10-Q

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to           

Commission file number: 001-37363

Enviva Partners, LP

(Exact name of registrant as specified in its charter)

Delaware	46-4097730
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7200 Wisconsin Ave, Suite 1000 Bethesda, MD	20814
(Address of principal executive offices)	(Zip code)

(301) 657-5560

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer x (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of November 4, 2015, 11,908,072 common units and 11,905,138 subordinated units were outstanding.

ENVIVA PARTNERS, LP
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS

		Page
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		1
GLOSSARY OF TERMS		2
PART I — FINANCIAL INFORMATION		4
Item 1.	Financial Statements (unaudited)	4
Condensed Consolidated Balance Sheets		4
Condensed Consolidated Statements of Operations		5
Condensed Consolidated Statement of Changes in Partners’ Capital		6
Condensed Consolidated Statements of Cash Flows		7
Notes to Condensed Consolidated Financial Statements		9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48
PART II — OTHER INFORMATION		49
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 6.	Exhibits	49

i

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements and information in this Quarterly Report on Form 10-Q (this “Quarterly Report”) may constitute “forward-looking statements.” The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenues and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below:

·the amount of products that we are able to produce, which could be adversely affected by, among other things, operating difficulties;

·the volume of products that we are able to sell;

·the price at which we are able to sell products;

·changes in the price and availability of natural gas, coal or other sources of energy;

·changes in prevailing economic conditions;

·our ability to complete acquisitions, including acquisitions from our sponsor;

·unanticipated ground, grade or water conditions;

·inclement or hazardous weather conditions, including extreme precipitation, temperatures and flooding;

·environmental hazards;

·fires, explosions or other accidents;

·changes in domestic and foreign laws and regulations (or the interpretation thereof) related to renewable or low-carbon energy, the forestry products industry or power generators;

·inability to acquire or maintain necessary permits;

·inability to obtain necessary production equipment or replacement parts;

·technical difficulties or failures;

·labor disputes;

·late delivery of raw materials;

·inability of our customers to take delivery of products or their rejection of delivery of products;

·changes in the price and availability of transportation; and

·our ability to borrow funds and access capital markets.

All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements.

Readers are cautioned not to place undue reliance on forward-looking statements and we undertake no obligation to update or revise any such statements after the date they are made, whether as a result of new information, future events or otherwise.

1

GLOSSARY OF TERMS

biomass: any organic biological material, derived from living organisms, that stores energy from the sun.

C&F: cost and freight.

CIF: Cost, Insurance and Freight. Where a contract for the sale of goods contains CIF shipping terms, the seller is obligated to pay the costs and freight necessary to bring the goods to the named port of destination, but title and risk of loss are transferred from the seller to the buyer when the goods pass the ship’s rail in the port of shipment.

co-fire: the combustion of two different types of materials at the same time. For example, biomass is sometimes co-fired in existing coal plants instead of new or converted biomass plants.

cost pass-through: a mechanism in commercial contracts that passes costs through to the purchaser.

Cottondale plant: a wood pellet production plant in Cottondale, Florida, owned by Enviva Pellets Cottondale, LLC.

dry-bulk: describes commodities which are shipped in large, unpackaged amounts.

FIFO: first in, first out method of valuing inventory.

FOB: Free On Board. Where a contract for the sale of goods contains FOB shipping terms, the seller completes delivery when the goods pass the ship’s rail at the named port of shipment, and the buyer must bear all costs and risk of loss from such point.

GAAP: Generally Accepted Accounting Principles in the United States.

General Partner: Enviva Partners GP, LLC, the general partner of the Partnership.

Green Circle: Green Circle Bio Energy, Inc., the former owner of the Cottondale plant.

Hancock JV: a joint venture between the sponsor and Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life Insurance Company.

MT: metric ton, which is equivalent to 1,000 kilograms. One MT equals 1.1023 short tons.

MTPY: metric tons per year.

net calorific value: the amount of usable heat energy released when a fuel is burned completely and the heat contained in the water vapor generated by the combustion process is not recovered. The European power industry typically uses net calorific value as the means of expressing fuel energy.

off-take contract: an agreement between a producer of a resource and a buyer of a resource to purchase a certain volume of the producer’s future production.

Partnership: Enviva Partners, LP.

Predecessor: Enviva, LP.

ramp or ramp-up: a period of time of increasing production following the startup of a plant or completion of a project.

Schedule K-1: an income tax document used to report the incomes, losses and dividends of a business’s partners and prepared for each partner individually.

Southampton plant: a wood pellet production plant in Southampton County, Virginia, owned by Enviva Pellets Southampton, LLC.

sponsor: Enviva Holdings, LP.

2

stumpage: the price paid to the underlying timber resource owner for the raw material.

utility-grade wood pellets: wood pellets meeting minimum requirements generally specified by industrial consumers and produced and sold in sufficient quantities to satisfy industrial-scale consumption.

weighted average remaining term: the average of the remaining terms of our customer contracts, with each agreement weighted by the amount of product to be delivered each year under such agreement.

wood fiber: cellulosic elements that are extracted from trees and used to make various materials, including paper. In North America, wood fiber is primarily extracted from hardwood (deciduous) trees and softwood (coniferous) trees.

wood pellets: energy-dense, low-moisture and uniformly-sized units of wood fuel produced from processing various wood resources or byproducts.

3

PART I — FINANCIAL INFORMATION

Item 1.Financial Statements (unaudited)

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

	September 30, 2015		December 31, 2014
			(Predecessor)
Assets
Current assets:
Cash and cash equivalents	$	75,157	$	592
Accounts receivable, net of allowance for doubtful accounts of $0 in 2015 and $61 in 2014	44,464		21,998
Related party receivable	652		—
Inventories	25,366		18,064
Restricted cash	—		11,640
Deferred issuance costs	—		4,052
Prepaid expenses and other current assets	2,808		1,734
Total current assets	148,447		58,080
Property, plant and equipment, net of accumulated depreciation of $49.1 million in 2015 and $40.9 million in 2014	321,639		316,259
Intangible assets, net of accumulated amortization of $6.9 million in 2015 and $1.0 million in 2014	3,505		722
Goodwill	85,615		4,879
Debt issuance costs, net of accumulated amortization of $0.5 million in 2015 and $3.0 million in 2014	4,705		3,594
Other long-term assets	519		955
Total assets	$	564,430	$	384,489
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable	$	8,975	$	4,013
Related party payable	5,459		2,354
Accrued and other current liabilities	16,399		8,159
Deferred revenue	575		60
Current portion of interest payable	—		73
Current portion of long-term debt and capital lease obligations	3,072		10,237
Total current liabilities	34,480		24,896
Long-term debt and capital lease obligations	173,767		83,838
Other long-term liabilities	1,176		1,227
Total liabilities	209,423		109,961
Commitments and contingencies
Partners’ capital:
Predecessor equity	—		271,495
General partner interest	—		—
Limited partner interests, 23.8 million units outstanding	352,004		—
Total Enviva Partners, LP partners’ capital	352,004		271,495
Noncontrolling partners’ interests	3,003		3,033
Total partners’ capital	355,007		274,528
Total liabilities and partners’ capital	$	564,430	$	384,489

See accompanying notes to unaudited condensed consolidated financial statements

4

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except per unit amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
				(Predecessor)						(Predecessor)
Product sales	$	115,081		$	75,186		$	335,857		$	208,332
Other revenue	1,507			924			4,704			2,827
Net revenue	116,588			76,110			340,561			211,159
Cost of goods sold, excluding depreciation and amortization	96,238			63,277			279,858			184,887
Depreciation and amortization	6,294			4,767			21,587			14,308
Total cost of goods sold	102,532			68,044			301,445			199,195
Gross margin	14,056			8,066			39,116			11,964
General and administrative expenses	4,779			2,837			13,176			7,399
Income from operations	9,277			5,229			25,940			4,565
Other income (expense):
Interest expense	(2,887		)	(2,124		)	(7,576		)	(6,619		)
Related party interest expense	—			—			(1,097		)	—
Early retirement of debt obligation	—			—			(4,699		)	(73		)
Other income	9			4			24			16
Total other expense, net	(2,878		)	(2,120		)	(13,348		)	(6,676		)
Income (loss) before income tax expense	6,399			3,109			12,592			(2,111		)
Income tax expense	1			4			2,657			12
Net income (loss)	6,398			3,105			9,935			(2,123		)
Less net loss attributable to noncontrolling partners’ interests	14			19			30			61
Net income (loss) attributable to Enviva Partners, LP	$	6,412		$	3,124		$	9,965		$	(2,062	)
Less: Predecessor loss to May 4, 2015 (prior to IPO)							$	(2,132	)
Enviva Partners, LP partners’ interest in net income from May 4, 2015 to September 30, 2015							$	12,097
Net income per common unit:
Basic	$	0.27					$	0.51
Diluted	$	0.27					$	0.50
Net income per subordinated unit:
Basic	$	0.27					$	0.51
Diluted	$	0.27					$	0.50
Weighted average number of limited partner units outstanding:
Common — basic	11,906						11,906
Common — diluted	12,193						12,179
Subordinated — basic and diluted	11,905						11,905
Distribution declared per limited partner unit for respective periods	$	0.4400					$	0.7030

See accompanying notes to unaudited condensed consolidated financial statements

5

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Partners’ Capital

(In thousands)

(Unaudited)

				General Partner -		Partners’ Capital
	Net Parent			Incentive Distribution		Common Units – Public				Common Units - Sponsor				Subordinated Units - Sponsor				Non- controlling			Total Partners’
	Investment			Rights		Units	Amount			Units	Amount			Units	Amount			Interest			Capital
Balance as of December 31, 2014	$	271,495		$	—	—	$	—		—	$	—		—	$	—		$	3,033		$	274,528
Conveyance of Enviva Pellets Southampton, LLC to Hancock JV	(91,696		)	—		—	—			—	—			—	—			—			(91,696		)
Contribution of Enviva Cottondale Acquisition II, LLC	132,765			—		—	—			—	—			—	—			—			132,765
Distribution to sponsor	(4,152		)	—		—	—			—	—			—	—			—			(4,152		)
Expenses incurred by sponsor	3,088			—		—	—			—	—			—	—			—			3,088
Net income from January 1, 2015 to May 4, 2015 (prior to IPO)	(2,132		)	—		—	—			—	—			—	—			(9		)	(2,141		)
Balance as of May 4, 2015 (prior to IPO)	309,368			—		—	—			—	—			—	—			3,024			312,392
Net proceeds from initial public offering, net of deferred IPO costs	—			—		11,500	209,065			—	—			—	—			—			209,065
Distribution to sponsor	(172,550		)	—		—	—			—	—			—	—			—			(172,550		)
Allocation of net Parent investment to sponsor	(136,818		)	—		—	—			405	4,503			11,905	132,315			—			—
Issuance of common units under Long-Term Incentive Plan	—			—		1	—			—	—			—	—			—			—
Cash distribution, phantom units and distribution equivalent rights	—			—		—	(3,101		)	—	(107		)	—	(3,131		)	—			(6,339		)
Unit-based compensation	—			—		—	363			—	—			—	—			—			363
Net income - May 5, 2015 through September 30, 2015	—			—		—	5,843			—	206			—	6,048			(21		)	12,076
Partners’ Capital, September 30, 2015	$	—		$	—	11,501	$	212,170		405	$	4,602		11,905	$	135,232		$	3,003		$	355,007

See accompanying notes to unaudited condensed consolidated financial statements

6

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2015			2014
				(Predecessor)
Net income (loss)	$	9,935		$	(2,123	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	21,621			14,335
Amortization of debt issuance costs and original issue discount	1,229			1,516
General and administrative expense incurred by Enviva Holdings, LP	475			—
Allocation of income tax expense from Enviva Cottondale Acquisition I, LLC	2,663			—
Early retirement of debt obligation	4,699			73
Unit-based compensation expense	363			2
Other operating	(74		)	46
Change in operating assets and liabilities:
Accounts receivable	(9,954		)	(4,454		)
Prepaid expenses and other assets	(757		)	2,331
Inventories	(4,985		)	3,833
Other long-term assets	494			268
Accounts payable, accrued liabilities and other current liabilities	13,405			5,541
Accrued interest	33			(286		)
Deferred revenue	515			(536		)
Other long-term liabilities	—			384
Net cash provided by operating activities	39,662			20,930
Cash flows from investing activities:
Purchases of property, plant and equipment	(4,129		)	(13,860		)
Restricted cash	—			43
Payment of acquisition related costs	(3,573		)	—
Proceeds from the sale of equipment	277			25
Net cash used in investing activities	(7,425		)	(13,792		)
Cash flows from financing activities:
Principal payments on debt and capital lease obligations	(183,183		)	(40,117		)
Cash paid related to debt issuance costs	(5,123		)	—
Termination payment for interest rate swap derivatives	(146		)	—
Release of cash restricted for debt service	11,640			—
Cash restricted for debt service	—			(4,600		)
IPO proceeds, net	215,050			—
Cash distribution to sponsor	(176,702		)	—
Cash paid for deferred IPO costs	(1,790		)	—
Cash distribution to unitholders	(6,159		)	—
Proceeds from contributions from sponsor	10,236			—
Proceeds from debt issuance	178,505			37,000
Net cash provided by (used in) financing activities	42,328			(7,717		)
Net increase (decrease) in cash and cash equivalents	74,565			(579		)
Cash and cash equivalents, beginning of period	592			3,558
Cash and cash equivalents, end of period	$	75,157		$	2,979

See accompanying notes to unaudited condensed consolidated financial statements

7

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2015		2014
			(Predecessor)
Non-cash investing and financing activities:
The Partnership acquired property, plant and equipment in non-cash transactions as follows:
Property, plant and equipment acquired and included in accounts payable and accrued liabilities	$	1,431	$	327
Property, plant and equipment acquired and included in other assets as notes receivable	—		175
Property, plant and equipment acquired under capital leases	—		290
Property, plant and equipment acquired under notes payable	39		—
Property, plant and equipment transferred from prepaid expenses	173		—
Property, plant and equipment transferred from inventory	146		—
Contribution of Enviva Pellets Cottondale, LLC non-cash net assets	122,529		—
Application of deferred IPO costs to partners’ capital	5,913		—
IPO costs included in accounts payable and accrued liabilities	21		—
Distributions included in liabilities	179		—
Debt issuance costs included in accrued liabilities	66		—
Conveyance of Enviva Pellets Southampton, LLC to Hancock JV	91,696		—
Distribution of Enviva Pellets Cottondale, LLC assets to sponsor	354		—
Non-cash adjustments to financed insurance and prepaid expenses	105		—
Gain on disposal included in receivables	8		—
Financed insurance	—		2,157
Depreciation capitalized to inventories	409		242
Early retirement of debt obligation:
Deposit applied to principal outstanding under promissory note	—		391
Deposit applied to accrued interest under promissory note	—		154
Non-cash capital contributions from sponsor	339		1,083
Supplemental information:
Interest paid	$	7,369	$	5,181

See accompanying notes to unaudited condensed consolidated financial statements

8

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

(1)   Description of Business and Basis of Presentation

Enviva Partners, LP (the “Partnership”) is a Delaware limited partnership formed on November 12, 2013 as a wholly owned subsidiary of Enviva Holdings, LP (the “sponsor”). Through its interests in Enviva, LP (the “Predecessor”) and Enviva GP, LLC, the general partner of the Predecessor, the Partnership supplies utility-grade wood pellets to major power generators under long-term, take-or-pay off-take contracts. The Partnership acquires wood fiber from landowners and other suppliers, dries and processes that fiber into wood pellets at industrial-scale production plants and transports those products to deep-water marine terminals where they are stored and then distributed to customers. Wood pellets are sold principally to Northern European power generators who use them as a substitute fuel for coal in dedicated biomass or co-fired coal power plants.

The Partnership operates five industrial-scale wood pellet production plants located in the Mid-Atlantic and Gulf Coast regions of the United States. Wood pellets are exported from a wholly-owned deep-water marine terminal in Chesapeake, Virginia and from a third-party deep-water marine terminal in Mobile, Alabama under a long-term contract. Production from the Partnership’s wood pellet production plant in Cottondale, Florida (the “Cottondale plant”) is exported from a third-party terminal in Panama City, Florida, under a long-term contract.

On May 4, 2015, the Partnership completed an initial public offering (the “IPO”) of common units representing limited partner interests in the Partnership (see Note 2, Initial Public Offering). Prior to the closing of the IPO, the sponsor contributed to the Partnership its interests in the Predecessor, Enviva GP, LLC, and Enviva Cottondale Acquisition II, LLC (“Acquisition II”), which was the owner of Enviva Pellets Cottondale, LLC (“Cottondale”). The primary assets contributed to the Partnership by the sponsor included five industrial-scale wood pellet production plants and a wholly-owned deep-water terminal and long-term contractual arrangements to sell the wood pellets produced at the plants to third parties.

Until April 9, 2015, Enviva MLP Holdco, LLC, a wholly-owned subsidiary of the sponsor, was the owner of the Predecessor, and Enviva Cottondale Acquisition I, LLC (“Acquisition I”), a wholly-owned subsidiary of the sponsor, was the owner of Acquisition II.

In January 2015, the sponsor acquired Green Circle Bio Energy, Inc. (“Green Circle”), which owned the Cottondale plant. Acquisition I contributed it to the Partnership in April 2015 in exchange for subordinated units in the Partnership. Prior to such contribution, the sponsor converted Green Circle into a Delaware limited liability company and changed the name of the entity to “Enviva Pellets Cottondale, LLC.”

In connection with the closing of the Senior Secured Credit Facilities (as defined below) (see Note 10, Long-Term Debt and Capital Lease Obligations), on April 9, 2015, the Partnership, the Predecessor and the sponsor executed a series of transactions that were accounted for as common control transactions and are referred to as the “Reorganization:”

·Under a Contribution Agreement, the Predecessor conveyed 100% of the outstanding limited liability company interest in Enviva Pellets Southampton, LLC, which owns a wood pellet production plant in Southampton County, Virginia (the “Southampton plant”), to a joint venture between the sponsor and Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life Insurance Company (the “Hancock JV,” which is consolidated by the sponsor); and

·Under a separate Contribution Agreement by and among the sponsor, Enviva MLP Holdco, LLC, Acquisition I, the Predecessor and the Partnership, the parties executed the following transactions:

·The Predecessor distributed cash and cash equivalents of $1.7 million and accounts receivable of $2.4 million to the sponsor;

9

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

·The sponsor contributed to the Partnership 100% of the outstanding limited liability company interest in Acquisition II, the former owner of Cottondale (formerly Green Circle Bio Energy, Inc.), which owns the Cottondale plant;

·The sponsor contributed 100% of the outstanding interests in each of the Predecessor and Enviva GP, LLC to the Partnership; and

·The Partnership used $82.2 million of the proceeds from borrowings under the Senior Secured Credit Facilities to repay all outstanding indebtedness under the Predecessor’s $120.0 million senior secured credit facilities (the “Prior Senior Secured Credit Facilities”) and related accrued interest (see Note 10, Long-Term Debt and Capital Lease Obligations).

As a result of the Reorganization, the Partnership became the owner of the Predecessor, Enviva GP, LLC and Acquisition II.

On April 9, 2015, the Partnership also entered into a Master Biomass Purchase and Sale Agreement (the “Biomass Purchase Agreement”) pursuant to which the Hancock JV sells to the Partnership, at a fixed price per metric ton, wood pellets initially sourced from the production at the Southampton plant. The purchased wood pellets from the Hancock JV are sold to the Partnership’s customers under existing off-take contracts.

In connection with the closing of the IPO, under a Contribution Agreement by and among the sponsor, Enviva MLP Holdco, LLC, Acquisition I, the Predecessor and the Partnership, Acquisition II merged into the Partnership and the Partnership contributed its interest in Cottondale to the Predecessor.

The accompanying unaudited interim condensed consolidated financial statements (“interim statements”) of the Partnership have been prepared in connection with the completed IPO of common units representing limited partner interests in the Partnership. The accompanying interim statements include the accounts of the Predecessor and its subsidiaries and were prepared using the Predecessor’s historical basis. Prior to the IPO, certain of the assets and liabilities of the Predecessor were transferred to the Partnership within the sponsor’s consolidated group in a transaction under common control and, as such, the condensed consolidated historical financial statements of the Predecessor are presented as the Partnership’s historical financial statements as we believe they provide a representation of our management’s ability to execute and manage our business plan. As entities under common control, the contributed assets were recorded on the balance sheet at the Predecessor’s historical basis rather than fair value. The financial statements were prepared using the Predecessor’s historical basis in the assets and liabilities, and include all revenues, costs, assets and liabilities attributed to the Predecessor. The financial statements for periods prior to the Reorganization have been recast to reflect the contribution of the sponsor’s interests in the Predecessor and Enviva GP, LLC as if the contributions occurred at the beginning of the periods presented and the contribution of the sponsor’s interests in Acquisition II as if the contribution occurred on January 5, 2015. Enviva Pellets Southampton, LLC is not included in the Partnership’s condensed consolidated financial statements effective April 9, 2015, the date of the Reorganization.

10

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

The following table outlines the changes in consolidated net assets resulting from the contribution of Acquisition II to the Partnership and the conveyance of Enviva Pellets Southampton, LLC to the Hancock JV:

	Enviva Pellets Southampton, LLC			Acquisition II		Total
Assets:
Cash	$	—		$	10,236	$	10,236
Accounts receivable	(12		)	13,457		13,445
Inventories	(4,040		)	6,095		2,055
Prepaid expenses and other current assets	(130		)	507		377
Property, plant and equipment, net	(91,537		)	108,736		17,199
Intangibles, net	—			8,700		8,700
Goodwill	—			80,736		80,736
Other assets	—			58		58
Total assets	(95,719		)	228,525		132,806
Liabilities:
Accounts payable	(536		)	3,597		3,061
Accrued liabilities	(2,362		)	4,849		2,487
Long-term debt and capital leases	(1,076		)	87,314		86,238
Other liabilities	(49		)	—		(49		)
Total liabilities	(4,023		)	95,760		91,737
Net assets contributed to Partnership	$	(91,696	)	$	132,765	$	41,069

The following is a reconciliation of the Predecessor’s partners’ capital as of December 31, 2014 and total net assets contributed to the Partnership prior to the May 4, 2015 IPO:

Predecessor’s partners’ capital — December 31, 2014	$	274,528
Conveyance of Enviva Pellets Southampton, LLC to Hancock JV	(91,696		)
Distribution of cash to sponsor	(4,152		)
Contribution of Acquisition II	132,765
Expenses incurred by sponsor	3,088
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to Predecessor	(2,132		)
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to noncontrolling partners’ interest	(9		)
Predecessor’s partners’ capital — May 4, 2015 (prior to IPO)	$	312,392

The following summarized unaudited pro forma consolidated income statement information for the nine months ended September 30, 2015 and 2014 assumes that the contribution of the sponsor’s interests in the Predecessor and Enviva GP, LLC occurred on January 1, 2014 and that the contribution of the sponsor’s interests in Acquisition II occurred on January 1, 2014. The summarized unaudited pro forma financial results are prepared for comparative purposes only. The summarized unaudited pro forma financial results may not be indicative of the results that would have occurred if the contributions had been completed as of January 1, 2014 or the results that will be attained in the future.

	Nine Months Ended September 30,
	2015		2014
			(Predecessor)
Net revenue	$	340,561	$	316,108
Net income	9,935		13,751
Less net loss attributable to noncontrolling partners’ interests	30		61
Net income attributable to Enviva Partners, LP	9,965		13,812
Net income per limited partner unit:
Common — diluted	$	0.41
Subordinated — diluted	$	0.41

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

The following table presents the changes to previously reported amounts of the Partnership’s condensed consolidated statement of operations for the three months ended March 31, 2015 included in the Partnership’s quarterly report on Form 10-Q for the quarter ended March 31, 2015 to reflect the contribution of Acquisition II as if it had been contributed on January 5, 2015, the date on which the sponsor acquired Green Circle:

	Three Months Ended March 31, 2015
	As Reported			Acquisition II			Total
Product sales	$	70,983		$	42,162		$	113,145
Other revenue	1,168			—			1,168
Net revenue	72,151			42,162			114,313
Cost of goods sold, excluding depreciation and amortization	64,294			30,106			94,400
Depreciation and amortization	4,658			3,601			8,259
Total cost of goods sold	68,952			33,707			102,659
Gross margin	3,199			8,455			11,654
General and administrative expenses	3,310			460			3,770
(Loss) income from operations	(111		)	7,995			7,884
Other income (expense):
Interest expense	(1,916		)	(800		)	(2,716		)
Other income	3			3			6
Total other expense, net	(1,913		)	(797		)	(2,710		)
(Loss) income before income tax expense	(2,024		)	7,198			5,174
Income tax expense	—			2,663			2,663
Net (loss) income	(2,024		)	4,535			2,511
Less net loss attributable to noncontrolling partners’ interests	8			—			8
Net (loss) income attributable to Enviva Partners, LP	$	(2,016	)	$	4,535		$	2,519

The Partnership’s condensed consolidated statement of operations for the nine months ended September 30, 2015 includes income tax expense of $2.7 million related to the activities of the Cottondale plant, from the date of acquisition on January 5, 2015 through April 8, 2015. During this period, Cottondale was a corporate subsidiary of Acquisition II, a wholly-owned corporate subsidiary of Acquisition I, the corporate parent of the consolidated group. On April 7 and 8, 2015, Cottondale and Acquisition II, respectively, converted to limited liability companies. Prior to the contribution of Acquisition II to the Partnership on April 9, 2015, the financial results of Acquisition II and Cottondale were included in the consolidated federal income tax return of the tax paying entity, Acquisition I. As the income tax expense recorded for the period January 5, 2015 through April 9, 2015 related to the time that the Cottondale plant and Acquisition II were corporate subsidiaries of Acquisition I’s consolidated group, the income tax expense is reflected as an equity contribution on the books of Cottondale.

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments and accruals that are necessary for a fair presentation of the results of all interim periods presented herein and are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in the prospectus of Enviva Partners, LP as filed with the SEC on April 29, 2015 in connection with the IPO.

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)

(Unaudited)

(2)Initial Public Offering

On May 4, 2015, the Partnership completed an IPO of 11,500,000 common units, including common units issued upon exercise of the underwriter’s option, representing limited partner interests in the Partnership at a price to the public of $20.00 per unit ($18.80 per common unit, net of underwriting discounts and commissions) and constituting approximately 48.3% of the Partnership’s outstanding limited partner interests. The IPO was registered pursuant to a registration statement on Form S-1 originally filed on October 27, 2014, as amended (Registration No. 333-199625), that was declared effective by the SEC on April 28, 2015. The net proceeds from the IPO of approximately $215.1 million after deducting the underwriting discount and structuring fee were used to (i) repay intercompany indebtedness related to the acquisition of Green Circle in the amount of approximately $83.0 million and (ii) distribute approximately $86.7 million to the sponsor related to its contribution of assets to the Partnership in connection with the IPO, with the Partnership retaining $45.4 million for general partnership purposes, including offering expenses.

The sponsor owns 405,138 common units and all of the Partnership’s subordinated units, representing 51.7% of the Partnership’s limited partner interests. Enviva Partners GP, LLC, the Partnership’s general partner and a wholly-owned subsidiary of the sponsor (the “General Partner”), owns all the outstanding incentive distribution rights (“IDRs”).

(3)Significant Accounting Policies

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Partnership and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Certain amounts for the nine months ended September 30, 2014 have been reclassified to conform to the current presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the Partnership’s unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Segment and Geographic Information

Operating segments are defined as components of an enterprise about which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Partnership views its operations and manages its business as one operating segment. All long-lived assets of the Partnership are located in the United States.

Other Comprehensive Income (Loss)

Comprehensive loss includes net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that, under GAAP, are recorded as an element of partners’ capital but are excluded from net loss. The Partnership had no components of other comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014.

Net Income per Limited Partner Unit

The Partnership computes net income per unit using the two-class method as the Partnership has more than one class of participating securities, including common units, subordinated units, certain equity based-compensation awards and incentive distribution rights. The Partnership bases its calculation of net income per unit on the

13

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)

(Unaudited)

weighted-average number of common and subordinated limited partner units outstanding during the period. Diluted net income per unit includes the effects of potentially dilutive time-based and performance-based phantom units on our common units.

The General Partner owns a non-economic interest in the Partnership, which does not entitle it to receive cash distributions, but owns all of the outstanding IDRs as of September 30, 2015. Pursuant to the partnership agreement, IDRs represent the right to receive increasing percentages (ranging from 15% to 50%) of quarterly distributions from operating surplus after the minimum quarterly distribution and certain target distribution levels have been achieved. Net income per unit applicable to limited partners (including the holder of subordinated units) is computed by dividing limited partners’ interest in net income by the weighted-average number of outstanding common and subordinated units.

Income Taxes

The Partnership and sponsor are pass-through entities and are not considered taxable entities for federal income tax purposes. Therefore, there is not a provision for U.S. federal and most state income taxes in the accompanying condensed consolidated financial statements. The Partnership’s net income or loss is allocated to its partners in accordance with the partnership agreement. The partners are taxed individually on their share of the Partnership’s earnings. At September 30, 2015 and December 31, 2014, the Partnership and sponsor did not have any liabilities for uncertain tax position or gross unrecognized tax benefit. Some states impose franchise and capital taxes on the Partnership. Such taxes are not material to the condensed consolidated financial statements and have been included in other income (expense) as incurred. Income tax expense for the nine months ended September 30, 2015 includes expense incurred by Acquisition II prior to being contributed to the Partnership.

Cash and Cash Equivalents

Cash and cash equivalents consist of short-term, highly liquid investments readily convertible into cash with an original maturity of three months or less.

Restricted Cash

The Predecessor funded a restricted debt service reserve account in connection with the Prior Senior Secured Credit Facilities (see Note 10, Long-Term Debt and Capital Lease Obligations). The restricted debt service reserve account was released as a result of the repayment in full of the Prior Senior Secured Credit Facilities on April 9, 2015.

Revenue Recognition

The Partnership primarily earns revenue by supplying wood pellets to customers under long-term, U.S. dollar-denominated contracts (also referred to as “off-take” contracts). The Partnership refers to the structure of the contracts as “take-or-pay” because they include a firm obligation to take a fixed quantity of product at a stated price and provisions that ensure the Partnership will be made whole in the case of the customer’s failure to accept all or a part of the contracted volumes or for termination by the customer. Each contract defines the annual volume of wood pellets that the customer is required to purchase and the Partnership is required to sell, the fixed price per metric ton for product satisfying a base net calorific value and other technical specifications, and, in some instances, provides for price adjustments for actual product specification and changes in underlying costs. Revenues from the sale of wood pellets are recognized when the goods are shipped, title passes, the sales price to the customer is fixed and collectability is reasonably assured.

Depending on the specific off-take contract, shipping terms are either Cost, Insurance and Freight (“CIF”) or Free on Board (“FOB”). Under a CIF contract, the Partnership procures and pays for shipping costs, which include insurance and all other charges, up to the port of destination for the customer. These costs are included in the price to the customer and, as such, are included in revenue and cost of goods sold. Under a FOB contract, the customer is directly responsible for shipping costs.

14

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)

(Unaudited)

In some cases, the Partnership may purchase shipments of product from a third-party supplier and resell them in back-to-back transactions that immediately transfer title and risk of loss to the ultimate purchaser. Thus, the revenue from these transactions is recorded net of costs paid to the third-party supplier. The Partnership records this revenue as “Other revenue.”

In instances when a customer requests the cancellation, deferral or acceleration of a shipment, the customer may pay a fee, including reimbursement of any incremental costs incurred by the Partnership, which is included in revenue.

Cost of Goods Sold

Cost of goods sold includes the costs to produce and deliver wood pellets to customers. Raw material, production and distribution costs associated with delivering wood pellets to the ports and third-party wood pellet purchase costs are capitalized as a component of inventory. Fixed production overhead, including the related depreciation expense, is allocated to inventory based on the normal capacity of the facilities. These costs are reflected in cost of goods sold when inventory is sold. Distribution costs associated with shipping wood pellets to customers and amortization are expensed as incurred. Inventory is recorded using FIFO, which requires the use of judgment and estimates. Given the nature of the inventory, the calculation of cost of goods sold is based on estimates used in the valuation of the FIFO inventory and in determining the specific composition of inventory that is sold to each customer.

The Partnership entered into the Biomass Purchase Agreement pursuant to which the Hancock JV sells certain volumes of wood pellets per month to the Partnership at a fixed price per metric ton. The pellets purchased from the Hancock JV are sold to the Partnership’s customers under existing off-take contracts (see Note 11, Related Party Transactions).

Additionally, the purchase price of acquired customer contracts that were recorded as intangible assets are amortized as deliveries are made during the contract term.

Derivative Instruments

The Predecessor used derivative financial instruments to manage its exposure to fluctuations in interest rates on long-term debt as required per the terms of the Prior Senior Secured Credit Facilities (see Note 10, Long-Term Debt and Capital Lease Obligations). The Partnership does not hold or issue derivative financial instruments for trading or speculative purposes. The Predecessor accounted for the interest rate swaps by recognizing all derivative financial instruments on the condensed consolidated balance sheets at fair value. The Predecessor’s interest rate swap agreements were not designated as hedges; therefore, the gain or loss was recognized in the condensed consolidated statements of operations in interest expense. In connection with the repayment of the Prior Senior Secured Credit Facilities in April 2015 (see Note 10, Long-Term Debt and Capital Lease Obligations), the Predecessor terminated the interest rate swaps and paid a termination fee of $0.1 million. The Partnership does not currently hold any interest rate swaps or derivative financial instruments.

Debt Issuance Costs and Original Issue Discount

Debt issuance costs represent legal fees and other direct expenses associated with securing the Partnership’s credit agreements and are capitalized on the condensed consolidated balance sheets as other long-term assets. Original issue discounts are recorded on the condensed consolidated balance sheets within the carrying amount of long-term debt. Debt issuance costs and original issue discount are amortized over the term of the related debt using straight line amortization, which approximates the effective interest rate method.

The Predecessor and the Partnership primarily incurred debt issuance costs and original issue discount in connection with the Prior Senior Secured Credit Facilities and Senior Secured Credit Facilities, respectively (see Note 10, Long-Term Debt and Capital Lease Obligations). Debt issuance costs, net at September 30, 2015 and December 31, 2014, was $4.7 million and $3.6 million, respectively.

15

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)

(Unaudited)

Gains or losses on debt extinguishment include any associated unamortized debt issuance costs and original issue discount.

Deferred Issuance Costs

Deferred issuance costs primarily consist of legal, accounting, printing and other fees relating to the IPO. These costs were offset against the proceeds of the IPO. As of September 30, 2015 and December 31, 2014, the Partnership had $0 and $4.1 million of deferred issuance costs, respectively.

Intangible Assets

In April 2015, the sponsor contributed net assets to the Partnership associated with the acquisition of Green Circle in January 2015, which included intangible assets related to favorable customer contracts. The Partnership also recorded payments made to acquire a six-year wood pellet off-take contract with a European utility in 2010 as an intangible asset. These costs are recoverable through the future revenue streams generated from the customer contracts and are closely related to the revenue from the customer contracts. These costs are recorded as an asset and charged to expense as the revenue is recognized. All other costs, such as general and administrative expenses and costs associated with the negotiation of a contract that is not consummated, are charged to expense as incurred.

Intangible assets are evaluated for impairment when events and changes in circumstances indicate the carrying value may not be recoverable. At September 30, 2015, intangible assets included favorable customer contract and an acquired customer contract, and at December 31, 2014, intangible assets included an acquired customer contract. The customer contract intangible assets are amortized as deliveries are completed during the contract terms (see Note 9, Goodwill and Other Intangible Assets).

Goodwill

Goodwill represents the purchase price paid for an acquired business in excess of the identifiable acquired assets and assumed liabilities. Goodwill is not amortized, but is tested for impairment annually and whenever an event occurs or circumstances change such that it is more likely than not that the fair value of the reporting unit is less than its carrying amounts. The Partnership has identified one reporting unit which corresponds to the Partnership’s one segment and has selected the fourth fiscal quarter to perform its annual goodwill impairment test.

A qualitative assessment is first made to determine whether it is necessary to perform quantitative testing. If this initial qualitative assessment indicates that it is more likely than not that the fair value is more than its carrying value, goodwill is not considered impaired and the Partnership is not required to perform the two-step impairment test. Qualitative factors considered in this assessment include (i) macroeconomic conditions, (ii) past, current and projected future financial performance, (iii) industry and market considerations, (iv) changes in the costs of raw materials, fuel and labor and (v) entity-specific factors such as changes in management or customer base.

If the results of the qualitative assessment indicate that it is more likely than not that goodwill is impaired, the Partnership will perform a two-step impairment test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill.

16

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)

(Unaudited)

For the years ended December 31, 2014 and 2013, the Predecessor applied the qualitative test and determined that it was more likely than not that the estimated fair value of the reporting unit substantially exceeded the related carrying value, and, accordingly, was not required to apply the two-step impairment test. The Predecessor has not recorded any goodwill impairment for the years ended December 31, 2014 and 2013 (see Note 9, Goodwill and Other Intangible Assets).

Unit-Based Compensation

Employees, consultants and directors of the General Partner and any of its affiliates are eligible to receive awards under the Enviva Partners, LP Long-Term Incentive Plan. For accounting purposes, units granted to employees of the Partnership’s affiliates are treated as if they are distributed by the Partnership. In May, June and July 2015, phantom units in tandem with corresponding distribution equivalent rights were granted to employees of Enviva Management Company, LLC who provide services to the Partnership and to certain non-employee directors of the General Partner. These awards vest subject to the satisfaction of service requirements or the achievement of certain performance goals, following which common units in the Partnership will be delivered to the holder of the phantom units. Affiliate entities recognize compensation expense for the phantom units awarded to their employees and a portion of that expense is allocated to the Partnership (see Note 13, Equity-Based Awards). The Partnership’s outstanding unit-based awards do not have a cash option and are classified as equity on the Partnership’s condensed consolidated balance sheets. The Partnership also recognizes compensation expense for units awarded to non-employee directors.

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant and equipment and amortizable intangible assets, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that a long-lived asset or asset group be tested for possible impairment, the Partnership first compares undiscounted cash flows expected to be generated by that asset or asset group to such asset or asset group’s carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Fair Value Measurements

The Partnership applies authoritative accounting guidance for fair value measurements of financial and nonfinancial assets and liabilities. The Partnership uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Partnership determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

·Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

·Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

·Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

17

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)

(Unaudited)

Recent and Pending Accounting Pronouncements

In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, to amend the guidance for amounts that are adjusted in a merger or acquisition. The standard eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement period adjustments that occur in periods after a business combination is consummated. The ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The standard simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value for entities using the first-in, first-out method of valuing inventory. ASU No. 2015-11 eliminates other measures required by current guidance to determine net realizable value. ASU No. 2015-11 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years and early adoption is permitted. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-06, Earnings Per Share (Topic 260)—Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions—a consensus of the FASB Emerging Issues Task Force (EITF). The amendments in ASU No. 2015-06 apply to master limited partnerships subject to the Master Limited Partnerships Subsections of Topic 260 that receive net assets through a dropdown transaction that is accounted for under the Transactions Between Entities Under Common Control Subsections of Subtopic 805-50, Business Combinations—Related Issues. When a general partner transfers, or “drops down,” net assets to a master limited partnership and that transaction is accounted for as a transaction between entities under common control, the statements of operations of the master limited partnership are adjusted retrospectively to reflect the dropdown transaction as if it occurred on the earliest date during which the entities were under common control. The amendments in ASU No. 2015-06 specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required. The amendments in ASU No. 2015-06 are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The amendments in ASU No. 2015-06 should be applied retrospectively for all financial statements presented. The Partnership is evaluating the new pronouncement to determine the impact it may have on its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Topic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 requires the presentation of debt issuance costs in the balance sheet as a reduction from the related debt liability rather than as an asset. The amortization of such costs will continue to be reported as interest expense. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and allows early adoption for financial statements that have not been previously issued. The update requires retrospective application upon adoption. Upon adoption, the Partnership expects to reclassify amounts included as debt issuance costs within total assets on the consolidated balance sheet to a reduction of long-term debt within total liabilities on the consolidated balance sheet for all periods presented. The adoption is not expected to have an impact on the periodic amount amortized.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new standard reduces the number of consolidation models and simplifies their application. The amendments in ASU No. 2015-02 are intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships and similar legal entities. The amendments simplify the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments (1) eliminate the presumption that a general partner should consolidate a limited partnership, (2) eliminate the indefinite deferral of FASB Statement No. 167, thereby reducing the number of variable interest entity (“VIE”) consolidation models from four to two (including the limited partnership consolidation model), (3) clarify when fees paid to a decision maker should be a factor to include in the consolidation of VIEs, (4) amend the guidance for assessing how related party relationships affect VIE consolidation analysis and (5) exclude certain money market funds from the consolidation guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The standard allows early adoption, including early adoption in an interim period. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements.

18

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)

(Unaudited)

In January 2015, the FASB issued ASU No. 2015-01, Income Statement-Extraordinary and Unusual Items. The new standard eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU No. 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. The standard is effective for periods beginning after December 15, 2015 and early adoption is permitted. The adoption is not expected to have a material effect on the Partnership’s consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The new standard provides new guidance on the recognition of revenue and states that an entity should recognize revenue when control of the goods or services transfers to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. The new standard also requires significantly expanded disclosure regarding qualitative and quantitative information about the nature, timing and uncertainty of revenue and cash flow arising from contracts with customers. On July 9, 2015, the FASB approved a one-year delay in the effective date of ASU No. 2014-09. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The standard permits the use of either applying retrospectively the amendment to each prior reporting period presented or retrospectively with the cumulative effect of initially applying at the date of initial application. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements and has not determined which implementation method will be adopted.

(4)   Significant Risks and Uncertainties Including Business and Credit Concentrations

The Partnership’s business is significantly impacted by greenhouse gas emission and renewable energy legislation and regulations in the European Union (the “E.U.”). If the E.U. significantly modifies such legislation and regulations, the Partnership’s ability to enter into new contracts as the current contracts expire may be materially affected.

The Partnership’s primary industrial customers are located in Northern Europe. Three customers accounted for 92% of the Partnership’s product sales during the three months ended September 30, 2015 and 94% during the nine months ended September 30, 2015. Three customers accounted for 100% of the Partnership’s product sales during the three months ended September 30, 2014 and 99% during the nine months ended September 30, 2014.

The Partnership’s cash and cash equivalents are placed in or with various financial institutions. The Partnership has not experienced any losses on such accounts and does not believe it has any significant risk in this area.

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)

(Unaudited)

(5)Property, Plant and Equipment

Property, plant and equipment consisted of the following at:

	September 30, 2015			December 31, 2014
				(Predecessor)
Land	$	12,429		$	11,984
Land improvements	29,600			24,899
Buildings	59,686			57,275
Machinery and equipment	263,756			259,186
Vehicles	505			768
Furniture and office equipment	1,711			1,736
	367,687			355,848
Less accumulated depreciation	(49,103		)	(40,858		)
	318,584			314,990
Construction in progress	3,055			1,269
Total property, plant and equipment, net	$	321,639		$	316,259

Total depreciation expense was $4.7 million and $15.7 million for the three and nine months ended September 30, 2015, respectively, and $4.7 million and $14.1 million for the three and nine months ended September 30, 2014, respectively.

(6)Inventories

Inventories consisted of the following at:

	September 30, 2015		December 31, 2014
			(Predecessor)
Raw materials and work-in-process	$	5,910	$	6,880
Consumable tooling	7,559		6,934
Finished goods	11,897		4,250
Total inventories	$	25,366	$	18,064

(7)Derivative Instruments

The Partnership has used interest rate swaps that meet the definition of a derivative instrument to manage changes in interest rates on its variable-rate debt instruments.

The Prior Credit Agreement required the Predecessor to swap a minimum of 50% of the term loan balance outstanding under the Prior Senior Secured Credit Facilities. In connection with the issuance of the Prior Senior Secured Credit Facilities (see Note 10, Long-Term Debt and Capital Lease Obligations), the Predecessor entered into floating-to-fixed interest rate swaps (the Partnership received a floating market rate and paid a fixed interest rate) to manage the interest rate exposure related to the Prior Senior Secured Credit Facilities. All indebtedness outstanding under the Prior Senior Secured Credit Facilities was repaid in full on April 9, 2015, and the related interest rate swaps were terminated.

For the three and nine months ended September 30, 2015, the Partnership recorded $0 and an insignificant amount as interest expense related to the change in fair value of the interest rate swaps. The Partnership recorded insignificant amounts related to the change in the fair value of the interest rate swap agreements for the three and nine months ended September 30, 2014 as interest expense.

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)

(Unaudited)

In connection with the repayment of the Prior Senior Secured Credit Facilities in April 2015 (see Note 10, Long Term Debt and Capital Lease Obligations), the Partnership terminated the interest rate swaps and paid a termination fee of $0.1 million.

(8)Fair Value Measurements

The amounts reported in the condensed consolidated balance sheets as cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other assets, accounts payable, related party payable and accrued liabilities approximate fair value because of the short-term nature of these instruments.

Interest rate swaps and long-term and short-term debt are classified as Level 2 instruments due to the usage of market prices not quoted on active markets and other observable market data. The carrying amount of Level 2 instruments approximates fair value as of September 30, 2015 and December 31, 2014.

(9)Goodwill and Other Intangible Assets

Acquired Intangible Assets

Intangible assets consisted of the following at:

		September 30, 2015							December 31, 2014
	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Favorable customer contracts	3 years	$	8,700	$	(5,698	)	$	3,002	$	—	$	—		$	—
Wood pellet contract	6 years	1,750		(1,247		)	503		1,750		(1,028		)	722
Total		$	10,450	$	(6,945	)	$	3,505	$	1,750	$	(1,028	)	$	722

In April 2015, the sponsor contributed net assets to the Partnership associated with the acquisition of Green Circle in January 2015, including intangible assets related to favorable customer contracts. The Partnership also recorded payments made to acquire a six-year wood pellet contract with a European utility in 2010 as an intangible asset. These costs are recoverable through the future revenue streams generated from the customer contracts and are closely related to the revenue from the customer contracts. The Partnership amortizes the customer contract intangible assets as deliveries are completed during the respective contract terms. During the three and nine months ended September 30, 2015, amortization of $1.6 million and $5.9 million, respectively, was included in cost of goods sold in the accompanying condensed consolidated statements of operations. During the three and nine months ended September 30, 2014, amortization of $0.1 million and $0.2 million, respectively, was included in cost of goods sold in the accompanying condensed consolidated statements of operations.

Goodwill

In 2015, the Partnership recorded an addition to goodwill of $80.7 million as part of the acquisition of Cottondale by the sponsor and its contribution to the Partnership as part of the Reorganization. Goodwill also resulted from the acquisition of a business from IN Group Companies and the acquisition of a company now known as Enviva Pellets Amory, LLC, both in 2010.

(10)Long-Term Debt and Capital Lease Obligations

Senior Secured Credit Facilities

On April 9, 2015, the Partnership entered into a Credit Agreement (the “Credit Agreement”) providing for $199.5 million aggregate principal amount of senior secured credit facilities (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities consist of (i) $99.5 million aggregate principal amount of Tranche A-1 advances, (ii) $75.0 million aggregate principal amount of Tranche A-2 advances and (iii) up to $25.0 million aggregate principal amount of revolving credit commitments. The Partnership will also be able to request loans under incremental facilities under the Credit Agreement on the terms and conditions and in the maximum aggregate principal amounts set forth therein, provided that lenders provide commitments to make loans under such incremental facilities.

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

The Senior Secured Credit Facilities mature in April 2020. Borrowings under the Senior Secured Credit Facilities bear interest, at the Partnership’s option, at either a base rate plus an applicable margin or at a Eurodollar rate (with a 1.00% floor for term loan borrowings) plus an applicable margin. The applicable margin is (i) for Tranche A-1 base rate borrowings, 3.10% through April 2017, 2.95% thereafter through April 2018 and 2.80% thereafter, and for Tranche A-1 Eurodollar rate borrowings, 4.10% through April 2017, 3.95% thereafter through April 2018 and 3.80% thereafter and (ii) 3.25% for Tranche A-2 base rate borrowings and revolving facility base rate borrowings and 4.25% for Tranche A-2 Eurodollar rate borrowings and revolving facility Eurodollar rate borrowings. The applicable margin for revolving facility borrowings will be reduced by 0.50% if the Total Leverage Ratio (as defined below) is less than or equal to 2.00:1.00. During the continuance of an event of default, overdue amounts under the Senior Secured Credit Facilities will bear interest at 2.00% plus the otherwise applicable interest rate.

The Partnership borrowed the full amount of the Tranche A-1 and Tranche A-2 facilities at the closing of the Credit Agreement. Of the total proceeds from borrowings under the Tranche A-1 and Tranche A-2 facilities, $82.2 million was used to repay all outstanding indebtedness under the Prior Senior Secured Credit Facilities and related accrued interest, $6.4 million was used to pay closing fees and expenses, and the balance of $85.9 million was used to make a distribution to the sponsor. Borrowings under the revolving facility may be used for working capital requirements and general partnership purposes, including the issuance of letters of credit.

The Senior Secured Credit Facilities include customary lender and agency fees, including a 1.00% fee that was paid to the lenders at the closing of the Credit Agreement and a commitment fee payable on undrawn revolving facility commitments of 0.50% per annum (subject to a stepdown to 0.375% per annum if the Total Leverage Ratio is less than or equal to 2.00:1.00). Letters of credit issued under the revolving facility are subject to a fee calculated at the applicable margin for revolving facility Eurodollar rate borrowings.

Interest is payable quarterly for loans bearing interest at the base rate and at the end of the applicable interest period for loans bearing interest at the Eurodollar rate. The principal amount of the Tranche A-1 facility is payable in quarterly installments of 0.50% through March 2017, 0.75% thereafter through March 2018 and 1.25% thereafter, in each case subject to a quarterly increase of 0.50% during each year if less than 75% of the aggregate projected production capacity of the wood pellet production plants for the two-year period beginning on January 1 of such year is contracted to be sold during such period pursuant to certain qualifying off-take contracts. The principal amount of the Tranche A-2 facility is payable in equal quarterly installments of 0.25%. No amortization is required with respect to the principal amount of the revolving facility. All outstanding amounts under the Senior Secured Credit Facilities will be due and the letter of credit commitments will terminate on the maturity date or upon earlier prepayment or acceleration.

As of September 30, 2015, the Partnership had $97.4 million, net of $1.1 million unamortized original issue discount, of outstanding Tranche A-1 advances and $73.9 million, net of $0.7 million unamortized original issue discount, outstanding of Tranche A-2 advances priced at the Eurodollar rate, with an effective rate of 5.1% and 5.25%, respectively.

The Partnership had $5.0 million outstanding under the letter of credit facility as of September 30, 2015. The letters of credit were issued in connection with contracts between the Partnership and third parties, in the ordinary course of business. The amounts required to be secured with letters of credit under these contracts may be adjusted or cancelled based on the specific third-party contract terms. The amounts outstanding as of September 30, 2015 are subject to automatic extensions through the termination dates of the letters of credit facilities. The letters of credit are not cash collateralized and no debt is outstanding as of September 30, 2015. The Partnership pays a fee of 3.75% on the outstanding letters of credit.

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

The Partnership is required to make mandatory prepayments of the Senior Secured Credit Facilities with the proceeds of certain asset sales and debt incurrences. The Partnership may voluntarily prepay the Senior Secured Credit Facilities in whole or in part at any time without premium or penalty, except that prepayments of any portion of the Tranche A-1 or Tranche A-2 facilities made in connection with a repricing transaction (as well as any repricing of the Senior Secured Credit Facilities) prior to the six-month anniversary of the Credit Agreement closing date will incur a premium of 1.00% of amounts prepaid (or repriced).

The Credit Agreement contains certain covenants, restrictions and events of default including, but not limited to, a change of control restriction and limitations on the Partnership’s ability to (i) incur indebtedness, (ii) pay dividends or make other distributions, (iii) prepay, redeem or repurchase certain debt, (iv) make loans and investments, (v) sell assets, (vi) incur liens, (vii) enter into transactions with affiliates, (viii) consolidate or merge and (ix) assign certain material contracts to third parties or unrestricted subsidiaries. The Partnership will be restricted from making distributions if an event of default exists under the Credit Agreement or if the interest coverage ratio (determined as the ratio of consolidated EBITDA, as defined in the Credit Agreement, to consolidated interest expense, determined quarterly) is less than 2.25:1.00 at such time.

Pursuant to the Credit Agreement, the Partnership is required to maintain, as of the last day of each fiscal quarter, a ratio of total debt to consolidated EBITDA (“Total Leverage Ratio”), as defined in the Credit Agreement, of not more than a maximum ratio, initially set at 4.25:1.00 and stepping down to 3.75:1.00 during the term of the Credit Agreement; provided that the maximum permitted Total Leverage Ratio will be increased by 0.50:1.00 for the period from the consummation of certain qualifying acquisitions through the end of the second full fiscal quarter thereafter.

As of September 30, 2015, the Partnership was in compliance with all covenants and restrictions associated with, and no events of default existed under, the Credit Agreement. The obligations under the Credit Agreement are guaranteed by certain of the Partnership’s subsidiaries and secured by liens on substantially all assets.

Prior Senior Secured Credit Facilities

In November 2012, the Predecessor entered into a Credit and Guaranty Agreement (the “Prior Credit Agreement”) that provided for a $120.0 million aggregate principal amount of senior secured credit facilities (the “Prior Senior Secured Credit Facilities”). The Prior Senior Secured Credit Facilities consisted of (i) $35.0 million aggregate principal amount of Tranche A advances, (ii) up to $60.0 million aggregate principal amount of delayed draw term commitments, (iii) up to $15.0 million aggregate principal amount of working capital commitments and (iv) up to $10.0 million aggregate principal amount of letter of credit facility commitments. The Prior Senior Secured Credit Facilities were repaid in full, including related accrued interest, in the amount of $82.2 million on April 9, 2015, the date of the closing of the Senior Secured Credit Facilities. The Partnership funded the repayment with a portion of borrowings under the Senior Secured Credit Facilities. For the three and nine months ended September 30, 2015, the Partnership recorded $0 and a $4.7 million loss, respectively, on early retirement of debt obligation related to the repayment. The loss includes a $3.2 million write off of unamortized deferred issuance costs and a $1.5 million write off of unamortized discount. In August 2015, the Partnership cancelled a $4.0 million letter of credit previously issued under the terms of the Prior Senior Secured Credit Facilities. At September 30, 2015, the Partnership had no outstanding letters of credit in connection with the Prior Senior Secured Credit Facilities.

Related Party Notes Payable

In connection with the January 5, 2015 acquisition of Green Circle, the sponsor made a term advance of $36.7 million to Green Circle under a revolving note. The revolving note accrued interest at an annual rate of 4.0%. In connection with the acquisition, the sponsor also advanced its wholly-owned subsidiary, Acquisition II, $50.0 million under a note payable accruing interest at an annual rate of 4.0%. Cottondale repaid $4.8 million of the outstanding principal in March 2015. As a result of the sponsor’s contribution of Acquisition II, which owned Cottondale, to the Partnership on April 9, 2015, the Partnership recorded $81.9 million of outstanding principal and $0.9 million of accrued interest related to these notes.

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

In connection with the closing of the IPO on May 4, 2015, the related party notes payable outstanding principal of $81.9 million and accrued interest of $1.1 million were repaid by the Partnership to the sponsor. During the three and nine months ended September 30, 2015, $0 and $1.1 million, respectively, was incurred as related party interest expense.

Long-term debt, at carrying value which approximates fair value, and capital lease obligations consisted of the following:

	September 30, 2015			December 31, 2014
				(Predecessor)
	(unaudited)
Senior Secured Credit Facilities, Tranche A-1 Advances, net of unamortized discount of $1.1 million as of September 30, 2015, with quarterly interest payments beginning June 30, 2015 at a Eurodollar Rate of 5.10% at September 30, 2015. A principal payment of $0.5 million is due quarterly through March 2017, $0.7 million is due quarterly June 2017 through March 2018, $1.2 million is due quarterly June 2018 through December 2019, and the final payment of $83.8 million is due on the April 9, 2020 maturity date	$	97,379		$	—
Senior Secured Credit Facilities, Tranche A-2 Advances, net of unamortized discount of $0.7 million as of September 30, 2015, with quarterly interest payments beginning June 30, 2015 at a Eurodollar Rate of 5.25% at September 30, 2015. A principal payment of $0.2 million is due quarterly through December 2019, and the final payment of $71.4 million is due on the April 9, 2020 maturity date	73,946			—
Prior Senior Secured Credit Facilities, Tranche A Advances, net of unamortized discount of $1.6 million as of December 31, 2014, with quarterly interest payments	—			29,718
Prior Senior Secured Credit Facilities, delayed draw term commitments with elected quarterly interest payments beginning the first quarter following the day that the cash was drawn	—			57,000
Enviva Pellets Wiggins construction loan, with monthly principal and interest (at an annual rate of 6.35%) payments of $32.9 and a lump sum payment of $2.4 million due on the October 18, 2016 maturity date	2,603			2,770
Enviva Pellets Wiggins working capital line, with monthly principal and interest (at an annual rate of 6.35%) payments of $10.3 and a lump sum payment of $743.3 due on the October 18, 2016 maturity date	813			864
Enviva Pellets Amory note, with principal and accrued interest (at an annual rate of 6.0%) due on the August 4, 2017 maturity date	2,000			2,000
Enviva Pellets Southampton promissory note, with principal and interest in the amount of $0.9 million that was due on the June 8, 2017 maturity date. Present value for 3 years at an annual rate of 7.6%	—			729
Other loans	40			419
Capital leases	58			575
Total long-term debt and capital lease obligations	176,839			94,075
Less current portion of long-term debt and capital lease obligations	(3,072		)	(10,237		)
Long-term debt and capital lease obligations, excluding current installments	$	173,767		$	83,838

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

The aggregate maturities of long-term debt and capital lease obligations are as follows:

Year Ending December 31:
2015	$	666
2016	5,708
2017	3,117
2018	6,850
2019	5,335
Thereafter	155,163
Total long-term debt and capital lease obligations	$	176,839

(11)Related Party Transactions

Management Services Agreement

On April 9, 2015, the Partnership, the General Partner, the Predecessor, Enviva GP, LLC and certain subsidiaries of the Predecessor (collectively, the “Service Recipients”) entered into a five-year Management Services Agreement (the “MSA”) with Enviva Management Company, LLC (the “Provider”), a subsidiary of Enviva Holdings, LP, pursuant to which the Provider provides the Service Recipients with general administrative and management services and other similar services (the “Services”). Under the terms of the MSA, the Service Recipients are required to reimburse the Provider the amount of all direct or indirect, internal or third-party expenses incurred, including without limitation: (i) the portion of the salary and benefits of the employees engaged in providing the Services reasonably allocable to the Service Recipients; (ii) the charges and expenses of any third party retained to provide any portion of the Services; (iii) office rent and expenses and other overhead costs incurred in connection with, or reasonably allocable to, providing the Services; (iv) amounts related to the payment of taxes related to the business of the Service Recipients; and (v) costs and expenses incurred in connection with the formation, capitalization, business or other activities of the Provider pursuant to the MSA.

Direct or indirect, internal or third-party expenses incurred are either directly identifiable or allocated to the Partnership by the Provider. The Provider estimates the percentage of salary, benefits, third-party costs, office rent and expenses and any other overhead costs associated with the Services to be provided to the Partnership. Each month, the Provider allocates the actual costs accumulated in the financial accounting system. The Provider charges the Partnership for any directly identifiable costs such as goods or services provided at the Partnership’s request.

During the three and nine months ended September 30, 2015, the Partnership incurred $9.3 million and $21.7 million, respectively, related to the MSA. Of these amounts, during the three and nine months ended September 30, 2015, $4.9 million and $11.0 million, respectively, is included in cost of goods sold and $3.3 million and $9.6 million, respectively, is included in general and administrative expenses on the condensed consolidated statement of operations. At September 30, 2015, $1.1 million of amounts incurred under the MSA is included in finished goods inventory.

Prior Management Services Agreement

On November 9, 2012, the Predecessor entered into a six-year management services agreement (the “Prior MSA”) with Enviva Holdings, LP (the “Service Provider”) to provide the Predecessor with general administrative and management services and other similar services (the “Prior Services”). Under the Prior MSA, the Predecessor incurred the following costs:

·A maximum annual fee in the amount of $7.2 million may be charged by the Service Provider. Under the Prior MSA, during the three and nine months ended September 30, 2015, the Predecessor incurred $0 and $2.2 million, respectively, and during the three and nine months ended September 30, 2014, the Predecessor incurred $1.9 million and $4.8 million, respectively, for the annual fee to the Service Provider. These amounts are included in general and administrative expenses on the condensed consolidated statement of operations.

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

·The Predecessor reimbursed the Service Provider for all direct or indirect costs and expenses incurred by, or chargeable to, the Service Provider in connection with the Prior Services. This included (1) the portion of the salary and benefits of employees engaged in providing the Prior Services reasonably allocable to the provision of the Prior Services, excluding those included in the annual fee, (2) the charges and expenses of any third party retained by the Service Provider to provide any portion of the Prior Services and (3) office rent and expenses and other overhead costs of the Service Provider incurred in connection with, or reasonably allocable to, providing the Prior Services (collectively, “Reimbursable Expenses”). During the three and nine months ended September 30, 2015, the Predecessor incurred $0 and $0.8 million, respectively, of Reimbursable Expenses to the Service Provider which are included in general and administrative expenses and an insignificant amount is included in cost of goods sold on the condensed consolidated statements of operations. During the three months ended September 30, 2014, the Predecessor incurred $0.6 million of Reimbursable Expenses to the Service Provider of which $0.5 million is included in general and administrative expenses and $0.1 million is included in cost of goods sold. During the nine months ended September 30, 2014, the Predecessor incurred $2.0 million of Reimbursable Expenses to the Service Provider of which $1.6 million is included in general and administrative expenses and $0.4 million is included in cost of goods sold.

As of September 30, 2015, $2.8 million is included in related party payable related to the MSA, and as of December 31, 2014, the Predecessor had $2.4 million included in related party payable related to the Prior MSA.

During the three and nine months ended September 30, 2015, the Partnership capitalized deferred issuance costs that were paid by the Service Provider of $0 million and $0.9 million, respectively, and during the three and nine months ended September 30, 2014, $0.2 million and $1.0 million, respectively. These costs, which consist of direct incremental legal and professional accounting fees related to the IPO, were recognized as an offset against proceeds upon the consummation of the IPO.

During the three and nine months ended September 30, 2015, the Predecessor recorded $0 and $0.5 million, respectively, of general and administrative expenses that were incurred by the Service Provider and recorded as a capital contribution. The Predecessor did not record any general and administrative expenses that were incurred by the Service Provider during the three and nine months ended September 30, 2014. The Prior MSA automatically terminated upon the execution of the MSA.

Biomass Purchase and Terminal Services Agreements

In April 2015, the Partnership entered into the Biomass Purchase Agreement pursuant to which the Hancock JV sells to the Partnership, at a fixed price per metric ton, certain volumes of wood pellets per month through August 2017. The Partnership sells the wood pellets purchased from the Hancock JV to customers under the Partnership’s existing off-take contracts. During the three and nine months ended September 30, 2015, $19.2 million and $35.9 million, respectively, of wood pellets were purchased from the Hancock JV of which $18.3 million and $34.7 million, respectively, is reflected in cost of goods sold and $1.2 million in inventories as finished goods at September 30, 2015. The Partnership also entered into a terminal services agreement pursuant to which the Partnership provides terminal services at the Chesapeake port for the production from the Hancock JV that is not sold to the Partnership under the Biomass Purchase Agreement. During the three and nine months ended September 30, 2015, the Partnership purchased all wood pellets produced by the Hancock JV and therefore no terminal service fees were recorded. At September 30, 2015, related party payables include $2.4 million related to the wood pellets purchased from the Hancock JV.

Related Party Notes Payable

The net assets contributed by the sponsor included notes payable issued by the sponsor to related parties. In January 2015, the sponsor issued a revolving note to Green Circle in the amount of $36.7 million and issued a note payable to Acquisition II in the amount of $50.0 million. In connection with the closing of the IPO on May 4, 2015, the related party notes payable outstanding principal of $81.9 million and accrued interest of $1.1 million were repaid by the Partnership (see Note 10, Long-Term Debt and Capital Lease Obligations).

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

(12)Partners’ Capital

In connection with the closing of the IPO, the Partnership recapitalized the outstanding limited partner interests held by the sponsor into 405,138 common units and 11,905,138 subordinated units representing a 51.7% ownership interest in the Partnership as of the closing of the IPO. In addition, the sponsor is the owner of our General Partner and the General Partner holds the incentive distribution rights.

Allocations of Net Income

The partnership agreement contains provisions for the allocation of net income and loss to the unitholders and the General Partner. For purposes of maintaining partner capital accounts, the partnership agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage ownership interest. Normal allocations according to percentage interests are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions allocated 100% to the General Partner.

Incentive Distribution Rights

Incentive distribution rights represent the right to receive increasing percentages (ranging from 15.0% to 50.0%) of quarterly distributions from operating surplus after distributions in amounts exceeding specified target distribution levels have been achieved. The General Partner currently holds the incentive distribution rights, but may transfer these rights at any time.

Cash Distributions

The partnership agreement sets forth the calculation to be used to determine the amount of cash distributions that our common and subordinated unitholders and sponsor will receive.

On July 29, 2015, the Partnership declared the first cash distribution totaling $6.3 million, or $0.2630 per unit. The distribution was calculated based on the minimum quarterly distribution of $0.4125, prorated for the period from May 4, 2015 to June 30, 2015. This distribution was paid on August 31, 2015 to unitholders of record on August 14, 2015. On October 28, 2015, the Partnership declared a cash distribution of $10.5 million, or $0.4400 per unit. The distribution will be paid on November 27, 2015 to unitholders of record as of the close of business on November 17, 2015. No distributions have been declared for the holders of incentive distribution rights.

For purposes of calculating the Partnership’s earnings per unit under the two-class method, common units are treated as participating preferred units, and the subordinated units are treated as the residual equity interest, or common equity. Incentive distribution rights are treated as participating securities.

Distributions made in future periods based on the current period calculation of cash available for distribution are allocated to each class of equity that will receive the distribution. Any unpaid cumulative distributions are allocated to the appropriate class of equity.

The Partnership determines the amount of cash available for distribution for each quarter in accordance with the partnership agreement. The amount to be distributed to common unitholders, subordinated unitholders and incentive distribution rights holders is based on the distribution waterfall set forth in the partnership agreement. Net earnings for the quarter are allocated to each class of partnership interest based on the distributions to be made. Additionally, if, during the subordination period, the Partnership does not have enough cash available to make the required minimum distribution to the common unitholders, the Partnership will allocate net earnings to the common unitholders based on the amount of distributions in arrears. When actual cash distributions are made based on distributions in arrears, those cash distributions will not be allocated to the common unitholders, as such earnings were allocated in previous quarters.

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

(13)Equity - Based Awards

Long-Term Incentive Plan

Effective April 30, 2015, the General Partner adopted the Enviva Partners, LP Long-Term Incentive Plan (“LTIP”) for employees, consultants and directors of the General Partner and any of its affiliates that perform services for the Partnership. The LTIP provides for the grant, from time to time, at the discretion of the board of directors of the General Partner or a committee thereof, of unit options, unit appreciation rights, restricted units, phantom units, distribution equivalent rights (“DERs”), unit awards, and other unit-based awards. The LTIP limits the number of common units that may be delivered pursuant to awards under the plan to 2,738,182 common units. Common units subject to awards that are forfeited, cancelled, exercised, paid, or otherwise terminate or expire without the actual delivery of common units will be available for delivery pursuant to other awards.

On May 4, 2015, the Board granted 227,253 phantom units in tandem with corresponding DERs to employees of the Provider who provide services to the Partnership (the “Affiliate Grants”), and 14,112 phantom units in tandem with corresponding DERs to certain non-employee directors of the General Partner (the “Director Grants”). On June 3, 2015, the Board granted additional Affiliate Grants consisting of 27,141 phantom units in tandem with corresponding DERs. On July 29, 2015, the Board granted additional Affiliate Grants consisting of 27,760 phantom units in tandem with corresponding DERs. The phantom units and corresponding DERs are subject to certain vesting and forfeiture provisions. Award recipients do not have all the rights of a unitholder with respect to the phantom units until the phantom units have vested and been settled. Awards of the phantom units are settled in common units within 60 days after the applicable vesting date. If a phantom unit award recipient experiences a termination of service under certain circumstances set forth in the applicable award agreement, the unvested phantom units and corresponding DERs are forfeited.

The Director Grants have an aggregate grant date fair value of $0.3 million and vest on the first anniversary of the grant date. For the three and nine months ended September 30, 2015, the Partnership recorded an insignificant amount of compensation expense with respect to the Director Grants. As of September 30, 2015, the unrecognized unit-based compensation expense for the Director Grants is insignificant.

Of the total Affiliate Grants, 200,351 phantom units vest on the third anniversary of the grant date and 81,803 phantom units vest on the achievement of specific performance milestones. The fair value of the Affiliate Grants was $5.8 million based on the market price per unit on the date of grant. These units are accounted for as if they are distributed by the Partnership. The fair value of Affiliate grants is remeasured by the provider at each reporting period until the award is settled. Compensation cost recorded each period will vary based on the change in the award’s fair value. For awards with performance goals, the expense is accrued only if the performance goals are considered to be probable of occurring. The Provider recognizes unit-based compensation expense for the units awarded and a portion of that expense is allocated to the Partnership. The Provider allocates unit-based compensation expense to the Partnership in the same manner as other corporate expenses. The Partnership’s portion of the unit-based compensation expense is included in general and administrative expenses. During both the three and nine months ended September 30, 2015, the Partnership recognized an insignificant amount and $0.2 million, respectively, of general and administrative expense associated with these awards.

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ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per unit amounts and unless otherwise noted)
(Unaudited)

The following table summarizes information regarding phantom unit awards for the periods presented:

	Number of Units	Weighted- Average Grant Date Fair Value per Unit (1)
Phantom units outstanding at December 31, 2014	—	$	—
Granted	296,266	$	20.58
Phantom units outstanding at September 30, 2015	296,266	$	20.58

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

The DERs associated with the Director Grants and the Affiliate Grants entitle the recipients to receive payments equal to any distributions made by the Partnership to the holders of common units within 60 days following the record date for such distributions. The DERs associated with the performance-based Affiliate Grants will remain outstanding and unpaid from the grant date until the earlier of the settlement or forfeiture of the related phantom units. Distributions related to DERs for the three and nine months ended September 30, 2015 were not significant.

(14)Net Income per Limited Partner Unit

Net income (loss) per unit applicable to limited partners (including subordinated unitholders) is computed by dividing limited partners’ interest in net income (loss), after deducting any incentive distributions, by the weighted-average number of outstanding common and subordinated units. The Partnership’s net income (loss) is allocated to the limited partners in accordance with their respective ownership percentages, after giving effect to priority income allocations for incentive distributions, if any, to the holder of the IDRs, pursuant to the partnership agreement, which are declared and paid following the close of each quarter. Earnings (losses) per unit is only calculated for the Partnership for the periods following the IPO as no units were outstanding prior to May 4, 2015. Earnings in excess of distributions are allocated to the limited partners based on their respective ownership interests. Payments made to the Partnership’s unitholders are determined in relation to actual distributions declared and are not based on the net income (loss) allocations used in the calculation of earnings per unit.

In addition to the common and subordinated units, the Partnership has also identified the IDRs and phantom units as participating securities and uses the two-class method when calculating the net income (loss) per unit applicable to limited partners, which is based on the weighted-average number of common units outstanding during the period. Diluted net income per unit includes the effects of potentially dilutive time-based and performance-based phantom units on the Partnership’s common units. Basic and diluted earnings (losses) per unit applicable to subordinated limited partners are the same because there are no potentially dilutive subordinated units outstanding.

The table below shows the weighted-average common units outstanding used to compute net income (loss) per common unit for the three and nine months ended September 30, 2015.

	Three Months Ended September 30, 2015	Nine Months Ended September 30, 2015
Weighted average limited partner common units—basic	11,905,739	11,905,509
Dilutive effect of unvested phantom units	287,516	273,848
Weighted average limited partner common units—diluted	12,193,255	12,179,357

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

References in this Quarterly Report to the “Predecessor,” “our Predecessor,” “we,” “our,” “us” or like terms for periods prior to April 9, 2015 refer to Enviva, LP and its subsidiaries (other than Enviva Pellets Cottondale, LLC (“Cottondale”)). References to the “Partnership,” “we,” “our,” “us” or like terms for periods on and after April 9, 2015 refer to Enviva Partners, LP and its subsidiaries. References to “our sponsor” refer to Enviva Holdings, LP, together with its wholly-owned subsidiaries Enviva MLP Holdco, LLC and Enviva Development Holdings, LLC. References to “our General Partner” refer to Enviva Partners GP, LLC, a wholly-owned subsidiary of Enviva Holdings, LP. References to “Enviva Management” refer to Enviva Management Company, LLC, an entity wholly-owned by Enviva Holdings, LP and its affiliates, and references to “our employees” refer to the employees of Enviva Management. References to the “Hancock JV” refer to Enviva Wilmington Holdings, LLC, a joint venture between our sponsor, Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life Insurance Company. Our sponsor consolidates the Hancock JV.

The following discussion of our historical performance, financial condition and future prospects should be read in conjunction with our unaudited condensed consolidated financial statements, and the notes thereto, set forth herein. The following information and such unaudited condensed consolidated financial statements should also be read in conjunction with the audited consolidated financial statements and related notes, together with our discussion and analysis of financial condition and results of operations, in the prospectus related to our initial public offering (the “IPO”) dated April 28, 2015 as filed with the Securities and Exchange Commission (the “SEC”) on April 29, 2015 (the “Prospectus”).

Basis of Presentation

The following discussion of our historical performance and financial condition is derived from our Predecessor’s unaudited condensed consolidated financial statements and the unaudited condensed consolidated financial statements of Enviva Pellets Cottondale, LLC. On April 9, 2015, the Partnership, the Predecessor and our sponsor executed a series of transactions that were accounted for as common control transactions (the “Reorganization”). On April 9, 2015, our sponsor contributed some but not all of our Predecessor’s assets and liabilities to us. Specifically, our sponsor’s interest in Enviva Pellets Southampton, LLC was excluded from the April 9, 2015 contribution as it was distributed to a consolidated entity of the sponsor (the “Hancock JV”) on April 9, 2015. Accordingly, the condensed consolidated financial results for the three- and nine-month periods ended September 30, 2014 discussed below include capital expenditures and other costs related to certain assets that were not contributed to us in connection with the IPO. Additionally, our sponsor contributed its interest in Cottondale, which owns a 650,000 metric ton per year (“MTPY”) wood pellet production plant in Cottondale, Florida (the “Cottondale plant”), to us on April 9, 2015. Because entities that were contributed by or distributed to our sponsor are considered entities under common control, we have recorded them at historical cost. The condensed consolidated financial statements for periods prior to the IPO are the results of our Predecessor and its subsidiaries and include all revenues, costs, assets and liabilities attributed to our Predecessor after the elimination of all intercompany accounts and transactions. The condensed consolidated financial statements for the period after the IPO pertain to our operations. Our condensed consolidated financial statements for periods prior to April 9, 2015 have been recast to reflect the contribution of our sponsor’s interest in our Predecessor and Enviva GP, LLC as if the contributions occurred at the beginning of the periods presented and in Enviva Cottondale Acquisition II, LLC (“Acquisition II”) as if the contribution occurred on January 5, 2015, which is the date on which our sponsor acquired Green Circle Bio Energy, Inc., (“Green Circle”), which owned the Cottondale plant.

Business Overview

We own and operate five production plants in the Southeastern U.S. that have a combined wood pellet production capacity of 1.7 million MTPY. We also own a dry-bulk, deep-water marine terminal at the Port of Chesapeake (the “Chesapeake terminal”). Under our existing off-take contracts, we are required through 2016 to deliver wood pellet quantities approximately equal to all of the production capacity of our production plants plus the wood pellets we purchase from the Hancock JV. From 2017 through 2021, our contracted quantities are more than half of the production capacity of our production plants. Our off-take contracts provide for sales of 2.3 million MT of wood pellets in 2015 and have a weighted average remaining term of 5.4 years from October 1, 2015. We intend to expand our business by taking advantage of the growing demand for our products that is driven by the conversion of coal-fired power generation and combined heat and power plants to co-fired or dedicated biomass-fired plants, principally in Northern Europe and, increasingly, in South Korea and Japan.

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Initial Public Offering

On April 29, 2015, the Partnership’s common units began trading on the NYSE under the ticker symbol “EVA.” On May 4, 2015, the Partnership closed the IPO of 11,500,000 common units to the public at a price of $20.00 per common unit, which included a 1,500,000 common unit over-allotment option that was exercised in full by the underwriters.

Prior to or in connection with the closing of the IPO, the following transactions, among others, occurred:

·On April 9, 2015, our sponsor contributed its interests in each of Enviva Pellets Cottondale, LLC, Enviva, LP and Enviva GP, LLC, the general partner of Enviva, LP, to us;

·On April 9, 2015, our Predecessor distributed its interest in Enviva Pellets Southampton, LLC to the Hancock JV;

·The Predecessor distributed cash and cash equivalents of $1.7 million and accounts receivable of $2.4 million to the sponsor;

·On May 4, 2015, we issued 405,138 common units and 11,905,138 subordinated units to our sponsor; and

·On May 4, 2015, we issued the incentive distribution rights to our General Partner.

The Partnership received net proceeds of approximately $215.1 million from the IPO, after deducting the underwriting discount and structuring fee.

How We Evaluate Our Operations

Adjusted Gross Margin per Metric Ton

We use adjusted gross margin per metric ton to measure our financial performance. We define adjusted gross margin as gross margin excluding depreciation and amortization included in cost of goods sold. We believe adjusted gross margin per metric ton is a meaningful measure because it compares our off-take pricing to our operating costs for a view of profitability and performance on a per metric ton basis. Adjusted gross margin per metric ton will primarily be affected by our ability to meet targeted production volumes and to control direct and indirect costs associated with procurement and delivery of wood fiber to our production plants and the production and distribution of wood pellets.

Adjusted EBITDA

We view adjusted EBITDA as an important indicator of performance. We define adjusted EBITDA as net income or loss excluding depreciation and amortization, interest expense, taxes, early retirement of debt obligation, non-cash unit compensation expense, asset impairments and disposals and certain items of income or loss that we characterize as unrepresentative of our operations. Adjusted EBITDA is a supplemental measure used by our management and other users of our financial statements, such as investors, commercial banks and research analysts, to assess the financial performance of our assets without regard to financing methods or capital structure.

Distributable Cash Flow

We define distributable cash flow as adjusted EBITDA less maintenance capital expenditures and interest expense net of amortization of debt issuance costs and original issue discount. Distributable cash flow is used as a supplemental measure by our management and other users of our financial statements as it provides important information relating to the relationship between our financial operating performance and our ability to make cash distributions.

Non-GAAP Financial Measures

Adjusted gross margin per metric ton, adjusted EBITDA and distributable cash flow are not financial measures presented in accordance with generally accepted accounting principles (“GAAP”). We believe that the presentation of these non-GAAP financial measures provides useful information to investors in assessing our financial condition and results of operations. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures. Each of these non-GAAP financial measures has important limitations as an analytical tool because they exclude some, but not all, items that affect the most directly comparable GAAP financial measures. You should not consider adjusted gross margin per metric ton, adjusted EBITDA or distributable cash flow in isolation or as substitutes for analysis of our results as reported under GAAP.

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Our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

The following tables present a reconciliation of each of adjusted gross margin per metric ton, adjusted EBITDA and distributable cash flow to the most directly comparable GAAP financial measure for each of the periods indicated.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
			(Predecessor)				(Predecessor)
	(in thousands, except per metric ton)
Reconciliation of gross margin to adjusted gross margin per metric ton:
Metric tons sold	602		397		1,746		1,094
Gross margin	$	14,056	$	8,066	$	39,116	$	11,964
Depreciation and amortization (1)	6,294		4,767		21,587		14,308
Adjusted gross margin	$	20,350	$	12,833	$	60,703	$	26,272
Adjusted gross margin per metric ton	$	33.80	$	32.32	$	34.77	$	24.01

(1)Excludes depreciation of office furniture and equipment. Such amount is included in general and administrative expenses.

	Three Months Ended September 30,					Nine Months Ended September 30,
	2015			2014		2015			2014
				(Predecessor)					(Predecessor)
	(in thousands)
Reconciliation of distributable cash flow and adjusted EBITDA to net income (loss):
Net income (loss)	$	6,398		$	3,105	$	9,935		$	(2,123	)
Add:
Depreciation and amortization	6,306			4,777		21,621			14,335
Interest expense	2,887			2,124		8,673			6,619
Early retirement of debt obligation	—			—		4,699			73
Purchase accounting adjustment to inventory	—			—		697			—
Non-cash unit compensation expense	180			1		363			2
Income tax expense	1			4		2,657			12
Asset impairments and disposals	(127		)	—		(100		)	62
Acquisition transaction expenses	257			—		257			—
Adjusted EBITDA	$	15,902		$	10,011	$	48,802		$	18,980
Less:
Interest expense net of amortization of debt issuance costs and original issue discount	2,532			1,619		7,444			5,103
Maintenance capital expenditures	735			184		2,342			184
Distributable cash flow	$	12,635		$	8,208	$	39,016		$	13,693

Factors Impacting Comparability of Our Financial Results

Our future results of operations and cash flows may not be comparable to our historical consolidated results of operations and cash flows, principally for the following reasons:

Our sponsor contributed its interest in Enviva Pellets Cottondale, LLC to us on April 9, 2015. On January 5, 2015, our sponsor acquired Green Circle, which owned the Cottondale plant. Our sponsor converted the entity into a Delaware limited liability company, changed the name of the entity to Cottondale and, on April 9, 2015, contributed its interests in Cottondale. On May 4, 2015, we contributed our interests in Cottondale to Enviva, LP. Our condensed consolidated financial statements have been recast to reflect the contribution of our sponsor’s interest in Cottondale as if the contributions occurred on the January 5, 2015 acquisition date. The three and nine months ended September 30, 2014 do not include revenues or operating costs for the Cottondale plant.

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Our Predecessor distributed Enviva Pellets Southampton, LLC to the Hancock JV on April 9, 2015. Prior to April 9, 2015, our Predecessor owned Enviva Pellets Southampton, LLC, which owns a 510,000 MTPY production plant located in Southampton County, Virginia (the “Southampton plant”). On April 9, 2015, our Predecessor conveyed its interest in Enviva Pellets Southampton, LLC to the Hancock JV, and we entered into a Master Biomass Purchase and Sale Agreement (the “Biomass Purchase Agreement”) pursuant to which the Hancock JV sells to us, at a fixed price per metric ton, wood pellets initially sourced from the production at the Southampton plant. As a result, our condensed consolidated financial statements for the periods following April 9, 2015 do not include operating costs for the Southampton plant.

We entered into the Senior Secured Credit Facilities and repaid all amounts outstanding under the Prior Senior Secured Credit Facilities. On April 9, 2015, we entered into a Credit Agreement (the “Credit Agreement”) for an aggregate $199.5 million senior secured credit facilities (the “Senior Secured Credit Facilities”) comprised of $99.5 million of Tranche A-1 advances, $75.0 million of Tranche A-2 advances and $25.0 million of revolving credit commitments of which $82.2 million was used to repay all amounts outstanding under the Prior Senior Secured Credit Facilities (as defined below). As a result, our condensed consolidated financial statements for periods following April 9, 2015 reflect the outstanding debt and interest expense related to the Credit Agreement.

Revenue and costs for deliveries to customers can vary significantly between periods depending upon the specific shipment and reimbursement for expenses, including the then-current cost of fuel. Depending on the specific off-take contract, shipping terms are either Cost, Insurance and Freight (“CIF”) or Free on Board (“FOB”). Under a CIF contract, we procure and pay for shipping costs, which include insurance and all other charges, up to the port of destination for the customer. These costs are included in the price to the customer and, as such, are included in revenue and cost of goods sold. Under a FOB contract, the customer is directly responsible for shipping costs. We have one FOB contract in connection with which we have subsequently executed an annual shipping contract for a portion of the volume, creating financial and operating obligations and economics similar to a “Cost and Freight” (“C&F”) contract. Our customer shipping terms, as well as the timing and size of shipments during the year, can result in material fluctuations in our revenue recognition between periods, but these terms generally have little impact on gross margin.

We incur additional general and administrative expenses as a publicly traded limited partnership that we have not previously incurred. We estimate we will incur, on an annual basis, approximately $3.0 million in additional general and administrative expenses as a publicly traded limited partnership that we have not previously incurred, including costs associated with compliance under the Securities Exchange Act of 1934, preparation and distribution of annual and quarterly reports, tax returns and Schedule K-1s to our unitholders, investor relations, registrar and transfer agent fees, audit fees, incremental director and officer liability insurance costs and director and officer compensation. Actual costs could differ significantly from our estimate.

How We Generate Revenue

Overview

We primarily earn revenue by supplying wood pellets to our customers under long-term, U.S. dollar-denominated contracts (also referred to as “off-take” contracts). We refer to the structure of our contracts as “take-or-pay” because they include a firm obligation to take a fixed quantity of product at a stated price and provisions that ensure we will be made whole in the case of a customer’s failure to accept all or a part of the contracted volumes or for termination by a customer. Each contract defines the annual volume of wood pellets that a customer is required to purchase and we are required to sell, the fixed price per metric ton for product satisfying a base net calorific value and other technical specifications. These prices are fixed for the entire term, subject to annual inflation-based adjustments and price escalators, as well as, in some instances, price adjustments for product specifications and changes in underlying costs. As a result, our revenue over the duration of these contracts may not follow spot market pricing trends. Our revenues from the sale of wood pellets are recognized when the goods are shipped, title passes, the sales price to the customer is fixed and collectability is reasonably assured.

Depending on the specific off-take contract, shipping terms are either CIF or FOB. Under a CIF contract, we procure and pay for shipping costs, which include insurance and all other charges, up to the port of destination for the customer. These costs are included in the price to the customer and, as such, are included in revenue and cost of goods sold. Under an FOB contract, the customer is directly responsible for shipping costs. We have one FOB contract where we have executed an annual shipping contract for a portion

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of the annual volume, creating economics similar to a C&F contract. Our customer shipping terms, as well as the timing and size of shipments during the year, can result in material fluctuations in our revenue recognition between periods but generally have little impact on gross margin.

The majority of the wood pellets we supply to our customers are produced at our production plants. In addition, we have entered into the Biomass Purchase Agreement, effective April 2015 through May 2016, pursuant to which the Hancock JV sells to us certain production volumes from the Southampton plant at a fixed price upon delivery to our Chesapeake terminal. We also fulfill our contractual commitments and take advantage of dislocations in market supply and demand by purchasing shipments from third parties and reselling them in back-to-back transactions. In transactions where title and risk of loss are immediately transferred to the ultimate purchaser, revenue is recorded net of costs paid to the third-party supplier. This revenue is included in “Other revenue.”

In some instances, a customer may request to cancel, defer or accelerate a shipment. Contractually, we will seek to optimize our position by selling or purchasing the subject shipment to or from another party, either within our contracted off-take portfolio or as an independent transaction on the spot market. In most instances, the original customer pays us a fee including reimbursement of any incremental costs, which is included in revenue.

Contracted Backlog

We have entered into off-take contracts with annual delivery requirements that approximate our estimated available production capacity. As of September 30, 2015, we had approximately $1.6 billion of product sales backlog for firm contracted product sales to E.ON UK PL, Drax Power Limited, GDF SUEZ Energy Management Trading and other major power generators. Backlog represents the revenue to be recognized under existing contracts assuming deliveries occur as specified in the contract.

Our expected future product sales revenue under our contracted backlog as of September 30, 2015 is as follows (in millions):

October 1, 2015 - December 31, 2015	$	84
Year ending December 31, 2016	366
Year ending December 31, 2017 and thereafter	1,119
Total product sales contracted backlog	$	1,569

Costs of Conducting Our Business

Cost of Goods Sold

Cost of goods sold includes the costs to produce and deliver our wood pellets to customers. The principal expenses to produce and deliver our wood pellets consist of raw material, production and distribution costs.

We have strategically located our plants in the Southeastern U.S., a region with plentiful wood fiber resources. We manage the supply of raw materials into our plants through a mixture of short-term and long-term contracts. Delivered wood fiber costs include stumpage (i.e., the price paid to the underlying timber resource owner for the raw material) as well as harvesting, transportation and, in some cases, size reduction services provided by our suppliers. The majority of our product volumes are sold under contracts that include cost pass-through mechanisms to mitigate increases in raw material and distribution costs.

Production costs at our production plants consist of labor, energy, tooling, repairs and maintenance and plant overhead costs. Our off-take contracts include price escalators that mitigate inflationary pressure on certain components of our production costs. In addition to the wood pellets that we produce at our owned and operated production plants, we selectively purchase additional quantities of wood pellets from third-party wood pellet producers. We entered into the Biomass Purchase Agreement pursuant to which the Hancock JV sells certain volumes of wood pellets per month to us, at a fixed price per metric ton. Production costs also include depreciation expense associated with the use of our plants and equipment that increases as assets are placed into service.

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Distribution costs include all transport costs from our plants to our port locations, any storage or handling costs while the product remains at port and shipping costs related to the delivery of our product from our port locations to our customers. Both the strategic location of our plants and our ownership or control of our ports has allowed for the efficient and cost-effective transport of our wood pellets. We mitigate shipping risk by entering into long-term, fixed-price shipping contracts with reputable shippers matching the terms and volumes of our contracts for which we are responsible for arranging shipping. Certain of our off-take contracts include pricing adjustments for volatility in fuel prices, which create a pass-through for the majority of fuel price risk associated with shipping to our customers.

Additionally, we amortize the purchase price of acquired customer contracts that were recorded as intangibles as deliveries are made during the applicable contract term.

Raw material, production and distribution costs associated with delivering our wood pellets to our ports and third-party pellet purchase costs are capitalized as a component of inventory. Fixed production overhead, including the related depreciation expense, is allocated to inventory based on the normal capacity of the facilities. These costs are reflected in cost of goods sold when inventory is sold. Distribution costs associated with shipping our wood pellets to our customers and amortization are expensed as incurred.

General and Administrative Expenses

We incurred general and administrative costs related to a Management Services Agreement (the “Prior MSA”) with our sponsor that covered the corporate salary and overhead expenses associated with our business. Under the Prior MSA, we paid an annual fee and reimbursed our sponsor for direct and indirect expenses it incurred on our behalf. Effective April 9, 2015, all of our employees and management became employed by Enviva Management, and we and our General Partner entered into a new management services agreement (the “MSA”) with Enviva Management. The Prior MSA automatically terminated upon the execution of the MSA. Under the MSA, direct and indirect costs and expenses are either directly identifiable or allocated to us. Enviva Management estimates the percentage of employee salary and related benefits, third-party costs, office rent and expenses and any other overhead costs to be provided to us. We are charged for any directly identifiable costs such as goods or services provided to us at our request. We believe the assumptions and allocations were made on a reasonable basis and were the best estimate of the costs that we would have incurred on a stand-alone basis.

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Results of Operations

Three Months Ended September 30, 2015 Compared to Three Months Ended September 30, 2014

	Three Months Ended September 30,
	2015			2014			Change
	(Predecessor)(in thousands)
Product sales	$	115,081		$	75,186		$	39,895
Other revenue	1,507			924			583
Net revenue	116,588			76,110			40,478
Cost of goods sold, excluding depreciation and amortization	96,238			63,277			32,961
Depreciation and amortization(1)	6,294			4,767			1,527
Total cost of goods sold	102,532			68,044			34,488
Gross margin	14,056			8,066			5,990
General and administrative expenses	4,779			2,837			1,942
Income from operations	9,277			5,229			4,048
Interest expense	(2,887		)	(2,124		)	(763		)
Other income	9			4			5
Net income before income tax expense	6,399			3,109			3,290
Income tax expense	1			4			(3		)
Net income	6,398			3,105			3,293
Less net loss attributable to noncontrolling partners’ interests	14			19			(5		)
Net income attributable to Enviva Partners, LP	$	6,412		$	3,124		$	3,288

(1)Excludes depreciation of office furniture and equipment of $12 and $10 for the three months ended September 30, 2015 and 2014, respectively. Such amounts are included in general and administrative expenses.

Net revenue

Net revenue was $116.6 million and $76.1 million for the three months ended September 30, 2015 and 2014, respectively, and was comprised of product sales and other revenue, which are discussed below.

Product sales

Revenue related to product sales (either produced by us or procured from a third party) increased $39.9 million from $75.2 million for the three months ended September 30, 2014 to $115.1 million for the three months ended September 30, 2015. The increase was primarily a result of increased sales volume. During the three months ended September 30, 2015, we sold approximately 205,000 more MT of wood pellets than during the three months ended September 30, 2014. This increase was primarily due to approximately 129,000 MT of sales under contracts acquired with the Cottondale plant. In addition, the prior year period was negatively affected by a maintenance outage at one of our customer’s plants that resulted in our agreeing to a financial settlement to delay and, in some cases cancel, specific contracted quantities. The higher sales were enabled by higher production from our existing facilities as well as Cottondale plant production. A pricing benefit attributable to the mix of contracts had a modest favorable impact on revenues.

Other revenue

Other revenue increased to $1.5 million for the three months ended September 30, 2015 from $0.9 million for the three months ended September 30, 2014 primarily due to a purchase and sale transaction on behalf of our existing customer base. In these agency-related transactions, we do not bear the risk of loss or take title to the wood pellets purchased from a third party and accordingly the transaction is presented on a net basis. Other revenue is also comprised of terminal services and other professional fees.

Cost of goods sold

Cost of goods sold increased to $102.5 million for the three months ended September 30, 2015 from $68.0 million for the three months ended September 30, 2014. The $34.5 million increase was primarily due to increased wood pellet sales volumes during the three months ended September 30, 2015 compared to the three months ended September 30, 2014. Cost of goods sold included depreciation and amortization expenses of $6.3 million and $4.8 million for the three months ended September 30, 2015 and 2014, respectively.

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Gross margin

We earned gross margin of $14.1 million and $8.1 million for the three months ended September 30, 2015 and 2014, respectively. The gross margin increase of $6.0 million was primarily attributable to the following:

·We sold approximately 602,000 MT of wood pellets during the three months ended September 30, 2015 as compared to approximately 397,000 MT during the corresponding prior year quarter, a 52% increase. The incremental volumes sold accounted for $6.6 million of the gross margin increase.

·Favorable pricing on customer contracts during the three months ended September 30, 2015 as compared to the three months ended September 30, 2014 added $1.0 million of gross margin. The pricing benefit is attributable to the mix of contracts during the three month period as well as fees earned from a customer who requested modification in delivery schedules for contracted and scheduled shipments.

·Lower export shipping costs contributed $1.0 million to gross margin during the three months ended September 30, 2015 as compared to the three months ended September 30, 2014. The favorable cost position is attributable to the mix of shipping contracts utilized during the quarter.

·Increased plant utilization combined with decreased wood fiber costs resulted in a $1.1 million decrease in the cost position of delivered pellets. Also, lower fuel costs resulted in reduced to-port logistics costs for all plants during the three months ended September 30, 2015. The decrease in cost position was offset by the higher per unit cost of wood pellets purchased under the Biomass Purchase Agreement compared to the per unit cost of producing wood pellets at our plants. The pellets purchased under the Biomass Purchase Agreement added $2.4 million of costs during the three months ended September 30, 2015 as compared to the three months ended September 30, 2014.

·A $1.5 million increase in depreciation and amortization during the three months ended September 30, 2015 as compared to the corresponding prior year period further decreased gross margin. The increase is attributable to depreciation on the Cottondale plant assets and amortization of favorable customer contracts acquired as part of the Cottondale acquisition.

Adjusted gross margin per metric ton

	Three Months Ended September 30,
	2015		2014		Change
			(Predecessor)
	(in thousands except per metric ton)
Reconciliation of gross margin to adjusted gross margin per metric ton:
Metric tons sold	602		397		205
Gross margin	$	14,056	$	8,066	$	5,990
Depreciation and amortization(1)	6,294		4,767		1,527
Adjusted gross margin	$	20,350	$	12,833	$	7,517
Adjusted gross margin per metric ton	$	33.80	$	32.32	$	1.48

(1)Excludes depreciation of office furniture and equipment. Such amount is included in general and administrative expenses.

We earned an adjusted gross margin of $20.4 million, or $33.80 per metric ton, for the three months ended September 30, 2015 and an adjusted gross margin of $12.8 million, or $32.32 per metric ton, for the three months ended September 30, 2014. The factors impacting adjusted gross margin are detailed above under the heading “Gross margin.”

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General and administrative expenses

General and administrative expenses were $4.8 million for the three months ended September 30, 2015 and $2.8 million for the three months ended September 30, 2014. For the three months ended September 30, 2015, general and administrative expenses included allocated and direct expenses of $3.3 million that were incurred under the MSA, $0.3 million of expenses related to a potential acquisition transaction and $0.2 million of compensation expense associated with unit-based awards. We are also incurring incremental general and administrative expenses due to our transition from a private company to a publicly traded limited partnership. General and administrative costs for the three months ended September 30, 2014 included $2.4 million of charges under the Prior MSA.

Interest expense

We incurred $2.9 million of interest expense during the three months ended September 30, 2015, and $2.1 million during the three months ended September 30, 2014. The increase in interest expense was primarily attributable to an increase in our long-term debt outstanding. Please read “—Senior Secured Credit Facilities” below.

Adjusted EBITDA

	Three Months Ended September 30,
	2015			2014		Change
				(Predecessor)
				(in thousands)
Reconciliation of adjusted EBITDA to net income:
Net income	$	6,398		$	3,105	$	3,293
Depreciation and amortization	6,306			4,777		1,529
Interest expense	2,887			2,124		763
Early retirement of debt obligation	—			—		—
Non-cash unit compensation expense	180			1		179
Income tax expense	1			4		(3		)
Asset impairments and disposals	(127		)	—		(127		)
Acquisition transaction expenses	257			—		257
Adjusted EBITDA	$	15,902		$	10,011	$	5,891

We generated adjusted EBITDA of $15.9 million for the three months ended September 30, 2015 compared to $10.0 million for the three months ended September 30, 2014. The $5.9 million improvement in adjusted EBITDA was primarily attributable to the $7.5 million increase in adjusted gross margin discussed in further detail above. Offsetting the increase to adjusted gross margin was a $1.6 million increase in general and administrative expenses, net of expenses related to a potential acquisition transaction, non-cash unit compensation expense and disposals. The increase is discussed above under the heading “General and administrative expenses.”

Distributable Cash Flow

The following is a reconciliation of adjusted EBITDA to distributable cash flow:

	Three Months Ended September 30,
	2015		2014		Change
			(Predecessor)
			(in thousands)
Reconciliation of adjusted EBITDA to distributable cash flow:
Adjusted EBITDA	$	15,902	$	10,011	$	5,891
Less:
Interest expense net of amortization of debt issuance costs and original issue discount	2,532		1,619		913
Maintenance capital expenditures	735		184		551
Distributable cash flow	$	12,635	$	8,208	$	4,427

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Nine Months Ended September 30, 2015 Compared to Nine Months Ended September 30, 2014

	Nine Months Ended September 30,
	2015			2014			Change
	(Predecessor)(in thousands)
Product sales	$	335,857		$	208,332		$	127,525
Other revenue	4,704			2,827			1,877
Net revenue	340,561			211,159			129,402
Cost of goods sold, excluding depreciation and amortization	279,858			184,887			94,971
Depreciation and amortization(1)	21,587			14,308			7,279
Total cost of goods sold	301,445			199,195			102,250
Gross margin	39,116			11,964			27,152
General and administrative expenses	13,176			7,399			5,777
Income from operations	25,940			4,565			21,375
Interest expense	(7,576		)	(6,619		)	(957		)
Related party interest expense	(1,097		)	—			(1,097		)
Early retirement of debt obligation	(4,699		)	(73		)	(4,626		)
Other income	24			16			8
Net income (loss) before income tax expense	12,592			(2,111		)	14,703
Income tax expense	2,657			12			2,645
Net income (loss)	9,935			(2,123		)	12,058
Less net loss attributable to noncontrolling partners’ interests	30			61			(31		)
Net income (loss) attributable to Enviva Partners, LP	$	9,965		$	(2,062	)	$	12,027

(1)Excludes depreciation of office furniture and equipment of $34 and $27 for the nine months ended September 30, 2015 and 2014, respectively. Such amounts are included in general and administrative expenses.

Net revenue

Net revenue was $340.6 million and $211.2 million for the nine months ended September 30, 2015 and 2014, respectively, and was comprised of product sales and other revenue, which are discussed below.

Product sales

Revenue related to product sales (either produced by us or procured from a third party) increased $127.5 million from $208.3 million for the nine months ended September 31, 2014 to $335.9 million for the nine months ended September 30, 2015. The increase was primarily a result of increased sales volume. During the nine months ended September 30, 2015, we sold approximately 652,000 MT more wood pellets than the nine months ended September 30, 2014. The volume increase is primarily due to approximately 363,000 MT of sales under contracts acquired with the Cottondale plant. In addition, the prior year period was negatively affected by a maintenance outage at one of our customer’s plants that resulted in our agreeing to a financial settlement to delay and, in some cases, cancel specific contracted quantities. The remaining increase is attributable to a 45,000 MT shipment under a new customer contract for one shipment of wood pellets per year for the next three years. These sales increases were driven by higher production from our existing facilities as well as Cottondale plant production. Pricing had a modest favorable impact on revenues.

Other revenue

Other revenue increased to $4.7 million for the nine months ended September 30, 2015 from $2.8 million for the nine months ended September 30, 2014 primarily due to purchase and sale transactions with our existing customer base. In these agency-related transactions, we do not bear the risk of loss or take title to the wood pellets purchased from a third party and accordingly the transaction is presented on a net basis. Other revenue is also comprised of terminal services and other professional fees.

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Cost of goods sold

Cost of goods sold increased to $301.4 million for the nine months ended September 30, 2015 from $199.2 million for the nine months ended September 30, 2014. The $102.2 million increase was primarily due to increased wood pellet sales volumes during the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014. Cost of goods sold included depreciation and amortization expenses of $21.6 million and $14.3 million for the nine months ended September 30, 2015 and 2014, respectively.

Gross margin

We earned gross margin of $39.1 million and $12.0 million for the nine months ended September 30, 2015 and 2014, respectively. The gross margin increase of $27.1 million was primarily attributable to the following:

·Our wood pellet sales volumes increased approximately 652,000 MT during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014, a 60% increase. The incremental volumes sold accounted for $13.9 million of the gross margin increase.

·The favorable cost position of our delivered pellets during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014 contributed $9.0 million to gross margin. The improved cost position was primarily attributable to increased plant utilization. Lower fuel costs also reduced our to-port logistics costs for all plants during the nine months ended September 30, 2015.

·Favorable pricing on customer contracts during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014 added $5.3 million of gross margin. The pricing benefit is attributable to the mix of contracts during the nine month period as well as fees earned from a customer who requested modification in delivery schedules for contracted and scheduled shipments.

·Lower export shipping costs contributed $5.3 million to gross margin during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014. The favorable cost position is attributable to the mix of shipping contracts.

·Purchase and sale transactions contributed to an increase of $1.3 million in other revenue during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014.

·Offsetting the above was a $7.3 million increase in depreciation and amortization during the nine months ended September 30, 2015 as compared to the corresponding prior year period. The increase is attributable to depreciation on the Cottondale plant assets and amortization of favorable customer contracts acquired as part of the Cottondale acquisition.

Adjusted gross margin per metric ton

	Nine Months Ended September 30,
	2015		2014		Change
	(Predecessor)(in thousands except per metric ton)
Reconciliation of gross margin to adjusted gross margin per metric ton:
Metric tons sold	1,746		1,094		652
Gross margin	$	39,116	$	11,964	$	27,152
Depreciation and amortization(1)	21,587		14,308		7,279
Adjusted gross margin	60,703		26,272		$	34,431
Adjusted gross margin per metric ton	$	34.77	$	24.01	$	10.76

(1)Excludes depreciation of office furniture and equipment. Such amount is included in general and administrative expenses.

We earned an adjusted gross margin of $60.7 million, or $34.77 per metric ton, for the nine months ended September 30, 2015 and an adjusted gross margin of $26.3 million, or $24.01 per metric ton, for the nine months ended September 30, 2014. The factors impacting adjusted gross margin are detailed above under the heading “Gross margin.”

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General and administrative expenses

General and administrative expenses were $13.2 million for the nine months ended September 30, 2015 and $7.4 million for the nine months ended September 30, 2014. For the nine months ended September 30, 2015, general and administrative expenses included allocated and direct expenses of $9.6 million that were incurred under the MSA. During the nine months ended September 30, 2015, we incurred $0.4 million of compensation expense associated with unit-based awards, $0.4 million of accounting, legal and other expenses related to our Reorganization activities and $0.3 million of expenses related to a potential acquisition transaction. We are also incurring incremental general and administrative expenses due to our transition from a private company to a publicly traded limited partnership. General and administrative costs for the nine months ended September 30, 2014 included $6.4 million of charges under the Prior MSA.

Interest expense

We incurred $7.6 million of interest expense during the nine months ended September 30, 2015 and $6.6 million during the nine months ended September 30, 2014. The increase in interest expense was primarily attributable to an increase in our long-term debt outstanding. Please read “—Senior Secured Credit Facilities” below.

Related party interest expense

In connection with the January 5, 2015 acquisition of Green Circle, the sponsor made a term advance of $36.7 million to Green Circle under a revolving note and advanced Acquisition II $50.0 million under a note payable. Green Circle repaid $4.8 million of the outstanding principal in March 2015. As a result of the sponsor’s contribution of Acquisition II, which owned Enviva Pellets Cottondale, LLC, to us on April 9, 2015, we recorded $81.9 million of outstanding principal and $0.9 million of accrued interest related to these notes. In connection with the closing of the IPO on May 4, 2015, the related party notes payable outstanding principal of $81.9 million and accrued interest of $1.1 million were repaid by us to the sponsor. We incurred $1.1 million of related party interest expense for the term advance and note payable during the nine months ended September 30, 2015.

Early retirement of debt obligation

We incurred a $4.7 million charge during the nine months ended September 30, 2015 for the write-off of debt issuance costs and original issue discount associated with the Prior Senior Secured Credit Facilities. The amounts had been amortizing over the term of the debt and were expensed on April 9, 2015 when we repaid all amounts outstanding under the Prior Senior Secured Credit Facilities.

Income tax expense

During the nine months ended September 30, 2015, we incurred income tax expense of $2.7 million related to the separate activity of the Cottondale plant, from the date of acquisition on January 5, 2015 through April 8, 2015. During this period, the Cottondale plant was a corporate subsidiary of Acquisition II, a wholly-owned corporate subsidiary of Enviva Cottondale Acquisition I, LLC (“Acquisition I”), the corporate parent of the consolidated group. On April 7 and 8, 2015, Cottondale and Acquisition II, respectively, converted to limited liability companies. Prior to the contribution of Acquisition II to us on April 9, 2015, the financial results of Acquisition II and Cottondale were included in the consolidated federal income tax return of the tax paying entity, Acquisition I.

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Adjusted EBITDA

	Nine Months Ended September 30,
	2015			2014			Change
				(Predecessor)(in thousands)
Reconciliation of adjusted EBITDA to net income (loss):
Net income (loss)	$	9,935		$	(2,123	)	$	12,058
Depreciation and amortization	21,621			14,335			7,286
Interest expense	8,673			6,619			2,054
Early retirement of debt obligation	4,699			73			4,626
Purchase accounting adjustment to inventory	697			—			697
Non-cash unit compensation expense	363			2			361
Income tax expense	2,657			12			2,645
Asset impairments and disposals	(100		)	62			(162		)
Acquisition transaction expenses	257			—			257
Adjusted EBITDA	$	48,802		$	18,980		$	29,822

We generated adjusted EBITDA of $48.8 million for the nine months ended September 30, 2015 compared to $19.0 million for the nine months ended September 30, 2014. The $29.8 million improvement in adjusted EBITDA was primarily attributable to the $34.4 million increase in adjusted gross margin discussed in further detail above. Offsetting the increase to adjusted gross margin was a $5.3 million increase in general and administrative expenses, net of expenses related to a potential acquisition transaction, non-cash unit compensation expense and disposals. The increase is discussed above under the heading “General and administrative expenses.”

Distributable Cash Flow

The following is a reconciliation of adjusted EBITDA to distributable cash flow:

	Nine Months Ended September 30,
	2015		2014		Change
			(Predecessor)(in thousands)
Reconciliation of adjusted EBITDA to distributable cash flow:
Adjusted EBITDA	$	48,802	$	18,980	$	29,822
Less:
Interest expense net of amortization of debt issuance costs and original issue discount	7,444		5,103		2,341
Maintenance capital expenditures	2,342		184		2,158
Distributable cash flow	$	39,016	$	13,693	$	25,323

Liquidity and Capital Resources

Overview

We expect our sources of liquidity to include cash generated from operations, borrowings under our Senior Secured Credit Facilities and, from time to time, debt and equity offerings. We operate in a capital-intensive industry, and our primary liquidity needs are to fund working capital, service our debt, maintain cash reserves, finance maintenance capital expenditures and pay distributions. We believe cash generated from our operations will be sufficient to meet the short-term working capital requirements of our business. However, future capital expenditures and other cash requirements could be higher than we currently expect as a result of various factors. Additionally, our ability to generate sufficient cash from our operating activities depends on our future performance, which is subject to general economic, political, financial, competitive and other factors beyond our control. We intend to pay at least the minimum quarterly distribution of $0.4125 per common and subordinated unit per quarter, which equates to approximately $9.8 million per quarter, or approximately $39.3 million per year, based on the number of common and subordinated units outstanding, to the extent we have sufficient cash from our operations after establishment of cash reserves and payment of fees and expenses. Because it is our intent to distribute at least the minimum quarterly distribution on all of our units on a quarterly basis, we expect that we will rely upon external financing sources, including bank borrowings and the issuance of debt and equity securities, to fund future acquisitions and expansions.

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Noncash Working Capital

Noncash working capital is the amount by which current assets, excluding cash, exceed current liabilities and is a measure of our ability to pay our liabilities as they become due. Our noncash working capital was $38.8 million at September 30, 2015 and $32.6 million at December 31, 2014. The primary components of changes in noncash working capital were the following:

Accounts receivable, net

Accounts receivable, net increased noncash working capital by $23.1 million during the nine months ended September 30, 2015 as compared to December 31, 2014, primarily due to the timing, volume and size of product shipments.

Inventories

Our inventories consist of raw materials, work-in-process, consumable tooling and finished goods. Inventories increased to $25.4 million at September 30, 2015 from $18.1 million at December 31, 2014. The $7.3 million increase in noncash working capital was primarily attributable to an increase in finished goods related to the timing of product shipments from our port locations.

Accounts payable, related party payable and accrued liabilities

The increase in accounts payable, related party payable and accrued liabilities at September 30, 2015 as compared to December 31, 2014 decreased noncash working capital by $16.3 million and was primarily attributable to the addition of the Cottondale plant in January 2015, an increase in shipping and trading sales liabilities due to timing and volume of the shipments and an increase due to the related party liability for pellets purchased from the Hancock JV. At September 30, 2015, the accounts payable and accrued liabilities balance for Cottondale was $6.8 million. Related party payable at September 30, 2015 included $2.8 million related to the MSA and $2.4 million related to wood pellets purchased from the Hancock JV compared to $2.4 million related to the Prior MSA at December 31, 2014.

Cash Flows

The following table sets forth a summary of our net cash flows from operating, investing and financing activities for the nine months ended September 30, 2015 and 2014:

	Nine Months Ended September 30,
	2015			2014
	(Predecessor)(in thousands)
Net cash provided by operating activities	$	39,662		$	20,930
Net cash used in investing activities	(7,425		)	(13,792		)
Net cash provided by (used in) financing activities	42,328			(7,717		)
Net increase (decrease) in cash and cash equivalents	$	74,565		$	(579	)

Cash Provided by Operating Activities

Net cash provided by operating activities was $39.7 million for the nine months ended September 30, 2015 compared to $20.9 million for the nine months ended September 30, 2014. The improvement of $18.8 million was primarily attributable to the following:

·An increase in net income, excluding depreciation and amortization and early retirement of debt obligation, of $23.7 million during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014. The improvement in net income was attributable to the factors detailed above under “—Results of Operations.”

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·Offsetting the above was an unfavorable change in operating assets and liabilities of $8.3 million during the nine months ended September 30, 2015 compared to the corresponding period in 2014. This unfavorable change was primarily attributable to increases in accounts receivable and inventory during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014, which was primarily due to the timing and size of product shipments. Also, prepaid expenses increased during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014 due to a payment for annual insurance policies. These changes were partially offset by an increase in accounts payable, related party accounts payable and accrued liabilities during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014 which is discussed above.

Cash Used in Investing Activities

Net cash used in investing activities decreased by $6.4 million for the nine months ended September 30, 2015 as compared to the corresponding period in 2014. The decrease during the nine months ended September 30, 2015 related primarily to a decrease in purchases of property, plant and equipment driven by completing the construction of the Southampton plant during the early part of 2014. Of the $4.1 million used for purchases of property, plant and equipment during the nine months ended September 30, 2015, approximately $1.8 million related to projects intended to increase the production capacity of our plants. The remaining $2.3 million was used to maintain our equipment and machinery.

Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities increased by $50.0 million for the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014. Borrowings under our Senior Secured Credit Facilities and our IPO proceeds totaled $387.6 million. Except for a portion retained for general partnership purposes, the aggregate amount was used to pay debt issuance costs and to repay the Prior Senior Secured Credit Facilities and related party notes totaling $187.5 million as well as to distribute $176.7 million to our sponsor. Also contributing to the increase in cash provided by financing activities was the release of $11.6 million of restricted cash upon the repayment of the Prior Senior Secured Credit Facilities. These increases were partially offset by the payment of a cash distribution to unitholders of $6.2 million.

Senior Secured Credit Facilities

On April 9, 2015, we entered into the Credit Agreement providing for $199.5 million aggregate principal amount of Senior Secured Credit Facilities. The Senior Secured Credit Facilities consist of (i) $99.5 million aggregate principal amount of Tranche A-1 advances, (ii) $75.0 million aggregate principal amount of Tranche A-2 advances and (iii) up to $25.0 million aggregate principal amount of revolving credit commitments. We are also able to request loans under incremental facilities under the Credit Agreement on the terms and conditions and in the maximum aggregate principal amounts set forth therein, provided that lenders provide commitments to make loans under such incremental facilities. The Senior Secured Credit Facilities mature in April 2020. Borrowings under the Senior Secured Credit Facilities bear interest, at our option, at either a base rate plus an applicable margin or at a Eurodollar rate (with a 1.00% floor for term loan borrowings) plus an applicable margin.

We borrowed the full amount of the Tranche A-1 and Tranche A-2 facilities at the closing of the Credit Agreement. Of the total proceeds from borrowings under the Tranche A-1 and Tranche A-2 facilities, $82.2 million was used to repay all outstanding indebtedness under the Prior Senior Secured Credit Facilities and related accrued interest, $6.4 million was used to pay closing fees and expenses, and the balance of $85.9 million was used to make a distribution to the sponsor. Borrowings under the revolving facility may be used for working capital requirements and general partnership purposes, including the issuance of letters of credit.

Interest is payable quarterly for loans bearing interest at the base rate and at the end of the applicable interest period for loans bearing interest at the Eurodollar rate. The principal amounts of the Tranche A-1 facility and the Tranche A-2 facility are payable in quarterly installments. No amortization is required with respect to the principal amount of the revolving facility. All outstanding amounts under the Senior Secured Credit Facilities will be due and the letter of credit commitments will terminate on the maturity date or upon earlier prepayment or acceleration. We are required to make mandatory prepayments of the Senior Secured Credit Facilities with the proceeds of certain asset sales and debt incurrences.

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As of September 30, 2015, we had $97.4 million, net of $1.1 million unamortized original issue discount, of outstanding Tranche A-1 advances and $73.9 million, net of $0.7 million unamortized original issue discount, outstanding of Tranche A-2 advances priced at the Eurodollar rate, with an effective rate of 5.1% and 5.25%, respectively.

We had $5.0 million outstanding under the letter of credit facility as of September 30, 2015. The letters of credit were issued in connection with contracts between us and third parties, in the ordinary course of business. The amounts required to be secured with letters of credit under these contracts may be adjusted or cancelled based on the specific third-party contract terms. The amounts outstanding as of September 30, 2015 are subject to automatic extensions through the termination dates of the letters of credit facilities. The letters of credit are not cash collateralized and no debt is outstanding as of September 30, 2015. We pay a fee of 3.75% on the outstanding letters of credit.

The Credit Agreement contains certain covenants, restrictions and events of default including, but not limited to, a change of control restriction and limitations on our ability to (i) incur indebtedness, (ii) pay dividends or make other distributions, (iii) prepay, redeem or repurchase certain debt, (iv) make loans and investments, (v) sell assets, (vi) incur liens, (vii) enter into transactions with affiliates, (viii) consolidate or merge and (ix) assign certain material contracts to third parties or unrestricted subsidiaries. We will be restricted from making distributions if an event of default exists under the Credit Agreement or if our interest coverage ratio (determined as the ratio of consolidated EBITDA to consolidated interest expense, determined quarterly) is less than 2.25:1.00 at such time.

Pursuant to the Credit Agreement, we are required to maintain, as of the last day of each fiscal quarter, a ratio of total debt to consolidated EBITDA (“Total Leverage Ratio”), as defined in the Credit Agreement, of not more than a maximum ratio, initially set at 4.25:1.00 and stepping down to 3.75:1.00 during the term of the Credit Agreement; provided that the maximum permitted Total Leverage Ratio will be increased by 0.50:1.00 for the period from the consummation of certain qualifying acquisitions through the end of the second full fiscal quarter thereafter.

As of September 30, 2015, our total debt to consolidated EBITDA was 1.65:1.00, which was less than the maximum ratio of 4.25:1.00. As of September 30, 2015, we were in compliance with all covenants and restrictions associated with, and no events of default existed under, the Credit Agreement. Our obligations under the Credit Agreement are guaranteed by certain of our subsidiaries and secured by liens on substantially all of our assets.

Prior Senior Secured Credit Facilities

In November 2012, the Predecessor entered into a Credit and Guaranty Agreement (the “Prior Credit Agreement”) that provided for a $120.0 million aggregate principal amount of senior secured credit facilities (the “Prior Senior Secured Credit Facilities”). The Prior Senior Secured Credit Facilities consisted of (i) $35.0 million aggregate principal amount of Tranche A advances, (ii) up to $60.0 million aggregate principal amount of delayed draw term commitments, (iii) up to $15.0 million aggregate principal amount of working capital commitments and (iv) up to $10.0 million aggregate principal amount of letter of credit facility commitments. The Prior Senior Secured Credit Facilities were repaid in full, including related accrued interest, in the amount of $82.2 million on April 9, 2015, the date of the closing of the Senior Secured Credit Facilities. We funded the repayment with a portion of borrowings under the Senior Secured Credit Facilities. For the three and nine months ended September 30, 2015, we recorded $0 and a $4.7 million loss, respectively, on early retirement of debt obligation related to the repayment. The loss includes a $3.2 million write off of unamortized deferred issuance costs and a $1.5 million write-off of unamortized discount. In August 2015, we cancelled a $4.0 million letter of credit previously issued under the terms of the Prior Senior Secured Credit Facilities. At September 30, 2015, we had no outstanding letters of credit in connection with the Prior Senior Secured Credit Facilities.

Off-Balance Sheet Arrangements

As of September 30, 2015, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, such as the use of unconsolidated subsidiaries, structured finance, special purpose entities or variable interest entities.

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Recent Accounting Pronouncements

In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, to amend the guidance for amounts that are adjusted in a merger or acquisition. The standard eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement period adjustments that occur in periods after a business combination is consummated. The ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. We are in the process of evaluating the impact of adoption on our consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The standard simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value for entities using the first-in, first-out method of valuing inventory. ASU No. 2015-11 eliminates other measures required by current guidance to determine net realizable value. ASU No. 2015-11 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years and early adoption is permitted. We are in the process of evaluating the impact of adoption on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-06, Earnings Per Share (Topic 260)—Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions—a consensus of the FASB Emerging Issues Task Force (EITF). The amendments in ASU No. 2015-06 apply to master limited partnerships subject to the Master Limited Partnerships Subsections of Topic 260 that receive net assets through a dropdown transaction that is accounted for under the Transactions Between Entities Under Common Control Subsections of Subtopic 805-50, Business Combinations—Related Issues. When a general partner transfers, or “drops down,” net assets to a master limited partnership and that transaction is accounted for as a transaction between entities under common control, the statements of operations of the master limited partnership are adjusted retrospectively to reflect the dropdown transaction as if it occurred on the earliest date during which the entities were under common control. The amendments in ASU No. 2015-06 specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required. The amendments in ASU No. 2015-06 are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The amendments in ASU No. 2015-06 should be applied retrospectively for all financial statements presented. We are evaluating the new pronouncement to determine the impact it may have on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Topic 83530): Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 requires the presentation of debt issuance costs in the balance sheet as a reduction from the related debt liability rather than as an asset. The amortization of such costs will continue to be reported as interest expense. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and allows early adoption for financial statements that have not been previously issued. The update requires retrospective application upon adoption. Upon adoption, we expect to reclassify amounts included as debt issuance costs within total assets on the consolidated balance sheet to a reduction of long-term debt within total liabilities on the consolidated balance sheet for all periods presented. The adoption is not expected to have an impact on the periodic amount recorded as amortization expense.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new standard reduces the number of consolidation models and simplifies their application. The amendments in ASU No. 2015-02 are intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships and similar legal entities. The amendments simplify the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments (1) eliminate the presumption that a general partner should consolidate a limited partnership, (2) eliminate the indefinite deferral of FASB Statement No. 167, thereby reducing the number of variable interest entity (“VIE”) consolidation models from four to two (including the limited partnership consolidation model), (3) clarify when fees paid to a decision maker should be a factor to include in the consolidation of VIEs, (4) amend the guidance for assessing how related party relationships affect VIE consolidation analysis and (5) exclude certain money market funds from the consolidation guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The standard allows early adoption, including

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early adoption in an interim period. We are in the process of evaluating the impact of adoption on our consolidated financial statements.

In January 2015, the FASB issued ASU No. 2015-01, Income Statement-Extraordinary and Unusual Items. The standard eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU No. 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. The standard is effective for periods beginning after December 15, 2015 and early adoption is permitted. The adoption of ASU No. 2015-01 is not expected to have a material effect on our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The new standard provides new guidance on the recognition of revenue and states that an entity should recognize revenue when control of the goods or services transfers to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. The new standard also requires significantly expanded disclosure regarding qualitative and quantitative information about the nature, timing and uncertainty of revenue and cash flow arising from contracts with customers. On July 9, 2015, the FASB approved a one-year delay in the effective date of ASU No. 2014-09. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The standard permits the use of either applying retrospectively the amendment to each prior reporting period presented or retrospectively with the cumulative effect of initially applying at the date of initial application. We are in the process of evaluating the impact of adoption on our consolidated financial statements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make judgments, estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Our critical accounting policies and estimates are more fully described in the Prospectus.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

The information about market risks for the nine months ended September 30, 2015 does not differ materially from that disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk” in the Prospectus, other than as described below.

Interest Rate Risk

At September 30, 2015, our total debt had a carrying value of $176.8 million, which approximates fair value.

We are exposed to interest rate risk on borrowings under our Senior Secured Credit Facilities. As of September 30, 2015, $171.3 million, net of unamortized discount of $1.8 million, of our total debt related to borrowings under our Senior Secured Credit Facilities.

Borrowings under the Senior Secured Credit Facilities bear interest, at our option, at either a base rate plus an applicable margin or at a Eurodollar rate (with a 1.00% floor for term loan borrowings) plus an applicable margin. The applicable margin is (i) for Tranche A-1 base rate borrowings, 3.10% through April 2017, 2.95% thereafter through April 2018 and 2.80% thereafter, and for Tranche A-1 Eurodollar rate borrowings, 4.10% through April 2017, 3.95% thereafter through April 2018 and 3.80% thereafter and (ii) 3.25% for Tranche A-2 base rate borrowings and revolving facility base rate borrowings and 4.25% for Tranche A-2 Eurodollar rate borrowings and revolving facility Eurodollar rate borrowings. To manage our exposure to fluctuations in interest rates under our Senior Secured Credit Facilities, we may enter into interest rate swaps.

47

Changes in the overall level of interest rates affect the interest expense that we recognize in our condensed consolidated statements of operations related to interest rate swap agreements and borrowings. An interest rate risk sensitivity analysis is used to measure interest rate risk by computing estimated changes in cash flows as a result of assumed changes in market interest rates. Based on the $173.1 million outstanding under the Senior Secured Credit Facilities as of September 30, 2015, if three month LIBOR-based interest rates increased by 100 basis points, our interest expense would have increased annually by approximately $0.6 million.

Item 4.Controls and Procedures

Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13 (a)-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended) was carried out under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of our General Partner. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer of our General Partner concluded that the design and operation of these disclosure controls and procedures were effective as of September 30, 2015, the end of the period covered by this report.

Internal Control Over Financial Reporting and Changes in Internal Control Over Financial Reporting

The SEC, as required by Section 404 of the Sarbanes-Oxley Act, adopted rules that generally require every company that files reports with the SEC to include a management report on such company’s internal control over financial reporting in its annual report. In addition, our independent registered public accounting firm must attest to our internal control over financial reporting. Our first Annual Report on Form 10-K will not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by SEC rules applicable to new public companies. Management will be required to provide an assessment of effectiveness of our internal control over financial reporting as of December 31, 2016. We are not required to comply with the auditor attestation requirement of Section 404 of the Sarbanes-Oxley Act while we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012.

During the three months ended September 30, 2015, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

48

PART II — OTHER INFORMATION

Item 1.Legal Proceedings

Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believe that we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations.

Item 1A.Risk Factors

There have been no material changes from the risk factors disclosed in the section entitled “Risk Factors” in the Prospectus.

Item 6.Exhibits

The information required by this Item 6 is set forth in the Exhibit Index accompanying this Quarterly Report and is incorporated herein by reference.

49

SIGNATURES

Pursuant to the requirements 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.

	ENVIVA PARTNERS, LP
	By:	Enviva Partners GP, LLC, its general partner
Date: November 5, 2015	By:	/s/ Stephen F. Reeves
		Stephen F. Reeves
		Executive Vice President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer)

50

EXHIBIT INDEX

Exhibit Number	Exhibit
3.1	Certificate of Limited Partnership of Enviva Partners, LP (Exhibit 3.1, Form S-1 Registration Statement filed October 28, 2014, File No. 333-199625)
3.2	First Amended and Restated Agreement of Limited Partnership of Enviva Partners, LP, dated May 4, 2015, by Enviva Partners GP, LLC (Exhibit 3.1, Form 8-K filed May 4, 2015, File No. 001-37363)
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Schema Document
101.CAL*	XBRL Calculation Linkbase Document
101.DEF*	XBRL Definition Linkbase Document
101.LAB*	XBRL Labels Linkbase Document.
101.PRE*	XBRL Presentation Linkbase Document.

*Filed herewith.

** Furnished herewith.

51

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, John K. Keppler, certify that:

1.I have reviewed this report on Form 10-Q of Enviva Partners, LP (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:November 5, 2015

/s/ John K. Keppler

John K. Keppler

President and Chief Executive Officer

of Enviva Partners GP, LLC

(the general partner of Enviva Partners, LP)

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Stephen F. Reeves, certify that:

1.I have reviewed this report on Form 10-Q of Enviva Partners, LP (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:November 5, 2015

/s/ Stephen F. Reeves

Stephen F. Reeves

Executive Vice President and Chief Financial Officer

of Enviva Partners GP, LLC

(the general partner of Enviva Partners, LP)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Enviva Partners, LP (the “Company”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John K. Keppler, Chairman and Chief Executive Officer of Enviva Partners GP, LLC, the general partner of the Company, and Stephen F. Reeves, Executive Vice President and Chief Financial Officer of Enviva Partners GP, LLC, the general partner of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:November 5, 2015

/s/ John K. Keppler

John K. Keppler

President and Chief Executive Officer

Date:November 5, 2015

/s/ Stephen F. Reeves

Stephen F. Reeves

Executive Vice President and Chief Executive Officer

XML

Long-Term Debt and Capital Lease Obligations (Details 2) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Long term debt
Capital Lease Obligations	$ 58,000
Total long-term debt and capital lease obligations	176,839,000
Less current portion of long-term debt and capital lease obligations	(3,072,000)
Long-term debt and capital lease obligations, excluding current installments	173,767,000
Maturities of long-term debt and capital lease obligations
2015	666,000
2016	5,708,000
2017	3,117,000
2018	6,850,000
2019	5,335,000
Thereafter	155,163,000
Enviva Pellets Wiggins construction loan
Long term debt
Long-term Debt	2,603,000
Payment of principal and interest	32,900
lump sum payment on October 18, 2016	$ 2,400,000
Annual rate (as a percent)	6.35%
Enviva Pellets Wiggins working capital line
Long term debt
Long-term Debt	$ 813,000
Payment of principal and interest	10,300
lump sum payment on October 18, 2016	$ 743,300
Annual rate (as a percent)	6.35%
Enviva Pellets Amory note
Long term debt
Long-term Debt	$ 2,000,000
Annual rate (as a percent)	6.00%
Enviva Pellets Southampton promissory note
Long term debt
Payment of principal and interest	$ 900,000
Annual imputed rate (as a percent)	7.60%
Present value period	3 years
Other loans
Long term debt
Long-term Debt	$ 40,000
Senior Secured Credit Facilities | Tranche A-1 advances
Long term debt
Long-term Debt	97,379,000
Unamortized discount	1,100,000
Quarterly principal payments June 2017 through March 2018	700,000
Quarterly principal payments June 2018 through December 2019	1,200,000
Final principal payment on April 9, 2020	83,800,000
Senior Secured Credit Facilities | Tranche A-1 advances | Eurodollar rate
Long term debt
Quarterly principal payments through March 2017	$ 500,000
Interest rate (as a percent)	5.10%
Senior Secured Credit Facilities | Tranche A-2 advances
Long term debt
Long-term Debt	$ 73,946,000
Unamortized discount	700,000
Final principal payment on April 9, 2020	71,400,000
Senior Secured Credit Facilities | Tranche A-2 advances | Eurodollar rate
Long term debt
Quarterly principal payments through December 2019	$ 200,000
Interest rate (as a percent)	5.25%
Prior Senior Secured Credit Facilities
Long term debt
Unamortized discount	$ 1,500,000
Prior Senior Secured Credit Facilities | Tranche A Advances
Long term debt
Unamortized discount		$ 1,600,000
Enviva, LP and Subsidiaries
Long term debt
Capital Lease Obligations		575,000
Total long-term debt and capital lease obligations		94,075,000
Less current portion of long-term debt and capital lease obligations		(10,237,000)
Long-term debt and capital lease obligations, excluding current installments		83,838,000
Enviva, LP and Subsidiaries | Enviva Pellets Wiggins construction loan
Long term debt
Long-term Debt		2,770,000
Enviva, LP and Subsidiaries | Enviva Pellets Wiggins working capital line
Long term debt
Long-term Debt		864,000
Enviva, LP and Subsidiaries | Enviva Pellets Amory note
Long term debt
Long-term Debt		2,000,000
Enviva, LP and Subsidiaries | Enviva Pellets Southampton promissory note
Long term debt
Long-term Debt		729,000
Enviva, LP and Subsidiaries | Other loans
Long term debt
Long-term Debt		419,000
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Tranche A Advances
Long term debt
Long-term Debt		29,718,000
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Delayed Draw Term Commitments
Long term debt
Long-term Debt		$ 57,000,000

XML

Net Income per Limited Partner Unit (Details)	May. 03, 2015 shares
Net Income per Limited Partner Unit.
Number of basic units outstanding	0

XML

Significant Risks and Uncertainties Including Business and Credit Concentrations (Details) - Product Sales - Customer - Three major customers - customer	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Concentration Risk
Number of customers	3	3	3	3
Concentration risk (as a percent)	92.00%	100.00%	94.00%	99.00%

XML

Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2015

Goodwill and Other Intangible Assets

Schedule of intangible assets

		September 30, 2015							December 31, 2014
	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Favorable customer contracts	3 years	$	8,700	$	(5,698	)	$	3,002	$	—	$	—		$	—
Wood pellet contract	6 years	1,750		(1,247		)	503		1,750		(1,028		)	722
Total		$	10,450	$	(6,945	)	$	3,505	$	1,750	$	(1,028	)	$	722

XML

Partners' Capital (Details 2)	9 Months Ended
	Sep. 30, 2015
Minimum
Incentive Distribution Rights
Quarterly distribution of operating surplus (as a percent)	15.00%
Maximum
Incentive Distribution Rights
Quarterly distribution of operating surplus (as a percent)	50.00%

XML

Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Acquired Intangible Assets
Amortization Period	6 years
Gross Carrying Amount		$ 10,450		$ 10,450		$ 1,750
Accumulated Amortization		(6,945)		(6,945)		(1,028)
Net Carrying Amount		3,505		3,505		722
Period of wood pellet contract	6 years
Amortization expense		1,600	$ 100	5,900	$ 200
Enviva Pellets Cottondale, LLC
Goodwill.
Addition to goodwill				$ 80,700
Favorable customer contracts
Acquired Intangible Assets
Amortization Period				3 years
Gross Carrying Amount		8,700		$ 8,700
Accumulated Amortization		(5,698)		(5,698)
Net Carrying Amount		3,002		$ 3,002
Wood pellet contract
Acquired Intangible Assets
Amortization Period				6 years
Gross Carrying Amount		1,750		$ 1,750		1,750
Accumulated Amortization		(1,247)		(1,247)		(1,028)
Net Carrying Amount		$ 503		$ 503		$ 722

XML

Net Income per Limited Partner Unit (Details 2) - shares		3 Months Ended	9 Months Ended
	May. 03, 2015	Sep. 30, 2015	Sep. 30, 2015
Weighted average number of units outstanding
Weighted average limited partner common units - basic	0
Subordinated Units
Weighted average number of units outstanding
Potentially dilutive subordinated units outstanding			0
Common Units
Weighted average number of units outstanding
Weighted average limited partner common units - basic		11,905,739	11,905,509
Dilutive effect of unvested phantom units		287,516	273,848
Weighted average limited partner common units-diluted		12,193,255	12,179,357

XML

Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Significant Accounting Policies

Significant Accounting Policies

(3)Significant Accounting Policies

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Partnership and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Certain amounts for the nine months ended September 30, 2014 have been reclassified to conform to the current presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the Partnership’s unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Segment and Geographic Information

Operating segments are defined as components of an enterprise about which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Partnership views its operations and manages its business as one operating segment. All long-lived assets of the Partnership are located in the United States.

Other Comprehensive Income (Loss)

Comprehensive loss includes net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that, under GAAP, are recorded as an element of partners’ capital but are excluded from net loss. The Partnership had no components of other comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014.

Net Income per Limited Partner Unit

The Partnership computes net income per unit using the two-class method as the Partnership has more than one class of participating securities, including common units, subordinated units, certain equity based-compensation awards and incentive distribution rights. The Partnership bases its calculation of net income per unit on the weighted-average number of common and subordinated limited partner units outstanding during the period. Diluted net income per unit includes the effects of potentially dilutive time-based and performance-based phantom units on our common units.

The General Partner owns a non-economic interest in the Partnership, which does not entitle it to receive cash distributions, but owns all of the outstanding IDRs as of September 30, 2015. Pursuant to the partnership agreement, IDRs represent the right to receive increasing percentages (ranging from 15% to 50%) of quarterly distributions from operating surplus after the minimum quarterly distribution and certain target distribution levels have been achieved. Net income per unit applicable to limited partners (including the holder of subordinated units) is computed by dividing limited partners’ interest in net income by the weighted-average number of outstanding common and subordinated units.

Income Taxes

The Partnership and sponsor are pass-through entities and are not considered taxable entities for federal income tax purposes. Therefore, there is not a provision for U.S. federal and most state income taxes in the accompanying condensed consolidated financial statements. The Partnership’s net income or loss is allocated to its partners in accordance with the partnership agreement. The partners are taxed individually on their share of the Partnership’s earnings. At September 30, 2015 and December 31, 2014, the Partnership and sponsor did not have any liabilities for uncertain tax position or gross unrecognized tax benefit. Some states impose franchise and capital taxes on the Partnership. Such taxes are not material to the condensed consolidated financial statements and have been included in other income (expense) as incurred. Income tax expense for the nine months ended September 30, 2015 includes expense incurred by Acquisition II prior to being contributed to the Partnership.

Cash and Cash Equivalents

Cash and cash equivalents consist of short-term, highly liquid investments readily convertible into cash with an original maturity of three months or less.

Restricted Cash

The Predecessor funded a restricted debt service reserve account in connection with the Prior Senior Secured Credit Facilities (see Note 10, Long-Term Debt and Capital Lease Obligations). The restricted debt service reserve account was released as a result of the repayment in full of the Prior Senior Secured Credit Facilities on April 9, 2015.

Revenue Recognition

The Partnership primarily earns revenue by supplying wood pellets to customers under long-term, U.S. dollar-denominated contracts (also referred to as “off-take” contracts). The Partnership refers to the structure of the contracts as “take-or-pay” because they include a firm obligation to take a fixed quantity of product at a stated price and provisions that ensure the Partnership will be made whole in the case of the customer’s failure to accept all or a part of the contracted volumes or for termination by the customer. Each contract defines the annual volume of wood pellets that the customer is required to purchase and the Partnership is required to sell, the fixed price per metric ton for product satisfying a base net calorific value and other technical specifications, and, in some instances, provides for price adjustments for actual product specification and changes in underlying costs. Revenues from the sale of wood pellets are recognized when the goods are shipped, title passes, the sales price to the customer is fixed and collectability is reasonably assured.

Depending on the specific off-take contract, shipping terms are either Cost, Insurance and Freight (“CIF”) or Free on Board (“FOB”). Under a CIF contract, the Partnership procures and pays for shipping costs, which include insurance and all other charges, up to the port of destination for the customer. These costs are included in the price to the customer and, as such, are included in revenue and cost of goods sold. Under a FOB contract, the customer is directly responsible for shipping costs.

In some cases, the Partnership may purchase shipments of product from a third-party supplier and resell them in back-to-back transactions that immediately transfer title and risk of loss to the ultimate purchaser. Thus, the revenue from these transactions is recorded net of costs paid to the third-party supplier. The Partnership records this revenue as “Other revenue.”

In instances when a customer requests the cancellation, deferral or acceleration of a shipment, the customer may pay a fee, including reimbursement of any incremental costs incurred by the Partnership, which is included in revenue.

Cost of Goods Sold

Cost of goods sold includes the costs to produce and deliver wood pellets to customers. Raw material, production and distribution costs associated with delivering wood pellets to the ports and third-party wood pellet purchase costs are capitalized as a component of inventory. Fixed production overhead, including the related depreciation expense, is allocated to inventory based on the normal capacity of the facilities. These costs are reflected in cost of goods sold when inventory is sold. Distribution costs associated with shipping wood pellets to customers and amortization are expensed as incurred. Inventory is recorded using FIFO, which requires the use of judgment and estimates. Given the nature of the inventory, the calculation of cost of goods sold is based on estimates used in the valuation of the FIFO inventory and in determining the specific composition of inventory that is sold to each customer.

The Partnership entered into the Biomass Purchase Agreement pursuant to which the Hancock JV sells certain volumes of wood pellets per month to the Partnership at a fixed price per metric ton. The pellets purchased from the Hancock JV are sold to the Partnership’s customers under existing off-take contracts (see Note 11, Related Party Transactions).

Additionally, the purchase price of acquired customer contracts that were recorded as intangible assets are amortized as deliveries are made during the contract term.

Derivative Instruments

The Predecessor used derivative financial instruments to manage its exposure to fluctuations in interest rates on long-term debt as required per the terms of the Prior Senior Secured Credit Facilities (see Note 10, Long-Term Debt and Capital Lease Obligations). The Partnership does not hold or issue derivative financial instruments for trading or speculative purposes. The Predecessor accounted for the interest rate swaps by recognizing all derivative financial instruments on the condensed consolidated balance sheets at fair value. The Predecessor’s interest rate swap agreements were not designated as hedges; therefore, the gain or loss was recognized in the condensed consolidated statements of operations in interest expense. In connection with the repayment of the Prior Senior Secured Credit Facilities in April 2015 (see Note 10, Long-Term Debt and Capital Lease Obligations), the Predecessor terminated the interest rate swaps and paid a termination fee of $0.1 million. The Partnership does not currently hold any interest rate swaps or derivative financial instruments.

Debt Issuance Costs and Original Issue Discount

Debt issuance costs represent legal fees and other direct expenses associated with securing the Partnership’s credit agreements and are capitalized on the condensed consolidated balance sheets as other long-term assets. Original issue discounts are recorded on the condensed consolidated balance sheets within the carrying amount of long-term debt. Debt issuance costs and original issue discount are amortized over the term of the related debt using straight line amortization, which approximates the effective interest rate method.

The Predecessor and the Partnership primarily incurred debt issuance costs and original issue discount in connection with the Prior Senior Secured Credit Facilities and Senior Secured Credit Facilities, respectively (see Note 10, Long-Term Debt and Capital Lease Obligations). Debt issuance costs, net at September 30, 2015 and December 31, 2014, was $4.7 million and $3.6 million, respectively.

Gains or losses on debt extinguishment include any associated unamortized debt issuance costs and original issue discount.

Deferred Issuance Costs

Deferred issuance costs primarily consist of legal, accounting, printing and other fees relating to the IPO. These costs were offset against the proceeds of the IPO. As of September 30, 2015 and December 31, 2014, the Partnership had $0 and $4.1 million of deferred issuance costs, respectively.

Intangible Assets

In April 2015, the sponsor contributed net assets to the Partnership associated with the acquisition of Green Circle in January 2015, which included intangible assets related to favorable customer contracts. The Partnership also recorded payments made to acquire a six-year wood pellet off-take contract with a European utility in 2010 as an intangible asset. These costs are recoverable through the future revenue streams generated from the customer contracts and are closely related to the revenue from the customer contracts. These costs are recorded as an asset and charged to expense as the revenue is recognized. All other costs, such as general and administrative expenses and costs associated with the negotiation of a contract that is not consummated, are charged to expense as incurred.

Intangible assets are evaluated for impairment when events and changes in circumstances indicate the carrying value may not be recoverable. At September 30, 2015, intangible assets included favorable customer contract and an acquired customer contract, and at December 31, 2014, intangible assets included an acquired customer contract. The customer contract intangible assets are amortized as deliveries are completed during the contract terms (see Note 9, Goodwill and Other Intangible Assets).

Goodwill

Goodwill represents the purchase price paid for an acquired business in excess of the identifiable acquired assets and assumed liabilities. Goodwill is not amortized, but is tested for impairment annually and whenever an event occurs or circumstances change such that it is more likely than not that the fair value of the reporting unit is less than its carrying amounts. The Partnership has identified one reporting unit which corresponds to the Partnership’s one segment and has selected the fourth fiscal quarter to perform its annual goodwill impairment test.

A qualitative assessment is first made to determine whether it is necessary to perform quantitative testing. If this initial qualitative assessment indicates that it is more likely than not that the fair value is more than its carrying value, goodwill is not considered impaired and the Partnership is not required to perform the two-step impairment test. Qualitative factors considered in this assessment include (i) macroeconomic conditions, (ii) past, current and projected future financial performance, (iii) industry and market considerations, (iv) changes in the costs of raw materials, fuel and labor and (v) entity-specific factors such as changes in management or customer base.

If the results of the qualitative assessment indicate that it is more likely than not that goodwill is impaired, the Partnership will perform a two-step impairment test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill.

For the years ended December 31, 2014 and 2013, the Predecessor applied the qualitative test and determined that it was more likely than not that the estimated fair value of the reporting unit substantially exceeded the related carrying value, and, accordingly, was not required to apply the two-step impairment test. The Predecessor has not recorded any goodwill impairment for the years ended December 31, 2014 and 2013 (see Note 9, Goodwill and Other Intangible Assets).

Unit-Based Compensation

Employees, consultants and directors of the General Partner and any of its affiliates are eligible to receive awards under the Enviva Partners, LP Long-Term Incentive Plan. For accounting purposes, units granted to employees of the Partnership’s affiliates are treated as if they are distributed by the Partnership. In May, June and July 2015, phantom units in tandem with corresponding distribution equivalent rights were granted to employees of Enviva Management Company, LLC who provide services to the Partnership and to certain non-employee directors of the General Partner. These awards vest subject to the satisfaction of service requirements or the achievement of certain performance goals, following which common units in the Partnership will be delivered to the holder of the phantom units. Affiliate entities recognize compensation expense for the phantom units awarded to their employees and a portion of that expense is allocated to the Partnership (see Note 13, Equity-Based Awards). The Partnership’s outstanding unit-based awards do not have a cash option and are classified as equity on the Partnership’s condensed consolidated balance sheets. The Partnership also recognizes compensation expense for units awarded to non-employee directors.

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant and equipment and amortizable intangible assets, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that a long-lived asset or asset group be tested for possible impairment, the Partnership first compares undiscounted cash flows expected to be generated by that asset or asset group to such asset or asset group’s carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Fair Value Measurements

The Partnership applies authoritative accounting guidance for fair value measurements of financial and nonfinancial assets and liabilities. The Partnership uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Partnership determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

· Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

· Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

· Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

Recent and Pending Accounting Pronouncements

In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, to amend the guidance for amounts that are adjusted in a merger or acquisition. The standard eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement period adjustments that occur in periods after a business combination is consummated. The ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The standard simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value for entities using the first-in, first-out method of valuing inventory. ASU No. 2015-11 eliminates other measures required by current guidance to determine net realizable value. ASU No. 2015-11 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years and early adoption is permitted. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-06, Earnings Per Share (Topic 260)—Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions—a consensus of the FASB Emerging Issues Task Force (EITF). The amendments in ASU No. 2015-06 apply to master limited partnerships subject to the Master Limited Partnerships Subsections of Topic 260 that receive net assets through a dropdown transaction that is accounted for under the Transactions Between Entities Under Common Control Subsections of Subtopic 805-50, Business Combinations—Related Issues. When a general partner transfers, or “drops down,” net assets to a master limited partnership and that transaction is accounted for as a transaction between entities under common control, the statements of operations of the master limited partnership are adjusted retrospectively to reflect the dropdown transaction as if it occurred on the earliest date during which the entities were under common control. The amendments in ASU No. 2015-06 specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required. The amendments in ASU No. 2015-06 are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The amendments in ASU No. 2015-06 should be applied retrospectively for all financial statements presented. The Partnership is evaluating the new pronouncement to determine the impact it may have on its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Topic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 requires the presentation of debt issuance costs in the balance sheet as a reduction from the related debt liability rather than as an asset. The amortization of such costs will continue to be reported as interest expense. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and allows early adoption for financial statements that have not been previously issued. The update requires retrospective application upon adoption. Upon adoption, the Partnership expects to reclassify amounts included as debt issuance costs within total assets on the consolidated balance sheet to a reduction of long-term debt within total liabilities on the consolidated balance sheet for all periods presented. The adoption is not expected to have an impact on the periodic amount amortized.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new standard reduces the number of consolidation models and simplifies their application. The amendments in ASU No. 2015-02 are intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships and similar legal entities. The amendments simplify the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments (1) eliminate the presumption that a general partner should consolidate a limited partnership, (2) eliminate the indefinite deferral of FASB Statement No. 167, thereby reducing the number of variable interest entity (“VIE”) consolidation models from four to two (including the limited partnership consolidation model), (3) clarify when fees paid to a decision maker should be a factor to include in the consolidation of VIEs, (4) amend the guidance for assessing how related party relationships affect VIE consolidation analysis and (5) exclude certain money market funds from the consolidation guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The standard allows early adoption, including early adoption in an interim period. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements.

In January 2015, the FASB issued ASU No. 2015-01, Income Statement-Extraordinary and Unusual Items. The new standard eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU No. 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. The standard is effective for periods beginning after December 15, 2015 and early adoption is permitted. The adoption is not expected to have a material effect on the Partnership’s consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The new standard provides new guidance on the recognition of revenue and states that an entity should recognize revenue when control of the goods or services transfers to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. The new standard also requires significantly expanded disclosure regarding qualitative and quantitative information about the nature, timing and uncertainty of revenue and cash flow arising from contracts with customers. On July 9, 2015, the FASB approved a one-year delay in the effective date of ASU No. 2014-09. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The standard permits the use of either applying retrospectively the amendment to each prior reporting period presented or retrospectively with the cumulative effect of initially applying at the date of initial application. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements and has not determined which implementation method will be adopted.

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Partners' Capital (Details 3) - USD ($)			2 Months Ended	3 Months Ended	5 Months Ended	9 Months Ended
	Oct. 28, 2015	Jul. 29, 2015	Jun. 30, 2015	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2015
Cash Distributions
Cash distribution declared	$ 10,500,000	$ 6,300,000			$ 6,339,000
Cash distribution declared (in dollars per unit)	$ 0.4400	$ 0.2630		$ 0.4400		$ 0.7030
Incentive distribution						$ 0
Minimum
Cash Distributions
Prorated unit value for quarterly distribution (in dollars per unit)			$ 0.4125

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Description of Business and Basis of Presentation (Details) $ in Thousands		3 Months Ended			4 Months Ended	5 Months Ended	9 Months Ended
	Apr. 09, 2015 USD ($)	Sep. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Sep. 30, 2014 USD ($)	May. 04, 2015 USD ($) item	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Nov. 30, 2012 USD ($)
Number of industrial-scale production wood pellet production plants | item					5
Assets:
Cash	$ 10,236
Accounts receivable	13,445
Inventories	2,055
Prepaid expenses and other current assets	377
Property, plant and equipment, net	17,199
Intangibles, net	8,700
Goodwill	80,736
Other assets	58
Total Assets	132,806
Liabilities.
Accounts payable	3,061
Accrued liabilities	2,487
Long-term debt and capital leases	86,238
Other liabilities	(49)
Total Liabilities	91,737
Net assets contributed to Partnership	41,069
Predecessor contributed partners capital rollforward
Balance at the beginning of the period			$ 274,528		$ 274,528	$ 312,392	$ 274,528
Conveyance of Enviva Pellets Southampton, LLC to Hancock JV					(91,696)
Distribution to sponsor					(4,152)	(172,550)
Contribution of Acquisition II					132,765
Expenses incurred by sponsor					3,088
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to Predecessor		$ 6,398	2,511		(2,141)	12,076	9,935
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to noncontrolling partners' interest		14	8				30
Balance at the end of the period		$ 355,007			312,392	355,007	355,007
Senior Secured Credit Facilities
Maximum aggregate borrowing capacity	199,500
Prior Senior Secured Credit Facilities
Repayment of outstanding indebtedness under the Credit Facility and related accrued interest	82,200
Predecessor contributed partners capital rollforward
Distribution to sponsor	(85,900)
Enviva Pellets Southampton, LLC
Assets:
Accounts receivable	(12)
Inventories	(4,040)
Prepaid expenses and other current assets	(130)
Property, plant and equipment, net	(91,537)
Total Assets	(95,719)
Liabilities.
Accounts payable	(536)
Accrued liabilities	(2,362)
Long-term debt and capital leases	(1,076)
Other liabilities	(49)
Total Liabilities	(4,023)
Net assets contributed to Partnership	$ (91,696)
Acquisition II
Percentage of interest in subsidiaries	100.00%
Assets:
Cash	$ 10,236
Accounts receivable	13,457
Inventories	6,095
Prepaid expenses and other current assets	507
Property, plant and equipment, net	108,736
Intangibles, net	8,700
Goodwill	80,736
Other assets	58
Total Assets	228,525
Liabilities.
Accounts payable	3,597
Accrued liabilities	4,849
Long-term debt and capital leases	87,314
Total Liabilities	95,760
Net assets contributed to Partnership	$ 132,765
Predecessor contributed partners capital rollforward
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to Predecessor			4,535
Predecessor And Enviva GP, LLC
Percentage of interest in subsidiaries	100.00%
Enviva, LP and Subsidiaries
Predecessor contributed partners capital rollforward
Balance at the beginning of the period			274,528		274,528	$ 312,392	$ 274,528
Conveyance of Enviva Pellets Southampton, LLC to Hancock JV					(91,696)
Distribution to sponsor					(4,152)
Contribution of Acquisition II					132,765
Expenses incurred by sponsor					3,088
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to Predecessor			(2,024)	$ 3,105	(2,132)			$ (2,123)
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to noncontrolling partners' interest			$ 8	$ 19	(9)			$ 61
Balance at the end of the period					$ 312,392
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities
Repayment of outstanding indebtedness under the Credit Facility and related accrued interest	$ 82,200
Maximum aggregate borrowing capacity									$ 120,000
Enviva, LP and Subsidiaries | Enviva Pellets Southampton, LLC
Percentage of interest in subsidiaries	100.00%
Enviva, LP and Subsidiaries | Enviva Holdings, LP
Cash and cash equivalents distributed to sponsor	$ 1,700
Accounts receivable distributed to sponsor	$ 2,400

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Net Income per Limited Partner Unit (Tables)

9 Months Ended

Sep. 30, 2015

Net Income per Limited Partner Unit.

Schedule of weighted average common units outstanding

	Three Months Ended September 30, 2015	Nine Months Ended September 30, 2015
Weighted average limited partner common units—basic	11,905,739	11,905,509
Dilutive effect of unvested phantom units	287,516	273,848
Weighted average limited partner common units—diluted	12,193,255	12,179,357

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Equity - Based Awards (Details) - USD ($) $ in Thousands				3 Months Ended		9 Months Ended
	Jul. 29, 2015	Jun. 03, 2015	May. 04, 2015	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2015	Apr. 30, 2015
Long Term Incentive Plan
General and Administrative Expense				$ 4,779	$ 3,770	$ 13,176
Phantom units
Long Term Incentive Plan
Units granted						296,266
LTIP
Long Term Incentive Plan
Number of common units to be awarded under the plan							2,738,182
LTIP | Phantom units
Long Term Incentive Plan
Units granted	27,760	27,141
Period in which awards are settled in common units			60 days
General and Administrative Expense						$ 200
Employees of Affiliate | Phantom units
Long Term Incentive Plan
Units granted			227,253
Affiliate Grants | Phantom units
Long Term Incentive Plan
Grant date fair value						$ 5,800
Affiliate Grants | Phantom units | Tranche One
Long Term Incentive Plan
Units granted			200,351
Vesting period			3 years
Affiliate Grants | Phantom units | Tranche Two
Long Term Incentive Plan
Units granted			81,803
Non Employee Directors | Phantom units
Long Term Incentive Plan
Units granted			14,112
Director Grants | Phantom units
Long Term Incentive Plan
Grant date fair value			$ 300
Vesting period			1 year

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Description of Business and Basis of Presentation (Details 2) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			4 Months Ended	5 Months Ended	9 Months Ended
	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	May. 04, 2015	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014
Unaudited pro forma consolidated income statement information
Net revenue						$ 340,561
Net income						9,935
Less net loss attributable to noncontrolling partners' interests						30
Net income attributable to Enviva Partners, LP						$ 9,965
Common - diluted						$ 0.41
Subordinated- diluted						$ 0.41
Changes to previously reported amounts included in report [Abstract]
Product sales	$ 115,081	$ 113,145				$ 335,857
Other revenue	1,507	1,168				4,704
Net revenue	116,588	114,313				340,561
Cost of goods sold, excluding depreciation and amortization	96,238	94,400				279,858
Depreciation and amortization	6,294	8,259				21,587
Total cost of goods sold	102,532	102,659				301,445
Gross margin	14,056	11,654				39,116
General and administrative expenses	4,779	3,770				13,176
Income from operations	9,277	7,884				25,940
Other income (expense):
Interest expense	(2,887)	(2,716)				(7,576)
Other income	9	6				24
Total other expense, net	(2,878)	(2,710)				(13,348)
Income (loss) before income tax expense	6,399	5,174				12,592
Income tax expense	1	2,663				2,657
Net income (loss)	6,398	2,511		$ (2,141)	$ 12,076	9,935
Less net loss attributable to noncontrolling partners' interests	14	8				30
Net income (loss) attributable to Enviva Partners, LP	$ 6,412	2,519				9,965
Enviva, LP and Subsidiaries
Unaudited pro forma consolidated income statement information
Net revenue							$ 316,108
Net income							13,751
Less net loss attributable to noncontrolling partners' interests							61
Net income attributable to Enviva Partners, LP							13,812
Changes to previously reported amounts included in report [Abstract]
Product sales		70,983	$ 75,186				208,332
Other revenue		1,168	924				2,827
Net revenue		72,151	76,110				211,159
Cost of goods sold, excluding depreciation and amortization		64,294	63,277				184,887
Depreciation and amortization		4,658	4,767				14,308
Total cost of goods sold		68,952	68,044				199,195
Gross margin		3,199	8,066				11,964
General and administrative expenses		3,310	2,837				7,399
Income from operations		(111)	5,229				4,565
Other income (expense):
Interest expense		(1,916)	(2,124)				(6,619)
Other income		3	4				16
Total other expense, net		(1,913)	(2,120)				(6,676)
Income (loss) before income tax expense		(2,024)	3,109				(2,111)
Income tax expense			4				12
Net income (loss)		(2,024)	3,105	(2,132)			(2,123)
Less net loss attributable to noncontrolling partners' interests		8	19	$ (9)			61
Net income (loss) attributable to Enviva Partners, LP		(2,016)	$ 3,124			$ (2,132)	$ (2,062)
Acquisition II
Changes to previously reported amounts included in report [Abstract]
Product sales		42,162
Net revenue		42,162
Cost of goods sold, excluding depreciation and amortization		30,106
Depreciation and amortization		3,601
Total cost of goods sold		33,707
Gross margin		8,455
General and administrative expenses		460
Income from operations		7,995
Other income (expense):
Interest expense		(800)
Other income		3
Total other expense, net		(797)
Income (loss) before income tax expense		7,198
Income tax expense		2,663
Net income (loss)		4,535
Net income (loss) attributable to Enviva Partners, LP		$ 4,535

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Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	May. 04, 2015	Sep. 30, 2015
Initial Public Offering
Ownership interest by Non-controlling interest (as a percent)	48.30%
Net proceeds from issuance	$ 215,100	$ 215,050
Repayment of intercompany indebtedness	83,000
Distributions to partnership sponsor	86,700
Amount retained for general purposes	$ 45,400
Ownership interest (as a percent)		51.70%
Common Units
Initial Public Offering
Ownership interest (as a percent)	51.70%
Number of common units owned by the Sponsor	405,138
IPO | Common Units
Initial Public Offering
Shares issued	11,500,000
Share price (in dollars per share)	$ 20.00
Share price, net of underwriting discounts (in dollars per share)	$ 18.8

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Initial Public Offering

9 Months Ended

Sep. 30, 2015

Initial Public Offering.

Initial Public Offering

(2)Initial Public Offering

On May 4, 2015, the Partnership completed an IPO of 11,500,000 common units, including common units issued upon exercise of the underwriter’s option, representing limited partner interests in the Partnership at a price to the public of $20.00 per unit ($18.80 per common unit, net of underwriting discounts and commissions) and constituting approximately 48.3% of the Partnership’s outstanding limited partner interests. The IPO was registered pursuant to a registration statement on Form S-1 originally filed on October 27, 2014, as amended (Registration No. 333-199625), that was declared effective by the SEC on April 28, 2015. The net proceeds from the IPO of approximately $215.1 million after deducting the underwriting discount and structuring fee were used to (i) repay intercompany indebtedness related to the acquisition of Green Circle in the amount of approximately $83.0 million and (ii) distribute approximately $86.7 million to the sponsor related to its contribution of assets to the Partnership in connection with the IPO, with the Partnership retaining $45.4 million for general partnership purposes, including offering expenses.

The sponsor owns 405,138 common units and all of the Partnership’s subordinated units, representing 51.7% of the Partnership’s limited partner interests. Enviva Partners GP, LLC, the Partnership’s general partner and a wholly-owned subsidiary of the sponsor (the “General Partner”), owns all the outstanding incentive distribution rights (“IDRs”).

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Significant Accounting Policies (Details) $ in Thousands	1 Months Ended	9 Months Ended
	Apr. 30, 2015 USD ($)	Sep. 30, 2015 USD ($) segment item	Dec. 31, 2014 USD ($)
Segment and Geographic Information
Number of operating segments | segment		1
Derivative Instruments .
Termination payment for interest rate swap derivative	$ 100	$ 146
Debt Issuance Costs and Original Issue Discount
Debt issuance costs, net		4,700
Deferred Issuance Costs
Deferred issuance costs		$ 0
Intangible Assets
Period of wood pellet contract	6 years
Goodwill.
Number of reporting units for goodwill analysis | item		1
Number of operating segments | segment		1
Minimum
Net Income per Limited Partner Unit..
Quarterly distribution of operating surplus (as a percent)		15.00%
Maximum
Net Income per Limited Partner Unit..
Quarterly distribution of operating surplus (as a percent)		50.00%
Enviva, LP and Subsidiaries
Debt Issuance Costs and Original Issue Discount
Debt issuance costs, net			$ 3,600
Deferred Issuance Costs
Deferred issuance costs			$ 4,052

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Related Party Transactions (Details) - USD ($) $ in Thousands				3 Months Ended		9 Months Ended
	May. 04, 2015	Apr. 09, 2015	Nov. 09, 2012	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Jan. 31, 2015	Dec. 31, 2014
Related Party Transaction
Amount due to related party				$ 5,459		$ 5,459
Notes payable		$ 81,900
Related party notes payable repaid	$ 81,900
Accrued interest paid	$ 1,100
Green Circle
Related Party Transaction
Notes payable								$ 36,700
Acquisition II
Related Party Transaction
Notes payable								$ 50,000
Prior MSA | Enviva Holdings, LP.
Related Party Transaction
Amount due to related party				2,800		2,800
Capitalized deferred issuance costs				0		900
New MSA
Related Party Transaction
Annual fee expensed				9,300		21,700
New MSA | Inventory finished goods
Related Party Transaction
Annual fee expensed						1,100
New MSA | General and administrative expenses
Related Party Transaction
Annual fee expensed				3,300		9,600
New MSA | Cost of goods sold.
Related Party Transaction
Annual fee expensed				4,900		11,000
New MSA | Enviva Management Company, LLC
Related Party Transaction
Term of agreement		5 years
Biomass Purchase And Terminal Service Agreement
Related Party Transaction
Amount due to related party				2,400		2,400
Purchase of wood pellets				19,200		35,900
Terminal service fees				0		0
Biomass Purchase And Terminal Service Agreement | Inventory finished goods
Related Party Transaction
Purchase of wood pellets				1,200		1,200
Biomass Purchase And Terminal Service Agreement | Cost of goods sold.
Related Party Transaction
Purchase of wood pellets				18,300		34,700
Enviva, LP and Subsidiaries
Related Party Transaction
Amount due to related party									$ 2,354
Enviva, LP and Subsidiaries | Prior MSA | Enviva Holdings, LP.
Related Party Transaction
Term of agreement			6 years
Reimbursable expenses incurred				0	$ 600	800	$ 2,000
Amount due to related party									$ 2,400
Capitalized deferred issuance costs					200		1,000
Capital contributions				0		500
Enviva, LP and Subsidiaries | Prior MSA | Enviva Holdings, LP. | General and administrative expenses
Related Party Transaction
Annual fee expensed				$ 0	1,900	$ 2,200	4,800
Reimbursable expenses incurred					500		1,600
Enviva, LP and Subsidiaries | Prior MSA | Enviva Holdings, LP. | Cost of goods sold.
Related Party Transaction
Reimbursable expenses incurred					$ 100		$ 400
Enviva, LP and Subsidiaries | Prior MSA | Enviva Holdings, LP. | Maximum
Related Party Transaction
Annual fee			$ 7,200

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 75,157	$ 592
Accounts receivable, net of allowance for doubtful accounts of $0 in 2015 and $61 in 2014	44,464
Related party receivable	652
Inventories	25,366
Deferred issuance costs	0
Prepaid expenses and other current assets	2,808
Total current assets	148,447
Property, plant and equipment, net of accumulated depreciation of $49.1 million in 2015 and $40.9 million in 2014	321,639
Intangible assets, net of accumulated amortization of $6.9 million in 2015 and $1.0 million in 2014	3,505	722
Goodwill	85,615
Debt issuance costs, net of accumulated amortization of $0.5 million in 2015 and $3.0 million in 2014	4,705
Other long-term assets	519
Total assets	564,430
Current liabilities:
Accounts payable	8,975
Related party payable	5,459
Accrued and other current liabilities	16,399
Deferred revenue	575
Current portion of long-term debt and capital lease obligations	3,072
Total current liabilities	34,480
Long-term debt and capital lease obligations	173,767
Other long-term liabilities	1,176
Total liabilities	$ 209,423
Commitments and contingencies
Partners' capital:
Limited partner interests, 23.8 million units outstanding	$ 352,004
Total Enviva Partners, LP partners' capital	352,004
Noncontrolling partners' interests	3,003
Total partners' capital	355,007	274,528
Total liabilities and partners' capital	$ 564,430
Enviva, LP and Subsidiaries
Current assets:
Cash and cash equivalents		592
Accounts receivable, net of allowance for doubtful accounts of $0 in 2015 and $61 in 2014		21,998
Inventories		18,064
Restricted cash		11,640
Deferred issuance costs		4,052
Prepaid expenses and other current assets		1,734
Total current assets		58,080
Property, plant and equipment, net of accumulated depreciation of $49.1 million in 2015 and $40.9 million in 2014		316,259
Intangible assets, net of accumulated amortization of $6.9 million in 2015 and $1.0 million in 2014		722
Goodwill		4,879
Debt issuance costs, net of accumulated amortization of $0.5 million in 2015 and $3.0 million in 2014		3,594
Other long-term assets		955
Total assets		384,489
Current liabilities:
Accounts payable		4,013
Related party payable		2,354
Accrued and other current liabilities		8,159
Deferred revenue		60
Current portion of interest payable		73
Current portion of long-term debt and capital lease obligations		10,237
Total current liabilities		24,896
Long-term debt and capital lease obligations		83,838
Other long-term liabilities		1,227
Total liabilities		$ 109,961
Commitments and contingencies
Partners' capital:
Predecessor equity		$ 271,495
Total Enviva Partners, LP partners' capital		271,495
Noncontrolling partners' interests		3,033
Total partners' capital		274,528
Total liabilities and partners' capital		$ 384,489

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Equity - Based Awards (Details 2) - Phantom units	9 Months Ended
	Sep. 30, 2015 $ / shares shares
Number of Units
Granted (in units) | shares	296,266
Outstanding at the end of the period (in units) | shares	296,266
Weighted Average Grant Date Fair Value per Unit
Granted (in dollars per unit)	$ 20.58
Outstanding at the end of the period (in dollars per unit)	$ 20.58

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income (loss)	$ 9,935
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	21,621
Amortization of debt issuance costs and original issue discount	1,229
General and administrative expense incurred by Enviva Holdings, LP	475
Allocation of income tax expense from Enviva Cottondale Acquisition I, LLC	2,663
Early retirement of debt obligation	4,699
Unit-based compensation expense	363
Other operating	(74)
Change in operating assets and liabilities:
Accounts receivable	(9,954)
Prepaid expenses and other assets	(757)
Inventories	(4,985)
Other long-term assets	494
Accounts payable, accrued liabilities and other current liabilities	13,405
Accrued interest	33
Deferred revenue	515
Net cash provided by operating activities	39,662
Cash flows from investing activities:
Purchase of property, plant and equipment	(4,129)
Payment of acquisition related costs	(3,573)
Proceeds from the sale of equipment	277
Net cash used in investing activities	(7,425)
Cash flows from financing activities:
Principal payments on debt and capital lease obligations	(183,183)
Cash paid related to debt issuance costs	(5,123)
Termination payment for interest rate swap derivative	(146)
Release of cash restricted for debt service	11,640
IPO proceeds, net	215,050
Cash distribution to sponsor	(176,702)
Cash paid for deferred IPO costs	(1,790)
Cash distribution to unitholders	(6,159)
Proceeds from contributions from sponsor	10,236
Proceeds from debt issuance	178,505
Net cash provided by (used in) financing activities	42,328
Net increase (decrease) in cash and cash equivalents	74,565
Cash and cash equivalents, beginning of period	592
Cash and cash equivalents, end of period	75,157
Non-cash investing and financing activities:
The Partnership acquired property, plant and equipment in non-cash transactions: Property, plant and equipment acquired and included in accounts payable and accrued liabilities	1,431
The Partnership acquired property, plant and equipment in non-cash transactions: Property, plant and equipment acquired under notes payable	39
The Partnership acquired property, plant and equipment in non-cash transactions: property, plant and equipment transferred from prepaid expenses	173
The Partnership acquired property, plant and equipment in non-cash transactions: property, plant and equipment transferred from inventory	146
Contribution of Enviva Pellets Cottondale, LLC non-cash net assets	122,529
Application of deferred IPO costs to partners' capital	5,913
IPO costs included in accounts payable and accrued liabilities	21
Distributions included in liabilities	179
Debt issuance costs included in accrued liabilities	66
Conveyance of Enviva Pellets Southampton, LLC to Hancock JV	91,696
Distribution of Enviva Pellets Cottondale, LLC assets to sponsor	354
Non-Cash adjustment to financed insurance and prepaid expenses	105
Gain on disposal included in receivables	8
Depreciation capitalized to inventories	409
Non-cash capital contributions from sponsor	339
Supplemental information:
Interest paid	7,369
Enviva, LP and Subsidiaries
Cash flows from operating activities:
Net income (loss)		$ (2,123)
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		14,335
Amortization of debt issuance costs and original issue discount		1,516
Early retirement of debt obligation		73
Unit-based compensation expense		2
Other operating		46
Change in operating assets and liabilities:
Accounts receivable		(4,454)
Prepaid expenses and other assets		2,331
Inventories		3,833
Other long-term assets		268
Accounts payable, accrued liabilities and other current liabilities		5,541
Accrued interest		(286)
Deferred revenue		(536)
Other long-term liabilities		384
Net cash provided by operating activities		20,930
Cash flows from investing activities:
Purchase of property, plant and equipment		(13,860)
Restricted cash		43
Proceeds from the sale of equipment		25
Net cash used in investing activities		(13,792)
Cash flows from financing activities:
Principal payments on debt and capital lease obligations		(40,117)
Cash restricted for debt service		(4,600)
Proceeds from debt issuance		37,000
Net cash provided by (used in) financing activities		(7,717)
Net increase (decrease) in cash and cash equivalents		(579)
Cash and cash equivalents, beginning of period	$ 592	3,558
Cash and cash equivalents, end of period		2,979
Non-cash investing and financing activities:
The Partnership acquired property, plant and equipment in non-cash transactions: Property, plant and equipment acquired and included in accounts payable and accrued liabilities		327
The Partnership acquired property, plant and equipment in non-cash transactions: Property, plant and equipment acquired and included in other assets as notes receivable		175
The Partnership acquired property, plant and equipment in non-cash transactions: Property, plant and equipment acquired under capital leases		290
Financed insurance		2,157
Depreciation capitalized to inventories		242
Early retirement of debt obligation: Deposit applied to principal outstanding under promissory note		391
Early retirement of debt obligation: Deposit applied to accrued interest under promissory note		154
Non-cash capital contributions from sponsor		1,083
Supplemental information:
Interest paid		$ 5,181

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Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Raw materials and work-in-progress	$ 5,910
Consumable tooling	7,559
Finished goods	11,897
Total inventories	$ 25,366
Enviva, LP and Subsidiaries
Raw materials and work-in-progress		$ 6,880
Consumable tooling		6,934
Finished goods		4,250
Total inventories		$ 18,064

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Description of Business and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2015

Description of Business and Basis of Presentation

The schedule of changes in consolidated net assets resulting from the contribution of Acquisition II to the Partnership and the conveyance of Enviva Pellets Southampton, LLC to the Hancock JV

	Enviva Pellets Southampton, LLC			Acquisition II		Total
Assets:
Cash	$	—		$	10,236	$	10,236
Accounts receivable	(12		)	13,457		13,445
Inventories	(4,040		)	6,095		2,055
Prepaid expenses and other current assets	(130		)	507		377
Property, plant and equipment, net	(91,537		)	108,736		17,199
Intangibles, net	—			8,700		8,700
Goodwill	—			80,736		80,736
Other assets	—			58		58
Total assets	(95,719		)	228,525		132,806
Liabilities:
Accounts payable	(536		)	3,597		3,061
Accrued liabilities	(2,362		)	4,849		2,487
Long-term debt and capital leases	(1,076		)	87,314		86,238
Other liabilities	(49		)	—		(49		)
Total liabilities	(4,023		)	95,760		91,737
Net assets contributed to Partnership	$	(91,696	)	$	132,765	$	41,069

The schedule reconciling the Predecessor's partners' capital as of December 31, 2014 and total net assets contributed to the Partnership prior to the May 4, 2015 IPO

Predecessor’s partners’ capital — December 31, 2014	$	274,528
Conveyance of Enviva Pellets Southampton, LLC to Hancock JV	(91,696		)
Distribution of cash to sponsor	(4,152		)
Contribution of Acquisition II	132,765
Expenses incurred by sponsor	3,088
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to Predecessor	(2,132		)
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to noncontrolling partners’ interest	(9		)
Predecessor’s partners’ capital — May 4, 2015 (prior to IPO)	$	312,392

Schedule of unaudited pro forma consolidated income statement information

	Nine Months Ended September 30,
	2015		2014
			(Predecessor)
Net revenue	$	340,561	$	316,108
Net income	9,935		13,751
Less net loss attributable to noncontrolling partners’ interests	30		61
Net income attributable to Enviva Partners, LP	9,965		13,812
Net income per limited partner unit:
Common — diluted	$	0.41
Subordinated — diluted	$	0.41

Schedule of changes to previously reported amount included in quarterly report

	Three Months Ended March 31, 2015
	As Reported			Acquisition II			Total
Product sales	$	70,983		$	42,162		$	113,145
Other revenue	1,168			—			1,168
Net revenue	72,151			42,162			114,313
Cost of goods sold, excluding depreciation and amortization	64,294			30,106			94,400
Depreciation and amortization	4,658			3,601			8,259
Total cost of goods sold	68,952			33,707			102,659
Gross margin	3,199			8,455			11,654
General and administrative expenses	3,310			460			3,770
(Loss) income from operations	(111		)	7,995			7,884
Other income (expense):
Interest expense	(1,916		)	(800		)	(2,716		)
Other income	3			3			6
Total other expense, net	(1,913		)	(797		)	(2,710		)
(Loss) income before income tax expense	(2,024		)	7,198			5,174
Income tax expense	—			2,663			2,663
Net (loss) income	(2,024		)	4,535			2,511
Less net loss attributable to noncontrolling partners’ interests	8			—			8
Net (loss) income attributable to Enviva Partners, LP	$	(2,016	)	$	4,535		$	2,519

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Derivative Instruments (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended			9 Months Ended
	Apr. 30, 2015	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Derivative Instruments
Interest expense		$ 2,887	$ 2,716		$ 7,576
Termination payment for interest rate swap derivative	$ 100				$ 146
Interest Rate Swap
Derivative Instruments
Interest expense		$ 0
Enviva, LP and Subsidiaries
Derivative Instruments
Interest expense			$ 1,916	$ 2,124		$ 6,619
Enviva, LP and Subsidiaries | Interest Rate Swap
Derivative Instruments
Minimum swap percent of term loan outstanding balance					50.00%

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Inventories (Tables)

9 Months Ended

Sep. 30, 2015

Inventories

Schedule of inventories

	September 30, 2015		December 31, 2014
			(Predecessor)
Raw materials and work-in-process	$	5,910	$	6,880
Consumable tooling	7,559		6,934
Finished goods	11,897		4,250
Total inventories	$	25,366	$	18,064

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Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2015

Description of Business and Basis of Presentation

Description of Business and Basis of Presentation

(1)Description of Business and Basis of Presentation

Enviva Partners, LP (the “Partnership”) is a Delaware limited partnership formed on November 12, 2013 as a wholly owned subsidiary of Enviva Holdings, LP (the “sponsor”). Through its interests in Enviva, LP (the “Predecessor”) and Enviva GP, LLC, the general partner of the Predecessor, the Partnership supplies utility-grade wood pellets to major power generators under long-term, take-or-pay off-take contracts. The Partnership acquires wood fiber from landowners and other suppliers, dries and processes that fiber into wood pellets at industrial-scale production plants and transports those products to deep-water marine terminals where they are stored and then distributed to customers. Wood pellets are sold principally to Northern European power generators who use them as a substitute fuel for coal in dedicated biomass or co-fired coal power plants.

The Partnership operates five industrial-scale wood pellet production plants located in the Mid-Atlantic and Gulf Coast regions of the United States. Wood pellets are exported from a wholly-owned deep-water marine terminal in Chesapeake, Virginia and from a third-party deep-water marine terminal in Mobile, Alabama under a long-term contract. Production from the Partnership’s wood pellet production plant in Cottondale, Florida (the “Cottondale plant”) is exported from a third-party terminal in Panama City, Florida, under a long-term contract.

On May 4, 2015, the Partnership completed an initial public offering (the “IPO”) of common units representing limited partner interests in the Partnership (see Note 2, Initial Public Offering). Prior to the closing of the IPO, the sponsor contributed to the Partnership its interests in the Predecessor, Enviva GP, LLC, and Enviva Cottondale Acquisition II, LLC (“Acquisition II”), which was the owner of Enviva Pellets Cottondale, LLC (“Cottondale”). The primary assets contributed to the Partnership by the sponsor included five industrial-scale wood pellet production plants and a wholly-owned deep-water terminal and long-term contractual arrangements to sell the wood pellets produced at the plants to third parties.

Until April 9, 2015, Enviva MLP Holdco, LLC, a wholly-owned subsidiary of the sponsor, was the owner of the Predecessor, and Enviva Cottondale Acquisition I, LLC (“Acquisition I”), a wholly-owned subsidiary of the sponsor, was the owner of Acquisition II.

In January 2015, the sponsor acquired Green Circle Bio Energy, Inc. (“Green Circle”), which owned the Cottondale plant. Acquisition I contributed it to the Partnership in April 2015 in exchange for subordinated units in the Partnership. Prior to such contribution, the sponsor converted Green Circle into a Delaware limited liability company and changed the name of the entity to “Enviva Pellets Cottondale, LLC.”

In connection with the closing of the Senior Secured Credit Facilities (as defined below) (see Note 10, Long-Term Debt and Capital Lease Obligations), on April 9, 2015, the Partnership, the Predecessor and the sponsor executed a series of transactions that were accounted for as common control transactions and are referred to as the “Reorganization:”

· Under a Contribution Agreement, the Predecessor conveyed 100% of the outstanding limited liability company interest in Enviva Pellets Southampton, LLC, which owns a wood pellet production plant in Southampton County, Virginia (the “Southampton plant”), to a joint venture between the sponsor and Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life Insurance Company (the “Hancock JV,” which is consolidated by the sponsor); and

· Under a separate Contribution Agreement by and among the sponsor, Enviva MLP Holdco, LLC, Acquisition I, the Predecessor and the Partnership, the parties executed the following transactions:

· The Predecessor distributed cash and cash equivalents of $1.7 million and accounts receivable of $2.4 million to the sponsor;

· The sponsor contributed to the Partnership 100% of the outstanding limited liability company interest in Acquisition II, the former owner of Cottondale (formerly Green Circle Bio Energy, Inc.), which owns the Cottondale plant;

· The sponsor contributed 100% of the outstanding interests in each of the Predecessor and Enviva GP, LLC to the Partnership; and

· The Partnership used $82.2 million of the proceeds from borrowings under the Senior Secured Credit Facilities to repay all outstanding indebtedness under the Predecessor’s $120.0 million senior secured credit facilities (the “Prior Senior Secured Credit Facilities”) and related accrued interest (see Note 10, Long-Term Debt and Capital Lease Obligations).

As a result of the Reorganization, the Partnership became the owner of the Predecessor, Enviva GP, LLC and Acquisition II.

On April 9, 2015, the Partnership also entered into a Master Biomass Purchase and Sale Agreement (the “Biomass Purchase Agreement”) pursuant to which the Hancock JV sells to the Partnership, at a fixed price per metric ton, wood pellets initially sourced from the production at the Southampton plant. The purchased wood pellets from the Hancock JV are sold to the Partnership’s customers under existing off-take contracts.

In connection with the closing of the IPO, under a Contribution Agreement by and among the sponsor, Enviva MLP Holdco, LLC, Acquisition I, the Predecessor and the Partnership, Acquisition II merged into the Partnership and the Partnership contributed its interest in Cottondale to the Predecessor.

The accompanying unaudited interim condensed consolidated financial statements (“interim statements”) of the Partnership have been prepared in connection with the completed IPO of common units representing limited partner interests in the Partnership. The accompanying interim statements include the accounts of the Predecessor and its subsidiaries and were prepared using the Predecessor’s historical basis. Prior to the IPO, certain of the assets and liabilities of the Predecessor were transferred to the Partnership within the sponsor’s consolidated group in a transaction under common control and, as such, the condensed consolidated historical financial statements of the Predecessor are presented as the Partnership’s historical financial statements as we believe they provide a representation of our management’s ability to execute and manage our business plan. As entities under common control, the contributed assets were recorded on the balance sheet at the Predecessor’s historical basis rather than fair value. The financial statements were prepared using the Predecessor’s historical basis in the assets and liabilities, and include all revenues, costs, assets and liabilities attributed to the Predecessor. The financial statements for periods prior to the Reorganization have been recast to reflect the contribution of the sponsor’s interests in the Predecessor and Enviva GP, LLC as if the contributions occurred at the beginning of the periods presented and the contribution of the sponsor’s interests in Acquisition II as if the contribution occurred on January 5, 2015. Enviva Pellets Southampton, LLC is not included in the Partnership’s condensed consolidated financial statements effective April 9, 2015, the date of the Reorganization.

The following table outlines the changes in consolidated net assets resulting from the contribution of Acquisition II to the Partnership and the conveyance of Enviva Pellets Southampton, LLC to the Hancock JV:

	Enviva Pellets Southampton, LLC			Acquisition II		Total
Assets:
Cash	$	—		$	10,236	$	10,236
Accounts receivable	(12		)	13,457		13,445
Inventories	(4,040		)	6,095		2,055
Prepaid expenses and other current assets	(130		)	507		377
Property, plant and equipment, net	(91,537		)	108,736		17,199
Intangibles, net	—			8,700		8,700
Goodwill	—			80,736		80,736
Other assets	—			58		58
Total assets	(95,719		)	228,525		132,806
Liabilities:
Accounts payable	(536		)	3,597		3,061
Accrued liabilities	(2,362		)	4,849		2,487
Long-term debt and capital leases	(1,076		)	87,314		86,238
Other liabilities	(49		)	—		(49		)
Total liabilities	(4,023		)	95,760		91,737
Net assets contributed to Partnership	$	(91,696	)	$	132,765	$	41,069

The following is a reconciliation of the Predecessor’s partners’ capital as of December 31, 2014 and total net assets contributed to the Partnership prior to the May 4, 2015 IPO:

Predecessor’s partners’ capital — December 31, 2014	$	274,528
Conveyance of Enviva Pellets Southampton, LLC to Hancock JV	(91,696		)
Distribution of cash to sponsor	(4,152		)
Contribution of Acquisition II	132,765
Expenses incurred by sponsor	3,088
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to Predecessor	(2,132		)
Net loss January 1, 2015 to May 4, 2015 (prior to IPO) attributable to noncontrolling partners’ interest	(9		)
Predecessor’s partners’ capital — May 4, 2015 (prior to IPO)	$	312,392

The following summarized unaudited pro forma consolidated income statement information for the nine months ended September 30, 2015 and 2014 assumes that the contribution of the sponsor’s interests in the Predecessor and Enviva GP, LLC occurred on January 1, 2014 and that the contribution of the sponsor’s interests in Acquisition II occurred on January 1, 2014. The summarized unaudited pro forma financial results are prepared for comparative purposes only. The summarized unaudited pro forma financial results may not be indicative of the results that would have occurred if the contributions had been completed as of January 1, 2014 or the results that will be attained in the future.

	Nine Months Ended September 30,
	2015		2014
			(Predecessor)
Net revenue	$	340,561	$	316,108
Net income	9,935		13,751
Less net loss attributable to noncontrolling partners’ interests	30		61
Net income attributable to Enviva Partners, LP	9,965		13,812
Net income per limited partner unit:
Common — diluted	$	0.41
Subordinated — diluted	$	0.41

The following table presents the changes to previously reported amounts of the Partnership’s condensed consolidated statement of operations for the three months ended March 31, 2015 included in the Partnership’s quarterly report on Form 10-Q for the quarter ended March 31, 2015 to reflect the contribution of Acquisition II as if it had been contributed on January 5, 2015, the date on which the sponsor acquired Green Circle:

	Three Months Ended March 31, 2015
	As Reported			Acquisition II			Total
Product sales	$	70,983		$	42,162		$	113,145
Other revenue	1,168			—			1,168
Net revenue	72,151			42,162			114,313
Cost of goods sold, excluding depreciation and amortization	64,294			30,106			94,400
Depreciation and amortization	4,658			3,601			8,259
Total cost of goods sold	68,952			33,707			102,659
Gross margin	3,199			8,455			11,654
General and administrative expenses	3,310			460			3,770
(Loss) income from operations	(111		)	7,995			7,884
Other income (expense):
Interest expense	(1,916		)	(800		)	(2,716		)
Other income	3			3			6
Total other expense, net	(1,913		)	(797		)	(2,710		)
(Loss) income before income tax expense	(2,024		)	7,198			5,174
Income tax expense	—			2,663			2,663
Net (loss) income	(2,024		)	4,535			2,511
Less net loss attributable to noncontrolling partners’ interests	8			—			8
Net (loss) income attributable to Enviva Partners, LP	$	(2,016	)	$	4,535		$	2,519

The Partnership’s condensed consolidated statement of operations for the nine months ended September 30, 2015 includes income tax expense of $2.7 million related to the activities of the Cottondale plant, from the date of acquisition on January 5, 2015 through April 8, 2015. During this period, Cottondale was a corporate subsidiary of Acquisition II, a wholly-owned corporate subsidiary of Acquisition I, the corporate parent of the consolidated group. On April 7 and 8, 2015, Cottondale and Acquisition II, respectively, converted to limited liability companies. Prior to the contribution of Acquisition II to the Partnership on April 9, 2015, the financial results of Acquisition II and Cottondale were included in the consolidated federal income tax return of the tax paying entity, Acquisition I. As the income tax expense recorded for the period January 5, 2015 through April 9, 2015 related to the time that the Cottondale plant and Acquisition II were corporate subsidiaries of Acquisition I’s consolidated group, the income tax expense is reflected as an equity contribution on the books of Cottondale.

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments and accruals that are necessary for a fair presentation of the results of all interim periods presented herein and are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in the prospectus of Enviva Partners, LP as filed with the SEC on April 29, 2015 in connection with the IPO.

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands, shares in Millions	Sep. 30, 2015	Dec. 31, 2014
Accounts receivable, allowance for doubtful accounts	$ 0
Property, plant and equipment, accumulated depreciation	49,103
Intangible assets, accumulated amortization	6,945	$ 1,028
Debt issuance costs, accumulated amortization	$ 500
Limited partner units outstanding	23.8
Enviva, LP and Subsidiaries
Accounts receivable, allowance for doubtful accounts		61
Property, plant and equipment, accumulated depreciation		40,858
Intangible assets, accumulated amortization		1,000
Debt issuance costs, accumulated amortization		$ 3,000

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Related Party Transactions

9 Months Ended

Sep. 30, 2015

Related Party Transactions

Related Party Transactions

(11)Related Party Transactions

Management Services Agreement

On April 9, 2015, the Partnership, the General Partner, the Predecessor, Enviva GP, LLC and certain subsidiaries of the Predecessor (collectively, the “Service Recipients”) entered into a five-year Management Services Agreement (the “MSA”) with Enviva Management Company, LLC (the “Provider”), a subsidiary of Enviva Holdings, LP, pursuant to which the Provider provides the Service Recipients with general administrative and management services and other similar services (the “Services”). Under the terms of the MSA, the Service Recipients are required to reimburse the Provider the amount of all direct or indirect, internal or third-party expenses incurred, including without limitation: (i) the portion of the salary and benefits of the employees engaged in providing the Services reasonably allocable to the Service Recipients; (ii) the charges and expenses of any third party retained to provide any portion of the Services; (iii) office rent and expenses and other overhead costs incurred in connection with, or reasonably allocable to, providing the Services; (iv) amounts related to the payment of taxes related to the business of the Service Recipients; and (v) costs and expenses incurred in connection with the formation, capitalization, business or other activities of the Provider pursuant to the MSA.

Direct or indirect, internal or third-party expenses incurred are either directly identifiable or allocated to the Partnership by the Provider. The Provider estimates the percentage of salary, benefits, third-party costs, office rent and expenses and any other overhead costs associated with the Services to be provided to the Partnership. Each month, the Provider allocates the actual costs accumulated in the financial accounting system. The Provider charges the Partnership for any directly identifiable costs such as goods or services provided at the Partnership’s request.

During the three and nine months ended September 30, 2015, the Partnership incurred $9.3 million and $21.7 million, respectively, related to the MSA. Of these amounts, during the three and nine months ended September 30, 2015, $4.9 million and $11.0 million, respectively, is included in cost of goods sold and $3.3 million and $9.6 million, respectively, is included in general and administrative expenses on the condensed consolidated statement of operations. At September 30, 2015, $1.1 million of amounts incurred under the MSA is included in finished goods inventory.

Prior Management Services Agreement

On November 9, 2012, the Predecessor entered into a six-year management services agreement (the “Prior MSA”) with Enviva Holdings, LP (the “Service Provider”) to provide the Predecessor with general administrative and management services and other similar services (the “Prior Services”). Under the Prior MSA, the Predecessor incurred the following costs:

· A maximum annual fee in the amount of $7.2 million may be charged by the Service Provider. Under the Prior MSA, during the three and nine months ended September 30, 2015, the Predecessor incurred $0 and $2.2 million, respectively, and during the three and nine months ended September 30, 2014, the Predecessor incurred $1.9 million and $4.8 million, respectively, for the annual fee to the Service Provider. These amounts are included in general and administrative expenses on the condensed consolidated statement of operations.

· The Predecessor reimbursed the Service Provider for all direct or indirect costs and expenses incurred by, or chargeable to, the Service Provider in connection with the Prior Services. This included (1) the portion of the salary and benefits of employees engaged in providing the Prior Services reasonably allocable to the provision of the Prior Services, excluding those included in the annual fee, (2) the charges and expenses of any third party retained by the Service Provider to provide any portion of the Prior Services and (3) office rent and expenses and other overhead costs of the Service Provider incurred in connection with, or reasonably allocable to, providing the Prior Services (collectively, “Reimbursable Expenses”). During the three and nine months ended September 30, 2015, the Predecessor incurred $0 and $0.8 million, respectively, of Reimbursable Expenses to the Service Provider which are included in general and administrative expenses and an insignificant amount is included in cost of goods sold on the condensed consolidated statements of operations. During the three months ended September 30, 2014, the Predecessor incurred $0.6 million of Reimbursable Expenses to the Service Provider of which $0.5 million is included in general and administrative expenses and $0.1 million is included in cost of goods sold. During the nine months ended September 30, 2014, the Predecessor incurred $2.0 million of Reimbursable Expenses to the Service Provider of which $1.6 million is included in general and administrative expenses and $0.4 million is included in cost of goods sold.

As of September 30, 2015, $2.8 million is included in related party payable related to the MSA, and as of December 31, 2014, the Predecessor had $2.4 million included in related party payable related to the Prior MSA.

During the three and nine months ended September 30, 2015, the Partnership capitalized deferred issuance costs that were paid by the Service Provider of $0 million and $0.9 million, respectively, and during the three and nine months ended September 30, 2014, $0.2 million and $1.0 million, respectively. These costs, which consist of direct incremental legal and professional accounting fees related to the IPO, were recognized as an offset against proceeds upon the consummation of the IPO.

During the three and nine months ended September 30, 2015, the Predecessor recorded $0 and $0.5 million, respectively, of general and administrative expenses that were incurred by the Service Provider and recorded as a capital contribution. The Predecessor did not record any general and administrative expenses that were incurred by the Service Provider during the three and nine months ended September 30, 2014. The Prior MSA automatically terminated upon the execution of the MSA.

Biomass Purchase and Terminal Services Agreements

In April 2015, the Partnership entered into the Biomass Purchase Agreement pursuant to which the Hancock JV sells to the Partnership, at a fixed price per metric ton, certain volumes of wood pellets per month through August 2017. The Partnership sells the wood pellets purchased from the Hancock JV to customers under the Partnership’s existing off-take contracts. During the three and nine months ended September 30, 2015, $19.2 million and $35.9 million, respectively, of wood pellets were purchased from the Hancock JV of which $18.3 million and $34.7 million, respectively, is reflected in cost of goods sold and $1.2 million in inventories as finished goods at September 30, 2015. The Partnership also entered into a terminal services agreement pursuant to which the Partnership provides terminal services at the Chesapeake port for the production from the Hancock JV that is not sold to the Partnership under the Biomass Purchase Agreement. During the three and nine months ended September 30, 2015, the Partnership purchased all wood pellets produced by the Hancock JV and therefore no terminal service fees were recorded. At September 30, 2015, related party payables include $2.4 million related to the wood pellets purchased from the Hancock JV.

Related Party Notes Payable

The net assets contributed by the sponsor included notes payable issued by the sponsor to related parties. In January 2015, the sponsor issued a revolving note to Green Circle in the amount of $36.7 million and issued a note payable to Acquisition II in the amount of $50.0 million. In connection with the closing of the IPO on May 4, 2015, the related party notes payable outstanding principal of $81.9 million and accrued interest of $1.1 million were repaid by the Partnership (see Note 10, Long-Term Debt and Capital Lease Obligations).

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 04, 2015
Entity Registrant Name	Enviva Partners, LP
Entity Central Index Key	0001592057
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Common Units
Entity Common Stock, Shares Outstanding		11,908,072
Subordinated Units
Entity Common Stock, Shares Outstanding		11,905,138

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Partners' Capital

9 Months Ended

Sep. 30, 2015

Partners' Capital.

Partners' Capital

(12)Partners’ Capital

In connection with the closing of the IPO, the Partnership recapitalized the outstanding limited partner interests held by the sponsor into 405,138 common units and 11,905,138 subordinated units representing a 51.7% ownership interest in the Partnership as of the closing of the IPO. In addition, the sponsor is the owner of our General Partner and the General Partner holds the incentive distribution rights.

Allocations of Net Income

The partnership agreement contains provisions for the allocation of net income and loss to the unitholders and the General Partner. For purposes of maintaining partner capital accounts, the partnership agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage ownership interest. Normal allocations according to percentage interests are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions allocated 100% to the General Partner.

Incentive Distribution Rights

Incentive distribution rights represent the right to receive increasing percentages (ranging from 15.0% to 50.0%) of quarterly distributions from operating surplus after distributions in amounts exceeding specified target distribution levels have been achieved. The General Partner currently holds the incentive distribution rights, but may transfer these rights at any time.

Cash Distributions

The partnership agreement sets forth the calculation to be used to determine the amount of cash distributions that our common and subordinated unitholders and sponsor will receive.

On July 29, 2015, the Partnership declared the first cash distribution totaling $6.3 million, or $0.2630 per unit. The distribution was calculated based on the minimum quarterly distribution of $0.4125, prorated for the period from May 4, 2015 to June 30, 2015. This distribution was paid on August 31, 2015 to unitholders of record on August 14, 2015. On October 28, 2015, the Partnership declared a cash distribution of $10.5 million, or $0.4400 per unit. The distribution will be paid on November 27, 2015 to unitholders of record as of the close of business on November 17, 2015. No distributions have been declared for the holders of incentive distribution rights.

For purposes of calculating the Partnership’s earnings per unit under the two-class method, common units are treated as participating preferred units, and the subordinated units are treated as the residual equity interest, or common equity. Incentive distribution rights are treated as participating securities.

Distributions made in future periods based on the current period calculation of cash available for distribution are allocated to each class of equity that will receive the distribution. Any unpaid cumulative distributions are allocated to the appropriate class of equity.

The Partnership determines the amount of cash available for distribution for each quarter in accordance with the partnership agreement. The amount to be distributed to common unitholders, subordinated unitholders and incentive distribution rights holders is based on the distribution waterfall set forth in the partnership agreement. Net earnings for the quarter are allocated to each class of partnership interest based on the distributions to be made. Additionally, if, during the subordination period, the Partnership does not have enough cash available to make the required minimum distribution to the common unitholders, the Partnership will allocate net earnings to the common unitholders based on the amount of distributions in arrears. When actual cash distributions are made based on distributions in arrears, those cash distributions will not be allocated to the common unitholders, as such earnings were allocated in previous quarters.

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Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Product sales	$ 115,081	$ 335,857
Other revenue	1,507	4,704
Net revenue	116,588	340,561
Cost of goods sold, excluding depreciation and amortization	96,238	279,858
Depreciation and amortization	6,294	21,587
Total cost of goods sold	102,532	301,445
Gross margin	14,056	39,116
General and administrative expenses	4,779	13,176
Income from operations	9,277	25,940
Other income (expense):
Interest expense	(2,887)	(7,576)
Related party interest expense	0	(1,097)
Early retirement of debt obligation		(4,699)
Other income	9	24
Total other expense, net	(2,878)	(13,348)
Income (loss) before income tax expense	6,399	12,592
Income tax expense	1	2,657
Net income (loss)	6,398	9,935
Less net loss attributable to noncontrolling partners' interests	14	30
Net income (loss) attributable to Enviva Partners, LP	$ 6,412	$ 9,965
Net income per unit:
Common - basic (in dollars per unit)	$ 0.27	$ 0.51
Common - Diluted (in dollars per unit)	0.27	0.50
Subordinated - basic (in dollars per unit)	0.27	0.51
Subordinated - diluted (in dollars per unit)	$ 0.27	$ 0.50
Weighted average number of limited partner units outstanding
Common - basic (in units)	11,906	11,906
Common - diluted (in units)	12,193	12,179
Subordinated - basic and diluted (in units)	11,905	11,905
Distribution declared per limited partner unit for respective periods	$ 0.4400	$ 0.7030
Limited Partners
Other income (expense):
Net income (loss) attributable to Enviva Partners, LP		$ 12,097
Enviva, LP and Subsidiaries
Other income (expense):
Net income (loss) attributable to Enviva Partners, LP		$ (2,132)

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Inventories

9 Months Ended

Sep. 30, 2015

Inventories

Inventories

(6)Inventories

Inventories consisted of the following at:

	September 30, 2015		December 31, 2014
			(Predecessor)
Raw materials and work-in-process	$	5,910	$	6,880
Consumable tooling	7,559		6,934
Finished goods	11,897		4,250
Total inventories	$	25,366	$	18,064

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Property, Plant and Equipment

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment

Property, Plant and Equipment

(5)Property, Plant and Equipment

Property, plant and equipment consisted of the following at:

	September 30, 2015			December 31, 2014
				(Predecessor)
Land	$	12,429		$	11,984
Land improvements	29,600			24,899
Buildings	59,686			57,275
Machinery and equipment	263,756			259,186
Vehicles	505			768
Furniture and office equipment	1,711			1,736
	367,687			355,848
Less accumulated depreciation	(49,103		)	(40,858		)
	318,584			314,990
Construction in progress	3,055			1,269
Total property, plant and equipment, net	$	321,639		$	316,259

Total depreciation expense was $4.7 million and $15.7 million for the three and nine months ended September 30, 2015, respectively, and $4.7 million and $14.1 million for the three and nine months ended September 30, 2014, respectively.

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Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment

Schedule of property, plant and equipment

	September 30, 2015			December 31, 2014
				(Predecessor)
Land	$	12,429		$	11,984
Land improvements	29,600			24,899
Buildings	59,686			57,275
Machinery and equipment	263,756			259,186
Vehicles	505			768
Furniture and office equipment	1,711			1,736
	367,687			355,848
Less accumulated depreciation	(49,103		)	(40,858		)
	318,584			314,990
Construction in progress	3,055			1,269
Total property, plant and equipment, net	$	321,639		$	316,259

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Equity - Based Awards

9 Months Ended

Sep. 30, 2015

Equity - Based Awards

Equity - Based Awards

(13)Equity - Based Awards

Long-Term Incentive Plan

Effective April 30, 2015, the General Partner adopted the Enviva Partners, LP Long-Term Incentive Plan (“LTIP”) for employees, consultants and directors of the General Partner and any of its affiliates that perform services for the Partnership. The LTIP provides for the grant, from time to time, at the discretion of the board of directors of the General Partner or a committee thereof, of unit options, unit appreciation rights, restricted units, phantom units, distribution equivalent rights (“DERs”), unit awards, and other unit-based awards. The LTIP limits the number of common units that may be delivered pursuant to awards under the plan to 2,738,182 common units. Common units subject to awards that are forfeited, cancelled, exercised, paid, or otherwise terminate or expire without the actual delivery of common units will be available for delivery pursuant to other awards.

On May 4, 2015, the Board granted 227,253 phantom units in tandem with corresponding DERs to employees of the Provider who provide services to the Partnership (the “Affiliate Grants”), and 14,112 phantom units in tandem with corresponding DERs to certain non-employee directors of the General Partner (the “Director Grants”). On June 3, 2015, the Board granted additional Affiliate Grants consisting of 27,141 phantom units in tandem with corresponding DERs. On July 29, 2015, the Board granted additional Affiliate Grants consisting of 27,760 phantom units in tandem with corresponding DERs. The phantom units and corresponding DERs are subject to certain vesting and forfeiture provisions. Award recipients do not have all the rights of a unitholder with respect to the phantom units until the phantom units have vested and been settled. Awards of the phantom units are settled in common units within 60 days after the applicable vesting date. If a phantom unit award recipient experiences a termination of service under certain circumstances set forth in the applicable award agreement, the unvested phantom units and corresponding DERs are forfeited.

The Director Grants have an aggregate grant date fair value of $0.3 million and vest on the first anniversary of the grant date. For the three and nine months ended September 30, 2015, the Partnership recorded an insignificant amount of compensation expense with respect to the Director Grants. As of September 30, 2015, the unrecognized unit-based compensation expense for the Director Grants is insignificant.

Of the total Affiliate Grants, 200,351 phantom units vest on the third anniversary of the grant date and 81,803 phantom units vest on the achievement of specific performance milestones. The fair value of the Affiliate Grants was $5.8 million based on the market price per unit on the date of grant. These units are accounted for as if they are distributed by the Partnership. The fair value of Affiliate grants is remeasured by the provider at each reporting period until the award is settled. Compensation cost recorded each period will vary based on the change in the award’s fair value. For awards with performance goals, the expense is accrued only if the performance goals are considered to be probable of occurring. The Provider recognizes unit-based compensation expense for the units awarded and a portion of that expense is allocated to the Partnership. The Provider allocates unit-based compensation expense to the Partnership in the same manner as other corporate expenses. The Partnership’s portion of the unit-based compensation expense is included in general and administrative expenses. During both the three and nine months ended September 30, 2015, the Partnership recognized an insignificant amount and $0.2 million, respectively, of general and administrative expense associated with these awards.

The following table summarizes information regarding phantom unit awards for the periods presented:

	Number of Units	Weighted- Average Grant Date Fair Value per Unit (1)
Phantom units outstanding at December 31, 2014	—	$	—
Granted	296,266	$	20.58
Phantom units outstanding at September 30, 2015	296,266	$	20.58

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

The DERs associated with the Director Grants and the Affiliate Grants entitle the recipients to receive payments equal to any distributions made by the Partnership to the holders of common units within 60 days following the record date for such distributions. The DERs associated with the performance-based Affiliate Grants will remain outstanding and unpaid from the grant date until the earlier of the settlement or forfeiture of the related phantom units. Distributions related to DERs for the three and nine months ended September 30, 2015 were not significant.

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2015

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

(9)Goodwill and Other Intangible Assets

Acquired Intangible Assets

Intangible assets consisted of the following at:

		September 30, 2015							December 31, 2014
	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Favorable customer contracts	3 years	$	8,700	$	(5,698	)	$	3,002	$	—	$	—		$	—
Wood pellet contract	6 years	1,750		(1,247		)	503		1,750		(1,028		)	722
Total		$	10,450	$	(6,945	)	$	3,505	$	1,750	$	(1,028	)	$	722

In April 2015, the sponsor contributed net assets to the Partnership associated with the acquisition of Green Circle in January 2015, including intangible assets related to favorable customer contracts. The Partnership also recorded payments made to acquire a six-year wood pellet contract with a European utility in 2010 as an intangible asset. These costs are recoverable through the future revenue streams generated from the customer contracts and are closely related to the revenue from the customer contracts. The Partnership amortizes the customer contract intangible assets as deliveries are completed during the respective contract terms. During the three and nine months ended September 30, 2015, amortization of $1.6 million and $5.9 million, respectively, was included in cost of goods sold in the accompanying condensed consolidated statements of operations. During the three and nine months ended September 30, 2014, amortization of $0.1 million and $0.2 million, respectively, was included in cost of goods sold in the accompanying condensed consolidated statements of operations.

Goodwill

In 2015, the Partnership recorded an addition to goodwill of $80.7 million as part of the acquisition of Cottondale by the sponsor and its contribution to the Partnership as part of the Reorganization. Goodwill also resulted from the acquisition of a business from IN Group Companies and the acquisition of a company now known as Enviva Pellets Amory, LLC, both in 2010.

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Derivative Instruments

9 Months Ended

Sep. 30, 2015

Derivative Instruments.

Derivative Instruments

(7)Derivative Instruments

The Partnership has used interest rate swaps that meet the definition of a derivative instrument to manage changes in interest rates on its variable-rate debt instruments.

The Prior Credit Agreement required the Predecessor to swap a minimum of 50% of the term loan balance outstanding under the Prior Senior Secured Credit Facilities. In connection with the issuance of the Prior Senior Secured Credit Facilities (see Note 10, Long-Term Debt and Capital Lease Obligations), the Predecessor entered into floating-to-fixed interest rate swaps (the Partnership received a floating market rate and paid a fixed interest rate) to manage the interest rate exposure related to the Prior Senior Secured Credit Facilities. All indebtedness outstanding under the Prior Senior Secured Credit Facilities was repaid in full on April 9, 2015, and the related interest rate swaps were terminated.

For the three and nine months ended September 30, 2015, the Partnership recorded $0 and an insignificant amount as interest expense related to the change in fair value of the interest rate swaps. The Partnership recorded insignificant amounts related to the change in the fair value of the interest rate swap agreements for the three and nine months ended September 30, 2014 as interest expense.

In connection with the repayment of the Prior Senior Secured Credit Facilities in April 2015 (see Note 10, Long Term Debt and Capital Lease Obligations), the Partnership terminated the interest rate swaps and paid a termination fee of $0.1 million.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Fair Value Measurements

Fair Value Measurements

(8)Fair Value Measurements

The amounts reported in the condensed consolidated balance sheets as cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other assets, accounts payable, related party payable and accrued liabilities approximate fair value because of the short-term nature of these instruments.

Interest rate swaps and long-term and short-term debt are classified as Level 2 instruments due to the usage of market prices not quoted on active markets and other observable market data. The carrying amount of Level 2 instruments approximates fair value as of September 30, 2015 and December 31, 2014.

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Long-Term Debt and Capital Lease Obligations

9 Months Ended

Sep. 30, 2015

Long-Term Debt and Capital Lease Obligations.

Long-Term Debt and Capital Lease Obligations

(10)Long-Term Debt and Capital Lease Obligations

Senior Secured Credit Facilities

On April 9, 2015, the Partnership entered into a Credit Agreement (the “Credit Agreement”) providing for $199.5 million aggregate principal amount of senior secured credit facilities (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities consist of (i) $99.5 million aggregate principal amount of Tranche A-1 advances, (ii) $75.0 million aggregate principal amount of Tranche A-2 advances and (iii) up to $25.0 million aggregate principal amount of revolving credit commitments. The Partnership will also be able to request loans under incremental facilities under the Credit Agreement on the terms and conditions and in the maximum aggregate principal amounts set forth therein, provided that lenders provide commitments to make loans under such incremental facilities.

The Senior Secured Credit Facilities mature in April 2020. Borrowings under the Senior Secured Credit Facilities bear interest, at the Partnership’s option, at either a base rate plus an applicable margin or at a Eurodollar rate (with a 1.00% floor for term loan borrowings) plus an applicable margin. The applicable margin is (i) for Tranche A-1 base rate borrowings, 3.10% through April 2017, 2.95% thereafter through April 2018 and 2.80% thereafter, and for Tranche A-1 Eurodollar rate borrowings, 4.10% through April 2017, 3.95% thereafter through April 2018 and 3.80% thereafter and (ii) 3.25% for Tranche A-2 base rate borrowings and revolving facility base rate borrowings and 4.25% for Tranche A-2 Eurodollar rate borrowings and revolving facility Eurodollar rate borrowings. The applicable margin for revolving facility borrowings will be reduced by 0.50% if the Total Leverage Ratio (as defined below) is less than or equal to 2.00:1.00. During the continuance of an event of default, overdue amounts under the Senior Secured Credit Facilities will bear interest at 2.00% plus the otherwise applicable interest rate.

The Partnership borrowed the full amount of the Tranche A-1 and Tranche A-2 facilities at the closing of the Credit Agreement. Of the total proceeds from borrowings under the Tranche A-1 and Tranche A-2 facilities, $82.2 million was used to repay all outstanding indebtedness under the Prior Senior Secured Credit Facilities and related accrued interest, $6.4 million was used to pay closing fees and expenses, and the balance of $85.9 million was used to make a distribution to the sponsor. Borrowings under the revolving facility may be used for working capital requirements and general partnership purposes, including the issuance of letters of credit.

The Senior Secured Credit Facilities include customary lender and agency fees, including a 1.00% fee that was paid to the lenders at the closing of the Credit Agreement and a commitment fee payable on undrawn revolving facility commitments of 0.50% per annum (subject to a stepdown to 0.375% per annum if the Total Leverage Ratio is less than or equal to 2.00:1.00). Letters of credit issued under the revolving facility are subject to a fee calculated at the applicable margin for revolving facility Eurodollar rate borrowings.

Interest is payable quarterly for loans bearing interest at the base rate and at the end of the applicable interest period for loans bearing interest at the Eurodollar rate. The principal amount of the Tranche A-1 facility is payable in quarterly installments of 0.50% through March 2017, 0.75% thereafter through March 2018 and 1.25% thereafter, in each case subject to a quarterly increase of 0.50% during each year if less than 75% of the aggregate projected production capacity of the wood pellet production plants for the two-year period beginning on January 1 of such year is contracted to be sold during such period pursuant to certain qualifying off-take contracts. The principal amount of the Tranche A-2 facility is payable in equal quarterly installments of 0.25%. No amortization is required with respect to the principal amount of the revolving facility. All outstanding amounts under the Senior Secured Credit Facilities will be due and the letter of credit commitments will terminate on the maturity date or upon earlier prepayment or acceleration.

As of September 30, 2015, the Partnership had $97.4 million, net of $1.1 million unamortized original issue discount, of outstanding Tranche A-1 advances and $73.9 million, net of $0.7 million unamortized original issue discount, outstanding of Tranche A-2 advances priced at the Eurodollar rate, with an effective rate of 5.1% and 5.25%, respectively.

The Partnership had $5.0 million outstanding under the letter of credit facility as of September 30, 2015. The letters of credit were issued in connection with contracts between the Partnership and third parties, in the ordinary course of business. The amounts required to be secured with letters of credit under these contracts may be adjusted or cancelled based on the specific third-party contract terms. The amounts outstanding as of September 30, 2015 are subject to automatic extensions through the termination dates of the letters of credit facilities. The letters of credit are not cash collateralized and no debt is outstanding as of September 30, 2015. The Partnership pays a fee of 3.75% on the outstanding letters of credit.

The Partnership is required to make mandatory prepayments of the Senior Secured Credit Facilities with the proceeds of certain asset sales and debt incurrences. The Partnership may voluntarily prepay the Senior Secured Credit Facilities in whole or in part at any time without premium or penalty, except that prepayments of any portion of the Tranche A-1 or Tranche A-2 facilities made in connection with a repricing transaction (as well as any repricing of the Senior Secured Credit Facilities) prior to the six-month anniversary of the Credit Agreement closing date will incur a premium of 1.00% of amounts prepaid (or repriced).

The Credit Agreement contains certain covenants, restrictions and events of default including, but not limited to, a change of control restriction and limitations on the Partnership’s ability to (i) incur indebtedness, (ii) pay dividends or make other distributions, (iii) prepay, redeem or repurchase certain debt, (iv) make loans and investments, (v) sell assets, (vi) incur liens, (vii) enter into transactions with affiliates, (viii) consolidate or merge and (ix) assign certain material contracts to third parties or unrestricted subsidiaries. The Partnership will be restricted from making distributions if an event of default exists under the Credit Agreement or if the interest coverage ratio (determined as the ratio of consolidated EBITDA, as defined in the Credit Agreement, to consolidated interest expense, determined quarterly) is less than 2.25:1.00 at such time.

Pursuant to the Credit Agreement, the Partnership is required to maintain, as of the last day of each fiscal quarter, a ratio of total debt to consolidated EBITDA (“Total Leverage Ratio”), as defined in the Credit Agreement, of not more than a maximum ratio, initially set at 4.25:1.00 and stepping down to 3.75:1.00 during the term of the Credit Agreement; provided that the maximum permitted Total Leverage Ratio will be increased by 0.50:1.00 for the period from the consummation of certain qualifying acquisitions through the end of the second full fiscal quarter thereafter.

As of September 30, 2015, the Partnership was in compliance with all covenants and restrictions associated with, and no events of default existed under, the Credit Agreement. The obligations under the Credit Agreement are guaranteed by certain of the Partnership’s subsidiaries and secured by liens on substantially all assets.

Prior Senior Secured Credit Facilities

In November 2012, the Predecessor entered into a Credit and Guaranty Agreement (the “Prior Credit Agreement”) that provided for a $120.0 million aggregate principal amount of senior secured credit facilities (the “Prior Senior Secured Credit Facilities”). The Prior Senior Secured Credit Facilities consisted of (i) $35.0 million aggregate principal amount of Tranche A advances, (ii) up to $60.0 million aggregate principal amount of delayed draw term commitments, (iii) up to $15.0 million aggregate principal amount of working capital commitments and (iv) up to $10.0 million aggregate principal amount of letter of credit facility commitments. The Prior Senior Secured Credit Facilities were repaid in full, including related accrued interest, in the amount of $82.2 million on April 9, 2015, the date of the closing of the Senior Secured Credit Facilities. The Partnership funded the repayment with a portion of borrowings under the Senior Secured Credit Facilities. For the three and nine months ended September 30, 2015, the Partnership recorded $0 and a $4.7 million loss, respectively, on early retirement of debt obligation related to the repayment. The loss includes a $3.2 million write off of unamortized deferred issuance costs and a $1.5 million write off of unamortized discount. In August 2015, the Partnership cancelled a $4.0 million letter of credit previously issued under the terms of the Prior Senior Secured Credit Facilities. At September 30, 2015, the Partnership had no outstanding letters of credit in connection with the Prior Senior Secured Credit Facilities.

Related Party Notes Payable

In connection with the January 5, 2015 acquisition of Green Circle, the sponsor made a term advance of $36.7 million to Green Circle under a revolving note. The revolving note accrued interest at an annual rate of 4.0%. In connection with the acquisition, the sponsor also advanced its wholly-owned subsidiary, Acquisition II, $50.0 million under a note payable accruing interest at an annual rate of 4.0%. Cottondale repaid $4.8 million of the outstanding principal in March 2015. As a result of the sponsor’s contribution of Acquisition II, which owned Cottondale, to the Partnership on April 9, 2015, the Partnership recorded $81.9 million of outstanding principal and $0.9 million of accrued interest related to these notes.

In connection with the closing of the IPO on May 4, 2015, the related party notes payable outstanding principal of $81.9 million and accrued interest of $1.1 million were repaid by the Partnership to the sponsor. During the three and nine months ended September 30, 2015, $0 and $1.1 million, respectively, was incurred as related party interest expense.

Long-term debt, at carrying value which approximates fair value, and capital lease obligations consisted of the following:

	September 30, 2015			December 31, 2014
				(Predecessor)
	(unaudited)
Senior Secured Credit Facilities, Tranche A-1 Advances, net of unamortized discount of $1.1 million as of September 30, 2015, with quarterly interest payments beginning June 30, 2015 at a Eurodollar Rate of 5.10% at September 30, 2015. A principal payment of $0.5 million is due quarterly through March 2017, $0.7 million is due quarterly June 2017 through March 2018, $1.2 million is due quarterly June 2018 through December 2019, and the final payment of $83.8 million is due on the April 9, 2020 maturity date	$	97,379		$	—
Senior Secured Credit Facilities, Tranche A-2 Advances, net of unamortized discount of $0.7 million as of September 30, 2015, with quarterly interest payments beginning June 30, 2015 at a Eurodollar Rate of 5.25% at September 30, 2015. A principal payment of $0.2 million is due quarterly through December 2019, and the final payment of $71.4 million is due on the April 9, 2020 maturity date	73,946			—
Prior Senior Secured Credit Facilities, Tranche A Advances, net of unamortized discount of $1.6 million as of December 31, 2014, with quarterly interest payments	—			29,718
Prior Senior Secured Credit Facilities, delayed draw term commitments with elected quarterly interest payments beginning the first quarter following the day that the cash was drawn	—			57,000
Enviva Pellets Wiggins construction loan, with monthly principal and interest (at an annual rate of 6.35%) payments of $32.9 and a lump sum payment of $2.4 million due on the October 18, 2016 maturity date	2,603			2,770
Enviva Pellets Wiggins working capital line, with monthly principal and interest (at an annual rate of 6.35%) payments of $10.3 and a lump sum payment of $743.3 due on the October 18, 2016 maturity date	813			864
Enviva Pellets Amory note, with principal and accrued interest (at an annual rate of 6.0%) due on the August 4, 2017 maturity date	2,000			2,000
Enviva Pellets Southampton promissory note, with principal and interest in the amount of $0.9 million that was due on the June 8, 2017 maturity date. Present value for 3 years at an annual rate of 7.6%	—			729
Other loans	40			419
Capital leases	58			575
Total long-term debt and capital lease obligations	176,839			94,075
Less current portion of long-term debt and capital lease obligations	(3,072		)	(10,237		)
Long-term debt and capital lease obligations, excluding current installments	$	173,767		$	83,838

The aggregate maturities of long-term debt and capital lease obligations are as follows:

Year Ending December 31:
2015	$	666
2016	5,708
2017	3,117
2018	6,850
2019	5,335
Thereafter	155,163
Total long-term debt and capital lease obligations	$	176,839

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Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2014	Dec. 31, 2014
Components of Property, plant and equipment
Property, plant and equipment, gross	$ 367,687
Less accumulated depreciation	(49,103)
Property, plant and equipment excluding construction in progress	318,584
Construction in progress	3,055
Total property, plant and equipment, net	321,639
Total depreciation expense	4,700		$ 15,700
Land
Components of Property, plant and equipment
Property, plant and equipment, gross	12,429
Land improvements
Components of Property, plant and equipment
Property, plant and equipment, gross	29,600
Buildings
Components of Property, plant and equipment
Property, plant and equipment, gross	59,686
Machinery and equipment
Components of Property, plant and equipment
Property, plant and equipment, gross	263,756
Vehicles
Components of Property, plant and equipment
Property, plant and equipment, gross	505
Furniture and office equipment
Components of Property, plant and equipment
Property, plant and equipment, gross	$ 1,711
Enviva, LP and Subsidiaries
Components of Property, plant and equipment
Property, plant and equipment, gross				$ 355,848
Less accumulated depreciation				(40,858)
Property, plant and equipment excluding construction in progress				314,990
Construction in progress				1,269
Total property, plant and equipment, net				316,259
Total depreciation expense		$ 4,700	$ 14,100
Enviva, LP and Subsidiaries | Land
Components of Property, plant and equipment
Property, plant and equipment, gross				11,984
Enviva, LP and Subsidiaries | Land improvements
Components of Property, plant and equipment
Property, plant and equipment, gross				24,899
Enviva, LP and Subsidiaries | Buildings
Components of Property, plant and equipment
Property, plant and equipment, gross				57,275
Enviva, LP and Subsidiaries | Machinery and equipment
Components of Property, plant and equipment
Property, plant and equipment, gross				259,186
Enviva, LP and Subsidiaries | Vehicles
Components of Property, plant and equipment
Property, plant and equipment, gross				768
Enviva, LP and Subsidiaries | Furniture and office equipment
Components of Property, plant and equipment
Property, plant and equipment, gross				$ 1,736

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

Significant Accounting Policies

Principles of Consolidation

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Partnership and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Certain amounts for the nine months ended September 30, 2014 have been reclassified to conform to the current presentation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the Partnership’s unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Segment and Geographic Information

Segment and Geographic Information

Operating segments are defined as components of an enterprise about which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Partnership views its operations and manages its business as one operating segment. All long-lived assets of the Partnership are located in the United States.

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

Comprehensive loss includes net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that, under GAAP, are recorded as an element of partners’ capital but are excluded from net loss. The Partnership had no components of other comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014.

Net Income per Limited Partner Unit

Net Income per Limited Partner Unit

The Partnership computes net income per unit using the two-class method as the Partnership has more than one class of participating securities, including common units, subordinated units, certain equity based-compensation awards and incentive distribution rights. The Partnership bases its calculation of net income per unit on the weighted-average number of common and subordinated limited partner units outstanding during the period. Diluted net income per unit includes the effects of potentially dilutive time-based and performance-based phantom units on our common units.

The General Partner owns a non-economic interest in the Partnership, which does not entitle it to receive cash distributions, but owns all of the outstanding IDRs as of September 30, 2015. Pursuant to the partnership agreement, IDRs represent the right to receive increasing percentages (ranging from 15% to 50%) of quarterly distributions from operating surplus after the minimum quarterly distribution and certain target distribution levels have been achieved. Net income per unit applicable to limited partners (including the holder of subordinated units) is computed by dividing limited partners’ interest in net income by the weighted-average number of outstanding common and subordinated units.

Income taxes

Income Taxes

The Partnership and sponsor are pass-through entities and are not considered taxable entities for federal income tax purposes. Therefore, there is not a provision for U.S. federal and most state income taxes in the accompanying condensed consolidated financial statements. The Partnership’s net income or loss is allocated to its partners in accordance with the partnership agreement. The partners are taxed individually on their share of the Partnership’s earnings. At September 30, 2015 and December 31, 2014, the Partnership and sponsor did not have any liabilities for uncertain tax position or gross unrecognized tax benefit. Some states impose franchise and capital taxes on the Partnership. Such taxes are not material to the condensed consolidated financial statements and have been included in other income (expense) as incurred. Income tax expense for the nine months ended September 30, 2015 includes expense incurred by Acquisition II prior to being contributed to the Partnership.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents consist of short-term, highly liquid investments readily convertible into cash with an original maturity of three months or less.

Restricted Cash

Restricted Cash

The Predecessor funded a restricted debt service reserve account in connection with the Prior Senior Secured Credit Facilities (see Note 10, Long-Term Debt and Capital Lease Obligations). The restricted debt service reserve account was released as a result of the repayment in full of the Prior Senior Secured Credit Facilities on April 9, 2015.

Revenue Recognition

Revenue Recognition

The Partnership primarily earns revenue by supplying wood pellets to customers under long-term, U.S. dollar-denominated contracts (also referred to as “off-take” contracts). The Partnership refers to the structure of the contracts as “take-or-pay” because they include a firm obligation to take a fixed quantity of product at a stated price and provisions that ensure the Partnership will be made whole in the case of the customer’s failure to accept all or a part of the contracted volumes or for termination by the customer. Each contract defines the annual volume of wood pellets that the customer is required to purchase and the Partnership is required to sell, the fixed price per metric ton for product satisfying a base net calorific value and other technical specifications, and, in some instances, provides for price adjustments for actual product specification and changes in underlying costs. Revenues from the sale of wood pellets are recognized when the goods are shipped, title passes, the sales price to the customer is fixed and collectability is reasonably assured.

Depending on the specific off-take contract, shipping terms are either Cost, Insurance and Freight (“CIF”) or Free on Board (“FOB”). Under a CIF contract, the Partnership procures and pays for shipping costs, which include insurance and all other charges, up to the port of destination for the customer. These costs are included in the price to the customer and, as such, are included in revenue and cost of goods sold. Under a FOB contract, the customer is directly responsible for shipping costs.

In some cases, the Partnership may purchase shipments of product from a third-party supplier and resell them in back-to-back transactions that immediately transfer title and risk of loss to the ultimate purchaser. Thus, the revenue from these transactions is recorded net of costs paid to the third-party supplier. The Partnership records this revenue as “Other revenue.”

In instances when a customer requests the cancellation, deferral or acceleration of a shipment, the customer may pay a fee, including reimbursement of any incremental costs incurred by the Partnership, which is included in revenue.

Cost of Goods Sold

Cost of Goods Sold

Cost of goods sold includes the costs to produce and deliver wood pellets to customers. Raw material, production and distribution costs associated with delivering wood pellets to the ports and third-party wood pellet purchase costs are capitalized as a component of inventory. Fixed production overhead, including the related depreciation expense, is allocated to inventory based on the normal capacity of the facilities. These costs are reflected in cost of goods sold when inventory is sold. Distribution costs associated with shipping wood pellets to customers and amortization are expensed as incurred. Inventory is recorded using FIFO, which requires the use of judgment and estimates. Given the nature of the inventory, the calculation of cost of goods sold is based on estimates used in the valuation of the FIFO inventory and in determining the specific composition of inventory that is sold to each customer.

The Partnership entered into the Biomass Purchase Agreement pursuant to which the Hancock JV sells certain volumes of wood pellets per month to the Partnership at a fixed price per metric ton. The pellets purchased from the Hancock JV are sold to the Partnership’s customers under existing off-take contracts (see Note 11, Related Party Transactions).

Additionally, the purchase price of acquired customer contracts that were recorded as intangible assets are amortized as deliveries are made during the contract term.

Derivative Instruments

Derivative Instruments

The Predecessor used derivative financial instruments to manage its exposure to fluctuations in interest rates on long-term debt as required per the terms of the Prior Senior Secured Credit Facilities (see Note 10, Long-Term Debt and Capital Lease Obligations). The Partnership does not hold or issue derivative financial instruments for trading or speculative purposes. The Predecessor accounted for the interest rate swaps by recognizing all derivative financial instruments on the condensed consolidated balance sheets at fair value. The Predecessor’s interest rate swap agreements were not designated as hedges; therefore, the gain or loss was recognized in the condensed consolidated statements of operations in interest expense. In connection with the repayment of the Prior Senior Secured Credit Facilities in April 2015 (see Note 10, Long-Term Debt and Capital Lease Obligations), the Predecessor terminated the interest rate swaps and paid a termination fee of $0.1 million. The Partnership does not currently hold any interest rate swaps or derivative financial instruments.

Debt Issuance Costs and Original Issue Discount

Debt Issuance Costs and Original Issue Discount

Debt issuance costs represent legal fees and other direct expenses associated with securing the Partnership’s credit agreements and are capitalized on the condensed consolidated balance sheets as other long-term assets. Original issue discounts are recorded on the condensed consolidated balance sheets within the carrying amount of long-term debt. Debt issuance costs and original issue discount are amortized over the term of the related debt using straight line amortization, which approximates the effective interest rate method.

The Predecessor and the Partnership primarily incurred debt issuance costs and original issue discount in connection with the Prior Senior Secured Credit Facilities and Senior Secured Credit Facilities, respectively (see Note 10, Long-Term Debt and Capital Lease Obligations). Debt issuance costs, net at September 30, 2015 and December 31, 2014, was $4.7 million and $3.6 million, respectively.

Gains or losses on debt extinguishment include any associated unamortized debt issuance costs and original issue discount.

Deferred Issuance Costs

Deferred Issuance Costs

Deferred issuance costs primarily consist of legal, accounting, printing and other fees relating to the IPO. These costs were offset against the proceeds of the IPO. As of September 30, 2015 and December 31, 2014, the Partnership had $0 and $4.1 million of deferred issuance costs, respectively.

Intangible Assets

Intangible Assets

In April 2015, the sponsor contributed net assets to the Partnership associated with the acquisition of Green Circle in January 2015, which included intangible assets related to favorable customer contracts. The Partnership also recorded payments made to acquire a six-year wood pellet off-take contract with a European utility in 2010 as an intangible asset. These costs are recoverable through the future revenue streams generated from the customer contracts and are closely related to the revenue from the customer contracts. These costs are recorded as an asset and charged to expense as the revenue is recognized. All other costs, such as general and administrative expenses and costs associated with the negotiation of a contract that is not consummated, are charged to expense as incurred.

Intangible assets are evaluated for impairment when events and changes in circumstances indicate the carrying value may not be recoverable. At September 30, 2015, intangible assets included favorable customer contract and an acquired customer contract, and at December 31, 2014, intangible assets included an acquired customer contract. The customer contract intangible assets are amortized as deliveries are completed during the contract terms (see Note 9, Goodwill and Other Intangible Assets).

Goodwill

Goodwill

Goodwill represents the purchase price paid for an acquired business in excess of the identifiable acquired assets and assumed liabilities. Goodwill is not amortized, but is tested for impairment annually and whenever an event occurs or circumstances change such that it is more likely than not that the fair value of the reporting unit is less than its carrying amounts. The Partnership has identified one reporting unit which corresponds to the Partnership’s one segment and has selected the fourth fiscal quarter to perform its annual goodwill impairment test.

A qualitative assessment is first made to determine whether it is necessary to perform quantitative testing. If this initial qualitative assessment indicates that it is more likely than not that the fair value is more than its carrying value, goodwill is not considered impaired and the Partnership is not required to perform the two-step impairment test. Qualitative factors considered in this assessment include (i) macroeconomic conditions, (ii) past, current and projected future financial performance, (iii) industry and market considerations, (iv) changes in the costs of raw materials, fuel and labor and (v) entity-specific factors such as changes in management or customer base.

If the results of the qualitative assessment indicate that it is more likely than not that goodwill is impaired, the Partnership will perform a two-step impairment test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill.

For the years ended December 31, 2014 and 2013, the Predecessor applied the qualitative test and determined that it was more likely than not that the estimated fair value of the reporting unit substantially exceeded the related carrying value, and, accordingly, was not required to apply the two-step impairment test. The Predecessor has not recorded any goodwill impairment for the years ended December 31, 2014 and 2013 (see Note 9, Goodwill and Other Intangible Assets).

Unit-Based Compensation

Unit-Based Compensation

Employees, consultants and directors of the General Partner and any of its affiliates are eligible to receive awards under the Enviva Partners, LP Long-Term Incentive Plan. For accounting purposes, units granted to employees of the Partnership’s affiliates are treated as if they are distributed by the Partnership. In May, June and July 2015, phantom units in tandem with corresponding distribution equivalent rights were granted to employees of Enviva Management Company, LLC who provide services to the Partnership and to certain non-employee directors of the General Partner. These awards vest subject to the satisfaction of service requirements or the achievement of certain performance goals, following which common units in the Partnership will be delivered to the holder of the phantom units. Affiliate entities recognize compensation expense for the phantom units awarded to their employees and a portion of that expense is allocated to the Partnership (see Note 13, Equity-Based Awards). The Partnership’s outstanding unit-based awards do not have a cash option and are classified as equity on the Partnership’s condensed consolidated balance sheets. The Partnership also recognizes compensation expense for units awarded to non-employee directors.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant and equipment and amortizable intangible assets, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that a long-lived asset or asset group be tested for possible impairment, the Partnership first compares undiscounted cash flows expected to be generated by that asset or asset group to such asset or asset group’s carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Fair Value Measurements

Fair Value Measurements

The Partnership applies authoritative accounting guidance for fair value measurements of financial and nonfinancial assets and liabilities. The Partnership uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Partnership determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

· Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

· Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

· Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

Recent and Pending Accounting Pronouncements

Recent and Pending Accounting Pronouncements

In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, to amend the guidance for amounts that are adjusted in a merger or acquisition. The standard eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement period adjustments that occur in periods after a business combination is consummated. The ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The standard simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value for entities using the first-in, first-out method of valuing inventory. ASU No. 2015-11 eliminates other measures required by current guidance to determine net realizable value. ASU No. 2015-11 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years and early adoption is permitted. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-06, Earnings Per Share (Topic 260)—Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions—a consensus of the FASB Emerging Issues Task Force (EITF). The amendments in ASU No. 2015-06 apply to master limited partnerships subject to the Master Limited Partnerships Subsections of Topic 260 that receive net assets through a dropdown transaction that is accounted for under the Transactions Between Entities Under Common Control Subsections of Subtopic 805-50, Business Combinations—Related Issues. When a general partner transfers, or “drops down,” net assets to a master limited partnership and that transaction is accounted for as a transaction between entities under common control, the statements of operations of the master limited partnership are adjusted retrospectively to reflect the dropdown transaction as if it occurred on the earliest date during which the entities were under common control. The amendments in ASU No. 2015-06 specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required. The amendments in ASU No. 2015-06 are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The amendments in ASU No. 2015-06 should be applied retrospectively for all financial statements presented. The Partnership is evaluating the new pronouncement to determine the impact it may have on its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Topic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 requires the presentation of debt issuance costs in the balance sheet as a reduction from the related debt liability rather than as an asset. The amortization of such costs will continue to be reported as interest expense. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and allows early adoption for financial statements that have not been previously issued. The update requires retrospective application upon adoption. Upon adoption, the Partnership expects to reclassify amounts included as debt issuance costs within total assets on the consolidated balance sheet to a reduction of long-term debt within total liabilities on the consolidated balance sheet for all periods presented. The adoption is not expected to have an impact on the periodic amount amortized.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new standard reduces the number of consolidation models and simplifies their application. The amendments in ASU No. 2015-02 are intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships and similar legal entities. The amendments simplify the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments (1) eliminate the presumption that a general partner should consolidate a limited partnership, (2) eliminate the indefinite deferral of FASB Statement No. 167, thereby reducing the number of variable interest entity (“VIE”) consolidation models from four to two (including the limited partnership consolidation model), (3) clarify when fees paid to a decision maker should be a factor to include in the consolidation of VIEs, (4) amend the guidance for assessing how related party relationships affect VIE consolidation analysis and (5) exclude certain money market funds from the consolidation guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The standard allows early adoption, including early adoption in an interim period. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements.

In January 2015, the FASB issued ASU No. 2015-01, Income Statement-Extraordinary and Unusual Items. The new standard eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU No. 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. The standard is effective for periods beginning after December 15, 2015 and early adoption is permitted. The adoption is not expected to have a material effect on the Partnership’s consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The new standard provides new guidance on the recognition of revenue and states that an entity should recognize revenue when control of the goods or services transfers to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. The new standard also requires significantly expanded disclosure regarding qualitative and quantitative information about the nature, timing and uncertainty of revenue and cash flow arising from contracts with customers. On July 9, 2015, the FASB approved a one-year delay in the effective date of ASU No. 2014-09. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The standard permits the use of either applying retrospectively the amendment to each prior reporting period presented or retrospectively with the cumulative effect of initially applying at the date of initial application. The Partnership is in the process of evaluating the impact of adoption on its consolidated financial statements and has not determined which implementation method will be adopted.

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Long-Term Debt and Capital Lease Obligations (Tables)

9 Months Ended

Sep. 30, 2015

Long-Term Debt and Capital Lease Obligations.

Schedule of long-term debt and capital lease obligations

	September 30, 2015			December 31, 2014
				(Predecessor)
	(unaudited)
Senior Secured Credit Facilities, Tranche A-1 Advances, net of unamortized discount of $1.1 million as of September 30, 2015, with quarterly interest payments beginning June 30, 2015 at a Eurodollar Rate of 5.10% at September 30, 2015. A principal payment of $0.5 million is due quarterly through March 2017, $0.7 million is due quarterly June 2017 through March 2018, $1.2 million is due quarterly June 2018 through December 2019, and the final payment of $83.8 million is due on the April 9, 2020 maturity date	$	97,379		$	—
Senior Secured Credit Facilities, Tranche A-2 Advances, net of unamortized discount of $0.7 million as of September 30, 2015, with quarterly interest payments beginning June 30, 2015 at a Eurodollar Rate of 5.25% at September 30, 2015. A principal payment of $0.2 million is due quarterly through December 2019, and the final payment of $71.4 million is due on the April 9, 2020 maturity date	73,946			—
Prior Senior Secured Credit Facilities, Tranche A Advances, net of unamortized discount of $1.6 million as of December 31, 2014, with quarterly interest payments	—			29,718
Prior Senior Secured Credit Facilities, delayed draw term commitments with elected quarterly interest payments beginning the first quarter following the day that the cash was drawn	—			57,000
Enviva Pellets Wiggins construction loan, with monthly principal and interest (at an annual rate of 6.35%) payments of $32.9 and a lump sum payment of $2.4 million due on the October 18, 2016 maturity date	2,603			2,770
Enviva Pellets Wiggins working capital line, with monthly principal and interest (at an annual rate of 6.35%) payments of $10.3 and a lump sum payment of $743.3 due on the October 18, 2016 maturity date	813			864
Enviva Pellets Amory note, with principal and accrued interest (at an annual rate of 6.0%) due on the August 4, 2017 maturity date	2,000			2,000
Enviva Pellets Southampton promissory note, with principal and interest in the amount of $0.9 million that was due on the June 8, 2017 maturity date. Present value for 3 years at an annual rate of 7.6%	—			729
Other loans	40			419
Capital leases	58			575
Total long-term debt and capital lease obligations	176,839			94,075
Less current portion of long-term debt and capital lease obligations	(3,072		)	(10,237		)
Long-term debt and capital lease obligations, excluding current installments	$	173,767		$	83,838

Maturities schedule of long-term debt and capital lease obligations

Year Ending December 31:
2015	$	666
2016	5,708
2017	3,117
2018	6,850
2019	5,335
Thereafter	155,163
Total long-term debt and capital lease obligations	$	176,839

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Partners' Capital (Details)	9 Months Ended
	Sep. 30, 2015 shares
Partners' Capital and Distribution
Ownership interest (as a percent)	51.70%
Allocations to partners (as a percent)	100.00%
Common Units
Partners' Capital and Distribution
Number of units issued to partnership's sponsor	405,138
Subordinated Units
Partners' Capital and Distribution
Number of units issued to partnership's sponsor	11,905,138

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Condensed Consolidated Statement of Changes in Partners' Capital - USD ($) shares in Thousands, $ in Thousands	Net Parent Investment	Common Units-Public	Common Units-Sponsor	Subordinated Units	Noncontrolling Interest	Total
Balance at the beginning of the period at Dec. 31, 2014	$ 271,495				$ 3,033	$ 274,528
Changes in Partners' Capital
Conveyance of Enviva Pellets Southampton, LLC to Hancock JV	(91,696)					(91,696)
Contribution of Enviva Cottondale Acquisition II, LLC	132,765					132,765
Distribution to sponsor	(4,152)					(4,152)
Expenses incurred by sponsor	3,088					3,088
Net income	(2,132)				(9)	(2,141)
Balance at the end of the period at May. 04, 2015	309,368				3,024	312,392
Balance at the beginning of the period at Dec. 31, 2014	271,495				3,033	$ 274,528
Balance at the end of the period (in units) at Sep. 30, 2015		11,501	405	11,905		23,800
Changes in Partners' Capital
Net income						$ 9,935
Balance at the end of the period at Sep. 30, 2015		$ 212,170	$ 4,602	$ 135,232	3,003	355,007
Balance at the beginning of the period at May. 04, 2015	309,368				3,024	$ 312,392
Balance at the end of the period (in units) at Sep. 30, 2015		11,501	405	11,905		23,800
Changes in Partners' Capital
Net proceeds from initial public offering, net of deferred IPO costs		$ 209,065				$ 209,065
Net proceeds from initial public offering, net of deferred IPO costs (in units)		11,500
Distribution to sponsor	(172,550)					(172,550)
Allocation of net Parent investment to sponsor	$ (136,818)		$ 4,503	$ 132,315
Allocation of net Parent investment to sponsor (in units)			405	11,905
Issuance of common units under Long-Term Incentive Plan		1
Cash distributions, phantom units and distribution equivalents		$ (3,101)	$ (107)	$ (3,131)		(6,339)
Unit-based compensation		363				363
Net income		5,843	206	6,048	(21)	12,076
Balance at the end of the period at Sep. 30, 2015		$ 212,170	$ 4,602	$ 135,232	$ 3,003	$ 355,007

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Significant Risks and Uncertainties Including Business and Credit Concentrations

9 Months Ended

Sep. 30, 2015

Significant Risks and Uncertainties Including Business and Credit Concentrations

Significant Risks and Uncertainties Including Business and Credit Concentrations

(4)Significant Risks and Uncertainties Including Business and Credit Concentrations

The Partnership’s business is significantly impacted by greenhouse gas emission and renewable energy legislation and regulations in the European Union (the “E.U.”). If the E.U. significantly modifies such legislation and regulations, the Partnership’s ability to enter into new contracts as the current contracts expire may be materially affected.

The Partnership’s primary industrial customers are located in Northern Europe. Three customers accounted for 92% of the Partnership’s product sales during the three months ended September 30, 2015 and 94% during the nine months ended September 30, 2015. Three customers accounted for 100% of the Partnership’s product sales during the three months ended September 30, 2014 and 99% during the nine months ended September 30, 2014.

The Partnership’s cash and cash equivalents are placed in or with various financial institutions. The Partnership has not experienced any losses on such accounts and does not believe it has any significant risk in this area.

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Equity - Based Awards (Tables)

9 Months Ended

Sep. 30, 2015

Equity - Based Awards

Schedule of phantom unit awards

	Number of Units	Weighted- Average Grant Date Fair Value per Unit (1)
Phantom units outstanding at December 31, 2014	—	$	—
Granted	296,266	$	20.58
Phantom units outstanding at September 30, 2015	296,266	$	20.58

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

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Long-Term Debt and Capital Lease Obligations (Details) $ in Thousands			1 Months Ended	3 Months Ended	4 Months Ended	5 Months Ended	9 Months Ended
	May. 04, 2015 USD ($)	Apr. 09, 2015 USD ($)	Aug. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	May. 04, 2015 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Mar. 31, 2015 USD ($)	Jan. 05, 2015 USD ($)	Dec. 31, 2014 USD ($)	Nov. 30, 2012 USD ($)
Long term debt and capital lease obligations
Distribution of cash to sponsor					$ 4,152	$ 172,550
Debt issuance costs, net				$ 4,705		4,705	$ 4,705
Early retirement of debt obligation							(4,699)
Notes payable related party		$ 81,900
Accrued interest related party		900
Related party notes payable repaid	$ 81,900
Accrued interest paid	$ 1,100
Related party interest expense				0			1,097
Green Circle
Long term debt and capital lease obligations
Effective rate										4.00%
Notes payable related party									$ 4,800	$ 36,700
Acquisition II
Long term debt and capital lease obligations
Effective rate										4.00%
Notes payable related party										$ 50,000
Prior Senior Secured Credit Facilities
Long term debt and capital lease obligations
Repayment of credit facilities in full including related accrued interest		82,200
Closing fees and expenses		6,400
Distribution of cash to sponsor		85,900
Letters of credit outstanding				0		0	0
Early retirement of debt obligation				0			(4,700)
write off of deferred issuance costs							3,200
Unamortized discount				1,500		1,500	1,500
Letter of credit cancelled			$ 4,000
Prior Senior Secured Credit Facilities | Tranche A Advances
Long term debt and capital lease obligations
Unamortized discount											$ 1,600
Senior Secured Credit Facilities
Long term debt and capital lease obligations
Aggregate principal amount		$ 199,500
Floor rate for Eurodollar term loan borrowings		1.00%
Reduction in floating interest rate for revolving facility borrowings based on leverage ratio (as a percent)		0.50%
Extra interest in an event of default (as a percent)		2.00%
Fee paid to lenders at closing of Credit Agreement (as a percent)		1.00%
Letters of credit outstanding				5,000		5,000	$ 5,000
Letters of credit fee (as a percent)							3.75%
Prepayment premium or penalty amount (as a percent)		1.00%
Step down in Leverage Ratio		3.75%
Increase in Leverage Ratio		0.50
Senior Secured Credit Facilities | Tranche A-1 advances
Long term debt and capital lease obligations
Aggregate principal amount		$ 99,500
Long-term debt				97,379		97,379	$ 97,379
Increase in quarterly installments of principal payable based on achieving targeted wood pellet production (as a percent)		0.50%
Aggregate wood pellet production capacity for determining additional quarterly principal payments (as a percent)		75.00%
Period for aggregate wood pellet production capacity (in years)		2 years
Unamortized discount				$ 1,100		$ 1,100	$ 1,100
Senior Secured Credit Facilities | Tranche A-1 advances | Eurodollar rate
Long term debt and capital lease obligations
Effective rate				5.10%		5.10%	5.10%
Senior Secured Credit Facilities | Tranche A-1 advances | Through March 2017
Long term debt and capital lease obligations
Quarterly installments of principal payable (as a percent)		0.50%
Senior Secured Credit Facilities | Tranche A-1 advances | After March 2017 through March 2018
Long term debt and capital lease obligations
Quarterly installments of principal payable (as a percent)		0.75%
Senior Secured Credit Facilities | Tranche A-1 advances | After March 2018 through thereafter
Long term debt and capital lease obligations
Quarterly installments of principal payable (as a percent)		1.25%
Senior Secured Credit Facilities | Tranche A-1 advances | Through April 2017 | Base rate
Long term debt and capital lease obligations
Floating interest rate (as a percent)		3.10%
Senior Secured Credit Facilities | Tranche A-1 advances | Through April 2017 | Eurodollar rate
Long term debt and capital lease obligations
Floating interest rate (as a percent)		4.10%
Senior Secured Credit Facilities | Tranche A-1 advances | After April 2017 through April 2018 | Base rate
Long term debt and capital lease obligations
Floating interest rate (as a percent)		2.95%
Senior Secured Credit Facilities | Tranche A-1 advances | After April 2017 through April 2018 | Eurodollar rate
Long term debt and capital lease obligations
Floating interest rate (as a percent)		3.95%
Senior Secured Credit Facilities | Tranche A-1 advances | After April 2018 through thereafter | Base rate
Long term debt and capital lease obligations
Floating interest rate (as a percent)		2.80%
Senior Secured Credit Facilities | Tranche A-1 advances | After April 2018 through thereafter | Eurodollar rate
Long term debt and capital lease obligations
Floating interest rate (as a percent)		3.80%
Senior Secured Credit Facilities | Tranche A-2 advances
Long term debt and capital lease obligations
Aggregate principal amount		$ 75,000
Quarterly installments of principal payable (as a percent)		0.25%
Long-term debt				$ 73,946		$ 73,946	$ 73,946
Unamortized discount				$ 700		$ 700	$ 700
Senior Secured Credit Facilities | Tranche A-2 advances | Eurodollar rate
Long term debt and capital lease obligations
Effective rate				5.25%		5.25%	5.25%
Senior Secured Credit Facilities | Revolving credit commitments
Long term debt and capital lease obligations
Commitment fee payable on undrawn commitments (as a percent)		0.50%
Reduction in commitment fee payable on undrawn commitments based on total leverage ratio (as a percent)		0.375%
Senior Secured Credit Facilities | Tranche A-2 and revolving facility borrowings | Base rate
Long term debt and capital lease obligations
Floating interest rate (as a percent)		3.25%
Senior Secured Credit Facilities | Tranche A-2 and revolving facility borrowings | Eurodollar rate
Long term debt and capital lease obligations
Floating interest rate (as a percent)		4.25%
Senior Secured Credit Facilities | Minimum
Long term debt and capital lease obligations
Period from closing of the credit agreement for prepayment of debt resulting in a premium or penalty payment (in months)		6 months
Interest coverage ratio		2.25
Senior Secured Credit Facilities | Maximum
Long term debt and capital lease obligations
Leverage Ratio required for reduction in margin rate		2.00
Initial Leverage Ratio		4.25
Senior Secured Credit Facilities | Maximum | Revolving credit commitments
Long term debt and capital lease obligations
Aggregate principal amount		$ 25,000
Leverage Ratio required for reduction in margin rate		2.00
Enviva, LP and Subsidiaries
Long term debt and capital lease obligations
Distribution of cash to sponsor					$ 4,152
Debt issuance costs, net											3,594
Early retirement of debt obligation								$ (73)
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities
Long term debt and capital lease obligations
Aggregate principal amount												$ 120,000
Repayment of credit facilities in full including related accrued interest		$ 82,200
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Tranche A Advances
Long term debt and capital lease obligations
Aggregate principal amount												35,000
Long-term debt											29,718
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Delayed Draw Term Commitments
Long term debt and capital lease obligations
Long-term debt											$ 57,000
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Maximum | Delayed Draw Term Commitments
Long term debt and capital lease obligations
Aggregate principal amount												60,000
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Maximum | Working Capital Commitments
Long term debt and capital lease obligations
Aggregate principal amount												15,000
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Maximum | Letter of credit facility commitments
Long term debt and capital lease obligations
Aggregate principal amount												$ 10,000

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Net Income per Limited Partner Unit

9 Months Ended

Sep. 30, 2015

Net Income per Limited Partner Unit.

Net Income per Limited Partner Unit

(14)Net Income per Limited Partner Unit

Net income (loss) per unit applicable to limited partners (including subordinated unitholders) is computed by dividing limited partners’ interest in net income (loss), after deducting any incentive distributions, by the weighted-average number of outstanding common and subordinated units. The Partnership’s net income (loss) is allocated to the limited partners in accordance with their respective ownership percentages, after giving effect to priority income allocations for incentive distributions, if any, to the holder of the IDRs, pursuant to the partnership agreement, which are declared and paid following the close of each quarter. Earnings (losses) per unit is only calculated for the Partnership for the periods following the IPO as no units were outstanding prior to May 4, 2015. Earnings in excess of distributions are allocated to the limited partners based on their respective ownership interests. Payments made to the Partnership’s unitholders are determined in relation to actual distributions declared and are not based on the net income (loss) allocations used in the calculation of earnings per unit.

In addition to the common and subordinated units, the Partnership has also identified the IDRs and phantom units as participating securities and uses the two-class method when calculating the net income (loss) per unit applicable to limited partners, which is based on the weighted-average number of common units outstanding during the period. Diluted net income per unit includes the effects of potentially dilutive time-based and performance-based phantom units on the Partnership’s common units. Basic and diluted earnings (losses) per unit applicable to subordinated limited partners are the same because there are no potentially dilutive subordinated units outstanding.

The table below shows the weighted-average common units outstanding used to compute net income (loss) per common unit for the three and nine months ended September 30, 2015.

	Three Months Ended September 30, 2015	Nine Months Ended September 30, 2015
Weighted average limited partner common units—basic	11,905,739	11,905,509
Dilutive effect of unvested phantom units	287,516	273,848
Weighted average limited partner common units—diluted	12,193,255	12,179,357