Related Party Transactions

9 Months Ended

Sep. 30, 2020

See Note 17 to our Consolidated Financial Statements included in Part IV of our 2019 Annual Report on Form 10-K for a complete discussion of our related party transactions.

PAA’s Ownership of our Class C Shares

As of September 30, 2020 and December 31, 2019, PAA owned 553,800,444 and 549,538,139, respectively, Class C shares. The Class C shares represent a non-economic limited partner interest in us that provides PAA a “pass-through” voting mechanism through which PAA, as the sole holder, votes on behalf of PAA’s common unitholders and Series A preferred unitholders, who have the right to vote, pro rata with the holders of our Class A and Class B shares, for the election of eligible directors.

Transactions with Other Related Parties

Our other related parties include (i) principal owners and their affiliated entities and (ii) entities in which we hold investments and account for under the equity method of accounting (see Note 7 for information regarding such entities). We recognize as our principal owners entities that have a designated representative on the board of directors of our general partner and/or own greater than 10% of the limited partner interests in AAP. Such limited partner interests in AAP translates into a significantly smaller indirect ownership interest in PAA. We also consider subsidiaries or funds identified as affiliated with principal owners to be related parties. As of September 30, 2020, Kayne Anderson Capital Advisors, L.P. was a principal owner.

During the three and nine months ended September 30, 2020 and 2019, we recognized sales and transportation revenues, purchased petroleum products and utilized transportation services from our principal owners and their affiliated entities and our equity method investees. 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 Condensed Consolidated Statements of Operations from these transactions is included below (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenues from related parties (1) (2)	$	7	$	205	$	40	$	661

Purchases and related costs from related parties (1) (2)	$	116	$	(7)	$	339	$	93

(1)Crude oil purchases that are part of inventory exchanges under buy/sell transactions are netted with the related sales, with any margin presented in “Purchases and related costs” in our Condensed Consolidated Statements of Operations.

(2)Revenues and purchases and related costs from related parties for 2019 include transactions with The Energy & Minerals Group (“EMG”) and its subsidiaries through May 2019 and Occidental Petroleum Corporation (“Oxy”) and its subsidiaries through September 2019. Following transactions reducing EMG and Oxy’s ownership interest in AAP in May and September 2019, respectively, EMG and Oxy are no longer recognized as principal owners. See Note 17 to our 2019 Annual Report on Form 10-K for additional information.

Our receivable and payable amounts with these related parties as reflected on our Condensed Consolidated Balance Sheets were as follows (in millions):


	September 30, 2020		December 31, 2019
Trade accounts receivable and other receivables, net from related parties (1)	$	83	$	134

Trade accounts payable to related parties (1) (2)	$	82	$	102

(1)Includes amounts related to crude oil purchases and sales, transportation services and amounts owed to us or advanced to us related to investment capital projects of equity method investees where we serve as construction manager.

(2)We have agreements to store and transport crude oil at posted tariff rates on pipelines or at facilities that are owned by equity method investees, in which we own a 50% interest. A portion of our commitment to transport is supported by crude oil buy/sell or other agreements with third parties with commensurate quantities.