Conversion factor for chemical to physical scale of atomic masses
$$\frac{\ce{O}}{\ce{^16O}}=\frac{(.9976\times\ce{^16O})+(.0004\times\ce{^17O})+(.002\times\ce{^18O})}{\ce{^16O}}$$
$$=\frac{(.9976\times\ce{^16O})+(.0004\times(\ce{^16O}+1))+(.002\times(\ce{^16O}+2))}{\ce{^16O}}$$
$$=\frac{(\ce{^16O})+(.0004\times1)+(.002\times2)}{\ce{^16O}}$$

Essentially, it comes from collecting factors of $\ce{^16O}$.