Growing scale and asset diversity Long-term, fee-based contracts provide stable cash flows The natural gas gathering, processing, and fractionation business adds some volume and price risk Strategic relationship with higher-rated parent Tesoro Corp. (Tesoro) Moderately high leverage, likely to be in the low 4x area over the next year Increasing reliance on financial markets to fund growth initiatives and acquisitions Distribution coverage ratio of 1.1x to 1.2x The stable outlook reflects our expectation that Tesoro Logistics L.P. (TLLP) will successfully integrate the natural gas gathering, processing, and fractionation business, while largely maintaining stable, fee-based cash flow and financial leverage of 4x or less as it continues to pursue growth opportunities. We could lower our ratings on TLLP if the partnership
