Fair Value	(63)		(63)		(133)
Derivatives not designated as hedging instruments | Commodity Derivatives | Other current assets
Derivatives disclosures
Asset Derivatives Fair Value	76		76		60
Liability Derivatives Fair Value	(56)		(56)		(117)
Derivatives not designated as hedging instruments | Commodity Derivatives | Other long-term assets
Derivatives disclosures
Asset Derivatives Fair Value	2		2		5
Liability Derivatives Fair Value	(1)		(1)		(6)
Derivatives not designated as hedging instruments | Commodity Derivatives | Other current liabilities
Derivatives disclosures
Asset Derivatives Fair Value					1
Liability Derivatives Fair Value	(1)		(1)		(5)
Derivatives not designated as hedging instruments | Commodity Derivatives | Other long-term liabilities
Derivatives disclosures
Asset Derivatives Fair Value	1		1
Liability Derivatives Fair Value	(5)		(5)		(1)
Derivatives not designated as hedging instruments | Foreign Currency Derivatives | Other current assets
Derivatives disclosures
Asset Derivatives Fair Value	6		6
Derivatives not designated as hedging instruments | Foreign Currency Derivatives | Other current liabilities
Derivatives disclosures
Liability Derivatives Fair Value					$ (4)

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL / MEMBERS' EQUITY (USD $) In Millions, except Share data, unless otherwise specified	Total USD ($)	Class A Shares	Class B Shares	Partners' Capital (Excluding Noncontrolling Interests) Class A Shares USD ($)	Partners' Capital (Excluding Noncontrolling Interests) Class B Shares	Noncontrolling Interests USD ($)	Members' Equity (Excluding Noncontrolling Interests) USD ($)
Balance, beginning of period at Dec. 31, 2012	$ 6,968					$ 6,968
Increase (Decrease) in Partners' Capital
Net income	834					832	2
Distributions	(581)					(579)	(2)
Issuance of common units by subsidiaries	354					354
Contributions from noncontrolling interests related to the issuance of common units by subsidiaries	7					7
Issuance of PAA common units under LTIP, net of units tendered by employees to satisfy tax withholding obligations	(11)					(11)
Equity-indexed compensation expense	20					20
Distribution equivalent right payments	(3)					(3)
Other comprehensive loss	(137)					(137)
Balance, end of period at Jun. 30, 2013	7,451					7,451
Balance, beginning of period at Dec. 31, 2013	8,279			1,035		7,244
Balance, beginning of period (in shares) at Dec. 31, 2013		133,833,637	472,196,136	133,800,000	472,200,000
Increase (Decrease) in Partners' Capital
Net income	647			29		618
Distributions	(666)			(40)		(626)
Transfer of ownership interest in connection with AAP unit exchanges (Note 8)				(1)		1
Transfer of ownership interest in connection with AAP unit exchanges (Note 8) (in shares)		2,213,000		2,200,000
Transfer of ownership interest in connection with AAP unit exchanges (Note 8) (in shares)			(2,213,000)		(2,200,000)
Deferred tax asset	23			23
Issuance of common units by subsidiaries	444					444
Issuance of PAA common units under LTIP, net of units tendered by employees to satisfy tax withholding obligations	(18)					(18)
Equity-indexed compensation expense	23					23
Distribution equivalent right payments	(3)					(3)
Other comprehensive loss	(45)					(45)
Balance, end of period at Jun. 30, 2014	$ 8,684			$ 1,046		$ 7,638
Balance, end of period (in shares) at Jun. 30, 2014		136,046,637	469,983,136	136,000,000	470,000,000

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Derivatives and Risk Management Activities (Details)	Jun. 30, 2014 bbl
Net long position associated with crude oil purchases
Commodity Price Risk Hedging:
Average derivative positions notional amount per day (in barrels)	210,100
Derivative position notional amount (in barrels, Mcf or megawatt hours)	6,500,000
Net short spread position hedging anticipated crude oil lease gathering purchases
Commodity Price Risk Hedging:
Average derivative positions notional amount per day (in barrels)	21,300
Derivative position notional amount (in barrels, Mcf or megawatt hours)	14,300,000
Butane/WTI spread positions
Commodity Price Risk Hedging:
Average derivative positions notional amount per day (in barrels)	2,800
Derivative position notional amount (in barrels, Mcf or megawatt hours)	800,000
WTI /Brent spread positions
Commodity Price Risk Hedging:
Average derivative positions notional amount per day (in barrels)	19,300
Derivative position notional amount (in barrels, Mcf or megawatt hours)	1,800,000
Long natural gas position for anticipated base gas requirements
Commodity Price Risk Hedging:
Derivative position notional amount (in barrels, Mcf or megawatt hours)	4,100,000
Short natural gas position related to anticipated natural gas sales
Commodity Price Risk Hedging:
Derivative position notional amount (in barrels, Mcf or megawatt hours)	10,700,000
Net short position related to anticipated sales of crude oil, NGL and refined products inventory
Commodity Price Risk Hedging:
Derivative position notional amount (in barrels, Mcf or megawatt hours)	7,600,000
PLA crude oil net short position
Commodity Price Risk Hedging:
Average derivative positions notional amount per day (in barrels)	1,600
Derivative position notional amount (in barrels, Mcf or megawatt hours)	1,500,000
PLA crude oil long call option position
Commodity Price Risk Hedging:
Derivative position notional amount (in barrels, Mcf or megawatt hours)	700,000
Long natural gas position for natural gas purchases
Commodity Price Risk Hedging:
Derivative position notional amount (in barrels, Mcf or megawatt hours)	31,300,000
Short propane position related to subsequent sale of products
Commodity Price Risk Hedging:
Derivative position notional amount (in barrels, Mcf or megawatt hours)	5,200,000
Short butane position related to subsequent sale of products
Commodity Price Risk Hedging:
Derivative position notional amount (in barrels, Mcf or megawatt hours)	1,500,000
Short WTI position related to subsequent sale of products
Commodity Price Risk Hedging:
Derivative position notional amount (in barrels, Mcf or megawatt hours)	600,000
Long power position for power supply requirements
Commodity Price Risk Hedging:
Derivative position notional amount (in barrels, Mcf or megawatt hours)	600,000

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Derivatives and Risk Management Activities (Tables)

6 Months Ended

Jun. 30, 2014

Derivative disclosures

Schedule of interest rate risk hedging

The following table summarizes the terms of these forward starting interest rate swaps as of June 30, 2014 (notional amounts in millions):

Hedged Transaction	Number and Types of Derivatives Employed	Notional Amount		Expected Termination Date	Average Rate Locked	Accounting Treatment
Anticipated debt offering	10 forward starting swaps (30-year)	$	250	6/15/2015	3.60%	Cash flow hedge

Open foreign currency exchange contracts

The following table summarizes our open forward exchange contracts as of June 30, 2014 (in millions):

		USD		CAD			Average Exchange Rate USD to CAD
Forward exchange contracts that exchange CAD for USD:
	2014	$	273	$	292		$1.00 - $1.07
	2015	77		82			$1.00 - $1.07
		$	350	$	374		$1.00 - $1.07
Forward exchange contracts that exchange USD for CAD:
	2014	$	273	$	297		$1.00 - $1.09
	2015	77		84			$1.00 - $1.09
		$	350	$	381		$1.00 - $1.09
Net position by currency:
	2014	$	—	$	(5	)
	2015	—		(2		)
		$	—	$	(7	)

Impact of derivative activities recognized in earnings

A summary of the impact of our derivative activities recognized in earnings for the three and six months ended June 30, 2014 and 2013 is as follows (in millions):

	Three Months Ended June 30, 2014										Three Months Ended June 30, 2013
	Derivatives in Hedging Relationships										Derivatives in Hedging Relationships
Location of gain/(loss)	Gain/(loss) reclassified from AOCI into income			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge		Total			Gain/(loss) reclassified from AOCI into income (1)			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge		Total
Commodity Derivatives
Supply and Logistics segment revenues	$	12		$	—	$	—	$	12		$	21		$	—	$	21	$	42
Facilities segment revenues	—			—		—		—			(9		)	—		—		(9		)
Field operating costs	—			—		—		—			—			—		4		4
Interest Rate Derivatives
Interest expense	(1		)	—		—		(1		)	(2		)	—		—		(2		)
Foreign Currency Derivatives
Supply and Logistics segment revenues	—			—		9		9			—			—		—		—
Other income/(expense), net	—			—		—		—			1			—		—		1
Total Gain/(Loss) on Derivatives Recognized in Net Income	$	11		$	—	$	9	$	20		$	11		$	—	$	25	$	36

	Six Months Ended June 30, 2014											Six Months Ended June 30, 2013
	Derivatives in Hedging Relationships											Derivatives in Hedging Relationships
Location of gain/(loss)	Gain/(loss) reclassified from AOCI into income			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge			Total			Gain/(loss) reclassified from AOCI into income (1)			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge		Total
Commodity Derivatives
Supply and Logistics segment revenues	$	(8	)	$	—	$	—		$	(8	)	$	29		$	—	$	59	$	88
Facilities segment revenues	—			—		—			—			(12		)	—		—		(12		)
Field operating costs	—			—		(1		)	(1		)	—			—		5		5
Interest Rate Derivatives
Interest expense	(2		)	—		—			(2		)	(3		)	—		—		(3		)
Foreign Currency Derivatives
Other income/(expense), net	—			—		—			—			2			—		—		2
Total Gain/(Loss) on Derivatives Recognized in Net Income	$	(10	)	$	—	$	(1	)	$	(11	)	$	16		$	—	$	64	$	80

(1) During the three months ended June 30, 2013 we reclassified gains of approximately $1 million and $1 million from AOCI to Supply and Logistics segment revenues and Facilities segment revenues, respectively, as a result of anticipated hedged transactions that are probable of not occurring. During the six months ended June 30, 2013, we reclassified gains of approximately $3 million and $1 million from AOCI to Supply and Logistics segment revenues and Facilities segment revenues, respectively, as a result of anticipated hedged transactions that are probable of not occurring. During the three and six months ended June 30, 2014, all of our hedged transactions were probable of occurring.

Summary of derivative assets and liabilities on condensed consolidated balance sheet

The following table summarizes the derivative assets and liabilities on our condensed consolidated balance sheet on a gross basis as of June 30, 2014 (in millions):

	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
	Location	Fair Value		Location	Fair Value
Derivatives designated as hedging instruments:
Commodity derivatives	Other current assets	$	7	Other current assets	$	(4	)
	Other long-term assets	1
Interest rate derivatives	Other current assets	1		Other current liabilities	(8		)
Total derivatives designated as hedging instruments		$	9		$	(12	)
Derivatives not designated as hedging instruments:
Commodity derivatives	Other current assets	$	76	Other current assets	$	(56	)
	Other long-term assets	2		Other long-term assets	(1		)
	Other long-term liabilities	1		Other current liabilities	(1		)
				Other long-term liabilities	(5		)
Foreign currency derivatives	Other current assets	6
Total derivatives not designated as hedging instruments		$	85		$	(63	)
Total derivatives		$	94		$	(75	)

The following table summarizes the derivative assets and liabilities on our condensed consolidated balance sheet on a gross basis as of December 31, 2013 (in millions):

	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
	Location	Fair Value		Location	Fair Value
Derivatives designated as hedging instruments:
Commodity derivatives	Other current assets	$	36	Other current assets	$	(24	)
	Other long-term assets	5
Interest rate derivatives	Other long-term assets	26
Total derivatives designated as hedging instruments		$	67		$	(24	)
Derivatives not designated as hedging instruments:
Commodity derivatives	Other current assets	$	60	Other current assets	$	(117	)
	Other long-term assets	5		Other long-term assets	(6		)
	Other current liabilities	1		Other current liabilities	(5		)
				Other long-term liabilities	(1		)
Foreign currency derivatives				Other current liabilities	(4		)
Total derivatives not designated as hedging instruments		$	66		$	(133	)
Total derivatives		$	133		$	(157	)

Schedule of derivatives assets and liabilities that are subject to offsetting, including enforceable master netting arrangements

The following tables present information about derivatives and financial assets and liabilities that are subject to offsetting, including enforceable master netting arrangements at June 30, 2014 and December 31, 2013 (in millions):

	June 30, 2014						December 31, 2013
	Derivative			Derivative			Derivative			Derivative
	Asset Positions			Liability Positions			Asset Positions			Liability Positions
Netting Adjustments:
Gross position - asset/(liability)	$	94		$	(75	)	$	133		$	(157	)
Netting adjustment	(62		)	62			(148		)	148
Cash collateral paid/(received)	66			—			161			—
Net position - asset/(liability)	$	98		$	(13	)	$	146		$	(9	)
Balance Sheet Location After Netting Adjustments:
Other current assets	$	96		$	—		$	116		$	—
Other long-term assets	2			—			30			—
Other current liabilities	—			(9		)	—			(8		)
Other long-term liabilities	—			(4		)	—			(1		)
	$	98		$	(13	)	$	146		$	(9	)

Net deferred gain/(loss), including tax effects, recognized in AOCI for derivatives

The net deferred gain/(loss), including tax effects, recognized in AOCI for derivatives for the three and six months ended June 30, 2014 and 2013 are as follows (in millions):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014			2013		2014			2013
Commodity derivatives, net	$	—		$	3	$	(12	)	$	11
Interest rate derivatives, net	(19		)	32		(39		)	52
Total	$	(19	)	$	35	$	(51	)	$	63

Derivative financial assets and liabilities within the fair value hierarchy accounted for at fair value on a recurring basis

The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 (in millions):

	Fair Value as of June 30, 2014										Fair Value as of December 31, 2013
Recurring Fair Value Measures (1)	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3			Total
Commodity derivatives	$	28	$	(9	)	$	1	$	20		$	16	$	(59	)	$	(3	)	$	(46	)
Interest rate derivatives	—		(7		)	—		(7		)	—		26			—			26
Foreign currency derivatives	—		6			—		6			—		(4		)	—			(4		)
Total net derivative asset/(liability)	$	28	$	(10	)	$	1	$	19		$	16	$	(37	)	$	(3	)	$	(24	)

(1) Derivative assets and liabilities are presented above on a net basis but do not include related cash margin deposits.

Reconciliation of changes in fair value of derivatives classified as level 3

The following table provides a reconciliation of changes in fair value of the beginning and ending balances for our derivatives classified as level 3 (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014			2013
Beginning Balance	$	1	$	1	$	(3	)	$	4
Unrealized gains/(losses):
Included in earnings (1)	—		1		—			1
Included in other comprehensive income	—		—		—			—
Settlements	—		—		3			(3		)
Derivatives entered into during the period	—		2		1			2
Transfers out of level 3	—		—		—			—
Ending Balance	$	1	$	4	$	1		$	4
Change in unrealized gains/(losses) included in earnings relating to level 3 derivatives still held at the end of the periods	$	1	$	3	$	1		$	3

(1) We reported unrealized gains and losses associated with level 3 commodity derivatives in our condensed consolidated statements of operations as Supply and Logistics segment revenues.

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Equity-Indexed Compensation Plans (Tables)

6 Months Ended

Jun. 30, 2014

Equity-Indexed Compensation Plans

Summary of equity-indexed compensation activity for PAA and PAGP LTIP awards

Equity-indexed compensation activity for PAA and PAGP LTIP awards is summarized in the following table (units and shares in millions):

			Weighted Average			Weighted Average
			Grant Date			Grant Date
	PAA Units (1)		Fair Value per Unit		PAGP Shares (1)	Fair Value per Share
Outstanding at December 31, 2013	8.4		$	36.97	—	$	—
Granted	0.9		$	46.61	0.1	$	27.84
Vested (2)	(1.8	)	$	25.39	—	$	—
Cancelled or forfeited	(0.3	)	$	38.88	—	$	—
Outstanding at June 30, 2014	7.2		$	41.05	0.1	$	27.84

(1) Amounts do not include AAP Management Units.

(2) Approximately 0.6 million PAA common units were issued, net of tax withholding of 0.3 million units, during the six months ended June 30, 2014 in connection with the settlement of vested awards. The remaining PAA awards that vested during the six months ended June 30, 2014 of approximately 0.9 million units were settled in cash.

Summary of AAP Management Units

The following table contains a summary of AAP Management Units (in millions):

	Reserved for Future Grants		Outstanding	Outstanding Units Earned	Grant Date Fair Value Of Outstanding AAP Management Units (1)
Balance at December 31, 2013	3.5		48.6	47.0	$	51
Granted	(0.4	)	0.4	—	11
Earned	N/A		N/A	0.8	N/A
Balance at June 30, 2014	3.1		49.0	47.8	$	62

(1) Of the grant date fair value, approximately $4 million was recognized as expense during the six months ended June 30, 2014. Of the $62 million grant date fair value, approximately $52 million had been recognized through June 30, 2014.

Summary of expense recognized and value of vesting related to equity-indexed compensation plans

The table below summarizes the expense recognized and the value of vesting (settled both in PAA common units and cash) related to our equity-indexed compensation plans and includes both liability-classified and equity-classified awards (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Equity-indexed compensation expense	$	34	$	27	$	68	$	78
LTIP unit-settled vestings	$	44	$	46	$	51	$	46
LTIP cash-settled vestings	$	51	$	60	$	52	$	60
DER cash payments	$	2	$	2	$	4	$	4

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Derivatives and Risk Management Activities (Details 2) (USD $) In Millions, unless otherwise specified								1 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2014 Interest Rate Derivatives	Jun. 30, 2014 10 forward starting interest rate swaps (30-year) PAA Cash flow hedge contract	Apr. 23, 2014 Treasury locks entered into in anticipation of issuance of 4.70% senior notes due 2044 PAA	Apr. 30, 2014 Treasury locks entered into in anticipation of issuance of 4.70% senior notes due 2044 PAA Cash flow hedge	Apr. 23, 2014 Treasury locks entered into in anticipation of issuance of 4.70% senior notes due 2044 PAA Cash flow hedge contract
Interest Rate Risk Hedging
Net deferred gains/(losses) from interest rate risk hedging included in AOCI	$ (142)	$ (97)	$ (58)	$ 79	$ (101)
Number of interest rate derivatives (in contracts)						10			5
Notional amount of derivatives						250	250		250
Rate of fixed interest to be received on interest rate swap (as a percent)						3.60%			3.64%
Cash payment for (proceeds from) termination of interest rate swaps								$ 7

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Operating Segments (Tables)

6 Months Ended

Jun. 30, 2014

Operating Segments

Segment financial data

The following table reflects certain financial data for each segment for the periods indicated (in millions):

	Transportation		Facilities		Supply and Logistics		Total
Three Months Ended June 30, 2014
Revenues (1):
External Customers	$	195	$	144	$	10,856	$	11,195
Intersegment (2)	217		133		4		354
Total revenues of reportable segments	$	412	$	277	$	10,860	$	11,549
Equity earnings in unconsolidated entities	$	23	$	—	$	—	$	23
Segment profit (3) (4)	$	221	$	134	$	133	$	488
Maintenance capital	$	42	$	5	$	1	$	48
Three Months Ended June 30, 2013
Revenues:
External Customers	$	165	$	197	$	9,933	$	10,295
Intersegment (2)	200		151		1		352
Total revenues of reportable segments	$	365	$	348	$	9,934	$	10,647
Equity earnings in unconsolidated entities	$	11	$	—	$	—	$	11
Segment profit (3) (4)	$	160	$	149	$	176	$	485
Maintenance capital	$	23	$	11	$	5	$	39

	Transportation		Facilities		Supply and Logistics		Total
Six Months Ended June 30, 2014
Revenues (1):
External Customers	$	376	$	301	$	22,201	$	22,878
Intersegment (2)	422		275		27		724
Total revenues of reportable segments	$	798	$	576	$	22,228	$	23,602
Equity earnings in unconsolidated entities	$	44	$	—	$	—	$	44
Segment profit (3) (4)	$	427	$	288	$	382	$	1,097
Maintenance capital	$	76	$	15	$	4	$	95
Six Months Ended June 30, 2013
Revenues:
External Customers	$	338	$	420	$	20,157	$	20,915
Intersegment (2)	394		283		1		678
Total revenues of reportable segments	$	732	$	703	$	20,158	$	21,593
Equity earnings in unconsolidated entities	$	23	$	—	$	—	$	23
Segment profit (3) (4)	$	323	$	300	$	610	$	1,233
Maintenance capital	$	55	$	18	$	9	$	82

(1) Effective January 1, 2014, our natural gas sales and costs, primarily attributable to the activities performed by our natural gas storage commercial optimization group, are reported in the Supply and Logistics segment. Such items were previously reported in the Facilities segment.

(2) Segment revenues and purchases and related costs include intersegment amounts. Intersegment sales are conducted at posted tariff rates, rates similar to those charged to third parties or rates that we believe approximate market. For further discussion, see “Analysis of Operating Segments” under Item 7 of our 2013 Annual Report on Form 10-K.

(3) Supply and Logistics segment profit includes interest expense (related to hedged inventory purchases) of approximately $5 million for each of the three months ended June 30, 2014 and 2013 and approximately $7 million and $10 million for the six months ended June 30, 2014 and 2013, respectively.

(4) The following table reconciles segment profit to net income attributable to PAGP (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Segment profit	$	488		$	485		$	1,097		$	1,233
Unallocated general and administrative expenses	(1		)	—			(2		)	—
Depreciation and amortization	(100		)	(91		)	(197		)	(174		)
Interest expense, net	(85		)	(76		)	(166		)	(154		)
Other income/(expense), net	4			(1		)	2			(1		)
Income before tax	306			317			734			904
Income tax expense	(31		)	(18		)	(87		)	(70		)
Net income	275			299			647			834
Net income attributable to noncontrolling interests	(260		)	(298		)	(618		)	(832		)
Net income attributable to PAGP	$	15		$	1		$	29		$	2

Reconciliation of segment profit to net income attributable to PAGP

The following table reconciles segment profit to net income attributable to PAGP (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Segment profit	$	488		$	485		$	1,097		$	1,233
Unallocated general and administrative expenses	(1		)	—			(2		)	—
Depreciation and amortization	(100		)	(91		)	(197		)	(174		)
Interest expense, net	(85		)	(76		)	(166		)	(154		)
Other income/(expense), net	4			(1		)	2			(1		)
Income before tax	306			317			734			904
Income tax expense	(31		)	(18		)	(87		)	(70		)
Net income	275			299			647			834
Net income attributable to noncontrolling interests	(260		)	(298		)	(618		)	(832		)
Net income attributable to PAGP	$	15		$	1		$	29		$	2

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Related Party Transactions (Tables) (Oxy)

6 Months Ended

Jun. 30, 2014

Oxy

Related party transaction

Information related to transactions with related parties

See detail below (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Revenues	$	351	$	424	$	443	$	694
Purchases and related costs	$	209	$	214	$	468	$	375

 Our gross receivable and payable amounts with affiliates of Oxy were as follows (in millions):

	June 30,		December 31,
	2014		2013
Trade accounts receivable and other receivables	$	460	$	133
Accounts payable	$	321	$	181

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 647	$ 834
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	197	174
Equity-indexed compensation expense	68	78
Inventory valuation adjustments	37
Deferred income tax expense	35	17
Gain on sales of linefill and base gas	(8)	(3)
Gain on foreign currency revaluation	(5)	(5)
Settlement of terminated interest rate hedging instruments	(7)
Equity earnings in unconsolidated entities, net of distributions	7	(1)
Other	5
Changes in assets and liabilities, net of acquisitions	(22)	240
Net cash provided by operating activities	954	1,334
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid in connection with acquisitions, net of cash acquired	(2)	(31)
Additions to property, equipment and other	(918)	(785)
Cash received for sales of linefill and base gas	23	14
Cash paid for purchases of linefill and base gas	(140)	(24)
Investment in unconsolidated entities	(67)	(112)
Proceeds from sales of assets	3	3
Other investing activities		3
Net cash used in investing activities	(1,101)	(932)
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments under PAA senior secured hedged inventory facility (Note 6)		(85)
Net repayments under PAA senior unsecured revolving credit facility (Note 6)		(65)
Net repayments under PNG credit agreement		(36)
Net borrowings under AAP revolving credit facility (Note 6)	11	3
Net repayments under PAA commercial paper program (Note 6)	(344)
Proceeds from the issuance of PAA senior notes (Note 6)	698
Net proceeds from the issuance of common units by subsidiaries (Note 8)	444	354
Contributions from noncontrolling interests related to the issuance of common units by subsidiaries		5
Distributions paid to noncontrolling interests (Note 8)	(626)	(579)
Distributions paid to Class A shareholders (Note 8)	(40)
Distributions paid to members		(2)
Other financing activities	(11)	(1)
Net cash provided by/(used in) financing activities	132	(406)
Effect of translation adjustment on cash		(3)
Net decrease in cash and cash equivalents	(15)	(7)
Cash and cash equivalents, beginning of period	43	25
Cash and cash equivalents, end of period	28	18
Cash paid for:
Interest, net of amounts capitalized	166	148
Income taxes, net of amounts refunded	$ 104	$ 18

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Organization and Basis of Consolidation and Presentation (Details)	6 Months Ended
	Jun. 30, 2014 segment
Organization and basis of presentation
Operating segments number	3
GP LLC
Organization and basis of presentation
Consolidated subsidiary, ownership interest held by the parent (as a percent)	100.00%
AAP
Organization and basis of presentation
Number of AAP units owned	136,046,637
Consolidated subsidiary, ownership interest held by the parent (as a percent)	22.40%
AAP | PAA | Indirect Ownership
Organization and basis of presentation
General partner or managing member ownership interest (as a percent)	2.00%
PAA GP | PAA
Organization and basis of presentation
General partner or managing member ownership interest (as a percent)	2.00%

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Partners' Capital and Distributions (Details 2)	6 Months Ended
	Jun. 30, 2014
Class B Shares
Partners Capital and Distribution
Balance, beginning of period (in shares)	472,196,136
Shares exchanged in connection with Exchange Right exercises	(2,213,000)
Balance, end of period (in shares)	469,983,136
Class A Shares
Partners Capital and Distribution
Balance, beginning of period (in shares)	133,833,637
Shares issued in connection with Exchange Right exercises	2,213,000
Balance, end of period (in shares)	136,046,637
Class A Shares | AAP units
Partners Capital and Distribution
AAP unit conversion ratio to Class A shares	1

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Operating Segments (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Reconciliation of segment profit to net income attributable to Plains
Segment profit	$ 488	$ 485	$ 1,097	$ 1,233
Unallocated general and administrative expenses	(1)		(2)
Depreciation and amortization	(100)	(91)	(197)	(174)
Interest expense, net	(85)	(76)	(166)	(154)
Other income (expense), net	4	(1)	2	(1)
INCOME BEFORE TAX	306	317	734	904
Income tax expense	(31)	(18)	(87)	(70)
NET INCOME	275	299	647	834
Net income attributable to noncontrolling interests	(260)	(298)	(618)	(832)
NET INCOME ATTRIBUTABLE TO PAGP	$ 15	$ 1	$ 29	$ 2

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
CURRENT ASSETS
Cash and cash equivalents	$ 28	$ 43
Trade accounts receivable and other receivables, net	3,730	3,637
Inventory	1,096	1,065
Other current assets	316	220
Total current assets	5,170	4,965
PROPERTY AND EQUIPMENT	13,451	12,514
Accumulated depreciation	(1,817)	(1,673)
Property and equipment, net	11,634	10,841
OTHER ASSETS
Goodwill	2,502	2,503
Linefill and base gas	895	798
Long-term inventory	287	251
Investments in unconsolidated entities	545	485
Other, net	1,561	1,610
Total assets	22,594	21,453
CURRENT LIABILITIES
Accounts payable and accrued liabilities	4,302	3,985
Short-term debt	763	1,113
Other current liabilities	359	315
Total current liabilities	5,424	5,413
LONG-TERM LIABILITIES
Senior notes, net of unamortized discount of $16 and $15, respectively	7,409	6,710
Long-term debt under credit facilities and other	531	520
Other long-term liabilities and deferred credits	546	531
Total long-term liabilities	8,486	7,761
COMMITMENTS AND CONTINGENCIES (NOTE 11)
PARTNERS' CAPITAL
Noncontrolling interests	7,638	7,244
Total partners' capital	8,684	8,279
Total liabilities and partners' capital	22,594	21,453
Class A Shares
PARTNERS' CAPITAL
Partners' Capital	1,046	1,035
Class B Shares
PARTNERS' CAPITAL
Partners' Capital

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Derivatives and Risk Management Activities (Details 3) In Millions, unless otherwise specified	Jun. 30, 2014 Net Position By Currency of Foreign Currency Derivatives CAD	Jun. 30, 2014 Net Position By Currency of Foreign Exchange Forward Contracts Maturing in 2014 CAD	Jun. 30, 2014 Net Position By Currency of Foreign Exchange Forward Contracts Maturing in 2015 CAD	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange CAD for USD at the Rate USD 1.00 to CAD 1.07 Maturing in 2014 USD ($)	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange CAD for USD at the Rate USD 1.00 to CAD 1.07 Maturing in 2014 CAD	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange CAD for USD at the Rate USD 1.00 to CAD 1.07 Maturing in 2015 USD ($)	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange CAD for USD at the Rate USD 1.00 to CAD 1.07 Maturing in 2015 CAD	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange CAD for USD at the Rate USD 1.00 to CAD 1.07 USD ($)	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange CAD for USD at the Rate USD 1.00 to CAD 1.07 CAD	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange USD for CAD at the Rate USD 1.00 to CAD 1.09 Maturing in 2014 USD ($)	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange USD for CAD at the Rate USD 1.00 to CAD 1.09 Maturing in 2014 CAD	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange USD for CAD at the Rate USD 1.00 to CAD 1.09 Maturing in 2015 USD ($)	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange USD for CAD at the Rate USD 1.00 to CAD 1.09 Maturing in 2015 CAD	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange USD for CAD at the Rate USD 1.00 to CAD 1.09 USD ($)	Jun. 30, 2014 Foreign Exchange Forward Contracts that exchange USD for CAD at the Rate USD 1.00 to CAD 1.09 CAD
Currency Exchange Rate Risk Hedging:
Notional amount of derivatives				$ 273	292	$ 77	82	$ 350	374	$ 273	297	$ 77	84	$ 350	381
Net position by currency	(7)	(5)	(2)
Average exchange rate for outstanding foreign currency forward exchange contracts					1.07		1.07		1.07		1.09		1.09		1.09

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 275	$ 299	$ 647	$ 834
Other comprehensive income/(loss)	91	(92)	(45)	(137)
Comprehensive income	366	207	602	697
Comprehensive income attributable to noncontrolling interests	(351)	(206)	(573)	(695)
Comprehensive income attributable to PAGP	$ 15	$ 1	$ 29	$ 2

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Goodwill (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 Transportation	Jun. 30, 2014 Facilities	Dec. 31, 2013 Facilities	Jun. 30, 2014 Supply and Logistics	Dec. 31, 2013 Supply and Logistics
Changes in goodwill
Balance at beginning of period	$ 2,503	$ 878	$ 1,162	$ 1,162	$ 463	$ 463
Foreign currency translation adjustments	(1)	(1)
Balance at end of period	2,502	877	1,162	1,162	463	463
Impairment	$ 0

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Related Party Transactions

6 Months Ended

Jun. 30, 2014

Related Party Transactions

Related Party Transactions

Note 13—Related Party Transactions

See Note 14 to our Consolidated Financial Statements included in Part IV of our 2013 Annual Report on Form 10-K for a complete discussion of our related party transactions.

Occidental Petroleum Corporation

As of June 30, 2014, a subsidiary of Occidental Petroleum Corporation (“Oxy”) owned approximately 25% of the limited partner interests in AAP and had a representative on the board of directors of GP LLC and our general partner. During the three and six months ended June 30, 2014 and 2013, we recognized sales and transportation revenues and purchased petroleum products from companies affiliated with Oxy. These transactions were conducted at posted tariff rates or prices that we believe approximate market. See detail below (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Revenues	$	351	$	424	$	443	$	694
Purchases and related costs	$	209	$	214	$	468	$	375

We currently have a netting arrangement with Oxy. Our gross receivable and payable amounts with affiliates of Oxy were as follows (in millions):

	June 30,		December 31,
	2014		2013
Trade accounts receivable and other receivables	$	460	$	133
Accounts payable	$	321	$	181

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Debt (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Short-term debt:
Other short-term debt	$ 3	$ 4
Total short-term debt	763	1,113
Long-term debt:
PAA senior notes, net of unamortized discounts of $16 and $15, respectively	7,409	6,710
Unamortized discounts	16	15
Long-term debt, other	5	5
Total long-term debt	7,940	7,230
Total debt	8,703	8,343
PAA senior notes
Long-term debt:
PAA senior notes, net of unamortized discounts of $16 and $15, respectively	7,409	6,710
Unamortized discounts	16	15
PAA 5.25% senior notes due June 2015
Long-term debt:
Senior Notes	150
Debt instrument, interest rate (as a percent)	5.25%
PAA commercial paper notes
Short-term debt:
PAA commercial paper notes, bearing a weighted-average interest rate of 0.29% and 0.33%, respectively	760	1,109
Repayment period	1 year
Weighted average interest rate, short-term (as a percent)	0.29%	0.33%
AAP term loan
Long-term debt:
Term loan, amount outstanding	500	500
Weighted average interest rate, long-term (as a percent)	1.80%	1.90%
AAP senior secured revolving credit facility
Long-term debt:
Long-term debt under credit facilities	$ 26	$ 15
Weighted average interest rate, long-term (as a percent)	1.70%	2.20%

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill

Schedule of goodwill by segment and changes during the period

The table below reflects our goodwill by segment and changes during the period indicated (in millions):

	Transportation			Facilities		Supply and Logistics		Total
Balance at December 31, 2013	$	878		$	1,162	$	463	$	2,503
Foreign currency translation adjustments	(1		)	—		—		(1		)
Balance at June 30, 2014	$	877		$	1,162	$	463	$	2,502

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME / (LOSS) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Increase (Decrease) in Accumulated Other Comprehensive Income
Balance at beginning of period			$ (97)	$ 79
Reclassification adjustments			10	(16)
Deferred gain (loss) on cash flow hedges, net of tax			(51)	63
Currency translation adjustments			(4)	(184)
Total period activity	91	(92)	(45)	(137)
Balance at end of period	(142)	(58)	(142)	(58)
Derivative Instruments
Increase (Decrease) in Accumulated Other Comprehensive Income
Balance at beginning of period			(77)	(121)
Reclassification adjustments			10	(16)
Deferred gain (loss) on cash flow hedges, net of tax			(51)	63
Total period activity			(41)	47
Balance at end of period	(118)	(74)	(118)	(74)
Translation Adjustments
Increase (Decrease) in Accumulated Other Comprehensive Income
Balance at beginning of period			(20)	200
Currency translation adjustments			(4)	(184)
Total period activity			(4)	(184)
Balance at end of period	$ (24)	$ 16	$ (24)	$ 16

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
CONDENSED CONSOLIDATED BALANCE SHEETS
Senior notes, unamortized discount (in dollars)	$ 16	$ 15
Class A Shares
Shares outstanding
Shares outstanding	136,046,637	133,833,637
Class B Shares
Shares outstanding
Shares outstanding	469,983,136	472,196,136

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Partners' Capital and Distributions

6 Months Ended

Jun. 30, 2014

Partners' Capital and Distributions

Partners' Capital and Distributions

Note 8—Partners’ Capital and Distributions

Distributions

The following table details the distributions paid to Class A shareholders during or pertaining to the first six months of 2014 (in millions, except per share data):

Date Declared	Distribution Date	Distributions to Class A Shareholders		Distributions per Class A Share (2)
July 8, 2014	August 14, 2014 (1)	$	25	$	0.18340
April 7, 2014	May 15, 2014	$	23	$	0.17055
January 9, 2014	February 14, 2014	$	17	$	0.12505

(1) Payable to shareholders of record at the close of business on August 1, 2014, for the period April 1, 2014 through June 30, 2014.

(2) The distribution per Class A share paid on February 14, 2014 was prorated for the partial quarter following the closing of our IPO on October 21, 2013.

Units Outstanding

Exchange Rights. Holders of AAP units and their permitted transferees each have the right to exchange all or a portion of their AAP units into Class A shares at an exchange ratio of one Class A share for each AAP unit exchanged (referred to herein as their “Exchange Right”). This Exchange Right may be exercised only if, simultaneously therewith, an equal number of Class B shares and general partner units are transferred by the exercising party to us. For additional information regarding Exchange Rights, see Note 10 to our Consolidated Financial Statements included in Part IV of our 2013 Annual Report on Form 10-K. During the six months ended June 30, 2014, certain holders of AAP units and their permitted transferees exercised their Exchange Right, which resulted in the exchange of AAP units, general partner units and our Class B shares for our Class A shares. The following table reflects the impact of such Exchange Right exercises on our Class A and Class B shares outstanding:

	Class B Shares		Class A Shares
Balance at December 31, 2013	472,196,136		133,833,637
Shares (exchanged)/issued in connection with Exchange Right exercises	(2,213,000	)	2,213,000
Balance at June 30, 2014	469,983,136		136,046,637

Consolidated Subsidiaries

Sales of Common Units by Subsidiaries

PAA Continuous Offering Program.  During the six months ended June 30, 2014, PAA sold an aggregate of approximately 8.1 million common units under its continuous offering program, generating proceeds of approximately $444 million, net of offering costs.

Noncontrolling Interests in Subsidiaries

As of June 30, 2014, noncontrolling interests in subsidiaries consisted of the following: (i) a 98% limited partner interest in PAA, (ii) an approximate 78% limited partner interest in AAP that consists of Class A units and AAP Management Units (a profits interest) and (iii) a 25% interest in SLC Pipeline LLC.

Subsidiary Distributions

PAA Distributions. The following table details the distributions to PAA’s partners paid during or pertaining to the first six months of 2014, net of incentive distribution reductions (in millions, except per unit data):

		Distributions to PAA’s Partners								Distributions
		Limited		AAP						per limited
Date Declared	Distribution Date	Partners		Incentive		2%		Total		partner unit
July 8, 2014	August 14, 2014 (1)	$	238	$	117	$	5	$	360	$	0.6450
April 7, 2014	May 15, 2014	$	229	$	110	$	5	$	344	$	0.6300
January 9, 2014	February 14, 2014	$	221	$	102	$	5	$	328	$	0.6150

(1) Payable to unitholders of record at the close of business on August 1, 2014, for the period April 1, 2014 through June 30, 2014.

During the six months ended June 30, 2014, distributions of approximately $1 million were paid to noncontrolling interests in SLC Pipeline LLC.

AAP Distributions. The following table details the distributions to AAP’s partners paid during or pertaining to the first six months of 2014 (in millions):

						Distributions to AAP’s Partners
	Distributions received		Cash					Noncontrolling
Distribution Date	by AAP from PAA		Reserves			Total		Interests		PAGP
August 14, 2014 (1)	$	122	$	(3	)	$	119	$	94	$	25
May 15, 2014	$	115	$	(4	)	$	111	$	88	$	23
February 14, 2014 (2)	$	107	$	(3	)	$	104	$	87	$	17

(1) Payable to unitholders of record at the close of business on August 1, 2014, for the period April 1, 2014 through June 30, 2014.

(2) The distribution paid by AAP on February 14, 2014 was prorated as of the date of the consummation of our IPO, such that the owners of AAP prior to our IPO received the portion of the distribution attributable to the period prior to our IPO, and the owners of AAP at the date of record of January 31, 2014, including us, received the portion of the distribution attributable to the period beginning on the date of the IPO through the end of the fourth quarter of 2013.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 04, 2014
Document and Entity Information
Entity Registrant Name	PLAINS GP HOLDINGS LP
Entity Central Index Key	0001581990
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		136,046,637
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

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Equity-Indexed Compensation Plans

6 Months Ended

Jun. 30, 2014

Equity-Indexed Compensation Plans

Equity-Indexed Compensation Plans

Note 9—Equity-Indexed Compensation Plans

We refer to the PAGP LTIP, PAA LTIPs and AAP Management Units collectively as our “Equity-indexed compensation plans.” For additional discussion of our equity-indexed compensation plans and awards, see Note 15 to our Consolidated Financial Statements included in Part IV of our 2013 Annual Report on Form 10-K.

In connection with our IPO in October 2013, our general partner adopted the PAGP LTIP, which is intended to align the interests of employees and directors with those of our shareholders by providing such employees and directors incentive compensation awards that reward achievement of targeted distribution levels and other business objectives. The PAGP LTIP provides for awards of options, restricted shares, phantom shares and share appreciation rights. Certain awards may also include distribution equivalent rights (“DERs”), which, subject to applicable vesting criteria, entitle the grantee to a cash payment equal to the cash distribution paid on an outstanding Class A share. The PAGP LTIP authorizes the issuance of up to 10 million Class A shares deliverable upon vesting. In February 2014, an aggregate of 83,200 phantom Class A shares were issued to our directors, resulting in expense of less than $1 million for the six months ended June 30, 2014.  These awards will vest annually in 25% increments, beginning in February 2015, and have an automatic re-grant feature such that as they vest, an equivalent amount is granted.

Equity-indexed compensation activity for PAA and PAGP LTIP awards is summarized in the following table (units and shares in millions):

			Weighted Average			Weighted Average
			Grant Date			Grant Date
	PAA Units (1)		Fair Value per Unit		PAGP Shares (1)	Fair Value per Share
Outstanding at December 31, 2013	8.4		$	36.97	—	$	—
Granted	0.9		$	46.61	0.1	$	27.84
Vested (2)	(1.8	)	$	25.39	—	$	—
Cancelled or forfeited	(0.3	)	$	38.88	—	$	—
Outstanding at June 30, 2014	7.2		$	41.05	0.1	$	27.84

(1) Amounts do not include AAP Management Units.

(2) Approximately 0.6 million PAA common units were issued, net of tax withholding of 0.3 million units, during the six months ended June 30, 2014 in connection with the settlement of vested awards. The remaining PAA awards that vested during the six months ended June 30, 2014 of approximately 0.9 million units were settled in cash.

AAP Management Units

The following table contains a summary of AAP Management Units (in millions):

	Reserved for Future Grants		Outstanding	Outstanding Units Earned	Grant Date Fair Value Of Outstanding AAP Management Units (1)
Balance at December 31, 2013	3.5		48.6	47.0	$	51
Granted	(0.4	)	0.4	—	11
Earned	N/A		N/A	0.8	N/A
Balance at June 30, 2014	3.1		49.0	47.8	$	62

(1) Of the grant date fair value, approximately $4 million was recognized as expense during the six months ended June 30, 2014. Of the $62 million grant date fair value, approximately $52 million had been recognized through June 30, 2014.

Other Consolidated Equity-Indexed Compensation Information

The table below summarizes the expense recognized and the value of vesting (settled both in PAA common units and cash) related to our equity-indexed compensation plans and includes both liability-classified and equity-classified awards (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Equity-indexed compensation expense	$	34	$	27	$	68	$	78
LTIP unit-settled vestings	$	44	$	46	$	51	$	46
LTIP cash-settled vestings	$	51	$	60	$	52	$	60
DER cash payments	$	2	$	2	$	4	$	4

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
REVENUES
Supply and Logistics segment revenues	$ 10,856	$ 9,933	$ 22,201	$ 20,157
Transportation segment revenues	195	165	376	338
Facilities segment revenues	144	197	301	420
Total revenues	11,195	10,295	22,878	20,915
COSTS AND EXPENSES
Purchases and related costs	10,280	9,387	20,950	18,825
Field operating costs	360	343	696	684
General and administrative expenses	91	91	181	196
Depreciation and amortization	100	91	197	174
Total costs and expenses	10,831	9,912	22,024	19,879
OPERATING INCOME	364	383	854	1,036
OTHER INCOME/(EXPENSE)
Equity earnings in unconsolidated entities	23	11	44	23
Interest expense (net of capitalized interest of $10, $10, $22 and $19, respectively)	(85)	(76)	(166)	(154)
Other income/(expense), net	4	(1)	2	(1)
INCOME BEFORE TAX	306	317	734	904
Current income tax expense	(16)	(8)	(52)	(53)
Deferred income tax expense	(15)	(10)	(35)	(17)
NET INCOME	275	299	647	834
Net income attributable to noncontrolling interests	(260)	(298)	(618)	(832)
NET INCOME ATTRIBUTABLE TO PAGP	$ 15	$ 1	$ 29	$ 2
BASIC AND DILUTED NET INCOME PER CLASS A SHARE (in dollars per share)	$ 0.11		$ 0.21
BASIC AND DILUTED WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING (in shares)	136		135

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Accounts Receivable

6 Months Ended

Jun. 30, 2014

Accounts Receivable

Accounts Receivable

Note 3—Accounts Receivable

Our accounts receivable are primarily from purchasers and shippers of crude oil and, to a lesser extent, purchasers of NGL and natural gas storage. These purchasers include, but are not limited to, refiners, producers, marketing and trading companies and financial institutions that are active in the physical and financial commodity markets. The majority of our accounts receivable relate to our crude oil supply and logistics activities that can generally be described as high volume and low margin activities, in many cases involving exchanges of crude oil volumes.

To mitigate credit risk related to our accounts receivable, we have in place a rigorous credit review process.  We closely monitor market conditions in order to make a determination with respect to the amount, if any, of credit to be extended to any given customer and the form and amount of financial performance assurances we require. Such financial assurances are commonly provided to us in the form of advance cash payments, standby letters of credit or parental guarantees. As of June 30, 2014 and December 31, 2013, we had received approximately $157 million and $117 million, respectively, of advance cash payments from third parties to mitigate credit risk. Furthermore, as of June 30, 2014 and December 31, 2013, we had received approximately $384 million and $426 million, respectively, of standby letters of credit to support obligations due from third parties, a portion of which applies to future business. In addition, in an effort to mitigate credit risk, a significant portion of our transactions with counterparties are settled on a net-cash basis. Further, we enter into netting agreements (contractual agreements that allow us to offset receivables and payables with those counterparties against each other on our balance sheet) for a majority of such arrangements.

We review all outstanding accounts receivable balances on a monthly basis and record a reserve for amounts that we expect will not be fully recovered. We do not apply actual balances against the reserve until we have exhausted substantially all collection efforts. At June 30, 2014 and December 31, 2013, substantially all of our accounts receivable (net of allowance for doubtful accounts) were less than 30 days past their scheduled invoice date. Our allowance for doubtful accounts receivable totaled approximately $5 million at both June 30, 2014 and December 31, 2013. Although we consider our allowance for doubtful accounts receivable to be adequate, actual amounts could vary significantly from estimated amounts.

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2014

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Note 2—Recent Accounting Pronouncements

Other than as discussed below and in our 2013 Annual Report on Form 10-K, no new accounting pronouncements have become effective or have been issued during the six months ended June 30, 2014 that are of significance or potential significance to us.

In May 2014, the FASB issued guidance regarding the recognition of revenue from contracts with customers with the underlying principle that an entity will recognize revenue to reflect amounts expected to be received in exchange for the provision of goods and services to customers upon the transfer of those goods or services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and the related cash flows. This guidance becomes effective for interim and annual periods beginning after December 15, 2016 and can be adopted either with a full retrospective approach or a modified retrospective approach with a cumulative-effect adjustment as of the date of adoption. We are currently evaluating which transition approach to apply and the effect that adopting this guidance will have on our financial position, results of operations and cash flows.

In April 2014, the FASB issued guidance that modifies the criteria under which assets to be disposed of are evaluated to determine if such assets qualify as a discontinued operation and requires new disclosures for both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. This guidance is effective prospectively for annual and interim reporting periods beginning after December 15, 2014. Early adoption is permitted but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issue. We are currently evaluating the provisions of this authoritative guidance and assessing its impact, but do not believe our adoption will have a material impact on our financial position, results of operations or cash flows.

In March 2013, the FASB issued guidance regarding the release of cumulative translation adjustments into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. This guidance became effective for interim and annual periods beginning after December 15, 2013. We adopted this guidance on January 1, 2014. Our adoption did not have a material impact on our financial position, results of operations or cash flows.

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Inventory, Linefill and Base Gas and Long-term Inventory (Tables)

6 Months Ended

Jun. 30, 2014

Inventory, Linefill and Base Gas and Long-term Inventory

Components of inventory, linefill and base gas and long-term inventory

Inventory, linefill and base gas and long-term inventory consisted of the following as of the dates indicated (barrels and natural gas volumes in thousands and carrying value in millions):

	June 30, 2014						December 31, 2013
	Volumes	Unit of Measure	Carrying Value		Price/Unit (1)		Volumes	Unit of Measure	Carrying Value		Price/Unit (1)
Inventory
Crude oil	6,233	barrels	$	579	$	92.89	6,951	barrels	$	540	$	77.69
NGL	10,591	barrels	444		$	41.92	8,061	barrels	352		$	43.67
Natural gas	10,824	Mcf	50		$	4.62	40,505	Mcf	150		$	3.70
Other	N/A		23		N/A		N/A		23		N/A
Inventory subtotal			1,096						1,065
Linefill and base gas
Crude oil	11,211	barrels	713		$	63.60	10,966	barrels	679		$	61.92
NGL	1,214	barrels	56		$	46.13	1,341	barrels	62		$	46.23
Natural gas	26,612	Mcf	126		$	4.73	16,615	Mcf	57		$	3.43
Linefill and base gas subtotal			895						798
Long-term inventory
Crude oil	2,712	barrels	220		$	81.12	2,498	barrels	202		$	80.86
NGL	1,681	barrels	67		$	39.86	1,161	barrels	49		$	42.20
Long-term inventory subtotal			287						251
Total			$	2,278					$	2,114

(1) Price per unit of measure represents a weighted average associated with various grades, qualities and locations. Accordingly, these prices may not coincide with any published benchmarks for such products.

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Derivatives and Risk Management Activities

6 Months Ended

Jun. 30, 2014

Derivatives and Risk Management Activities

Derivatives and Risk Management Activities

Note 10—Derivatives and Risk Management Activities

We identify the risks that underlie our core business activities and use risk management strategies to mitigate those risks when we determine that there is value in doing so.  Our policy is to use derivative instruments for risk management purposes and not for the purpose of speculating on hydrocarbon commodity (referred to herein as “commodity”) price changes.  We use various derivative instruments to (i) manage our exposure to commodity price risk as well as to optimize our profits, (ii) manage our exposure to interest rate risk and (iii) manage our exposure to currency exchange rate risk.  Our commodity risk management policies and procedures are designed to help ensure that our hedging activities address our risks by monitoring our derivative positions, as well as physical volumes, grades, locations, delivery schedules and storage capacity.  Our interest rate and currency exchange rate risk management policies and procedures are designed to monitor our derivative positions and ensure that those positions are consistent with our objectives and approved strategies.  When we apply hedge accounting, our policy is to formally document all relationships between hedging instruments and hedged items, as well as our risk management objectives for undertaking the hedge.  This process includes specific identification of the hedging instrument and the hedged transaction, the nature of the risk being hedged and how the hedging instrument’s effectiveness will be assessed.  Both at the inception of the hedge and on an ongoing basis, we assess whether the derivatives used in a transaction are highly effective in offsetting changes in cash flows or the fair value of hedged items.

Commodity Price Risk Hedging

Our core business activities involve certain commodity price-related risks that we manage in various ways, including through the use of derivative instruments.  Our policy is to (i) only purchase inventory for which we have a market, (ii) structure our sales contracts so that price fluctuations do not materially affect our operating income and (iii) not acquire and hold physical inventory or derivatives for the purpose of speculating on commodity price changes.  The material commodity-related risks inherent in our business activities can be divided into the following general categories:

Commodity Purchases and Sales — In the normal course of our operations, we purchase and sell commodities.  We use derivatives to manage the associated risks and to optimize profits.  As of June 30, 2014, net derivative positions related to these activities included:

· An average of 210,100 barrels per day net long position (total of 6.5 million barrels) associated with our crude oil purchases, which was unwound ratably during July 2014 to match monthly average pricing.

· A net short spread position averaging approximately 21,300 barrels per day (total of 14.3 million barrels), which hedges a portion of our anticipated crude oil lease gathering purchases through June 2016.  These derivatives are time spreads consisting of offsetting purchases and sales between two different months.  Our use of these derivatives does not expose us to outright price risk.

· An average of 2,800 barrels per day (total of 0.8 million barrels) of butane/WTI spread positions, which hedge specific butane sales contracts that are priced as a percentage of WTI through March 2015.

· An average of 19,300 barrels per day (total of 1.8 million barrels) of WTI/Brent crude oil grade spread positions through September 2014. These derivatives allow us to lock in grade basis differentials where we are hedging anticipated purchases of crude oil based on a WTI index and hedging anticipated sales of crude oil based on a Brent index. Our use of these derivatives does not expose us to outright price risk.

· A long position of approximately 4.1 Bcf through April 2016 related to anticipated base gas requirements.

· A short position of approximately 10.7 Bcf through February 2015 related to anticipated sales of natural gas inventory.

· A net short position of approximately 7.6 million barrels through December 2015 related to the anticipated sales of our crude oil, NGL and refined products inventory.

Pipeline Loss Allowance Oil — As is common in the pipeline transportation industry, our tariffs incorporate a loss allowance factor that is intended to offset losses due to evaporation, measurement and other losses in transit.  We utilize derivative instruments to hedge a portion of the anticipated sales of the allowance oil that is to be collected under our tariffs.  As of June 30, 2014, our PLA hedges included a net short position for an average of approximately 1,600 barrels per day (total of 1.5 million barrels) through December 2016 and a long call option position of approximately 0.7 million barrels through December 2016.

Natural Gas Processing/NGL Fractionation — As part of our supply and logistics activities, we purchase natural gas for processing and NGL mix for fractionation, and we sell the resulting individual specification products (including ethane, propane, butane and condensate).  In conjunction with these activities, we hedge the price risk associated with the purchase of the natural gas and the subsequent sale of the individual specification products.  As of June 30, 2014, we had a long natural gas position of approximately 31.3 Bcf through December 2016, a short propane position of approximately 5.2 million barrels through December 2016, a short butane position of approximately 1.5 million barrels through December 2016 and a short WTI position of approximately 0.6 million barrels through December 2016. In addition, we had a long power position of 0.6 million megawatt hours which hedges a portion of our power supply requirements at our natural gas processing and fractionation plants through December 2016.

To the extent they qualify and we decide to make the election, all of our commodity derivatives where we elect hedge accounting are designated as cash flow hedges.  We have determined that substantially all of our physical purchase and sale agreements qualify for the normal purchase normal sale scope exception.  Physical commodity contracts that meet the definition of a derivative but are ineligible, or not designated, for the normal purchase normal sale scope exception are recorded on the balance sheet at fair value, with changes in fair value recognized in earnings.

Interest Rate Risk Hedging

We use interest rate derivatives to hedge interest rate risk associated with anticipated debt issuances and outstanding debt instruments.  The derivative instruments we use to manage this risk consist primarily of interest rate swaps and treasury locks.  As of June 30, 2014, AOCI includes deferred losses of approximately $101 million that relate to open and terminated interest rate derivatives that were designated for hedge accounting.  The terminated interest rate derivatives were cash-settled in connection with the issuance or refinancing of debt agreements.  The deferred loss related to these instruments is being amortized to interest expense over the terms of the hedged debt instruments.

PAA has entered into forward starting interest rate swaps to hedge the underlying benchmark interest rate related to forecasted debt issuances through 2015.  The following table summarizes the terms of these forward starting interest rate swaps as of June 30, 2014 (notional amounts in millions):

Hedged Transaction	Number and Types of Derivatives Employed	Notional Amount		Expected Termination Date	Average Rate Locked	Accounting Treatment
Anticipated debt offering	10 forward starting swaps (30-year)	$	250	6/15/2015	3.60%	Cash flow hedge

In anticipation of PAA’s April 2014 issuance of senior notes, PAA entered into an aggregate of five treasury lock agreements in March and April 2014 for a combined notional amount of $250 million at a locked in rate of 3.64%. The treasury locks were designated as cash flow hedges, thus changes in fair value are deferred in AOCI.  In connection with PAA’s April 2014 senior notes issuance, these treasury locks were terminated prior to maturity for an aggregate cash payment of approximately $7 million.  The effective portion of the treasury locks was deferred in AOCI and will be amortized to interest expense over the life of the senior notes.

Currency Exchange Rate Risk Hedging

Because a significant portion of our Canadian business is conducted in CAD and, at times, a portion of our debt is denominated in CAD, we use foreign currency derivatives to minimize the risks of unfavorable changes in exchange rates.  These instruments include foreign currency exchange contracts and forwards.

As of June 30, 2014, our outstanding foreign currency derivatives include derivatives we use to (i) hedge currency exchange risk associated with USD-denominated commodity purchases and sales in Canada and (ii) hedge currency exchange risk created by the use of USD-denominated commodity derivatives to hedge commodity price risk associated with CAD-denominated commodity purchases and sales.

The following table summarizes our open forward exchange contracts as of June 30, 2014 (in millions):

		USD		CAD			Average Exchange Rate USD to CAD
Forward exchange contracts that exchange CAD for USD:
	2014	$	273	$	292		$1.00 - $1.07
	2015	77		82			$1.00 - $1.07
		$	350	$	374		$1.00 - $1.07
Forward exchange contracts that exchange USD for CAD:
	2014	$	273	$	297		$1.00 - $1.09
	2015	77		84			$1.00 - $1.09
		$	350	$	381		$1.00 - $1.09
Net position by currency:
	2014	$	—	$	(5	)
	2015	—		(2		)
		$	—	$	(7	)

Summary of Financial Impact

We record all open derivatives on the balance sheet as either assets or liabilities measured at fair value. Changes in the fair value of derivatives are recognized currently in earnings unless specific hedge accounting criteria are met.  For derivatives that qualify as cash flow hedges, changes in fair value of the effective portion of the hedges are deferred in AOCI and recognized in earnings in the periods during which the underlying physical transactions are recognized in earnings. Derivatives that do not qualify for hedge accounting and the portion of cash flow hedges that are not highly effective in offsetting changes in cash flows of the hedged items are recognized in earnings each period.  Cash settlements associated with our derivative activities are reflected as cash flows from operating activities in our condensed consolidated statements of cash flows.

A summary of the impact of our derivative activities recognized in earnings for the three and six months ended June 30, 2014 and 2013 is as follows (in millions):

	Three Months Ended June 30, 2014										Three Months Ended June 30, 2013
	Derivatives in Hedging Relationships										Derivatives in Hedging Relationships
Location of gain/(loss)	Gain/(loss) reclassified from AOCI into income			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge		Total			Gain/(loss) reclassified from AOCI into income (1)			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge		Total
Commodity Derivatives
Supply and Logistics segment revenues	$	12		$	—	$	—	$	12		$	21		$	—	$	21	$	42
Facilities segment revenues	—			—		—		—			(9		)	—		—		(9		)
Field operating costs	—			—		—		—			—			—		4		4
Interest Rate Derivatives
Interest expense	(1		)	—		—		(1		)	(2		)	—		—		(2		)
Foreign Currency Derivatives
Supply and Logistics segment revenues	—			—		9		9			—			—		—		—
Other income/(expense), net	—			—		—		—			1			—		—		1
Total Gain/(Loss) on Derivatives Recognized in Net Income	$	11		$	—	$	9	$	20		$	11		$	—	$	25	$	36

	Six Months Ended June 30, 2014											Six Months Ended June 30, 2013
	Derivatives in Hedging Relationships											Derivatives in Hedging Relationships
Location of gain/(loss)	Gain/(loss) reclassified from AOCI into income			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge			Total			Gain/(loss) reclassified from AOCI into income (1)			Other gain/(loss) recognized in income		Derivatives Not Designated as a Hedge		Total
Commodity Derivatives
Supply and Logistics segment revenues	$	(8	)	$	—	$	—		$	(8	)	$	29		$	—	$	59	$	88
Facilities segment revenues	—			—		—			—			(12		)	—		—		(12		)
Field operating costs	—			—		(1		)	(1		)	—			—		5		5
Interest Rate Derivatives
Interest expense	(2		)	—		—			(2		)	(3		)	—		—		(3		)
Foreign Currency Derivatives
Other income/(expense), net	—			—		—			—			2			—		—		2
Total Gain/(Loss) on Derivatives Recognized in Net Income	$	(10	)	$	—	$	(1	)	$	(11	)	$	16		$	—	$	64	$	80

(1) During the three months ended June 30, 2013 we reclassified gains of approximately $1 million and $1 million from AOCI to Supply and Logistics segment revenues and Facilities segment revenues, respectively, as a result of anticipated hedged transactions that are probable of not occurring. During the six months ended June 30, 2013, we reclassified gains of approximately $3 million and $1 million from AOCI to Supply and Logistics segment revenues and Facilities segment revenues, respectively, as a result of anticipated hedged transactions that are probable of not occurring. During the three and six months ended June 30, 2014, all of our hedged transactions were probable of occurring.

The following table summarizes the derivative assets and liabilities on our condensed consolidated balance sheet on a gross basis as of June 30, 2014 (in millions):

	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
	Location	Fair Value		Location	Fair Value
Derivatives designated as hedging instruments:
Commodity derivatives	Other current assets	$	7	Other current assets	$	(4	)
	Other long-term assets	1
Interest rate derivatives	Other current assets	1		Other current liabilities	(8		)
Total derivatives designated as hedging instruments		$	9		$	(12	)
Derivatives not designated as hedging instruments:
Commodity derivatives	Other current assets	$	76	Other current assets	$	(56	)
	Other long-term assets	2		Other long-term assets	(1		)
	Other long-term liabilities	1		Other current liabilities	(1		)
				Other long-term liabilities	(5		)
Foreign currency derivatives	Other current assets	6
Total derivatives not designated as hedging instruments		$	85		$	(63	)
Total derivatives		$	94		$	(75	)

The following table summarizes the derivative assets and liabilities on our condensed consolidated balance sheet on a gross basis as of December 31, 2013 (in millions):

	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
	Location	Fair Value		Location	Fair Value
Derivatives designated as hedging instruments:
Commodity derivatives	Other current assets	$	36	Other current assets	$	(24	)
	Other long-term assets	5
Interest rate derivatives	Other long-term assets	26
Total derivatives designated as hedging instruments		$	67		$	(24	)
Derivatives not designated as hedging instruments:
Commodity derivatives	Other current assets	$	60	Other current assets	$	(117	)
	Other long-term assets	5		Other long-term assets	(6		)
	Other current liabilities	1		Other current liabilities	(5		)
				Other long-term liabilities	(1		)
Foreign currency derivatives				Other current liabilities	(4		)
Total derivatives not designated as hedging instruments		$	66		$	(133	)
Total derivatives		$	133		$	(157	)

Our derivative transactions are governed through ISDA (International Swaps and Derivatives Association) master agreements and clearing brokerage agreements. These agreements include stipulations regarding the right of set off in the event that we or our counterparty default on our performance obligations. If a default were to occur, both parties have the right to net amounts payable and receivable into a single net settlement between parties.

Our accounting policy is to offset derivative assets and liabilities executed with the same counterparty when a master netting arrangement exists.  Accordingly, we also offset derivative assets and liabilities with amounts associated with cash margin.  Our exchange-traded derivatives are transacted through clearing brokerage accounts and are subject to margin requirements as established by the respective exchange.  On a daily basis, our account equity (consisting of the sum of our cash balance and the fair value of our open derivatives) is compared to our initial margin requirement resulting in the payment or return of variation margin. As of June 30, 2014, we had a net broker receivable of approximately $66 million (consisting of initial margin of $54 million increased by $12 million of variation margin that had been posted by us).  As of December 31, 2013, we had a net broker receivable of approximately $161 million (consisting of initial margin of $85 million increased by $76 million of variation margin that had been posted by us).

The following tables present information about derivatives and financial assets and liabilities that are subject to offsetting, including enforceable master netting arrangements at June 30, 2014 and December 31, 2013 (in millions):

	June 30, 2014						December 31, 2013
	Derivative			Derivative			Derivative			Derivative
	Asset Positions			Liability Positions			Asset Positions			Liability Positions
Netting Adjustments:
Gross position - asset/(liability)	$	94		$	(75	)	$	133		$	(157	)
Netting adjustment	(62		)	62			(148		)	148
Cash collateral paid/(received)	66			—			161			—
Net position - asset/(liability)	$	98		$	(13	)	$	146		$	(9	)
Balance Sheet Location After Netting Adjustments:
Other current assets	$	96		$	—		$	116		$	—
Other long-term assets	2			—			30			—
Other current liabilities	—			(9		)	—			(8		)
Other long-term liabilities	—			(4		)	—			(1		)
	$	98		$	(13	)	$	146		$	(9	)

As of June 30, 2014, there was a net loss of approximately $118 million deferred in AOCI including tax effects.  The deferred net loss recorded in AOCI is expected to be reclassified to future earnings contemporaneously with (i) the earnings recognition of the underlying hedged commodity transaction or (ii) interest expense accruals associated with underlying debt instruments. Of the total net loss deferred in AOCI at June 30, 2014, we expect to reclassify a net loss of approximately $4 million to earnings in the next twelve months.  The remaining deferred loss of approximately $114 million is expected to be reclassified to earnings through 2045. A portion of these amounts are based on market prices as of June 30, 2014; thus, actual amounts to be reclassified will differ and could vary materially as a result of changes in market conditions.

The net deferred gain/(loss), including tax effects, recognized in AOCI for derivatives for the three and six months ended June 30, 2014 and 2013 are as follows (in millions):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014			2013		2014			2013
Commodity derivatives, net	$	—		$	3	$	(12	)	$	11
Interest rate derivatives, net	(19		)	32		(39		)	52
Total	$	(19	)	$	35	$	(51	)	$	63

At June 30, 2014 and December 31, 2013, none of our outstanding derivatives contained credit-risk related contingent features that would result in a material adverse impact to us upon any change in our credit ratings.  Although we may be required to post margin on our cleared derivatives as described above, we do not require our non-cleared derivative counterparties to post collateral with us.

Recurring Fair Value Measurements

Derivative Financial Assets and Liabilities

The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 (in millions):

	Fair Value as of June 30, 2014										Fair Value as of December 31, 2013
Recurring Fair Value Measures (1)	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3			Total
Commodity derivatives	$	28	$	(9	)	$	1	$	20		$	16	$	(59	)	$	(3	)	$	(46	)
Interest rate derivatives	—		(7		)	—		(7		)	—		26			—			26
Foreign currency derivatives	—		6			—		6			—		(4		)	—			(4		)
Total net derivative asset/(liability)	$	28	$	(10	)	$	1	$	19		$	16	$	(37	)	$	(3	)	$	(24	)

(1) Derivative assets and liabilities are presented above on a net basis but do not include related cash margin deposits.

Level 1

Level 1 of the fair value hierarchy includes exchange-traded commodity derivatives such as futures and options.  The fair value of exchange-traded commodity derivatives is based on unadjusted quoted prices in active markets.

Level 2

Level 2 of the fair value hierarchy includes exchange-cleared commodity derivatives and over-the-counter commodity, interest rate and foreign currency derivatives that are traded in active markets.  In addition, it includes certain physical commodity contracts.  The fair value of these derivatives is based on broker price quotations which are corroborated with market observable inputs.

Level 3

Level 3 of the fair value hierarchy includes certain physical commodity contracts.  The fair value of our level 3 physical commodity contracts is based on a valuation model utilizing broker-quoted forward commodity prices, and timing estimates, which involve management judgment. The significant unobservable inputs used in the fair value measurement of our level 3 derivatives are forward prices obtained from brokers.  A significant increase or decrease in these forward prices could result in a material change in fair value to our level 3 derivatives.

Rollforward of Level 3 Net Asset

The following table provides a reconciliation of changes in fair value of the beginning and ending balances for our derivatives classified as level 3 (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014			2013
Beginning Balance	$	1	$	1	$	(3	)	$	4
Unrealized gains/(losses):
Included in earnings (1)	—		1		—			1
Included in other comprehensive income	—		—		—			—
Settlements	—		—		3			(3		)
Derivatives entered into during the period	—		2		1			2
Transfers out of level 3	—		—		—			—
Ending Balance	$	1	$	4	$	1		$	4
Change in unrealized gains/(losses) included in earnings relating to level 3 derivatives still held at the end of the periods	$	1	$	3	$	1		$	3

(1) We reported unrealized gains and losses associated with level 3 commodity derivatives in our condensed consolidated statements of operations as Supply and Logistics segment revenues.

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Debt

6 Months Ended

Jun. 30, 2014

Debt

Debt

Note 6—Debt

Debt consisted of the following as of the dates indicated (in millions):

	June 30,		December 31,
	2014		2013
SHORT-TERM DEBT
PAA commercial paper notes, bearing a weighted-average interest rate of 0.29% and 0.33%, respectively (1)	$	760	$	1,109
Other	3		4
Total short-term debt	763		1,113
LONG-TERM DEBT
PAA senior notes, net of unamortized discounts of $16 and $15, respectively (2)	7,409		6,710
Credit Facilities and Other:
AAP term loan, bearing a weighted-average interest rate of 1.8% and 1.9%, respectively	500		500
AAP senior secured revolving credit facility, bearing a weighted-average interest rate of 1.7% and 2.2%, respectively	26		15
Other	5		5
Total long-term debt	7,940		7,230
Total debt (3)	$	8,703	$	8,343

(1) PAA commercial paper notes are backstopped by the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility, which mature in August 2018 and August 2016, respectively; as such, any borrowings under the PAA commercial paper program reduce the available capacity under these facilities. At June 30, 2014 and December 31, 2013, we classified $760 million and $1.1 billion, respectively, of borrowings under the PAA commercial paper program as short-term. These borrowings are primarily designated as working capital borrowings, must be repaid within one year and are primarily for hedged NGL and crude oil inventory and NYMEX and ICE margin deposits.

(2) As of June 30, 2014, we have classified PAA’s $150 million, 5.25% senior notes due June 2015 as long-term based on the ability and intent to refinance them on a long-term basis.

(3) PAA’s fixed-rate senior notes had a face value of approximately $7.4 billion and $6.7 billion at June 30, 2014 and December 31, 2013, respectively. We estimated the aggregate fair value of these notes as of June 30, 2014 and December 31, 2013 to be approximately $8.2 billion and $7.2 billion, respectively. PAA’s fixed-rate senior notes are traded among institutions, and these trades are routinely published by a reporting service. Our determination of fair value is based on reported trading activity near quarter end. We estimate that the carrying value of outstanding borrowings under credit facilities and agreements and commercial paper program approximates fair value as interest rates reflect current market rates. The fair value estimates for both the senior notes and credit facilities are based upon observable market data and are classified within Level 2 of the fair value hierarchy. See Note 10 for additional discussion of the fair value hierarchy.

Borrowings and Repayments

Total borrowings under credit agreements and the commercial paper program for the six months ended June 30, 2014 and 2013 were approximately $34.6 billion and $7.6 billion, respectively. Total repayments under credit agreements and the commercial paper program for the six months ended June 30, 2014 and 2013 were approximately $34.9 billion and $7.8 billion, respectively. The variance in total gross borrowings and repayments is impacted by various business and financial factors including, but not limited to, the timing, average term and method of general partnership borrowing activities.

Letters of Credit

In connection with our supply and logistics activities, we provide certain suppliers with irrevocable standby letters of credit to secure our obligation for the purchase of crude oil, NGL and natural gas. Additionally, we issue letters of credit to support insurance programs and construction activities. At June 30, 2014 and December 31, 2013 we had outstanding letters of credit of approximately $38 million and $41 million, respectively.

PAA Senior Notes Issuance

On April 23, 2014, PAA completed the issuance of $700 million, 4.70% senior notes due 2044 at a public offering price of 99.734%. Interest payments are due on June 15 and December 15 of each year, commencing on December 15, 2014. In anticipation of the issuance of these senior notes, PAA entered into $250 million notional principal amount of U.S. treasury locks in March and April 2014 to hedge the treasury rate portion of the interest rate on a portion of the notes. PAA terminated these treasury locks in April 2014. See Note 10 for additional disclosure.

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Inventory, Linefill and Base Gas and Long-term Inventory

6 Months Ended

Jun. 30, 2014

Inventory, Linefill and Base Gas and Long-term Inventory

Inventory, Linefill and Base Gas and Long-term Inventory

Note 4—Inventory, Linefill and Base Gas and Long-term Inventory

Inventory, linefill and base gas and long-term inventory consisted of the following as of the dates indicated (barrels and natural gas volumes in thousands and carrying value in millions):

	June 30, 2014						December 31, 2013
	Volumes	Unit of Measure	Carrying Value		Price/Unit (1)		Volumes	Unit of Measure	Carrying Value		Price/Unit (1)
Inventory
Crude oil	6,233	barrels	$	579	$	92.89	6,951	barrels	$	540	$	77.69
NGL	10,591	barrels	444		$	41.92	8,061	barrels	352		$	43.67
Natural gas	10,824	Mcf	50		$	4.62	40,505	Mcf	150		$	3.70
Other	N/A		23		N/A		N/A		23		N/A
Inventory subtotal			1,096						1,065
Linefill and base gas
Crude oil	11,211	barrels	713		$	63.60	10,966	barrels	679		$	61.92
NGL	1,214	barrels	56		$	46.13	1,341	barrels	62		$	46.23
Natural gas	26,612	Mcf	126		$	4.73	16,615	Mcf	57		$	3.43
Linefill and base gas subtotal			895						798
Long-term inventory
Crude oil	2,712	barrels	220		$	81.12	2,498	barrels	202		$	80.86
NGL	1,681	barrels	67		$	39.86	1,161	barrels	49		$	42.20
Long-term inventory subtotal			287						251
Total			$	2,278					$	2,114

(1) Price per unit of measure represents a weighted average associated with various grades, qualities and locations. Accordingly, these prices may not coincide with any published benchmarks for such products.

At the end of each reporting period, we assess the carrying value of our inventory and make any adjustments necessary to reduce the carrying value to the applicable net realizable value. We recorded a charge of approximately $37 million during the six months ended June 30, 2014 related to the writedown of our natural gas inventory that was purchased in conjunction with managing natural gas storage deliverability requirements during the extended period of severe cold weather in the first quarter of 2014. This adjustment is a component of “Purchases and related costs” in our accompanying condensed consolidated statements of operations.

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Goodwill

6 Months Ended

Jun. 30, 2014

Goodwill

Goodwill

Note 5—Goodwill

The table below reflects our goodwill by segment and changes during the period indicated (in millions):

	Transportation			Facilities		Supply and Logistics		Total
Balance at December 31, 2013	$	878		$	1,162	$	463	$	2,503
Foreign currency translation adjustments	(1		)	—		—		(1		)
Balance at June 30, 2014	$	877		$	1,162	$	463	$	2,502

We completed our annual goodwill impairment test as of June 30, 2014 and determined that there was no impairment of goodwill.

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Net Income Per Class A Share

6 Months Ended

Jun. 30, 2014

Net Income Per Class A Share

Net Income Per Class A Share

Note 7—Net Income Per Class A Share

Basic net income per Class A share is determined by dividing net income attributable to PAGP by the weighted average number of outstanding Class A shares during the period. Class B shares do not share in the earnings of the Partnership. Accordingly, basic and diluted net income per Class B share has not been presented.

Diluted net income per Class A share is determined by dividing net income attributable to PAGP by the weighted average number of outstanding diluted Class A shares during the period. For purposes of calculating diluted net income per Class A share, both the net income attributable to PAGP and the weighted average number of outstanding diluted Class A shares consider the impact of possible future exchanges of (i) AAP units and the associated Class B shares into our Class A shares and (ii) certain Class B units of AAP (referred to herein as “AAP Management Units”) into our Class A shares. In addition, the calculation of the weighted average number of outstanding diluted Class A shares considers the effect of potentially dilutive awards under the Plains GP Holdings, L.P. Long-Term Incentive Plan (the “PAGP LTIP”).

All AAP Management Units that have satisfied the applicable performance condition are considered potentially dilutive. Exchanges of potentially dilutive AAP units and AAP Management Units are assumed to have occurred at the beginning of the period and the incremental income attributable to PAGP resulting from the assumed exchanges is representative of the incremental income that would have been attributable to PAGP if the assumed exchanges occurred on that date. Our PAGP LTIP awards that contemplate the issuance of Class A Shares are considered dilutive unless (i) vesting occurs only upon the satisfaction of a performance condition and (ii) that performance condition has yet to be satisfied. PAGP LTIP awards that are deemed to be dilutive are reduced by a hypothetical share repurchase based on the remaining unamortized fair value, as prescribed by the treasury stock method in guidance issued by the FASB. All outstanding PAGP LTIP awards as of June 30, 2014 are dilutive.

For the three and six months ended June 30, 2014, the possible exchange of any AAP units and certain AAP Management Units would have had an antidilutive effect on net income per Class A share. For the same periods, our PAGP LTIP awards are dilutive; however, there are less than 0.1 million dilutive LTIP awards, which amount is not large enough to change the presentation of weighted average shares outstanding or net income per Class A share. The following table illustrates the calculation of basic net income per Class A share and diluted net income per Class A share for the three and six months ended June 30, 2014 (amounts in millions, except per share data):

	Three Months Ended		Six Months Ended
	June 30, 2014		June 30, 2014
Basic and Diluted Net Income per Class A Share
Net income attributable to PAGP	$	15	$	29
Basic and diluted weighted average number of Class A shares outstanding	136		135
Basic and diluted net income per Class A share	$	0.11	$	0.21

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Inventory, Linefill and Base Gas and Long-term Inventory (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Inventory by category
Inventory	$ 1,096	$ 1,065
Linefill and base gas	895	798
Long-term inventory	287	251
Total	2,278	2,114
Inventory-related disclosures
Charge related to the write-down of inventory	37
Crude oil
Inventory by category
Inventory	579	540
Linefill and base gas	713	679
Long-term inventory	220	202
Inventory, Volumes (in barrels or in Mcf)	6,233,000	6,951,000
Linefill and base gas, Volumes (in barrels or in Mcf)	11,211,000	10,966,000
Long-term inventory, Volumes (in barrels or in Mcf)	2,712,000	2,498,000
Inventory, Price/Unit of measure (in dollars per unit)	92.89	77.69
Linefill and base gas, Price/Unit of measure (in dollars per unit)	63.60	61.92
Long-term inventory, Price/Unit of measure (in dollars per unit)	81.12	80.86
NGL
Inventory by category
Inventory	444	352
Linefill and base gas	56	62
Long-term inventory	67	49
Inventory, Volumes (in barrels or in Mcf)	10,591,000	8,061,000
Linefill and base gas, Volumes (in barrels or in Mcf)	1,214,000	1,341,000
Long-term inventory, Volumes (in barrels or in Mcf)	1,681,000	1,161,000
Inventory, Price/Unit of measure (in dollars per unit)	41.92	43.67
Linefill and base gas, Price/Unit of measure (in dollars per unit)	46.13	46.23
Long-term inventory, Price/Unit of measure (in dollars per unit)	39.86	42.20
Natural gas
Inventory by category
Inventory	50	150
Linefill and base gas	126	57
Inventory, Volumes (in barrels or in Mcf)	10,824,000	40,505,000
Linefill and base gas, Volumes (in barrels or in Mcf)	26,612,000	16,615,000
Inventory, Price/Unit of measure (in dollars per unit)	4.62	3.70
Linefill and base gas, Price/Unit of measure (in dollars per unit)	4.73	3.43
Inventory-related disclosures
Charge related to the write-down of inventory	37
Other
Inventory by category
Inventory	$ 23	$ 23

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Commitments and Contingencies (Details 2)			6 Months Ended	1 Months Ended	39 Months Ended		1 Months Ended		25 Months Ended		1 Months Ended		6 Months Ended	2 Months Ended	6 Months Ended	14 Months Ended
	Jun. 30, 2014 USD ($)	Dec. 31, 2013 USD ($)	Jun. 30, 2014 Minimum	Apr. 30, 2011 Rainbow Pipeline Release bbl	Jun. 30, 2014 Rainbow Pipeline Release USD ($)	Feb. 26, 2013 Rainbow Pipeline Release enforcementaction	Jul. 31, 2014 Rainbow Pipeline Release Subsequent Event CAD	Jun. 30, 2012 Rangeland Pipeline Release bbl	Jun. 30, 2014 Rangeland Pipeline Release USD ($)	Jul. 04, 2013 Rangeland Pipeline Release enforcementaction	Jul. 31, 2014 Rangeland Pipeline Release Subsequent Event CAD	Feb. 28, 2013 Bay Springs Pipeline Release bbl	Jun. 30, 2014 Bay Springs Pipeline Release USD ($)	Jun. 30, 2013 Kemp River Pipeline Release bbl event	Jun. 30, 2014 Kemp River Pipeline Release USD ($)	Jun. 30, 2014 Kemp River Pipeline Release USD ($)
Environmental
Estimated undiscounted reserve for environmental liabilities	$ 92,000,000	$ 93,000,000
Estimated undiscounted reserve for environmental liabilities, short-term	13,000,000	11,000,000
Estimated undiscounted reserve for environmental liabilities, long-term	79,000,000	82,000,000
Probable recoveries from insurers and from third parties under indemnification agreements recorded as a receivable	8,000,000	10,000,000
Actual cash expenditures for environmental liabilities, period paid			3 years
Number of events occurred														2
Estimated size of release (in barrels)				28,000				3,000				120		700
Number of enforcement actions						4				4
Total estimated cost to clean up and remediate the site, before insurance recoveries															15,000,000
Total cost to clean up and remediate the site, before insurance recoveries					70,000,000				47,000,000				6,000,000
Cost incurred, to date, to clean up and remediate the site, before insurance recoveries																8,000,000
Settlement charges paid							450,000				850,000
Charges, fines or penalties assessed															$ 0	$ 0

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Operating Segments

6 Months Ended

Jun. 30, 2014

Operating Segments

Operating Segments

Note 12—Operating Segments

We manage our operations through three operating segments: (i) Transportation, (ii) Facilities and (iii) Supply and Logistics. Our Chief Operating Decision Maker (our Chief Executive Officer) evaluates segment performance based on measures including segment profit and maintenance capital investment. We define segment profit as revenues and equity earnings in unconsolidated entities less (i) purchases and related costs, (ii) field operating costs and (iii) segment general and administrative expenses. Each of the items above excludes depreciation and amortization. Maintenance capital consists of capital expenditures for the replacement of partially or fully depreciated assets in order to maintain the operating and/or earnings capacity of our existing assets.

The following table reflects certain financial data for each segment for the periods indicated (in millions):

	Transportation		Facilities		Supply and Logistics		Total
Three Months Ended June 30, 2014
Revenues (1):
External Customers	$	195	$	144	$	10,856	$	11,195
Intersegment (2)	217		133		4		354
Total revenues of reportable segments	$	412	$	277	$	10,860	$	11,549
Equity earnings in unconsolidated entities	$	23	$	—	$	—	$	23
Segment profit (3) (4)	$	221	$	134	$	133	$	488
Maintenance capital	$	42	$	5	$	1	$	48
Three Months Ended June 30, 2013
Revenues:
External Customers	$	165	$	197	$	9,933	$	10,295
Intersegment (2)	200		151		1		352
Total revenues of reportable segments	$	365	$	348	$	9,934	$	10,647
Equity earnings in unconsolidated entities	$	11	$	—	$	—	$	11
Segment profit (3) (4)	$	160	$	149	$	176	$	485
Maintenance capital	$	23	$	11	$	5	$	39

	Transportation		Facilities		Supply and Logistics		Total
Six Months Ended June 30, 2014
Revenues (1):
External Customers	$	376	$	301	$	22,201	$	22,878
Intersegment (2)	422		275		27		724
Total revenues of reportable segments	$	798	$	576	$	22,228	$	23,602
Equity earnings in unconsolidated entities	$	44	$	—	$	—	$	44
Segment profit (3) (4)	$	427	$	288	$	382	$	1,097
Maintenance capital	$	76	$	15	$	4	$	95
Six Months Ended June 30, 2013
Revenues:
External Customers	$	338	$	420	$	20,157	$	20,915
Intersegment (2)	394		283		1		678
Total revenues of reportable segments	$	732	$	703	$	20,158	$	21,593
Equity earnings in unconsolidated entities	$	23	$	—	$	—	$	23
Segment profit (3) (4)	$	323	$	300	$	610	$	1,233
Maintenance capital	$	55	$	18	$	9	$	82

(1) Effective January 1, 2014, our natural gas sales and costs, primarily attributable to the activities performed by our natural gas storage commercial optimization group, are reported in the Supply and Logistics segment. Such items were previously reported in the Facilities segment.

(2) Segment revenues and purchases and related costs include intersegment amounts. Intersegment sales are conducted at posted tariff rates, rates similar to those charged to third parties or rates that we believe approximate market. For further discussion, see “Analysis of Operating Segments” under Item 7 of our 2013 Annual Report on Form 10-K.

(3) Supply and Logistics segment profit includes interest expense (related to hedged inventory purchases) of approximately $5 million for each of the three months ended June 30, 2014 and 2013 and approximately $7 million and $10 million for the six months ended June 30, 2014 and 2013, respectively.

(4) The following table reconciles segment profit to net income attributable to PAGP (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Segment profit	$	488		$	485		$	1,097		$	1,233
Unallocated general and administrative expenses	(1		)	—			(2		)	—
Depreciation and amortization	(100		)	(91		)	(197		)	(174		)
Interest expense, net	(85		)	(76		)	(166		)	(154		)
Other income/(expense), net	4			(1		)	2			(1		)
Income before tax	306			317			734			904
Income tax expense	(31		)	(18		)	(87		)	(70		)
Net income	275			299			647			834
Net income attributable to noncontrolling interests	(260		)	(298		)	(618		)	(832		)
Net income attributable to PAGP	$	15		$	1		$	29		$	2

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Net Income Per Class A Share (Tables)

6 Months Ended

Jun. 30, 2014

Net Income Per Class A Share

Computation of basic and diluted net income per Class A share

The following table illustrates the calculation of basic net income per Class A share and diluted net income per Class A share for the three and six months ended June 30, 2014 (amounts in millions, except per share data):

	Three Months Ended		Six Months Ended
	June 30, 2014		June 30, 2014
Basic and Diluted Net Income per Class A Share
Net income attributable to PAGP	$	15	$	29
Basic and diluted weighted average number of Class A shares outstanding	136		135
Basic and diluted net income per Class A share	$	0.11	$	0.21

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Derivatives and Risk Management Activities (Details 7) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014 Level 3	Jun. 30, 2013 Level 3	Jun. 30, 2014 Level 3	Jun. 30, 2013 Level 3	Jun. 30, 2014 Recurring Fair Value Measures	Dec. 31, 2013 Recurring Fair Value Measures	Jun. 30, 2014 Recurring Fair Value Measures Level 1	Dec. 31, 2013 Recurring Fair Value Measures Level 1	Jun. 30, 2014 Recurring Fair Value Measures Level 1 Commodity Derivatives	Dec. 31, 2013 Recurring Fair Value Measures Level 1 Commodity Derivatives	Jun. 30, 2014 Recurring Fair Value Measures Level 2	Dec. 31, 2013 Recurring Fair Value Measures Level 2	Jun. 30, 2014 Recurring Fair Value Measures Level 2 Commodity Derivatives	Dec. 31, 2013 Recurring Fair Value Measures Level 2 Commodity Derivatives	Jun. 30, 2014 Recurring Fair Value Measures Level 2 Interest Rate Derivatives	Dec. 31, 2013 Recurring Fair Value Measures Level 2 Interest Rate Derivatives	Jun. 30, 2014 Recurring Fair Value Measures Level 2 Foreign Currency Derivatives	Dec. 31, 2013 Recurring Fair Value Measures Level 2 Foreign Currency Derivatives	Jun. 30, 2014 Recurring Fair Value Measures Level 3	Dec. 31, 2013 Recurring Fair Value Measures Level 3	Jun. 30, 2014 Recurring Fair Value Measures Level 3 Commodity Derivatives	Dec. 31, 2013 Recurring Fair Value Measures Level 3 Commodity Derivatives	Jun. 30, 2014 Recurring Fair Value Measures Total Commodity Derivatives	Dec. 31, 2013 Recurring Fair Value Measures Total Commodity Derivatives	Jun. 30, 2014 Recurring Fair Value Measures Total Interest Rate Derivatives	Dec. 31, 2013 Recurring Fair Value Measures Total Interest Rate Derivatives	Jun. 30, 2014 Recurring Fair Value Measures Total Foreign Currency Derivatives	Dec. 31, 2013 Recurring Fair Value Measures Total Foreign Currency Derivatives
Recurring Fair Value Measures
Net derivative asset/(liability)					$ 19	$ (24)	$ 28	$ 16	$ 28	$ 16	$ (10)	$ (37)	$ (9)	$ (59)	$ (7)	$ 26	$ 6	$ (4)	$ 1	$ (3)	$ 1	$ (3)	$ 20	$ (46)	$ (7)	$ 26	$ 6	$ (4)
Rollforward of Level 3 Net Asset
Beginning Balance	1	1	(3)	4
Unrealized gains/(losses):
Included in earnings		1		1
Settlements			3	(3)
Derivatives entered into during the period		2	1	2
Ending Balance	1	4	1	4
Change in unrealized gains/(losses) included in earnings relating to level 3 derivatives still held at the end of the periods	$ 1	$ 3	$ 1	$ 3

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Partners' Capital and Distributions (Details 3) (USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended			6 Months Ended			0 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 PAA	Jun. 30, 2014 PAA PAA Continuous Offering Program	Jun. 30, 2014 SLC Pipeline LLC	Jun. 30, 2014 AAP	Aug. 14, 2014 Second Quarter Distribution PAA Subsequent Event	Jun. 30, 2014 Second Quarter Distribution PAA Subsequent Event	Aug. 14, 2014 Second Quarter Distribution AAP Subsequent Event	Jun. 30, 2014 Second Quarter Distribution AAP Subsequent Event	May 15, 2014 First Quarter Distribution PAA	Jun. 30, 2014 First Quarter Distribution PAA	May 15, 2014 First Quarter Distribution AAP	Jun. 30, 2014 First Quarter Distribution AAP	Feb. 14, 2014 Fourth quarter distribution PAA	Jun. 30, 2014 Fourth quarter distribution PAA	Feb. 14, 2014 Fourth quarter distribution AAP	Jun. 30, 2014 Fourth quarter distribution AAP
Partners Capital and Distribution
Units Issued (in units)				8.1
Proceeds from Sale	$ 444	$ 354		$ 444
Noncontrolling interests, ownership percentage of noncontrolling owners			98.00%		25.00%	78.00%
Date Declared								Jul. 08, 2014				Apr. 07, 2014				Jan. 09, 2014
Distribution Date								Aug. 14, 2014		Aug. 14, 2014		May 15, 2014		May 15, 2014		Feb. 14, 2014		Feb. 14, 2014
Unitholders of record, date								Aug. 01, 2014		Aug. 01, 2014								Jan. 31, 2014
Distributions received by AAP from PAA									122				115				107
Cash Reserves									(3)				(4)				(3)
Distributions paid to limited partners							238		119		229		111		221		104
Distributions to AAP - Incentive							117				110				102
Distributions to AAP - 2%							5				5				5
Total distributions paid during the period							360				344				328
Distribution per limited partner unit (in dollars per unit)							$ 0.6450				$ 0.6300				$ 0.6150
Distributions to noncontrolling interests					1				94				88				87
Distributions to PAGP									$ 25				$ 23				$ 17

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Interest expense, capitalized interest	$ 10	$ 10	$ 22	$ 19

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Organization and Basis of Consolidation and Presentation

6 Months Ended

Jun. 30, 2014

Organization and Basis of Consolidation and Presentation

Organization and Basis of Consolidation and Presentation

Note 1—Organization and Basis of Consolidation and Presentation

Organization

Plains GP Holdings, L.P. (“PAGP”) is a Delaware limited partnership formed on July 17, 2013 to own an interest in the general partner and incentive distribution rights (“IDRs”) of Plains All American Pipeline, L.P (“PAA”), a publicly traded Delaware limited partnership. PAGP has elected to be treated as a corporation for U.S. federal income tax purposes.

We completed our initial public offering (“IPO”) on October 21, 2013. Immediately prior to our IPO, certain owners of Plains AAP, L.P. (“AAP”) sold a portion of their interests in AAP to us, resulting in our ownership of Class A units of AAP (“AAP units”), which represent limited partnership interests in AAP. As of June 30, 2014, we owned 136,046,637 AAP units (representing an approximate 22.4% limited partner interest in AAP). AAP is a Delaware limited partnership that directly owns all of PAA’s IDRs and indirectly owns the 2% general partner interest in PAA. AAP is the sole member of PAA GP LLC (“PAA GP”), a Delaware limited liability company that directly holds the 2% general partner interest in PAA. Also, through a series of transactions prior to our IPO with Plains GP Holdings LLC (our general partner), a Delaware limited liability company, and the owners of Plains All American GP LLC (“GP LLC”), a Delaware limited liability company formed on May 2, 2001, GP LLC’s general partner interest in AAP became a non-economic interest, and we became the owner of a 100% managing member interest in GP LLC. See “Basis of Consolidation and Presentation” below for the resulting accounting impacts.

GP LLC manages the business and affairs of PAA and AAP. Except for certain matters relating to PAA that require the approval of the limited partners of PAA, and certain matters relating to AAP that require the approval of the limited partners of AAP or of us as the sole member of GP LLC, either pursuant to the governing documents of PAA, AAP or GP LLC, or as may be required by non-waivable provisions of applicable law, GP LLC has full and complete authority, power and discretion to manage and control the business, affairs and property of PAA and AAP, to make all decisions regarding those matters and to perform any and all other acts or activities customary or incident to the management of PAA and AAP’s business, including the execution of contracts and management of litigation. GP LLC employs all domestic officers and personnel involved in the operation and management of PAA and AAP.  PAA’s Canadian officers and personnel are employed by Plains Midstream Canada ULC (“PMC”).

PAA is a publicly traded master limited partnership that owns and operates midstream energy infrastructure and provides logistics services for crude oil, natural gas liquids (“NGL”), natural gas and refined products. The term NGL includes ethane and natural gasoline products as well as products commonly referred to as liquefied petroleum gas (“LPG”), such as propane and butane. When used in this Form 10-Q, NGL refers to all NGL products including LPG. PAA owns an extensive network of pipeline transportation, terminalling, storage, and gathering assets in key crude oil and NGL producing basins and transportation corridors and at major market hubs in the United States and Canada. Our business activities are conducted through three operating segments: (i) Transportation, (ii) Facilities and (iii) Supply and Logistics. See Note 12 for further discussion of our operating segments.

As used in this Form 10-Q and unless the context suggests otherwise (taking into account the fact that PAGP has no operating activities apart from those conducted by PAA and its subsidiaries), the terms “PAGP,” “Partnership,” “Plains,” “we,” “us,” “our,” “ours” and similar terms refer to PAGP and its consolidated subsidiaries.

Definitions

Additional defined terms are used in this Form 10-Q and shall have the meanings indicated below:

AOCI	=	Accumulated other comprehensive income
Bcf	=	Billion cubic feet
Btu	=	British thermal unit
CAD	=	Canadian dollar
DERs	=	Distribution equivalent rights
EBITDA	=	Earnings before interest, taxes, depreciation and amortization
FASB	=	Financial Accounting Standards Board
GAAP	=	Generally accepted accounting principles in the United States
ICE	=	IntercontinentalExchange
LIBOR	=	London Interbank Offered Rate
LTIP	=	Long-term incentive plan
Mcf	=	Thousand cubic feet
NGL	=	Natural gas liquids including ethane, natural gasoline, products, propane and butane
NYMEX	=	New York Mercantile Exchange
PLA	=	Pipeline loss allowance
PNG	=	PAA Natural Gas Storage, L.P.
SEC	=	Securities and Exchange Commission
USD	=	United States dollar
White Cliffs	=	White Cliffs Pipeline, LLC
WTI	=	West Texas Intermediate

Basis of Consolidation and Presentation

The accompanying unaudited condensed consolidated interim financial statements and notes thereto should be read in conjunction with our 2013 Annual Report on Form 10-K. The financial statements have been prepared in accordance with the instructions for interim reporting as set forth by the SEC. All adjustments (consisting only of normal recurring adjustments) that in the opinion of management were necessary for a fair statement of the results for the interim periods have been reflected.  All significant intercompany transactions have been eliminated in consolidation. Certain reclassifications have been made to information from previous years to conform to the current presentation. The condensed consolidated balance sheet data as of December 31, 2013 was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the three and six months ended June 30, 2014 should not be taken as indicative of results to be expected for the entire year. These financials include PAGP and all of our wholly owned subsidiaries and those entities that we control. Under GAAP, we consolidate PAA, AAP and GP LLC. Amounts associated with the interests in these entities not owned by us are reflected in our results of operations as net income attributable to noncontrolling interests and in our balance sheet partners’ capital section as noncontrolling interests.

For periods prior to our IPO, the accompanying condensed consolidated financial statements reflect the financial statements of GP LLC, the predecessor of PAGP, and are based on the historical ownership percentages of GP LLC and AAP. These financial statements, to the extent they relate to periods prior to our IPO, have been prepared from the separate financial records maintained by GP LLC and may not necessarily be indicative of the actual results of operations that might have occurred if PAGP had operated separately during those periods.

Subsequent events have been evaluated through the financial statements issuance date and have been included in the following footnotes where applicable.

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Partners' Capital and Distributions (Tables)

6 Months Ended

Jun. 30, 2014

Partners Capital and Distribution

Schedule of distributions

The following table details the distributions paid to Class A shareholders during or pertaining to the first six months of 2014 (in millions, except per share data):

Date Declared	Distribution Date	Distributions to Class A Shareholders		Distributions per Class A Share (2)
July 8, 2014	August 14, 2014 (1)	$	25	$	0.18340
April 7, 2014	May 15, 2014	$	23	$	0.17055
January 9, 2014	February 14, 2014	$	17	$	0.12505

(1) Payable to shareholders of record at the close of business on August 1, 2014, for the period April 1, 2014 through June 30, 2014.

(2) The distribution per Class A share paid on February 14, 2014 was prorated for the partial quarter following the closing of our IPO on October 21, 2013.

Schedule of impact of Exchange Right exercises on Class A and Class B shares outstanding

	Class B Shares		Class A Shares
Balance at December 31, 2013	472,196,136		133,833,637
Shares (exchanged)/issued in connection with Exchange Right exercises	(2,213,000	)	2,213,000
Balance at June 30, 2014	469,983,136		136,046,637

PAA

Partners Capital and Distribution

Schedule of distributions

The following table details the distributions to PAA’s partners paid during or pertaining to the first six months of 2014, net of incentive distribution reductions (in millions, except per unit data):

		Distributions to PAA’s Partners								Distributions
		Limited		AAP						per limited
Date Declared	Distribution Date	Partners		Incentive		2%		Total		partner unit
July 8, 2014	August 14, 2014 (1)	$	238	$	117	$	5	$	360	$	0.6450
April 7, 2014	May 15, 2014	$	229	$	110	$	5	$	344	$	0.6300
January 9, 2014	February 14, 2014	$	221	$	102	$	5	$	328	$	0.6150

(1) Payable to unitholders of record at the close of business on August 1, 2014, for the period April 1, 2014 through June 30, 2014.

AAP

Partners Capital and Distribution

Schedule of distributions

The following table details the distributions to AAP’s partners paid during or pertaining to the first six months of 2014 (in millions):

						Distributions to AAP’s Partners
	Distributions received		Cash					Noncontrolling
Distribution Date	by AAP from PAA		Reserves			Total		Interests		PAGP
August 14, 2014 (1)	$	122	$	(3	)	$	119	$	94	$	25
May 15, 2014	$	115	$	(4	)	$	111	$	88	$	23
February 14, 2014 (2)	$	107	$	(3	)	$	104	$	87	$	17

(1) Payable to unitholders of record at the close of business on August 1, 2014, for the period April 1, 2014 through June 30, 2014.

(2) The distribution paid by AAP on February 14, 2014 was prorated as of the date of the consummation of our IPO, such that the owners of AAP prior to our IPO received the portion of the distribution attributable to the period prior to our IPO, and the owners of AAP at the date of record of January 31, 2014, including us, received the portion of the distribution attributable to the period beginning on the date of the IPO through the end of the fourth quarter of 2013.

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Net Income Per Class A Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Basic and Diluted Net Income per Class A Share
Net income attributable to PAGP	$ 15	$ 1	$ 29	$ 2
Basic and diluted weighted average number of Class A shares outstanding	136		135
Basic and diluted net income per Class A share (in dollars per share)	$ 0.11		$ 0.21
Class A Shares
Basic and Diluted Net Income per Class A Share
Net income attributable to PAGP	$ 15		$ 29
Basic and diluted weighted average number of Class A shares outstanding	136		135
Basic and diluted net income per Class A share (in dollars per share)	$ 0.11		$ 0.21
Class A Shares | Maximum
Basic and Diluted Net Income per Class A Share
Dilutive LTIP awards (in shares)	0.1		0.1

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies

Commitments and Contingencies

Note 11—Commitments and Contingencies

Litigation

General.  In the ordinary course of business, we are involved in various legal proceedings. To the extent we are able to assess the likelihood of a negative outcome for these proceedings, our assessments of such likelihood range from remote to probable.  If we determine that a negative outcome is probable and the amount of loss is reasonably estimable, we accrue the estimated amount.  We do not believe that the outcome of these legal proceedings, individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows.  Although we believe that our operations are presently in material compliance with applicable requirements, as we acquire and incorporate additional assets it is possible that the EPA or other governmental entities may seek to impose fines, penalties or performance obligations on us (or on a portion of our operations) as a result of any past noncompliance whether such noncompliance initially developed before or after our acquisition.

PemexExploración y Producción v. Big Star Gathering Ltd L.L.P. et al (the “Big Star Lawsuit”) and Pemex Exploración y Producción v. Murphy Energy et al (the “Murphy Lawsuit”). In two cases filed in the Texas Southern District Court in May 2011 and April 2012, Pemex Exploración y Producción (“PEP”) alleges that certain parties stole condensate from pipelines and gathering stations and conspired with U.S. companies (primarily in Texas) to import and market the stolen condensate.  PEP does not allege that Plains was part of any conspiracy, but that it dealt in the condensate only after it had been obtained by others and resold to Plains Marketing, L.P.  PEP seeks actual damages, attorney’s fees, and statutory penalties from Plains Marketing, L.P.  In February 2013, the Court granted Plains Marketing, L.P.’s motion to be dismissed from the Murphy Lawsuit. In October 2013, the Court issued an order in the Big Star Lawsuit granting summary judgment in favor of Plains Marketing, L.P. with respect to all of PEP’s remaining claims against Plains Marketing, L.P. In February 2014, the Court affirmed its order granting summary judgment in favor of Plains Marketing, L.P. in the Big Star Lawsuit, denied PEP’s motion for reconsideration, severed the case against Plains from the other defendants and issued a final judgment dismissing all claims against Plains. The time for PEP to appeal the final judgment in both cases has lapsed. Plains’ motion to sever Plains from the remainder of the defendants in the Murphy Lawsuit in order to obtain a final judgment has been granted.

In the Matter of Rancho LPG Holdings LLC, Respondent.  In May 2014, Rancho LPG Holdings LLC (“Rancho”), a wholly owned subsidiary of PAA, entered into a Consent Agreement and Final Order (“Consent Agreement”) with the EPA regarding alleged violations of certain risk management plan regulations under the federal Clean Air Act at Rancho’s LPG storage facility in San Pedro, California.  The allegations, which Rancho disputed, arose from inspections of the facility by the EPA during 2010 and 2011.  Pursuant to the Consent Agreement, Rancho agreed to pay a civil penalty of $260,000; however, no injunctive relief was sought by the EPA.  Further, the Rancho facility was determined, as of the date of the Consent Agreement, to be in full compliance with the regulations that were the subject of the alleged violations.

Environmental

General.  Although we believe that our efforts to enhance our leak prevention and detection capabilities have produced positive results, we have experienced (and likely will experience future) releases of hydrocarbon products into the environment from our pipeline, rail and storage operations. These releases can result from unpredictable man-made or natural forces and may reach surface water bodies, groundwater aquifers or other sensitive environments. Whether current or past, damages and liabilities associated with any such releases from our assets may substantially affect our business.

At June 30, 2014, our estimated undiscounted reserve for environmental liabilities totaled approximately $92 million, of which approximately $13 million was classified as short-term and approximately $79 million was classified as long-term. At December 31, 2013, our estimated undiscounted reserve for environmental liabilities totaled approximately $93 million, of which approximately $11 million was classified as short-term and approximately $82 million was classified as long-term. The short- and long-term environmental liabilities referenced above are reflected in “Accounts payable and accrued liabilities” and “Other long-term liabilities and deferred credits,” respectively, on our condensed consolidated balance sheets. At June 30, 2014 and December 31, 2013, we had recorded receivables totaling approximately $8 million and $10 million, respectively, for amounts probable of recovery under insurance and from third parties under indemnification agreements, which are predominantly reflected in “Trade accounts receivable and other receivables, net” on our condensed consolidated balance sheets.

In some cases, the actual cash expenditures may not occur for three years or longer. Our estimates used in these reserves are based on information currently available to us and our assessment of the ultimate outcome. Among the many uncertainties that impact our estimates are the necessary regulatory approvals for, and potential modification of, our remediation plans, the limited amount of data available upon initial assessment of the impact of soil or water contamination, changes in costs associated with environmental remediation services and equipment and the possibility of existing legal claims giving rise to additional liabilities. Therefore, although we believe that the reserve is adequate, costs incurred may be in excess of the reserve and may potentially have a material adverse effect on our financial condition, results of operations or cash flows.

Rainbow Pipeline Release. During April 2011, we experienced a crude oil release of approximately 28,000 barrels of crude oil on a remote section of our Rainbow Pipeline located in Alberta, Canada.  Since the release and through June 30, 2014, we spent approximately $70 million, before insurance recoveries, in connection with site clean-up, reclamation and remediation activities, and as of June 30, 2014, we did not have any material outstanding liabilities or insurance receivables relating to this release. On February 26, 2013, the Alberta Energy Regulator (“AER”) issued four enforcement actions against PMC for failure to comply with certain regulatory requirements in connection with the release, including requirements related to operations and maintenance procedures, leak detection and response, backfill and compaction procedures and emergency response plan testing.  PMC has taken and continues to take appropriate actions necessary to respond to and comply with the enforcement actions set forth in the report, including the implementation of additional risk assessment procedures and other actions designed to minimize the risk that similar incidents occur in the future and enhance the effectiveness of PMC’s response to any such future incidents.  In addition, on April 23, 2013, the Alberta Crown Prosecutor filed charges under the Alberta Environmental Protection and Enhancement Act against PMC relating to the release.  PMC settled these charges in July 2014 for $450,000 CAD.

Rangeland Pipeline Release. During June 2012, we experienced a crude oil release on a section of our Rangeland Pipeline located near Sundre, Alberta, Canada.  Approximately 3,000 barrels were released into the Red Deer River and were contained downstream in the Gleniffer Reservoir. Remediation activities in the reservoir area were completed by June 30, 2012, remediation of the remaining impacted areas of government-owned lands was completed by September 30, 2012 and interim closure, in respect of those lands, was received from the applicable regulatory agencies.  A long-term monitoring plan has been developed and implemented in accordance with regulatory requirements. Through June 30, 2014, we spent approximately $47 million, before insurance recoveries, in connection with site clean-up, reclamation and remediation activities. On July 4, 2013, the AER issued four enforcement actions against PMC citing failure to inspect water crossings, failure to complete an engineering assessment to determine suitability of continued operation of the Rangeland Pipeline, failure to maintain updated emergency response plans, and failure to conduct regular public awareness programs.  In addition, on May 30, 2014, the Alberta Crown Prosecutor and Public Prosecution Services of Canada filed charges under the Alberta Environmental Protection and Enhancement Act and Canadian Federal Fisheries Act against PMC relating to the release. PMC settled all of such charges in July 2014 for an aggregate of $850,000 CAD.

Bay Springs Pipeline Release. During February 2013, we experienced a crude oil release of approximately 120 barrels on a portion of one of our pipelines near Bay Springs, Mississippi. Most of the released oil was contained within our pipeline right of way, but some of the released oil entered a nearby waterway where it was contained with booms.  The EPA has issued an administrative order requiring us to take various actions in response to the release, including remediation, reporting and other actions. We have satisfied the requirements of the administrative order; however, we may be subjected to a civil penalty. The aggregate cost to clean up and remediate the site was approximately $6 million.

Kemp River Pipeline Release. During May and June 2013, two separate releases were discovered on our Kemp River pipeline in Northern Alberta, Canada that, in the aggregate, resulted in the release of approximately 700 barrels of condensate and light crude oil.  Clean-up and remediation activities are being conducted in cooperation with the applicable regulatory agencies.  AER’s final investigation is not complete. To date, no charges, fines or penalties have been assessed against PMC with respect to these releases; however, it is possible that fines or penalties may be assessed against PMC in the future. We estimate that the aggregate clean-up and remediation costs associated with these releases will be approximately $15 million. Through June 30, 2014, we spent approximately $8 million in connection with clean-up and remediation activities.