Related Party Transactions

PAA’s Ownership of our Class C Shares

As of December 31, 2016, PAA owned 491,910,863 Class C shares. The Class C shares represent a non-economic limited partner interest in us that provides PAA, as the sole holder, the right to vote in elections of eligible directors together with the holders of our Class A and Class B shares, commencing in 2018.

Omnibus Agreement

In connection with the Simplification Transactions completed in November 2016, the Plains Entities entered into an Omnibus Agreement, which, among other things, provides for the following:


•	our ability to issue additional Class A shares and use the net proceeds therefrom to purchase a like number of AAP units from AAP, and the corresponding ability of AAP to use the net proceeds therefrom to purchase a like number of PAA common units; and


•	our ability to lend proceeds of any future indebtedness incurred by us to AAP, and AAP’s corresponding ability to lend such proceeds to PAA, in each case on substantially the same terms as incurred by us.

See Note 1 for discussion of the Simplification Transactions.

Transactions with Oxy

As of December 31, 2016, Oxy had a representative on the board of directors of our general partner and owned approximately 13% of the limited partner interests in AAP. During the three years ended December 31, 2016, we recognized sales and transportation revenues and purchased petroleum products from Oxy. These transactions were conducted at posted tariff rates or prices that we believe approximate market. Included in these transactions was a crude oil buy/sell agreement that includes a multi-year minimum volume commitment. The impact to our Consolidated Statements of Operations from those transactions is included below (in millions):



	Year Ended December 31,
	2016		2015		2014
Revenues	$	655	$	866	$	1,212

Purchases and related costs ⁽¹⁾	$	42	$	41	$	925


⁽¹⁾	Purchases and related costs include crude oil buy/sell transactions that are accounted for as inventory exchanges and are presented net in our Consolidated Statements of Operations.

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



	December 31,
	2016		2015
Trade accounts receivable and other receivables	$	789	$	405

Accounts payable	$	836	$	363

In November 2014, we purchased Oxy’s 50% interest in BridgeTex. See Note 8 for further discussion. Also in November 2014, Oxy exercised its Exchange Right, pursuant to which Oxy received 25,910,938 Class A shares in exchange for an equal number of Class B shares, general partner units and AAP units. Immediately following the exercise of the Exchange Right, we completed an underwritten secondary public offering of the Class A shares received by Oxy. We did not receive any of the proceeds from the offering.

Transactions with Equity Method Investees

We also have transactions with companies in which we hold an investment accounted for under the equity method of accounting (see Note 8 for information related to these investments). We recorded revenues of $14 million, $17 million and $3 million during the years ended December 31, 2016, 2015 and 2014, respectively. During the three years ended December 31, 2016, we utilized transportation services and purchased petroleum products provided by these companies. Costs related to these services totaled $209 million, $164 million and $75 million for the years ended December 31, 2016, 2015 and 2014, respectively. These transactions were conducted at posted tariff rates or contracted rates or prices that we believe approximate market. Receivables from our equity method investees totaled $39 million and $14 million at December 31, 2016 and 2015, respectively, and included amounts related to capital activity at several of our investments. In addition, we had prepaid tariff costs related to our equity method investees of $14 million at December 31, 2016. Accounts payable to our equity method investees were $35 million and $25 million at December 31, 2016 and 2015, respectively, and included amounts related to capital activity at several of our investments.

In addition, we have an agreement to transport crude oil at posted tariff rates on a pipeline that is owned by an equity method investee, in which we own a 50% interest. Our commitment to transport is supported by crude oil buy/sell agreements with third parties (including Oxy) with commensurate quantities.

PAA Preferred Unit Issuance

In January 2016, PAA completed a private placement of preferred units. Certain of the purchasers of the PAA preferred units or their affiliates are related parties. Kayne Anderson Capital Advisors, L.P. and certain of its affiliates and an affiliate of The Energy Minerals Group hold ownership interests in AAP. In addition, certain of the current directors of our general partner are affiliated with certain of the purchasers. See Note 11 for additional information.