PLAINS GP HOLDINGS LP 10-K

Item 9A. 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. Applicable SEC rules require an evaluation of the effectiveness 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 our DCP as of December 31, 2021, the end of the period covered by this report, and, based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our DCP is effective. 101 Table of Contents Index to Financial Statements Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting. “Internal control over financial reporting” is a process designed by, or under the supervision of, our Chief Executive Officer and our Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management, including our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2021. See “Management’s Report on Internal Control Over Financial Reporting” on page F-2 of our Consolidated Financial Statements. Our independent registered public accounting firm, PricewaterhouseCoopers LLP, assessed the effectiveness of our internal control over financial reporting, as stated in the firm’s report. See “Report of Independent Registered Public Accounting Firm” on page F-3 of our Consolidated Financial Statements. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting during the fourth quarter of 2021 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. Item 9B. Other Information There was no information that was required to be disclosed in a report on Form 8-K during the fourth quarter of 2021 that has not previously been reported. 102 Table of Contents Index to Financial Statements PART III Item 10. Directors and Executive Officers of Our General Partner and Corporate Governance The information required by this item will be set forth in the Proxy Statement for our 2022 Annual Meeting, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2021, and is incorporated herein by reference thereto. Directors and Executive Officers As of the date of filing this report, the following individuals were serving as our executive officers and/or directors: Name Principal Occupation or Employment Willie Chiang (1)(2) Chairman of the Board and Chief Executive Officer Harry N. Pefanis (1)(2) President Chris R. Chandler (1) Executive Vice President and Chief Operating Officer Al Swanson (1) Executive Vice President and Chief Financial Officer Jeremy L. Goebel (1) Executive Vice President and Chief Commercial Officer Richard K. McGee (1) Executive Vice President, General Counsel and Secretary Chris Herbold (1) Senior Vice President, Finance and Chief Accounting Officer Greg L. Armstrong (2) Senior Advisor to the Chief Executive Officer (former Chairman and Chief Executive Officer) Victor Burk (2) Managing Director, Alvarez and Marsal Kevin McCarthy (2) Vice Chairman, Kayne Anderson Capital Advisors, L.P. Gary R. Petersen (2) Managing Partner, EnCap Investments L.P. Alexandra D. Pruner (2) Senior Advisor, Perella Weinberg Partners John T. Raymond (2) Managing Partner and Chief Executive Officer, The Energy & Minerals Group Bobby S. Shackouls (2) Former Chairman and CEO, Burlington Resources Inc. Christopher M. Temple (2) President, DelTex Capital LLC Lawrence M. Ziemba (2) Former Executive Vice President, Refining, Phillips 66 (1) Executive officer (for purposes of Item 401(b) of Regulation S-K) (2) Director A complete list of our officers, including the executive officers listed above, is available on our website at www.plains.com under About Us—Leadership. Item 11. Executive Compensation The information required by this item will be set forth in the Proxy Statement for our 2022 Annual Meeting, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2021, and is incorporated herein by reference thereto. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters The information required by this item will be set forth in the Proxy Statement for our 2022 Annual Meeting, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2021, and is incorporated herein by reference thereto. 103 Table of Contents Index to Financial Statements Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item will be set forth in the Proxy Statement for our 2022 Annual Meeting, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2021, and is incorporated herein by reference thereto. Item 14. Principal Accountant Fees and Services The information required by this item will be set forth in the Proxy Statement for our 2022 Annual Meeting, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2021, and is incorporated herein by reference thereto. 104 Table of Contents Index to Financial Statements PART IV Item 15. Exhibits and Financial Statement Schedules (a) (1) Financial Statements See “Index to the Consolidated Financial Statements” set forth on Page F-1. (2) Financial Statement Schedules All schedules are omitted because they are either not applicable or the required information is shown in the Consolidated Financial Statements or notes thereto. (3) Exhibits Exhibit No. Description 2.1* — Simplification Agreement, dated as of July 11, 2016, by and among PAA GP Holdings LLC, Plains GP Holdings, L.P., Plains All American GP LLC, Plains AAP, L.P., PAA GP LLC and Plains All American Pipeline, L.P. (incorporated by reference to Exhibit 2.1 to PAA’s Current Report on Form 8-K filed July 14, 2016). 2.2* — Agreement and Plan of Merger dated as of July 12, 2021 by and among Plains Pipeline, L.P., Plains Marketing, L.P., Oryx Midstream Holdings LLC, Middle Cadence Holdings LLC, POP HoldCo LLC, Oryx Wink Oil Marketing LLC, Oryx Permian Oil Marketing LLC, Plains Oryx Permian Basin LLC, Plains Oryx Permian Basin Marketing LLC and Plains Oryx Permian Basin Pipeline LLC (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed July 13, 2021). 3.1 — Seventh Amended and Restated Agreement of Limited Partnership of Plains All American Pipeline, L.P. dated as of October 10, 2017 (incorporated by reference to Exhibit 3.1 to PAA’s Current Report on Form 8-K filed October 12, 2017). 3.2 — Seventh Amended and Restated Limited Liability Company Agreement of Plains All American GP LLC dated November 15, 2016 (incorporated by reference to Exhibit 3.3 to our Current Report on Form 8-K filed November 21, 2016). 3.3 — Eighth Amended and Restated Limited Partnership Agreement of Plains AAP, L.P. dated November 15, 2016 (incorporated by reference to Exhibit 3.4 to our Current Report on Form 8-K filed November 21, 2016). 3.4 — Amendment No. 1 dated September 26, 2018 to the Eighth Amended and Restated Limited Partnership Agreement of Plains AAP, L.P. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed October 2, 2018). 3.5 — Amendment No. 2 dated May 23, 2019 to the Eighth Amended and Restated Limited Partnership Agreement of Plains AAP, L.P. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed May 30, 2019). 3.6 — 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). 3.7 — Certificate of Limited Partnership of Plains GP Holdings, L.P. (incorporated by reference to Exhibit 3.1 to our Registration Statement on Form S-1 (333-190227) filed July 29, 2013). 3.8 — Second Amended and Restated Agreement of Limited Partnership of Plains GP Holdings, L.P. dated as of November 15, 2016 (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed November 21, 2016). 3.9 — Amendment No. 1 dated April 6, 2020 to the Second Amended and Restated Agreement of Limited Partnership of Plains GP Holdings, L.P. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed April 9, 2020). 3.10 — Certificate of Formation of PAA GP Holdings LLC (incorporated by reference to Exhibit 3.3 to our Registration Statement on Form S-1 (333-190227) filed July 29, 2013). 105 Table of Contents Index to Financial Statements 3.11 † — Fourth Amended and Restated Limited Liability Company Agreement of PAA GP Holdings LLC dated effective as of August 19, 2021. 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 — 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). 4.3 — 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). 4.4 — 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). 4.5 — 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). 4.6 — 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). 4.7 — 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). 4.8 — 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 our Current Report on Form 8-K filed August 15, 2013). 4.9 — 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 our Current Report on Form 8-K filed April 29, 2014). 4.10 — Twenty-Sixth Supplemental Indenture (3.60% Senior Notes due 2024) dated September 9, 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 our Current Report on Form 8-K filed September 11, 2014). 4.11 — Twenty-Eighth Supplemental Indenture (4.90% Senior Notes due 2045) dated December 9, 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 4.3 to our Current Report on Form 8-K filed December 11, 2014). 4.12 — Twenty-Ninth Supplemental Indenture (4.65% Senior Notes due 2025) dated August 24, 2015, 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 26, 2015). 4.13 — Thirtieth Supplemental Indenture (4.50% Senior Notes due 2026) dated November 22, 2016, 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 November 29, 2016). 4.14 — Thirty-First Supplemental Indenture (3.55% Senior Notes due 2029) dated September 16, 2019, 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 September 17, 2019). 106 Table of Contents Index to Financial Statements 4.15 — Thirty-Second Supplemental Indenture (3.80% Senior Notes due 2030) dated June 11, 2020, 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 June 11, 2020). 4.16 — Shareholder and Registration Rights Agreement dated October 21, 2013 by and among Plains GP Holdings, L.P. and the other parties signatory thereto (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed October 25, 2013). 4.17 † — Description of Our Securities. 10.1 — Credit Agreement dated as of August 20, 2021, among Plains All American Pipeline, L.P. and Plains Midstream Canada ULC, as Borrowers; certain subsidiaries of Plains All American Pipeline, L.P. from time to time party thereto, as Designated Borrowers; Bank of America, N.A., as Administrative Agent and Swing Line Lender; Bank of America, N.A., Citibank, N.A., JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as L/C Issuers; and the other Lenders party thereto (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed August 26, 2021). 10.2 — Fourth Amended and Restated Credit Agreement dated as of August 20, 2021, among Plains Marketing, L.P. and Plains Midstream Canada ULC, as Borrowers; Plains All American Pipeline, L.P., as guarantor; Bank of America, N.A., as Administrative Agent and Swing Line Lender; Bank of America, N.A., Citibank, N.A., JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as L/C Issuers; and the other Lenders party thereto (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed August 26, 2021). 10.3 — Contribution and Assumption Agreement dated December 28, 2007, by and between Plains AAP, L.P. and PAA GP LLC (incorporated by reference to Exhibit 10.2 to PAA’s Current Report on Form 8-K filed January 4, 2008). 10.4 — Omnibus Agreement by and among PAA GP Holdings LLC, Plains GP Holdings, L.P., Plains All American GP LLC, Plains AAP, L.P., PAA GP LLC, and Plains All American Pipeline, L.P., dated November 15, 2016 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed November 21, 2016). 10.5 — Amended and Restated Administrative Agreement by and among PAA GP Holdings LLC, Plains GP Holdings, L.P., Plains All American GP LLC, Plains AAP, L.P., PAA GP LLC, and Plains All American Pipeline, L.P., dated November 15, 2016 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed November 21, 2016). 10.6** — Amended and Restated Employment Agreement between Plains All American GP LLC and Greg L. Armstrong dated as of June 30, 2001 (incorporated by reference to Exhibit 10.1 to PAA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001). 10.7** — First Amendment to Amended and Restated Employment Agreement dated December 4, 2008 between Plains All American GP LLC and Greg L. Armstrong (incorporated by reference to Exhibit 10.49 to PAA’s Annual Report on Form 10-K for the year ended December 31, 2008). 10.8** — Waiver Agreement dated as of December 23, 2010 between Plains All American GP LLC and Greg L. Armstrong (incorporated by reference to Exhibit 10.31 to PAA’s Annual Report on Form 10-K for the year ended December 31, 2010). 10.9** — Waiver Agreement dated October 21, 2013 to the Amended and Restated Employment Agreement dated June 30, 2001 of Greg L. Armstrong (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed October 25, 2013). 10.10** — Second Amended and Restated Employment Agreement dated effective October 1, 2018 between Plains All American GP LLC and Greg L. Armstrong (incorporated by reference to Exhibit 10.6 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018). 10.11** — Third Amended and Restated Employment Agreement dated effective January 1, 2020 between Plains All American GP LLC and Greg L. Armstrong (incorporated by reference to Exhibit 10.31 to our Annual Report on Form 10-K for the year ended December 31, 2019). 10.12**† — Amendment No. 1 to Third Amended and Restated Employment Agreement dated effective December 31, 2021 between Plains All American GP LLC and Greg L. Armstrong. 107 Table of Contents Index to Financial Statements 10.13** — Amended and Restated Employment Agreement between Plains All American GP LLC and Harry N. Pefanis dated as of June 30, 2001 (incorporated by reference to Exhibit 10.2 to PAA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001). 10.14** — First Amendment to Amended and Restated Employment Agreement dated December 4, 2008 between Plains All American GP LLC and Harry N. Pefanis (incorporated by reference to Exhibit 10.50 to PAA’s Annual Report on Form 10-K for the year ended December 31, 2008). 10.15** — Amendment No. 2 dated August 15, 2019 to Harry Pefanis Amended and Restated Employment Agreement (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019). 10.16** — Waiver Agreement dated as of December 23, 2010 between Plains All American GP LLC and Harry N. Pefanis (incorporated by reference to Exhibit 10.32 to PAA’s Annual Report on Form 10-K for the year ended December 31, 2010). 10.17** — Waiver Agreement dated October 21, 2013 to the Amended and Restated Employment Agreement dated June 30, 2001 of Harry N. Pefanis (incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K filed October 25, 2013). 10.18** — Employment Agreement between Plains All American GP LLC and Willie Chiang dated July 10, 2015 (incorporated by reference to Exhibit 10.53 to PAA’s Annual Report on Form 10-K for the year ended December 31, 2015). 10.19** — Amended and Restated Employment Agreement dated effective October 1, 2018 between Plains All American GP LLC and Willie Chiang (incorporated by reference to Exhibit 10.7 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018). 10.20** — First Amendment to Plains AAP, L.P. Class B Restricted Units Agreement dated August 25, 2016 (Willie Chiang) (incorporated by reference to Exhibit 10.8 to PAA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016). 10.21** — Second Amendment dated March 22, 2018 to Plains AAP, L.P. Class B Restricted Units Agreement (Willie Chiang) (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018). 10.22** — LTIP Grant Letter dated August 16, 2018 (Willie Chiang) incorporated by reference to Exhibit 10.8 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018). 10.23** — Plains All American 2021 Long-Term Incentive Plan (incorporated by reference to Exhibit A to PAA’s Definitive Proxy Statement filed on April 12, 2021). 10.24** — Plains All American 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit A to PAA’s Definitive Proxy Statement filed on October 3, 2013). 10.25** — Plains All American PNG Successor Long-Term Incentive Plan (incorporated by reference to Exhibit 4.4 to PAA’s Registration Statement on Form S-8 (333-193139) filed December 31, 2013). 10.26** — PAA Natural Gas Storage, L.P. 2010 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to PNG’s Current Report on Form 8-K filed May 11, 2010). 10.27** — Plains GP Holdings, L.P. Long Term Incentive Plan, (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed October 25, 2013). 10.28** — Form of Plains AAP, L.P. Class B Restricted Units Agreement (incorporated by reference to Exhibit 10.1 to PAA’s Current Report on Form 8-K filed January 4, 2008). 10.29** — Form of Amendment to the Plains AAP, L.P. Class B Restricted Units Agreement, dated October 18, 2013 (incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K filed October 25, 2013). 10.30** — Form of Amendment to Plains AAP, L.P. Class B Restricted Units Agreement dated August 25, 2016 (incorporated by reference to Exhibit 10.6 to PAA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 filed November 8, 2016). 108 Table of Contents Index to Financial Statements 10.31** — Form of First Amendment dated March 22, 2018 to Amended and Restated Plains AAP, L.P. Class B Restricted Units Agreement dated August 25, 2016 (Officers) (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018). 10.32** — Form of Director LTIP Grant Letter (August 2018) (incorporated by reference to Exhibit 10.66 to our Annual Report on Form 10-K for the year ended December 31, 2018). 10.33** — Director LTIP Grant Letter (December 2018) (incorporated by reference to Exhibit 10.66 to our Annual Report on Form 10-K for the year ended December 31, 2018). 10.34** — Form of LTIP Grant Letter dated August 15, 2019 (Officers) (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019). 10.35** — Form of LTIP Grant Letter dated August 15, 2019 (Directors) (incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019). 10.36** — Director LTIP Grant Letter (January 2020) (incorporated by reference to Exhibit 10.72 to our Annual Report on Form 10-K for the year ended December 31, 2019). 10.37** — Form of LTIP Grant Letter dated August 13, 2020 (Officers) (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020). 10.38** — Form of LTIP Grant Letter dated August 13, 2020 (Directors) (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020). 10.39 — Contribution Agreement dated October 21, 2013, by and among Plains GP Holdings, L.P., PAA GP Holdings LLC and the other parties signatory thereto (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed October 25, 2013). 10.40** — Form of Special Retention LTIP Grant Letter dated November 20, 2019 (incorporated by reference to Exhibit 10.54 to our Annual Report on Form 10-K for the year ended December 31, 2020). 10.41** — Form of LTIP Grant Letter dated December 21, 2017 (Goebel) (incorporated by reference to Exhibit 10.55 to our Annual Report on Form 10-K for the year ended December 31, 2020). 10.42** — Form of LTIP Grant Letter dated May 1, 2018 (Chandler) (incorporated by reference to Exhibit 10.57 to our Annual Report on Form 10-K for the year ended December 31, 2020). 10.43** — Form of LTIP Grant Letter dated August 19, 2021 (Named Executive Officers) (incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021). 10.44** — Form of LTIP Grant Letter dated August 19, 2021 (Directors) (incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021). 21.1 † — List of Subsidiaries of Plains GP Holdings, L.P. 23.1 † — Consent of PricewaterhouseCoopers LLP. 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 - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH† — Inline XBRL Taxonomy Extension Schema Document 101.CAL† — Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF† — Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB† — Inline XBRL Taxonomy Extension Label Linkbase Document 109 Table of Contents Index to Financial Statements 101.PRE† — Inline XBRL Taxonomy Extension Presentation Linkbase Document 104† — Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) † Filed herewith. †† Furnished herewith. * Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC upon request. ** Management compensatory plan or arrangement. Item 16. Form 10-K Summary None. 110 Table of Contents Index to Financial Statements SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 By: /s/ Willie Chiang Willie Chiang, Chairman of the Board and Chief Executive Officer of PAA GP Holdings LLC (Principal Executive Officer) February 28, 2022 By: /s/ Al Swanson Al Swanson, Executive Vice President and Chief Financial Officer of PAA GP Holdings LLC (Principal Financial Officer) February 28, 2022 By: /s/ Chris Herbold Chris Herbold, Senior Vice President, Finance and Chief Accounting Officer of PAA GP Holdings LLC (Principal Accounting Officer) February 28, 2022 111 Table of Contents Index to Financial Statements Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Title Date /s/ Willie Chiang Chairman of the Board and Chief Executive Officer of PAA GP Holdings LLC (Principal Executive Officer) February 28, 2022 Willie Chiang /s/ Harry N. Pefanis Director and President of PAA GP Holdings LLC February 28, 2022 Harry N. Pefanis /s/ Al Swanson Executive Vice President and Chief Financial Officer of PAA GP Holdings LLC (Principal Financial Officer) February 28, 2022 Al Swanson /s/ Chris Herbold Senior Vice President, Finance and Chief Accounting Officer of PAA GP Holdings LLC (Principal Accounting Officer) February 28, 2022 Chris Herbold /s/ Greg L. Armstrong Director of PAA GP Holdings LLC February 28, 2022 Greg L. Armstrong /s/ Victor Burk Director of PAA GP Holdings LLC February 28, 2022 Victor Burk /s/ Kevin McCarthy Director of PAA GP Holdings LLC February 28, 2022 Kevin McCarthy /s/ Gary R. Petersen Director of PAA GP Holdings LLC February 28, 2022 Gary R. Petersen /s/ Alexandra D. Pruner Director of PAA GP Holdings LLC February 28, 2022 Alexandra D. Pruner /s/ John T. Raymond Director of PAA GP Holdings LLC February 28, 2022 John T. Raymond /s/ Bobby S. Shackouls Director of PAA GP Holdings LLC February 28, 2022 Bobby S. Shackouls /s/ Christopher M. Temple Director of PAA GP Holdings LLC February 28, 2022 Christopher M. Temple /s/ Lawrence M. Ziemba Director of PAA GP Holdings LLC February 28, 2022 Lawrence M. Ziemba 112 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS Page Consolidated Financial Statements Management’s Report on Internal Control Over Financial Reporting F- 2 Report of Independent Registered Public Accounting Firm (PCAOB ID: 238 ) F- 3 Consolidated Balance Sheets as of December 31, 2021 and 2020 F- 6 Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 F- 7 Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2021, 2020 and 2019 F- 8 Consolidated Statements of Changes in Accumulated Other Comprehensive Income/(Loss) for the years ended December 31, 2021, 2020 and 2019 F- 8 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 F- 9 Consolidated Statements of Changes in Partners’ Capital for the years ended December 31, 2021, 2020 and 2019 F- 10 Notes to the Consolidated Financial Statements: F- 11 1. Organization and Basis of Consolidation and Presentation F- 11 2. Summary of Significant Accounting Policies F- 13 3. Revenues and Accounts Receivable F- 17 4. Net Income/(Loss) Per Class A Share F- 21 5. Inventory, Linefill and Base Gas and Long-term Inventory F- 22 6. Property and Equipment F- 23 7. Acquisitions , Divestitures and Other Transactions F- 25 8. Goodwill F- 29 9. Investments in Unconsolidated Entities F- 30 10. Intangible Assets, Net F- 34 11. Debt F- 35 12. Partners’ Capital and Distributions F- 39 13. Derivatives and Risk Management Activities F- 43 14. Leases F- 47 15. Income Taxes F- 50 16. Major Customers and Concentration of Credit Risk F- 53 17. Related Party Transactions F- 53 18. Equity-Indexed Compensation Plans F- 55 19. Commitments and Contingencies F- 56 20. Segment Information F- 61 F-1 Table of Contents Index to Financial Statements MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Plains GP Holdings, L.P.’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Management has used the framework set forth in the report entitled “Internal Control—Integrated Framework” (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) to evaluate the effectiveness of the Partnership’s internal control over financial reporting. Based on that evaluation, management has concluded that the Partnership’s internal control over financial reporting was effective as of December 31, 2021. The effectiveness of the Partnership’s internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears on Page F-3. /s/ Willie Chiang Willie Chiang Chairman of the Board and Chief Executive Officer of PAA GP Holdings LLC (Principal Executive Officer) /s/ Al Swanson Al Swanson Executive Vice President and Chief Financial Officer of PAA GP Holdings LLC (Principal Financial Officer) February 28, 2022 F-2 Table of Contents Index to Financial Statements Report of Independent Registered Public Accounting Firm To the Board of Directors of PAA GP Holdings LLC and Shareholders of Plains GP Holdings, L.P. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Plains GP Holdings, L.P. and its subsidiaries (the “Partnership”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, of comprehensive income (loss), of changes in accumulated other comprehensive income/(loss), of changes in partners' capital and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Partnership's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Partnership's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Partnership’s consolidated financial statements and on the Partnership's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. F-3 Table of Contents Index to Financial Statements Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Accounting for the Oryx Midstream Holdings LLC Business Combination As described in Note 7 to the consolidated financial statements, in October 2021, the Partnership and Oryx Midstream Holdings LLC (“Oryx Midstream”), completed the merger, in a cashless, debt-free transaction, of their respective Permian Basin assets, operations and commercial activities into a newly formed strategic joint venture, Plains Oryx Permian Basin LLC (the “Permian JV”). The Permian JV includes all of Oryx Midstream’s Permian Basin assets and, with the exception of the Partnership’s long-haul pipeline systems and certain of the intra-basin terminal assets, the vast majority of the Partnership’s assets located within the Permian Basin. The Partnership owns 65% of Permian JV, operates the combined assets and reflects Permian JV as a consolidated subsidiary in the consolidated financial statements. The formation of the joint venture was accounted for as a business combination using the acquisition method of accounting. As the majority owner and the controlling entity, the Partnership is considered the acquirer and the transfer of the predecessor business to the joint venture was accounted for at historical cost, while the Oryx Midstream predecessor business was recorded based on the fair value of the assets acquired and liabilities assumed. In accordance with applicable accounting guidance, the fair value of Oryx Midstream’s ownership interest in the joint venture following the formation of $3.256 billion is utilized as the consideration transferred for the purchase price allocation. The fair value of the $3.256 billion consideration is a Level 3 measurement in the fair value hierarchy and was determined by valuing both the enterprise value of Oryx Midstream’s Permian Basin business and the enterprise value of the Partnership’s Permian Basin assets that were contributed to the joint venture. The enterprise value of Oryx Midstream’s Permian Basin business was calculated by weighting the results of (i) a discounted cash flow (“DCF”) approach and (ii) a guideline public company method (“GPCM”). The DCF approach utilized a discount rate based on the estimate of the risk that a theoretical market participant would assign to the business. The projection of future crude volumes gathered and transported was also a key assumption in the DCF approach and was based on projected rig activity on the associated acreage. The fair value of the intangible assets was determined by applying a discounted cash flow approach. Such approach utilized a discount rate based on the estimate of the risk that a theoretical market participant would assign to the respective intangible assets. The projection of future crude volumes gathered and transported was also a key assumption in the valuation of the intangible assets and was based on projected rig activity on the associated acreage. The fair value of intangible assets is comprised of customer relationships with an assigned value of $1.247 billion. The principal considerations for our determination that performing procedures relating to the accounting for the Oryx Midstream business combination is a critical audit matter are (i) the significant judgment by management when determining the fair value of the consideration transferred for the Oryx Midstream Permian Basin business and the customer relationships, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to future crude volumes gathered and transported and the discount rates used in the valuation of the consideration transferred for the Oryx Midstream Permian Basin business and the customer relationships; and (ii) the audit effort involved the use of professionals with specialized skill and knowledge. F-4 Table of Contents Index to Financial Statements Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to acquisition accounting, including controls over management’s valuation of the consideration transferred and the customer relationships, and controls over the determination of the significant assumptions. These procedures also included, among others (i) reading the transaction agreement and (ii) testing management’s process for determining the fair value of the consideration transferred for the Oryx Midstream Permian Basin business and the customer relationships. Testing management’s process included evaluating the appropriateness of the valuation methods, testing the completeness and accuracy of data provided by management, and evaluating the reasonableness of the significant assumptions related to future crude volumes gathered and transported and the discount rates used in the valuation of the consideration transferred for the Oryx Midstream Permian Basin business and the customer relationships. Evaluating the reasonableness of the future crude volumes gathered and transported involved considering (i) the consistency with external market and industry data and (ii) the past performance of the Oryx Midstream Permian Basin business. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the valuation methods and the reasonableness of the discount rate significant assumption. /s/ PricewaterhouseCoopers LLP Houston, Texas February 28, 2022 We have served as the Partnership’s auditor since 2013. F-5 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in millions, except share data) December 31, 2021 December 31, 2020 ASSETS CURRENT ASSETS Cash and cash equivalents $ 452 $ 25 Restricted cash 4 38 Trade accounts receivable and other receivables, net 4,705 2,553 Inventory 783 647 Other current assets 196 405 Total current assets 6,140 3,668 PROPERTY AND EQUIPMENT 19,292 18,620 Accumulated depreciation ( 4,383 ) ( 4,000 ) Property and equipment, net 14,909 14,620 OTHER ASSETS Investments in unconsolidated entities 3,805 3,764 Intangible assets, net 1,960 805 Deferred tax asset 1,362 1,444 Linefill and base gas 907 982 Long-term operating lease right-of-use assets, net 393 378 Long-term inventory 253 130 Other long-term assets, net 249 160 Total assets $ 29,978 $ 25,951 LIABILITIES AND PARTNERS’ CAPITAL CURRENT LIABILITIES Trade accounts payable $ 4,811 $ 2,425 Short-term debt 822 831 Other current liabilities 601 999 Total current liabilities 6,234 4,255 LONG-TERM LIABILITIES Senior notes, net 8,329 9,071 Other long-term debt, net 69 311 Long-term operating lease liabilities 339 317 Other long-term liabilities and deferred credits 830 807 Total long-term liabilities 9,567 10,506 COMMITMENTS AND CONTINGENCIES (NOTE 19) PARTNERS’ CAPITAL Class A shareholders ( 194,192,777 and 194,051,436 shares outstanding, respectively) 1,533 1,464 Noncontrolling interests 12,644 9,726 Total partners’ capital 14,177 11,190 Total liabilities and partners’ capital $ 29,978 $ 25,951 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) Year Ended December 31, 2021 2020 2019 REVENUES Product sales revenues $ 40,883 $ 22,058 $ 32,272 Services revenues 1,195 1,232 1,397 Total revenues 42,078 23,290 33,669 COSTS AND EXPENSES Purchases and related costs 38,504 20,431 29,452 Field operating costs 1,065 1,076 1,303 General and administrative expenses 298 276 302 Depreciation and amortization 777 656 604 (Gains)/losses on asset sales and asset impairments, net (Note 6, Note 7) 592 719 28 Goodwill impairment losses (Note 8) — 2,515 — Total costs and expenses 41,236 25,673 31,689 OPERATING INCOME/(LOSS) 842 ( 2,383 ) 1,980 OTHER INCOME/(EXPENSE) Equity earnings in unconsolidated entities 274 355 388 Gain on/(impairment of) investments in unconsolidated entities, net (Note 9) 2 ( 182 ) 271 Interest expense (net of capitalized interest of $ 18 , $ 24 and $ 34 , respectively) ( 425 ) ( 436 ) ( 425 ) Other income, net 19 39 24 INCOME/(LOSS) BEFORE TAX 712 ( 2,607 ) 2,238 Current income tax expense ( 50 ) ( 51 ) ( 112 ) Deferred income tax (expense)/benefit ( 62 ) 218 ( 64 ) NET INCOME/(LOSS) 600 ( 2,440 ) 2,062 Net (income)/loss attributable to noncontrolling interests ( 540 ) 1,872 ( 1,731 ) NET INCOME/(LOSS) ATTRIBUTABLE TO PAGP $ 60 $ ( 568 ) $ 331 Basic weighted average Class A shares outstanding 194 186 168 Basic net income/(loss) per Class A share $ 0.31 $ ( 3.06 ) $ 1.97 Diluted weighted average Class A shares outstanding 194 246 170 Diluted net income/(loss) per Class A share $ 0.31 $ ( 3.07 ) $ 1.96 The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (in millions) Year Ended December 31, 2021 2020 2019 Net income/(loss) $ 600 $ ( 2,440 ) $ 2,062 Other comprehensive income 65 15 97 Comprehensive income/(loss) 665 ( 2,425 ) 2,159 Comprehensive (income)/loss attributable to noncontrolling interests ( 588 ) 1,863 ( 1,805 ) Comprehensive income/(loss) attributable to PAGP $ 77 $ ( 562 ) $ 354 The accompanying notes are an integral part of these consolidated financial statements. PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) (in millions) Derivative Instruments Translation Adjustments Other Total Balance at December 31, 2018 $ ( 177 ) $ ( 853 ) $ — $ ( 1,030 ) Reclassification adjustments 9 — — 9 Unrealized loss on hedges ( 91 ) — — ( 91 ) Currency translation adjustments — 179 — 179 2019 Activity ( 82 ) 179 — 97 Balance at December 31, 2019 $ ( 259 ) $ ( 674 ) $ — $ ( 933 ) Reclassification adjustments 11 — — 11 Unrealized loss on hedges ( 10 ) — — ( 10 ) Currency translation adjustments — 17 — 17 Other — — ( 3 ) ( 3 ) 2020 Activity 1 17 ( 3 ) 15 Balance at December 31, 2020 $ ( 258 ) $ ( 657 ) $ ( 3 ) $ ( 918 ) Reclassification adjustments 31 — — 31 Unrealized gain on hedges 19 — — 19 Currency translation adjustments — 15 — 15 2021 Activity 50 15 — 65 Balance at December 31, 2021 $ ( 208 ) $ ( 642 ) $ ( 3 ) $ ( 853 ) The accompanying notes are an integral part of these consolidated financial statements. F-8 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2021 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Net income/(loss) $ 600 $ ( 2,440 ) $ 2,062 Reconciliation of net income/(loss) to net cash provided by operating activities: Depreciation and amortization 777 656 604 (Gains)/losses on asset sales and asset impairments, net (Note 6, Note 7) 592 719 28 Goodwill impairment losses (Note 8) — 2,515 — Equity-indexed compensation expense 24 16 35 Inventory valuation adjustments (Note 5) — 233 11 Deferred income tax expense/(benefit) 62 ( 218 ) 64 Settlement of terminated interest rate hedging instruments — ( 100 ) ( 55 ) Equity earnings in unconsolidated entities ( 274 ) ( 355 ) ( 388 ) Distributions on earnings from unconsolidated entities 431 472 401 (Gain on)/impairment of investments in unconsolidated entities, net (Note 9) ( 2 ) 182 ( 271 ) Other 8 ( 12 ) 21 Changes in assets and liabilities, net of acquisitions: Trade accounts receivable and other ( 2,179 ) 1,432 ( 1,158 ) Inventory ( 18 ) ( 304 ) ( 5 ) Trade accounts payable and other 1,970 ( 1,286 ) 1,151 Net cash provided by operating activities 1,991 1,510 2,500 CASH FLOWS FROM INVESTING ACTIVITIES Cash paid in connection with acquisitions, net of cash acquired (Note 7) ( 32 ) ( 310 ) ( 50 ) Investments in unconsolidated entities (Note 9) ( 94 ) ( 461 ) ( 524 ) Additions to property, equipment and other ( 336 ) ( 738 ) ( 1,181 ) Proceeds from sales of assets (Note 7) 881 429 77 Other investing activities ( 33 ) ( 13 ) ( 87 ) Net cash provided by/(used in) investing activities 386 ( 1,093 ) ( 1,765 ) CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings/(repayments) under PAA commercial paper program (Note 11) ( 545 ) 456 93 Net borrowings/(repayments) under PAA senior secured hedged inventory facility (Note 11) ( 167 ) ( 160 ) 325 Repayment of PAA GO Zone term loans (Note 11) ( 200 ) — — Proceeds from the issuance of PAA senior notes (Note 11) — 748 998 Repayments of PAA senior notes (Note 11) — ( 617 ) ( 1,000 ) Repurchase of common units by a subsidiary (Note 12) ( 178 ) ( 50 ) — Distributions paid to Class A shareholders (Note 12) ( 140 ) ( 166 ) ( 231 ) Distributions paid to noncontrolling interests (Note 12) ( 589 ) ( 697 ) ( 977 ) Sale of noncontrolling interest in a subsidiary (Note 12) — — 128 Other financing activities ( 160 ) 56 ( 53 ) Net cash used in financing activities ( 1,979 ) ( 430 ) ( 717 ) Effect of translation adjustment ( 5 ) ( 8 ) ( 3 ) Net increase/(decrease) in cash and cash equivalents and restricted cash 393 ( 21 ) 15 Cash and cash equivalents and restricted cash, beginning of period 63 84 69 Cash and cash equivalents and restricted cash, end of period $ 456 $ 63 $ 84 Cash paid for: Interest, net of amounts capitalized $ 401 $ 428 $ 397 Income taxes, net of amounts refunded $ 76 $ 111 $ 136 The accompanying notes are an integral part of these consolidated financial statements. F-9 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (in millions) Class A Shareholders Noncontrolling Interests Total Partners’ Capital Balance at December 31, 2018 $ 1,846 $ 11,473 $ 13,319 Net income 331 1,731 2,062 Distributions (Note 12) ( 231 ) ( 977 ) ( 1,208 ) Deferred tax asset (Note 15) 86 — 86 Change in ownership interest in connection with Exchange Right exercises (Note 12) 101 ( 101 ) — Other comprehensive income (Note 12) 23 74 97 Equity-indexed compensation expense 5 13 18 Sale of noncontrolling interest in a subsidiary (Note 12) — 128 128 Other ( 6 ) ( 11 ) ( 17 ) Balance at December 31, 2019 $ 2,155 $ 12,330 $ 14,485 Net loss ( 568 ) ( 1,872 ) ( 2,440 ) Distributions (Note 12) ( 166 ) ( 697 ) ( 863 ) Deferred tax asset (Note 15) 16 — 16 Change in ownership interest in connection with Exchange Right exercises (Note 12) 10 ( 10 ) — Other comprehensive income (Note 12) 6 9 15 Equity-indexed compensation expense 6 14 20 Repurchase of common units by a subsidiary (Note 12) 4 ( 54 ) ( 50 ) Contributions from noncontrolling interests (Note 12) — 12 12 Other 1 ( 6 ) ( 5 ) Balance at December 31, 2020 $ 1,464 $ 9,726 $ 11,190 Net income 60 540 600 Distributions (Note 12) ( 140 ) ( 589 ) ( 729 ) Deferred tax asset (Note 15) ( 42 ) — ( 42 ) Other comprehensive income (Note 12) 17 48 65 Equity-indexed compensation expense 6 14 20 Repurchase of common units by a subsidiary (Note 12) 2 ( 180 ) ( 178 ) Contributions from noncontrolling interests (Note 12) — 1 1 Plains Oryx Permian Basin LLC joint venture formation (Note 7) 166 3,090 3,256 Other — ( 6 ) ( 6 ) Balance at December 31, 2021 $ 1,533 $ 12,644 $ 14,177 The accompanying notes are an integral part of these consolidated financial statements. F-10 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1— Organization and Basis of Consolidation and Presentation Organization Plains GP Holdings, L.P. (“PAGP”) is a Delaware limited partnership formed in 2013 that has elected to be taxed as a corporation for United States federal income tax purposes. PAGP does not directly own any operating assets; as of December 31, 2021, its principal sources of cash flow are derived from an indirect investment in Plains All American Pipeline, L.P. (“PAA”), a publicly traded Delaware limited partnership. As used in this Form 10-K and unless the context indicates otherwise (taking into account the fact that PAGP has no operating activities apart from those conducted by PAA and its subsidiaries), the terms “Partnership,” “we,” “us,” “our,” “ours” and similar terms refer to PAGP and its subsidiaries. As of December 31, 2021, PAGP owned (i) a 100 % managing member interest in Plains All American GP LLC (“GP LLC”), an entity that has also elected to be taxed as a corporation for United States federal income tax purposes and (ii) an approximate 81 % limited partner interest in Plains AAP, L.P. (“AAP”) through our direct ownership of approximately 193.2 million Class A units of AAP (“AAP units”) and indirect ownership of approximately 1.0 million AAP units through GP LLC. GP LLC is a Delaware limited liability company that also holds the non-economic general partner interest in AAP. AAP is a Delaware limited partnership that, as of December 31, 2021, directly owned a limited partner interest in PAA through its ownership of approximately 241.5 million PAA common units (approximately 31 % of PAA’s total outstanding common units and Series A preferred units combined). AAP is the sole member of PAA GP LLC (“PAA GP”), a Delaware limited liability company that directly holds the non-economic general partner interest in PAA. PAA’s business model integrates large-scale supply aggregation capabilities with the ownership and operation of critical midstream infrastructure systems that connect major producing regions to key demand centers and export terminals. As one of the largest midstream service providers in North America, PAA owns an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and natural gas liquids (“NGL”) producing basins (including the Permian Basin) and transportation corridors and at major market hubs in the United States and Canada. PAA’s assets and the services it provides are primarily focused on and conducted through two operating segments: Crude Oil and NGL. See Note 20 for further discussion of our operating segments. PAA GP Holdings LLC, a Delaware limited liability company, is our general partner. Our general partner manages our operations and activities and is responsible for exercising on our behalf any rights we have as the sole and managing member of GP LLC, including responsibility for conducting the business and managing the operations of AAP and PAA. GP LLC employs our domestic officers and personnel involved in the operation and management of AAP and PAA. PAA’s Canadian officers and personnel are employed by our subsidiary, Plains Midstream Canada ULC. References to the “Plains Entities” include us, our general partner, GP LLC, AAP, PAA GP and PAA and its subsidiaries. Definitions Additional defined terms are used in the following notes and shall have the meanings indicated below: AOCI = Accumulated other comprehensive income/(loss) ASC = Accounting Standards Codification ASU = Accounting Standards Update Bcf = Billion cubic feet Btu = British thermal unit CAD = Canadian dollar CODM = Chief Operating Decision Maker DERs = Distribution equivalent rights EBITDA = Earnings before interest, taxes, depreciation and amortization EPA = United States Environmental Protection Agency FASB = Financial Accounting Standards Board GAAP = Generally accepted accounting principles in the United States F-11 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ICE = Intercontinental Exchange ISDA = International Swaps and Derivatives Association LIBOR = London Interbank Offered Rate LTIP = Long-term incentive plan Mcf = Thousand cubic feet MMbls = Million barrels NGL = Natural gas liquids, including ethane, propane and butane NYMEX = New York Mercantile Exchange SEC = United States Securities and Exchange Commission TWh = Terawatt hour U.S. = United States USD = United States dollar WTI = West Texas Intermediate Basis of Consolidation and Presentation The accompanying financial statements and related notes present and discuss our consolidated financial position as of December 31, 2021 and 2020, and the consolidated results of our operations, cash flows, changes in partners’ capital, comprehensive income and changes in accumulated other comprehensive income/(loss) for the years ended December 31, 2021, 2020 and 2019. All significant intercompany transactions have been eliminated in consolidation, and certain reclassifications have been made to information from previous years to conform to the current presentation, as discussed further below. The accompanying consolidated financial statements include the accounts of PAGP and all of its wholly owned subsidiaries and those entities that it controls. Investments in entities over which we have significant influence but not control are accounted for by the equity method. We apply proportionate consolidation for pipelines and other assets in which we own undivided joint interests. Management judgment is required to evaluate whether PAGP controls an entity. Key areas of that evaluation include (i) determining whether an entity is a variable interest entity (“VIE”); (ii) determining whether PAGP is the primary beneficiary of a VIE, including evaluating which activities of the VIE most significantly impact its economic performance and the degree of power that PAGP and its related parties have over those activities through variable interests; and (iii) identifying events that require reconsideration of whether an entity is a VIE and continuously evaluating whether PAGP is a VIE’s primary beneficiary. We have determined that our subsidiaries, PAA and AAP, are VIEs and should be consolidated by PAGP because: • The limited partners of PAA and AAP lack (i) substantive “kick-out rights” (i.e., the right to remove the general partner) based on a simple majority or lower vote and (ii) substantive participation rights and thus lack the ability to block actions of the general partner that most significantly impact the economic performance of PAA and AAP, respectively. • AAP is the primary beneficiary of PAA because it has the power to direct the activities that most significantly impact PAA’s performance and the right to receive benefits, and obligation to absorb losses, that could be significant to PAA. • PAGP is the primary beneficiary of AAP because it has the power to direct the activities that most significantly impact AAP’s performance and the right to receive benefits, and obligation to absorb losses, that could be significant to AAP. F-12 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS With the exception of a deferred tax asset of $ 1.362 billion and $ 1.444 billion as of December 31, 2021 and 2020, respectively, substantially all assets and liabilities presented on PAGP’s Consolidated Balance Sheets are those of PAA. Only the assets of each respective VIE can be used to settle the obligations of that individual VIE, and the creditors of each/either of those VIEs do not have recourse against the general credit of PAGP. PAGP did not provide any financial support to PAA or AAP during the years ended December 31, 2021, 2020 or 2019. See Note 17 for information regarding the Omnibus Agreement entered into by the Plains Entities on November 15, 2016. Reclassification of Prior Period Information During the fourth quarter of 2021, we effected changes in the primary financial information provided to our Chief Operating Decision Maker (“CODM”) (our Chief Executive Officer) for assessing performance and allocating resources to present two operating segments, Crude Oil and NGL. Prior to the fourth quarter of 2021, this information was organized into three operating segments: Transportation, Facilities and Supply and Logistics. See Note 20 for further discussion of our operating segments. In connection with this change, we changed the presentation of Revenues on our Consolidated Statements of Operations. “Product sales revenues” include amounts that were previously presented as “Supply and Logistics segment revenues,” while “Services revenues” includes amounts previously presented as “Transportation segment revenues” and “Facilities segment revenues.” In October 2021, we and Oryx Midstream Holdings LLC (“Oryx Midstream”) completed the merger, in a cashless, debt-free transaction, of our respective Permian Basin assets, operations and commercial activities into a newly formed joint venture, Plains Oryx Permian Basin LLC (the “Permian JV”). See Note 7 for more details regarding this transaction. Due to the increase in intangible assets associated with this transaction, we present “Intangible assets, net” as a separate line item on our Consolidated Balance Sheets. Such amounts were previously reported in “Other long-term assets, net” on our Consolidated Balance Sheets. COVID-19 Many uncertainties remain with respect to the novel coronavirus (“COVID-19”) pandemic, including uncertainty regarding the length of time the pandemic will continue, as well as the timing, pace and extent of an economic recovery in the United States, Canada and elsewhere, and how such uncertainties will impact the energy industry and our business. As a result, these matters may affect our estimates and assumptions on amounts reported in the financial statements and accompanying notes in the near term. Subsequent Events Subsequent events have been evaluated through the financial statements issuance date and have been included in the following footnotes where applicable. Note 2— Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period. We make significant estimates with respect to (i) estimated fair value of assets and liabilities acquired and identification of associated goodwill and intangible assets, (ii) fair value of derivatives, (iii) accruals and contingent liabilities, (iv) property and equipment, depreciation and amortization expense and asset retirement obligations, (v) impairment assessments of property and equipment, investments in unconsolidated entities and intangible assets and (vi) inventory valuations. Although we believe these estimates are reasonable, actual results could differ from these estimates. F-13 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Purchases and Related Costs Purchases and related costs include (i) the weighted average cost of crude oil and NGL sold to customers, (ii) fees incurred for storage and transportation, whether by pipeline, truck or rail and (iii) performance-related bonus costs. These costs are recognized when incurred except in the case of products sold, which are recognized at the time title transfers to our customers. Inventory exchanges under buy/sell transactions are presented net in “Purchases and related costs” in our Consolidated Statements of Operations. Field Operating Costs and General and Administrative Expenses Field operating costs consist of various field operating expenses, including payroll, compensation and benefits costs for operations personnel; fuel and power costs (including the impact of gains and losses from derivative related activities); third-party trucking transportation costs for our U.S. crude oil operations; maintenance and integrity management costs; regulatory compliance; environmental remediation; insurance; costs for usage of third-party owned pipeline, rail and storage assets; vehicle leases; and property taxes. General and administrative expenses consist primarily of payroll, compensation and benefits costs; certain information systems and legal costs; office rent; contract and consultant costs; and audit and tax fees. Foreign Currency Transactions/Translation Certain of our subsidiaries use the Canadian dollar as their functional currency. Assets and liabilities of subsidiaries with a Canadian dollar functional currency are translated at period-end rates of exchange, and revenues and expenses are translated at average exchange rates prevailing for each month. The resulting translation adjustments are made directly to a separate component of other comprehensive income, which is reflected in Partners’ Capital on our Consolidated Balance Sheets. Certain of our subsidiaries also enter into transactions and have monetary assets and liabilities that are denominated in a currency other than the entities’ respective functional currencies. Gains and losses from the revaluation of foreign currency transactions and monetary assets and liabilities are generally included in the Consolidated Statements of Operations. However, gains and losses arising from intercompany foreign currency transactions that are of a long-term investment nature are reported in the same manner as translation adjustments. For the years ended December 31, 2021, 2020 and 2019, the revaluation of foreign currency transactions and monetary assets and liabilities resulted in the recognitions of net gains of $ 7 million, $ 16 million and $ 1 million, respectively, in our Consolidated Statements of Operations. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of all unrestricted demand deposits and funds invested in highly liquid instruments with original maturities of three months or less and typically exceed federally insured limits. We periodically assess the financial condition of the institutions where these funds are held and believe that our credit risk is minimal. In accordance with our policy, unless they may be covered by funds on deposit, outstanding checks are classified as trade accounts payable rather than negative cash. As of December 31, 2021 and 2020, trade accounts payable included $ 19 million and $ 27 million, respectively, of outstanding checks that were reclassified from cash and cash equivalents. Restricted cash includes cash held by us that is unavailable for general use and is comprised of amounts advanced to us by certain equity method investees related to the construction of fixed assets where we serve as construction manager. The following table presents a reconciliation of cash and cash equivalents and restricted cash reported on our Consolidated Balance Sheets that sum to the total of the amounts shown on our Consolidated Statements of Cash Flows (in millions): December 31, 2021 2020 Cash and cash equivalents $ 452 $ 25 Restricted cash 4 38 Total cash and cash equivalents and restricted cash $ 456 $ 63 F-14 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Noncontrolling Interests Noncontrolling interest represents the portion of assets and liabilities in a consolidated subsidiary that is owned by a third party. FASB guidance requires all entities to report noncontrolling interests in subsidiaries as a component of equity in the consolidated financial statements. See Note 12 for additional discussion regarding our noncontrolling interests. Asset Retirement Obligations FASB guidance establishes accounting requirements for retirement obligations associated with tangible long-lived assets, including estimates related to (i) the time of the liability recognition, (ii) initial measurement of the liability, (iii) allocation of asset retirement cost to expense, (iv) subsequent measurement of the liability and (v) financial statement disclosures. FASB guidance also requires that the cost for asset retirement should be capitalized as part of the cost of the related long-lived asset and subsequently allocated to expense using a systematic and rational method. Some of our assets, primarily our pipelines, certain processing and fractionation facilities and terminals assets, have contractual or regulatory obligations to perform remediation and, in some instances, dismantlement and removal activities when the assets are abandoned. These obligations include varying levels of activity including disconnecting inactive assets from active assets, cleaning and purging assets, and in some cases, completely removing the assets and returning the land to its original state. These assets have been in existence for many years and with regular maintenance will continue to be in service for many years to come. It is not possible to predict when demand for these transportation, storage or other services will cease, and we do not believe that such demand will cease for the foreseeable future. Accordingly, we believe the date when these assets will be abandoned is indeterminate. With no reasonably determinable abandonment date, we cannot reasonably estimate the fair value of the associated asset retirement obligations. We will record asset retirement obligations for these assets in the period in which sufficient information becomes available for us to reasonably estimate the settlement dates. A small portion of our contractual or regulatory obligations is related to assets that are inactive or that we plan to take out of service and, although the ultimate timing and costs to settle these obligations are not known with certainty, we have recorded a reasonable estimate of these obligations. The following table presents the change in the liability for asset retirement obligations, substantially all of which is reflected in “Other long-term liabilities and deferred credits” on our Consolidated Balance Sheets as of December 31, 2021, 2020 and 2019 (in millions): December 31, 2021 2020 2019 Beginning balance $ 135 $ 137 $ 109 Liabilities incurred 2 12 3 Liabilities settled ( 1 ) ( 1 ) ( 3 ) Accretion expense 4 5 5 Revisions in estimated cash flows 3 ( 18 ) 23 Ending balance $ 143 $ 135 $ 137 Fair Value Measurements Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which affects the placement of assets and liabilities within the fair value hierarchy levels. The determination of the fair values includes not only the credit standing of the counterparties involved and the impact of credit enhancements (such as cash deposits and letters of credit) but also the impact of our nonperformance risk on our liabilities. The fair value of our commodity derivatives, interest rate derivatives and foreign currency derivatives includes adjustments for credit risk. Our credit adjustment methodology uses market observable inputs and requires judgment. There were no changes to any of our valuation techniques during the period. See Note 13 for further discussion. F-15 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Other Significant Accounting Policies See the respective footnotes for our accounting policies regarding (i) revenues and accounts receivable, (ii) net income/(loss) per Class A share, (iii) inventory, linefill and base gas and long-term inventory, (iv) property and equipment, (v) acquisitions, (vi) goodwill, (vii) investments in unconsolidated entities, (viii) intangible assets, (ix) derivatives and risk management activities, (x) leases, (xi) income taxes, (xii) equity-indexed compensation and (xiii) legal and environmental matters. Recent Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This guidance requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers, as if it had originated the contracts. The guidance is effective prospectively for interim and annual periods beginning after December 15, 2022, with early adoption permitted. We have not adopted this guidance as of December 31, 2021, but do not anticipate that our adoption will have a material impact on our financial position, results of operations or cash flows. In July 2021, the FASB issued ASU 2021-05, Lessors - Certain Leases with Variable Lease Payments (Topic 842) w hich modifies the lease classification requirements for lessors in Topic 842, which we adopted on the effective date of January 1, 2019. The amendments require lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease at lease commencement if another classification (i.e., sales-type or direct financing) would result in the recognition of a day-one loss. For entities that have adopted Topic 842, the guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. We have elected to early adopt the guidance on a prospective basis as of July 1, 2021. Our adoption did not have a material impact on our financial position, results of operations or cash flows. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity, by eliminating two of the three models that require separate accounting for embedded conversion features and the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification. This guidance is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted. We adopted this guidance effective January 1, 2021, and our adoption did not have a material impact on our financial position, results of operations or cash flows. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance is effective prospectively upon issuance through December 31, 2022 and may be applied from the beginning of an interim period that includes the issuance date of this ASU. We will apply applicable expedients and exceptions to contract modifications through December 31, 2022. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , to simplify the accounting for income taxes based on changes suggested by stakeholders as part of the FASB’s simplification initiative. This guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. We adopted this guidance effective January 1, 2021, and our adoption did not have a material impact on our financial position, results of operations or cash flows. F-16 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 3— Revenues and Accounts Receivable Revenue Recognition We disaggregate our revenues by segment and type of activity. These categories depict how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. Revenues from Contracts with Customers. The following tables present our revenues from contracts with customers disaggregated by segment and type of activity (in millions): Year Ended December 31, 2021 2020 2019 Crude Oil segment revenues from contracts with customers Sales $ 39,635 $ 21,250 $ 30,156 Transportation 484 570 722 Terminalling, Storage and Other 431 507 505 Total Crude Oil segment revenues from contracts with customers $ 40,550 $ 22,327 $ 31,383 Year Ended December 31, 2021 2020 2019 NGL segment revenues from contracts with customers Sales $ 2,292 $ 1,350 $ 2,211 Transportation 25 29 32 Terminalling, Storage and Other 82 96 80 Total NGL segment revenues from contracts with customers $ 2,399 $ 1,475 $ 2,323 Sales Revenues. Revenues from sales of crude oil and NGL are recognized at the time title to the product sold transfers to the purchaser, which occurs upon delivery of the product to the purchaser or its designee. The consideration received under these contracts is variable based on commodity prices. Inventory exchanges under buy/sell transactions are excluded from sales revenues in our Consolidated Statements of Operations. In addition, we have certain crude oil sales agreements that are entered into in conjunction with storage arrangements and future inventory exchanges. The revenues under these agreements are deferred until all performance obligations associated with the related agreements are completed. The inventory that has been sold under these crude oil sales agreements is reflected in “Other current assets” on our Consolidated Balance Sheet until all of our performance obligations are complete. At that time, the inventory that has been sold is removed from our Consolidated Balance Sheet and recorded as “Purchases and related costs” in our Consolidated Statement of Operations. See “ Contract Balances ” below for further discussion of contract liabilities associated with these agreements. The following table presents amounts in Other current assets and deferred revenue associated with these agreements (in millions): December 31, 2021 2020 Other current assets $ — $ 229 Deferred revenue (1) $ — $ 361 (1) Included in “Other current liabilities” on our Consolidated Balance Sheet. We may also utilize derivatives in connection with the transactions described above. Derivative revenue is not included as a component of revenue from contracts with customers, but is included in other items in revenue. The change in the fair value of derivatives that are not designated or do not qualify for hedge accounting is recognized in revenues each period. F-17 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Transportation Revenues. T ransportation revenues include revenues from transporting crude oil and NGL on pipelines and trucks. Revenues from pipeline tariffs and fees are associated with the transportation of crude oil and NGL at a published tariff. We primarily recognize pipeline tariff and fee revenues over time as services are rendered, based on the volumes transported. As is common in the pipeline transportation industry, our tariffs incorporate a loss allowance factor. We recognize the allowance volumes collected as part of the transaction price and record this non-cash consideration at fair value, measured as of the contract inception date . Terminalling, Storage and Other Revenues. Revenues in this category include (i) fees that are generated when we receive liquids from one connecting source and deliver the applicable product to another connecting carrier, (ii) fees from storage capacity agreements, (iii) fees from loading and unloading services at our terminals and (iv) fees from natural gas and condensate processing services and from NGL fractionation and isomerization service. We generate revenue through a combination of month-to-month and multi-year agreements and processing arrangements. Storage fees are typically recognized in revenue ratably over the term of the contract regardless of the actual storage capacity utilized as our performance obligation is to make available storage capacity for a period of time. Terminal fees (including throughput and loading/unloading fees) are recognized as the liquids enter or exit the terminal and are received from or delivered to the connecting carrier or third-party terminal, as applicable. We recognize loading and unloading fees when the volumes are delivered or received. Natural gas storage related activities fees were recognized in the period the natural gas moved across our header system. Fees from NGL fractionation and isomerization services and gas processing services are recognized in the period when the services are performed. Reconciliation to Total Revenues of Reportable Segments. The following disclosures only include information regarding revenues associated with consolidated entities; revenues from entities accounted for by the equity method are not included. The following tables present the reconciliation of our revenues from contracts with customers (as described above for each segment) to segment revenues and total revenues as disclosed in our Consolidated Statements of Operations (in millions): Year Ended December 31, 2021 Crude Oil NGL Total Revenues from contracts with customers $ 40,550 $ 2,399 $ 42,949 Other items in revenues ( 80 ) ( 431 ) ( 511 ) Total revenues of reportable segments $ 40,470 $ 1,968 $ 42,438 Intersegment revenues elimination ( 360 ) Total revenues $ 42,078 Year Ended December 31, 2020 Crude Oil NGL Total Revenues from contracts with customers $ 22,327 $ 1,475 $ 23,802 Other items in revenues ( 128 ) ( 115 ) ( 243 ) Total revenues of reportable segments $ 22,199 $ 1,360 $ 23,559 Intersegment revenues elimination ( 269 ) Total revenues $ 23,290 Year Ended December 31, 2019 Crude Oil NGL Total Revenues from contracts with customers $ 31,383 $ 2,323 $ 33,706 Other items in revenues 272 116 388 Total revenues of reportable segments $ 31,655 $ 2,439 $ 34,094 Intersegment revenues elimination ( 425 ) Total revenues $ 33,669 F-18 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Minimum Volume Commitments. We have certain agreements that require counterparties to transport or throughput a minimum volume over an agreed upon period. Some of these agreements include make-up rights if the minimum volume is not met. We record a receivable from the counterparty in the period that services are provided or when the transaction occurs, including amounts for deficiency obligations from counterparties associated with minimum volume commitments. If a counterparty has a make-up right associated with a deficiency, we defer the revenue attributable to the counterparty’s make-up right as a contract liability and subsequently recognize the revenue at the earlier of when the deficiency volume is delivered or shipped, when the make-up right expires or when it is determined that the counterparty’s ability to utilize the make-up right is remote. The following table presents counterparty deficiencies associated with contracts with customers and buy/sell arrangements that include minimum volume commitments for which we had remaining performance obligations and the customers still had the ability to meet their obligations (in millions): December 31, Counterparty Deficiencies Financial Statement Classification 2021 2020 Billed and collected Liability $ 63 $ 73 Unbilled (1) N/A 16 4 Total $ 79 $ 77 (1) Amounts were related to deficiencies for which the counterparties had not met their contractual minimum commitments and are not reflected in our Consolidated Financial Statements as we had not yet billed or collected such amounts. Contract Balances . Our contract balances consist of amounts received associated with services or sales for which we have not yet completed the related performance obligation. The following table presents the changes in the liability balance associated with contracts with customers (in millions): Contract Liabilities Balance at December 31, 2019 $ 354 Amounts recognized as revenue (1) ( 246 ) Additions (2) 393 Balance at December 31, 2020 $ 501 Amounts recognized as revenue (2) ( 393 ) Additions 33 Balance at December 31, 2021 $ 141 (1) Includes approximately $ 155 million associated with crude oil sales agreements that were entered into in conjunction with storage arrangements and future inventory exchanges. Such agreements were entered into in 2019 and recognized as revenue in the first quarter of 2020. (2) Includes approximately $ 361 million associated with crude oil sales agreements that were entered into in conjunction with storage arrangements and future inventory exchanges. Such amount was recognized as revenue in the first quarter of 2021. F-19 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Remaining Performance Obligations . The information below includes the amount of consideration allocated to partially and wholly unsatisfied remaining performance obligations under contracts that exist as of the end of the periods and the timing of revenue recognition of those remaining performance obligations. Certain contracts meet the requirements for the presentation as remaining performance obligations. These arrangements include a fixed minimum level of service, typically a set volume of service, and do not contain any variability other than expected timing within a limited range. The following table presents the amount of consideration associated with remaining performance obligations for the population of contracts with external customers meeting the presentation requirements as of December 31, 2021 (in millions): 2022 2023 2024 2025 2026 2027 and Thereafter Pipeline revenues supported by minimum volume commitments and capacity agreements (1) $ 179 $ 174 $ 158 $ 131 $ 86 $ 379 Terminalling, storage and other agreement revenues 237 170 130 63 45 197 Total $ 416 $ 344 $ 288 $ 194 $ 131 $ 576 (1) Calculated as volumes committed under contracts multiplied by the current applicable tariff rate. The presentation above does not include (i) expected revenues from legacy shippers not underpinned by minimum volume commitments, including pipelines where there are no or limited alternative pipeline transportation options, (ii) intersegment revenues and (iii) the amount of consideration associated with certain income generating contracts, which include a fixed minimum level of service, that are either not within the scope of ASC 606 or do not meet the requirements for presentation as remaining performance obligations. The following are examples of contracts that are not included in the table above because they are not within the scope of ASC 606 or do not meet the requirements for presentation: • Minimum volume commitments on certain of our joint venture pipeline systems; • Acreage dedications; • Buy/sell arrangements with future committed volumes; • Short-term contracts and those with variable consideration due to the election of practical expedients, as discussed below; • Contracts within the scope of ASC Topic 842, Leases ; and • Contracts within the scope of ASC Topic 815, Derivatives and Hedging . We have elected practical expedients to exclude the presentation of remaining performance obligations for variable consideration which relates to wholly unsatisfied performance obligations. Certain contracts do not meet the requirements for presentation of remaining performance obligations due to variability in amount of performance obligation remaining, variability in the timing of recognition or variability in consideration. Acreage dedications do require us to perform future services but do not contain a minimum level of services and are therefore excluded from this presentation. Long-term merchant arrangements contain variable timing, volumes and/or consideration and are excluded from this presentation. The duration of these contracts varies across the periods presented above. Additionally, we have elected practical expedients to exclude contracts with terms of one year or less, and therefore exclude the presentation of remaining performance obligations for short-term transportation, storage and processing services, merchant arrangements, including the non-cancelable period of evergreen arrangements, and any other types of arrangements with terms of one year or less. Trade Accounts Receivable and Other Receivables, Net Our accounts receivable are primarily from purchasers and shippers of crude oil and, to a lesser extent, purchasers of NGL. These purchasers include, but are not limited to, refiners, producers, marketing and trading companies and financial institutions. The majority of our accounts receivable relate to our crude oil merchant activities that can generally be described as high volume and low margin activities, in many cases involving exchanges of crude oil volumes. F-20 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS To mitigate credit risk related to our accounts receivable, we utilize a rigorous credit review process. We closely monitor market conditions and perform credit reviews of each customer to make a determination with respect to the amount, if any, of open 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, credit insurance or parental guarantees. Additionally, in an effort to mitigate credit risk, a significant portion of our transactions with counterparties are settled on a net-cash basis. For a majority of these net-cash arrangements, we also enter into netting agreements (contractual agreements that allow us to offset receivables and payables with those counterparties against each other on our balance sheet). Accounts receivable from the sale of crude oil are generally settled with counterparties on the industry settlement date, which is typically in the month following the month in which the title transfers. Otherwise, we generally invoice customers within 30 days of when the products or services were provided and generally require payment within 30 days of the invoice date. We review all outstanding accounts receivable balances on a monthly basis and record our receivables net of expected credit losses. We do not write-off accounts receivable balances until we have exhausted substantially all collection efforts. At December 31, 2021 and 2020, substantially all of our trade accounts receivable were less than 30 days past their invoice date. Our expected credit losses are immaterial. Although we consider our credit procedures to be adequate to mitigate any significant credit losses, the actual amount of current and future credit losses could vary significantly from estimated amounts. The following is a reconciliation of trade accounts receivable from revenues from contracts with customers to total Trade accounts receivable and other receivables, net as presented on our Consolidated Balance Sheets (in millions): December 31, 2021 2020 Trade accounts receivable arising from revenues from contracts with customers $ 4,031 $ 2,317 Other trade accounts receivables and other receivables (1) 5,126 2,818 Impact due to contractual rights of offset with counterparties ( 4,452 ) ( 2,582 ) Trade accounts receivable and other receivables, net $ 4,705 $ 2,553 (1) The balance is comprised primarily of accounts receivable associated with buy/sell arrangements that are not within the scope of ASC 606. Note 4— Net Income/(Loss) Per Class A Share Basic net income/(loss) per Class A share is determined by dividing net income/(loss) attributable to PAGP by the weighted average number of Class A shares outstanding during the period. Our Class B and Class C shares do not share in the earnings of the Partnership; accordingly, basic and diluted net income/(loss) per Class B and Class C share has not been presented. Diluted net income/(loss) per Class A share is determined by dividing net income/(loss) attributable to PAGP by the diluted weighted average number of Class A shares outstanding during the period. For purposes of calculating diluted net income/(loss) per Class A share, both the net income/(loss) attributable to PAGP and the diluted weighted average number of Class A shares outstanding 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 diluted weighted average number of Class A shares outstanding 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 conditions 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. See Note 12 for information regarding exchanges of AAP units and AAP Management Units. 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. See Note 18 for information regarding PAGP LTIP awards. F-21 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS On a weighted-average basis, for the years ended December 31, 2021 and 2019, the possible exchange of 50 million and 99 million AAP units, respectively, would not have had a dilutive effect on basic net income per Class A share. For each of the years ended December 31, 2021 and 2020, the possible exchange of 1 million AAP Management Units would not have had a dilutive effect on basic net income/(loss) per Class A share on a weighted-average basis. For the year ended December 31, 2020, our PAGP LTIP awards were antidilutive. For the years ended December 31, 2021 and 2019 our PAGP LTIP awards were dilutive; however, there were less than 0.1 million dilutive LTIP awards for each period, which did not change the presentation of weighted average Class A shares outstanding or net income per Class A share. The following table sets forth the computation of basic and diluted net income/(loss) per Class A share (in millions, except per share data): Year Ended December 31, 2021 2020 2019 Basic Net Income/(Loss) per Class A Share Net income/(loss) attributable to PAGP $ 60 $ ( 568 ) $ 331 Basic weighted average Class A shares outstanding 194 186 168 Basic net income/(loss) per Class A share $ 0.31 $ ( 3.06 ) $ 1.97 Diluted Net Income/(Loss) per Class A Share Net income/(loss) attributable to PAGP $ 60 $ ( 568 ) $ 331 Incremental net income/(loss) attributable to PAGP resulting from assumed exchange of AAP units and AAP Management Units — ( 189 ) 2 Net income/(loss) attributable to PAGP including incremental net income/(loss) from assumed exchange of AAP units and AAP Management Units $ 60 $ ( 757 ) $ 333 Basic weighted average Class A shares outstanding 194 186 168 Dilutive shares resulting from assumed exchange of AAP units and AAP Management Units — 60 2 Diluted weighted average Class A shares outstanding 194 246 170 Diluted net income/(loss) per Class A share $ 0.31 $ ( 3.07 ) $ 1.96 Note 5— Inventory, Linefill and Base Gas and Long-term Inventory Inventory, including long-term inventory, primarily consists of crude oil and NGL in pipelines, storage facilities and railcars that are valued at the lower of cost or net realizable value, with cost determined using an average cost method within specific inventory pools. 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. Any resulting adjustments are a component of “Purchases and related costs” on our accompanying Consolidated Statements of Operations. During the year ended December 31, 2021, no adjustments were recorded. During the years ended December 31, 2020 and 2019, we recorded charges of $ 233 million (of which $ 40 million was associated with our long-term inventory) and $ 11 million, respectively, related to the write down of our crude oil and NGL inventory due to declines in prices. A portion of these inventory valuation adjustments was offset by the recognition of gains on derivative instruments being utilized to hedge future sales of our crude oil and NGL inventory. Such gains were recorded to “Product sales revenues” in our accompanying Consolidated Statements of Operations. See Note 13 for discussion of our derivative and risk management activities. Linefill and base gas in assets we own are recorded at historical cost and consist of crude oil, NGL and natural gas. We classify as linefill or base gas (i) our proportionate share of barrels used to fill a pipeline that we own such that when an incremental barrel is pumped into or enters a pipeline it forces product out at another location, (ii) barrels that represent the minimum working requirements in tanks and caverns that we own and (iii) natural gas required to maintain the minimum operating pressure of natural gas storage facilities we own. Following the sale of our Pine Prairie and Southern Pines natural gas storage facilities in August of 2021, we no longer own natural gas storage facilities. See Note 7 for additional information. F-22 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Linefill and base gas carrying amounts are reviewed for impairment in accordance with FASB guidance with respect to accounting for the impairment or disposal of long-lived assets. Carrying amounts that are not expected to be recoverable through future cash flows are written down to estimated fair value. See Note 6 for further discussion regarding impairment of long-lived assets. During 2021, 2020 and 2019, we did not recognize any material impairments of linefill and base gas. Minimum working inventory requirements in third-party assets and other working inventory in our assets that are needed for our commercial operations are included within specific inventory pools in inventory (a current asset) in determining the average cost of operating inventory. At the end of each period, we reclassify the inventory not expected to be liquidated within the succeeding twelve months out of “Inventory,” at the average cost of the applicable inventory pools, and into “Long-term inventory,” which is reflected as a separate line item under “Other assets” on our Consolidated Balance Sheets. Inventory, linefill and base gas and long-term inventory consisted of the following (barrels and natural gas volumes in thousands and carrying value in millions): December 31, 2021 December 31, 2020 Volumes Unit of Measure Carrying Value Price/ Unit (1) Volumes Unit of Measure Carrying Value Price/ Unit (1) Inventory Crude oil 8,041 barrels $ 544 $ 67.65 13,450 barrels $ 441 $ 32.79 NGL 6,982 barrels 234 $ 33.51 12,302 barrels 199 $ 16.18 Other N/A 5 N/A N/A 7 N/A Inventory subtotal 783 647 Linefill and base gas Crude oil 15,199 barrels 862 $ 56.71 14,669 barrels 828 $ 56.45 NGL 1,633 barrels 45 $ 27.56 1,640 barrels 44 $ 26.83 Natural gas (2) — Mcf — $ — 25,576 Mcf 110 $ 4.30 Linefill and base gas subtotal 907 982 Long-term inventory Crude oil 2,973 barrels 209 $ 70.30 2,499 barrels 111 $ 44.42 NGL 1,135 barrels 44 $ 38.77 1,185 barrels 19 $ 16.03 Long-term inventory subtotal 253 130 Total $ 1,943 $ 1,759 (1) Price per unit of measure is comprised of a weighted average associated with various grades, qualities and locations. Accordingly, these prices may not coincide with any published benchmarks for such products. (2) Base gas with a carrying value of $ 110 million was included in the sale of our natural gas storage facilities, which closed in August 2021. See Note 7 for additional information. Note 6— Property and Equipment In accordance with our capitalization policy, expenditures made to expand the existing operating and/or earnings capacity of our assets are capitalized. We also capitalize certain costs directly related to the construction of such assets, including related internal labor costs, engineering costs and interest costs. For the years ended December 31, 2021, 2020 and 2019, capitalized interest recorded to property and equipment was $ 6 million, $ 8 million and $ 14 million, respectively. In addition, we capitalize interest related to investments in certain unconsolidated entities. See Note 9 for additional information. We also capitalize expenditures for the replacement and/or refurbishment of partially or fully depreciated assets in order to maintain the operating and/or earnings capacity of our existing assets. Repair and maintenance expenditures incurred in order to maintain the day to day operation of our existing assets are expensed as incurred. F-23 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Property and equipment, net is stated at cost and consisted of the following (in millions): Estimated Useful Lives (Years) December 31, 2021 2020 Pipelines and related facilities (1) (2) 10 - 50 $ 12,800 $ 11,147 Storage, terminal and rail facilities (2) 10 - 50 5,100 6,042 Trucking equipment and other 2 - 15 502 524 Construction in progress N/A 248 272 Office property and equipment 2 - 50 312 293 Land and other N/A 330 342 Property and equipment, gross 19,292 18,620 Accumulated depreciation ( 4,383 ) ( 4,000 ) Property and equipment, net $ 14,909 $ 14,620 (1) We include rights-of-way, which are intangible assets, in our Pipelines and related facilities amounts within property and equipment. (2) Useful lives changed to 10 to 50 years in 2021 See below for additional information. We calculate our depreciation using the straight-line method, based on estimated useful lives and salvage values of our assets. Depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $ 655 million, $ 566 million and $ 528 million, respectively. During the first quarter of 2021, we modified the useful lives of our Pipelines and related facilities and Storage, terminal and rail facilities to useful lives of 10 to 50 years from useful lives of 10 to 70 years to reflect current expectations given our future operating and commercial outlook. These depreciable life adjustments will prospectively increase depreciation expense. For the year ended December 31, 2021, these reductions in useful lives increased depreciation expense by approximately $ 72 million, which resulted in a decrease in net income attributable to PAGP of approximately $ 15 million and to both basic and diluted net income per Class A share of approximately $ 0.08 from what these amounts would have been absent the change in useful lives. As of December 31, 2021, 2020 and 2019, we incurred liabilities for construction in progress that had not been paid of $ 48 million, $ 51 million and $ 120 million, respectively. Impairment of Long-Lived Assets (Held and Used) Long-lived assets with recorded values that are not expected to be recovered through future cash flows are written down to estimated fair value in accordance with FASB guidance with respect to the accounting for the impairment or disposal of long-lived assets. Under this guidance, a long-lived asset is tested for impairment when events or circumstances indicate that its carrying value may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value exceeds the sum of the undiscounted cash flows, an impairment loss equal to the amount by which the carrying value exceeds the fair value of the asset is recognized. We periodically evaluate property and equipment and other long-lived assets for impairment when events or circumstances indicate that the carrying value of these assets may not be recoverable. The evaluation is highly dependent on the underlying assumptions of related cash flows. The subjective assumptions used to determine the existence of an impairment in carrying value include: • whether there is an indication of impairment; • the grouping of assets; • the intention of “holding,” “abandoning” or “selling” an asset; • the forecast of undiscounted expected future cash flow over the asset’s estimated useful life; and • if an impairment exists, the fair value of the asset or asset group. F-24 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS In addition, when we evaluate property and equipment and other long-lived assets for recoverability, it may also be necessary to review related depreciation estimates and methods. During the year ended December 31, 2021, we recognized approximately $ 220 million of non-cash impairment losses related to certain crude oil storage terminal assets included in our Crude Oil segment. This amount is reflected in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Statements of Operations. Decreased demand for our services related to changing market conditions resulted in decreases in expected future cash flows for certain of our assets, which was a triggering event that required us to assess the recoverability of our carrying value of such long-lived assets. As a result of our impairment review, we wrote off the portion of the carrying amount of these long-lived assets that exceeded their fair value. Our estimated fair value (which we consider a Level 3 measurement in the fair value hierarchy) was primarily based upon an assumption for the amount for which the relevant assets and land could be sold. During the year ended December 31, 2020, we recognized approximately $ 541 million of non-cash impairment losses, reflected in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Statement of Operations. Of our impairment losses, approximately $ 415 million was associated with certain pipeline assets in our Crude Oil segment located in the Mid-Continent region. The macroeconomic and geopolitical conditions that occurred in 2020, including the collapse of oil prices driven by both the decrease in demand caused by the COVID-19 pandemic and excess supply, as well as changing market conditions and expected lower crude oil production in certain regions, resulted in expected decreases in future cash flows for certain of our assets, which was a triggering event that required us to assess the recoverability of our carrying value of such long-lived assets. As a result of our impairment review, we wrote off the portion of the carrying amount of these long-lived assets that exceeded their fair value. Our estimated fair values (which we consider a Level 3 measurement in the fair value hierarchy) were based upon a discounted cash flow approach utilizing various assumptions and the application of a discount rate of approximately 14 %, which represents our estimate of the cost of capital of a theoretical market participant. Such assumptions included (but were not limited to) (i) future commodity volumes (consistent with historical information and estimates of future drilling and completion activity), (ii) tariff rates, (iii) future commodity prices (based on relevant indices and applicable quality and location differentials), and (iv) estimated fixed and variable costs. The remaining impairment losses were associated with idled or underutilized assets, primarily in our Crude Oil segment, including certain pipelines located in the Western region and other long-lived assets, for which it has been determined that it is unlikely that opportunities will exist in the future to recover our investment in these assets. We wrote off substantially all of the carrying value of these assets. We did not recognize any material impairments during the year ended December 31, 2019. Note 7— Acquisitions, Divestitures and Other Transactions Joint Venture Transaction In October 2021, we and Oryx Midstream completed the merger, in a cashless, debt-free transaction, of our respective Permian Basin assets, operations and commercial activities into a newly formed joint venture, the Permian JV. The Permian JV includes all of Oryx Midstream’s Permian Basin assets and, with the exception of our long-haul pipeline systems and certain of our intra-basin terminal assets, the vast majority of our assets located within the Permian Basin. We own 65 % of the Permian JV, operate the combined assets and reflect the Permian JV as a consolidated subsidiary in our consolidated financial statements. The formation of the joint venture was accounted for as a business combination using the acquisition method of accounting. As the majority owner and the controlling entity, we are considered the acquirer and the transfer of our predecessor business to the joint venture was accounted for at historical cost, while the Oryx Midstream predecessor business was recorded based on the fair value of the assets acquired and liabilities assumed. In accordance with applicable accounting guidance, the fair value of Oryx Midstream’s ownership interest in the joint venture following the formation of $ 3.256 billion is utilized as the consideration transferred for the purchase price allocation. F-25 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The combination of the historical cost and fair value, discussed above, resulted in net assets of the joint venture of approximately $ 7.575 billion upon formation. Oryx Midstream’s 35 % interest in the net assets of the Permian JV was recognized as noncontrolling interest in partners’ capital. The difference between such amount and the fair value of Oryx Midstream’s assets acquired and liabilities assumed was recorded as an increase to partners’ capital attributable to our Class A shareholders and noncontrolling interests in PAA and AAP in proportion to their respective ownership interests. The following table presents the amounts recognized in partners’ capital associated with this transaction (in millions): Recognized Amount Oryx Midstream’s 35 % interest in the Permian JV $ 2,651 Increase to partners’ capital attributable to noncontrolling interests in PAA and AAP 439 Noncontrolling interests $ 3,090 Class A shareholders 166 Total partners’ capital $ 3,256 The fair value of the $ 3.256 billion consideration is a Level 3 measurement in the fair value hierarchy and was determined by valuing both the enterprise value of Oryx Midstream’s Permian Basin business and the enterprise value of our Permian Basin assets that were contributed to the joint venture. The enterprise value of Oryx Midstream’s Permian Basin business was calculated by weighting the results of (i) a discounted cash flow (“DCF”) approach and (ii) a guideline public company method (“GPCM”). The value of our Permian Basin assets that were contributed to the joint venture was based on a GPCM. The DCF approach utilized a discount rate of 11.75 %, based on our estimate of the risk that a theoretical market participant would assign to the business. The projection of future crude volumes gathered and transported was also a key assumption in the DCF approach and was based on projected rig activity on the associated acreage. The GPCM applies market multiples to estimated earnings to derive the fair value. The GPCM values for Oryx Midstream’s Permian Basin business and for our Permian Basin assets that were contributed to the joint venture assumed market multiples ranging from 9.5 to 11.0 , which were derived from assumptions of market multiples for similar businesses. The determination of the fair value of the assets acquired and liabilities assumed was estimated in accordance with the applicable accounting guidance. The analysis was performed based on estimates that are reflective of market participant assumptions. The determination of these values is preliminary, pending finalization of working capital balances, and we expect to finalize our fair value determination in 2022. The following table reflects our preliminary determination of the fair value of those assets and liabilities (in millions): Identifiable Assets Acquired and Liabilities Assumed Estimated Useful Lives (in years) Recognized Amount Property and equipment 3 - 30 $ 1,886 Intangible assets 20 1,247 Investment in unconsolidated entities N/A 103 Linefill N/A 5 Working capital and other assets and liabilities N/A 15 $ 3,256 The fair value of the tangible assets is a Level 3 measurement in the fair value hierarchy and was determined using a cost approach based on costs incurred on similar recent construction projects. The fair value of the intangible assets is also a Level 3 measurement in the fair value hierarchy and was determined by applying a discounted cash flow approach. Such approach utilized a discount rate of approximately 16 %, based on our estimate of the risk that a theoretical market participant would assign to the respective intangible assets. The projection of future crude oil volumes gathered and transported was also a key assumption in the valuation of the intangible assets and was based on projected rig activity on the associated acreage. F-26 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The fair value of intangible assets is comprised of customer relationships that will be amortized over their useful lives, which have a remaining weighted average life of approximately 20 years. The value assigned to such intangible assets will be amortized to earnings under the declining balance method of amortization. Amortization expense was approximately $ 28 million during the year ended December 31, 2021, and the future amortization expense through 2026 is estimated as follows (in millions): 2022 $ 142 2023 $ 138 2024 $ 127 2025 $ 117 2026 $ 106 During the year ended December 31, 2021, we incurred approximately $ 17 million of transaction-related costs associated with the joint venture formation transaction. Such costs are reflected as a component of “General and administrative expenses” on our Consolidated Statements of Operations. Quarterly distributions of available cash from the Permian JV to PAA and Oryx Midstream are subject to a tiered modified sharing arrangement (“MSA”) for up to ten years . Pursuant to the terms of the governing documents for the Permian JV, the MSA will terminate in October 2031, or sooner if Oryx Midstream exercises its right to terminate the MSA at any time by delivery of written notice to PAA. Upon termination of the MSA, quarterly distributions of available cash will be paid 65 % to PAA and 35 % to Oryx. Under the MSA, distributions will be allocated as follows (in millions): Available Cash Distributions Percentages Tier Annualized PAA Oryx 1 Up to $300 50 % 50 % 2 $300 - $428 100 % — % 3 $428 - $815 65 % 35 % 4 $815 and above 70 % 30 % Oryx Midstream is a portfolio company of Stonepeak Infrastructure Partners (“Stonepeak”). Affiliates of Stonepeak own approximately 8.9 % of PAA’s outstanding Series A preferred units, which equates to less than 1 % of PAA’s outstanding common units and Series A preferred units (PAA’s “common unit equivalents”) combined. Pro Forma and Other Financial Results Financial results of the Permian JV have been included in the results of operations within the Crude Oil segment since the date of the formation. Disclosure of the revenues and earnings from the Oryx Midstream predecessor business for the period subsequent to the joint venture formation is not practicable as it is not being operated as a standalone subsidiary. The following selected unaudited pro forma results of operations were derived from the historical financial statements of PAGP and Oryx Midstream, and gives effect to the joint venture formation as if it had occurred on January 1, 2020. The pro forma results of operations do not include any cost savings or other synergies that may result from the Permian JV or any estimated costs that have been or will be incurred by us to integrate Oryx Midstream’s assets. These results are not necessarily indicative of the results that might have actually occurred had the merger taken place on January 1, 2020; furthermore, this financial information is not intended to be a projection of future results (in millions, except per unit amounts): F-27 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Year ended December 31, 2021 2020 Total revenues $ 42,359 $ 23,536 Net income/(loss) attributable to PAGP $ 37 $ ( 629 ) Basic net income/(loss) per Class A Share $ 0.19 $ ( 3.38 ) Diluted net income/(loss) per Class A Share $ 0.19 $ ( 3.41 ) Asset Exchange In June 2021, we closed on an asset exchange agreement (the “Asset Exchange”) with Inter Pipeline Ltd., through which we acquired additional interests in two straddle plants included in our NGL segment that we currently operate, in exchange for a pipeline and related storage and truck offload facilities previously included in our Crude Oil segment and cash consideration of $ 32 million, including working capital and other adjustments. We recognized a gain of $ 106 million on the divestiture of the pipeline and related storage and truck offload facilities, which is included in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Statement of Operations, based on the difference between the fair value of the divested assets and their carrying value. Acquisitions In February 2020, we acquired Felix Midstream LLC, now known as FM Gathering LLC (“FM Gathering”) from Felix Energy Holdings II, LLC for approximately $ 300 million, net of working capital and other adjustments. FM Gathering owns and operates a newly constructed crude oil gathering system in the Delaware Basin, with associated crude oil storage and truck offloading capacity, and is supported by a long-term acreage dedication. The assets acquired are included in our Crude Oil segment. This acquisition was accounted for using the acquisition method of accounting and the determination of the fair value of the assets acquired and liabilities assumed was determined in accordance with the applicable accounting guidance. The assets acquired primarily consisted of property and equipment of $ 115 million and intangible assets of $ 187 million. The fair value of the tangible assets is a Level 3 measurement in the fair value hierarchy and was determined using a cost approach. The cost approach was based on costs incurred on similar recent construction projects. The fair value of the intangible assets is also a Level 3 measurement in the fair value hierarchy and was determined by applying a discounted cash flow approach. Such approach utilized discount rates varying from 18 % to 19 %, based on our estimate of the risk that a theoretical market participant would assign to the respective intangible assets. During the second quarter of 2019, we acquired a crude oil terminal, including tank bottoms and linefill, in Cushing, Oklahoma for cash consideration of $ 44 million, which was accounted for as an asset acquisition. Divestitures In August 2021, we sold our Pine Prairie and Southern Pines natural gas storage facilities, which were included in our Crude Oil segment for periods prior to the sale, for net proceeds of approximately $ 850 million, including working capital adjustments. Prior to the sale, we classified the assets related to this transaction (primarily “Property and equipment”), valued at the lower of the carrying amount or fair value less costs to sell, of approximately $ 832 million as assets held for sale with approximately $ 18 million of deferred losses on hedges remaining in other comprehensive income until the closing of the sale. Upon classification of the assets to held for sale in the second quarter of 2021, we recognized a non-cash impairment loss of $ 475 million which is included in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Statement of Operations. F-28 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS During the year ended December 31, 2020, we received cash proceeds of $ 451 million, primarily from the sale of: • certain Los Angeles Basin crude oil terminals previously included in our Crude Oil segment for proceeds of approximately $ 200 million, subject to certain adjustments; • certain NGL terminals previously included in our NGL segment for proceeds of approximately $ 163 million (including $ 22 million related to a multi-year supply agreement related to the sale), subject to certain adjustments; and • a 10 % ownership interest in Saddlehorn Pipeline Company, LLC (“Saddlehorn”) for proceeds of approximately $ 78 million, including working capital adjustments (see Note 9 for additional information). We recognized a loss related to these assets sales of $ 178 million, including non-cash impairments recognized upon classification to assets held for sale, for the year ended December 31, 2020. Such amount is included in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Statement of Operations. During the year ended December 31, 2019, we sold certain non-core assets for total proceeds of $ 77 million that primarily consisted of a storage terminal in North Dakota, which is reflected in our Crude Oil segment for the period prior to the sale. For the year ended December 31, 2019, we recognized a net loss related to these asset sales of $ 16 million, which is comprised of gains of $ 31 million and losses of $ 47 million. Such amounts are included in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Statement of Operations. Note 8— Goodwill Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. In accordance with FASB guidance, we test goodwill to determine whether an impairment has occurred at least annually (as of June 30) and on an interim basis if it is more likely than not that a reporting unit’s fair value is less than its carrying value. Goodwill is tested for impairment at a level of reporting referred to as a reporting unit. A reporting unit is an operating segment or one level below an operating segment for which discrete financial information is available and regularly reviewed by segment management. Our reporting units are our operating segments. FASB guidance provides for a quantitative approach to testing goodwill for impairment; however, we may first assess certain qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In the quantitative test, we compare the fair value of the reporting unit with the respective book values, including goodwill, by using an income approach based on a discounted cash flow model. This approach requires us to make long-term forecasts of future revenues, expenses and other expenditures. Those forecasts require the use of various assumptions and estimates, the most significant of which are net revenues (total revenues less purchases and related costs), operating expenses, general and administrative expenses and the weighted average cost of capital. Fair value of the reporting units is determined using significant unobservable inputs, or Level 3 inputs in the fair value hierarchy. When the fair value is greater than book value, then the reporting unit’s goodwill is not considered impaired. If the book value is greater than fair value, then goodwill is impaired by the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. F-29 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS During the first quarter of 2020, we recorded impairment losses of $ 2.515 billion related to goodwill. Our market capitalization declined significantly during the first quarter driven by macroeconomic and geopolitical conditions that occurred in 2020, including the collapse of oil prices driven by both the decrease in demand caused by the COVID-19 pandemic and excess supply, as well as changing market conditions and expected lower crude oil production in certain regions, that resulted in expected decreases in future cash flows for certain of our assets, which we concluded was a triggering event that required us to perform a quantitative impairment test as of March 31, 2020, utilizing a discounted cash flow approach. We applied a discount rate of approximately 14 % in the determination of the fair value of each of our reporting units, which represents our estimate of the cost of capital of a theoretical market participant as of March 31, 2020. The fair values of the reporting units are Level 3 measurements in the fair value hierarchy and were based on various inputs, as discussed below. The discounted cash flows for each reporting unit were based on six years of projected cash flows and terminal values that we believe would be applied by a theoretical market participant in similar market transactions. The discounted cash flows for the respective reporting units utilized various other assumptions, including, but not limited to (i) volumes (based on historical information and estimates of future drilling and completion activity, as well as expectations of future demand recovery), (ii) tariff and storage rates, (iii) future commodity prices (based on relevant indices and applicable quality and location differentials), and (iv) estimated fixed and variable costs. We used a range of cash flows for the discounted cash flow calculations based on differing potential market scenarios, but for each of the reporting units, the ultimate outcome of the impairment test was unchanged by the various points within the range of cash flows. As a result of the impairment test, we concluded that the carrying value of each of our reporting units exceeded their respective fair values, resulting in a goodwill impairment charge for the entire goodwill balance for each reporting unit. Prior to the year ended December 31, 2020, we did not recognize any impairments of goodwill. Goodwill by segment and changes in goodwill is reflected in the following table (in millions): Crude Oil NGL Total Balance at December 31, 2019 $ 2,300 $ 240 $ 2,540 Acquisitions 2 — 2 Goodwill, gross $ 2,302 $ 240 $ 2,542 Impairments ( 2,287 ) ( 228 ) ( 2,515 ) Foreign currency translation adjustments ( 15 ) ( 12 ) ( 27 ) Accumulated impairment losses ( 2,302 ) ( 240 ) ( 2,542 ) Balance at December 31, 2020 $ — $ — $ — Note 9— Investments in Unconsolidated Entities Investments in entities over which we have significant influence but not control are accounted for under the equity method. We do not consolidate any part of the assets or liabilities of our equity investees. Our share of net income or loss is reflected as one line item on our Consolidated Statements of Operations entitled “Equity earnings in unconsolidated entities” and will increase or decrease, as applicable, the carrying value of our investments in unconsolidated entities on our Consolidated Balance Sheets. We evaluate our equity investments for impairment in accordance with FASB guidance with respect to the equity method of accounting for investments in common stock. An impairment of an equity investment results when factors indicate that the investment’s fair value is less than its carrying value and the reduction in value is other than temporary in nature. F-30 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Our investments in unconsolidated entities consisted of the following (in millions, except percentage data): Ownership Interest at December 31, 2021 Investment Balance December 31, Entity (1) Type of Operation 2021 2020 BridgeTex Pipeline Company, LLC (“BridgeTex”) Crude Oil Pipeline 20 % $ 406 $ 421 Cactus II Pipeline LLC (“Cactus II”) Crude Oil Pipeline 65 % 737 752 Capline Pipeline Company LLC Crude Oil Pipeline (2) 54 % 531 514 Diamond Pipeline LLC (“Diamond”) Crude Oil Pipeline 50 % 464 480 Eagle Ford Pipeline LLC (“Eagle Ford Pipeline”) Crude Oil Pipeline 50 % 363 372 Eagle Ford Terminals Corpus Christi LLC (“Eagle Ford Terminals”) Crude Oil Terminal and Dock 50 % 120 122 OMOG JV LLC (3) Crude Oil Pipeline 40 % 102 — Saddlehorn Crude Oil Pipeline 30 % 209 208 White Cliffs Pipeline, LLC Crude Oil Pipeline 36 % 171 192 Wink to Webster Pipeline LLC (“W2W Pipeline”) (4) Crude Oil Pipeline (5) 16 % 345 330 Other investments 357 373 Total Investments in Unconsolidated Entities $ 3,805 $ 3,764 (1) The financial results from these entities are reported in our Crude Oil segment. (2) The Capline pipeline was out of service during 2020 and a majority of 2021 pending the reversal of the pipeline system. The pipeline reversal project was completed with interim service beginning in mid-December 2021 and full service beginning in January 2022. (3) Our ownership in this entity was acquired as part of the assets contributed by Oryx Midstream in the formation of the Permian JV in October 2021. See Note 7 for additional information. (4) Although we own less than 20% of W2W Pipeline, we use the equity method to account for the investment because we believe we have significant influence over the financial and operating decisions of the company. (5) The pipeline system was in partial service during 2021 and another phase of the pipeline construction project was completed in the first quarter of 2022. Impairments During the year ended December 31, 2020, we recognized losses as a result of the write-down of certain of our investments in unconsolidated entities, as discussed further below. Such amounts are reflected in “Gain on/(impairment of) investments in unconsolidated entities, net” on our Consolidated Statement of Operations. STACK. During the third quarter of 2020, we determined that there was an other-than-temporary impairment of our investment in STACK Pipeline LLC as a result of a continued decline of drilling activity and related volumes of crude oil in its area of operation. We recognized a loss of $ 91 million related to the write-down of the portion of the carrying amount of our investment that exceeded its fair value. The estimated fair value (which we consider a Level 3 measurement in the fair value hierarchy) was based on a discounted cash flow approach utilizing various assumptions and the application of a discount rate of approximately 14 %, which represents our estimate of the cost of capital of a theoretical market participant. Such assumptions included (but were not limited to) (i) volumes (consistent with historical information and estimates of future drilling and completion activity), (ii) tariff rates, (iii) future commodity prices (based on relevant indices and applicable quality and location differentials), and (iv) estimated fixed and variable costs. Red Oak . In June 2019, we formed Red Oak Pipeline LLC (“Red Oak”), a joint venture with a subsidiary of Phillips 66 and in which we own a 50 % interest, to develop a new crude oil pipeline project. In 2020, the partners of Red Oak determined that the project would not proceed as previously contemplated. We determined that there was an other-than-temporary impairment of our investment in Red Oak, and we recognized a loss of $ 69 million related to the write-down of our investment in Red Oak to the estimated residual value of our share of the net assets during the second quarter of 2020. F-31 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Other investments. During the first quarter of 2020, we also recognized a loss of $ 43 million related to the write-down of certain of our investments included in “Other investments” in the table above due to an other-than-temporary impairment related to a decline in market conditions. Formations Capline LLC . During the first quarter of 2019, the owners of the Capline pipeline system contributed their undivided joint interests in the system to a newly formed entity, Capline Pipeline Company LLC (“Capline LLC”), in exchange for equity interests in such entity. After the contribution, Capline LLC owns 100 % of the pipeline system. Each owner’s undivided joint interest in the Capline pipeline system prior to the transaction is equal to each owner’s equity interest in Capline LLC. Although we own a majority of Capline LLC’s equity, we do not have a controlling financial interest in Capline LLC because the other members have substantive participating rights. Therefore, we account for our ownership interest in Capline LLC as an equity method investment. Under applicable accounting rules, the transaction resulted in a “loss of control” of our undivided joint interest, which was derecognized and contributed to Capline LLC. The “loss of control” required us to measure our equity interest in Capline LLC at fair value. At the time of the transaction, our 54 % undivided joint interest in the Capline pipeline system had a carrying value of $ 175 million, which primarily related to property and equipment included in our Crude Oil segment. We determined the fair value of our investment in Capline LLC to be approximately $ 444 million, resulting in the recognition of a gain of $ 269 million during the year ended December 31, 2019. Such gain is included in “Gain on/(impairment of) investment in unconsolidated entities, net” on our Consolidated Statement of Operations. The fair value of our investment in Capline LLC was based on an income approach utilizing a discounted cash flow analysis. The cash flow forecasts require the use of various assumptions and estimates which include those related to the timing and amount of capital expenditures, the expected tariff rates and volumes of crude oil, and the terminal value. We probability-weighted various forecasted cash flow scenarios utilized in the analysis when we considered the possible outcomes. We used a discount rate representing our estimate of the risk adjusted discount rate that would be used by market participants. If shipper interest varies from the levels assumed in our model, the related cash flows, and thus the fair value of our investment, could be materially impacted. The fair value of our investment was determined using significant unobservable inputs, or Level 3 inputs in the fair value hierarchy. Divestitures Saddlehorn. In February 2020, we sold a 10 % ownership interest in Saddlehorn for proceeds of approximately $ 78 million and have retained a 30 % ownership interest. We recorded a gain of approximately $ 21 million related to this sale, which is included in “Gain on/(impairment of) investments in unconsolidated entities, net” on our Consolidated Statement of Operations. We continue to account for our remaining interest under the equity method of accounting. Distributions Distributions received from unconsolidated entities are classified based on the nature of the distribution approach, which looks to the activity that generated the distribution. We consider distributions received from unconsolidated entities as a return on investment in those entities to the extent that the distribution was generated through operating results, and therefore classify these distributions as cash flows from operating activities in our Consolidated Statement of Cash Flows. Other distributions received from unconsolidated entities are considered a return of investment and classified as cash flows from investing activities on the Consolidated Statement of Cash Flows. Contributions We generally fund our portion of development, construction or capital investment projects of our equity method investees through capital contributions. Our contributions to these entities increase the carrying value of our investments and are reflected in our Consolidated Statements of Cash Flows as cash used in investing activities. During the years ended December 31, 2021, 2020 and 2019, we made cash contributions of $ 82 million, $ 445 million and $ 504 million, respectively, to certain of our equity method investees. In addition, we capitalized interest of $ 12 million, $ 16 million and $ 20 million during the years ended December 31, 2021, 2020 and 2019, respectively, related to contributions to unconsolidated entities for projects under development and construction. F-32 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Basis Differences Our investments in unconsolidated entities exceeded our share of the underlying equity in the net assets of such entities by $ 223 million and $ 170 million at December 31, 2021 and 2020, respectively. Such basis differences are included in the carrying values of our investments on our Consolidated Balance Sheets. The portion of the basis differences attributable to depreciable or amortizable assets is amortized on a straight-line basis over the estimated useful life of the related assets, which reduces “Equity earnings in unconsolidated entities” on our Consolidated Statements of Operations. The portion of the basis differences attributable to goodwill is not amortized. The majority of the basis difference at both December 31, 2021 and 2020 was attributable to goodwill related to our ownership interest in BridgeTex and Capline LLC with the remaining basis difference primarily related to capitalized interest incurred during construction of the assets of our unconsolidated entities. Summarized Financial Information of Unconsolidated Entities Combined summarized financial information for all of our unconsolidated entities is shown in the tables below (in millions). None of our unconsolidated entities have noncontrolling interests. December 31, 2021 2020 Current assets $ 509 $ 580 Noncurrent assets $ 8,879 $ 8,769 Current liabilities $ 366 $ 343 Noncurrent liabilities $ 15 $ 10 Year Ended December 31, 2021 2020 2019 Revenues $ 1,320 $ 1,360 $ 1,469 Operating income $ 505 $ 828 $ 994 Net income $ 506 $ 826 $ 995 F-33 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 10— Intangible Assets, Net Intangible assets, net of accumulated amortization, consisted of the following (in millions): December 31, 2021 December 31, 2020 Estimated Useful Lives (Years) Cost Accumulated Amortization Net Cost Accumulated Amortization Net Customer contracts and relationships (1) 3 – 31 $ 2,445 $ ( 510 ) $ 1,935 $ 1,291 $ ( 519 ) $ 772 Other agreements 1 – 70 36 ( 11 ) 25 63 ( 30 ) 33 Intangible assets (2) $ 2,481 $ ( 521 ) $ 1,960 $ 1,354 $ ( 549 ) $ 805 (1) The increase in intangible assets related to Customer contracts and relationships in 2021 is associated with the assets acquired in the formation of the Permian JV. See Note 7 for additional information. (2) We include rights-of-way, which are intangible assets, in our pipeline and related facilities amounts within property and equipment. See Note 6 for a discussion of property and equipment. Intangible assets that have finite lives are tested for impairment when events or circumstances indicate that the carrying value may not be recoverable. We did not recognize any impairments of finite-lived intangible assets during the three years ended December 31, 2021. Amortization expense for finite-lived intangible assets for the years ended December 31, 2021, 2020 and 2019 was $ 122 million, $ 90 million and $ 76 million, respectively. We estimate that our amortization expense related to finite-lived intangible assets for the next five years will be as follows (in millions): 2022 $ 240 2023 $ 232 2024 $ 220 2025 $ 207 2026 $ 187 F-34 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 11— Debt Debt consisted of the following (in millions): December 31, 2021 December 31, 2020 SHORT-TERM DEBT PAA commercial paper notes, bearing a weighted-average interest rate of 0.7 % (1) $ — $ 547 PAA senior secured hedged inventory facility, bearing a weighted-average interest rate of 1.2 % (1) — 167 PAA senior notes: 3.65 % senior notes due June 2022 (2) 750 — Other 72 117 Total short-term debt 822 831 LONG-TERM DEBT PAA senior notes: 3.65 % senior notes due June 2022 — 750 2.85 % senior notes due January 2023 400 400 3.85 % senior notes due October 2023 700 700 3.60 % senior notes due November 2024 750 750 4.65 % senior notes due October 2025 1,000 1,000 4.50 % senior notes due December 2026 750 750 3.55 % senior notes due December 2029 1,000 1,000 3.80 % senior notes due September 2030 750 750 6.70 % senior notes due May 2036 250 250 6.65 % senior notes due January 2037 600 600 5.15 % senior notes due June 2042 (3) 499 499 4.30 % senior notes due January 2043 (3) 348 348 4.70 % senior notes due June 2044 (3) 687 687 4.90 % senior notes due February 2045 (3) 649 649 Unamortized discounts and debt issuance costs ( 54 ) ( 62 ) PAA senior notes, net of unamortized discounts and debt issuance costs 8,329 9,071 Other long-term debt: PAA GO Zone term loans, net of debt issuance costs of $ 1 , bearing a weighted-average interest rate of 1.3 % (4) — 199 Other 69 112 Total long-term debt 8,398 9,382 Total debt (5) $ 9,220 $ 10,213 (1) We classified these PAA commercial paper notes and credit facility borrowings as short-term as of December 31, 2020, as these notes and borrowings were primarily designated as working capital borrowings, were required to be repaid within one year and were primarily for hedged NGL and crude oil inventory and NYMEX and ICE margin deposits. (2) In January 2022, PAA provided notice of its intention to redeem these senior notes on March 1, 2022. (3) During the year ended December 31, 2020, we repurchased $ 17 million of our outstanding senior notes on the open market and recognized a gain of $ 3 million on these transactions, which is included in “Other income/(expense), net” on our Consolidated Statement of Operations. F-35 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (4) The GO Zone term loans were initially assumed by a subsidiary of PAA in connection with the acquisition of the Southern Pines natural gas storage facility. The loans were repaid in August 2021 in connection with the sale of that facility. See Note 7 for additional information. (5) PAA’s fixed-rate senior notes had a face value of approximately $ 9.1 billion at both December 31, 2021 and 2020. We estimated the aggregate fair value of these notes to be approximately $ 9.9 billion at both December 31, 2021 and 2020. 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 the end of the reporting period. We estimate that the carrying value of outstanding borrowings under PAA’s credit facilities, commercial paper program and GO Zone term loans approximates fair value as interest rates reflect current market rates. The fair value estimates for the PAA senior notes, credit facilities, commercial paper program and GO Zone term loans are based upon observable market data and are classified in Level 2 of the fair value hierarchy. PAA Commercial Paper Program PAA has a commercial paper program under which it may issue (and have outstanding at any time) up to $ 2.7 billion in the aggregate of privately placed, unsecured commercial paper notes. Such notes are backstopped by the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility; as such, any borrowings under the PAA commercial paper program reduce the available capacity under these facilities. Credit Agreements PAA senior secured hedged inventory facility . In August 2021, PAA entered into an amended credit agreement which replaced its $ 1.4 billion senior secured hedged inventory facility scheduled to mature in August 2022 with a $ 1.35 billion senior secured hedged inventory facility with an initial maturity date of August 2024. Subject to obtaining additional or increased lender commitments and other terms and conditions, the committed capacity of the facility may be increased to $ 1.9 billion. The amended credit agreement provides for the issuance of letters of credit of up to $ 400 million. Proceeds from the facility are primarily used to finance purchased or stored hedged inventory, including NYMEX and ICE margin deposits. Such obligations under the committed facility are secured by the financed inventory and the associated accounts receivable and are repaid from the proceeds of the sale of the financed inventory. Borrowings accrue interest based, at our election, on certain floating rate indices as defined in the credit agreement, in each case plus a margin based on our credit rating at the applicable time. The amended credit agreement also provides for one or more one-year extensions, subject to applicable approval and other terms and conditions. PAA senior unsecured revolving credit facility. In August 2021, PAA entered into a new unsecured credit agreement that provides for a senior unsecured revolving credit facility with a committed borrowing capacity of $ 1.35 billion, of which $ 400 million is available for the issuance of letters of credit. The new credit agreement replaced its previous credit agreement that provided for a $ 1.6 billion senior unsecured revolving credit facility and was scheduled to mature in August 2024. Subject to obtaining additional or increased lender commitments and other terms and conditions, the committed capacity may be increased to $ 2.1 billion. Borrowings accrue interest based, at our election, on certain floating rate indices as defined in the credit agreement, in each case plus a margin based on our credit rating at the applicable time. The new credit agreement has an initial maturity date of August 2026 and provides for one or more one-year extensions, subject to applicable approval and other terms and conditions. PAA GO Zone term loans . In August 2018, PAA entered into an agreement for two $ 100 million term loans (the “GO Zone term loans”) from the remarketing of its $ 100 million Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue Bonds (PAA Natural Gas Storage, L.P. Project), Series 2009 and its $ 100 million Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue Bonds (PAA Natural Gas Storage, L.P. Project), Series 2010 (collectively, the “GO Bonds”). The GO Zone term loans accrued interest, based on certain floating rate indices, in accordance with the interest payable on the related GO Bonds as provided in the GO Bonds Indenture pursuant to which such GO Bonds are issued and governed. The GO Zone term loans were repaid in August 2021 in connection with the sale of the Southern Pines natural gas storage facility. See Note 7 for additional information. F-36 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS PAA Senior Notes PAA’s senior notes are co-issued, jointly and severally, by Plains All American Pipeline, L.P. and a 100 %-owned consolidated finance subsidiary (neither of which have independent assets or operations) and are unsecured senior obligations of such entities and rank equally in right of payment with existing and future senior indebtedness of the issuers. PAA may, at its option, redeem any series of senior notes at any time in whole or from time to time in part, prior to maturity, at the redemption prices described in the indentures governing the senior notes. PAA’s senior notes are not guaranteed by any of its subsidiaries. PAA Senior Notes Issuances. The table below summarizes PAA’s issuances of senior unsecured notes during the three years ended December 31, 2021 (in millions): Year Description Maturity Face Value Interest Payment Dates 2020 3.80 % Senior Notes issued at 99.794 % of face value September 2030 $ 750 March 15 and September 15 2019 3.55 % Senior Notes issued at 99.801 % of face value December 2029 $ 1,000 June 15 and December 15 PAA Senior Notes Repayments. During the three years ended December 31, 2021, PAA repaid the following senior unsecured notes in full (in millions): Year Description Repayment Date 2020 $ 600 million 5.00 % Senior Notes due February 2021 November 2020 (1) 2019 $ 500 million 2.60 % Senior Notes due December 2019 November 2019 (2) 2019 $ 500 million 5.75 % Senior Notes due January 2020 December 2019 (2) (1) These senior notes were repaid with proceeds from PAA’s 3.80 % senior notes issued in June 2020 and cash on hand. (2) These senior notes were repaid with proceeds from PAA’s 3.55 % senior notes issued in September 2019 and cash on hand. Maturities The weighted average maturity of PAA’s senior notes outstanding at December 31, 2021 was approximately 10 years. The following table presents the aggregate contractually scheduled maturities of such senior notes for the next five years and thereafter. The amounts presented exclude unamortized discounts and debt issuance costs. Calendar Year Payment (in millions) 2022 $ 750 2023 $ 1,100 2024 $ 750 2025 $ 1,000 2026 $ 750 Thereafter $ 4,783 F-37 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Covenants and Compliance The credit agreements for PAA’s revolving credit facilities (which impact the ability to access the PAA commercial paper program because they provide the financial backstop that supports PAA’s short-term credit ratings) and the indentures governing PAA’s senior notes contain cross-default provisions. PAA’s credit agreements prohibit declaration or payments of distributions on, or purchases or redemptions of, units if any default or event of default is continuing. In addition, PAA’s agreements contain various covenants limiting PAA’s ability to, among other things: • grant liens on certain property; • incur indebtedness, including finance leases; • sell substantially all of its assets or enter into a merger or consolidation; • engage in certain transactions with affiliates; and • enter into certain burdensome agreements. The credit agreements for the PAA senior unsecured revolving credit facility and senior secured hedged inventory facility treat a change of control as an event of default and also require PAA to maintain a debt-to-EBITDA coverage ratio that, on a trailing four-quarter basis, will not be greater than 5.00 to 1.00 (or 5.50 to 1.00 on all outstanding debt during an acquisition period (generally, the period consisting of three fiscal quarters following an acquisition greater than $ 150 million)). For covenant compliance purposes, Consolidated EBITDA may include certain adjustments, including those for material projects and certain non-recurring expenses. Additionally, letters of credit and borrowings to fund hedged inventory and margin requirements are excluded when calculating the debt coverage ratio. A default under PAA’s credit agreements or indentures would permit the lenders to accelerate the maturity of the outstanding debt. As long as PAA is in compliance with the provisions contained in its credit agreements, PAA’s ability to make distributions of available cash is not restricted. As of December 31, 2021, PAA was in compliance with the covenants contained in its credit agreements and indentures. Borrowings and Repayments Total borrowings under PAA’s credit facilities and commercial paper program for the years ended December 31, 2021, 2020 and 2019 were approximately $ 32.5 billion, $ 29.3 billion and $ 13.3 billion, respectively. Total repayments under PAA’s credit facilities and commercial paper program were approximately $ 33.2 billion, $ 29.0 billion and $ 12.9 billion for the years ended December 31, 2021, 2020 and 2019, 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 merchant activities, we provide certain suppliers with irrevocable standby letters of credit to secure our obligation for the purchase and transportation of crude oil and NGL. These letters of credit are issued under PAA’s senior unsecured revolving credit facility and senior secured hedged inventory facility, and our liabilities with respect to these purchase obligations are recorded in accounts payable on our balance sheet in the month the crude oil or NGL is purchased. Generally, these letters of credit are issued for periods of up to seventy days and are terminated upon completion of each transaction. Additionally, we issue letters of credit to support insurance programs, derivative transactions, including hedging-related margin obligations, and construction activities. At December 31, 2021 and 2020, we had outstanding letters of credit of $ 98 million and $ 129 million, respectively. Debt Issuance Costs Costs incurred in connection with the issuance of senior notes are recorded as a direct deduction from the related debt liability and are amortized using the straight-line method over the term of the related debt. Use of the straight-line method does not differ materially from the “effective interest” method of amortization. F-38 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 12— Partners’ Capital and Distributions Our Shares Our Class A shares, Class B shares and Class C shares represent limited partner interests in us. The holders of our Class A and Class B shares are entitled to exercise the rights or privileges available to limited partners under our partnership agreement, but only holders of Class A shares are entitled to participate in our distributions. Our Class C shares are non-economic and provide PAA, as the sole holder of such Class C shares, the right to vote, pro rata with the holders of our Class A and Class B shares, in the election of eligible PAGP GP directors. Pursuant to the Omnibus Agreement entered into on November 15, 2016, the number of Class C shares that PAA owns will at all times equal the number of outstanding PAA common units, excluding common units held by AAP, and Series A preferred units. Thus, the Class C shares function as a “pass-through” voting mechanism through which PAA votes at the direction of and as proxy for the PAA common unitholders, other than AAP, and Series A preferred unitholders in such director elections. Exchange and Redemption Rights Holders of AAP units and their permitted transferees each have the right to exchange all or a portion of their AAP units for 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 our Class B shares and general partner units are transferred by the exercising party to us. Additionally, a holder of vested AAP Management Units is entitled to convert his or her AAP Management Units into AAP units and a like number of our Class B shares based on a conversion ratio of approximately 0.941 AAP units for each AAP Management Unit. Following any such conversion, the holder will have the Exchange Right for our Class A shares. Holders of AAP Management Units who convert such units into AAP units and Class B shares will not receive general partner units and thus will not need to include any general partner units in a transfer or the exercise of their Exchange Right. See Note 15 for information regarding the recognition of deferred tax assets associated the transfer of ownership resulting from Exchange Right exercises. Additionally, subject to certain limitations, a holder of AAP units (other than us and GP LLC) has the right (a “Redemption Right”) to cause AAP to redeem any or all of such holder’s AAP units in exchange for the distribution of an equivalent number of PAA common units held by AAP (“AAP Unit Redemption”). In connection with any AAP Unit Redemption, the redeeming holder will transfer the AAP units to AAP and a corresponding number of our Class B shares and general partner units (if any), in each case, to us. The AAP units transferred to AAP will be canceled, the Class B shares transferred to us will be canceled and the general partner units transferred to us will remain outstanding and increase our ownership percentage in our general partner. Additionally, we will issue a corresponding number of Class C shares to PAA. F-39 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Shares Outstanding The following table presents the activity for our Class A shares, Class B shares and Class C shares: Class A Shares Class B Shares Class C Shares Outstanding at December 31, 2018 159,485,588 119,604,338 516,938,280 Exchange Right exercises (1) 22,637,818 ( 22,637,818 ) — Redemption Right exercises (1) — ( 31,180,818 ) 31,180,818 Other 15,186 — 1,419,041 Outstanding at December 31, 2019 182,138,592 65,785,702 549,538,139 Conversion of AAP Management Units — 595,117 — Exchange Right exercises 11,858,457 ( 11,858,457 ) — Redemption Right exercises — ( 3,882,170 ) 3,882,170 Repurchase and cancellation of common units by a subsidiary — — ( 6,222,748 ) Other 54,387 — 520,201 Outstanding at December 31, 2020 194,051,436 50,640,192 547,717,762 Conversion of AAP Management Units — 414,608 — Exchange Right exercises 122,795 ( 122,795 ) — Redemption Right exercises — ( 4,286,491 ) 4,286,491 Repurchase and cancellation of common units by a subsidiary — — ( 18,061,583 ) Other 18,546 — 654,161 Outstanding at December 31, 2021 194,192,777 46,645,514 534,596,831 (1) Includes exercises by Occidental Petroleum Corporation or its subsidiaries (“Oxy”) and an affiliate of The Energy & Minerals Group (“EMG”). See Note 17 for additional information. Distributions We distribute 100 % of our available cash within 55 days following the end of each quarter to Class A shareholders of record. Available cash is generally defined as all cash on hand at the date of determination of available cash for the distribution in respect to such quarter (including expected distributions from AAP in respect of such quarter), less reserves established by our general partner for future requirements. The following table details distributions paid to our Class A shareholders during the years presented (in millions, except per share data): Year Distributions to Class A Shareholders Distributions per Class A Share 2021 $ 140 $ 0.72 2020 $ 166 $ 0.90 2019 $ 231 $ 1.38 On January 10, 2022, we declared a cash distribution of $ 0.18 per outstanding Class A share. This distribution of $ 35 million was paid on February 14, 2022 to shareholders of record at the close of business on January 31, 2022, for the period October 1, 2021 through December 31, 2021. F-40 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Other Comprehensive Income/(Loss) Other comprehensive income/(loss) attributable to our Class A shareholders is comprised solely of their proportionate share of PAA’s other comprehensive income/(loss) based on our indirect ownership interest in PAA during the period. Consolidated Subsidiaries Noncontrolling Interests in Subsidiaries As of December 31, 2021, noncontrolling interests in our subsidiaries consisted of (i) limited partner interests in PAA including a 69 % interest in PAA’s common units and PAA’s Series A preferred units combined and 100 % of PAA’s Series B preferred units, (ii) an approximate 19 % limited partner interest in AAP, (iii) a 35 % interest in the Permian JV, as discussed further below, and (iv) a 33 % interest in Red River Pipeline Company LLC (“Red River LLC”), as discussed further below. In October 2021, we formed a joint venture, the Permian JV, with Oryx Midstream. We own 65 % of the Permian JV and consolidate based on control, with Oryx Midstream’s 35 % interest accounted for as a noncontrolling interest. This transaction resulted in the recognition of partners’ capital attributable to noncontrolling interests of approximately $ 3.1 billion and an increase to partners’ capital attributable to our Class A shareholders of $ 166 million. See Note 7 for more details regarding this transaction. In May 2019, we formed a joint venture, Red River LLC, with Delek Logistics Partners, LP (“Delek”) on our Red River pipeline system. We received approximately $ 128 million for Delek’s 33 % interest in Red River LLC. We consolidate Red River LLC based on control, with Delek’s 33 % interest accounted for as a noncontrolling interest. During the years ended December 31, 2021 and 2020, we received contributions from noncontrolling interests in Red River LLC of $ 1 million and $ 12 million, respectively, related to the Red River pipeline capacity expansion. Repurchases of Units by Subsidiary Common Equity Repurchase Program. In November 2020, the board of directors of our general partner approved a $ 500 million common equity repurchase program (the “Program”) to be utilized as an additional method of returning capital to investors. The Program authorizes the repurchase from time to time of up to $ 500 million of PAA common units and/or our Class A shares via open market purchases or negotiated transactions conducted in accordance with applicable regulatory requirements. No time limit has been set for completion of the Program, and the Program may be suspended or discontinued at any time. The Program does not obligate PAA or us to acquire a particular number of PAA common units or Class A shares. Any PAA common units or Class A shares that are repurchased will be canceled. Class C shares held by PAA associated with any publicly held common units that are repurchased will also be canceled. PAA repurchased 18,061,583 and 6,222,748 common units under the Program through open market purchases that settled during the years ended December 31, 2021 and 2020, respectively. The total purchase price of these PAA common units was $ 178 million and $ 50 million, respectively, including commissions and fees. The repurchased common units were canceled immediately upon acquisition, as were the Class C shares held by PAA associated with the repurchased common units. We did not repurchase any Class A shares under the Program during the year ended December 31, 2021. At December 31, 2021, the remaining available capacity under the program was $ 272 million. PAA’s capital attributable to AAP was adjusted, in accordance with ASC 810, to reflect the accretion of its interest in PAA as a result of the repurchase of common units from public unitholders. Such adjustment is recognized by PAGP in proportion to its ownership interest in AAP, which results in a net increase in partners’ capital attributable to PAGP. See Note 15 for additional information regarding the associated impact to the deferred tax asset. F-41 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Subsidiary Distributions PAA Preferred Unit Distributions. The following table details distributions paid to PAA’s preferred unitholders during the years presented (in millions, except unit data): Cash Distributions Year Series A Preferred Unitholders Series B Preferred Unitholders 2021 $ 149 $ 49 2020 $ 149 $ 49 2019 $ 149 $ 49 On February 14, 2022, PAA paid a cash distribution of $ 37 million to its Series A preferred unitholders. At December 31, 2021, such amount was accrued as distributions payable in “Other current liabilities” on our Consolidated Balance Sheet. At December 31, 2021, approximately $ 6 million of accrued distributions payable to PAA’s Series B preferred unitholders was included in “Other current liabilities” on our Consolidated Balance Sheet. PAA Common Unit Distributions. PAA distributes 100 % of its available cash within 45 days following the end of each quarter to common unitholders of record, including AAP. Available cash is generally defined as all of PAA’s cash and cash equivalents on hand at the end of each quarter, less reserves established in the reasonable discretion of its general partner for future requirements. The following table details distributions paid by PAA during the years presented (in millions, except per unit data): Distributions Paid Distributions per common unit Year Public AAP Total 2021 $ 341 $ 176 $ 517 $ 0.72 2020 $ 432 $ 223 $ 655 $ 0.90 2019 $ 632 $ 372 $ 1,004 $ 1.38 On January 10, 2022, PAA declared a cash distribution of $ 0.18 per unit on its outstanding common units. The total distribution of $ 127 million was paid on February 14, 2022 to unitholders of record at the close of business on January 31, 2022, for the period from October 1, 2021 through December 31, 2021. Of this amount, approximately $ 43 million was paid to AAP. AAP Distributions. AAP distributes all of the cash received from PAA distributions on a quarterly basis, less reserves established in the discretion of its general partner for future requirements. Generally, distributions are paid to its partners in proportion to their percentage interest in AAP. The following table details the distributions to AAP’s partners paid during the years presented from distributions received from PAA (in millions): Distributions to AAP’s Partners Year Noncontrolling Interests PAGP Total Cash Distributions 2021 $ 36 $ 140 $ 176 2020 $ 57 $ 166 $ 223 2019 $ 141 $ 231 $ 372 On February 14, 2022, AAP distributed $ 43 million to its partners from distributions received from PAA. Of this amount, $ 8 million was distributed to noncontrolling interests and $ 35 million was distributed to us. Other Distributions. During the years ended December 31, 2021, 2020 and 2019, we paid distributions of $ 14 million, $ 10 million and $ 6 million, respectively, to noncontrolling interests in Red River LLC. F-42 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The initial distribution from the Permian JV was paid during the first quarter of 2022, with approximately $ 54 million paid to noncontrolling interests in the Permian JV. Subsequent distributions will be allocated based on the MSA. See Note 7 for additional information . Note 13— 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. We use various derivative instruments to optimize our profits while managing our exposure to (i) commodity price risk, (ii) interest rate risk and (iii) currency exchange rate risk. Our commodity price 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. Our policy is to use derivative instruments for risk management purposes and not for the purpose of speculating on changes in commodity prices, interest rates or currency exchange rates. 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. At the inception of the hedging relationship, we assess whether the derivatives employed are highly effective in offsetting changes in cash flows of anticipated hedged transactions. Throughout the hedging relationship, retrospective and prospective hedge effectiveness is assessed on a qualitative basis. 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 designated as cash flow hedges, changes in fair value are deferred in AOCI and recognized in earnings in the periods during which the underlying hedged transactions are recognized in earnings. Derivatives that are not designated in a hedging relationship for accounting purposes are recognized in earnings each period. Cash settlements associated with our derivative activities are classified within the same category as the related hedged item in our Consolidated Statements of Cash Flows. Our financial derivatives, used for hedging risk, are governed through ISDA 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 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. At December 31, 2021 and 2020, 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 exchange-traded derivatives transacted through a clearing brokerage account, as described below, we do not require our non-cleared derivative counterparties to post collateral with us. 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 sales market, (ii) structure our sales contracts so that price fluctuations do not materially affect our operating income and (iii) not acquire and hold material 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 December 31, 2021, net derivative positions related to these activities included: • A net long position of 8.4 million barrels associated with our crude oil purchases, which was unwound ratably during January 2022 to match monthly average pricing. • A net short time spread position of 5.7 million barrels, which hedges a portion of our anticipated crude oil lease gathering purchases through December 2022. • A net crude oil basis spread position of 7.3 million barrels at multiple locations through December 2022. These derivatives allow us to lock in grade and location basis differentials. F-43 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • A net short position of 19.2 million barrels through December 2023 related to anticipated net sales of crude oil and NGL inventory. Natural Gas Processing/NGL Fractionation — We purchase natural gas for processing and operational needs. Additionally, we purchase NGL mix for fractionation and 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. The following table summarizes our open derivative positions utilized to hedge the price risk associated with anticipated purchases and sales related to our natural gas processing and NGL fractionation activities as of December 31, 2021. Notional Volume (Short)/Long Remaining Tenor Natural gas purchases 73.4 Bcf December 2023 Propane sales ( 13.7 ) MMbls December 2023 Butane sales ( 3.3 ) MMbls December 2023 Condensate sales ( 1.5 ) MMbls December 2023 Fuel gas requirements (1) 7.5 Bcf December 2022 Power supply requirements (1) 0.6 TWh December 2023 (1) Positions to hedge a portion of our power supply and fuel gas requirements at our Canadian natural gas processing and fractionation plants. Physical commodity contracts that meet the definition of a derivative but are ineligible, or not designated, for the normal purchases and normal sales scope exception are recorded on the balance sheet at fair value, with changes in fair value recognized in earnings. We have determined that substantially all of our physical commodity contracts qualify for the normal purchases and normal sales scope exception. Our commodity derivatives are not designated in a hedging relationship for accounting purposes; as such, changes in the fair value are reported in earnings. The following table summarizes the impact of our commodity derivatives recognized in earnings (in millions): Year Ended December 31, 2021 2020 2019 Product sales revenues $ ( 710 ) $ ( 302 ) $ 310 Field operating costs 71 5 14 Net gain/(loss) from commodity derivative activity $ ( 639 ) $ ( 297 ) $ 324 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. The following table provides the components of our net broker receivable/(payable) (in millions): December 31, 2021 2020 Initial margin $ 133 $ 91 Variation margin posted/(returned) 173 290 Letters of credit ( 47 ) ( 63 ) Net broker receivable/(payable) $ 259 $ 318 F-44 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The following table reflects the Consolidated Balance Sheet line items that include the fair values of our commodity derivative assets and liabilities and the effect of the collateral netting. Such amounts are presented on a gross basis, before the effects of counterparty netting. However, we have elected to present our commodity derivative assets and liabilities with the same counterparty on a net basis on our Consolidated Balance Sheet when the legal right of offset exists. Amounts in the table below are presented in millions. December 31, 2021 December 31, 2020 Effect of Collateral Netting Net Carrying Value Presented on the Balance Sheet Effect of Collateral Netting Net Carrying Value Presented on the Balance Sheet Commodity Derivatives Commodity Derivatives Assets Liabilities Assets Liabilities Derivative Assets Other current assets $ 90 $ ( 210 ) $ 259 $ 139 $ 71 $ ( 314 ) $ 318 $ 75 Other long-term assets, net 3 — — 3 5 — — 5 Derivative Liabilities Other current liabilities 4 ( 24 ) — ( 20 ) 9 ( 40 ) — ( 31 ) Other long-term liabilities and deferred credits 3 ( 9 ) — ( 6 ) — ( 32 ) — ( 32 ) Total $ 100 $ ( 243 ) $ 259 $ 116 $ 85 $ ( 386 ) $ 318 $ 17 Interest Rate Risk Hedging We use interest rate derivatives to hedge the benchmark interest rate associated with interest payments occurring as a result of debt issuances. The derivative instruments we use to manage this risk consist of forward starting interest rate swaps and treasury locks. These derivatives are designated as cash flow hedges. As such, changes in fair value are deferred in AOCI and are reclassified to interest expense as we incur the interest expense associated with the underlying debt. The following table summarizes the terms of our outstanding interest rate derivatives as of December 31, 2021 (notional amounts in millions): Hedged Transaction Number and Types of Derivatives Employed Notional Amount Expected Termination Date Average Rate Locked Accounting Treatment Anticipated interest payments 8 forward starting swaps ( 30 -year) $ 200 6/15/2023 1.38 % Cash flow hedge Anticipated interest payments 8 forward starting swaps ( 30 -year) $ 200 6/14/2024 0.73 % Cash flow hedge As of December 31, 2021, there was a net loss of $ 208 million deferred in AOCI. The deferred net loss recorded in AOCI is expected to be reclassified to future earnings contemporaneously with interest expense accruals associated with underlying debt instruments. We estimate that substantially all of the remaining deferred loss will be reclassified to earnings through 2054 as the underlying hedged transactions impact earnings. A portion of these amounts is based on market prices as of December 31, 2021; thus, actual amounts to be reclassified will differ and could vary materially as a result of changes in market conditions. The following table summarizes the net unrealized gain/(loss) recognized in AOCI for derivatives (in millions): Year Ended December 31, 2021 2020 2019 Interest rate derivatives, net $ 19 $ ( 10 ) $ ( 91 ) At December 31, 2021, the net fair value of our interest rate hedges, which were included in “Other long-term assets, net” on our Consolidated Balance Sheet, totaled $ 65 million. At December 31, 2020, the net fair value of these hedges totaled $ 46 million and was included in “Other long-term assets, net.” F-45 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Preferred Distribution Rate Reset Option A derivative feature embedded in a contract that does not meet the definition of a derivative in its entirety must be bifurcated and accounted for separately if the economic characteristics and risks of the embedded derivative are not clearly and closely related to those of the host contract. The Preferred Distribution Rate Reset Option of the PAA Series A preferred units is an embedded derivative that must be bifurcated from the related host contract, the PAA partnership agreement, and recorded at fair value on our Consolidated Balance Sheets. This embedded derivative is not designated in a hedging relationship for accounting purposes and corresponding changes in fair value are recognized in “Other income/(expense), net” in our Consolidated Statement of Operations. For the years ended December 31, 2021, 2020 and 2019 we recognized net gains of $ 14 million, $ 20 million and $ 2 million, respectively. The fair value of the Preferred Distribution Rate Reset Option, which was included in “Other long-term liabilities and deferred credits” on our Consolidated Balance Sheets, totaled less than $ 1 million and $ 14 million at December 31, 2021 and 2020, respectively. See Note 12 for additional information regarding our Series A preferred units and the Preferred Distribution Rate Reset Option. 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 (in millions): Fair Value as of December 31, 2021 Fair Value as of December 31, 2020 Recurring Fair Value Measures (1) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Commodity derivatives $ ( 17 ) $ ( 124 ) $ ( 2 ) $ ( 143 ) $ ( 143 ) $ ( 143 ) $ ( 15 ) $ ( 301 ) Interest rate derivatives — 65 — 65 — 46 — 46 Preferred Distribution Rate Reset Option and Other — — — — — 2 ( 14 ) ( 12 ) Total net derivative asset/(liability) $ ( 17 ) $ ( 59 ) $ ( 2 ) $ ( 78 ) $ ( 143 ) $ ( 95 ) $ ( 29 ) $ ( 267 ) (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 and over-the-counter commodity contracts such as futures and swaps. The fair value of exchange-traded commodity derivatives and over-the-counter commodity contracts 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 observable markets with less volume and transaction frequency than active markets. In addition, it includes certain physical commodity contracts. The fair values of these derivatives are corroborated with market observable inputs. Level 3 Level 3 of the fair value hierarchy includes certain physical commodity and other contracts, over-the-counter options and the Preferred Distribution Rate Reset Option contained in our partnership agreement which is classified as an embedded derivative. The fair values of our Level 3 physical commodity and other contracts and over-the-counter options are based on valuation models utilizing significant timing estimates, which involve management judgment, and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. We report unrealized gains and losses associated with these contracts in our Consolidated Statements of Operations as Product sales revenues. F-46 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The fair value of the embedded derivative feature contained in our partnership agreement is based on a valuation model that estimates the fair value of the Series A preferred units with and without the Preferred Distribution Rate Reset Option. This model contains inputs, including our common unit price, ten-year U.S. Treasury rates, default probabilities and timing estimates, some of which involve management judgment. A significant change in these inputs could result in a material change in fair value to this embedded derivative feature. Rollforward of Level 3 Net Asset/(Liability) 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): Year Ended December 31, 2021 2020 Beginning Balance $ ( 29 ) $ ( 51 ) Net gains/(losses) for the period included in earnings 15 12 Settlements 12 10 Ending Balance $ ( 2 ) $ ( 29 ) Change in unrealized gains/(losses) included in earnings relating to Level 3 derivatives still held at the end of the period $ 15 $ 12 Note 14— Leases Lessee We evaluate all agreements entered into or modified that convey to us the use of property or equipment for a term to determine whether the agreement is or contains a lease. Significant judgment is required when determining whether we obtain the right to direct the use of identified property or equipment. We lease certain property and equipment under noncancelable and cancelable operating and finance leases. Our operating leases primarily relate to railcars, office space, land, vehicles, and storage tanks, and our finance leases primarily relate to tractor trailers, land, storage tanks and vehicles. One of our finance leases is for storage tanks owned by an equity method investee, in which we own a 50 % interest. For leases with an initial term of greater than 12 months, we recognize a right-of-use asset and lease liability on the balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We have elected the non-lease component separation practical expedient for certain classes of assets where we are the lessee. Our lease agreements have remaining lease terms ranging from one year to approximately 59 years. When applicable, this range includes additional terms associated with leases for which we are reasonably certain to exercise the option to renew and such renewal options are recognized as part of our right-of-use assets and lease liabilities. We have renewal options for leases with terms ranging from one year to 25 years that are not recognized as part of our right-of-use assets or lease liabilities as we have determined we are not reasonably certain to exercise the option to renew. Certain of our leases have variable lease payments, many of which are based on changes in market indices such as the Consumer Price Index. Our lease agreements for our tractor trailers contain residual value guarantees equal to the fair market value of the tractor trailers at the end of the lease term in the event that we elect not to purchase the asset for an amount equal to the fair value. Our lease agreements do not contain any material restrictive covenants. For determining the present value of lease payments, we use the discount rate implicit in the lease when readily determinable; however, such rate is not readily determinable for most of our leases. For those leases for which the discount rate is not readily determinable, we utilize incremental borrowing rates that reflect collateralized borrowing with payments and terms that mirror our lease portfolio to discount the lease payments based on information available at the lease commencement date. F-47 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The following table presents components of lease cost, including both amounts recognized in income and amounts capitalized (in millions): Year Ended December 31, Lease Cost 2021 2020 2019 Operating lease cost $ 96 $ 111 $ 125 Short-term lease cost 19 31 35 Other (1) (2) 14 8 — Total lease cost $ 129 $ 150 $ 160 (1) Includes finance lease costs, variable lease costs and sublease income. (2) Includes approximately $ 8 million and $ 6 million for the years ended December 31, 2021 and 2020, respectively, associated with leased storage tanks owned by an equity method investee, in which we own a 50 % interest. The following table presents information related to cash flows arising from lease transactions (in millions): Year Ended December 31, 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 91 $ 108 $ 116 Operating cash flows for finance leases $ 7 $ 5 $ 1 Financing cash flows for finance leases $ 11 $ 19 $ 18 Non-cash change in lease liabilities arising from obtaining new right-of-use assets or modifications: Operating leases $ 94 $ 5 $ 77 Finance leases (1) $ 1 $ 32 $ 27 (1) Includes $ 25 million and $ 12 million for the years ended December 31, 2020 and 2019, respectively, associated with leased storage tanks owned by an equity method investee, in which we own a 50 % interest. Information related to the weighted-average remaining lease term and discount rate is presented in the table below: December 31, 2021 2020 Weighted-average remaining lease term (in years): Operating leases 11 12 Finance leases 9 9 Weighted-average discount rate: Operating leases 4.2 % 4.5 % Finance leases 11.6 % 11.1 % F-48 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The following table presents the amount and location of our operating and finance lease right-of-use assets and liabilities on our Consolidated Balance Sheets (in millions): December 31, Leases Balance Sheet Location 2021 2020 Assets Operating lease right-of-use assets Long-term operating lease right-of-use assets, net $ 393 $ 378 Finance lease right-of-use assets (1) Property and equipment $ 136 $ 141 Accumulated depreciation ( 37 ) ( 27 ) Property and equipment, net $ 99 $ 114 Total lease right-of-use assets $ 492 $ 492 Liabilities Operating lease liabilities Current Other current liabilities $ 77 $ 78 Noncurrent Long-term operating lease liabilities 339 317 Total operating lease liabilities $ 416 $ 395 Finance lease liabilities (1) Current Short-term debt $ 12 $ 11 Noncurrent Other long-term debt, net 59 70 Total finance lease liabilities $ 71 $ 81 Total lease liabilities $ 487 $ 476 (1) Includes right-of-use assets of $ 33 million and $ 35 million and lease liabilities of $ 35 million and $ 36 million as of December 31, 2021 and 2020, respectively, associated with leased storage tanks owned by an equity method investee, in which we own a 50 % interest. The following table presents the maturity of undiscounted cash flows for future minimum lease payments under noncancelable leases as of December 31, 2021 reconciled to our lease liabilities on our Consolidated Balance Sheet (amounts in millions): Operating Finance (2) Future minimum lease payments (1) : 2022 $ 92 $ 18 2023 75 15 2024 63 14 2025 50 12 2026 38 7 Thereafter 252 60 Total 570 126 Less: Present value discount ( 154 ) ( 55 ) Lease liabilities $ 416 $ 71 F-49 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (1) Excludes future minimum payments for short-term and other immaterial leases not included on our Consolidated Balance Sheet. (2) Includes payments of approximately $ 6 million for each of the years ending 2022 through 2026 and approximately $ 58 million thereafter associated with leased storage tanks owned by an equity method investee, in which we own a 50 % interest. Lessor We evaluate all agreements entered into or modified that convey to others the use of property or equipment for a term to determine whether the agreement is or contains a lease. Significant judgment is required when determining whether a customer obtains the right to direct the use of identified property or equipment. The underlying assets associated with these agreements are evaluated for future use beyond the lease term. We have elected the non-lease component separation practical expedient for all classes of assets where we are the lessor. We enter into agreements to conduct activities associated with (i) providing storage services primarily for crude oil and NGL and (ii) transporting crude oil and NGL. Certain of these agreements convey counterparties the right to direct the operation of physically distinct assets. Such agreements include (i) fixed consideration, which is measured based on an available capacity during the period multiplied by the rate in the agreement, or (ii) a fixed monthly fee and variable consideration based on usage. These agreements often include options to extend or terminate the lease, with advance notice. These agreements are operating leases. The following table presents our lease revenue for the periods indicated (in millions): Year Ended December 31, 2021 2020 2019 Operating lease revenue (1) $ 28 $ 19 $ 17 (1) These amounts are included in “Services revenues” on our Consolidated Statements of Operations. The table below presents the maturity of lease payments for operating lease agreements in effect as of December 31, 2021. This presentation includes minimum fixed lease payments and does not include an estimate of variable lease consideration. These agreements have remaining lease terms ranging from one year to 20 years. The following table presents the undiscounted cash flows expected to be received related to these agreements (in millions): 2022 2023 2024 2025 2026 Thereafter Future minimum lease revenue $ 29 $ 22 $ 20 $ 20 $ 20 $ 197 Note 15— Income Taxes Income tax expense is estimated using the tax rate in effect or to be in effect during the relevant periods in the jurisdictions in which we operate. Deferred income tax assets and liabilities are recognized for temporary differences between the basis of assets and liabilities for financial reporting and tax purposes and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. To the extent we do not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established. Changes in tax legislation are included in the relevant computations in the period in which such changes are effective. We review contingent tax liabilities for estimated exposures on a more likely than not standard related to our current tax positions. Pursuant to FASB guidance related to accounting for uncertainty in income taxes, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the tax position and also the past administrative practices and precedents of the taxing authority. As of December 31, 2021 and 2020, we had not recognized any material amounts in connection with uncertainty in income taxes. F-50 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS U.S. Federal and State Taxes Although we are organized as a limited partnership, we have elected to be treated as a corporation for U.S. federal income tax purposes and are therefore subject to both U.S. federal and state income taxes. Canadian Federal and Provincial Taxes All of our Canadian operations are conducted by entities that are treated as corporations for Canadian tax purposes (flow through for U.S. income tax purposes) and that are subject to Canadian federal and provincial taxes. Additionally, payments of interest and dividends from our Canadian entities to other Plains entities are subject to Canadian withholding tax that is treated as income tax expense. Tax Components Components of income tax expense are as follows (in millions): Year Ended December 31, 2021 2020 2019 Current income tax expense: State income tax $ 2 $ — $ 3 Canadian federal and provincial income tax 48 51 109 Total current income tax expense $ 50 $ 51 $ 112 Deferred income tax expense/(benefit): Federal income tax $ 16 $ ( 149 ) $ 89 State income tax 23 1 21 Canadian federal and provincial income tax 23 ( 70 ) ( 46 ) Total deferred income tax expense/(benefit) $ 62 $ ( 218 ) $ 64 Total income tax expense/(benefit) $ 112 $ ( 167 ) $ 176 The difference between income tax expense based on the statutory federal income tax rate and our effective income tax expense is summarized as follows (in millions): Year Ended December 31, 2021 2020 2019 Income/(loss) before tax $ 712 $ ( 2,607 ) $ 2,238 Net (income)/loss attributable to noncontrolling interests ( 540 ) 1,872 ( 1,731 ) Income taxes attributable to noncontrolling interests ( 73 ) 19 ( 66 ) $ 99 $ ( 716 ) $ 441 Federal statutory income tax rate 21 % 21 % 21 % Income tax expense/(benefit) at statutory rate $ 21 $ ( 150 ) $ 93 Deferred tax rate adjustment 17 11 10 State income tax, net of federal benefit 1 ( 9 ) 7 Income taxes attributable to noncontrolling interests: Canadian federal and provincial income tax 71 ( 19 ) 63 State income tax 2 — 3 Total income tax expense/(benefit) $ 112 $ ( 167 ) $ 176 The Canadian federal and provincial income tax for the year ended December 31, 2020 reflects the impact of permanent differences primarily related to an impairment of goodwill that was recognized during the year. A portion of the F-51 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS goodwill that was impaired had no basis for Canadian income tax purposes and thus was not a deductible expense in determining taxable income, resulting in a permanent difference for Canadian tax purposes. See Note 8 for additional information regarding this impairment. During the second quarter of 2019, the Alberta government enacted legislation that reduces the Alberta provincial corporate income tax rate from 12 % to 8 % over the period from July 1, 2019 through January 1, 2022. As a result, during the second quarter of 2019, we recognized a reduction of our deferred income tax liability of approximately $ 60 million and a corresponding deferred tax benefit. In the fourth quarter of 2020, the Alberta government changed the timing of the rate reduction to decrease the corporate income tax rate to 8 % starting July 1, 2020. Deferred tax assets and liabilities are aggregated by the applicable tax paying entity and jurisdiction and result from the following (in millions): December 31, 2021 2020 Deferred tax assets: Investment in partnerships $ 729 $ 917 Net operating losses 633 527 Derivative instruments 39 45 Lease liabilities 48 39 Other 17 16 Total deferred tax assets 1,466 1,544 Deferred tax liabilities: Property and equipment in excess of tax values ( 531 ) ( 475 ) Lease assets ( 47 ) ( 38 ) Other ( 3 ) ( 3 ) Total deferred tax liabilities ( 581 ) ( 516 ) Net deferred tax assets $ 885 $ 1,028 Balance sheet classification of deferred tax assets/(liabilities): Deferred tax asset $ 1,362 $ 1,444 Other long-term liabilities and deferred credits ( 477 ) ( 416 ) $ 885 $ 1,028 As a result of the exchange of the ownership interest in AAP in connection with our IPO and all subsequent exchanges, a deferred tax asset was created. These transfers of ownership were accounted for at the historical carrying basis for GAAP accounting purposes, but were recorded at the fair market value of the Class A shares at the time of exchange for U.S. federal income tax purposes. These transfers were transactions among shareholders, with the basis differences resulting in a deferred tax asset that was recorded as a component of partners’ capital. Also, other equity transactions, including the repurchase of common units by PAA, and the associated adjustment to partners’ capital attributable to PAGP resulted in a corresponding change to the deferred tax asset balance that was recorded as a component of partners’ capital. See Note 12 for additional information regarding exchanges and the repurchase of common units by PAA. The deferred tax asset is amortized to deferred income tax expense as the associated basis step-up is realized on our tax returns. As of December 31, 2021, our federal, state, and foreign net operating loss carryforwards for income tax purposes were approximately $ 2,832 million, $ 797 million and $ 9 million, respectively. If not utilized, the state and foreign net operating losses will begin to expire in 2022 and 2034, respectively, and a portion of our federal net operating losses will begin to expire in 2033. Under the Tax Act, U.S. federal NOLs generated after 2017 will have an indefinite carryforward period but may only reduce up to 80% of taxable income in any given year. Our U.S. federal NOLs generated prior to 2018 will not be subject to the taxable income limitation and will remain subject to a 20 year carryforward period. F-52 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Generally, tax returns for our Canadian entities are open to audit from 2017 through 2021. Our U.S. and state tax years are generally open to examination from 2018 to 2021. As of December 31, 2021, in reference to tax years 2008 to 2016, we had received notices of reassessment (“notices”) from the Canada Revenue Agency and the Alberta Tax and Revenue Administration (the “Canadian Tax Authorities”) related primarily to transfer pricing associated with cross-border intercompany financing transactions. These notices include assessments, including penalties and interest, associated with these transfer pricing matters totaling approximately $ 120 million (based on the exchange rate as of December 31, 2021). Payment of a portion of the assessment is required in order to file a notice of objection to dispute the reassessment. Accordingly, we have remitted approximately $ 101 million (based on the exchange rate as of December 31, 2021) related to the assessments, which is included in “Other long-term assets, net,” on our Consolidated Balance Sheets. We disagree with these notices and have contested the reassessments. We intend to vigorously defend our position, and we plan to pursue all remedies available to us to successfully resolve these matters, including administrative remedies with the Canadian Tax Authorities, and judicial remedies, if necessary. As of December 31, 2021, we believe that our tax position associated with these matters is “more likely than not” to be sustained and have not recognized any amounts for uncertainty in income taxes related to these notices. Note 16— Major Customers and Concentration of Credit Risk ExxonMobil Corporation and its subsidiaries accounted for 15 %, 12 % and 12 % of our revenues for the years ended December 31, 2021, 2020 and 2019, respectively. Marathon Petroleum Corporation and its subsidiaries accounted for 12 %, 13 % and 12 % of our revenues for the years ended December 31, 2021, 2020 and 2019, respectively. BP p.l.c. and its subsidiaries accounted for 10 % of our revenues for the year ended December 31, 2021. Phillips 66 Company and its subsidiaries accounted for 11 % of our revenues for the year ended December 31, 2019. No other customers accounted for 10% or more of our revenues during any of the three years ended December 31, 2021. The majority of revenues from these customers pertain to our Crude Oil segment merchant activities, and sales to these customers occur at multiple locations. If we were to lose one or more of these customers, there is risk that we would not be able to identify and access a replacement market at a comparable margin. Financial instruments that potentially subject us to concentrations of credit risk consist principally of trade receivables. Our accounts receivable are primarily from purchasers and shippers of crude oil and, to a lesser extent, purchasers of NGL. This industry concentration has the potential to impact our overall exposure to credit risk in that the customers may be similarly affected by changes in economic, industry or other conditions. We review credit exposure and financial information of our counterparties and generally require letters of credit for receivables from customers that are not considered creditworthy, unless the credit risk can otherwise be reduced. See Note 3 for additional discussion of our accounts receivable and our review of credit exposure. Note 17— Related Party Transactions PAA’s Ownership of our Class C Shares As of December 31, 2021 and 2020, PAA owned 534,596,831 and 547,717,762 , respectively, Class C shares. See Note 12 for additional information regarding our Class C shares. Omnibus Agreement The Plains Entities entered into an Omnibus Agreement on November 15, 2016, 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. F-53 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 9 for information regarding such entities). We recognize as our principal owners entities that have a designated representative on the board of directors of PAGP GP and/or own greater than 10 % of the limited partner interests in AAP. Such limited partner interests in AAP translate 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 December 31, 2021, no entities met the criteria to be recognized as a principal owner in PAA. Through various transactions by an affiliate of EMG in May 2019, EMG’s limited partner interest in AAP was significantly reduced, which caused EMG to lose its right to designate a representative on the board of directors of our general partner (the “Board”). Additionally, as a result of various transactions by Oxy in September 2019, Oxy no longer holds a limited partner interest in AAP and lost its right to designate a representative on the Board. Following these transactions, we no longer recognize EMG or Oxy as a principal owner. In August 2021, the Board approved and adopted an amendment to our general partner’s limited liability company agreement (the “Amendment”) which eliminated all previously negotiated “director designation” rights and requires that all directors be subject to public election, including Kayne Anderson Capital Advisors, L.P.’s (“Kayne Anderson”) legacy contractual right to designate an individual to serve on the Board without being subject to public election. The Amendment also eliminated all previously negotiated rights, including Kayne Anderson’s right, to appoint a Board observer under certain circumstances. As a result of these changes, we no longer recognize Kayne Anderson and its affiliates as related parties. During the three years ended December 31, 2021, we recognized sales and transportation revenues, purchased petroleum products and utilized transportation and storage services from our related parties. These transactions were conducted at posted tariff rates or prices that we believe approximate market. The impact to our Consolidated Statements of Operations from these transactions is included below (in millions): Year Ended December 31, 2021 2020 2019 Revenues from related parties (1) $ 33 $ 46 $ 692 Purchases and related costs from related parties (1) $ 385 $ 451 $ 223 (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 Consolidated Statements of Operations. Our receivable and payable amounts with these related parties as reflected on our Consolidated Balance Sheets were as follows (in millions): December 31, 2021 2020 Trade accounts receivable and other receivables, net from related parties (1) $ 41 $ 34 Trade accounts payable to related parties (1) (2) $ 72 $ 88 (1) Includes amounts related to crude oil purchases and sales, transportation and storage 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 crude oil at facilities and transport crude oil or utilize capacity on pipelines that are owned by equity method investees. A portion of our commitment to transport is supported by crude oil buy/sell or other agreements with third parties with commensurate quantities. F-54 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 18— Equity-Indexed Compensation Plans Our equity-indexed compensation plans primarily include LTIPs. Although other types of awards are contemplated under certain of the LTIPs, currently outstanding awards are limited to “phantom units,” which mature into the right to receive our Class A shares or common units of PAA (or cash equivalent) upon vesting, and “tracking units,” which, upon vesting, represent the right to receive a cash payment in an amount based upon the market value of a PAA common unit at the time of vesting. Some awards also include 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 or PAA common unit. The DERs terminate with the vesting or forfeiture of the underlying LTIP award. Plains All American 2021 Long-Term Incentive Plan. In May 2021, PAA unitholders approved the Plains All American 2021 Long-Term Incentive Plan, which amends, restates, and renames the Plains All American 2013 Long-Term Incentive Plan and authorizes an incremental 20 million PAA common units deliverable upon vesting of awards granted under the plan. Our LTIP awards include both liability-classified and equity-classified awards. In accordance with FASB guidance regarding share-based payments, the fair value of liability-classified LTIP awards is calculated based on the closing market price of the underlying PAGP share or PAA unit at each balance sheet date and adjusted for the present value of any distributions that are estimated to occur on the underlying shares or units over the vesting period that will not be received by the award recipients. The fair value for equity-classified awards is calculated in a similar manner on the respective grant dates. These fair values are recognized as compensation expense over the service period. We have elected to recognize forfeitures of awards when they occur. Our LTIP awards contain (i) time-based vesting criteria, (ii) performance conditions, (iii) market conditions or (iv) a combination of time-based vesting criteria and performance conditions. For awards with performance conditions, expense is accrued over the service period only if the performance condition is considered probable of occurring. When awards with performance conditions that were previously considered improbable become probable, we incur additional expense in the period that the probability assessment changes. This is necessary to bring the accrued obligation associated with these awards up to the level it would have been if we had been accruing for these awards since the grant date. For awards with market conditions, the probable outcomes are determined on the respective dates that the fair values are calculated, and the resulting expense is accrued over the service period. The following is a summary of the awards authorized under our LTIPs as of December 31, 2021 (in millions): LTIP LTIP Awards Authorized Plains GP Holdings, L.P. Long-Term Incentive Plan 3.8 Plains All American 2021 Long-Term Incentive Plan 28.8 Plains All American PNG Successor Long-Term Incentive Plan 1.3 Plains All American GP LLC 2006 Long-Term Incentive Tracking Unit Plan 13.4 Total (1) 47.3 (1) Of the 47.3 million total awards authorized, 26.0 million awards are currently available. The remaining balance has already vested or is currently outstanding. As of December 31, 2021, 10.7 million PAA LTIP awards and 0.3 million PAGP LTIP awards were outstanding. Of the awards outstanding, 7.6 million PAA LTIP awards and 0.3 million PAGP LTIP awards include associated DERs. At December 31, 2021, certain of the outstanding LTIP awards were considered probable of vesting and such awards are expected to vest at various dates between January 2022 and August 2026. As of December 31, 2021, the outstanding awards that are considered probable of vesting have a remaining unrecognized fair value of approximately $ 46 million. F-55 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 19— Commitments and Contingencies Commitments We have commitments, some of which are leases, related to real property, equipment and operating facilities. We also incur costs associated with leased land, rights-of-way, permits and regulatory fees. Future noncancelable commitments related to these items at December 31, 2021 are summarized below (in millions): 2022 2023 2024 2025 2026 Thereafter Total Leases (1) $ 110 $ 90 $ 77 $ 62 $ 45 $ 312 $ 696 Other commitments (2) 327 307 298 282 211 624 2,049 Total $ 437 $ 397 $ 375 $ 344 $ 256 $ 936 $ 2,745 (1) Includes both operating and finance leases as defined by FASB guidance. Leases are primarily for (i) railcars, (ii) office space, (iii) land, (iv) vehicles, (v) storage tanks and (vi) tractor trailers. See Note 14 for additional information. (2) Primarily includes storage, transportation and pipeline throughput agreements, as well as certain rights-of-way easements. Expense associated with our storage, transportation and pipeline throughput agreements was approximately $ 270 million, $ 265 million and $ 236 million for 2021, 2020 and 2019, respectively. A majority of the storage, transportation and pipeline throughput commitments are associated with agreements to store crude oil at facilities and transport crude oil on pipelines owned by equity method investees, in which we own a 50 % interest, at posted tariff rates or prices that we believe approximate market. A portion of our commitment to transport is supported by crude oil buy/sell or other agreements with third parties with commensurate quantities. Loss Contingencies — General To the extent we are able to assess the likelihood of a negative outcome for a contingency, 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 an undiscounted liability equal to the estimated amount. If a range of probable loss amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then we accrue an undiscounted liability equal to the minimum amount in the range. In addition, we estimate legal fees that we expect to incur associated with loss contingencies and accrue those costs when they are material and probable of being incurred. We do not record a contingent liability when the likelihood of loss is probable but the amount cannot be reasonably estimated or when the likelihood of loss is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and the impact would be material to our consolidated financial statements, we disclose the nature of the contingency and, where feasible, an estimate of the possible loss or range of loss. Legal Proceedings — General In the ordinary course of business, we are involved in various legal proceedings, including those arising from regulatory and environmental matters. In connection with determining the probability of loss associated with such legal proceedings and whether any potential losses associated therewith are estimable, we take into account what we believe to be all relevant known facts and circumstances, and what we believe to be reasonable assumptions regarding the application of those facts and circumstances to existing agreements, laws and regulations. Although we are insured against various risks to the extent we believe it is prudent, there is no assurance that the nature and amount of such insurance will be adequate, in every case, to fully protect us from losses arising from current or future legal proceedings. Accordingly, we can provide no assurance that the outcome of the various legal proceedings that we are currently involved in, or will become involved with in the future, will not, individually or in the aggregate, have a material adverse effect on our consolidated financial condition, results of operations or cash flows. F-56 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Environmental — General We currently own or lease, and in the past have owned and leased, properties where hazardous liquids, including hydrocarbons, are or have been handled. These properties and the hazardous liquids or associated wastes disposed thereon may be subject to the U.S. federal Comprehensive Environmental Response, Compensation and Liability Act, as amended, and the U.S. federal Resource Conservation and Recovery Act, as amended, as well as state and Canadian federal and provincial laws and regulations. Under such laws and regulations, we could be required to remove or remediate hazardous liquids or associated wastes (including wastes disposed of or released by prior owners or operators) and to clean up contaminated property (including contaminated groundwater). Assets we have acquired or will acquire in the future may have environmental remediation liabilities for which we are not indemnified. Although we have made significant investments in our maintenance and integrity programs, we have experienced (and likely will experience future) releases of hydrocarbon products into the environment from our pipeline, rail, storage and other facility operations. These releases can result from accidents or from unpredictable man-made or natural forces and may reach surface water bodies, groundwater aquifers or other sensitive environments. We also may discover environmental impacts from past releases that were previously unidentified. Damages and liabilities associated with any such releases from our existing or future assets could be significant and could have a material adverse effect on our consolidated financial condition, results of operations or cash flows. We record environmental liabilities when environmental assessments and/or remedial efforts are probable and the amounts can be reasonably estimated. Generally, our recording of these accruals coincides with our completion of a feasibility study or our commitment to a formal plan of action. We do not discount our environmental remediation liabilities to present value. We also record environmental liabilities assumed in business combinations based on the estimated fair value of the environmental obligations caused by past operations of the acquired company. We record receivables for amounts we believe are recoverable from insurance or from third parties under indemnification agreements in the period that we determine the costs are probable of recovery. Environmental expenditures that pertain to current operations or to future revenues are expensed or capitalized consistent with our capitalization policy for property and equipment. Expenditures that result from the remediation of an existing condition caused by past operations and that do not contribute to current or future profitability are expensed. At December 31, 2021, our estimated undiscounted reserve for environmental liabilities (excluding liabilities related to the Line 901 incident, as discussed further below) totaled $ 57 million, of which $ 11 million was classified as short-term and $ 46 million was classified as long-term. At December 31, 2020, our estimated undiscounted reserve for environmental liabilities (excluding liabilities related to the Line 901 incident) totaled $ 55 million, of which $ 8 million was classified as short-term and $ 47 million was classified as long-term. Such short-term liabilities are reflected in “Other current liabilities” and long-term liabilities are reflected in “Other long-term liabilities and deferred credits” on our Consolidated Balance Sheets. At December 31, 2021 and 2020, we had recorded receivables (excluding receivables related to the Line 901 incident) totaling $ 11 million and $ 6 million, respectively, for amounts probable of recovery under insurance and from third parties under indemnification agreements, $ 1 million of which for each period is reflected in “Other long-term assets, net” and the remainder is reflected in “Trade accounts receivable and other receivables, net” on our Consolidated Balance Sheets. In some cases, the actual cash expenditures associated with these liabilities may not occur for three years or longer. Our estimates used in determining 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 or future legal claims giving rise to additional liabilities. Therefore, although we believe that the reserve is adequate, actual costs incurred (which may ultimately include costs for contingencies that are currently not reasonably estimable or costs for contingencies where the likelihood of loss is currently believed to be only reasonably possible or remote) may be in excess of the reserve and may potentially have a material adverse effect on our consolidated financial condition, results of operations or cash flows. F-57 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Specific Legal, Environmental or Regulatory Matters Line 901 Incident . In May 2015, we experienced a crude oil release from our Las Flores to Gaviota Pipeline (Line 901) in Santa Barbara County, California. A portion of the released crude oil reached the Pacific Ocean at Refugio State Beach through a drainage culvert. Following the release, we shut down the pipeline and initiated our emergency response plan. A Unified Command, which included the United States Coast Guard, the EPA, the State of California Department of Fish and Wildlife (“CDFW”), the California Office of Spill Prevention and Response and the Santa Barbara Office of Emergency Management, was established for the response effort. Clean-up and remediation operations with respect to impacted shoreline and other areas has been determined by the Unified Command to be complete, and the Unified Command has been dissolved. Our estimate of the amount of oil spilled, based on relevant facts, data and information, and as set forth in the Consent Decree described below, is approximately 2,934 barrels; of this amount, we estimate that 598 barrels reached the Pacific Ocean. As a result of the Line 901 incident, several governmental agencies and regulators initiated investigations into the Line 901 incident, various claims have been made against us and a number of lawsuits have been filed against us, the majority of which have been resolved. Set forth below is a brief summary of actions and matters that are currently pending or recently resolved: As the “responsible party” for the Line 901 incident we are liable for various costs and for certain natural resource damages under the Oil Pollution Act. In this regard, following the Line 901 incident, we entered into a cooperative Natural Resource Damage Assessment (“NRDA”) process with the federal and state agencies designated or authorized by law to act as trustees for the natural resources of the United States and the State of California (collectively, the “Trustees”). Additionally, various government agencies sought to collect civil fines and penalties under applicable state and federal regulations. On March 13, 2020, the United States and the People of the State of California filed a civil complaint against Plains All American Pipeline, L.P. and Plains Pipeline L.P. along with a pre-negotiated settlement agreement in the form of a Consent Decree (the “Consent Decree”) that was signed by the United States Department of Justice, Environmental and Natural Resources Division, the United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration, the EPA, CDFW, the California Department of Parks and Recreation, the California State Lands Commission, the California Department of Forestry and Fire Protection’s Office of the State Fire Marshal, Central Coast Regional Water Quality Control Board, and Regents of the University of California. The Consent Decree was approved and entered by the Federal District Court for the Central District of California on October 14, 2020. Pursuant to the terms of the Consent Decree, Plains paid $ 24 million in civil penalties and $ 22.325 million as compensation for injuries to, destruction of, loss of, or loss of use of natural resources resulting from the Line 901 incident. The Consent Decree also contains requirements for implementing certain agreed-upon injunctive relief, as well as requirements for potentially restarting Line 901 and the Sisquoc to Pentland portion of Line 903. The Consent Decree resolved all regulatory claims related to the incident. Following an investigation and grand jury proceedings, in May of 2016, PAA was charged by a California state grand jury, pursuant to an indictment filed in California Superior Court, Santa Barbara County (the “May 2016 Indictment”), with alleged violations of California law in connection with the Line 901 incident. Fifteen charges from the May 2016 Indictment were the subject of a jury trial in California Superior Court in Santa Barbara County, and the jury returned a verdict on September 7, 2018, pursuant to which we were (i) found guilty on one felony discharge count and eight misdemeanor counts (which included one reporting count, one strict liability discharge count and six strict liability animal takings counts) and (ii) found not guilty on one strict liability animal takings count. The remaining counts were subsequently dismissed by the Court. On April 25, 2019, PAA was sentenced to pay fines and penalties in the aggregate amount of just under $ 3.35 million for the convictions covered by the September 2018 jury verdict (the “2019 Sentence”). The fines and penalties imposed in connection with the 2019 Sentence have been paid. In September 2021, the Superior Court concluded a series of hearings on the issue of whether there were any “direct victims” of the spill that are entitled to restitution under applicable criminal law. Through a series of final orders issued at the trial court level and without affecting any rights of the claimants under civil law, the Court dismissed the vast majority of the claims and ruled that the claimants were not entitled to restitution under applicable criminal laws. The Court did award an aggregate amount of less than $ 150,000 to a handful of claimants and we settled with approximately 40 claimants before the hearings for aggregate consideration that is not material. The prosecution has appealed the Court’s rulings. F-58 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Shortly following the Line 901 incident, we established a claims line and encouraged any parties that were damaged by the release to contact us to discuss their damage claims. We received a number of claims through the claims line and we have processed those claims and made payments as appropriate. Nine class action lawsuits were filed against us; however, after various claims were either dismissed or consolidated, two proceedings remain pending in the United States District Court for the Central District of California. In the first proceeding, the plaintiffs claim two different classes of claimants were damaged by the release: (i) commercial fishermen who landed fish in certain specified fishing blocks in the waters off the coast of Southern California or persons or businesses who resold commercial seafood caught in those areas; and (ii) owners and lessees of residential beachfront properties, or properties with a private easement to a beach, where plaintiffs claim oil from the spill washed up. We are vigorously defending against those claims. This case is set for trial to begin in June of 2022. In the second proceeding, the plaintiffs seek a declaratory judgment that Plains’ right-of-way agreements would not allow Plains to lay a new pipeline to replace Line 901 and/or the non-operating segment of Line 903 without paying additional compensation. No trial date has been set in that action. In addition, four unitholder derivative lawsuits were filed by certain purported investors in PAA against PAGP and certain of PAA’s affiliates, officers and directors. After various claims were either dismissed or consolidated, one proceeding against PAGP remains pending in Delaware Chancery Court. Generally, the plaintiffs claim that PAGP failed to exercise proper oversight over the Partnership’s pipeline integrity efforts. We will continue to vigorously defend against the claim. No trial date has been set in this action. We have also received several other individual lawsuits and claims from companies, governmental agencies and individuals alleging damages arising out of the Line 901 incident. These lawsuits and claims generally seek restitution, compensatory and punitive damages, and/or injunctive relief. The majority of these lawsuits have been settled or dismissed by the court. Remaining claims include claims for lost revenue or profit asserted by a former oil producer that declared bankruptcy and shut in its offshore production platform following the Line 901 incident, a state agency that received royalties on oil produced from that platform until it was abandoned by its owner, and various companies and individuals who provided labor, goods, or services associated with oil production activities they claim were disrupted following the Line 901 incident. We are vigorously defending these suits. We may be subject to additional claims and lawsuits, which could materially impact the liabilities and costs we currently expect to incur as a result of the Line 901 incident. Taking the foregoing into account, as of December 31, 2021, we estimate that the aggregate total costs we have incurred or will incur with respect to the Line 901 incident will be approximately $ 495 million, which includes actual and projected emergency response and clean-up costs, natural resource damage assessments, fines and penalties payable pursuant to the Consent Decree and certain third-party claims settlements, as well as estimates for certain legal fees. We accrue such estimates of aggregate total costs to “Field operating costs” in our Consolidated Statements of Operations. This estimate considers our prior experience in environmental investigation and remediation matters and available data from, and in consultation with, our environmental and other specialists, as well as currently available facts and presently enacted laws and regulations. We have made assumptions for (i) the resolution of certain third-party claims and lawsuits, but excluding claims and lawsuits with respect to which losses are not probable and reasonably estimable, and excluding future claims and lawsuits and (ii) the nature, extent and cost of legal services that will be required in connection with all lawsuits, claims and other matters requiring legal or expert advice associated with the Line 901 incident. Our estimate does not include any lost revenue associated with the shutdown of Line 901 or 903 and does not include any liabilities or costs that are not reasonably estimable at this time or that relate to contingencies where we currently regard the likelihood of loss as being only reasonably possible or remote. We believe we have accrued adequate amounts for all probable and reasonably estimable costs; however, this estimate is subject to uncertainties associated with the assumptions that we have made. For example, with respect to potential losses that we regard as only reasonably possible or remote, we have made assumptions regarding the strength of our legal position based on our assessment of the relevant facts and applicable law and precedent; if our assumptions regarding such matters turn out to be inaccurate (i.e., we are found to be liable under circumstances where we regard the likelihood of loss as being only reasonably possible or remote), we could be responsible for significant costs and expenses that are not currently included in our estimates and accruals. In addition, for any potential losses that we regard as probable and for which we have accrued an estimate of the potential losses, our estimates regarding damages, legal fees, court costs and interest could turn out to be inaccurate and the actual losses we incur could be significantly higher than the amounts included in our estimates and accruals. Also, the amount of time it takes for us to resolve all of the current and future lawsuits and claims that relate to the Line 901 incident could turn out to be significantly longer than we have assumed, and as a result the costs we incur for legal services could be significantly higher than we have estimated. Accordingly, our assumptions and estimates may turn out to be inaccurate and our total costs could turn out to be materially higher; therefore, we can provide no assurance that we will not have to accrue significant additional costs in the future with respect to the Line 901 incident. F-59 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2021, we had a remaining undiscounted gross liability of $ 103 million related to this event, which is reflected in “Trade accounts payable” and “Other current liabilities” on our Consolidated Balance Sheet. We maintain insurance coverage, which is subject to certain exclusions and deductibles, in the event of such environmental liabilities. Subject to such exclusions and deductibles, we believe that our coverage is adequate to cover the current estimated total emergency response and clean-up costs, claims settlement costs and remediation costs and we believe that this coverage is also adequate to cover any potential increase in the estimates for these costs that exceed the amounts currently identified. Through December 31, 2021, we had collected, subject to customary reservations, $ 250 million out of the approximate $ 355 million of release costs that we believe are probable of recovery from insurance carriers, net of deductibles. Therefore, as of December 31, 2021, we have recognized a receivable of approximately $ 105 million for the portion of the release costs that we believe is probable of recovery from insurance, net of deductibles and amounts already collected. Such amount is recognized as a current asset in “Trade accounts receivable and other receivables, net” on our Consolidated Balance Sheet. We have completed the required clean-up and remediation work as determined by the Unified Command and the Unified Command has been dissolved; however, we expect to make payments for additional costs associated with restoration of the impacted areas, as well as legal, professional and regulatory costs during future periods. Insurance Pipelines, terminals, trucks or other facilities or equipment may experience damage as a result of an accident, natural disaster, terrorist attack, cyber event or other event. These hazards can cause personal injury and loss of life, severe damage to and destruction of property and equipment, pollution or environmental damage and suspension of operations. Consistent with insurance coverage generally available in the industry, in certain circumstances our insurance policies provide limited coverage for losses or liabilities relating to gradual pollution, with broader coverage for sudden and accidental occurrences. We maintain various types and varying levels of insurance coverage to cover our operations and properties, and we self-insure certain risks, including gradual pollution, cybersecurity and named windstorms. However, such insurance does not cover every potential risk that might occur, associated with operating pipelines, terminals and other facilities and equipment, including the potential loss of significant revenues and cash flows. The occurrence of a significant event not fully insured, indemnified or reserved against, or the failure of a party to meet its indemnification obligations, could materially and adversely affect our operations and financial condition. We believe that we maintain adequate insurance coverage, although insurance will not cover many types of interruptions that might occur, will not cover amounts up to applicable deductibles and will not cover all risks associated with certain of our assets and operations. With respect to our insurance coverage, our policies are subject to deductibles and retention levels that we consider reasonable and not excessive. Additionally, no assurance can be given that we will be able to maintain adequate insurance in the future at rates we consider reasonable. As a result, we may elect to self-insure or utilize higher deductibles in certain other insurance programs. In addition, although we believe that we have established adequate reserves and liquidity to the extent such risks are not insured, costs incurred in excess of these reserves may be higher or we may not receive insurance proceeds in a timely manner, which may potentially have a material adverse effect on our financial conditions, results of operations or cash flows. F-60 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 20— Segment Information During the fourth quarter of 2021, we effected changes in the primary financial information provided to our CODM (our Chief Executive Officer) for assessing performance and allocating resources to present two operating segments, Crude Oil and NGL. Prior to the fourth quarter of 2021, this information was organized into three operating segments: Transportation, Facilities and Supply and Logistics. The change in our segments is reflective of a change in how our CODM views our business and stems primarily from (i) a multi-year transition in the midstream energy industry driven by increased competition that has reduced the stand alone earnings opportunities of our supply and logistics activities such that those activities now primarily support our effort to increase the utilization of our Crude Oil and NGL assets and (ii) internal changes regarding the oversight and reporting of our assets and related results of operations. All segment data and related disclosures for earlier periods presented herein have been recast to reflect the new segment reporting structure. Our operating segments, which are also our reportable segments, are organized by product as our Crude Oil and NGL businesses are generally impacted by different market fundamentals and require the use of different assets and business strategies. The Crude Oil segment includes our crude oil pipelines, crude oil storage and marine terminals and related crude oil marketing activities. The NGL segment includes our NGL pipelines, NGL storage, natural gas processing and NGL fractionation facilities and related NGL marketing activities. In our historical segment reporting, our marketing activities were presented separately from our other operating activities. Our crude oil and NGL marketing activities are now included in the respective reporting segments as their primary purpose is to support the utilization of our assets by entering into transactions that facilitate increased volumes handled by our assets, resulting in additional earnings for each of our segments. Our CODM evaluates segment performance based on measures including Segment Adjusted EBITDA (as defined below) and maintenance capital. The measure of Segment Adjusted EBITDA forms the basis of our internal financial reporting and is the primary performance measure used by our CODM in assessing performance and allocating resources among our operating segments. We define Segment Adjusted EBITDA as revenues and equity earnings in unconsolidated entities less (a) purchases and related costs, (b) field operating costs and (c) segment general and administrative expenses, plus (d) our proportionate share of the depreciation and amortization expense of unconsolidated entities, further adjusted (e) for certain selected items including (i) gains and losses on derivative instruments that are related to underlying activities in another period (or the reversal of such adjustments from a prior period), gains and losses on derivatives that are related to investing activities (such as the purchase of linefill) and inventory valuation adjustments, as applicable, (ii) long-term inventory costing adjustments, (iii) charges for obligations that are expected to be settled with the issuance of equity instruments, (iv) amounts related to deficiencies associated with minimum volume commitments, net of the applicable amounts subsequently recognized into revenue and (v) other items that our CODM believes are integral to understanding our core segment operating performance and (f) to exclude the portion of all preceding items that is attributable to noncontrolling interests in consolidated joint venture entities (“Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures”). During the fourth quarter of 2021, we modified our definition of Segment Adjusted EBITDA to exclude amounts attributable to noncontrolling interests in consolidated joint ventures. In connection with the Permian JV formation in October 2021, our CODM determined this modification resulted in amounts that were more meaningful to evaluate segment performance. Amounts attributable to noncontrolling interests in consolidated joint ventures for periods prior have been recast to reflect this modification. Segment Adjusted EBITDA excludes depreciation and amortization. We look at each period’s earnings before non-cash depreciation and amortization as an important measure of segment performance. The exclusion of depreciation and amortization expense could be viewed as limiting the usefulness of Segment Adjusted EBITDA as a performance measure because it does not account in current periods for the implied reduction in value of our capital assets, such as pipelines and facilities, caused by age-related decline and wear and tear. We compensate for this limitation by recognizing that depreciation and amortization are largely offset by repair and maintenance investments, which act to partially offset the aging and wear and tear in the value of our principal fixed assets. These maintenance investments are a component of field operating costs included in Segment Adjusted EBITDA or in maintenance capital, depending on the nature of the cost. Capital expenditures made to expand the existing operating and/or earnings capacity of our assets are classified as investment capital. Capital expenditures for the replacement and/or refurbishment of partially or fully depreciated assets in order to maintain the operating and/or earnings capacity of our existing assets are classified as maintenance capital, which is deducted in determining “available cash.” Repair and maintenance expenditures incurred in order to maintain the day to day operation of our existing assets are charged to expense as incurred. Assets are not reviewed by our CODM on a segmented basis; therefore, such information is not presented. F-61 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The following tables reflect certain financial data for each segment (in millions): Crude Oil NGL Intersegment Revenues Elimination Total Year Ended December 31, 2021 Revenues (1) : Product sales $ 39,395 $ 1,829 $ ( 341 ) $ 40,883 Services 1,075 139 ( 19 ) 1,195 Total revenues $ 40,470 $ 1,968 $ ( 360 ) $ 42,078 Equity earnings in unconsolidated entities $ 274 $ — $ 274 Segment Adjusted EBITDA $ 1,909 $ 285 $ 2,194 Investment and acquisition capital expenditures (2) (3) $ 212 $ 57 $ 269 Maintenance capital expenditures (3) $ 100 $ 68 $ 168 As of December 31, 2021 Investments in unconsolidated entities $ 3,805 $ — $ 3,805 Crude Oil NGL Intersegment Revenues Elimination Total Year Ended December 31, 2020 Revenues (1) : Product sales $ 21,089 $ 1,218 $ ( 249 ) $ 22,058 Services 1,110 142 ( 20 ) 1,232 Total revenues $ 22,199 $ 1,360 $ ( 269 ) $ 23,290 Equity earnings in unconsolidated entities $ 355 $ — $ 355 Segment Adjusted EBITDA $ 2,216 $ 327 $ 2,543 Investment and acquisition capital expenditures (2) (3) $ 1,182 $ 49 $ 1,231 Maintenance capital expenditures (3) $ 171 $ 45 $ 216 As of December 31, 2020 Investments in unconsolidated entities $ 3,764 $ — $ 3,764 Crude Oil NGL Intersegment Revenues Elimination Total Year Ended December 31, 2019 Revenues (1) : Product sales $ 30,375 $ 2,302 $ ( 405 ) $ 32,272 Services 1,280 137 ( 20 ) 1,397 Total revenues $ 31,655 $ 2,439 $ ( 425 ) $ 33,669 Equity earnings in unconsolidated entities $ 388 $ — $ 388 Segment Adjusted EBITDA $ 2,753 $ 467 $ 3,220 Investment and acquisition capital expenditures (2) (3) $ 1,332 $ 58 $ 1,390 Maintenance capital expenditures (3) $ 248 $ 39 $ 287 As of December 31, 2019 Investments in unconsolidated entities $ 3,683 $ — $ 3,683 F-62 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (1) Segment revenues include intersegment amounts that are eliminated in Purchases and related costs. Intersegment activities are conducted at posted tariff rates where applicable, or otherwise at rates similar to those charged to third parties or rates that we believe approximate market at the time the agreement is executed or renegotiated. (2) Investment and acquisition capital expenditures, including investments in unconsolidated entities. (3) These amounts combined represent total capital expenditures. Segment Adjusted EBITDA Reconciliation The following table reconciles Segment Adjusted EBITDA to Net income/(loss) attributable to PAGP (in millions): Year Ended December 31, 2021 2020 2019 Segment Adjusted EBITDA $ 2,194 $ 2,543 $ 3,220 Adjustments (1) : Depreciation and amortization of unconsolidated entities (2) ( 123 ) ( 73 ) ( 62 ) Gains/(losses) from derivative activities and inventory valuation adjustments (3) 271 ( 480 ) ( 160 ) Long-term inventory costing adjustments (4) 94 ( 44 ) 20 Deficiencies under minimum volume commitments, net (5) 7 ( 74 ) 18 Equity-indexed compensation expense (6) ( 19 ) ( 19 ) ( 17 ) Net gain/(loss) on foreign currency revaluation (7) 4 3 ( 14 ) Line 901 incident (8) ( 15 ) — ( 10 ) Significant transaction-related expenses (9) ( 16 ) ( 3 ) — Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures (10) 94 14 10 Unallocated general and administrative expenses (11) ( 6 ) ( 5 ) ( 5 ) Depreciation and amortization ( 777 ) ( 656 ) ( 604 ) Gains/(losses) on asset sales and asset impairments, net ( 592 ) ( 719 ) ( 28 ) Goodwill impairment losses — ( 2,515 ) — Gain on/(impairment of) investments in unconsolidated entities, net 2 ( 182 ) 271 Interest expense, net ( 425 ) ( 436 ) ( 425 ) Other income, net 19 39 24 Income/(loss) before tax 712 ( 2,607 ) 2,238 Income tax (expense)/benefit ( 112 ) 167 ( 176 ) Net income/(loss) 600 ( 2,440 ) 2,062 Net (income)/loss attributable to noncontrolling interests ( 540 ) 1,872 ( 1,731 ) Net income/(loss) attributable to PAGP $ 60 $ ( 568 ) $ 331 (1) Represents adjustments utilized by our CODM in the evaluation of segment results. (2) Includes our proportionate share of the depreciation and amortization expense (including write-downs related to cancelled projects) of unconsolidated entities. F-63 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (3) We use derivative instruments for risk management purposes and our related processes include specific identification of hedging instruments to an underlying hedged transaction. Although we identify an underlying transaction for each derivative instrument we enter into, there may not be an accounting hedge relationship between the instrument and the underlying transaction. In the course of evaluating our results, we identify differences in the timing of earnings from the derivative instruments and the underlying transactions and exclude the related gains and losses in determining Segment Adjusted EBITDA such that the earnings from the derivative instruments and the underlying transactions impact Segment Adjusted EBITDA in the same period. In addition, we exclude gains and losses on derivatives that are related to investing activities, such as the purchase of linefill. We also exclude the impact of corresponding inventory valuation adjustments, as applicable. (4) We carry crude oil and NGL inventory that is comprised of minimum working inventory requirements in third-party assets and other working inventory that is needed for our commercial operations. We consider this inventory necessary to conduct our operations and we intend to carry this inventory for the foreseeable future. Therefore, we classify this inventory as long-term on our balance sheet and do not hedge the inventory with derivative instruments (similar to linefill in our own assets). We exclude the impact of changes in the average cost of the long-term inventory (that result from fluctuations in market prices) and write-downs of such inventory that result from price declines from Segment Adjusted EBITDA. (5) We, and certain of our equity method investments, have certain agreements that require counterparties to deliver, transport or throughput a minimum volume over an agreed upon period. Substantially all of such agreements were entered into with counterparties to economically support the return on our capital expenditure necessary to construct the related asset. Some of these agreements include make-up rights if the minimum volume is not met. We record a receivable from the counterparty in the period that services are provided or when the transaction occurs, including amounts for deficiency obligations from counterparties associated with minimum volume commitments. If a counterparty has a make-up right associated with a deficiency, we defer the revenue attributable to the counterparty’s make-up right and subsequently recognize the revenue at the earlier of when the deficiency volume is delivered or shipped, when the make-up right expires or when it is determined that the counterparty’s ability to utilize the make-up right is remote. We include the impact of amounts billed to counterparties for their deficiency obligation, net of applicable amounts subsequently recognized into revenue, as a selected item impacting comparability. Our CODM views the inclusion of the contractually committed revenues associated with that period as meaningful to Segment Adjusted EBITDA as the related asset has been constructed, is standing ready to provide the committed service and the fixed operating costs are included in the current period results. (6) Our total equity-indexed compensation expense includes expense associated with awards that will be settled in PAA common units and awards that will be settled in cash. The awards that will be settled in PAA common units are included in PAA’s diluted net income per unit calculation when the applicable performance criteria have been met. We exclude compensation expense associated with these awards in determining Segment Adjusted EBITDA as the dilutive impact of the outstanding awards is included in PAA’s diluted net income per unit calculation, as applicable. The portion of compensation expense associated with awards that will settle in cash is not excluded in determining Segment Adjusted EBITDA. See Note 18 for information regarding our equity-indexed compensation plans. (7) During the periods presented, there were fluctuations in the value of CAD to USD, resulting in the realization of foreign exchange gains and losses on the settlement of foreign currency transactions as well as the revaluation of monetary assets and liabilities denominated in a foreign currency. These gains and losses are not integral to our core operating performance and were therefore excluded in determining Segment Adjusted EBITDA. (8) Includes costs recognized during the period related to the Line 901 incident that occurred in May 2015, net of amounts we believe are probable of recovery from insurance. See Note 19 for additional information regarding the Line 901 incident. (9) Includes expenses associated with the Permian JV transaction in 2021 and the Felix Midstream LLC acquisition in 2020. See Note 7 for additional discussion. An adjustment for these non-recurring expenses is included in the calculation of Segment Adjusted EBITDA for the years ended December 31, 2021 and 2020 as our CODM does not view such expenses as integral to understanding our core segment operating performance. (10) Reflects amounts attributable to noncontrolling interests in the Permian JV (beginning October 2021) and Red River LLC. See Note 12 for additional information regarding these noncontrolling interests. (11) Represents general and administrative expenses incremental to those of PAA, which are not allocated to our reporting segments in determining Segment Adjusted EBITDA. F-64 Table of Contents Index to Financial Statements PLAINS GP HOLDINGS, L.P. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Geographic Data We have operations in the United States and Canada. Set forth below are revenues and long-lived assets attributable to these geographic areas (in millions): Year Ended December 31, Revenues (1) 2021 2020 2019 United States $ 34,458 $ 17,942 $ 27,162 Canada 7,620 5,348 6,507 $ 42,078 $ 23,290 $ 33,669 (1) Revenues are primarily attributed to each region based on where the services are provided or the product is shipped . December 31, Long-Lived Assets (1) 2021 2020 United States $ 18,279 $ 16,896 Canada 4,094 3,892 $ 22,373 $ 20,788 (1) Excludes long-term derivative assets, long-term deferred tax assets and goodwill. F-65