10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2019

or

☐ TRANSITION 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 (State or other jurisdiction of incorporation or organization)	46-4097730 (I.R.S. Employer Identification No.)
7200 Wisconsin Ave, Suite 1000 Bethesda, MD (Address of principal executive offices)	20814 (Zip code)

(301) 657-5560

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units	EVA	New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

Large accelerated filer  ☐	Accelerated filer  ☒
Non-accelerated filer  ☐	Smaller reporting company  ☐
	Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

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

As of October 25, 2019, 33,456,811 common 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		3
PART I—FINANCIAL INFORMATION		4
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Loss	6
	Condensed Consolidated Statements of Changes in Partners’ Capital	7
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 4.	Controls and Procedures	54
PART II—OTHER INFORMATION		55
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 5.	Other Information	55
Item 6.	Exhibits	56

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. Although 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 volume and quality of products that we are able to produce or source and sell, which could be adversely affected by, among other things, operating or technical difficulties at our plants or deep-water marine terminals;

• the prices at which we are able to sell our products;

• our ability to successfully negotiate and complete drop-down acquisitions with our sponsor or its joint ventures, including the associated contracts;

• failure of the Partnership’s customers, vendors and shipping partners to pay or perform their contractual obligations to the Partnership;

• our inability to successfully execute our project development and construction activities on time and within budget;

• the creditworthiness of our contract counterparties;

• the amount of low-cost wood fiber that we are able to procure and process, which could be adversely affected by, among other things, disruptions in supply or operating or financial difficulties suffered by our suppliers;

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

• changes in prevailing economic conditions;

• our inability to complete acquisitions, including acquisitions from our sponsor and joint ventures, or to realize the anticipated benefits of such acquisitions;

• inclement or hazardous environmental conditions, including extreme precipitation, temperatures and flooding;

• 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, the international shipping industry or power generators;

• changes in the regulatory treatment of biomass in core and emerging markets;

• our inability to timely acquire or maintain necessary permits or rights for our production, transportation or terminaling operations as well as expenditures associated therewith;

• changes in the price and availability of transportation;

• changes in foreign currency exchange rates or interest rates, and the failure of our hedging arrangements to effectively reduce our exposure to the risks related thereto;

• risks related to our indebtedness;

• our failure to maintain effective quality control systems at our production plants and deep-water marine terminals, which could lead to the rejection of our products by our customers;

• changes in the quality specifications for our products that are required by our customers;

1

• labor disputes;

• our inability to hire, train or retain qualified personnel to manage and operate our business and newly acquired assets;

• the effects of the anticipated exit of the United Kingdom from the European Union on our and our customers’ businesses; and

• our inability to borrow funds and access capital markets.

Please read the risks described in our Annual Report on Form 10-K for the year ended December 31, 2018. All forward-looking statements in this Quarterly Report 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.

2

GLOSSARY OF TERMS

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

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

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

metric ton: one metric ton, which is equivalent to 1,000 kilograms and 1.1023 short tons.

off-take contract: an agreement concerning the purchase and sale of a certain volume of a given resource such as wood pellets.

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

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.

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

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except number of units)

	September 30, 2019			December 31, 2018
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	2,357		$	2,460
Accounts receivable	49,643			54,794
Insurance receivables	—			5,140
Related-party receivables	—			1,392
Inventories	42,349			31,490
Prepaid expenses and other current assets	3,998			2,235
Total current assets	98,347			97,511
Property, plant and equipment - in service, net	683,524			542,635
Construction in progress	60,924			14,393
Total property, plant and equipment, net	744,448			557,028
Operating lease right-of-use assets, net	33,379			—
Goodwill	85,615			85,615
Other long-term assets	7,326			8,616
Total assets	$	969,115		$	748,770
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable	$	21,512		$	15,551
Related-party payables and accrued liabilities	9,119			28,225
Deferred consideration for drop-downs due to related party	40,000			74,000
Accrued and other current liabilities	48,318			41,400
Current portion of interest payable	13,209			5,434
Current portion of long-term debt and finance lease obligations	4,490			2,722
Total current liabilities	136,648			167,332
Long-term debt and finance lease obligations	543,589			429,933
Long-term operating lease liabilities	33,725			—
Long-term interest payable	1,100			1,010
Other long-term liabilities	2,170			3,779
Total liabilities	717,232			602,054
Commitments and contingencies
Partners’ capital:
Limited partners:
Common unitholders—public (19,870,436 and 14,573,452 units issued and outstanding at September 30, 2019 and December 31, 2018, respectively)	314,258			207,612
Common unitholder—sponsor (13,586,375 and 11,905,138 units issued and outstanding at September 30, 2019 and December 31, 2018, respectively)	92,286			72,352
General partner (no outstanding units)	(106,530		)	(133,687		)
Accumulated other comprehensive income	61			439
Total Enviva Partners, LP partners' capital	300,075			146,716
Noncontrolling interest	(48,192		)	—
Total partners’ capital	251,883			146,716
Total liabilities and partners’ capital	$	969,115		$	748,770

See accompanying notes to 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,
	2019			2018			2019			2018
Product sales	$	155,188		$	142,541		$	478,989		$	398,031
Other revenue (1)	2,217			1,607			4,864			7,037
Net revenue	157,405			144,148			483,853			405,068
Cost of goods sold (1)	117,993			104,351			395,861			331,356
Depreciation and amortization	12,946			9,678			35,112			28,800
Total cost of goods sold	130,939			114,029			430,973			360,156
Gross margin	26,466			30,119			52,880			44,912
General and administrative expenses	1,314			3,201			9,179			9,778
Related-party management services agreement fee	6,486			4,114			19,488			11,628
Total general and administrative expenses	7,800			7,315			28,667			21,406
Income from operations	18,666			22,804			24,213			23,506
Other income (expense):
Interest expense	(9,872		)	(9,445		)	(28,701		)	(27,137		)
Other income (expense), net	58			(3		)	616			1,196
Total other expense, net	(9,814		)	(9,448		)	(28,085		)	(25,941		)
Net income (loss)	$	8,852		$	13,356		$	(3,872	)	$	(2,435	)
Net income (loss) per limited partner common unit:
Basic	$	0.15		$	0.45		$	(0.44	)	$	(0.25	)
Diluted	$	0.15		$	0.43		$	(0.44	)	$	(0.25	)
Net loss per limited partner subordinated unit:
Basic and diluted	$	—		$	—		$	—		$	(0.25	)
Weighted-average number of limited partner units outstanding:
Common—basic	33,457			26,477			31,230			19,866
Common—diluted	33,457			27,478			31,230			19,866
Subordinated—basic and diluted	—			—			—			6,541
(1) See Note 13, Related-Party Transactions

See accompanying notes to condensed consolidated financial statements.

5

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net income (loss)	$	8,852		$	13,356		$	(3,872	)	$	(2,435	)
Other comprehensive (loss) income:
Net unrealized gains (losses) on cash flow hedges	13			2,713			(148		)	5,750
Reclassification of net gains realized into net income (loss)	(59		)	(2,013		)	(252		)	(2,076		)
Currency translation adjustment	4			1			4			1
Total other comprehensive (loss) income	(42		)	701			(396		)	3,675
Total comprehensive income (loss)	$	8,810		$	14,057		$	(4,268	)	$	1,240

See accompanying notes to condensed consolidated financial statements.

6

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Partners’ Capital

(In thousands)

(Unaudited)

	General Partner Interest			Limited Partners’ Capital								Accumulated Other Comprehensive Income			Non-Controlling Interest			Total Partners' Capital
				Common Units— Public				Common Units— Sponsor
				Units	Amount			Units	Amount
Partners' capital, December 31, 2018	$	(133,687	)	14,573	$	207,612		11,905	$	72,352		$	439		$	—		$	146,716
Distributions to unitholders, distribution equivalent and incentive distribution rights	(1,671		)	—	(10,269		)	—	(7,619		)	—			—			(19,559		)
Issuance of units through Long-Term Incentive Plan	(2,129		)	94	659			—	—			—			—			(1,470		)
Issuance of common units, net	—			3,509	96,661			—	—			—			—			96,661
Non-cash Management Services Agreement expenses	136			—	2,072			—	—			—			—			2,208
Cumulative effect of accounting change - derivative instruments	—			—	(10		)	—	(8		)	18			—			—
Other comprehensive loss	—			—	—			—	—			(162		)	—			(162		)
Net income (loss)	1,671			—	(5,880		)	—	(4,714		)	—			—			(8,923		)
Partners' capital, March 31, 2019	(135,680		)	18,176	290,845			11,905	60,011			295			—			215,471
Excess consideration over Enviva Wilmington Holdings, LLC net assets and initial recognition of its noncontrolling interest	1,283			—	—			—	—			—			(48,192		)	(46,909		)
Distributions to unitholders, distribution equivalent and incentive distribution rights	(2,271		)	—	(13,720		)	—	(8,763		)	—			—			(24,754		)
Issuance of units through Long-Term Incentive Plan	247			2	(287		)	—	—			—			—			(40		)
Issuance of common units, net	—			1,692	49,641			—	—			—			—			49,641
Issuance of units associated with the JV 1.0 Drop-Down	—			—	—			1,681	50,000			—			—			50,000
Non-cash Management Services Agreement expenses	11,226			—	1,013			—	—			—			—			12,239
Reimbursable amounts under Make-Whole Agreement	1,502			—	—			—	—			—			—			1,502
Other comprehensive loss	—			—	—			—	—			(192		)	—			(192		)
Net income (loss)	2,271			—	(3,609		)	—	(2,463		)	—			—			(3,801		)
Partners' capital, June 30, 2019	(121,422		)	19,870	323,883			13,586	98,785			103			(48,192		)	253,157
Distributions to unitholders, distribution equivalent and incentive distribution rights	(2,772		)	—	(13,776		)	—	(8,969		)	—			—			(25,517		)
Issuance of units through Long-Term Incentive Plan	(215		)	—	215			—	—			—			—			—
Costs of common unit issuances	—			—	(24		)	—	—			—			—			(24		)
Non-cash Management Services Agreement expenses	8,119			—	350			—	—			—			—			8,469
Reimbursable amounts under Make-Whole Agreement	6,988			—	—			—	—			—			—			6,988
Other comprehensive loss	—			—	—			—	—			(42		)	—			(42		)
Net income	2,772			—	3,610			—	2,470			—			—			8,852
Partners' capital, September 30, 2019	$	(106,530	)	19,870	$	314,258		13,586	$	92,286		$	61		$	(48,192	)	$	251,883

See accompanying notes to condensed consolidated financial statements.

7

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Partners’ Capital (Continued)

(In thousands)

(Unaudited)

	General Partner Interest			Limited Partners’ Capital														Accumulated Other Comprehensive Loss			Total Partners' Capital
				Common Units— Public				Common Units— Sponsor					Subordinated Units— Sponsor
				Units	Amount			Units		Amount			Units		Amount
Partners' capital, December 31, 2017	$	(128,569	)	13,073	$	224,027		1,347		$	16,050		11,905		$	101,901		$	(3,040	)	$	210,369
Distributions to unitholders, distribution equivalent and incentive distribution rights	(1,130		)	—	(8,833		)	—		(785		)	—		(7,381		)	—			(18,129		)
Issuance of units through Long-Term Incentive Plan	(2,129		)	99	(164		)	(82	)	(1,301		)	—		—			—			(3,594		)
Issuance of common units, net	—			8	241			—		—			—		—			—			241
Non-cash Management Services Agreement expenses	102			—	931			—		—			—		—			—			1,033
Other comprehensive loss	—			—	—			—		—			—		—			(1,327		)	(1,327		)
Net income (loss)	1,130			—	(10,233		)	—		(983		)	—		(9,249		)	—			(19,335		)
Partners' capital, March 31, 2018	(130,596		)	13,180	205,969			1,265		12,981			11,905		85,271			(4,367		)	169,258
Distributions to unitholders, distribution equivalent and incentive distribution rights	(1,264		)	—	(9,750		)	—		—			—		(7,441		)	—			(18,455		)
Issuance of units through Long-Term Incentive Plan	(3,435		)	122	723			—		—			—		—			—			(2,712		)
Sale of common units	—			1,265	13,335			(1,265	)	(13,335		)	—		—			—			—
Conversion of subordinated units to common units	—			—	—			11,905		78,504			(11,905	)	(78,504		)	—			—
Non-cash Management Services Agreement expenses	210			—	2,480			—		—			—		—			—			2,690
Other comprehensive income	—			—	—			—		—			—		—			4,301			4,301
Net income	1,264			—	1,252			—		354			—		674			—			3,544
Partners' capital, June 30, 2018	(133,821		)	14,567	214,009			11,905		78,504			—		—			(66		)	158,626
Distributions to unitholders, distribution equivalent and incentive distribution rights	(1,400		)	—	(9,784		)	—		(7,500		)	—		—			—			(18,684		)
Issuance of units through Long-Term Incentive Plan	(111		)	6	(48		)	—		—			—		—			—			(159		)
Non-cash Management Services Agreement expenses	122			—	1,782			—		—			—		—			—			1,904
Other comprehensive income	—			—	—			—		—			—		—			701			701
Net income	1,400			—	6,580			—		5,376			—		—			—			13,356
Partners' capital, September 30, 2018	$	(133,810	)	14,573	$	212,539		11,905		$	76,380		—		$	—		$	635		$	155,744

See accompanying notes to condensed consolidated financial statements.

8

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(3,872	)	$	(2,435	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	35,747			29,240
MSA Fee Waivers	18,749			—
Amortization of debt issuance costs, debt premium and original issue discounts	899			828
Loss on disposal of assets	562			900
Unit-based compensation	3,835			5,604
De-designation of foreign currency forwards and options	—			(1,947		)
Fair value changes in derivatives	(2,275		)	(4,465		)
Unrealized loss on foreign currency transactions, net	58			32
Change in operating assets and liabilities:
Accounts and insurance receivables	9,492			30,004
Related-party receivables	1,392			(123		)
Prepaid expenses and other current and long-term assets	(212		)	(160		)
Inventories	(10,679		)	(9,735		)
Derivatives	1,514			5,080
Accounts payable, accrued liabilities and other current liabilities	(2,247		)	5,709
Related-party payables and accrued liabilities	(12,025		)	3,317
Accrued interest	6,420			7,634
Operating lease liabilities	(3,715		)	—
Other long-term liabilities	(164		)	648
Net cash provided by operating activities	43,479			70,131
Cash flows from investing activities:
Purchases of property, plant and equipment	(81,484		)	(16,034		)
Payment in relation to the JV 1.0 Drop-Down	(74,700		)	—
Other	1,502			1,130
Net cash used in investing activities	(154,682		)	(14,904		)
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility	345,000			134,750
Payments on senior secured revolving credit facility	(233,000		)	(123,250		)
Payments on other long-term debt and finance lease obligations	(2,026		)	(4,745		)
Proceeds from common unit issuances, net	96,822			241
Payment of deferred consideration for Wilmington Drop-Down	(24,300		)	—
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder	(69,526		)	(55,163		)
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting	—			(2,341		)
Payment for withholding tax associated with Long-Term Incentive Plan vesting	(1,870		)	(4,380		)
Net cash provided by (used in) financing activities	111,100			(54,888		)
Net (decrease) increase in cash, cash equivalents and restricted cash	(103		)	339
Cash, cash equivalents and restricted cash, beginning of period	2,460			524
Cash, cash equivalents and restricted cash, end of period	$	2,357		$	863

See accompanying notes to condensed consolidated financial statements.

9

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Continued)

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2019		2018
Non-cash investing and financing activities:
Common unit issuance for deferred consideration for Wilmington Drop-Down	$	49,700	$	—
Common unit issuance for the JV 1.0 Drop-Down	50,000		—
Supplemental cash flow information:
Interest paid, net of capitalized interest	$	19,977	$	18,802

See accompanying notes to condensed consolidated financial statements.

10

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

(1) Description of Business and Basis of Presentation

Description of Business

Enviva Partners, LP, together with its subsidiaries (“we,” “us,” “our” or the “Partnership”), supplies utility-grade wood pellets primarily to major power generators under long-term, take-or-pay off-take contracts. We procure wood fiber and process it into utility-grade wood pellets and load the finished wood pellets into railcars, trucks and barges for transportation to deep-water marine terminals, where they are received, stored and ultimately loaded onto oceangoing vessels for delivery to our principally European, and increasingly Japanese, customers under long-term, take-or-pay contracts.

As of September 30, 2019, we owned and operated seven industrial-scale wood pellet production plants located in the Mid-Atlantic and Gulf Coast regions of the United States. In addition to the volumes from our plants, we also procure wood pellets from third parties and Enviva Pellets Greenwood, LLC (“Greenwood”), a wholly owned subsidiary of Enviva JV Development Company, LLC (the “Second JV”), a limited liability company owned by Enviva Holdings, LP (together with its wholly owned subsidiaries Enviva MLP Holdco, LLC and Enviva Development Holdings, LLC, where applicable, the “sponsor”) and John Hancock Life Insurance Company (U.S.A.) and certain of its affiliates. Greenwood owns a wood pellet production plant in Greenwood, South Carolina (the “Greenwood plant”). Wood pellets are exported from our wholly owned dry-bulk, deep-water marine terminal in Chesapeake, Virginia (the “Chesapeake terminal”) and terminal assets in Wilmington, North Carolina (the “Wilmington terminal”), and from third-party deep-water marine terminals in Mobile, Alabama and Panama City, Florida, under a short-term and a long-term contract, respectively.

Basis of Presentation

The unaudited financial statements and notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.

In the opinion of management, all adjustments and accruals necessary for a fair presentation have been included. All such adjustments and accruals are of a normal and recurring nature unless disclosed otherwise. All intercompany balances and transactions have been eliminated in consolidation. The results reported in the financial statements are not necessarily indicative of the results that may be reported for the entire year.

We entered into an agreement with our sponsor dated and effective as of September 30, 2019 pursuant to which the parties agreed to the right of set off of related-party accounts receivable and accounts payable; consequently, we intend to set off related-party receivables and payables, which are reflected net in related-party payables, in accordance with the agreement. As of December 31, 2018, related-party accounts receivable and accounts payable were not intended to be set off and were reflected separately in current assets and current liabilities.

For the nine months ended September 30, 2018, certain amounts on the statements of cash flows have been reclassified from proceeds and payments on revolving credit commitments, net, to proceeds from senior secured revolving credit facility and payments on senior secured revolving credit facility to conform to current period presentation.

The unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Enviva Wilmington Holdings, LLC

In April 2019, we acquired from the sponsor all of the issued and outstanding Class B Units in Enviva Wilmington Holdings, LLC (the “First JV”), a limited liability company owned by the sponsor and John Hancock Life Insurance Company (U.S.A.) and certain of its affiliates (collectively, the “Hancock Member”). As of April 2, 2019, we began to consolidate the First JV as a variable interest entity of which we are the primary beneficiary. As managing member, we have the sole power to direct the activities that most impact the economics of the First JV and substantially all of the activities are conducted on our behalf. Additionally, as the Class B Units represented a controlling interest in the First JV, we accounted for the First JV as a consolidated

11

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

subsidiary, not as a joint venture. The First JV owns a plant in Hamlet, North Carolina (the “Hamlet plant”) and a firm, 15-year take-or-pay off-take contract with nearly 1.0 million metric tons per year (“MTPY”) of wood pellets, following a ramp period.

On the date of our acquisition of the sponsor’s Class B Units in the First JV (collectively, the “JV 1.0 Drop-Down”):

• We commenced an associated terminal services agreement to handle contracted volumes from the Hamlet plant.

• We entered into an agreement with the sponsor, pursuant to which (1) the sponsor will guarantee certain cash flows from the Hamlet plant until June 30, 2020, (2) the sponsor will reimburse us for construction cost overruns in excess of budgeted capital expenditures for the Hamlet plant, subject to certain exceptions, (3) we will pay to the sponsor quarterly incentive payments for any wood pellets produced by the Hamlet plant in excess of forecast production levels through June 30, 2020, and (4) the sponsor will retain liability for certain claims payable, if any, by the First JV (the “Make-Whole Agreement”).

• The First JV entered into an agreement with Enviva Management Company, LLC, a Delaware limited liability company and wholly owned subsidiary of the sponsor (“Enviva Management”), to waive the obligation to pay an aggregate of approximately $2.7 million of management fees payable to Enviva Management under the management services agreement (the “First JV MSA”) between the First JV and Enviva Management with respect to the period from the date of acquisition of the Hamlet plant until July 1, 2019 (the “First JV MSA Fee Waiver”).

• We entered into an agreement with Enviva Management to waive our obligation to pay an aggregate of approximately $13.0 million in fees payable under our management services agreement (the “EVA MSA,” and together with the First JV MSA, the “MSAs”) with Enviva Management with respect to the period from the date of the JV 1.0 Drop-Down through the second quarter of 2020 (the “First EVA MSA Fee Waiver”).

• The sponsor assigned to us all of its rights and obligations under a credit agreement between the First JV, as borrower, and the sponsor, as lender (the “First JV Revolver”). On the date of assignment, $4.1 million was outstanding from the First JV to the sponsor.

• The First JV entered into an interim services agreement (the “ISA”) with Enviva Hamlet Operator, LLC, a wholly-owned subsidiary of our sponsor (“Hamlet Operator”) pursuant to which Hamlet Operator, as an independent contractor, will manage, operate, maintain and repair the Hamlet plant and provide other services to the First JV for the period from July 1, 2019 through June 30, 2020 in exchange for a fixed fee per metric ton of wood pellets produced by the Hamlet plant during such period and delivered at place. Under and during the term of the ISA, Hamlet Operator will (1) pay all operating and maintenance expenses at the Hamlet plant, (2) cover all reimbursable general and administrative expenses associated with the Hamlet plant and (3) pay other costs and expenses incurred by the Hamlet plant to produce and sell the wood pellets delivered to the Wilmington terminal from the Hamlet plant. The sponsor guarantees all obligations of Hamlet Operator under the ISA.

Fees to Enviva Management through the MSAs are expensed as incurred and, to the extent any amount is associated with the First JV MSA Fee Waiver and the First EVA MSA Fee Waiver, the related amount is recorded as an increase to partners’ capital.

The $165.0 million purchase price for the JV 1.0 Drop-Down consisted of (1) a cash payment of $24.7 million, net of a purchase price adjustment of $0.3 million, (2) the issuance of 1,681,237 unregistered common units at a value of $29.74 per unit, or $50.0 million of common units, (3) $50.0 million in cash paid on June 28, 2019, (4) $40.0 million in cash to be paid on January 2, 2020 and (5) the elimination of $3.7 million of net related-party receivables and payables included in the net assets of the First JV on the date of acquisition. As the holder of the Class B Units, we became a member of the First JV (the “Enviva Member”) on the acquisition date. During the three and nine months ended September 30, 2019, we incurred and expensed $0.1 million and $1.3 million, respectively, in acquisition costs to acquire the First JV which were recognized as general and administrative expenses.

As the Enviva Member, we are the managing member and primary beneficiary of the First JV. We included all accounts of the First JV in our consolidated results as of April 2, 2019 as the Class B Units represent a controlling interest in the First JV and are generally unrestricted as it relates to the management of the assets and cash flows of the First JV; however, we cannot cause the First JV to incur indebtedness in excess of $60.0 million.

12

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

The JV 1.0 Drop-Down was an asset acquisition of entities under common control and accounted for on the carryover basis of accounting. Pursuant to the First JV MSA, Enviva Management provides services to the First JV, including those necessary or incidental to the operation and management of the First JV’s business. We are responsible for managing the activities of the First JV, including the development, construction and operation of the Hamlet plant.

(2) Significant Accounting Policies

During interim periods, we follow the accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018 except for our adoption on and as of January 1, 2019 of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) andASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.

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 our unaudited financial statements and accompanying notes. Actual results could differ materially from those estimates.

Accounting Standards Adopted

Leases

ASU 2016-02 established a right-of-use (“ROU”) model that requires lessees to recognize a ROU asset and corresponding lease liability on the balance sheet for all leases with a term of longer than 12 months and classify leases as operating or finance. Operating lease expense is recorded in a single financial statement line item on a straight-line basis over the lease term. Amortization of the ROU asset is the calculated difference between straight-line lease expense and the accretion of interest on the lease liability each period.

We adopted ASU 2016-02 on and as of January 1, 2019 using the modified retrospective transition method, which we applied to all leases existing at the date of initial application of the ASU. We elected to use the effective date as the date of initial application, as opposed to the beginning of the earliest comparative period presented in the financial statements; consequently, financial information and disclosures are not presented under the new standard for periods prior to January 1, 2019. We elected the package of three practical expedients under the transition guidance within the new standard, which permitted us to reassess our prior conclusions under the previous guidance concerning lease identification, lease classification and initial direct leasing costs. We elected the practical expedient to not evaluate existing or expired land easements that were not accounted for as leases under previous guidance. We did not, however, elect the separate practical expedient pertaining to the use of hindsight in determining the lease term for existing leases. We have a significant contract containing both lease and nonlease components, which are accounted for separately. As this contract has fixed payments, the allocation of lease and nonlease components is based on relative standalone price.

The adoption of the new standard as of January 1, 2019 resulted in the recognition of operating lease ROU assets of $27.4 million, net of $2.1 million of deferred rent liabilities existing as of December 31, 2018, and operating lease liabilities of $29.5 million for operating leases related to real estate, machinery and equipment and other operating leases with terms of longer than 12 months. The amounts recognized as of January 1, 2019 were based on the present value of the remaining minimum rental payments under previous leasing standards for existing operating leases. The classification of a lease affects the pattern and classification of expense recognition in the income statement, which is unchanged from under the previous accounting method. The adoption of the new standard did not change our accounting for finance leases (which were described as “capital leases” under the previous standard) or impact our results of operations and cash flows. See Note 9, Leases.

Derivative Instruments

We adopted ASU 2017-12 on and as of January 1, 2019 using the modified retrospective method, which requires the recognition of the cumulative effect of the change on the opening balance of each affected component of equity in the statement of changes in partner’s capital as of the date of adoption of the new standard. Upon adoption of ASU 2017-12, we no longer measure and recognize ineffectiveness related to designated and qualifying cash flow hedges in earnings; as a result, any ineffectiveness is included in accumulated other comprehensive income. On January 1, 2019, we recorded a nominal cumulative

13

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

effect adjustment to accumulated other comprehensive income and common units in partners’ capital. See Note 10, Derivatives.

Recently Issued Accounting Standards not yet Adopted

Currently, there are no recently issued accounting standards not yet adopted by us that we expect to be reasonably likely to materially impact the financial position, results of operations or cash flows of the Partnership.

(3) Transactions Between Entities Under Common Control

The JV 1.0 Drop-Down was an asset acquisition of entities under common control and accounted for on the carryover basis of accounting. Accordingly, the consolidated financial statements for the period beginning April 2, 2019 reflect the acquisition.

The purchase price for the JV 1.0 Drop-Down consisted of $165.0 million, which included an initial cash payment of $24.7 million, net of purchase price adjustment of $0.3 million, and the issuance of 1,681,237 unregistered common units at a value of $29.74 per unit, or $50.0 million of common units, $50.0 million in cash, paid on June 28, 2019, and $40.0 million in cash, which will be paid on January 2, 2020 as the third and final payment.

The changes in net assets at carryover basis on April 2, 2019 included $121.6 million net assets of the First JV, net of the elimination of $3.7 million of net related-party receivables and payables. The following table outlines the changes in consolidated net assets resulting from the JV 1.0 Drop-Down on April 2, 2019.

Assets:
Cash and cash equivalents	$	3,426
Related-party receivables	945
Prepaid expenses and other current assets	22
Property, plant and equipment, net	140,446
Other long-term assets	8
Total assets	144,847
Liabilities:
Accounts payable	6,395
Related-party payables	1,923
Accrued and other current liabilities	14,965
Finance lease obligations	3
Total liabilities	23,286
Net assets contributed to Partnership	$	121,561

(4) Revenue

We disaggregate our revenue into two categories: product sales and other revenue. Other revenue includes fees associated with customer requests to cancel, defer or accelerate shipments in satisfaction of the related performance obligation and third- and related-party terminal services fees. These categories best reflect the nature, amount, timing and uncertainty of our revenue and cash flows.

Performance Obligations

As of September 30, 2019, the aggregate amount of revenues from contracts with customers allocated to performance obligations that were unsatisfied or partially satisfied was approximately $9.3 billion. This amount excludes forward prices related to variable consideration including inflation and foreign currency and commodity prices. Also, this amount excludes the effects of related foreign currency derivative contracts as they do not represent contracts with customers. As of October 1, 2019, we expect to recognize approximately 2.0% of our remaining performance obligations as revenue during the remainder of 2019, approximately 10.0% in 2020 and the balance thereafter. Our off-take contracts expire at various times through 2040 and our terminal services contracts extend into 2026.

14

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Variable Consideration

Variable consideration from off-take contracts arises from several pricing features outlined in our off-take contracts, pursuant to which such contract pricing may be adjusted in respect of particular shipments to reflect differences between certain contractual quality specifications of the wood pellets as measured both when the wood pellets are loaded onto ships and unloaded at the discharge port as well as certain other contractual adjustments.

Variable consideration from terminal services contracts, which was not material for the three and nine months ended September 30, 2019 and 2018, arises from price increases based on agreed inflation indices and from above-minimum throughput quantities or services.

We allocate variable consideration under our off-take and terminal services contracts entirely to each performance obligation to which variable consideration relates. The estimate of variable consideration represents the amount that is not more likely than not to be reversed. For the three and nine months ended September 30, 2019, we recognized $0.1 million and $0.5 million. respectively, of revenue related to performance obligations satisfied in previous periods. For the three and nine months ended September 30, 2018, we recognized an insignificant amount of revenue related to performance obligations in previous periods.

Contract Balances

Accounts receivable related to product sales as of September 30, 2019 and December 31, 2018 were $47.8 million and $51.3 million, respectively. We had no deferred revenue as of September 30, 2019 for future performance obligations associated with off-take contracts. We had $0.3 million of deferred revenue as of December 31, 2018 for future performance obligations associated with off-take contracts.

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

Our business is significantly impacted by greenhouse gas emission and renewable energy legislation and regulations in the European Union as well as its member states and Japan. If the European Union, its member states or Japan significantly modify such legislation or regulations, then our ability to enter into new contracts as our existing contracts expire may be materially affected.

Our current sales are primarily to industrial customers located in the United Kingdom, Denmark and Belgium. Product sales to third-party customers that accounted for 10% or a greater share of consolidated product sales are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Customer A	49	%	52	%	50	%	53	%
Customer B	12	%	10	%	11	%	10	%
Customer C	22	%	24	%	21	%	15	%
Customer D	8	%	9	%	11	%	14	%

(6) Inventory Impairment and Asset Disposal

On February 27, 2018, a fire occurred at the Chesapeake terminal, causing damage to equipment and approximately 43,000 MT of wood pellets (the “Chesapeake Incident”). The Chesapeake terminal returned to operations on June 28, 2018. During the three and nine months ended September 30, 2018, we incurred $9.7 million and $58.4 million, respectively, in costs as a result of the Chesapeake Incident related to asset impairment, inventory write-off and disposal costs, emergency response costs, asset repair costs and business continuity costs, the latter of which represented incremental costs to commission temporary wood pellet storage and handling and ship loading operations at nearby locations to meet our contractual obligations to our customers. As of September 30, 2018, we had recovered $48.1 million related to the Chesapeake Incident, which included $1.1 million of lost profits. As of December 31, 2018, $3.8 million of probable insurance recoveries for the then-remaining costs not yet recovered were included in insurance receivables; we received the $3.8 million in probable insurance recoveries (plus $0.5 million recognized as other income in 2019) in February 2019.

15

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

(7) Inventories

Inventories consisted of the following as of:

	September 30, 2019		December 31, 2018
Raw materials and work-in-process	$	9,883	$	4,936
Consumable tooling	19,995		17,561
Finished goods	12,471		8,993
Total inventories	$	42,349	$	31,490

(8) Property, Plant and Equipment

Property, plant and equipment consisted of the following as of:

	September 30, 2019			December 31, 2018
Land	$	15,226		$	13,492
Land improvements	56,637			44,990
Buildings	216,995			196,574
Machinery and equipment	576,401			434,776
Vehicles	635			635
Furniture and office equipment	6,759			6,148
Leasehold improvements	987			987
Property, plant and equipment - in service	873,640			697,602
Less accumulated depreciation	(190,116		)	(154,967		)
Property, plant and equipment - in service, net	683,524			542,635
Construction in progress	60,924			14,393
Total property, plant and equipment, net	$	744,448		$	557,028

Total depreciation expense was $13.3 million and $35.8 million, respectively, for the three and nine months ended September 30, 2019. Total depreciation expense was $9.8 million and $29.1 million, respectively, for the three and nine months ended September 30, 2018. Total interest capitalized related to construction in progress was $0.7 million and $1.4 million, respectively, for the three and nine months ended September 30, 2019. Accrued amounts for property, plant and equipment and construction in progress included in accrued and other current liabilities were $15.4 million and $6.3 million at September 30, 2019 and December 31, 2018, respectively.

(9) Leases

We have operating and finance leases related to real estate, machinery, equipment and other assets where we are the lessee. Leases with an initial term of 12 months or less are not recorded on the balance sheet but are recognized as lease expense on a straight-line basis over the applicable lease terms. Amortization of the ROU asset is calculated as the difference between straight-line lease expense and the accretion of interest on the lease liability each period. In addition to fixed lease payments, we have contracts that incur variable lease expense related to usage (e.g. throughput fees, maintenance and repair and machine hours), which are expensed as incurred. Our leases have remaining terms of one to 28 years, some of which include options to extend the leases for up to 5 years. Our leases are generally noncancellable. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

A discount rate is applied to our leases for balance sheet measurement. As rates are not explicitly defined in the operating and finance lease agreements, we use our incremental borrowing rate for purposes of measuring the ROU assets and lease liabilities for recognized leases. This is a secured interest rate which takes into account our credit rating, the term of our leases, as well as

16

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

the economic environment in which we operate. Each lease uses a secured interest rate with a term commensurate to the identified lease term.

Operating leases are included in operating lease ROU assets, accrued and other current liabilities and long-term operating lease liabilities on our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of long-term debt and finance lease obligations and long-term debt and finance lease obligations on our condensed consolidated balance sheets. Changes in ROU assets and operating lease liabilities are included net in change in operating lease liabilities on the condensed consolidated statement of cash flows.

Operating lease ROU assets and liabilities and finance leases were as follows as of September 30, 2019:

Operating leases:
Operating lease right-of-use assets, gross	$	36,964
Accumulated amortization	(3,585		)
Operating lease right-of-use assets, net	$	33,379
Current portion of operating lease liabilities	$	1,577
Long-term operating lease liabilities	33,725
Total operating lease liabilities	$	35,302
Finance leases:
Property, plant and equipment, gross	$	13,484
Accumulated depreciation	(5,870		)
Property plant and equipment, net	$	7,614
Current portion of long-term finance lease obligations	$	4,482
Long-term finance lease obligations	3,237
Total finance lease liabilities	$	7,719

Operating and finance lease costs were as follows:

Lease Cost	Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost:
Fixed lease cost	Cost of goods sold	$	1,269	$	3,546
Variable lease cost	Cost of goods sold	3		29
Short-term lease costs	Cost of goods sold	15		15
	Total operating lease costs	$	1,287	$	3,590
Finance lease cost:
Amortization of leased assets	Depreciation and amortization	1,094		2,578
Variable lease cost	Cost of goods sold	4		4
Interest on lease liabilities	Interest expense	70		179
	Total finance lease costs	$	1,168	$	2,761
	Total lease costs	$	2,455	$	6,351

17

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Operating and finance lease cash flow information was as follows:

	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,715
Operating cash flows from financing leases	179
Financing cash flows from financing leases	2,020
Assets obtained in exchange for lease obligations:
Operating leases	$	7,465
Financing leases	5,380

The future minimum lease payments and the aggregate maturities of operating and finance lease liabilities are as follows as of September 30, 2019:

Years Ending December 31,	Operating Leases			Finance Leases			Total
Remainder of 2019	$	1,112		$	1,415		$	2,527
2020	4,140			4,358			8,498
2021	3,890			1,814			5,704
2022	3,719			279			3,998
2023	3,710			246			3,956
Thereafter	65,110			92			65,202
Total lease payments	81,681			8,204			89,885
Less: imputed interest	(46,379		)	(485		)	(46,864		)
Total present value of lease liabilities	$	35,302		$	7,719		$	43,021

The future minimum lease payments as of December 31, 2018 for operating and finance lease liabilities were $73.8 million and $4.8 million, respectively.

The weighted-average remaining lease terms and discount rates for our operating and finance leases were weighted using the undiscounted future minimum lease payments and are as follows as of September 30, 2019:

Weighted average remaining lease term (years):
Operating leases	22
Finance leases	2
Weighted average discount rate:
Operating leases	8	%
Finance leases	6	%

(10) Derivative Instruments

We use derivative instruments to partially offset our business exposure to foreign currency exchange and interest rate risk. We may enter into foreign currency forward and option contracts to offset some of the foreign currency exchange risk on our expected future cash flows and interest rate swaps to offset some of the interest rate risk on our expected future cash flows from certain borrowings. Our derivative instruments expose us to credit risk to the extent that our hedge counterparties may be unable to meet the terms of the applicable derivative instrument. We seek to mitigate such risks by limiting our counterparties to major financial

18

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

institutions. In addition, we monitor the potential risk of loss with any one counterparty resulting from credit risk. Management does not expect material losses as a result of defaults by counterparties. We use derivative instruments to manage cash flow and not for speculative or trading purposes.

Cash Flow Hedges

For qualifying cash flow hedges, the effective and ineffective portion of the gain or loss on the change in fair value is initially reported as a component of accumulated other comprehensive income in partners’ capital and subsequently reclassified into earnings when the hedged exposure affects earnings. Prior to January 1, 2019 and the adoption of ASU 2017-12 (see Note 2, Significant Accounting Policies), the ineffective portion of the gain or loss, if any, was reported in earnings in the current period. We considered our cash flow hedges to be highly effective at inception. Changes in fair value for derivative instruments not designated as hedging instruments are recognized in earnings.

Foreign Currency Exchange Risk

We are primarily exposed to fluctuations in foreign currency exchange rates related to off-take contracts that require future deliveries of wood pellets to be settled in British Pound Sterling (“GBP”) and Euro (“EUR”). We have entered and may continue to enter into foreign currency forward contracts, purchased option contracts or other instruments to partially manage this risk and, prior to August 2018, had designated certain of these instruments as cash flow hedges.

In August 2018, due to market changes, increases in demand for wood pellets and requests from customers to accommodate the acceleration or deferral of contracted deliveries, we determined that it was no longer probable that the timing of the forecasted revenues associated with the hedged transactions would occur as originally scheduled. As a result, we discontinued hedge accounting for all designated foreign currency cash flow hedges and recognized the full amount of unrealized net gains included in accumulated other comprehensive income of $1.9 million to earnings. As of September 30, 2018, none of our foreign currency derivative instruments were designated as cash flow hedging instruments. In connection with the discontinuation of cash flow hedge accounting, we have recorded the on-going changes in the fair value of foreign currency derivatives as product sales or cost of sales depending on the nature of the item being hedged.

Interest Rate Risk

We are exposed to fluctuations in interest rates on borrowings under our senior secured revolving credit facility. We have entered into a pay-fixed, receive-variable interest rate swap that expires in April 2020 to hedge the interest rate risk associated with our variable rate borrowings under our senior secured revolving credit facility. The interest rate swap is designated and qualifies as a cash flow hedge.

19

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Derivative instruments are classified as Level 2 assets or liabilities based on inputs such as spot and forward benchmark interest rates (such as LIBOR) and foreign exchange rates. The fair value of derivative instruments as of September 30, 2019 and December 31, 2018 was as follows:

		Asset (Liability)
	Balance Sheet Classification	September 30, 2019		December 31, 2018
Designated as hedging instruments:
Interest rate swap
	Other current assets	$	122	$	508
	Other long-term assets	—		118
Total derivatives designated as hedging instruments		$	122	$	626
Not designated as hedging instruments:
Foreign currency exchange forward contracts:
	Other current assets	$	1,647	$	794
	Other long-term assets	1,290		1,810
	Accrued and other current liabilities	—		(68		)
	Other long-term liabilities	—		(179		)
Foreign currency purchased option contracts:
	Other current assets	286		22
	Other long-term assets	3,369		3,348
Total derivatives not designated as hedging instruments		$	6,592	$	5,727

Net unrealized gains related to the change in fair market value of derivative instruments not designated as hedging instruments were $1.1 million and $1.4 million, respectively, during the three and nine months ended September 30, 2019 and are included in product sales. Realized gains related to derivatives settled were $1.6 million and $1.7 million, respectively, during the three and nine months ended September 30, 2019, and are included in product sales.

During the three and nine months ended September 30, 2018, we recorded $2.3 million and $5.4 million, respectively, of unrealized net gains on derivative instruments in product sales. Included in the unrealized net gains for both the three and nine months ended September 30, 2018 was $1.9 million related to the reclassification of unrealized net gains previously included in accumulated other comprehensive income as described above. Net gains related to the change in fair market value of derivative instruments not designated as hedging instruments were $0.4 million and $3.5 million, respectively during the three and nine months ended September 30, 2018 and are included in product sales. During the three months ended September 30, 2018, we received $4.3 million on realized gains related to derivatives settled during the period.

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the three months ended September 30, 2019 were as follows:

	Amount of Gain in Other Comprehensive Loss on Derivative		Location of Gain Reclassified from Accumulated Other Comprehensive Loss	Amount of Gain  Reclassified from Accumulated Other Comprehensive Loss into Earnings
Interest rate swap	$	13	Interest expense	$	59

20

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the nine months ended September 30, 2019 were as follows:

	Amount of Loss in Other Comprehensive Loss on Derivative			Location of Gain Reclassified from Accumulated Other Comprehensive Loss	Amount of Gain  Reclassified from Accumulated Other Comprehensive Loss into Earnings
Interest rate swap	$	(148	)	Interest expense	$	252

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the three months ended September 30, 2018 were as follows:

	Amount of Gain in Other Comprehensive Income on Derivative (Effective Portion)		Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion)	Amount of Gain Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)		Location of (Loss) Gain Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency exchange forward contracts	$	1,907	Product sales	$	—	Product sales	$	2,418
Foreign currency exchange purchased option contracts	765		Product sales	—		Product sales	(470		)
Interest rate swap	41		Interest expense	—		Interest expense	67

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the nine months ended September 30, 2018 were as follows:

	Amount of Gain in Other Comprehensive Income on Derivative (Effective Portion)		Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion)	Amount of Gain Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)		Location of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency exchange forward contracts	$	4,532	Product sales	$	—	Product sales	$	2,413
Foreign currency exchange purchased option contracts	749		Product sales	—		Product sales	(470		)
Interest rate swap	469		Interest expense	—		Interest expense	131

We enter into master netting arrangements, which are designed to permit net settlement of derivative transactions among the respective counterparties. If we had settled all transactions with our respective counterparties at September 30, 2019, we would have received a net settlement termination payment of $6.7 million, which differs insignificantly from the recorded fair value of the derivatives. We present our derivative assets and liabilities at their gross fair values.

21

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

The notional amounts of outstanding derivative instruments associated with outstanding or unsettled derivative instruments as of September 30, 2019 and December 31, 2018 were as follows:

	September 30, 2019		December 31, 2018
Foreign exchange forward contracts in GBP	£	38,140	£	42,170
Foreign exchange purchased option contracts in GBP	£	43,415	£	39,365
Foreign exchange forward contracts in EUR	€	7,300	€	14,300
Foreign exchange purchased option contracts in EUR	€	1,675	€	1,675
Interest rate swap	$	35,723	$	39,829

(11) Fair Value Measurements

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

Long-term debt and finance lease obligations, including the current portion, are classified as Level 2 instruments. The fair value of our senior notes (see Note 12, Long-Term Debt and Finance Lease Obligations – Senior Notes Due 2021) was determined based on observable market prices in a less active market and was categorized as Level 2 in the fair value hierarchy. The fair value of other long-term debt and finance lease obligations classified as Level 2 was determined based on the usage of market prices not quoted on active markets and other observable market data. The fair value of long-term debt and finance lease obligations are based upon rates currently available for debt and finance lease obligations with similar terms and remaining maturities.

The carrying amount and estimated fair value of long-term debt and finance lease obligations as of September 30, 2019 and December 31, 2018 were as follows:

	September 30, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior notes	$	353,352	$	362,227	$	352,843	$	359,943
Other long-term debt and finance lease obligations	194,727		194,727		79,812		79,812
Total long-term debt and finance lease obligations	$	548,079	$	556,954	$	432,655	$	439,755

(12) Long-Term Debt and Finance Lease Obligations

Long-term debt and finance lease obligations at carrying value are composed of the following:

	September 30, 2019			December 31, 2018
Senior notes, net of unamortized discount, premium and debt issuance of $1.6 million as of September 30, 2019 and $2.2 million as of December 31, 2018	$	353,352		$	352,843
Senior secured revolving credit facility	185,000			73,000
Other loans	2,008			2,015
Finance leases	7,719			4,797
Total long-term debt and finance lease obligations	548,079			432,655
Less current portion of long-term debt and finance lease obligations	(4,490		)	(2,722		)
Long-term debt and finance lease obligations, excluding current installments	$	543,589		$	429,933

22

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Senior Notes Due 2021

As of September 30, 2019 and December 31, 2018, we were in compliance with all covenants and restrictions associated with, and no events of default existed under, our 8.5% senior unsecured notes due 2021. Our obligations under the senior notes are guaranteed by certain of our subsidiaries.

Senior Secured Revolving Credit Facility

As of September 30, 2019 and December 31, 2018, we were in compliance with all covenants and restrictions associated with, and no events of default existed under, our senior secured revolving credit facility due October 2023. Our obligations under the senior secured revolving credit facility are guaranteed by certain of our subsidiaries and secured by liens on substantially all of our assets; however, the senior secured revolving credit facility is not guaranteed by the First JV or secured by liens on its assets.

(13) Related-Party Transactions

Related-party transaction amounts included on the unaudited condensed consolidated statements of operations were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Other revenue	$	496	$	1,042	$	1,323	$	3,346
Cost of goods sold	26,300		20,133		80,921		56,184
General and administrative expenses	6,486		4,113		19,488		11,628

Management Services Agreements

Pursuant to the MSAs, Enviva Management provides us with operations, general administrative, management and other services. We are required to reimburse Enviva Management for the amount of all direct or indirect internal or third-party expenses incurred by Enviva Management in connection with the provision of such services. The MSAs include rent-related amounts for non-cancelable operating leases for office space in Maryland and North Carolina held by the sponsor. Under the First JV MSA, to the extent allocated costs exceed the annual management fee, the additional costs are recorded with an increase to partners’ capital.

During the three and nine months ended September 30, 2019, $17.8 million and $51.5 million, respectively, related to the MSAs was included in cost of goods sold and $6.5 million and $19.5 million, respectively, was included in general and administrative expenses. As of September 30, 2019, $1.7 million incurred under the MSAs was included in finished goods inventory.

During the three and nine months ended September 30, 2018, $13.4 million and $35.9 million, respectively, related to the MSAs was included in cost of goods sold and $4.1 million and $11.6 million, respectively, was included in general and administrative expenses.

During the three and nine months ended September 30, 2019, $0.8 million and $1.7 million, respectively, of fees expensed under the First JV MSA were waived and recorded as an increase to partner’s capital.

JV 1.0 Drop-Down Agreements

The agreements we entered into on the date of acquisition of the First JV resulted in the following amounts being recorded in our financial statements since the date of acquisition. During the three and nine months ended September 30, 2019, $11.6 million and $20.5 million, respectively, were recorded as an increase to partners’ capital and $0.1 million and $0.7 million, respectively, were recorded as a net reduction in cost of goods sold. These increases to partners’ capital are comprised of expenses waived under the EVA MSA Fee Waiver and the First JV MSA Fee Waiver and reimbursement of construction cost overruns in excess of budgeted capital expenditures for the Hamlet plant. The net reduction in cost of goods sold is comprised of the cost of cover deficiency fee from the Hamlet Operator under the ISA not producing enough pellets at Hamlet, offset by the agreed-upon price due to the Hamlet Operator for the pellets from Hamlet that we have sold.

23

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Second EVA MSA Fee Waiver

In June 2019, we entered into an additional agreement (the “Second EVA MSA Fee Waiver”) with Enviva Management pursuant to which we received a $5.0 million waiver of EVA MSA fees through September 30, 2019, as consideration for an assignment of two shipping contracts to our sponsor to rebalance our and our sponsor’s respective shipping obligations under existing off-take contracts. During the three and nine months ended September 30, 2019, $2.3 million and $5.0 million, respectively, of EVA MSA fees expensed were waived and recorded as an increase to partners’ capital pursuant to the Second EVA MSA Fee Waiver. During the three and nine months ended September 30, 2018, no EVA MSA fees were waived pursuant to the Second EVA MSA Fee Waiver.

Wilmington Drop-Down - Deferred Consideration

In October 2017, we acquired from the First JV all of the issued and outstanding limited liability company interests in Enviva Port of Wilmington, LLC (“Wilmington”), which owns the Wilmington terminal assets (the “Wilmington Drop-Down”), for total consideration of $130.0 million, subject to certain conditions. The Wilmington Drop-Down included the Wilmington terminal assets and a long-term terminal services agreement with our sponsor (the “Holdings TSA”) to handle throughput volumes sourced from Greenwood. The purchase price included $74.0 million of deferred consideration, which was paid in full in April 2019 and consisted of $24.3 million in cash, of which $22.8 million was distributed to the Hancock Member and the issuance of 1,691,627 common units, or approximately $49.7 million in common units, which were distributed to the Hancock Member. The $74.0 million of deferred consideration was reflected on the condensed consolidated balance sheets as of December 31, 2018.

Greenwood Contract

In February 2018, we entered into a contract with Greenwood to purchase wood pellets produced by the Greenwood plant through March 2022 (the “Greenwood contract”) and we have a take-or-pay obligation with respect to 550,000 MTPY of wood pellets from July 2019 through March 2022. In July 2019, we entered into an amendment whereby the commencement of the take-or-pay obligation date was deferred from July 2019 to January 2020.

During the three and nine months ended September 30, 2019, we purchased $11.3 million and $35.5 million, respectively, of wood pellets and recorded a cost of cover deficiency fee from Greenwood of approximately $1.0 million and $4.3 million, respectively, from Greenwood as Greenwood was unable to satisfy certain commitments. Of the net $8.6 million and $29.5 million, respectively, $9.7 million and $33.8 million, respectively, is included in cost of goods sold and $1.5 million is included in finished goods inventory as of September 30, 2019. During the three and nine months ended September 30, 2018, we purchased $8.5 million and $16.8 million, respectively, of wood pellets from Greenwood, which is included in cost of goods sold.

Holdings TSA

The Wilmington Drop-Down included a long-term terminal services agreement with our sponsor (the “Holdings TSA”). Pursuant to the Holdings TSA, our sponsor agreed to deliver a minimum of 125,000 MT of wood pellets per quarter for receipt, storage, handling and loading services by the Wilmington terminal and pay a fixed fee on a per-ton basis for such terminal services. The Holdings TSA remains in effect until September 1, 2026. We did not record any terminal services revenue from our sponsor during the three months ended September 30, 2018. During the nine months ended September 30, 2018, we recorded $0.8 million as terminal services revenue from our sponsor, which is included in other revenue.

In February 2018, our sponsor amended and assigned the Holdings TSA to Greenwood. Deficiency payments are due to Wilmington if quarterly minimum throughput requirements are not met. During the three and nine months ended September 30, 2019 and 2018, we recorded $0.5 million and $1.3 million, respectively, and $0.5 million and $2.0 million, respectively, of deficiency fees from Greenwood, which is included in other revenue.

In September 2018, Hurricane Florence impacted the rail line on which wood pellets are typically transported from the Greenwood plant to the Wilmington terminal. As a result, Greenwood was unable to satisfy certain commitments under the Holdings TSA and the Greenwood contract and agreed to pay $1.8 million to us as deficiency fees in consideration of these commitments. Consideration of $0.5 million related to the Holdings TSA was included in other revenue and $1.3 million related to the Greenwood contract was included as a reduction of cost of goods sold.

24

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Biomass Option Agreement – Enviva Holdings, LP

Enviva, LP purchased none and $1.7 million of wood pellets from the sponsor during the three and nine months ended September 30, 2018, respectively, pursuant to a biomass option agreement. The wood pellet purchase amounts are included in cost of goods sold. The biomass option agreement terminated in accordance with its terms in March 2018.

Enviva FiberCo, LLC

We purchase raw materials from Enviva FiberCo, LLC (“FiberCo”), a wholly owned subsidiary of our sponsor. During the three and nine months ended September 30, 2019, purchased raw materials, net of cost of cover deficiency fees from FiberCo, were immaterial and $0.6 million, respectively. During the three and nine months ended September 30, 2018, we purchased raw materials of $1.8 million and $3.5 million, respectively, from FiberCo. No cost of cover deficiency fees from FiberCo were recognized during the three and nine months ended September 30, 2018.

Long-Term Incentive Plan Vesting

As of September 30, 2019, we had an insignificant amount included in related-party payables related to withholding tax amounts due to Enviva Management associated with the vesting of time-based phantom units under the Enviva Partners, LP Long-Term Incentive Plan (“LTIP”).

(14) Partners’ Capital

Common Units - Issuance

During March 2019, we issued 3,508,778 common units in a registered direct offering for net proceeds of approximately $97.0 million, net of $3.0 million of issuance costs.

On April 1, 2019, as deferred consideration for the Wilmington Drop-Down, we issued 1,691,627 common units, or $49.7 million in common units, to the First JV, which common units were distributed to the Hancock Member. On April 2, 2019, in connection with the JV 1.0 Drop-Down, we issued 1,681,237 common units, or $50.0 million in common units, to the sponsor.

Allocations of Net Income

The Partnership’s partnership agreement contains provisions for the allocation of net income and loss to the unitholders of the Partnership 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 of the Partnership in accordance with their respective percentage ownership interest. Such allocations are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions, which are allocated 100% to the General Partner.

Incentive Distribution Rights

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

At-the-Market Offering Program

Pursuant to an equity distribution agreement dated August 8, 2016, we may offer and sell common units from time to time through a group of managers, subject to the terms and conditions set forth in such agreement, of up to an aggregate sales amount of $100.0 million (the “ATM Program”).

During the three and nine months ended September 30, 2019, we did not sell common units under the ATM Program. During the three months ended September 30, 2018, we did not sell common units under the ATM Program. During the nine months ended September 30, 2018, we sold 8,408 common units under the ATM Program for net proceeds of $0.2 million, net of an insignificant amount of commissions. Net proceeds from sales under the ATM Program were used for general partnership purposes.

25

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

First JV

The capital of the First JV is divided into two classifications: (1) Class A Units and (2) Class B Units, issued at a price of $1.00 per unit for each class.

Class A Units - Noncontrolling Interests

Class A Units were issued to the Hancock Member in exchange for capital contributions at a price of $1.00 for each Class A Unit.

The Hancock Member had a total capital commitment of $235.2 million and, as of September 30, 2019, the Hancock Member held 227.0 million Class A Units with a remaining capital commitment amount of $8.2 million.

Class B Units - Controlling Interests

Class B Units were issued to the Enviva Member in exchange for capital contributions at a price of $1.00 for each Class B Unit.

The Enviva Member had a total capital commitment of $232.2 million and, as of September 30, 2019, the Enviva Member held 224.0 million Class B Units with a remaining commitment amount of $8.2 million.

Pursuant to the limited liability company agreement of the First JV (the “First JV LLCA”), we are the managing member of the First JV and have the authority to manage the business and affairs of the First JV and take actions on its behalf, including adopting annual budgets, entering into agreements, effecting asset sales or biomass purchase agreements, making capital calls, incurring debt and taking other actions, subject to consent of the Hancock Member in certain circumstances. The First JV LLCA also sets forth the capital commitments and limitations thereon from each of the members, and provides for the allocation of sale proceeds and distributions among the holders of outstanding Class A Units and Class B Units.

We included all accounts of the First JV in our consolidated results as of April 2, 2019 as the Class B Units represent a controlling interest in the First JV.

Distribution Rights

Distributions to the Hancock Member, and to the Enviva Member, are made in the reasonable discretion of the Enviva Member and are governed by the waterfall provisions of the First JV LLCA, which provides that distributions, after repayment of the First JV Revolver borrowings, are to be made as follows:

• First: To the members in proportion to their relative unreturned capital contributions, then to the members in proportion to their relative unpaid preference amount.

• Thereafter: 25% to the Hancock Member and 75% to the Enviva Member.

Prior to the JV 1.0 Drop-Down, at the discretion of the Enviva Member, the Hancock Member had received all of its capital contributions and substantially all of its preference amount. Given that and the historical net losses of the First JV having been previously allocated to the Enviva Member and the Hancock Member in proportion to their unreturned capital contributions, the balance of the First JV members’ capital attributable to the Hancock Member had become negative as of the JV 1.0 Drop-Down. Additionally, given that and the extent to which the Enviva Member has yet to receive repayment of its revolver borrowings, capital contributions and preference amount as of September 30, 2019, none of the net loss of the First JV has been allocated to the Hancock Member subsequent to the date of the JV 1.0 Drop-Down. Thus, no change has been recognized to the acquired negative noncontrolling interest balance attributable to the Hancock Member.

26

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

(15) Equity-Based Awards

The following table summarizes information regarding phantom unit awards (the “Affiliate Grants”) under the LTIP to employees of Enviva Management and its affiliates who provide services to the Partnership:

	Time-Based Phantom Units				Performance-Based Phantom Units				Total Affiliate Grant Phantom Units
	Units		Weighted- Average Grant Date Fair Value (per unit)(1)		Units		Weighted- Average Grant Date Fair Value (per unit)(1)		Units		Weighted- Average Grant Date Fair Value (per unit)(1)
Nonvested December 31, 2018	723,940		$	25.91	239,512		$	27.65	963,452		$	26.34
Granted	390,909		$	30.39	216,224		$	30.25	607,133		$	30.34
Forfeitures	(81,332	)	$	28.27	(16,560	)	$	29.80	(97,892	)	$	28.53
Vested	(145,506	)	$	18.30	—		$	—	(145,506	)	$	18.30
Nonvested September 30, 2019	888,011		$	28.91	439,176		$	28.85	1,327,187		$	28.89

______________________________________________________________

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

As of September 30, 2019, an insignificant amount is included in related-party payables to Enviva Management to satisfy tax-withholding requirements associated with time-based phantom awards that vested under the LTIP during the nine months ended September 30, 2019. During the nine months ended September 30, 2018, we paid $2.3 million to the General Partner, which acquired common units from a wholly owned subsidiary of our sponsor for delivery to the recipients under the LTIP. We also paid $1.7 million during the nine months ended September 30, 2018 to Enviva Management to satisfy the tax-withholding requirements associated with such common units under the MSAs. The unrecognized estimated compensation cost relating to outstanding Affiliate Grants at September 30, 2019 was $14.2 million, which will be recognized over the remaining vesting period.

The following table summarizes information regarding phantom unit awards to certain non-employee directors of the General Partner (the “Director Grants”) under the LTIP:

	Time-Based  Phantom Units
	Units		Weighted- Average Grant Date Fair Value (per unit)(1)
Nonvested December 31, 2018	13,964		$	28.65
Granted	13,444		$	30.16
Vested	(13,964	)	$	28.65
Nonvested September 30, 2019	13,444		$	30.16

In February 2019, Director Grants valued at $0.4 million were granted and vest on the first anniversary of the grant date. In February 2019, the Director Grants that were nonvested at December 31, 2018 vested, and common units were issued in respect of such vested Director Grants. The unrecognized estimated compensation cost relating to outstanding Director Grants at September 30, 2019 was $0.1 million, which will be recognized over the remaining vesting period.

Distribution Equivalent Rights

Paid DER distributions related to time-based Affiliate Grants were $1.2 million and $2.1 million, respectively, for the three and nine months ended September 30, 2019. Paid DER distributions related to the time-based Affiliate Grants were $0.6 million and $1.8 million, respectively, for the three and nine months ended September 30, 2018. At September 30, 2019 and December 31, 2018, $0.6 million and $0.9 million, respectively, of DER distributions were included in related-party accrued liabilities.

27

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Unpaid DER amounts related to the performance-based Affiliate Grants at September 30, 2019 were $1.6 million, of which $0.6 million are included in accrued liabilities and $1.0 million are included in other long-term liabilities on the condensed consolidated balance sheets. Unpaid DER amounts related to the performance-based Affiliate Grants at December 31, 2018 were $0.7 million, of which $0.4 million are included in accrued liabilities and $0.3 million are included in other long-term liabilities.

(16) Income Taxes

Our operations are organized as limited partnerships and entities that are disregarded entities for federal and state income tax purposes. As a result, we are not subject to U.S. federal and most state income taxes. The unitholders of the Partnership are liable for these income taxes on their share of our taxable income. 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.

As of September 30, 2019, the only periods subject to examination for federal and state income tax returns are 2015 through 2018. We believe our income tax filing positions, including our status as a pass-through entity, would be sustained on audit and do not anticipate any adjustments that would result in a material change to our unaudited condensed consolidated balance sheet. Therefore, no reserves for uncertain tax positions or interest and penalties have been recorded. For the three and nine months ended September 30, 2019 and 2018, no provision for federal or state income taxes has been recorded in the condensed consolidated financial statements.

(17) Net Income (Loss) per Limited Partner Unit

Net income (loss) per unit applicable to limited partners is computed by dividing limited partners’ interest in net income (loss), after deducting any incentive distributions, by the weighted-average number of outstanding common units. Our 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, which are declared and paid following the close of each quarter. Earnings in excess of distributions are allocated to the limited partners based on their respective ownership interests. Payments made to our 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.

On May 30, 2018, the requirements under our partnership agreement for the conversion of all of our subordinated units into common units were satisfied and the subordination period for such subordinated units ended. As a result, all of our 11,905,138 outstanding subordinated units converted into common units on a one-for-one basis. The conversion did not impact the amount of the cash distribution paid or the total number of our outstanding units representing limited partner interests. Our net income (loss) was allocated to the General Partner and the limited partners, including the holders of the subordinated units and IDR holders, in accordance with our partnership agreement.

In addition to the common units, we have also identified the IDRs and phantom units as participating securities and use 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 and subordinated 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. Basic and diluted earnings per unit previously applicable to subordinated limited partner units were the same because there are no potentially dilutive subordinated units outstanding.

28

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

The following computation of net income (loss) per limited partner unit is as follows for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30, 2019
	Common Units	General Partner
Weighted-average common units outstanding—basic	33,457	—
Effect of nonvested phantom units	—	—
Weighted-average common units outstanding—diluted	33,457	—

	Three Months Ended September 30, 2019
	Common Units			General Partner		Total
Distributions declared	$	22,416		$	3,107	$	25,523
Earnings less than distributions	(17,275		)	—		(17,275		)
Net income available to partners	$	5,141		$	3,107	$	8,248
Weighted-average units outstanding—basic and diluted	33,457
Net income per limited partner unit—basic and diluted	$	0.15

	Nine Months Ended September 30, 2019
	Common Units	General Partner
Weighted-average common units outstanding—basic	31,230	—
Effect of nonvested phantom units	—	—
Weighted-average common units outstanding—diluted	31,230	—

	Nine Months Ended September 30, 2019
	Common Units			General Partner		Total
Distributions declared	$	66,077		$	8,150	$	74,227
Earnings less than distributions	(79,925		)	—		(79,925		)
Net (loss) income available to partners	$	(13,848	)	$	8,150	$	(5,698	)
Weighted-average units outstanding—basic and diluted	31,230
Net loss per limited partner unit—basic and diluted	$	(0.44	)

	Three Months Ended September 30, 2018
	Common Units	Subordinated Units	General Partner
Weighted-average common units outstanding—basic	26,477	—	—
Effect of nonvested phantom units	1,001	—	—
Weighted-average common units outstanding—diluted	27,478	—	—

29

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

	Three Months Ended September 30, 2018
	Common Units			General Partner		Total
Distributions declared	$	16,814		$	1,532	$	18,346
Earnings less than distributions	(4,990		)	—		(4,990		)
Net income available to partners	$	11,824		$	1,532	$	13,356
Weighted-average units outstanding—basic	26,477
Weighted-average units outstanding—diluted	27,478
Net income per limited partner unit—basic	$	0.45
Net income per limited partner unit—diluted	$	0.43

	Nine Months Ended September 30, 2018
	Common Units	Subordinated Units	General Partner
Weighted-average common units outstanding—basic	19,866	6,541	—
Effect of nonvested phantom units	—	—	—
Weighted-average common units outstanding—diluted	19,866	6,541	—

	Nine Months Ended September 30, 2018
	Common Units			Subordinated Units			General Partner		Total
Distributions declared	$	37,618		$	12,386		$	4,197	$	54,201
Earnings less than distributions	(42,607		)	(14,029		)	—		(56,636		)
Net (loss) income available to partners	$	(4,989	)	$	(1,643	)	$	4,197	$	(2,435	)
Weighted-average units outstanding—basic and diluted	19,866			6,541
Net loss per limited partner unit—basic and diluted	$	(0.25	)	$	(0.25	)

Cash Distributions to Unitholders

Distributions that have been paid or declared related to the reporting period are considered in the determination of earnings per unit. The following table details the cash distribution paid or declared (in millions, except per-unit amounts):

Quarter Ended	Declaration Date	Record Date	Payment Date	Distribution  Per Unit		Total Cash Distribution		Total Payment to General Partner for Incentive Distribution Rights
March 31, 2018	May 3, 2018	May 15, 2018	May 29, 2018	$	0.6250	$	16.5	$	1.3
June 30, 2018	August 1, 2018	August 15, 2018	August 29, 2018	$	0.6300	$	16.7	$	1.4
September 30, 2018	October 31, 2018	November 15, 2018	November 29, 2018	$	0.6350	$	16.8	$	1.5
December 31, 2018	January 29, 2019	February 15, 2019	February 28, 2019	$	0.6400	$	17.0	$	1.7
March 31, 2019	May 2, 2019	May 20, 2019	May 29, 2019	$	0.6450	$	21.6	$	2.3
June 30, 2019	July 31, 2019	August 15, 2019	August 29, 2019	$	0.6600	$	22.1	$	2.8
September 30, 2019	October 30, 2019	November 15, 2019	November 29, 2019	$	0.6700	$	22.4	$	3.1

Distributions to be 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.

We determine the amount of cash available for distribution for each quarter in accordance with our partnership agreement. The amount to be distributed to common unitholders and IDR holders is based on the distribution waterfall set forth in our partnership agreement. Net earnings for the quarter are allocated to each class of partnership interest based on the distributions to

30

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

be made. On May 30, 2018, the subordination period ended in accordance with our partnership agreement and the subordinated units were converted into common units on a one-for-one basis.

(18) Supplemental Guarantor Information

The Partnership and its wholly owned finance subsidiary, Enviva Partners Finance Corp., are the co-issuers of our senior notes on a joint and several basis. The senior notes are guaranteed on a senior unsecured basis by certain of the Partnership’s direct and indirect wholly owned subsidiaries (excluding Enviva Partners Finance Corp. and certain immaterial subsidiaries) and will be guaranteed by the Partnership’s future restricted subsidiaries that guarantee certain of its other indebtedness (collectively, the “Subsidiary Guarantors”). The guarantees are full and unconditional and joint and several. Each of the Subsidiary Guarantors is directly or indirectly 100% owned by the Partnership. Enviva Partners Finance Corp. is a finance subsidiary formed for the purpose of being the co-issuer of the senior notes. Other than certain restrictions arising under the senior secured revolving credit facility and the indenture governing the senior notes (see Note 12, Long-Term Debt and Finance Lease Obligations), there are no significant restrictions on the ability of any restricted subsidiary to (1) pay dividends or make any other distributions to the Partnership or any of its restricted subsidiaries or (2) make loans or advances to the Partnership or any of its restricted subsidiaries. In accordance with Rule 3-10 of Regulation S-X, supplemental consolidating financial statements have been prepared from our financial information on the same basis of accounting as our consolidated financial statements.

31

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Condensed Consolidated Balance Sheet
September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	2,046		$	311		$	—		$	2,357
Accounts receivable	49,634			9			—			49,643
Inventories	38,286			4,367			(304		)	42,349
Prepaid expenses and other current assets	3,925			73			—			3,998
Total current assets	93,891			4,760			(304		)	98,347
Property, plant and equipment - in service, net	517,577			166,195			(248		)	683,524
Construction in progress	60,181			743			—			60,924
Total property, plant and equipment, net	577,758			166,938			(248		)	744,448
Operating lease right-of-use assets, net	26,567			6,812			—			33,379
Related-party note receivable	42,989			—			(42,989		)	—
Goodwill	85,615			—			—			85,615
Investment in subsidiaries	118,543			—			(118,543		)	—
Other long-term assets	7,876			—			(550		)	7,326
Total assets	$	953,239		$	178,510		$	(162,634	)	$	969,115
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable	$	18,575		$	2,937		$	—		$	21,512
Related-party payables and accrued liabilities	12,048			(2,929		)	—			9,119
Deferred consideration for drop-downs due to related party	40,000			—			—			40,000
Accrued and other current liabilities	37,618			10,700			—			48,318
Current portion of interest payable	13,209			—			—			13,209
Current portion of long-term debt and finance lease obligations	3,891			599			—			4,490
Total current liabilities	125,341			11,307			—			136,648
Long-term debt and finance lease obligations	542,575			1,014			—			543,589
Related-party long-term debt	—			42,989			(42,989		)	—
Long-term operating lease liabilities	27,683			6,042			—			33,725
Long-term interest payable	1,100			—			—			1,100
Long-term interest related-party payable	—			550			(550		)	—
Other long-term liabilities	2,170			—			—			2,170
Total liabilities	698,869			61,902			(43,539		)	717,232
Total Enviva Partners, LP partners' capital	302,562			116,608			(119,095		)	300,075
Noncontrolling interest	(48,192		)	—			—			(48,192		)
Total partners’ capital	254,370			116,608			(119,095		)	251,883
Total liabilities and partners’ capital	$	953,239		$	178,510		$	(162,634	)	$	969,115

32

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Condensed Consolidated Balance Sheet
December 31, 2018
	Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	2,396	$	64		$	—		$	2,460
Accounts receivable	54,792		2			—			54,794
Insurance receivables	5,140		—			—			5,140
Related-party receivables	6,453		4,944			(10,005		)	1,392
Inventories	31,490		—			—			31,490
Prepaid expenses and other current assets	2,235		—			—			2,235
Total current assets	102,506		5,010			(10,005		)	97,511
Property, plant and equipment - in service, net	542,635		—			—			542,635
Construction in progress	14,393		—			—			14,393
Total property, plant and equipment, net	557,028		—			—			557,028
Goodwill	85,615		—			—			85,615
Investment in subsidiaries	652		—			(652		)	—
Other long-term assets	8,616		—			—			8,616
Total assets	$	754,417	$	5,010		$	(10,657	)	$	748,770
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable	$	15,551	$	—		$	—		$	15,551
Related-party payables and accrued liabilities	33,169		5,061			(10,005		)	28,225
Deferred consideration for drop-downs due to related party	74,000		—			—			74,000
Accrued and other current liabilities	41,395		5			—			41,400
Current portion of interest payable	5,434		—			—			5,434
Current portion of long-term debt and finance lease obligations	2,722		—			—			2,722
Total current liabilities	172,271		5,066			(10,005		)	167,332
Long-term debt and finance lease obligations	429,933		—			—			429,933
Long-term interest payable	1,010		—			—			1,010
Other long-term liabilities	3,779		—			—			3,779
Total liabilities	606,993		5,066			(10,005		)	602,054
Total partners’ capital	147,424		(56		)	(652		)	146,716
Total liabilities and partners’ capital	$	754,417	$	5,010		$	(10,657	)	$	748,770

33

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Condensed Consolidated Statement of Operations
For the Three Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Product sales	$	155,188		$	3,935		$	(3,935	)	$	155,188
Other revenue	2,454			—			(237		)	2,217
Net revenue	157,642			3,935			(4,172		)	157,405
Cost of goods sold	118,950			2,674			(3,631		)	117,993
Depreciation and amortization	11,173			1,773			—			12,946
Total cost of goods sold	130,123			4,447			(3,631		)	130,939
Gross margin	27,519			(512		)	(541		)	26,466
General and administrative expenses	1,842			(289		)	(239		)	1,314
Related-party management services agreement fee	4,510			1,976			—			6,486
Total general and administrative expenses	6,352			1,687			(239		)	7,800
Income (loss) from operations	21,167			(2,199		)	(302		)	18,666
Other (expense) income:
Interest expense	(9,864		)	(8		)	—			(9,872		)
Related-party interest expense	—			(300		)	300			—
Other income (expense), net	440			(11		)	(371		)	58
Total other (expense) income, net	(9,424		)	(319		)	(71		)	(9,814		)
Net income (loss)	$	11,743		$	(2,518	)	$	(373	)	$	8,852

34

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Condensed Consolidated Statement of Operations
For the Three Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Product sales	$	142,541		$	—		$	—	$	142,541
Other revenue	1,607			—			—		1,607
Net revenue	144,148			—			—		144,148
Cost of goods sold	104,351			—			—		104,351
Depreciation and amortization	9,678			—			—		9,678
Total cost of goods sold	114,029			—			—		114,029
Gross margin	30,119			—			—		30,119
General and administrative expenses	3,173			28			—		3,201
Related-party management services agreement fee	4,114			—			—		4,114
Total general and administrative expenses	7,287			28			—		7,315
Income (loss) from operations	22,832			(28		)	—		22,804
Other (expense) income:
Interest expense	(9,445		)	—			—		(9,445		)
Other (expense) income, net	(12		)	9			—		(3		)
Total other (expense) income, net	(9,457		)	9			—		(9,448		)
Net income (loss)	$	13,375		$	(19	)	$	—	$	13,356

35

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Product sales	$	478,989		$	3,935		$	(3,935	)	$	478,989
Other revenue	5,775			—			(911		)	4,864
Net revenue	484,764			3,935			(4,846		)	483,853
Cost of goods sold	396,818			2,674			(3,631		)	395,861
Depreciation and amortization	33,339			1,773			—			35,112
Total cost of goods sold	430,157			4,447			(3,631		)	430,973
Gross margin	54,607			(512		)	(1,215		)	52,880
General and administrative expenses	8,713			1,380			(914		)	9,179
Related-party management services agreement fee	13,837			5,651			—			19,488
Total general and administrative expenses	22,550			7,031			(914		)	28,667
Income (loss) from operations	32,057			(7,543		)	(301		)	24,213
Other (expense) income:
Interest expense	(28,666		)	(35		)	—			(28,701		)
Related-party interest expense	—			(300		)	300			—
Other income (expense), net	1,125			41			(550		)	616
Total other expense, net	(27,541		)	(294		)	(250		)	(28,085		)
Net income (loss)	$	4,516		$	(7,837	)	$	(551	)	$	(3,872	)

36

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Product sales	$	398,031		$	—		$	—	$	398,031
Other revenue	7,037			—			—		7,037
Net revenue	405,068			—			—		405,068
Cost of goods sold	331,356			—			—		331,356
Depreciation and amortization	28,800			—			—		28,800
Total cost of goods sold	360,156			—			—		360,156
Gross margin	44,912			—			—		44,912
General and administrative expenses	9,730			48			—		9,778
Related-party management services agreement fee	11,628			—			—		11,628
Total general and administrative expenses	21,358			48			—		21,406
Income (loss) from operations	23,554			(48		)	—		23,506
Other (expense) income:
Interest expense	(27,137		)	—			—		(27,137		)
Other income (expense), net	1,281			(85		)	—		1,196
Total other expense, net	(25,856		)	(85		)	—		(25,941		)
Net loss	$	(2,302	)	$	(133	)	$	—	$	(2,435	)

37

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Condensed Consolidated Statement of Comprehensive Income (Loss)
For the Three Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	11,743		$	(2,518	)	$	(373	)	$	8,852
Other comprehensive (loss) income:
Net unrealized losses on cash flow hedges	13			—			—			13
Reclassification of net gains realized into net income (loss)	(59		)	—			—			(59		)
Currency translation adjustment	—			4			—			4
Total other comprehensive (loss) income	(46		)	4			—			(42		)
Total comprehensive income (loss)	$	11,697		$	(2,514	)	$	(373	)	$	8,810

Condensed Consolidated Statement of Comprehensive Income (Loss)
For the Three Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Net income (loss)	$	13,375		$	(19	)	$	—	$	13,356
Other comprehensive income:
Net unrealized gains on cash flow hedges	2,713			—			—		2,713
Reclassification of net gains realized into net income (loss)	(2,013		)	—			—		(2,013		)
Currency translation adjustment	—			1			—		1
Total other comprehensive income	700			1			—		701
Total comprehensive income (loss)	$	14,075		$	(18	)	$	—	$	14,057

38

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Condensed Consolidated Statement of Comprehensive Loss
For the Nine Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	4,516		$	(7,837	)	$	(551	)	$	(3,872	)
Other comprehensive (loss) income:
Net unrealized losses on cash flow hedges	(148		)	—			—			(148		)
Reclassification of net gains realized into net income (loss)	(252		)	—			—			(252		)
Currency translation adjustment	—			4			—			4
Total other comprehensive (loss) income	(400		)	4			—			(396		)
Total comprehensive income (loss)	$	4,116		$	(7,833	)	$	(551	)	$	(4,268	)

Condensed Consolidated Statement of Comprehensive Loss
For the Nine Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Net loss	$	(2,302	)	$	(133	)	$	—	$	(2,435	)
Other comprehensive income:
Net unrealized gains on cash flow hedges	5,750			—			—		5,750
Reclassification of net gains realized into net loss	(2,076		)	—			—		(2,076		)
Currency translation adjustment	—			1			—		1
Total other comprehensive income	3,674			1			—		3,675
Total comprehensive income (loss)	$	1,372		$	(132	)	$	—	$	1,240

39

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Condensed Consolidated Statement of Cash Flows
For the Nine Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	4,516		$	(7,837	)	$	(551	)	$	(3,872	)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization	33,875			1,872			—			35,747
MSA Fee Waivers	13,200			5,549			—			18,749
Amortization of debt issuance costs, debt premium and original issue discounts	899			—			—			899
Loss on disposal of assets	562			—			—			562
Unit-based compensation	3,142			693			—			3,835
Fair value changes in derivatives	(2,275		)	—			—			(2,275		)
Unrealized loss on foreign currency transactions, net	58			—			—			58
Change in operating assets and liabilities:
Accounts and insurance receivables	9,502			(10		)	—			9,492
Related-party receivables	(20,281		)	(1,415		)	23,088			1,392
Prepaid expenses and other current and long-term assets	(711		)	(52		)	551			(212		)
Inventories	(6,313		)	(4,366		)	—			(10,679		)
Derivatives	1,514			—			—			1,514
Accounts payable, accrued liabilities and other current liabilities	824			(3,071		)	—			(2,247		)
Related-party payables and accrued liabilities	13,847			(2,784		)	(23,088		)	(12,025		)
Accrued interest	3,326			3,094			—			6,420
Operating lease liabilities	(2,800		)	(915		)	—			(3,715		)
Other long-term liabilities	313			(477		)	—			(164		)
Net cash provided by (used in) operating activities	53,198			(9,719		)	—			43,479
Cash flows from investing activities:
Purchases of property, plant and equipment	(47,561		)	(33,923		)	—			(81,484		)
Payment in relation to the JV 1.0 Drop-Down	(74,700		)	—			—			(74,700		)
Other	1,502			—			—			1,502
Net cash used in investing activities	(120,759		)	(33,923		)	—			(154,682		)
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility	306,150			38,850			—			345,000
Payments on senior secured revolving credit facility	(233,000		)	—			—			(233,000		)
Payments on other long-term debt and finance lease obligations	(3,639		)	1,613			—			(2,026		)
Proceeds from common unit issuances, net	96,822			—			—			96,822
Payment of deferred consideration for Wilmington Drop-Down	(24,300		)	—			—			(24,300		)
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder	(69,526		)	—			—			(69,526		)
Payment for withholding tax associated with Long-Term Incentive Plan vesting	(1,870		)	—			—			(1,870		)
Net cash provided by financing activities	70,637			40,463			—			111,100
Net increase (decrease) in cash, cash equivalents and restricted cash	3,076			(3,179		)	—			(103		)
Cash, cash equivalents and restricted cash, beginning of period	(1,030		)	3,490			—			2,460
Cash, cash equivalents and restricted cash, end of period	$	2,046		$	311		$	—		$	2,357

40

ENVIVA PARTNERS, LP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Condensed Consolidated Statement of Cash Flows
For the Nine Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net loss	$	(2,302	)	$	(133	)	$	—		$	(2,435	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	29,240			—			—			29,240
Amortization of debt issuance costs, debt premium and original issue discounts	828			—			—			828
Loss on disposal of assets	900			—			—			900
Unit-based compensation	5,604			—			—			5,604
De-designation of foreign currency forwards and options	(1,947		)	—			—			(1,947		)
Fair value changes in derivatives	(4,465		)	—			—			(4,465		)
Unrealized loss on foreign currency transactions, net	31			1			—			32
Change in operating assets and liabilities:
Accounts and insurance receivables	30,004			—			—			30,004
Related-party receivables	(4,943		)	(4,611		)	9,431			(123		)
Prepaid expenses and other current and long-term assets	(160		)	—			—			(160		)
Inventories	(9,735		)	—			—			(9,735		)
Derivatives	5,080			—			—			5,080
Accounts payable, accrued liabilities and other current liabilities	5,709			—			—			5,709
Related-party payables and accrued liabilities	7,928			4,820			(9,431		)	3,317
Accrued interest	7,634			—			—			7,634
Other long-term liabilities	648			—			—			648
Net cash provided by operating activities	70,054			77			—			70,131
Cash flows from investing activities:
Purchases of property, plant and equipment	(16,034		)	—			—			(16,034		)
Other	1,130			—			—			1,130
Net cash used in investing activities	(14,904		)	—			—			(14,904		)
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility	134,750			—			—			134,750
Payments on senior secured revolving credit facility	(123,250		)	—			—			(123,250		)
Payments on other long-term debt and capital lease obligations	(4,745		)	—			—			(4,745		)
Proceeds from common unit issuances, net	241			—			—			241
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder	(55,163		)	—			—			(55,163		)
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting	(2,341		)	—			—			(2,341		)
Payment for withholding tax associated with Long-Term Incentive Plan vesting	(4,380		)	—			—			(4,380		)
Net cash used in financing activities	(54,888		)	—			—			(54,888		)
Net increase in cash, cash equivalents and restricted cash	262			77			—			339
Cash, cash equivalents and restricted cash, beginning of period	524			—			—			524
Cash, cash equivalents and restricted cash, end of period	$	786		$	77		$	—		$	863

41

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

Unless otherwise stated or the context otherwise indicates, all references to “we,” “us,” “our,” the “Partnership”, or similar expressions refer to Enviva Partners, LP, including its consolidated subsidiaries. Our sponsor is Enviva Holdings, LP (and, where applicable, its wholly owned subsidiaries Enviva MLP Holdco, LLC and Enviva Development Holdings, LLC) and 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, a wholly owned subsidiary of Enviva Holdings, LP, and references to “our employees” refer to the employees of Enviva Management and its affiliates who provide services to the Partnership. References to the “First JV” refer to Enviva Wilmington Holdings, LLC, which is a joint venture between our wholly owned subsidiary, Enviva. LP, and John Hancock Life Insurance Company (U.S.A.) and certain of its affiliates. References to the “Second JV” refer to a joint venture between our sponsor and John Hancock Life Insurance Company (U.S.A.) and certain of its affiliates.

The following discussion and analysis should be read in conjunction with Management’s Discussion and Analysis (“MD&A”) in Part II-Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the U.S. Securities and Exchange Commission (the “SEC”). Our 2018 Form 10-K contains a discussion of other matters not included herein, such as disclosures regarding critical accounting policies and estimates and contractual obligations. You should also read the following discussion and analysis together with the risk factors set forth in the 2018 Form 10-K and the factors described under “Cautionary Statement Regarding Forward-Looking Information” and Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q for information regarding certain risks inherent in our business.

Basis of Presentation

The following discussion about matters affecting the financial condition and results of operations of the Partnership should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this report and the audited consolidated financial statements and related notes that are included in the 2018 Form 10-K. Among other things, those financial statements and the related notes include more detailed information regarding the basis of presentation for the following information.

Business Overview

We aggregate a natural resource, wood fiber, and process it into a transportable form, wood pellets. We sell a significant majority of our wood pellets through long-term, take-or-pay off-take contracts with creditworthy customers in the United Kingdom and Europe. We own and operate seven plants with a combined production capacity of over 3.5 million metric tons (“MT”) of wood pellets per year in Virginia, North Carolina, Mississippi, and Florida. We export our wood pellets through our marine terminals at the Port of Chesapeake, Virginia (the “Chesapeake terminal”) and the Port of Wilmington, North Carolina (the “Wilmington terminal”) and from third-party marine terminals in Mobile, Alabama and Panama City, Florida. In April 2019, we acquired our sponsor’s interest in the First JV. The First JV owns a plant in Hamlet, North Carolina (the “Hamlet plant”) and a firm, 15-year take-or-pay off-take contract to supply nearly 1.0 million metric tons per year (“MTPY”) of wood pellets, following a ramp period. The Hamlet plant is now operating, and we expect the plant to exit 2019 with a production run-rate of approximately 500,000 MTPY and to reach its nameplate production capacity of approximately 600,000 MTPY in 2021. All of our facilities are located in geographic regions with low input costs and favorable transportation logistics. Owning these cost-advantaged assets, the output from which is fully contracted, in a rapidly expanding industry provides us with a platform to generate stable and growing cash flows that should enable us to increase our per-unit cash distributions over time, which is our primary business objective.

Our strategy is to fully contract the wood pellet production from our plants under long-term, take-or-pay off-take contracts. During 2019, production capacity from our plants and wood pellets sourced from a production plant in Greenwood, South Carolina (the “Greenwood plant”) owned by the Second JV and from third parties are approximately equal to the contracted volumes under our existing long-term, take-or-pay off-take contracts. We intend to continue expanding our business by taking advantage of the growing demand for our product that is driven by conversion of coal-fired power generation and combined heat and power plants to co-fired or dedicated biomass-fired plants and construction of newly dedicated biomass-fired plants, principally in Europe and increasingly in Japan.

Recent Developments

JV 1.0 Drop-Down

The acquisition of all of the issued and outstanding Class B Units of the First JV from our sponsor consisted of $165.0 million total consideration, subject to certain adjustments. The First JV has a firm 15-year take-or-pay off-take contract to

42

supply nearly 1.0 million MTPY of wood pellets, which commences in 2019, ramps to full supply volumes in 2021 and continues through 2034.

Prior to the acquisition, we already had off-take contracts with the First JV to supply 470,000 MTPY of the volumes to be supplied to the First JV and, in connection with the acquisition, we acquired 500,000 MTPY in incremental sales volumes.

On the date of our acquisition of the sponsor’s Class B Units in the First JV (collectively, the “JV 1.0 Drop-Down:):

• We commenced an associated terminal services agreement to handle contracted volumes from the Hamlet plant.

• We entered into an agreement with the sponsor, pursuant to which (1) the sponsor will guarantee certain cash flows from the Hamlet plant until June 30, 2020, (2) the sponsor will reimburse us for construction cost overruns in excess of budgeted capital expenditures for the Hamlet plant, subject to certain exceptions, (3) we will pay to the sponsor quarterly incentive payments for any wood pellets produced by the Hamlet plant in excess of forecast production levels through June 30, 2020, and (4) the sponsor will retain liability for certain claims payable, if any, by the First JV (the “Make-Whole Agreement”).

• The First JV entered into an agreement with Enviva Management Company, LLC, a Delaware limited liability company and wholly owned subsidiary of the sponsor (“Enviva Management”), to waive the obligation to pay an aggregate of approximately $2.7 million of management fees payable to Enviva Management under the management services agreement (the “First JV MSA”) between the First JV and Enviva Management with respect to the period from the date of acquisition of the Hamlet plant until July 1, 2019 (the “First JV MSA Fee Waiver”).

• We entered into an agreement with Enviva Management to waive our obligation to pay an aggregate of approximately $13.0 million in fees payable under our management services agreement (the “EVA MSA,” and together with the First JV MSA, the “MSAs”) with Enviva Management with respect to the period from the date of the JV 1.0 Drop-Down through the second quarter of 2020 (the “First EVA MSA Fee Waiver”).

• The sponsor assigned to us all of its rights and obligations under a credit agreement between the First JV, as borrower, and the sponsor, as lender (the “First JV Revolver”). On the date of assignment, $4.1 million was outstanding from the First JV to the sponsor.

• The First JV entered into an interim services agreement (the “ISA”) with Enviva Hamlet Operator, LLC, a wholly-owned subsidiary of our sponsor (“Hamlet Operator”) pursuant to which Hamlet Operator, as an independent contractor, will manage, operate, maintain and repair the Hamlet plant and provide other services to the First JV for the period from July 1, 2019 through June 30, 2020 in exchange for a fixed fee per metric ton of wood pellets produced by the Hamlet plant during such period and delivered at place. Under and during the term of the ISA, Hamlet Operator will (1) pay all operating and maintenance expenses at the Hamlet plant, (2) cover all reimbursable general and administrative expenses associated with the Hamlet plant and (3) pay other costs and expenses incurred by the Hamlet plant to produce and sell the wood pellets delivered to the Wilmington terminal from the Hamlet plant. The sponsor guarantees all obligations of Hamlet Operator under the ISA.

The $165.0 million purchase price for the JV 1.0 Drop-Down consisted of (1) a cash payment of $24.7 million, net of a purchase price adjustment of $0.3 million, (2) the issuance of 1,681,237 unregistered common units at a value of $29.74 per unit, or $50.0 million of common units, (3) $50.0 million in cash paid on June 28, 2019, (4) $40.0 million in cash to be paid on January 2, 2020 and (5) the elimination of $3.7 million of net related-party receivables and payables included in the net assets of the First JV on the date of acquisition. As the holder of the Class B Units, we became a member of the First JV (the “Enviva Member”) on the acquisition date.

As the Enviva Member, we are the managing member and primary beneficiary of the First JV. We included all accounts of the First JV in our consolidated results as of April 2, 2019 as the Class B Units represent a controlling interest in the First JV and are generally unrestricted as it relates to the management of the assets and cash flows of the First JV; however, we cannot cause the First JV to incur indebtedness in excess of $60.0 million.

Wilmington Terminal Second Payment

We made an initial payment of $56.0 million to the First JV as partial payment of the $130.0 million purchase price for the Wilmington terminal in October 2017 (the “Wilmington Drop-Down”). On April 1, 2019, we made the second and final payment of $74.0 million in deferred consideration for the Wilmington Drop-Down consisting of 1,691,627 common units at a

43

price of $29.38 per common unit, or approximately $50.0 million in common units, subject to certain adjustments, and approximately $24.0 million in cash (the “Second Payment”).

Mid-Atlantic Expansions

During 2019, we started construction to increase the aggregate wood pellet production capacity of our plants in Northampton, North Carolina and Southampton, Virginia (the “Mid-Atlantic Expansions”) by approximately 400,000 MTPY in the aggregate, subject to receiving the necessary permits. We expect to invest a total of approximately $130.0 million in additional wood pellet production assets and emissions control equipment for the expansions and to complete expansion activities in the first half of 2020 with startup shortly thereafter.

Financing Activities

In addition to the approximately $100.0 million in common units issued as partial consideration for the JV 1.0 Drop-Down and the Second Payment, we issued an aggregate of 3,508,778 common units to investors in exchange for proceeds of $100.0 million in a registered direct offering (the “RDO”) pursuant to an effective registration statement on file with the SEC at a purchase price of $28.50 per unit, representing a 4.2 percent discount to the 20-day volume-weighted average price as of March 20, 2019.

We used proceeds from the RDO, along with borrowings under our existing $350.0 million senior secured revolving credit facility and the common units issued as consideration for the JV 1.0 Drop-Down and the Second Payment, to finance (1) $124.7 million of the total $165.0 million purchase price for the JV 1.0 Drop-Down, (2) the $74.0 million Second Payment (3) the $24.0 million in capital expenditures, net of payments received pursuant to the Make-Whole Agreement, required to complete construction of the Hamlet plant and (4) the initial $130.0 million in expenditures required for the Mid-Atlantic Expansions.

Contracted Backlog

As of October 1, 2019 we had approximately $9.5 billion of product sales backlog for firm contracted product sales to our long-term off-take customers and have a total weighted-average remaining term of 10.4 years, compared to approximately $7.3 billion and a total weighted-average remaining term of 9.4 years as of October 1, 2018. Backlog represents the revenue to be recognized under existing contracts assuming deliveries occur as specified in the contracts. Contracted future product sales denominated in foreign currencies, excluding revenue hedged with foreign currency forward contracts, are included in U.S. Dollars at October 1, 2019 forward rates. The contracted backlog includes forward prices including inflation, foreign currency and commodity prices. The amount also includes the effects of related foreign currency derivative contracts.

Our expected future product sales revenue under our contracted backlog as of October 1, 2019 is as follows (in millions):

Period from October 1, 2019 to December 31, 2019	$	177
Year ending December 31, 2020	906
Year ending December 31, 2021 and thereafter	8,399
Total product sales contracted backlog	$	9,482

Assuming all volumes under the firm and contingent off-take contracts held by our sponsor and the Second JV were included with our product sales backlog for firm contracted product sales, the total weighted-average remaining term as of October 1, 2019 would increase to 13.3 years and the product sales backlog would increase to $17.8 billion as follows (in millions):

Period from October 1, 2019 to December 31, 2019	$	177
Year ending December 31, 2020	906
Year ending December 31, 2021 and thereafter	16,744
Total product sales contracted backlog	$	17,827

44

Factors Impacting Comparability of Our Financial Results

Inventory Impairment and Asset Disposal

On February 27, 2018, a fire occurred at the Chesapeake terminal, causing damage to equipment and approximately 43,000 MT of wood pellets (the “Chesapeake Incident”). The Chesapeake terminal returned to operations on June 28, 2018. During the three and nine months ended September 30, 2018, we incurred $9.7 million and $58.4 million, respectively, in costs as a result of the Chesapeake Incident related to asset impairment, inventory write-off and disposal costs, emergency response costs, asset repair costs and business continuity costs, the latter of which represented incremental costs to commission temporary wood pellet storage and handling and ship loading operations at nearby locations to meet our contractual obligations to our customers. As of September 30, 2018, we had recovered $48.1 million related to the Chesapeake Incident, which included $1.1 million of lost profits. As of December 31, 2018, $3.8 million of probable insurance recoveries for the then-remaining costs not yet recovered were included in insurance receivables and subsequently received in February 2019, with an additional $0.5 million which was recognized as other income.

We incurred other losses and costs associated with the Chesapeake Incident during and since the three and nine months ended September 30, 2018 and are pursuing outstanding claims of approximately $25.0 million related to such amounts. Consequently, our results of operations and cash flows, as well as our financial measures not presented in accordance with accounting principles generally accepted in the United States (“GAAP”), or non-GAAP financial measures, may not be comparable to those for reported periods before or after the three and nine months ended September 30, 2018.

How We Evaluate Our Operations

Adjusted Net (Loss) Income

We define adjusted net (loss) income as net (loss) income excluding certain expenses incurred related to the Chesapeake Incident and Hurricanes Florence and Michael (the “Hurricane Events”), which occurred during the second half of 2018, consisting of emergency response expenses, expenses related to the disposal of inventory, and asset disposal and repair costs, offset by insurance recoveries received, certain non-cash waivers of fees for management services provided to us by our sponsor (collectively, the “MSA Fee Waivers”), and interest expense associated with incremental borrowings related to the Chesapeake Incident. We believe that adjusted net (loss) income enhances investors’ ability to compare the past financial performance of our underlying operations with our current performance separate from certain items of gain or loss that we characterize as unrepresentative of our ongoing 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 asset disposals, depreciation and amortization, changes in unrealized derivative instruments related to hedged items included in gross margin, MSA Fee Waivers, certain items of income or loss that we characterize as unrepresentative of our ongoing operations, including certain expenses incurred related to the Chesapeake Incident and Hurricane Events, consisting of emergency response expenses, expenses related to the disposal of inventory, and asset disposal and repair costs, offset by insurance recoveries received, and acquisition costs. We believe adjusted gross margin per metric ton is a meaningful measure because it compares our revenue-generating activities 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 define adjusted EBITDA as net income or loss excluding depreciation and amortization, interest expense, income tax expense, early retirement of debt obligations, MSA Fee Waivers and unit compensation expense, asset impairments and disposals, changes in unrealized derivative instruments related to hedged items included in gross margin and other income and expense, certain items of income or loss that we characterize as unrepresentative of our ongoing operations, including certain expenses incurred related to the Chesapeake Incident and Hurricane Events, consisting of emergency response expenses, expenses related to the disposal of inventory, and asset disposal and repair costs, offset by insurance recoveries received, and acquisition costs. 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.

45

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, debt premium, original issue discounts and the impact from incremental borrowings related to the Chesapeake Incident and Hurricane Events. We use distributable cash flow as a performance metric to compare the cash‑generating performance of the Partnership from period to period and to compare the cash‑generating performance for specific periods to the cash distributions (if any) that are expected to be paid to our unitholders. We do not rely on distributable cash flow as a liquidity measure.

Limitations of Non-GAAP Financial Measures

Adjusted net (loss) income, adjusted gross margin per metric ton, adjusted EBITDA, and distributable cash flow are not financial measures presented in accordance with 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 net (loss) income, 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.

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

Results of Operations

Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018

	Three Months ended September 30,						Change			Chesapeake Incident and Hurricane Events			Net Change
	2019			2018
	(in thousands)
Product sales	$	155,188		$	142,541		$	12,647		$	—		$	12,647
Other revenue (1)	2,217			1,607			610			—			610
Net revenue	157,405			144,148			13,257			—			13,257
Cost of goods sold, excluding depreciation and    amortization (1)	117,993			104,351			13,642			6,834			6,808
Depreciation and amortization	12,946			9,678			3,268			—			3,268
Total cost of goods sold	130,939			114,029			16,910			6,834			10,076
Gross margin	26,466			30,119			(3,653		)	(6,834		)	3,181
General and administrative expenses	1,314			3,201			(1,887		)	—			(1,887		)
Related-party management services agreement fee	6,486			4,114			2,372			—			2,372
Total general and administrative expenses	7,800			7,315			485			—			485
Income from operations	18,666			22,804			(4,138		)	(6,834		)	2,696
Interest expense	(9,872		)	(9,445		)	(427		)	(770		)	343
Other income (expense)	58			(3		)	61			—			61
Net income	$	8,852		$	13,356		$	(4,504	)	$	(7,604	)	$	3,100
(1) See Note 13, Related-Party Transactions

Net revenue

Net revenue increased to $157.4 million for the three months ended September 30, 2019 from $144.1 million for the three months ended September 30, 2018. The $13.3 million, or 9%, increase was primarily attributable to a 6% increase in sales volumes during the three months ended September 30, 2019 as compared to the three months ended September 30, 2018.

46

Cost of goods sold

Cost of goods sold increased to $130.9 million for the three months ended September 30, 2019 from $114.0 million for the three months ended September 30, 2018. Costs of goods sold during the three months ended September 30, 2018 was reduced by $12.1 million of insurance recoveries, net of expenses incurred, related to the Chesapeake Incident. We incurred $9.7 million in expenses related to the Chesapeake Incident during the three months ended September 30, 2018, offset by $21.8 million of insurance recoveries. The remaining $4.8 million, or 4%, increase was primarily attributable to a 6% increase in sales volumes during the three months ended September 30, 2019 as compared to the three months ended September 30, 2018.

Gross margin

Gross margin decreased to $26.5 million for the three months ended September 30, 2019 from $30.1 million for the three months ended September 30, 2018. The gross margin decrease of $3.7 million was attributable to $12.1 million of insurance recoveries, net of expenses incurred, related to the Chesapeake Incident during the three months ended September 30, 2018. Excluding the $12.1 million of insurance recoveries, net of expenses incurred, related to the Chesapeake Incident, gross margin would have increased by $8.4 million primarily due to a 6% increase in sales volumes during the three months ended September 30, 2019 as compared to the three months ended September 30, 2018.

Adjusted gross margin per metric ton

	Three Months Ended September 30,
	2019			2018			Change
	(in thousands except per metric ton)
Reconciliation of gross margin to adjusted gross margin per metric ton:
Gross margin	$	26,466		$	30,119		$	(3,653	)
Loss on disposal of assets	212			656			(444		)
Depreciation and amortization	12,946			9,678			3,268
Chesapeake Incident and Hurricane Events	47			(6,787		)	6,834
Changes in unrealized derivative instruments	(1,028		)	1,944			(2,972		)
MSA Fee Waivers	2,300			—			2,300
Acquisition costs	59			—			59
Adjusted gross margin	$	41,002		$	35,610		$	5,392
Metric tons sold	811			762			49
Adjusted gross margin per metric ton	$	50.56		$	46.73		$	3.83

We earned adjusted gross margin of $41.0 million, or $50.56 per MT, for the three months ended September 30, 2019. Adjusted gross margin was $35.6 million, or $46.73 per MT, for the three months ended September 30, 2018. The factors impacting the change in adjusted gross margin include those described above under the heading “Gross margin.” Additionally, adjusted gross margin increased during the three months ended September 30, 2019 compared to the three months ended September 30, 2018 due to the waiver of $2.3 million of management services fees by the sponsor as consideration for an assignment of two shipping contracts to our sponsor to rebalance our and our sponsor’s respective shipping obligations under existing off-take contracts.

General and administrative expenses

General and administrative expenses were $7.8 million for the three months ended September 30, 2019 and $7.3 million for the three months ended September 30, 2018. The $0.5 million increase in general and administrative expenses is primarily attributable to the consolidation of the First JV following the JV 1.0 Drop-Down on April 2, 2019.

Interest expense

We incurred $9.9 million of interest expense during the three months ended September 30, 2019 and $9.4 million of interest expense during the three months ended September 30, 2018. The increase in interest expense was primarily attributable to an increase in borrowings under our senior secured revolving credit facility.

47

Adjusted net income

	Three Months Ended September 30,
	2019		2018			Change
	(in thousands)
Reconciliation of net income to adjusted net income:
Net income	$	8,852	$	13,356		$	(4,504	)
Chesapeake Incident and Hurricane Events	47		(6,787		)	6,834
MSA Fee Waivers	7,703		—			7,703
Interest expense from incremental borrowings related to Chesapeake Incident and Hurricane Events	769		1,326			(557		)
Adjusted net income	$	17,371	$	7,895		$	9,476

We generated adjusted net income of $17.4 million for the three months ended September 30, 2019 and $7.9 million for the three months ended September 30, 2018. The $9.5 million increase in adjusted net income was primarily attributable to the factors described below under the heading “Adjusted EBITDA.”

Adjusted EBITDA

	Three Months Ended September 30,
	2019			2018			Change
	(in thousands)
Reconciliation of net income to adjusted EBITDA:
Net income	$	8,852		$	13,356		$	(4,504	)
Add:
Depreciation and amortization	13,291			9,801			3,490
Interest expense	9,872			9,445			427
Non-cash unit compensation expense	350			1,781			(1,431		)
Asset impairments and disposals	212			656			(444		)
Chesapeake Incident and Hurricane Events	47			(6,787		)	6,834
Changes in the fair value of derivative instruments	(1,028		)	1,944			(2,972		)
MSA Fee Waivers	7,703			—			7,703
Acquisition costs	114			30			84
Adjusted EBITDA	$	39,413		$	30,226		$	9,187

We generated adjusted EBITDA of $39.4 million for the three months ended September 30, 2019 compared to adjusted EBITDA of $30.2 million for the three months ended September 30, 2018. The $9.2 million increase was primarily attributable to the factors described above under the heading “Adjusted Gross margin per metric ton,” as well as $5.4 million of MSA Fee Waivers for general and administrative expenses.

48

Distributable Cash Flow

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

	Three Months Ended September 30,
	2019		2018		Change
	(in thousands)
Adjusted EBITDA	$	39,413	$	30,226	$	9,187
Less:
Interest expense, net of amortization of debt issuance costs, debt premium, original issue discount and impact from incremental borrowings related to Chesapeake Incident and Hurricane Events	8,797		7,839		958
Maintenance capital expenditures	579		1,638		(1,059		)
Distributable cash flow attributable to Enviva Partners, LP	30,037		20,749		9,288
Less: Distributable cash flow attributable to incentive distribution rights	3,107		1,532		1,575
Distributable cash flow attributable to Enviva Partners, LP limited partners	$	26,930	$	19,217	$	7,713

Results of Operations

Nine Months endedSeptember 30, 2019 Compared to Nine Months endedSeptember 30, 2018

	Nine Months Ended September 30,						Change			Chesapeake Incident and Hurricane Events			Net Change
	2019			2018
	(in thousands)
Product sales	$	478,989		$	398,031		$	80,958		$	—		$	80,958
Other revenue (1)	4,864			7,037			(2,173		)	—			(2,173		)
Net revenue	483,853			405,068			78,785			—			78,785
Cost of goods sold, excluding depreciation and    amortization (1)	395,861			331,356			64,505			(8,874		)	73,379
Depreciation and amortization	35,112			28,800			6,312			—			6,312
Total cost of goods sold	430,973			360,156			70,817			(8,874		)	79,691
Gross margin	52,880			44,912			7,968			8,874			(906		)
General and administrative expenses	9,179			9,778			(599		)	391			(990		)
Related-party management services agreement fee	19,488			11,628			7,860			—			7,860
Total general and administrative expenses	28,667			21,406			7,261			391			6,870
Income from operations	24,213			23,506			707			8,483			(7,776		)
Interest expense	(28,701		)	(27,137		)	(1,564		)	(1,259		)	(305		)
Other income	616			1,196			(580		)	—			(580		)
Net loss	$	(3,872	)	$	(2,435	)	$	(1,437	)	$	7,224		$	(8,661	)
(1) See Note 13, Related-Party Transactions

Net revenue

Net revenue increased to $483.9 million for the nine months ended September 30, 2019 from $405.1 million for the nine months ended September 30, 2018. The increase of $78.8 million, or 19%, was primarily attributable to a 20% increase in sales volumes during the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018.

49

Cost of goods sold

Cost of goods sold increased to $431.0 million for the nine months ended September 30, 2019 from $360.2 million for the nine months ended September 30, 2018, an increase of $70.8 million, or 20%. Excluding $10.3 million of expenses incurred, net of insurance recoveries received, related to the Chesapeake Incident during the nine months ended September 30, 2018, cost of goods sold would have increased by 23%, which is primarily attributable to a 20% increase in sales volumes during the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018.

Gross margin

Gross margin increased to $52.9 million for the nine months ended September 30, 2019 from $44.9 million for the nine months ended September 30, 2018. The gross margin increase of $8.0 million was primarily attributable to a 20% increase in sales volumes during the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018. A gross margin increase of $10.3 million for expenses incurred, net of insurance recoveries received, related to the Chesapeake Incident during the nine months ended September 30, 2018 was offset by a gross margin decrease of $6.3 million due to an increase in depreciation and amortization expense and $4.3 million of costs in connection with a potential acquisition, discussed below under the heading “Adjusted gross margin per metric ton.”

Adjusted gross margin per metric ton

	Nine Months Ended September 30,
	2019			2018			Change
	(in thousands except per metric ton)
Reconciliation of gross margin to adjusted gross margin per metric ton:
Gross margin	$	52,880		$	44,912		$	7,968
Loss on disposal of assets	562			900			(338		)
Depreciation and amortization	35,112			28,800			6,312
Chesapeake Incident and Hurricane Events	125			8,999			(8,874		)
Changes in unrealized derivative instruments	(1,352		)	(750		)	(602		)
MSA Fee Waivers	5,000			—			5,000
Acquisition costs	4,302			—			4,302
Adjusted gross margin	$	96,629		$	82,861		$	13,768
Metric tons sold	2,523			2,109			414
Adjusted gross margin per metric ton	$	38.30		$	39.29		$	(0.99	)

We earned adjusted gross margin of $96.6 million, or $38.30 per MT, for the nine months ended September 30, 2019. Adjusted gross margin was $82.9 million, or $39.29 per MT, for the nine months ended September 30, 2018. The factors impacting the change in adjusted gross margin include those described above under the heading “Gross margin,” an increase of $6.3 million related to depreciation and amortization expense, offset by a decrease of $8.9 million related to the Chesapeake Incident and Hurricane Events and a decrease of $0.6 million related to changes in unrealized derivative instruments. Additionally, adjusted gross margin increased during the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018 due to the waiver of $5.0 million of management services fees from our sponsor as consideration for an assignment of two shipping contracts to our sponsor to rebalance our and our sponsor’s respective shipping obligations under existing off-take contracts. In addition, the nine months ended September 30, 2019 includes $4.3 million of incremental costs, which are unrepresentative of our ongoing operations, in connection with our evaluation of a third-party wood pellet production plant we previously had considered, and were considering, purchasing (the “Potential Target”). When we commenced our review, the Potential Target had recently returned to operations following an extended shutdown during a bankruptcy proceeding with the intent of demonstrating favorable operations prior to proceeding to an auction sale process; however, the Potential Target had not yet established a logistics chain through a viable export terminal, given that the terminal through which the plant historically had exported was not operational at the time and was not reasonably certain to become operational in the future. Accordingly, as part of our diligence of the Potential Target, we developed an alternative logistics chain to bring the Potential Target’s wood pellets to market and began purchasing the production of the Potential Target for a trial period. The incremental costs associated with the establishment and evaluation of this new logistics chain primarily consist of barge, freight, trucking, storage and shiploading services. We have completed our evaluation of the alternative logistics chain and, therefore, do not expect to incur additional costs of this nature in the future.

50

General and administrative expenses

General and administrative expenses were $28.7 million for the nine months ended September 30, 2019 and $21.4 million for the nine months ended September 30, 2018. The $7.3 million increase in general and administrative expenses is primarily attributable to $7.0 million resulting from the consolidation of the First JV following the JV 1.0 Drop-Down on April 2, 2019, and $1.2 million of transaction expenses related to the JV 1.0 Drop-Down.

Interest expense

We incurred $28.7 million of interest expense during the nine months ended September 30, 2019 and $27.1 million of interest expense during the nine months ended September 30, 2018. The increase in interest expense was primarily attributable to an increase in borrowings under our senior secured revolving credit facility.

Adjusted net loss

	Nine Months Ended September 30,
	2019			2018			Change
	(in thousands)
Reconciliation of net loss to adjusted net income:
Net loss	$	(3,872	)	$	(2,435	)	$	(1,437	)
Chesapeake Incident and Hurricane Events	55			8,999			(8,944		)
MSA Fee Waivers	18,749			—			18,749
Interest expense from incremental borrowings related to Chesapeake Incident and Hurricane Events	1,259			1,326			(67		)
Adjusted net income	$	16,191		$	7,890		$	8,301

We generated adjusted net income of $16.2 million for the nine months ended September 30, 2019 and $7.9 million for the nine months ended September 30, 2018. The $8.3 million increase in adjusted net income was attributable to an increase in MSA Fee Waivers of $18.7 million, partially offset by a $8.9 million decrease in adjustments related to the Chesapeake Incident and Hurricane Events,and a $1.4 million increase in net loss primarily attributable to the factors described above.

Adjusted EBITDA

	Nine Months Ended September 30,
	2019			2018			Change
	(in thousands)
Reconciliation of net loss to adjusted EBITDA:
Net loss	$	(3,872	)	$	(2,435	)	$	(1,437	)
Add:
Depreciation and amortization	35,747			29,240			6,507
Interest expense	28,701			27,137			1,564
Non-cash unit compensation expense	3,835			5,604			(1,769		)
Asset impairments and disposals	562			900			(338		)
Chesapeake Incident and Hurricane Events	55			8,999			(8,944		)
Changes in the fair value of derivative instruments	(1,352		)	(750		)	(602		)
MSA Fee Waivers	18,749			—			18,749
Acquisition costs	5,566			176			5,390
Adjusted EBITDA	$	87,991		$	68,871		$	19,120

We generated adjusted EBITDA of $88.0 million for the nine months ended September 30, 2019 compared to adjusted EBITDA of $68.9 million for the nine months ended September 30, 2018. The $19.1 million increase was primarily attributable to the factors described above under the heading “Adjusted gross margin per metric ton,” as well as $13.7 million of MSA Fee Waivers for general and administrative expenses offset by $7.0 million resulting from the consolidation of the First JV following the JV 1.0 Drop-Down on April 2, 2019 and $1.2 million in costs, primarily in transaction expenses related to the JV 1.0 Drop-Down.

51

Distributable Cash Flow

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

	Nine Months Ended September 30,
	2019		2018		Change
	(in thousands)
Adjusted EBITDA	$	87,991	$	68,871	$	19,120
Less:
Interest expense, net of amortization of debt issuance costs, debt premium, original issue discount and impact from incremental borrowings related to Chesapeake Incident and Hurricane Events	26,542		24,984		1,558
Maintenance capital expenditures	2,343		3,252		(909		)
Distributable cash flow attributable to Enviva Partners, LP	59,106		40,635		18,471
Less: Distributable cash flow attributable to incentive distribution rights	8,150		4,196		3,954
Distributable cash flow attributable to Enviva Partners, LP limited partners	$	50,956	$	36,439	$	14,517

Liquidity and Capital Resources

Our primary sources of liquidity include cash and cash equivalent balances, cash generated from operations, borrowings under our revolving credit commitments and, from time to time, debt and equity offerings. Our primary liquidity requirements are to fund working capital, service our debt, maintain cash reserves, finance plant acquisitions and plant expansion projects, finance maintenance capital expenditures and pay distributions. We believe cash on hand, cash generated from our operations and the availability of our revolving credit commitments will be sufficient to meet our primary liquidity requirements. 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.

Cash Distributions

To the extent we have sufficient cash from our operations after establishment of cash reserves and payment of fees and expenses, our minimum quarterly distribution is $0.4125 per common unit per quarter, which equates to approximately $13.8 million per quarter, or approximately $55.2 million per year, based on the number of common units outstanding as of September 30, 2019.

Capital Requirements

We operate in a capital-intensive industry, which requires significant investments to maintain and upgrade existing capital assets. Our capital requirements have consisted, and we anticipate will continue to consist, primarily of the following:

• Maintenance capital expenditures, which are cash expenditures incurred to maintain our long-term operating income or operating capacity. These expenditures typically include certain system integrity, compliance and safety improvements; and

• Growth capital expenditures, which are cash expenditures we expect will increase our operating income or operating capacity over the long term. Growth capital expenditures include acquisitions or construction of new capital assets or capital improvements such as additions to or improvements on our existing capital assets as well as projects intended to extend the useful life of assets.

The classification of capital expenditures as either maintenance or growth is made at the individual asset level during our budgeting process and as we approve, execute and monitor our capital spending.

We expect to invest approximately $130.0 million in additional wood pellet production assets and emissions control equipment for the Mid-Atlantic Expansions. We expect to complete construction in the first half of 2020, subject to receiving the necessary permits, with startup shortly thereafter.

52

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, 2019 and 2018, respectively:

	Nine Months Ended September 30,
	2019			2018
	(in thousands)
Net cash provided by operating activities	$	43,479		$	70,131
Net cash used in investing activities	(154,682		)	(14,904		)
Net cash provided by (used in) financing activities	111,100			(54,888		)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(103	)	$	339

Cash Provided by Operating Activities

Net cash provided by operating activities was $43.5 million for the nine months ended September 30, 2019 compared to $70.1 million for the nine months ended September 30, 2018. The decrease of $26.7 million was largely due to changes in working capital, primarily attributable to the Chesapeake Incident during the nine months ended September 30, 2018.

Cash Used in Investing Activities

Net cash used in investing activities was $154.7 million for the nine months ended September 30, 2019 compared to $14.9 million for the nine months ended September 30, 2018. The $139.8 million increase is primarily due to the payment of $74.7 million in cash consideration for the JV 1.0 Drop-Down. The $81.5 million of cash used for property, plant and equipment during the nine months ended September 30, 2019 is primarily attributable to the completion of construction of the Hamlet plant and capital expenditures associated with the Mid-Atlantic Expansions.

Cash Used in Financing Activities

Net cash provided by financing activities was $111.1 million for the nine months ended September 30, 2019 compared to net cash used in financing activities of $54.9 million for the nine months ended September 30, 2018. The increase of $166.0 million is primarily attributable to an increase in proceeds from common unit issuances, net, of $96.6 million and an increase of $103.2 million in proceeds from debt issuance, net of principal payments on debt and finance lease obligations, partially offset by the $24.3 million Second Payment.

Off-Balance Sheet Arrangements

As of September 30, 2019, we did not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in our unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. We provide expanded discussion of our significant accounting policies, estimates and judgments in our 2018 Form 10‑K. We believe these accounting policies reflect our significant estimates and assumptions used in preparation of our financial statements. There have been no significant changes to our critical accounting policies and estimates since December 31, 2018.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our exposure to market risk as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018 other than as described below:

Foreign Currency Exchange Risk

We primarily are exposed to fluctuations in foreign currency exchange rates related to contracts pursuant to which deliveries of wood pellets will be settled in foreign currency. We have entered into forward contracts and purchased options to hedge a portion of our forecasted revenue for these customer contracts.

53

As of September 30, 2019, we had notional amounts of 38.1 million GBP and 7.3 million EUR under foreign currency forward contracts and 43.4 million GBP and 1.7 million EUR under foreign currency purchased options that expire between 2019 and 2023.

We do not utilize foreign exchange contracts for speculative or trading purposes. The counterparties to our foreign exchange contracts are major financial institutions.

Item 4. Controls and Procedures

Evaluation of 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, 2019.

Changes in Internal Control Over Financial Reporting

During the quarter ended September 30, 2019, 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.

54

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material changes with respect to the legal proceedings disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018.

Item 1A. Risk Factors

There have been no material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018.

Item 5. Other Information

Revised Code of Business Conduct and Ethics

On October 30, 2019, in accordance with its annual review of existing charters and policies, the Board adopted a revised Code of Business Conduct and Ethics (“Revised Code”). In addition to certain non-substantive changes, the Revised Code includes the following changes:

• the coverage of the Revised Code was expanded to include directors, officers and employees of entities other than Enviva Management Company, LLC that conduct business on behalf of the Partnership;

• the provisions relating to compliance with anti-corruption laws and to questionable or improper payments and gifts were revised to conform the concepts with those contained in the Partnership Group’s (as defined in the Revised Code) existing Anti-Corruption Policy and

• the provisions relating to work conduct, non-discrimination and anti-harassment policies were revised to further clarify the discriminatory conduct and harassment that is prohibited under the Revised Code and the confidential treatment of, and anti-retaliatory measures associated with, a complaint or investigation under the Revised Code.

The Revised Code is available on the “Investor Relations” page of the Partnership’s website at https://www.envivapartners.com/corporate-governance/documents.

55

Item 6. Exhibits

The information required by this Item 6 is set forth in the Exhibit Index accompanying this Quarterly Report on Form 10‑Q and is incorporated herein by reference.

Exhibit Index

Exhibit Number	Description
2.1	Contribution Agreement by and among Enviva Development Holdings, LLC, Enviva Holdings, LP, and Enviva Partners, LP dated March 21, 2019 (Exhibit 2.1, Form 10-K filed March 25, 2019, File No. 001-037363).
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)
3.3	Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Enviva Partners, LP, effective as of December 18, 2017, by Enviva Partners GP, LLC (Exhibit 3.1, Form 8-K filed December 21, 2017, 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.

56

SIGNATURE

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.

Date: October 30, 2019

ENVIVA PARTNERS, LP
By:	Enviva Partners GP, LLC, its general partner
By:	/s/ SHAI EVEN
	Name:	Shai Even
	Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

57

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, John K. Keppler, certify that:

1. I have reviewed this quarterly 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) 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. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. 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

d. 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: October 30, 2019
	By:	/s/ JOHN K. KEPPLER
		Name:	John K. Keppler
		Title:	Chairman, President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Shai Even, certify that:

1. I have reviewed this quarterly 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) 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. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. 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

d. 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: October 30, 2019
	By:	/s/ SHAI EVEN
		Name:	Shai Even
		Title:	Executive Vice President and Chief Financial Officer

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 on Form 10-Q of Enviva Partners, LP (the “Partnership”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John K. Keppler, Chairman, President and Chief Executive Officer of Enviva Partners GP, LLC, the general partner of the Partnership, and Shai Even, Executive Vice President and Chief Financial Officer of Enviva Partners GP, LLC, the general partner of the Partnership, 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 Partnership.

Date: October 30, 2019
	By:	/s/ JOHN KEPPLER
		Name:	John K. Keppler
		Title:	Chairman, President and Chief Executive Officer

Date: October 30, 2019
	By:	/s/ SHAI EVEN
		Name:	Shai Even
		Title:	Executive Vice President and Chief Financial Officer

XML

Inventories (Tables)

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Schedule of inventories

Inventories consisted of the following as of:

	September 30, 2019		December 31, 2018
Raw materials and work-in-process	$	9,883	$	4,936
Consumable tooling	19,995		17,561
Finished goods	12,471		8,993
Total inventories	$	42,349	$	31,490

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net revenue		$ 157,405	$ 144,148	$ 483,853	$ 405,068
Depreciation and amortization		12,946	9,678	35,112	28,800
Total cost of goods sold		130,939	114,029	430,973	360,156
Gross margin		26,466	30,119	52,880	44,912
General and administrative expenses		1,314	3,201	9,179	9,778
Related-party management services agreement fee		6,486	4,114	19,488	11,628
Total general and administrative expenses		7,800	7,315	28,667	21,406
Income from operations		18,666	22,804	24,213	23,506
Other income (expense):
Interest expense		(9,872)	(9,445)	(28,701)	(27,137)
Other income (expense), net		58	(3)	616	1,196
Total other expense, net		(9,814)	(9,448)	(28,085)	(25,941)
Net income (loss)		$ 8,852	$ 13,356	$ (3,872)	$ (2,435)
Net income (loss) per limited partner common unit:
Common - basic (in dollars per unit)		$ 0.15	$ 0.45	$ (0.44)	$ (0.25)
Common - diluted (in dollars per unit)		0.15	0.43	(0.44)	(0.25)
Net loss per limited partner subordinated unit:
Subordinated - basic and diluted (in dollars per unit)		$ 0.00	$ 0.00	$ 0.00	$ (0.25)
Weighted-average number of limited partner units outstanding:
Common - basic (in units)		33,457	26,477	31,230	19,866
Common - diluted (in units)		33,457	27,478	31,230	19,866
Subordinated - basic and diluted (in units)		0	0	0	6,541
Product sales
Net revenue		$ 155,188	$ 142,541	$ 478,989	$ 398,031
Cost of goods sold	[1]	117,993	104,351	395,861	331,356
Other revenue
Net revenue	[1]	$ 2,217	$ 1,607	$ 4,864	$ 7,037

[1] See Note 13, Related-Party Transactions

XML

Partners' Capital

9 Months Ended

Sep. 30, 2019

Partners' Capital Notes [Abstract]

Partners' Capital

Partners’ Capital

Common Units - Issuance

During March 2019, we issued 3,508,778 common units in a registered direct offering for net proceeds of approximately $97.0 million, net of $3.0 million of issuance costs.

On April 1, 2019, as deferred consideration for the Wilmington Drop-Down, we issued 1,691,627 common units, or $49.7 million in common units, to the First JV, which common units were distributed to the Hancock Member. On April 2, 2019, in connection with the JV 1.0 Drop-Down, we issued 1,681,237 common units, or $50.0 million in common units, to the sponsor.

Allocations of Net Income

The Partnership’s partnership agreement contains provisions for the allocation of net income and loss to the unitholders of the Partnership 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 of the Partnership in accordance with their respective percentage ownership interest. Such allocations are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions, which are allocated 100% to the General Partner.

Incentive Distribution Rights

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

At-the-Market Offering Program

Pursuant to an equity distribution agreement dated August 8, 2016, we may offer and sell common units from time to time through a group of managers, subject to the terms and conditions set forth in such agreement, of up to an aggregate sales amount of $100.0 million (the “ATM Program”).

During the three and nine months ended September 30, 2019, we did not sell common units under the ATM Program. During the three months ended September 30, 2018, we did not sell common units under the ATM Program. During the nine months ended September 30, 2018, we sold 8,408 common units under the ATM Program for net proceeds of $0.2 million, net of an insignificant amount of commissions. Net proceeds from sales under the ATM Program were used for general partnership purposes.

First JV

The capital of the First JV is divided into two classifications: (1) Class A Units and (2) Class B Units, issued at a price of $1.00 per unit for each class.

Class A Units - Noncontrolling Interests

Class A Units were issued to the Hancock Member in exchange for capital contributions at a price of $1.00 for each Class A Unit.

The Hancock Member had a total capital commitment of $235.2 million and, as of September 30, 2019, the Hancock Member held 227.0 million Class A Units with a remaining capital commitment amount of $8.2 million.

Class B Units - Controlling Interests

Class B Units were issued to the Enviva Member in exchange for capital contributions at a price of $1.00 for each Class B Unit.

The Enviva Member had a total capital commitment of $232.2 million and, as of September 30, 2019, the Enviva Member held 224.0 million Class B Units with a remaining commitment amount of $8.2 million.

Pursuant to the limited liability company agreement of the First JV (the “First JV LLCA”), we are the managing member of the First JV and have the authority to manage the business and affairs of the First JV and take actions on its behalf, including adopting annual budgets, entering into agreements, effecting asset sales or biomass purchase agreements, making capital calls, incurring debt and taking other actions, subject to consent of the Hancock Member in certain circumstances. The First JV LLCA also sets forth the capital commitments and limitations thereon from each of the members, and provides for the allocation of sale proceeds and distributions among the holders of outstanding Class A Units and Class B Units.

We included all accounts of the First JV in our consolidated results as of April 2, 2019 as the Class B Units represent a controlling interest in the First JV.

Distribution Rights

Distributions to the Hancock Member, and to the Enviva Member, are made in the reasonable discretion of the Enviva Member and are governed by the waterfall provisions of the First JV LLCA, which provides that distributions, after repayment of the First JV Revolver borrowings, are to be made as follows:

• First: To the members in proportion to their relative unreturned capital contributions, then to the members in proportion to their relative unpaid preference amount.

• Thereafter: 25% to the Hancock Member and 75% to the Enviva Member.

Prior to the JV 1.0 Drop-Down, at the discretion of the Enviva Member, the Hancock Member had received all of its capital contributions and substantially all of its preference amount. Given that and the historical net losses of the First JV having been previously allocated to the Enviva Member and the Hancock Member in proportion to their unreturned capital contributions, the balance of the First JV members’ capital attributable to the Hancock Member had become negative as of the JV 1.0 Drop-Down. Additionally, given that and the extent to which the Enviva Member has yet to receive repayment of its revolver borrowings, capital contributions and preference amount as of September 30, 2019, none of the net loss of the First JV has been allocated to the Hancock Member subsequent to the date of the JV 1.0 Drop-Down. Thus, no change has been recognized to the acquired negative noncontrolling interest balance attributable to the Hancock Member.

XML

Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Basis of Presentation

Description of Business and Basis of Presentation

Description of Business

Enviva Partners, LP, together with its subsidiaries (“we,” “us,” “our” or the “Partnership”), supplies utility-grade wood pellets primarily to major power generators under long-term, take-or-pay off-take contracts. We procure wood fiber and process it into utility-grade wood pellets and load the finished wood pellets into railcars, trucks and barges for transportation to deep-water marine terminals, where they are received, stored and ultimately loaded onto oceangoing vessels for delivery to our principally European, and increasingly Japanese, customers under long-term, take-or-pay contracts.

As of September 30, 2019, we owned and operated seven industrial-scale wood pellet production plants located in the Mid-Atlantic and Gulf Coast regions of the United States. In addition to the volumes from our plants, we also procure wood pellets from third parties and Enviva Pellets Greenwood, LLC (“Greenwood”), a wholly owned subsidiary of Enviva JV Development Company, LLC (the “Second JV”), a limited liability company owned by Enviva Holdings, LP (together with its wholly owned subsidiaries Enviva MLP Holdco, LLC and Enviva Development Holdings, LLC, where applicable, the “sponsor”) and John Hancock Life Insurance Company (U.S.A.) and certain of its affiliates. Greenwood owns a wood pellet production plant in Greenwood, South Carolina (the “Greenwood plant”). Wood pellets are exported from our wholly owned dry-bulk, deep-water marine terminal in Chesapeake, Virginia (the “Chesapeake terminal”) and terminal assets in Wilmington, North Carolina (the “Wilmington terminal”), and from third-party deep-water marine terminals in Mobile, Alabama and Panama City, Florida, under a short-term and a long-term contract, respectively.

Basis of Presentation

The unaudited financial statements and notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.

In the opinion of management, all adjustments and accruals necessary for a fair presentation have been included. All such adjustments and accruals are of a normal and recurring nature unless disclosed otherwise. All intercompany balances and transactions have been eliminated in consolidation. The results reported in the financial statements are not necessarily indicative of the results that may be reported for the entire year.

We entered into an agreement with our sponsor dated and effective as of September 30, 2019 pursuant to which the parties agreed to the right of set off of related-party accounts receivable and accounts payable; consequently, we intend to set off related-party receivables and payables, which are reflected net in related-party payables, in accordance with the agreement. As of December 31, 2018, related-party accounts receivable and accounts payable were not intended to be set off and were reflected separately in current assets and current liabilities.

For the nine months ended September 30, 2018, certain amounts on the statements of cash flows have been reclassified from proceeds and payments on revolving credit commitments, net, to proceeds from senior secured revolving credit facility and payments on senior secured revolving credit facility to conform to current period presentation.

The unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Enviva Wilmington Holdings, LLC

In April 2019, we acquired from the sponsor all of the issued and outstanding Class B Units in Enviva Wilmington Holdings, LLC (the “First JV”), a limited liability company owned by the sponsor and John Hancock Life Insurance Company (U.S.A.) and certain of its affiliates (collectively, the “Hancock Member”). As of April 2, 2019, we began to consolidate the First JV as a variable interest entity of which we are the primary beneficiary. As managing member, we have the sole power to direct the activities that most impact the economics of the First JV and substantially all of the activities are conducted on our behalf. Additionally, as the Class B Units represented a controlling interest in the First JV, we accounted for the First JV as a consolidated subsidiary, not as a joint venture. The First JV owns a plant in Hamlet, North Carolina (the “Hamlet plant”) and a firm, 15-year take-or-pay off-take contract with nearly 1.0 million metric tons per year (“MTPY”) of wood pellets, following a ramp period.

On the date of our acquisition of the sponsor’s Class B Units in the First JV (collectively, the “JV 1.0 Drop-Down”):

• We commenced an associated terminal services agreement to handle contracted volumes from the Hamlet plant.

• We entered into an agreement with the sponsor, pursuant to which (1) the sponsor will guarantee certain cash flows from the Hamlet plant until June 30, 2020, (2) the sponsor will reimburse us for construction cost overruns in excess of budgeted capital expenditures for the Hamlet plant, subject to certain exceptions, (3) we will pay to the sponsor quarterly incentive payments for any wood pellets produced by the Hamlet plant in excess of forecast production levels through June 30, 2020, and (4) the sponsor will retain liability for certain claims payable, if any, by the First JV (the “Make-Whole Agreement”).

• The First JV entered into an agreement with Enviva Management Company, LLC, a Delaware limited liability company and wholly owned subsidiary of the sponsor (“Enviva Management”), to waive the obligation to pay an aggregate of approximately $2.7 million of management fees payable to Enviva Management under the management services agreement (the “First JV MSA”) between the First JV and Enviva Management with respect to the period from the date of acquisition of the Hamlet plant until July 1, 2019 (the “First JV MSA Fee Waiver”).

• We entered into an agreement with Enviva Management to waive our obligation to pay an aggregate of approximately $13.0 million in fees payable under our management services agreement (the “EVA MSA,” and together with the First JV MSA, the “MSAs”) with Enviva Management with respect to the period from the date of the JV 1.0 Drop-Down through the second quarter of 2020 (the “First EVA MSA Fee Waiver”).

• The sponsor assigned to us all of its rights and obligations under a credit agreement between the First JV, as borrower, and the sponsor, as lender (the “First JV Revolver”). On the date of assignment, $4.1 million was outstanding from the First JV to the sponsor.

• The First JV entered into an interim services agreement (the “ISA”) with Enviva Hamlet Operator, LLC, a wholly-owned subsidiary of our sponsor (“Hamlet Operator”) pursuant to which Hamlet Operator, as an independent contractor, will manage, operate, maintain and repair the Hamlet plant and provide other services to the First JV for the period from July 1, 2019 through June 30, 2020 in exchange for a fixed fee per metric ton of wood pellets produced by the Hamlet plant during such period and delivered at place. Under and during the term of the ISA, Hamlet Operator will (1) pay all operating and maintenance expenses at the Hamlet plant, (2) cover all reimbursable general and administrative expenses associated with the Hamlet plant and (3) pay other costs and expenses incurred by the Hamlet plant to produce and sell the wood pellets delivered to the Wilmington terminal from the Hamlet plant. The sponsor guarantees all obligations of Hamlet Operator under the ISA.

Fees to Enviva Management through the MSAs are expensed as incurred and, to the extent any amount is associated with the First JV MSA Fee Waiver and the First EVA MSA Fee Waiver, the related amount is recorded as an increase to partners’ capital.

The $165.0 million purchase price for the JV 1.0 Drop-Down consisted of (1) a cash payment of $24.7 million, net of a purchase price adjustment of $0.3 million, (2) the issuance of 1,681,237 unregistered common units at a value of $29.74 per unit, or $50.0 million of common units, (3) $50.0 million in cash paid on June 28, 2019, (4) $40.0 million in cash to be paid on January 2, 2020 and (5) the elimination of $3.7 million of net related-party receivables and payables included in the net assets of the First JV on the date of acquisition. As the holder of the Class B Units, we became a member of the First JV (the “Enviva Member”) on the acquisition date. During the three and nine months ended September 30, 2019, we incurred and expensed $0.1 million and $1.3 million, respectively, in acquisition costs to acquire the First JV which were recognized as general and administrative expenses.

As the Enviva Member, we are the managing member and primary beneficiary of the First JV. We included all accounts of the First JV in our consolidated results as of April 2, 2019 as the Class B Units represent a controlling interest in the First JV and are generally unrestricted as it relates to the management of the assets and cash flows of the First JV; however, we cannot cause the First JV to incur indebtedness in excess of $60.0 million.

The JV 1.0 Drop-Down was an asset acquisition of entities under common control and accounted for on the carryover basis of accounting. Pursuant to the First JV MSA, Enviva Management provides services to the First JV, including those necessary or incidental to the operation and management of the First JV’s business. We are responsible for managing the activities of the First JV, including the development, construction and operation of the Hamlet plant.

XML

Supplemental Guarantor Information

9 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Supplemental Guarantor Information

Supplemental Guarantor Information

The Partnership and its wholly owned finance subsidiary, Enviva Partners Finance Corp., are the co-issuers of our senior notes on a joint and several basis. The senior notes are guaranteed on a senior unsecured basis by certain of the Partnership’s direct and indirect wholly owned subsidiaries (excluding Enviva Partners Finance Corp. and certain immaterial subsidiaries) and will be guaranteed by the Partnership’s future restricted subsidiaries that guarantee certain of its other indebtedness (collectively, the “Subsidiary Guarantors”). The guarantees are full and unconditional and joint and several. Each of the Subsidiary Guarantors is directly or indirectly 100% owned by the Partnership. Enviva Partners Finance Corp. is a finance subsidiary formed for the purpose of being the co-issuer of the senior notes. Other than certain restrictions arising under the senior secured revolving credit facility and the indenture governing the senior notes (see Note 12, Long-Term Debt and Finance Lease Obligations), there are no significant restrictions on the ability of any restricted subsidiary to (1) pay dividends or make any other distributions to the Partnership or any of its restricted subsidiaries or (2) make loans or advances to the Partnership or any of its restricted subsidiaries. In accordance with Rule 3-10 of Regulation S-X, supplemental consolidating financial statements have been prepared from our financial information on the same basis of accounting as our consolidated financial statements.

Condensed Consolidated Balance Sheet
September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	2,046		$	311		$	—		$	2,357
Accounts receivable	49,634			9			—			49,643
Inventories	38,286			4,367			(304		)	42,349
Prepaid expenses and other current assets	3,925			73			—			3,998
Total current assets	93,891			4,760			(304		)	98,347
Property, plant and equipment - in service, net	517,577			166,195			(248		)	683,524
Construction in progress	60,181			743			—			60,924
Total property, plant and equipment, net	577,758			166,938			(248		)	744,448
Operating lease right-of-use assets, net	26,567			6,812			—			33,379
Related-party note receivable	42,989			—			(42,989		)	—
Goodwill	85,615			—			—			85,615
Investment in subsidiaries	118,543			—			(118,543		)	—
Other long-term assets	7,876			—			(550		)	7,326
Total assets	$	953,239		$	178,510		$	(162,634	)	$	969,115
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable	$	18,575		$	2,937		$	—		$	21,512
Related-party payables and accrued liabilities	12,048			(2,929		)	—			9,119
Deferred consideration for drop-downs due to related party	40,000			—			—			40,000
Accrued and other current liabilities	37,618			10,700			—			48,318
Current portion of interest payable	13,209			—			—			13,209
Current portion of long-term debt and finance lease obligations	3,891			599			—			4,490
Total current liabilities	125,341			11,307			—			136,648
Long-term debt and finance lease obligations	542,575			1,014			—			543,589
Related-party long-term debt	—			42,989			(42,989		)	—
Long-term operating lease liabilities	27,683			6,042			—			33,725
Long-term interest payable	1,100			—			—			1,100
Long-term interest related-party payable	—			550			(550		)	—
Other long-term liabilities	2,170			—			—			2,170
Total liabilities	698,869			61,902			(43,539		)	717,232
Total Enviva Partners, LP partners' capital	302,562			116,608			(119,095		)	300,075
Noncontrolling interest	(48,192		)	—			—			(48,192		)
Total partners’ capital	254,370			116,608			(119,095		)	251,883
Total liabilities and partners’ capital	$	953,239		$	178,510		$	(162,634	)	$	969,115

Condensed Consolidated Balance Sheet
December 31, 2018
	Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	2,396	$	64		$	—		$	2,460
Accounts receivable	54,792		2			—			54,794
Insurance receivables	5,140		—			—			5,140
Related-party receivables	6,453		4,944			(10,005		)	1,392
Inventories	31,490		—			—			31,490
Prepaid expenses and other current assets	2,235		—			—			2,235
Total current assets	102,506		5,010			(10,005		)	97,511
Property, plant and equipment - in service, net	542,635		—			—			542,635
Construction in progress	14,393		—			—			14,393
Total property, plant and equipment, net	557,028		—			—			557,028
Goodwill	85,615		—			—			85,615
Investment in subsidiaries	652		—			(652		)	—
Other long-term assets	8,616		—			—			8,616
Total assets	$	754,417	$	5,010		$	(10,657	)	$	748,770
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable	$	15,551	$	—		$	—		$	15,551
Related-party payables and accrued liabilities	33,169		5,061			(10,005		)	28,225
Deferred consideration for drop-downs due to related party	74,000		—			—			74,000
Accrued and other current liabilities	41,395		5			—			41,400
Current portion of interest payable	5,434		—			—			5,434
Current portion of long-term debt and finance lease obligations	2,722		—			—			2,722
Total current liabilities	172,271		5,066			(10,005		)	167,332
Long-term debt and finance lease obligations	429,933		—			—			429,933
Long-term interest payable	1,010		—			—			1,010
Other long-term liabilities	3,779		—			—			3,779
Total liabilities	606,993		5,066			(10,005		)	602,054
Total partners’ capital	147,424		(56		)	(652		)	146,716
Total liabilities and partners’ capital	$	754,417	$	5,010		$	(10,657	)	$	748,770

Condensed Consolidated Statement of Operations
For the Three Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Product sales	$	155,188		$	3,935		$	(3,935	)	$	155,188
Other revenue	2,454			—			(237		)	2,217
Net revenue	157,642			3,935			(4,172		)	157,405
Cost of goods sold	118,950			2,674			(3,631		)	117,993
Depreciation and amortization	11,173			1,773			—			12,946
Total cost of goods sold	130,123			4,447			(3,631		)	130,939
Gross margin	27,519			(512		)	(541		)	26,466
General and administrative expenses	1,842			(289		)	(239		)	1,314
Related-party management services agreement fee	4,510			1,976			—			6,486
Total general and administrative expenses	6,352			1,687			(239		)	7,800
Income (loss) from operations	21,167			(2,199		)	(302		)	18,666
Other (expense) income:
Interest expense	(9,864		)	(8		)	—			(9,872		)
Related-party interest expense	—			(300		)	300			—
Other income (expense), net	440			(11		)	(371		)	58
Total other (expense) income, net	(9,424		)	(319		)	(71		)	(9,814		)
Net income (loss)	$	11,743		$	(2,518	)	$	(373	)	$	8,852

Condensed Consolidated Statement of Operations
For the Three Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Product sales	$	142,541		$	—		$	—	$	142,541
Other revenue	1,607			—			—		1,607
Net revenue	144,148			—			—		144,148
Cost of goods sold	104,351			—			—		104,351
Depreciation and amortization	9,678			—			—		9,678
Total cost of goods sold	114,029			—			—		114,029
Gross margin	30,119			—			—		30,119
General and administrative expenses	3,173			28			—		3,201
Related-party management services agreement fee	4,114			—			—		4,114
Total general and administrative expenses	7,287			28			—		7,315
Income (loss) from operations	22,832			(28		)	—		22,804
Other (expense) income:
Interest expense	(9,445		)	—			—		(9,445		)
Other (expense) income, net	(12		)	9			—		(3		)
Total other (expense) income, net	(9,457		)	9			—		(9,448		)
Net income (loss)	$	13,375		$	(19	)	$	—	$	13,356

Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Product sales	$	478,989		$	3,935		$	(3,935	)	$	478,989
Other revenue	5,775			—			(911		)	4,864
Net revenue	484,764			3,935			(4,846		)	483,853
Cost of goods sold	396,818			2,674			(3,631		)	395,861
Depreciation and amortization	33,339			1,773			—			35,112
Total cost of goods sold	430,157			4,447			(3,631		)	430,973
Gross margin	54,607			(512		)	(1,215		)	52,880
General and administrative expenses	8,713			1,380			(914		)	9,179
Related-party management services agreement fee	13,837			5,651			—			19,488
Total general and administrative expenses	22,550			7,031			(914		)	28,667
Income (loss) from operations	32,057			(7,543		)	(301		)	24,213
Other (expense) income:
Interest expense	(28,666		)	(35		)	—			(28,701		)
Related-party interest expense	—			(300		)	300			—
Other income (expense), net	1,125			41			(550		)	616
Total other expense, net	(27,541		)	(294		)	(250		)	(28,085		)
Net income (loss)	$	4,516		$	(7,837	)	$	(551	)	$	(3,872	)

Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Product sales	$	398,031		$	—		$	—	$	398,031
Other revenue	7,037			—			—		7,037
Net revenue	405,068			—			—		405,068
Cost of goods sold	331,356			—			—		331,356
Depreciation and amortization	28,800			—			—		28,800
Total cost of goods sold	360,156			—			—		360,156
Gross margin	44,912			—			—		44,912
General and administrative expenses	9,730			48			—		9,778
Related-party management services agreement fee	11,628			—			—		11,628
Total general and administrative expenses	21,358			48			—		21,406
Income (loss) from operations	23,554			(48		)	—		23,506
Other (expense) income:
Interest expense	(27,137		)	—			—		(27,137		)
Other income (expense), net	1,281			(85		)	—		1,196
Total other expense, net	(25,856		)	(85		)	—		(25,941		)
Net loss	$	(2,302	)	$	(133	)	$	—	$	(2,435	)

Condensed Consolidated Statement of Comprehensive Income (Loss)
For the Three Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	11,743		$	(2,518	)	$	(373	)	$	8,852
Other comprehensive (loss) income:
Net unrealized losses on cash flow hedges	13			—			—			13
Reclassification of net gains realized into net income (loss)	(59		)	—			—			(59		)
Currency translation adjustment	—			4			—			4
Total other comprehensive (loss) income	(46		)	4			—			(42		)
Total comprehensive income (loss)	$	11,697		$	(2,514	)	$	(373	)	$	8,810

Condensed Consolidated Statement of Comprehensive Income (Loss)
For the Three Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Net income (loss)	$	13,375		$	(19	)	$	—	$	13,356
Other comprehensive income:
Net unrealized gains on cash flow hedges	2,713			—			—		2,713
Reclassification of net gains realized into net income (loss)	(2,013		)	—			—		(2,013		)
Currency translation adjustment	—			1			—		1
Total other comprehensive income	700			1			—		701
Total comprehensive income (loss)	$	14,075		$	(18	)	$	—	$	14,057

Condensed Consolidated Statement of Comprehensive Loss
For the Nine Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	4,516		$	(7,837	)	$	(551	)	$	(3,872	)
Other comprehensive (loss) income:
Net unrealized losses on cash flow hedges	(148		)	—			—			(148		)
Reclassification of net gains realized into net income (loss)	(252		)	—			—			(252		)
Currency translation adjustment	—			4			—			4
Total other comprehensive (loss) income	(400		)	4			—			(396		)
Total comprehensive income (loss)	$	4,116		$	(7,833	)	$	(551	)	$	(4,268	)

Condensed Consolidated Statement of Comprehensive Loss
For the Nine Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Net loss	$	(2,302	)	$	(133	)	$	—	$	(2,435	)
Other comprehensive income:
Net unrealized gains on cash flow hedges	5,750			—			—		5,750
Reclassification of net gains realized into net loss	(2,076		)	—			—		(2,076		)
Currency translation adjustment	—			1			—		1
Total other comprehensive income	3,674			1			—		3,675
Total comprehensive income (loss)	$	1,372		$	(132	)	$	—	$	1,240

Condensed Consolidated Statement of Cash Flows
For the Nine Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	4,516		$	(7,837	)	$	(551	)	$	(3,872	)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization	33,875			1,872			—			35,747
MSA Fee Waivers	13,200			5,549			—			18,749
Amortization of debt issuance costs, debt premium and original issue discounts	899			—			—			899
Loss on disposal of assets	562			—			—			562
Unit-based compensation	3,142			693			—			3,835
Fair value changes in derivatives	(2,275		)	—			—			(2,275		)
Unrealized loss on foreign currency transactions, net	58			—			—			58
Change in operating assets and liabilities:
Accounts and insurance receivables	9,502			(10		)	—			9,492
Related-party receivables	(20,281		)	(1,415		)	23,088			1,392
Prepaid expenses and other current and long-term assets	(711		)	(52		)	551			(212		)
Inventories	(6,313		)	(4,366		)	—			(10,679		)
Derivatives	1,514			—			—			1,514
Accounts payable, accrued liabilities and other current liabilities	824			(3,071		)	—			(2,247		)
Related-party payables and accrued liabilities	13,847			(2,784		)	(23,088		)	(12,025		)
Accrued interest	3,326			3,094			—			6,420
Operating lease liabilities	(2,800		)	(915		)	—			(3,715		)
Other long-term liabilities	313			(477		)	—			(164		)
Net cash provided by (used in) operating activities	53,198			(9,719		)	—			43,479
Cash flows from investing activities:
Purchases of property, plant and equipment	(47,561		)	(33,923		)	—			(81,484		)
Payment in relation to the JV 1.0 Drop-Down	(74,700		)	—			—			(74,700		)
Other	1,502			—			—			1,502
Net cash used in investing activities	(120,759		)	(33,923		)	—			(154,682		)
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility	306,150			38,850			—			345,000
Payments on senior secured revolving credit facility	(233,000		)	—			—			(233,000		)
Payments on other long-term debt and finance lease obligations	(3,639		)	1,613			—			(2,026		)
Proceeds from common unit issuances, net	96,822			—			—			96,822
Payment of deferred consideration for Wilmington Drop-Down	(24,300		)	—			—			(24,300		)
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder	(69,526		)	—			—			(69,526		)
Payment for withholding tax associated with Long-Term Incentive Plan vesting	(1,870		)	—			—			(1,870		)
Net cash provided by financing activities	70,637			40,463			—			111,100
Net increase (decrease) in cash, cash equivalents and restricted cash	3,076			(3,179		)	—			(103		)
Cash, cash equivalents and restricted cash, beginning of period	(1,030		)	3,490			—			2,460
Cash, cash equivalents and restricted cash, end of period	$	2,046		$	311		$	—		$	2,357

Condensed Consolidated Statement of Cash Flows
For the Nine Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net loss	$	(2,302	)	$	(133	)	$	—		$	(2,435	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	29,240			—			—			29,240
Amortization of debt issuance costs, debt premium and original issue discounts	828			—			—			828
Loss on disposal of assets	900			—			—			900
Unit-based compensation	5,604			—			—			5,604
De-designation of foreign currency forwards and options	(1,947		)	—			—			(1,947		)
Fair value changes in derivatives	(4,465		)	—			—			(4,465		)
Unrealized loss on foreign currency transactions, net	31			1			—			32
Change in operating assets and liabilities:
Accounts and insurance receivables	30,004			—			—			30,004
Related-party receivables	(4,943		)	(4,611		)	9,431			(123		)
Prepaid expenses and other current and long-term assets	(160		)	—			—			(160		)
Inventories	(9,735		)	—			—			(9,735		)
Derivatives	5,080			—			—			5,080
Accounts payable, accrued liabilities and other current liabilities	5,709			—			—			5,709
Related-party payables and accrued liabilities	7,928			4,820			(9,431		)	3,317
Accrued interest	7,634			—			—			7,634
Other long-term liabilities	648			—			—			648
Net cash provided by operating activities	70,054			77			—			70,131
Cash flows from investing activities:
Purchases of property, plant and equipment	(16,034		)	—			—			(16,034		)
Other	1,130			—			—			1,130
Net cash used in investing activities	(14,904		)	—			—			(14,904		)
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility	134,750			—			—			134,750
Payments on senior secured revolving credit facility	(123,250		)	—			—			(123,250		)
Payments on other long-term debt and capital lease obligations	(4,745		)	—			—			(4,745		)
Proceeds from common unit issuances, net	241			—			—			241
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder	(55,163		)	—			—			(55,163		)
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting	(2,341		)	—			—			(2,341		)
Payment for withholding tax associated with Long-Term Incentive Plan vesting	(4,380		)	—			—			(4,380		)
Net cash used in financing activities	(54,888		)	—			—			(54,888		)
Net increase in cash, cash equivalents and restricted cash	262			77			—			339
Cash, cash equivalents and restricted cash, beginning of period	524			—			—			524
Cash, cash equivalents and restricted cash, end of period	$	786		$	77		$	—		$	863

XML

Partners' Capital - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended		3 Months Ended	9 Months Ended
	Apr. 02, 2019	Apr. 01, 2019	Apr. 30, 2019	Mar. 31, 2019	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	Aug. 08, 2016
Incentive Distribution Rights
Issue units in registered direct offering (in units)				3,508,778
Issue units in registered direct offering				$ 97,000
Issuance costs				$ 3,000
Distribution to General Partner						100.00%
Proceeds from sale of common units, net of commissions						$ 96,822	$ 241
Distribution to holders of outstanding Class A Unit						25.00%
Distribution to holders of outstanding Class B Unit						75.00%
JV 1.0 Drop-Down
Incentive Distribution Rights
Issuance of common units (usd per unit)					$ 1.00	$ 1.00
Common Units
Incentive Distribution Rights
Issuance of common units, net (in units)					0	0	8,408
Proceeds from sale of common units, net of commissions							$ 200
Minimum | General Partner Interest
Incentive Distribution Rights
Quarterly distribution of operating surplus (as a percent)						15.00%
Maximum | Common Units
Incentive Distribution Rights
Stated value of common units covered in the Equity Distribution Agreement								$ 100,000
Maximum | General Partner Interest
Incentive Distribution Rights
Quarterly distribution of operating surplus (as a percent)						50.00%
Wilmington Drop-Down
Incentive Distribution Rights
Common unit issuance						$ 49,700	$ 0
First Hancock JV | JV 1.0 Drop-Down | Class A Units
Incentive Distribution Rights
Total capital commitment					$ 235,200	$ 235,200
Limited partner units outstanding					227,000,000	227,000,000
Remaining commitment amount					$ 8,200	$ 8,200
First Hancock JV | Wilmington Drop-Down
Incentive Distribution Rights
Issuance of common units (in units)		1,691,627	1,691,627
Common unit issuance		$ 49,700	$ 49,700
First Hancock JV | JV1.0 Drop-Down
Incentive Distribution Rights
Issuance of common units (in units)	1,681,237
Common unit issuance	$ 50,000
Enviva Member | JV 1.0 Drop-Down | Class A Units
Incentive Distribution Rights
Issuance of common units (usd per unit)					$ 1.00	$ 1.00
Enviva Member | JV 1.0 Drop-Down | Class B Units
Incentive Distribution Rights
Issuance of common units (usd per unit)					$ 1.00	$ 1.00
Total capital commitment					$ 232,200	$ 232,200
Limited partner units outstanding					224,000,000	224,000,000
Remaining commitment amount					$ 8,200	$ 8,200

XML

Net Income (Loss) per Limited Partner Unit - Narrative (Details)		3 Months Ended	9 Months Ended
	May 30, 2018 shares	Jun. 30, 2018 shares	Sep. 30, 2019 shares
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Unit conversion ratio per unit	1
Conversion of common units ratio (per unit)	1
Subordinated Units
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Potentially dilutive subordinated units outstanding			0
Subordinated Units
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Conversion of subordinated units to common units (in units)	11,905,138	(11,905,000)

XML

Revenue - Contract Balances (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2018
Revenue from Contract with Customer [Abstract]
Revenue recognized	$ 100,000	$ 500,000
Accounts receivable primarily related to product sales	47,800,000	47,800,000	$ 51,300,000
Deferred revenue	$ 0	$ 0	$ 300,000

XML

Significant Accounting Policies - Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Lessee, Lease, Description [Line Items]
ROU assets	$ 33,379		$ 0
ROU liabilities			$ 2,100
Total present value of lease liabilities	$ 35,302
ASU 2016-02
Lessee, Lease, Description [Line Items]
ROU assets		$ 27,400
Total present value of lease liabilities		$ 29,500

XML

Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Components of Property, plant and equipment
Property, plant and equipment, gross	$ 873,640		$ 873,640		$ 697,602
Less accumulated depreciation	(190,116)		(190,116)		(154,967)
Property, plant and equipment excluding construction in progress	683,524		683,524		542,635
Construction in progress	60,924		60,924		14,393
Total property, plant and equipment, net	744,448		744,448		557,028
Total depreciation expense	13,300	$ 9,800	35,800	$ 29,100
Interest capitalized related to construction in progress	700		1,400
Accrued amounts for property, plant and equipment and construction in progress			15,400		6,300
Land
Components of Property, plant and equipment
Property, plant and equipment, gross	15,226		15,226		13,492
Land improvements
Components of Property, plant and equipment
Property, plant and equipment, gross	56,637		56,637		44,990
Buildings
Components of Property, plant and equipment
Property, plant and equipment, gross	216,995		216,995		196,574
Machinery and equipment
Components of Property, plant and equipment
Property, plant and equipment, gross	576,401		576,401		434,776
Vehicles
Components of Property, plant and equipment
Property, plant and equipment, gross	635		635		635
Furniture and office equipment
Components of Property, plant and equipment
Property, plant and equipment, gross	6,759		6,759		6,148
Leasehold improvements
Components of Property, plant and equipment
Property, plant and equipment, gross	$ 987		$ 987		$ 987

XML

Supplemental Guarantor Information - Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 2,357			$ 2,460
Accounts receivable	49,643			54,794
Insurance receivables	0			5,140
Related-party receivables	0			1,392
Inventories	42,349			31,490
Prepaid expenses and other current assets	3,998			2,235
Total current assets	98,347			97,511
Property, plant and equipment - in service, net	683,524			542,635
Construction in progress	60,924			14,393
Total property, plant and equipment, net	744,448			557,028
Operating lease right-of-use assets, net	33,379			0
Related-party note receivable	0
Goodwill	85,615			85,615
Investment in subsidiaries	0			0
Other long-term assets	7,326			8,616
Total assets	969,115			748,770
Current liabilities:
Accounts payable	21,512			15,551
Related-party payables and accrued liabilities	9,119			28,225
Deferred consideration for drop-downs due to related party	40,000			74,000
Accrued and other current liabilities	48,318			41,400
Current portion of interest payable	13,209			5,434
Current portion of long-term debt and finance lease obligations	4,490			2,722
Total current liabilities	136,648			167,332
Long-term debt and finance lease obligations	543,589			429,933
Related-party long-term debt	0
Long-term operating lease liabilities	33,725			0
Long-term interest payable	1,100			1,010
Long-term interest related-party payable	0
Other long-term liabilities	2,170			3,779
Total liabilities	717,232			602,054
Total Enviva Partners, LP partners' capital	300,075			146,716
Noncontrolling interest	(48,192)			0
Total partners’ capital	251,883	$ 253,157	$ 215,471	146,716	$ 155,744	$ 158,626	$ 169,258	$ 210,369
Total liabilities and partners’ capital	969,115			748,770
Eliminations
Current assets:
Cash and cash equivalents	0			0
Accounts receivable	0			0
Insurance receivables				0
Related-party receivables				(10,005)
Inventories	(304)			0
Prepaid expenses and other current assets	0			0
Total current assets	(304)			(10,005)
Property, plant and equipment - in service, net	(248)			0
Construction in progress	0			0
Total property, plant and equipment, net	(248)			0
Operating lease right-of-use assets, net	0
Related-party note receivable	(42,989)
Goodwill	0			0
Investment in subsidiaries	(118,543)			(652)
Other long-term assets	(550)			0
Total assets	(162,634)			(10,657)
Current liabilities:
Accounts payable	0			0
Related-party payables and accrued liabilities	0			(10,005)
Deferred consideration for drop-downs due to related party	0			0
Accrued and other current liabilities	0			0
Current portion of interest payable	0			0
Current portion of long-term debt and finance lease obligations	0			0
Total current liabilities	0			(10,005)
Long-term debt and finance lease obligations	0			0
Related-party long-term debt	(42,989)
Long-term operating lease liabilities	0
Long-term interest payable	0			0
Long-term interest related-party payable	(550)
Other long-term liabilities	0			0
Total liabilities	(43,539)			(10,005)
Total Enviva Partners, LP partners' capital	(119,095)
Noncontrolling interest	0
Total partners’ capital	(119,095)			(652)
Total liabilities and partners’ capital	(162,634)			(10,657)
Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	2,046			2,396
Accounts receivable	49,634			54,792
Insurance receivables				5,140
Related-party receivables				6,453
Inventories	38,286			31,490
Prepaid expenses and other current assets	3,925			2,235
Total current assets	93,891			102,506
Property, plant and equipment - in service, net	517,577			542,635
Construction in progress	60,181			14,393
Total property, plant and equipment, net	577,758			557,028
Operating lease right-of-use assets, net	26,567
Related-party note receivable	42,989
Goodwill	85,615			85,615
Investment in subsidiaries	118,543			652
Other long-term assets	7,876			8,616
Total assets	953,239			754,417
Current liabilities:
Accounts payable	18,575			15,551
Related-party payables and accrued liabilities	12,048			33,169
Deferred consideration for drop-downs due to related party	40,000			74,000
Accrued and other current liabilities	37,618			41,395
Current portion of interest payable	13,209			5,434
Current portion of long-term debt and finance lease obligations	3,891			2,722
Total current liabilities	125,341			172,271
Long-term debt and finance lease obligations	542,575			429,933
Related-party long-term debt	0
Long-term operating lease liabilities	27,683
Long-term interest payable	1,100			1,010
Long-term interest related-party payable	0
Other long-term liabilities	2,170			3,779
Total liabilities	698,869			606,993
Total Enviva Partners, LP partners' capital	302,562
Noncontrolling interest	(48,192)
Total partners’ capital	254,370			147,424
Total liabilities and partners’ capital	953,239			754,417
Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	311			64
Accounts receivable	9			2
Insurance receivables				0
Related-party receivables				4,944
Inventories	4,367			0
Prepaid expenses and other current assets	73			0
Total current assets	4,760			5,010
Property, plant and equipment - in service, net	166,195			0
Construction in progress	743			0
Total property, plant and equipment, net	166,938			0
Operating lease right-of-use assets, net	6,812
Related-party note receivable	0
Goodwill	0			0
Investment in subsidiaries	0			0
Other long-term assets	0			0
Total assets	178,510			5,010
Current liabilities:
Accounts payable	2,937			0
Related-party payables and accrued liabilities	(2,929)			5,061
Deferred consideration for drop-downs due to related party	0			0
Accrued and other current liabilities	10,700			5
Current portion of interest payable	0			0
Current portion of long-term debt and finance lease obligations	599			0
Total current liabilities	11,307			5,066
Long-term debt and finance lease obligations	1,014			0
Related-party long-term debt	42,989
Long-term operating lease liabilities	6,042
Long-term interest payable	0			0
Long-term interest related-party payable	550
Other long-term liabilities	0			0
Total liabilities	61,902			5,066
Total Enviva Partners, LP partners' capital	116,608
Noncontrolling interest	0
Total partners’ capital	116,608			(56)
Total liabilities and partners’ capital	$ 178,510			$ 5,010

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Total long-term debt and finance lease obligations	$ 548,079	$ 432,655
Recurring | Level 2 | Carrying Amount
Senior notes	353,352	352,843
Other long-term debt and finance lease obligations	194,727	79,812
Total long-term debt and finance lease obligations	548,079	432,655
Recurring | Level 2 | Fair Value
Senior notes	362,227	359,943
Other long-term debt and finance lease obligations	194,727	79,812
Total long-term debt and finance lease obligations	$ 556,954	$ 439,755

XML

Leases - Operating and Finance Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Operating lease cost:
Fixed lease cost	$ 1,269	$ 3,546
Variable lease cost	3	29
Short-term lease costs	15	15
Total operating lease costs	1,287	3,590
Finance lease cost:
Amortization of leased assets	1,094	2,578
Variable lease cost	4	4
Interest on lease liabilities	70	179
Total finance lease costs	1,168	2,761
Total lease costs	$ 2,455	$ 6,351

XML

Derivative Instruments - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Derivatives, Fair Value [Line Items]
Unrealized net gains included in accumulated other comprehensive income	$ 1,900		$ 1,900		$ 1,900
Unrealized net gains on derivative instruments				$ (1,514)	(5,080)
Realized gains on settled derivatives		$ 1,600	4,300	1,700
Unrealized net gains on derivative instruments			2,300		5,400
Net derivative settlement termination payment amount		6,700		6,700
Product sales
Derivatives, Fair Value [Line Items]
Unrealized net gains on derivative instruments		$ 1,100	$ 400	$ 1,400	$ 3,500

XML

Long-Term Debt and Finance Lease Obligations (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of long-term debt and finance lease obligations

Long-term debt and finance lease obligations at carrying value are composed of the following:

	September 30, 2019			December 31, 2018
Senior notes, net of unamortized discount, premium and debt issuance of $1.6 million as of September 30, 2019 and $2.2 million as of December 31, 2018	$	353,352		$	352,843
Senior secured revolving credit facility	185,000			73,000
Other loans	2,008			2,015
Finance leases	7,719			4,797
Total long-term debt and finance lease obligations	548,079			432,655
Less current portion of long-term debt and finance lease obligations	(4,490		)	(2,722		)
Long-term debt and finance lease obligations, excluding current installments	$	543,589		$	429,933

XML

Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 30, 2019

Property, Plant and Equipment [Abstract]

Schedule of property, plant and equipment

Property, plant and equipment consisted of the following as of:

	September 30, 2019			December 31, 2018
Land	$	15,226		$	13,492
Land improvements	56,637			44,990
Buildings	216,995			196,574
Machinery and equipment	576,401			434,776
Vehicles	635			635
Furniture and office equipment	6,759			6,148
Leasehold improvements	987			987
Property, plant and equipment - in service	873,640			697,602
Less accumulated depreciation	(190,116		)	(154,967		)
Property, plant and equipment - in service, net	683,524			542,635
Construction in progress	60,924			14,393
Total property, plant and equipment, net	$	744,448		$	557,028

XML

Supplemental Guarantor Information (Tables)

9 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidated Balance Sheet

Condensed Consolidated Balance Sheet
September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	2,046		$	311		$	—		$	2,357
Accounts receivable	49,634			9			—			49,643
Inventories	38,286			4,367			(304		)	42,349
Prepaid expenses and other current assets	3,925			73			—			3,998
Total current assets	93,891			4,760			(304		)	98,347
Property, plant and equipment - in service, net	517,577			166,195			(248		)	683,524
Construction in progress	60,181			743			—			60,924
Total property, plant and equipment, net	577,758			166,938			(248		)	744,448
Operating lease right-of-use assets, net	26,567			6,812			—			33,379
Related-party note receivable	42,989			—			(42,989		)	—
Goodwill	85,615			—			—			85,615
Investment in subsidiaries	118,543			—			(118,543		)	—
Other long-term assets	7,876			—			(550		)	7,326
Total assets	$	953,239		$	178,510		$	(162,634	)	$	969,115
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable	$	18,575		$	2,937		$	—		$	21,512
Related-party payables and accrued liabilities	12,048			(2,929		)	—			9,119
Deferred consideration for drop-downs due to related party	40,000			—			—			40,000
Accrued and other current liabilities	37,618			10,700			—			48,318
Current portion of interest payable	13,209			—			—			13,209
Current portion of long-term debt and finance lease obligations	3,891			599			—			4,490
Total current liabilities	125,341			11,307			—			136,648
Long-term debt and finance lease obligations	542,575			1,014			—			543,589
Related-party long-term debt	—			42,989			(42,989		)	—
Long-term operating lease liabilities	27,683			6,042			—			33,725
Long-term interest payable	1,100			—			—			1,100
Long-term interest related-party payable	—			550			(550		)	—
Other long-term liabilities	2,170			—			—			2,170
Total liabilities	698,869			61,902			(43,539		)	717,232
Total Enviva Partners, LP partners' capital	302,562			116,608			(119,095		)	300,075
Noncontrolling interest	(48,192		)	—			—			(48,192		)
Total partners’ capital	254,370			116,608			(119,095		)	251,883
Total liabilities and partners’ capital	$	953,239		$	178,510		$	(162,634	)	$	969,115

Condensed Consolidated Balance Sheet
December 31, 2018
	Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	2,396	$	64		$	—		$	2,460
Accounts receivable	54,792		2			—			54,794
Insurance receivables	5,140		—			—			5,140
Related-party receivables	6,453		4,944			(10,005		)	1,392
Inventories	31,490		—			—			31,490
Prepaid expenses and other current assets	2,235		—			—			2,235
Total current assets	102,506		5,010			(10,005		)	97,511
Property, plant and equipment - in service, net	542,635		—			—			542,635
Construction in progress	14,393		—			—			14,393
Total property, plant and equipment, net	557,028		—			—			557,028
Goodwill	85,615		—			—			85,615
Investment in subsidiaries	652		—			(652		)	—
Other long-term assets	8,616		—			—			8,616
Total assets	$	754,417	$	5,010		$	(10,657	)	$	748,770
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable	$	15,551	$	—		$	—		$	15,551
Related-party payables and accrued liabilities	33,169		5,061			(10,005		)	28,225
Deferred consideration for drop-downs due to related party	74,000		—			—			74,000
Accrued and other current liabilities	41,395		5			—			41,400
Current portion of interest payable	5,434		—			—			5,434
Current portion of long-term debt and finance lease obligations	2,722		—			—			2,722
Total current liabilities	172,271		5,066			(10,005		)	167,332
Long-term debt and finance lease obligations	429,933		—			—			429,933
Long-term interest payable	1,010		—			—			1,010
Other long-term liabilities	3,779		—			—			3,779
Total liabilities	606,993		5,066			(10,005		)	602,054
Total partners’ capital	147,424		(56		)	(652		)	146,716
Total liabilities and partners’ capital	$	754,417	$	5,010		$	(10,657	)	$	748,770

Condensed Consolidated Statement of Operations

Condensed Consolidated Statement of Operations
For the Three Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Product sales	$	155,188		$	3,935		$	(3,935	)	$	155,188
Other revenue	2,454			—			(237		)	2,217
Net revenue	157,642			3,935			(4,172		)	157,405
Cost of goods sold	118,950			2,674			(3,631		)	117,993
Depreciation and amortization	11,173			1,773			—			12,946
Total cost of goods sold	130,123			4,447			(3,631		)	130,939
Gross margin	27,519			(512		)	(541		)	26,466
General and administrative expenses	1,842			(289		)	(239		)	1,314
Related-party management services agreement fee	4,510			1,976			—			6,486
Total general and administrative expenses	6,352			1,687			(239		)	7,800
Income (loss) from operations	21,167			(2,199		)	(302		)	18,666
Other (expense) income:
Interest expense	(9,864		)	(8		)	—			(9,872		)
Related-party interest expense	—			(300		)	300			—
Other income (expense), net	440			(11		)	(371		)	58
Total other (expense) income, net	(9,424		)	(319		)	(71		)	(9,814		)
Net income (loss)	$	11,743		$	(2,518	)	$	(373	)	$	8,852

Condensed Consolidated Statement of Operations
For the Three Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Product sales	$	142,541		$	—		$	—	$	142,541
Other revenue	1,607			—			—		1,607
Net revenue	144,148			—			—		144,148
Cost of goods sold	104,351			—			—		104,351
Depreciation and amortization	9,678			—			—		9,678
Total cost of goods sold	114,029			—			—		114,029
Gross margin	30,119			—			—		30,119
General and administrative expenses	3,173			28			—		3,201
Related-party management services agreement fee	4,114			—			—		4,114
Total general and administrative expenses	7,287			28			—		7,315
Income (loss) from operations	22,832			(28		)	—		22,804
Other (expense) income:
Interest expense	(9,445		)	—			—		(9,445		)
Other (expense) income, net	(12		)	9			—		(3		)
Total other (expense) income, net	(9,457		)	9			—		(9,448		)
Net income (loss)	$	13,375		$	(19	)	$	—	$	13,356

Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Product sales	$	478,989		$	3,935		$	(3,935	)	$	478,989
Other revenue	5,775			—			(911		)	4,864
Net revenue	484,764			3,935			(4,846		)	483,853
Cost of goods sold	396,818			2,674			(3,631		)	395,861
Depreciation and amortization	33,339			1,773			—			35,112
Total cost of goods sold	430,157			4,447			(3,631		)	430,973
Gross margin	54,607			(512		)	(1,215		)	52,880
General and administrative expenses	8,713			1,380			(914		)	9,179
Related-party management services agreement fee	13,837			5,651			—			19,488
Total general and administrative expenses	22,550			7,031			(914		)	28,667
Income (loss) from operations	32,057			(7,543		)	(301		)	24,213
Other (expense) income:
Interest expense	(28,666		)	(35		)	—			(28,701		)
Related-party interest expense	—			(300		)	300			—
Other income (expense), net	1,125			41			(550		)	616
Total other expense, net	(27,541		)	(294		)	(250		)	(28,085		)
Net income (loss)	$	4,516		$	(7,837	)	$	(551	)	$	(3,872	)

Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Product sales	$	398,031		$	—		$	—	$	398,031
Other revenue	7,037			—			—		7,037
Net revenue	405,068			—			—		405,068
Cost of goods sold	331,356			—			—		331,356
Depreciation and amortization	28,800			—			—		28,800
Total cost of goods sold	360,156			—			—		360,156
Gross margin	44,912			—			—		44,912
General and administrative expenses	9,730			48			—		9,778
Related-party management services agreement fee	11,628			—			—		11,628
Total general and administrative expenses	21,358			48			—		21,406
Income (loss) from operations	23,554			(48		)	—		23,506
Other (expense) income:
Interest expense	(27,137		)	—			—		(27,137		)
Other income (expense), net	1,281			(85		)	—		1,196
Total other expense, net	(25,856		)	(85		)	—		(25,941		)
Net loss	$	(2,302	)	$	(133	)	$	—	$	(2,435	)

Condensed Consolidated Statement of Comprehensive Income (Loss)

Condensed Consolidated Statement of Comprehensive Income (Loss)
For the Three Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	11,743		$	(2,518	)	$	(373	)	$	8,852
Other comprehensive (loss) income:
Net unrealized losses on cash flow hedges	13			—			—			13
Reclassification of net gains realized into net income (loss)	(59		)	—			—			(59		)
Currency translation adjustment	—			4			—			4
Total other comprehensive (loss) income	(46		)	4			—			(42		)
Total comprehensive income (loss)	$	11,697		$	(2,514	)	$	(373	)	$	8,810

Condensed Consolidated Statement of Comprehensive Income (Loss)
For the Three Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Net income (loss)	$	13,375		$	(19	)	$	—	$	13,356
Other comprehensive income:
Net unrealized gains on cash flow hedges	2,713			—			—		2,713
Reclassification of net gains realized into net income (loss)	(2,013		)	—			—		(2,013		)
Currency translation adjustment	—			1			—		1
Total other comprehensive income	700			1			—		701
Total comprehensive income (loss)	$	14,075		$	(18	)	$	—	$	14,057

Condensed Consolidated Statement of Comprehensive Loss
For the Nine Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	4,516		$	(7,837	)	$	(551	)	$	(3,872	)
Other comprehensive (loss) income:
Net unrealized losses on cash flow hedges	(148		)	—			—			(148		)
Reclassification of net gains realized into net income (loss)	(252		)	—			—			(252		)
Currency translation adjustment	—			4			—			4
Total other comprehensive (loss) income	(400		)	4			—			(396		)
Total comprehensive income (loss)	$	4,116		$	(7,833	)	$	(551	)	$	(4,268	)

Condensed Consolidated Statement of Comprehensive Loss
For the Nine Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Net loss	$	(2,302	)	$	(133	)	$	—	$	(2,435	)
Other comprehensive income:
Net unrealized gains on cash flow hedges	5,750			—			—		5,750
Reclassification of net gains realized into net loss	(2,076		)	—			—		(2,076		)
Currency translation adjustment	—			1			—		1
Total other comprehensive income	3,674			1			—		3,675
Total comprehensive income (loss)	$	1,372		$	(132	)	$	—	$	1,240

Condensed Consolidated Statement of Cash Flows

Condensed Consolidated Statement of Cash Flows
For the Nine Months Ended September 30, 2019
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	4,516		$	(7,837	)	$	(551	)	$	(3,872	)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization	33,875			1,872			—			35,747
MSA Fee Waivers	13,200			5,549			—			18,749
Amortization of debt issuance costs, debt premium and original issue discounts	899			—			—			899
Loss on disposal of assets	562			—			—			562
Unit-based compensation	3,142			693			—			3,835
Fair value changes in derivatives	(2,275		)	—			—			(2,275		)
Unrealized loss on foreign currency transactions, net	58			—			—			58
Change in operating assets and liabilities:
Accounts and insurance receivables	9,502			(10		)	—			9,492
Related-party receivables	(20,281		)	(1,415		)	23,088			1,392
Prepaid expenses and other current and long-term assets	(711		)	(52		)	551			(212		)
Inventories	(6,313		)	(4,366		)	—			(10,679		)
Derivatives	1,514			—			—			1,514
Accounts payable, accrued liabilities and other current liabilities	824			(3,071		)	—			(2,247		)
Related-party payables and accrued liabilities	13,847			(2,784		)	(23,088		)	(12,025		)
Accrued interest	3,326			3,094			—			6,420
Operating lease liabilities	(2,800		)	(915		)	—			(3,715		)
Other long-term liabilities	313			(477		)	—			(164		)
Net cash provided by (used in) operating activities	53,198			(9,719		)	—			43,479
Cash flows from investing activities:
Purchases of property, plant and equipment	(47,561		)	(33,923		)	—			(81,484		)
Payment in relation to the JV 1.0 Drop-Down	(74,700		)	—			—			(74,700		)
Other	1,502			—			—			1,502
Net cash used in investing activities	(120,759		)	(33,923		)	—			(154,682		)
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility	306,150			38,850			—			345,000
Payments on senior secured revolving credit facility	(233,000		)	—			—			(233,000		)
Payments on other long-term debt and finance lease obligations	(3,639		)	1,613			—			(2,026		)
Proceeds from common unit issuances, net	96,822			—			—			96,822
Payment of deferred consideration for Wilmington Drop-Down	(24,300		)	—			—			(24,300		)
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder	(69,526		)	—			—			(69,526		)
Payment for withholding tax associated with Long-Term Incentive Plan vesting	(1,870		)	—			—			(1,870		)
Net cash provided by financing activities	70,637			40,463			—			111,100
Net increase (decrease) in cash, cash equivalents and restricted cash	3,076			(3,179		)	—			(103		)
Cash, cash equivalents and restricted cash, beginning of period	(1,030		)	3,490			—			2,460
Cash, cash equivalents and restricted cash, end of period	$	2,046		$	311		$	—		$	2,357

Condensed Consolidated Statement of Cash Flows
For the Nine Months Ended September 30, 2018
	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net loss	$	(2,302	)	$	(133	)	$	—		$	(2,435	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	29,240			—			—			29,240
Amortization of debt issuance costs, debt premium and original issue discounts	828			—			—			828
Loss on disposal of assets	900			—			—			900
Unit-based compensation	5,604			—			—			5,604
De-designation of foreign currency forwards and options	(1,947		)	—			—			(1,947		)
Fair value changes in derivatives	(4,465		)	—			—			(4,465		)
Unrealized loss on foreign currency transactions, net	31			1			—			32
Change in operating assets and liabilities:
Accounts and insurance receivables	30,004			—			—			30,004
Related-party receivables	(4,943		)	(4,611		)	9,431			(123		)
Prepaid expenses and other current and long-term assets	(160		)	—			—			(160		)
Inventories	(9,735		)	—			—			(9,735		)
Derivatives	5,080			—			—			5,080
Accounts payable, accrued liabilities and other current liabilities	5,709			—			—			5,709
Related-party payables and accrued liabilities	7,928			4,820			(9,431		)	3,317
Accrued interest	7,634			—			—			7,634
Other long-term liabilities	648			—			—			648
Net cash provided by operating activities	70,054			77			—			70,131
Cash flows from investing activities:
Purchases of property, plant and equipment	(16,034		)	—			—			(16,034		)
Other	1,130			—			—			1,130
Net cash used in investing activities	(14,904		)	—			—			(14,904		)
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility	134,750			—			—			134,750
Payments on senior secured revolving credit facility	(123,250		)	—			—			(123,250		)
Payments on other long-term debt and capital lease obligations	(4,745		)	—			—			(4,745		)
Proceeds from common unit issuances, net	241			—			—			241
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder	(55,163		)	—			—			(55,163		)
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting	(2,341		)	—			—			(2,341		)
Payment for withholding tax associated with Long-Term Incentive Plan vesting	(4,380		)	—			—			(4,380		)
Net cash used in financing activities	(54,888		)	—			—			(54,888		)
Net increase in cash, cash equivalents and restricted cash	262			77			—			339
Cash, cash equivalents and restricted cash, beginning of period	524			—			—			524
Cash, cash equivalents and restricted cash, end of period	$	786		$	77		$	—		$	863

XML

Inventory Impairment and Asset Disposal

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Inventory Impairment and Asset Disposal

Inventory Impairment and Asset Disposal

On February 27, 2018, a fire occurred at the Chesapeake terminal, causing damage to equipment and approximately 43,000 MT of wood pellets (the “Chesapeake Incident”). The Chesapeake terminal returned to operations on June 28, 2018. During the three and nine months ended September 30, 2018, we incurred $9.7 million and $58.4 million, respectively, in costs as a result of the Chesapeake Incident related to asset impairment, inventory write-off and disposal costs, emergency response costs, asset repair costs and business continuity costs, the latter of which represented incremental costs to commission temporary wood pellet storage and handling and ship loading operations at nearby locations to meet our contractual obligations to our customers. As of September 30, 2018, we had recovered $48.1 million related to the Chesapeake Incident, which included $1.1 million of lost profits. As of December 31, 2018, $3.8 million of probable insurance recoveries for the then-remaining costs not yet recovered were included in insurance receivables; we received the $3.8 million in probable insurance recoveries (plus $0.5 million recognized as other income in 2019) in February 2019.

XML

Derivative Instruments

9 Months Ended

Sep. 30, 2019

Derivative Instrument Detail [Abstract]

Derivative Instruments

Derivative Instruments

We use derivative instruments to partially offset our business exposure to foreign currency exchange and interest rate risk. We may enter into foreign currency forward and option contracts to offset some of the foreign currency exchange risk on our expected future cash flows and interest rate swaps to offset some of the interest rate risk on our expected future cash flows from certain borrowings. Our derivative instruments expose us to credit risk to the extent that our hedge counterparties may be unable to meet the terms of the applicable derivative instrument. We seek to mitigate such risks by limiting our counterparties to major financial institutions. In addition, we monitor the potential risk of loss with any one counterparty resulting from credit risk. Management does not expect material losses as a result of defaults by counterparties. We use derivative instruments to manage cash flow and not for speculative or trading purposes.

Cash Flow Hedges

For qualifying cash flow hedges, the effective and ineffective portion of the gain or loss on the change in fair value is initially reported as a component of accumulated other comprehensive income in partners’ capital and subsequently reclassified into earnings when the hedged exposure affects earnings. Prior to January 1, 2019 and the adoption of ASU 2017-12 (see Note 2, Significant Accounting Policies), the ineffective portion of the gain or loss, if any, was reported in earnings in the current period. We considered our cash flow hedges to be highly effective at inception. Changes in fair value for derivative instruments not designated as hedging instruments are recognized in earnings.

Foreign Currency Exchange Risk

We are primarily exposed to fluctuations in foreign currency exchange rates related to off-take contracts that require future deliveries of wood pellets to be settled in British Pound Sterling (“GBP”) and Euro (“EUR”). We have entered and may continue to enter into foreign currency forward contracts, purchased option contracts or other instruments to partially manage this risk and, prior to August 2018, had designated certain of these instruments as cash flow hedges.

In August 2018, due to market changes, increases in demand for wood pellets and requests from customers to accommodate the acceleration or deferral of contracted deliveries, we determined that it was no longer probable that the timing of the forecasted revenues associated with the hedged transactions would occur as originally scheduled. As a result, we discontinued hedge accounting for all designated foreign currency cash flow hedges and recognized the full amount of unrealized net gains included in accumulated other comprehensive income of $1.9 million to earnings. As of September 30, 2018, none of our foreign currency derivative instruments were designated as cash flow hedging instruments. In connection with the discontinuation of cash flow hedge accounting, we have recorded the on-going changes in the fair value of foreign currency derivatives as product sales or cost of sales depending on the nature of the item being hedged.

Interest Rate Risk

We are exposed to fluctuations in interest rates on borrowings under our senior secured revolving credit facility. We have entered into a pay-fixed, receive-variable interest rate swap that expires in April 2020 to hedge the interest rate risk associated with our variable rate borrowings under our senior secured revolving credit facility. The interest rate swap is designated and qualifies as a cash flow hedge.

Derivative instruments are classified as Level 2 assets or liabilities based on inputs such as spot and forward benchmark interest rates (such as LIBOR) and foreign exchange rates. The fair value of derivative instruments as of September 30, 2019 and December 31, 2018 was as follows:

		Asset (Liability)
	Balance Sheet Classification	September 30, 2019		December 31, 2018
Designated as hedging instruments:
Interest rate swap
	Other current assets	$	122	$	508
	Other long-term assets	—		118
Total derivatives designated as hedging instruments		$	122	$	626
Not designated as hedging instruments:
Foreign currency exchange forward contracts:
	Other current assets	$	1,647	$	794
	Other long-term assets	1,290		1,810
	Accrued and other current liabilities	—		(68		)
	Other long-term liabilities	—		(179		)
Foreign currency purchased option contracts:
	Other current assets	286		22
	Other long-term assets	3,369		3,348
Total derivatives not designated as hedging instruments		$	6,592	$	5,727

Net unrealized gains related to the change in fair market value of derivative instruments not designated as hedging instruments were $1.1 million and $1.4 million, respectively, during the three and nine months ended September 30, 2019 and are included in product sales. Realized gains related to derivatives settled were $1.6 million and $1.7 million, respectively, during the three and nine months ended September 30, 2019, and are included in product sales.

During the three and nine months ended September 30, 2018, we recorded $2.3 million and $5.4 million, respectively, of unrealized net gains on derivative instruments in product sales. Included in the unrealized net gains for both the three and nine months ended September 30, 2018 was $1.9 million related to the reclassification of unrealized net gains previously included in accumulated other comprehensive income as described above. Net gains related to the change in fair market value of derivative instruments not designated as hedging instruments were $0.4 million and $3.5 million, respectively during the three and nine months ended September 30, 2018 and are included in product sales. During the three months ended September 30, 2018, we received $4.3 million on realized gains related to derivatives settled during the period.

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the three months ended September 30, 2019 were as follows:

	Amount of Gain in Other Comprehensive Loss on Derivative		Location of Gain Reclassified from Accumulated Other Comprehensive Loss	Amount of Gain  Reclassified from Accumulated Other Comprehensive Loss into Earnings
Interest rate swap	$	13	Interest expense	$	59

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the nine months ended September 30, 2019 were as follows:

	Amount of Loss in Other Comprehensive Loss on Derivative			Location of Gain Reclassified from Accumulated Other Comprehensive Loss	Amount of Gain  Reclassified from Accumulated Other Comprehensive Loss into Earnings
Interest rate swap	$	(148	)	Interest expense	$	252

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the three months ended September 30, 2018 were as follows:

	Amount of Gain in Other Comprehensive Income on Derivative (Effective Portion)		Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion)	Amount of Gain Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)		Location of (Loss) Gain Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency exchange forward contracts	$	1,907	Product sales	$	—	Product sales	$	2,418
Foreign currency exchange purchased option contracts	765		Product sales	—		Product sales	(470		)
Interest rate swap	41		Interest expense	—		Interest expense	67

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the nine months ended September 30, 2018 were as follows:

	Amount of Gain in Other Comprehensive Income on Derivative (Effective Portion)		Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion)	Amount of Gain Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)		Location of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency exchange forward contracts	$	4,532	Product sales	$	—	Product sales	$	2,413
Foreign currency exchange purchased option contracts	749		Product sales	—		Product sales	(470		)
Interest rate swap	469		Interest expense	—		Interest expense	131

We enter into master netting arrangements, which are designed to permit net settlement of derivative transactions among the respective counterparties. If we had settled all transactions with our respective counterparties at September 30, 2019, we would have received a net settlement termination payment of $6.7 million, which differs insignificantly from the recorded fair value of the derivatives. We present our derivative assets and liabilities at their gross fair values.

The notional amounts of outstanding derivative instruments associated with outstanding or unsettled derivative instruments as of September 30, 2019 and December 31, 2018 were as follows:

	September 30, 2019		December 31, 2018
Foreign exchange forward contracts in GBP	£	38,140	£	42,170
Foreign exchange purchased option contracts in GBP	£	43,415	£	39,365
Foreign exchange forward contracts in EUR	€	7,300	€	14,300
Foreign exchange purchased option contracts in EUR	€	1,675	€	1,675
Interest rate swap	$	35,723	$	39,829

XML

Supplemental Guarantor Information - Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Condensed Consolidated Statement of Operations
Net revenue		$ 157,405	$ 144,148	$ 483,853	$ 405,068
Depreciation and amortization		12,946	9,678	35,112	28,800
Total cost of goods sold		130,939	114,029	430,973	360,156
Gross margin		26,466	30,119	52,880	44,912
General and administrative expenses		1,314	3,201	9,179	9,778
Related-party management services agreement fee		6,486	4,114	19,488	11,628
Total general and administrative expenses		7,800	7,315	28,667	21,406
Income from operations		18,666	22,804	24,213	23,506
Other income (expense):
Interest expense		(9,872)	(9,445)	(28,701)	(27,137)
Related-party interest expense		0		0
Other income (expense), net		58	(3)	616	1,196
Total other expense, net		(9,814)	(9,448)	(28,085)	(25,941)
Net income (loss)		8,852	13,356	(3,872)	(2,435)
Product sales
Condensed Consolidated Statement of Operations
Net revenue		155,188	142,541	478,989	398,031
Cost of goods sold	[1]	117,993	104,351	395,861	331,356
Other revenue
Condensed Consolidated Statement of Operations
Net revenue	[1]	2,217	1,607	4,864	7,037
Eliminations
Condensed Consolidated Statement of Operations
Net revenue		(4,172)	0	(4,846)	0
Depreciation and amortization		0	0	0	0
Total cost of goods sold		(3,631)	0	(3,631)	0
Gross margin		(541)	0	(1,215)	0
General and administrative expenses		(239)	0	(914)	0
Related-party management services agreement fee		0	0	0	0
Total general and administrative expenses		(239)	0	(914)	0
Income from operations		(302)	0	(301)	0
Other income (expense):
Interest expense		0	0	0	0
Related-party interest expense		300		300
Other income (expense), net		(371)	0	(550)	0
Total other expense, net		(71)	0	(250)	0
Net income (loss)		(373)	0	(551)	0
Eliminations | Product sales
Condensed Consolidated Statement of Operations
Net revenue		(3,935)	0	(3,935)	0
Cost of goods sold		(3,631)	0	(3,631)	0
Eliminations | Other revenue
Condensed Consolidated Statement of Operations
Net revenue		(237)	0	(911)	0
Guarantor Subsidiaries
Condensed Consolidated Statement of Operations
Net revenue		157,642	144,148	484,764	405,068
Depreciation and amortization		11,173	9,678	33,339	28,800
Total cost of goods sold		130,123	114,029	430,157	360,156
Gross margin		27,519	30,119	54,607	44,912
General and administrative expenses		1,842	3,173	8,713	9,730
Related-party management services agreement fee		4,510	4,114	13,837	11,628
Total general and administrative expenses		6,352	7,287	22,550	21,358
Income from operations		21,167	22,832	32,057	23,554
Other income (expense):
Interest expense		(9,864)	(9,445)	(28,666)	(27,137)
Related-party interest expense		0		0
Other income (expense), net		440	(12)	1,125	1,281
Total other expense, net		(9,424)	(9,457)	(27,541)	(25,856)
Net income (loss)		11,743	13,375	4,516	(2,302)
Guarantor Subsidiaries | Product sales
Condensed Consolidated Statement of Operations
Net revenue		155,188	142,541	478,989	398,031
Cost of goods sold		118,950	104,351	396,818	331,356
Guarantor Subsidiaries | Other revenue
Condensed Consolidated Statement of Operations
Net revenue		2,454	1,607	5,775	7,037
Non-Guarantor Subsidiaries
Condensed Consolidated Statement of Operations
Net revenue		3,935	0	3,935	0
Depreciation and amortization		1,773	0	1,773	0
Total cost of goods sold		4,447	0	4,447	0
Gross margin		(512)	0	(512)	0
General and administrative expenses		(289)	28	1,380	48
Related-party management services agreement fee		1,976	0	5,651	0
Total general and administrative expenses		1,687	28	7,031	48
Income from operations		(2,199)	(28)	(7,543)	(48)
Other income (expense):
Interest expense		(8)	0	(35)	0
Related-party interest expense		(300)		(300)
Other income (expense), net		(11)	9	41	(85)
Total other expense, net		(319)	9	(294)	(85)
Net income (loss)		(2,518)	(19)	(7,837)	(133)
Non-Guarantor Subsidiaries | Product sales
Condensed Consolidated Statement of Operations
Net revenue		3,935	0	3,935	0
Cost of goods sold		2,674	0	2,674	0
Non-Guarantor Subsidiaries | Other revenue
Condensed Consolidated Statement of Operations
Net revenue		$ 0	$ 0	$ 0	$ 0

[1] See Note 13, Related-Party Transactions

XML

Leases - Operating Lease ROU Assets and Liabilities and Finance Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Operating leases:
Operating lease right-of-use assets, gross	$ 36,964
Accumulated amortization	(3,585)
Operating lease right-of-use assets, net	33,379	$ 0
Current portion of operating lease liabilities	1,577
Long-term operating lease liabilities	33,725	$ 0
Total operating lease liabilities	35,302
Finance leases:
Property, plant and equipment, gross	13,484
Accumulated depreciation	(5,870)
Property plant and equipment, net	7,614
Current portion of long-term finance lease obligations	4,482
Long-term finance lease obligations	3,237
Total finance lease liabilities	$ 7,719

XML

Leases - Weighted-average Remaining Operating and Finance Lease Terms and Discount Rates (Details)	Sep. 30, 2019
Weighted average remaining lease term (years):
Operating leases	22 years
Finance leases	2 years
Weighted average discount rate:
Operating leases	8.00%
Finance leases	6.00%

XML

Derivative Instruments - Notional Amounts (Details) € in Thousands, £ in Thousands, $ in Thousands	Sep. 30, 2019 USD ($)	Sep. 30, 2019 GBP (£)	Sep. 30, 2019 EUR (€)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 GBP (£)	Dec. 31, 2018 EUR (€)
Foreign currency exchange forward contracts
Notional amounts of outstanding derivatives instruments designated as cash flow hedges
Notional amount		£ 38,140	€ 7,300		£ 42,170	€ 14,300
Foreign currency purchased option contracts
Notional amounts of outstanding derivatives instruments designated as cash flow hedges
Notional amount		£ 43,415	€ 1,675		£ 39,365	€ 1,675
Interest rate swap
Notional amounts of outstanding derivatives instruments designated as cash flow hedges
Notional amount	$ 35,723			$ 39,829

XML

Description of Business and Basis of Presentation (Details) $ / shares in Units, $ in Thousands, T in Millions				1 Months Ended	3 Months Ended	9 Months Ended
	Jan. 02, 2020 USD ($)	Jun. 28, 2019 USD ($)	Apr. 02, 2019 USD ($) $ / shares shares	Apr. 30, 2019 USD ($) T	Sep. 30, 2019 USD ($) plant $ / shares	Sep. 30, 2019 USD ($) plant $ / shares	Sep. 30, 2018 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of industrial-scale production wood pellet production plants in operation | plant					7	7
Business Acquisition [Line Items]
Cash payment						$ 74,700	$ 0
JV 1.0 Drop-Down
Business Acquisition [Line Items]
Issuance of common units (usd per unit) | $ / shares					$ 1.00	$ 1.00
Affiliated entity | Enviva Management
Business Acquisition [Line Items]
Fee waived				$ 13,000
Affiliated entity | Sponsor
Business Acquisition [Line Items]
Due from related party					$ 4,100	$ 4,100
Affiliated entity | JV 1.0 Drop-Down
Business Acquisition [Line Items]
Fee waived				$ 2,700
Hamlet Transaction
Business Acquisition [Line Items]
Costs to acquire					$ 100	$ 1,300
Hamlet Transaction | First Hancock JV
Business Acquisition [Line Items]
Issuance of common units (in units) | shares			1,681,237
Common unit issuance			$ 50,000
Hamlet Transaction | JV
Business Acquisition [Line Items]
Take-or-pay off-take contract term				15 years
Take-or-pay off-take contract volume (MTPY) | T				1.0
Elimination of related-party receivables			3,700
Maximum indebtedness			60,000
Hamlet Transaction | JV | Paid at closing
Business Acquisition [Line Items]
Cash payment			24,700
Net purchase price adjustment			300
Hamlet Transaction | JV | First Hancock JV
Business Acquisition [Line Items]
Total consideration			$ 165,000
Issuance of common units (in units) | shares			1,681,237
Issuance of common units (usd per unit) | $ / shares			$ 29.74
Common unit issuance			$ 50,000
Hamlet Transaction | JV | First Hancock JV | Paid on commencement of commercial operations
Business Acquisition [Line Items]
Payment for deferred consideration		$ 50,000
Forecast | Hamlet Transaction | JV | To be paid on later of COD or January 2, 2020
Business Acquisition [Line Items]
Payment for deferred consideration	$ 40,000

XML

Related-Party Transactions (Tables)

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Schedule of related party amounts

Related-party transaction amounts included on the unaudited condensed consolidated statements of operations were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Other revenue	$	496	$	1,042	$	1,323	$	3,346
Cost of goods sold	26,300		20,133		80,921		56,184
General and administrative expenses	6,486		4,113		19,488		11,628

XML

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Operating lease ROU assets and liabilities and finance leases

Operating lease ROU assets and liabilities and finance leases were as follows as of September 30, 2019:

Operating leases:
Operating lease right-of-use assets, gross	$	36,964
Accumulated amortization	(3,585		)
Operating lease right-of-use assets, net	$	33,379
Current portion of operating lease liabilities	$	1,577
Long-term operating lease liabilities	33,725
Total operating lease liabilities	$	35,302
Finance leases:
Property, plant and equipment, gross	$	13,484
Accumulated depreciation	(5,870		)
Property plant and equipment, net	$	7,614
Current portion of long-term finance lease obligations	$	4,482
Long-term finance lease obligations	3,237
Total finance lease liabilities	$	7,719

Operating and finance lease cash flow information

Operating and finance lease costs were as follows:

Lease Cost	Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost:
Fixed lease cost	Cost of goods sold	$	1,269	$	3,546
Variable lease cost	Cost of goods sold	3		29
Short-term lease costs	Cost of goods sold	15		15
	Total operating lease costs	$	1,287	$	3,590
Finance lease cost:
Amortization of leased assets	Depreciation and amortization	1,094		2,578
Variable lease cost	Cost of goods sold	4		4
Interest on lease liabilities	Interest expense	70		179
	Total finance lease costs	$	1,168	$	2,761
	Total lease costs	$	2,455	$	6,351

Operating and finance lease cash flow information was as follows:

	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,715
Operating cash flows from financing leases	179
Financing cash flows from financing leases	2,020
Assets obtained in exchange for lease obligations:
Operating leases	$	7,465
Financing leases	5,380

The weighted-average remaining lease terms and discount rates for our operating and finance leases were weighted using the undiscounted future minimum lease payments and are as follows as of September 30, 2019:

Weighted average remaining lease term (years):
Operating leases	22
Finance leases	2
Weighted average discount rate:
Operating leases	8	%
Finance leases	6	%

Aggregate maturities of operating lease liabilities

The future minimum lease payments and the aggregate maturities of operating and finance lease liabilities are as follows as of September 30, 2019:

Years Ending December 31,	Operating Leases			Finance Leases			Total
Remainder of 2019	$	1,112		$	1,415		$	2,527
2020	4,140			4,358			8,498
2021	3,890			1,814			5,704
2022	3,719			279			3,998
2023	3,710			246			3,956
Thereafter	65,110			92			65,202
Total lease payments	81,681			8,204			89,885
Less: imputed interest	(46,379		)	(485		)	(46,864		)
Total present value of lease liabilities	$	35,302		$	7,719		$	43,021

Aggregate maturities of finance lease liabilities

The future minimum lease payments and the aggregate maturities of operating and finance lease liabilities are as follows as of September 30, 2019:

Years Ending December 31,	Operating Leases			Finance Leases			Total
Remainder of 2019	$	1,112		$	1,415		$	2,527
2020	4,140			4,358			8,498
2021	3,890			1,814			5,704
2022	3,719			279			3,998
2023	3,710			246			3,956
Thereafter	65,110			92			65,202
Total lease payments	81,681			8,204			89,885
Less: imputed interest	(46,379		)	(485		)	(46,864		)
Total present value of lease liabilities	$	35,302		$	7,719		$	43,021

XML

Significant Risks and Uncertainties Including Business and Credit Concentrations

9 Months Ended

Sep. 30, 2019

Risks and Uncertainties [Abstract]

Significant Risks and Uncertainties Including Business and Credit Concentrations

Significant Risks and Uncertainties Including Business and Credit Concentrations

Our business is significantly impacted by greenhouse gas emission and renewable energy legislation and regulations in the European Union as well as its member states and Japan. If the European Union, its member states or Japan significantly modify such legislation or regulations, then our ability to enter into new contracts as our existing contracts expire may be materially affected.

Our current sales are primarily to industrial customers located in the United Kingdom, Denmark and Belgium. Product sales to third-party customers that accounted for 10% or a greater share of consolidated product sales are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Customer A	49	%	52	%	50	%	53	%
Customer B	12	%	10	%	11	%	10	%
Customer C	22	%	24	%	21	%	15	%
Customer D	8	%	9	%	11	%	14	%

XML

Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

Leases

We have operating and finance leases related to real estate, machinery, equipment and other assets where we are the lessee. Leases with an initial term of 12 months or less are not recorded on the balance sheet but are recognized as lease expense on a straight-line basis over the applicable lease terms. Amortization of the ROU asset is calculated as the difference between straight-line lease expense and the accretion of interest on the lease liability each period. In addition to fixed lease payments, we have contracts that incur variable lease expense related to usage (e.g. throughput fees, maintenance and repair and machine hours), which are expensed as incurred. Our leases have remaining terms of one to 28 years, some of which include options to extend the leases for up to 5 years. Our leases are generally noncancellable. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

A discount rate is applied to our leases for balance sheet measurement. As rates are not explicitly defined in the operating and finance lease agreements, we use our incremental borrowing rate for purposes of measuring the ROU assets and lease liabilities for recognized leases. This is a secured interest rate which takes into account our credit rating, the term of our leases, as well as the economic environment in which we operate. Each lease uses a secured interest rate with a term commensurate to the identified lease term.

Operating leases are included in operating lease ROU assets, accrued and other current liabilities and long-term operating lease liabilities on our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of long-term debt and finance lease obligations and long-term debt and finance lease obligations on our condensed consolidated balance sheets. Changes in ROU assets and operating lease liabilities are included net in change in operating lease liabilities on the condensed consolidated statement of cash flows.

Operating lease ROU assets and liabilities and finance leases were as follows as of September 30, 2019:

Operating leases:
Operating lease right-of-use assets, gross	$	36,964
Accumulated amortization	(3,585		)
Operating lease right-of-use assets, net	$	33,379
Current portion of operating lease liabilities	$	1,577
Long-term operating lease liabilities	33,725
Total operating lease liabilities	$	35,302
Finance leases:
Property, plant and equipment, gross	$	13,484
Accumulated depreciation	(5,870		)
Property plant and equipment, net	$	7,614
Current portion of long-term finance lease obligations	$	4,482
Long-term finance lease obligations	3,237
Total finance lease liabilities	$	7,719

Operating and finance lease costs were as follows:

Lease Cost	Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost:
Fixed lease cost	Cost of goods sold	$	1,269	$	3,546
Variable lease cost	Cost of goods sold	3		29
Short-term lease costs	Cost of goods sold	15		15
	Total operating lease costs	$	1,287	$	3,590
Finance lease cost:
Amortization of leased assets	Depreciation and amortization	1,094		2,578
Variable lease cost	Cost of goods sold	4		4
Interest on lease liabilities	Interest expense	70		179
	Total finance lease costs	$	1,168	$	2,761
	Total lease costs	$	2,455	$	6,351

Operating and finance lease cash flow information was as follows:

	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,715
Operating cash flows from financing leases	179
Financing cash flows from financing leases	2,020
Assets obtained in exchange for lease obligations:
Operating leases	$	7,465
Financing leases	5,380

The future minimum lease payments and the aggregate maturities of operating and finance lease liabilities are as follows as of September 30, 2019:

Years Ending December 31,	Operating Leases			Finance Leases			Total
Remainder of 2019	$	1,112		$	1,415		$	2,527
2020	4,140			4,358			8,498
2021	3,890			1,814			5,704
2022	3,719			279			3,998
2023	3,710			246			3,956
Thereafter	65,110			92			65,202
Total lease payments	81,681			8,204			89,885
Less: imputed interest	(46,379		)	(485		)	(46,864		)
Total present value of lease liabilities	$	35,302		$	7,719		$	43,021

The future minimum lease payments as of December 31, 2018 for operating and finance lease liabilities were $73.8 million and $4.8 million, respectively.

The weighted-average remaining lease terms and discount rates for our operating and finance leases were weighted using the undiscounted future minimum lease payments and are as follows as of September 30, 2019:

Weighted average remaining lease term (years):
Operating leases	22
Finance leases	2
Weighted average discount rate:
Operating leases	8	%
Finance leases	6	%

Leases

Leases

We have operating and finance leases related to real estate, machinery, equipment and other assets where we are the lessee. Leases with an initial term of 12 months or less are not recorded on the balance sheet but are recognized as lease expense on a straight-line basis over the applicable lease terms. Amortization of the ROU asset is calculated as the difference between straight-line lease expense and the accretion of interest on the lease liability each period. In addition to fixed lease payments, we have contracts that incur variable lease expense related to usage (e.g. throughput fees, maintenance and repair and machine hours), which are expensed as incurred. Our leases have remaining terms of one to 28 years, some of which include options to extend the leases for up to 5 years. Our leases are generally noncancellable. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

A discount rate is applied to our leases for balance sheet measurement. As rates are not explicitly defined in the operating and finance lease agreements, we use our incremental borrowing rate for purposes of measuring the ROU assets and lease liabilities for recognized leases. This is a secured interest rate which takes into account our credit rating, the term of our leases, as well as the economic environment in which we operate. Each lease uses a secured interest rate with a term commensurate to the identified lease term.

Operating leases are included in operating lease ROU assets, accrued and other current liabilities and long-term operating lease liabilities on our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of long-term debt and finance lease obligations and long-term debt and finance lease obligations on our condensed consolidated balance sheets. Changes in ROU assets and operating lease liabilities are included net in change in operating lease liabilities on the condensed consolidated statement of cash flows.

Operating lease ROU assets and liabilities and finance leases were as follows as of September 30, 2019:

Operating leases:
Operating lease right-of-use assets, gross	$	36,964
Accumulated amortization	(3,585		)
Operating lease right-of-use assets, net	$	33,379
Current portion of operating lease liabilities	$	1,577
Long-term operating lease liabilities	33,725
Total operating lease liabilities	$	35,302
Finance leases:
Property, plant and equipment, gross	$	13,484
Accumulated depreciation	(5,870		)
Property plant and equipment, net	$	7,614
Current portion of long-term finance lease obligations	$	4,482
Long-term finance lease obligations	3,237
Total finance lease liabilities	$	7,719

Operating and finance lease costs were as follows:

Lease Cost	Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost:
Fixed lease cost	Cost of goods sold	$	1,269	$	3,546
Variable lease cost	Cost of goods sold	3		29
Short-term lease costs	Cost of goods sold	15		15
	Total operating lease costs	$	1,287	$	3,590
Finance lease cost:
Amortization of leased assets	Depreciation and amortization	1,094		2,578
Variable lease cost	Cost of goods sold	4		4
Interest on lease liabilities	Interest expense	70		179
	Total finance lease costs	$	1,168	$	2,761
	Total lease costs	$	2,455	$	6,351

Operating and finance lease cash flow information was as follows:

	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,715
Operating cash flows from financing leases	179
Financing cash flows from financing leases	2,020
Assets obtained in exchange for lease obligations:
Operating leases	$	7,465
Financing leases	5,380

The future minimum lease payments and the aggregate maturities of operating and finance lease liabilities are as follows as of September 30, 2019:

Years Ending December 31,	Operating Leases			Finance Leases			Total
Remainder of 2019	$	1,112		$	1,415		$	2,527
2020	4,140			4,358			8,498
2021	3,890			1,814			5,704
2022	3,719			279			3,998
2023	3,710			246			3,956
Thereafter	65,110			92			65,202
Total lease payments	81,681			8,204			89,885
Less: imputed interest	(46,379		)	(485		)	(46,864		)
Total present value of lease liabilities	$	35,302		$	7,719		$	43,021

The future minimum lease payments as of December 31, 2018 for operating and finance lease liabilities were $73.8 million and $4.8 million, respectively.

The weighted-average remaining lease terms and discount rates for our operating and finance leases were weighted using the undiscounted future minimum lease payments and are as follows as of September 30, 2019:

Weighted average remaining lease term (years):
Operating leases	22
Finance leases	2
Weighted average discount rate:
Operating leases	8	%
Finance leases	6	%

XML

Related-Party Transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Related-Party Transactions

Transactions Between Entities Under Common Control

The JV 1.0 Drop-Down was an asset acquisition of entities under common control and accounted for on the carryover basis of accounting. Accordingly, the consolidated financial statements for the period beginning April 2, 2019 reflect the acquisition.

The purchase price for the JV 1.0 Drop-Down consisted of $165.0 million, which included an initial cash payment of $24.7 million, net of purchase price adjustment of $0.3 million, and the issuance of 1,681,237 unregistered common units at a value of $29.74 per unit, or $50.0 million of common units, $50.0 million in cash, paid on June 28, 2019, and $40.0 million in cash, which will be paid on January 2, 2020 as the third and final payment.

The changes in net assets at carryover basis on April 2, 2019 included $121.6 million net assets of the First JV, net of the elimination of $3.7 million of net related-party receivables and payables. The following table outlines the changes in consolidated net assets resulting from the JV 1.0 Drop-Down on April 2, 2019.

Assets:
Cash and cash equivalents	$	3,426
Related-party receivables	945
Prepaid expenses and other current assets	22
Property, plant and equipment, net	140,446
Other long-term assets	8
Total assets	144,847
Liabilities:
Accounts payable	6,395
Related-party payables	1,923
Accrued and other current liabilities	14,965
Finance lease obligations	3
Total liabilities	23,286
Net assets contributed to Partnership	$	121,561

Related-Party Transactions

Related-party transaction amounts included on the unaudited condensed consolidated statements of operations were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Other revenue	$	496	$	1,042	$	1,323	$	3,346
Cost of goods sold	26,300		20,133		80,921		56,184
General and administrative expenses	6,486		4,113		19,488		11,628

Management Services Agreements

Pursuant to the MSAs, Enviva Management provides us with operations, general administrative, management and other services. We are required to reimburse Enviva Management for the amount of all direct or indirect internal or third-party expenses incurred by Enviva Management in connection with the provision of such services. The MSAs include rent-related amounts for non-cancelable operating leases for office space in Maryland and North Carolina held by the sponsor. Under the First JV MSA, to the extent allocated costs exceed the annual management fee, the additional costs are recorded with an increase to partners’ capital.

During the three and nine months ended September 30, 2019, $17.8 million and $51.5 million, respectively, related to the MSAs was included in cost of goods sold and $6.5 million and $19.5 million, respectively, was included in general and administrative expenses. As of September 30, 2019, $1.7 million incurred under the MSAs was included in finished goods inventory.

During the three and nine months ended September 30, 2018, $13.4 million and $35.9 million, respectively, related to the MSAs was included in cost of goods sold and $4.1 million and $11.6 million, respectively, was included in general and administrative expenses.

During the three and nine months ended September 30, 2019, $0.8 million and $1.7 million, respectively, of fees expensed under the First JV MSA were waived and recorded as an increase to partner’s capital.

JV 1.0 Drop-Down Agreements

The agreements we entered into on the date of acquisition of the First JV resulted in the following amounts being recorded in our financial statements since the date of acquisition. During the three and nine months ended September 30, 2019, $11.6 million and $20.5 million, respectively, were recorded as an increase to partners’ capital and $0.1 million and $0.7 million, respectively, were recorded as a net reduction in cost of goods sold. These increases to partners’ capital are comprised of expenses waived under the EVA MSA Fee Waiver and the First JV MSA Fee Waiver and reimbursement of construction cost overruns in excess of budgeted capital expenditures for the Hamlet plant. The net reduction in cost of goods sold is comprised of the cost of cover deficiency fee from the Hamlet Operator under the ISA not producing enough pellets at Hamlet, offset by the agreed-upon price due to the Hamlet Operator for the pellets from Hamlet that we have sold.

Second EVA MSA Fee Waiver

In June 2019, we entered into an additional agreement (the “Second EVA MSA Fee Waiver”) with Enviva Management pursuant to which we received a $5.0 million waiver of EVA MSA fees through September 30, 2019, as consideration for an assignment of two shipping contracts to our sponsor to rebalance our and our sponsor’s respective shipping obligations under existing off-take contracts. During the three and nine months ended September 30, 2019, $2.3 million and $5.0 million, respectively, of EVA MSA fees expensed were waived and recorded as an increase to partners’ capital pursuant to the Second EVA MSA Fee Waiver. During the three and nine months ended September 30, 2018, no EVA MSA fees were waived pursuant to the Second EVA MSA Fee Waiver.

Wilmington Drop-Down - Deferred Consideration

In October 2017, we acquired from the First JV all of the issued and outstanding limited liability company interests in Enviva Port of Wilmington, LLC (“Wilmington”), which owns the Wilmington terminal assets (the “Wilmington Drop-Down”), for total consideration of $130.0 million, subject to certain conditions. The Wilmington Drop-Down included the Wilmington terminal assets and a long-term terminal services agreement with our sponsor (the “Holdings TSA”) to handle throughput volumes sourced from Greenwood. The purchase price included $74.0 million of deferred consideration, which was paid in full in April 2019 and consisted of $24.3 million in cash, of which $22.8 million was distributed to the Hancock Member and the issuance of 1,691,627 common units, or approximately $49.7 million in common units, which were distributed to the Hancock Member. The $74.0 million of deferred consideration was reflected on the condensed consolidated balance sheets as of December 31, 2018.

Greenwood Contract

In February 2018, we entered into a contract with Greenwood to purchase wood pellets produced by the Greenwood plant through March 2022 (the “Greenwood contract”) and we have a take-or-pay obligation with respect to 550,000 MTPY of wood pellets from July 2019 through March 2022. In July 2019, we entered into an amendment whereby the commencement of the take-or-pay obligation date was deferred from July 2019 to January 2020.

During the three and nine months ended September 30, 2019, we purchased $11.3 million and $35.5 million, respectively, of wood pellets and recorded a cost of cover deficiency fee from Greenwood of approximately $1.0 million and $4.3 million, respectively, from Greenwood as Greenwood was unable to satisfy certain commitments. Of the net $8.6 million and $29.5 million, respectively, $9.7 million and $33.8 million, respectively, is included in cost of goods sold and $1.5 million is included in finished goods inventory as of September 30, 2019. During the three and nine months ended September 30, 2018, we purchased $8.5 million and $16.8 million, respectively, of wood pellets from Greenwood, which is included in cost of goods sold.

Holdings TSA

The Wilmington Drop-Down included a long-term terminal services agreement with our sponsor (the “Holdings TSA”). Pursuant to the Holdings TSA, our sponsor agreed to deliver a minimum of 125,000 MT of wood pellets per quarter for receipt, storage, handling and loading services by the Wilmington terminal and pay a fixed fee on a per-ton basis for such terminal services. The Holdings TSA remains in effect until September 1, 2026. We did not record any terminal services revenue from our sponsor during the three months ended September 30, 2018. During the nine months ended September 30, 2018, we recorded $0.8 million as terminal services revenue from our sponsor, which is included in other revenue.

In February 2018, our sponsor amended and assigned the Holdings TSA to Greenwood. Deficiency payments are due to Wilmington if quarterly minimum throughput requirements are not met. During the three and nine months ended September 30, 2019 and 2018, we recorded $0.5 million and $1.3 million, respectively, and $0.5 million and $2.0 million, respectively, of deficiency fees from Greenwood, which is included in other revenue.

In September 2018, Hurricane Florence impacted the rail line on which wood pellets are typically transported from the Greenwood plant to the Wilmington terminal. As a result, Greenwood was unable to satisfy certain commitments under the Holdings TSA and the Greenwood contract and agreed to pay $1.8 million to us as deficiency fees in consideration of these commitments. Consideration of $0.5 million related to the Holdings TSA was included in other revenue and $1.3 million related to the Greenwood contract was included as a reduction of cost of goods sold.

Biomass Option Agreement – Enviva Holdings, LP

Enviva, LP purchased none and $1.7 million of wood pellets from the sponsor during the three and nine months ended September 30, 2018, respectively, pursuant to a biomass option agreement. The wood pellet purchase amounts are included in cost of goods sold. The biomass option agreement terminated in accordance with its terms in March 2018.

Enviva FiberCo, LLC

We purchase raw materials from Enviva FiberCo, LLC (“FiberCo”), a wholly owned subsidiary of our sponsor. During the three and nine months ended September 30, 2019, purchased raw materials, net of cost of cover deficiency fees from FiberCo, were immaterial and $0.6 million, respectively. During the three and nine months ended September 30, 2018, we purchased raw materials of $1.8 million and $3.5 million, respectively, from FiberCo. No cost of cover deficiency fees from FiberCo were recognized during the three and nine months ended September 30, 2018.

Long-Term Incentive Plan Vesting

As of September 30, 2019, we had an insignificant amount included in related-party payables related to withholding tax amounts due to Enviva Management associated with the vesting of time-based phantom units under the Enviva Partners, LP Long-Term Incentive Plan (“LTIP”).

XML

Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

During interim periods, we follow the accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018 except for our adoption on and as of January 1, 2019 of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) andASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.

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 our unaudited financial statements and accompanying notes. Actual results could differ materially from those estimates.

Accounting Standards Adopted

Leases

ASU 2016-02 established a right-of-use (“ROU”) model that requires lessees to recognize a ROU asset and corresponding lease liability on the balance sheet for all leases with a term of longer than 12 months and classify leases as operating or finance. Operating lease expense is recorded in a single financial statement line item on a straight-line basis over the lease term. Amortization of the ROU asset is the calculated difference between straight-line lease expense and the accretion of interest on the lease liability each period.

We adopted ASU 2016-02 on and as of January 1, 2019 using the modified retrospective transition method, which we applied to all leases existing at the date of initial application of the ASU. We elected to use the effective date as the date of initial application, as opposed to the beginning of the earliest comparative period presented in the financial statements; consequently, financial information and disclosures are not presented under the new standard for periods prior to January 1, 2019. We elected the package of three practical expedients under the transition guidance within the new standard, which permitted us to reassess our prior conclusions under the previous guidance concerning lease identification, lease classification and initial direct leasing costs. We elected the practical expedient to not evaluate existing or expired land easements that were not accounted for as leases under previous guidance. We did not, however, elect the separate practical expedient pertaining to the use of hindsight in determining the lease term for existing leases. We have a significant contract containing both lease and nonlease components, which are accounted for separately. As this contract has fixed payments, the allocation of lease and nonlease components is based on relative standalone price.

The adoption of the new standard as of January 1, 2019 resulted in the recognition of operating lease ROU assets of $27.4 million, net of $2.1 million of deferred rent liabilities existing as of December 31, 2018, and operating lease liabilities of $29.5 million for operating leases related to real estate, machinery and equipment and other operating leases with terms of longer than 12 months. The amounts recognized as of January 1, 2019 were based on the present value of the remaining minimum rental payments under previous leasing standards for existing operating leases. The classification of a lease affects the pattern and classification of expense recognition in the income statement, which is unchanged from under the previous accounting method. The adoption of the new standard did not change our accounting for finance leases (which were described as “capital leases” under the previous standard) or impact our results of operations and cash flows. See Note 9, Leases.

Derivative Instruments

We adopted ASU 2017-12 on and as of January 1, 2019 using the modified retrospective method, which requires the recognition of the cumulative effect of the change on the opening balance of each affected component of equity in the statement of changes in partner’s capital as of the date of adoption of the new standard. Upon adoption of ASU 2017-12, we no longer measure and recognize ineffectiveness related to designated and qualifying cash flow hedges in earnings; as a result, any ineffectiveness is included in accumulated other comprehensive income. On January 1, 2019, we recorded a nominal cumulative effect adjustment to accumulated other comprehensive income and common units in partners’ capital. See Note 10, Derivatives.

Recently Issued Accounting Standards not yet Adopted

Currently, there are no recently issued accounting standards not yet adopted by us that we expect to be reasonably likely to materially impact the financial position, results of operations or cash flows of the Partnership.

XML

Net Income (Loss) per Limited Partner Unit

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Net Income (Loss) per Limited Partner Unit

Net Income (Loss) per Limited Partner Unit

Net income (loss) per unit applicable to limited partners is computed by dividing limited partners’ interest in net income (loss), after deducting any incentive distributions, by the weighted-average number of outstanding common units. Our 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, which are declared and paid following the close of each quarter. Earnings in excess of distributions are allocated to the limited partners based on their respective ownership interests. Payments made to our 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.

On May 30, 2018, the requirements under our partnership agreement for the conversion of all of our subordinated units into common units were satisfied and the subordination period for such subordinated units ended. As a result, all of our 11,905,138 outstanding subordinated units converted into common units on a one-for-one basis. The conversion did not impact the amount of the cash distribution paid or the total number of our outstanding units representing limited partner interests. Our net income (loss) was allocated to the General Partner and the limited partners, including the holders of the subordinated units and IDR holders, in accordance with our partnership agreement.

In addition to the common units, we have also identified the IDRs and phantom units as participating securities and use 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 and subordinated 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. Basic and diluted earnings per unit previously applicable to subordinated limited partner units were the same because there are no potentially dilutive subordinated units outstanding.

The following computation of net income (loss) per limited partner unit is as follows for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30, 2019
	Common Units	General Partner
Weighted-average common units outstanding—basic	33,457	—
Effect of nonvested phantom units	—	—
Weighted-average common units outstanding—diluted	33,457	—

	Three Months Ended September 30, 2019
	Common Units			General Partner		Total
Distributions declared	$	22,416		$	3,107	$	25,523
Earnings less than distributions	(17,275		)	—		(17,275		)
Net income available to partners	$	5,141		$	3,107	$	8,248
Weighted-average units outstanding—basic and diluted	33,457
Net income per limited partner unit—basic and diluted	$	0.15

	Nine Months Ended September 30, 2019
	Common Units	General Partner
Weighted-average common units outstanding—basic	31,230	—
Effect of nonvested phantom units	—	—
Weighted-average common units outstanding—diluted	31,230	—

	Nine Months Ended September 30, 2019
	Common Units			General Partner		Total
Distributions declared	$	66,077		$	8,150	$	74,227
Earnings less than distributions	(79,925		)	—		(79,925		)
Net (loss) income available to partners	$	(13,848	)	$	8,150	$	(5,698	)
Weighted-average units outstanding—basic and diluted	31,230
Net loss per limited partner unit—basic and diluted	$	(0.44	)

	Three Months Ended September 30, 2018
	Common Units	Subordinated Units	General Partner
Weighted-average common units outstanding—basic	26,477	—	—
Effect of nonvested phantom units	1,001	—	—
Weighted-average common units outstanding—diluted	27,478	—	—

	Three Months Ended September 30, 2018
	Common Units			General Partner		Total
Distributions declared	$	16,814		$	1,532	$	18,346
Earnings less than distributions	(4,990		)	—		(4,990		)
Net income available to partners	$	11,824		$	1,532	$	13,356
Weighted-average units outstanding—basic	26,477
Weighted-average units outstanding—diluted	27,478
Net income per limited partner unit—basic	$	0.45
Net income per limited partner unit—diluted	$	0.43

	Nine Months Ended September 30, 2018
	Common Units	Subordinated Units	General Partner
Weighted-average common units outstanding—basic	19,866	6,541	—
Effect of nonvested phantom units	—	—	—
Weighted-average common units outstanding—diluted	19,866	6,541	—

	Nine Months Ended September 30, 2018
	Common Units			Subordinated Units			General Partner		Total
Distributions declared	$	37,618		$	12,386		$	4,197	$	54,201
Earnings less than distributions	(42,607		)	(14,029		)	—		(56,636		)
Net (loss) income available to partners	$	(4,989	)	$	(1,643	)	$	4,197	$	(2,435	)
Weighted-average units outstanding—basic and diluted	19,866			6,541
Net loss per limited partner unit—basic and diluted	$	(0.25	)	$	(0.25	)

Cash Distributions to Unitholders

Distributions that have been paid or declared related to the reporting period are considered in the determination of earnings per unit. The following table details the cash distribution paid or declared (in millions, except per-unit amounts):

Quarter Ended	Declaration Date	Record Date	Payment Date	Distribution  Per Unit		Total Cash Distribution		Total Payment to General Partner for Incentive Distribution Rights
March 31, 2018	May 3, 2018	May 15, 2018	May 29, 2018	$	0.6250	$	16.5	$	1.3
June 30, 2018	August 1, 2018	August 15, 2018	August 29, 2018	$	0.6300	$	16.7	$	1.4
September 30, 2018	October 31, 2018	November 15, 2018	November 29, 2018	$	0.6350	$	16.8	$	1.5
December 31, 2018	January 29, 2019	February 15, 2019	February 28, 2019	$	0.6400	$	17.0	$	1.7
March 31, 2019	May 2, 2019	May 20, 2019	May 29, 2019	$	0.6450	$	21.6	$	2.3
June 30, 2019	July 31, 2019	August 15, 2019	August 29, 2019	$	0.6600	$	22.1	$	2.8
September 30, 2019	October 30, 2019	November 15, 2019	November 29, 2019	$	0.6700	$	22.4	$	3.1

Distributions to be 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.

We determine the amount of cash available for distribution for each quarter in accordance with our partnership agreement. The amount to be distributed to common unitholders and IDR holders is based on the distribution waterfall set forth in our partnership agreement. Net earnings for the quarter are allocated to each class of partnership interest based on the distributions to be made. On May 30, 2018, the subordination period ended in accordance with our partnership agreement and the subordinated units were converted into common units on a one-for-one basis.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 25, 2019
Document And Entity Information Abstract
Entity Registrant Name	Enviva Partners, LP
Entity Central Index Key	0001592057
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		33,456,811
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3

XML

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

9 Months Ended

Sep. 30, 2019

Risks and Uncertainties [Abstract]

Schedule of revenue from major customers

Product sales to third-party customers that accounted for 10% or a greater share of consolidated product sales are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Customer A	49	%	52	%	50	%	53	%
Customer B	12	%	10	%	11	%	10	%
Customer C	22	%	24	%	21	%	15	%
Customer D	8	%	9	%	11	%	14	%

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 8,852	$ (3,801)	$ (8,923)	$ 13,356	$ 3,544	$ (19,335)	$ (3,872)	$ (2,435)
Other comprehensive (loss) income:
Net unrealized gains (losses) on cash flow hedges	13						(148)
Net unrealized gains (losses) on cash flow hedges				2,713				5,750
Reclassification of net gains realized into net income (loss)	(59)						(252)
Reclassification of net gains realized into net income (loss)				(2,013)				(2,076)
Currency translation adjustment	4			1			4	1
Total other comprehensive (loss) income	(42)	$ (192)	$ (162)	701	$ 4,301	$ (1,327)	(396)	3,675
Total comprehensive income (loss)	$ 8,810			$ 14,057			$ (4,268)	$ 1,240

XML

Label	Element	Value
Common Units Sponsor [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (8,000)
Common Units Public [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(10,000)
AOCI Attributable to Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 18,000

XML

Related-Party Transactions - Narrative (Details) T in Thousands		1 Months Ended				3 Months Ended		4 Months Ended	9 Months Ended
	Apr. 01, 2019 USD ($) shares	Apr. 30, 2019 USD ($) shares	Sep. 30, 2018 USD ($)	Feb. 28, 2018 T	Oct. 31, 2017 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($) MT	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Related Party Transaction [Line Items]
MSA fee waivers									$ 18,749,000	$ 0
Wilmington Drop-Down
Related Party Transaction [Line Items]
Total consideration					$ 130,000,000
Deferred consideration					$ 74,000,000						$ 74,000,000
Common unit issuance									49,700,000	0
Wilmington Drop-Down | Paid at closing
Related Party Transaction [Line Items]
Cash payment of deferred consideration		$ 24,300,000
Wholly owned subsidiary of sponsor | Enviva FiberCo. LLC
Related Party Transaction [Line Items]
Costs to cover fees							$ 0			0
Purchase of raw materials							1,800,000		600,000	3,500,000
First Hancock JV | Wilmington Drop-Down
Related Party Transaction [Line Items]
Issuance of common units (in units) | shares	1,691,627	1,691,627
Common unit issuance	$ 49,700,000	$ 49,700,000
First Hancock JV | Wilmington Drop-Down | Paid at closing
Related Party Transaction [Line Items]
Cash payment of deferred consideration		$ 22,800,000
MSAs | Inventory finished goods
Related Party Transaction [Line Items]
MSA related expenses incurred						$ 1,700,000
MSAs | Cost of goods sold
Related Party Transaction [Line Items]
MSA related expenses incurred						17,800,000	13,400,000		51,500,000	35,900,000
MSAs | General and administrative expenses
Related Party Transaction [Line Items]
MSA related expenses incurred						6,500,000	4,100,000		19,500,000	11,600,000
First JV MSA | Limited Partners’ Capital
Related Party Transaction [Line Items]
MSA fee waivers						800,000			1,700,000
ISA | Partners' capital | JV 1.0 Drop-Down
Related Party Transaction [Line Items]
Related party transaction						11,600,000			20,500,000
ISA | Cost of goods sold | JV 1.0 Drop-Down
Related Party Transaction [Line Items]
Related party transaction						100,000			700,000
Second EVA MSA Fee Waiver | Enviva Management | Affiliated entity
Related Party Transaction [Line Items]
MSA fee waivers						2,300,000	0	$ 5,000,000	5,000,000	0
Greenwood Contract
Related Party Transaction [Line Items]
Annual volume of wood pellets to be purchased | T				550
Costs to cover fees						1,000,000			4,300,000
Purchase of wood pellets net cost of cover deficiency fee						8,600,000			29,500,000
Deficiency fees received			$ 1,300,000
Greenwood Contract | Inventory finished goods
Related Party Transaction [Line Items]
Purchase of wood pellets net cost of cover deficiency fee									1,500,000
Greenwood Contract | Cost of goods sold
Related Party Transaction [Line Items]
Wood pellets purchased						11,300,000	8,500,000		35,500,000	16,800,000
Purchase of wood pellets net cost of cover deficiency fee						9,700,000			33,800,000
Greenwood Contract | Other revenue
Related Party Transaction [Line Items]
Deficiency fees received						$ 500,000	500,000		$ 1,300,000	2,000,000
Terminal Services Agreement
Related Party Transaction [Line Items]
Deficiency fees received			500,000
Terminal Services Agreement | First Hancock JV | Wilmington, LLC Drop-Down | Minimum
Related Party Transaction [Line Items]
Quarterly amounts of pellets to be delivered | MT									125,000
Terminal Services Agreement | Cost of goods sold | Wilmington, LLC Drop-Down
Related Party Transaction [Line Items]
Terminal service fees							$ 0			800,000
Greenwood contract
Related Party Transaction [Line Items]
Deficiency fees received			$ 1,800,000
Biomass Option Agreement | Enviva Holdings, LP.
Related Party Transaction [Line Items]
Wood pellets purchased										$ 1,700,000

XML

Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Reserves for uncertain tax positions	$ 0		$ 0
Reserves for interest and penalties			0
Provision for income tax	$ 0	$ 0	$ 0	$ 0

XML

Leases - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Lessee, Lease, Description [Line Items]
Option to extend the lease terms	5 years
Operating lease future minimum lease payments		$ 73.8
Finance lease future minimum lease payments		$ 4.8
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms	28 years

XML

Significant Risks and Uncertainties Including Business and Credit Concentrations (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Customer A
Concentration Risk
Concentration risk (as a percent)	49.00%	52.00%	50.00%	53.00%
Customer B
Concentration Risk
Concentration risk (as a percent)	12.00%	10.00%	11.00%	10.00%
Customer C
Concentration Risk
Concentration risk (as a percent)	22.00%	24.00%	21.00%	15.00%
Customer D
Concentration Risk
Concentration risk (as a percent)	8.00%	9.00%	11.00%	14.00%

XML

Transactions Between Entities Under Common Control - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands				9 Months Ended
	Jan. 02, 2020	Jun. 28, 2019	Apr. 02, 2019	Sep. 30, 2019	Sep. 30, 2018
Transactions Between Entities Under Common Control [Line Items]
Cash payment				$ 74,700	$ 0
JV1.0 Drop-Down | First Hancock JV
Transactions Between Entities Under Common Control [Line Items]
Issuance of common units (in units)			1,681,237
Common unit issuance			$ 50,000
JV1.0 Drop-Down | JV
Transactions Between Entities Under Common Control [Line Items]
Net assets contributed to Partnership			121,561
Elimination of related-party receivables			3,700
JV1.0 Drop-Down | JV | Paid at closing
Transactions Between Entities Under Common Control [Line Items]
Cash payment			24,700
Net purchase price adjustment			300
JV1.0 Drop-Down | JV | First Hancock JV
Transactions Between Entities Under Common Control [Line Items]
Total consideration			$ 165,000
Issuance of common units (in units)			1,681,237
Issuance of common units (usd per unit)			$ 29.74
Common unit issuance			$ 50,000
JV1.0 Drop-Down | JV | First Hancock JV | Paid on commencement of commercial operations
Transactions Between Entities Under Common Control [Line Items]
Payment for deferred consideration		$ 50,000
Forecast | JV1.0 Drop-Down | JV | To be paid on later of COD or January 2, 2020
Transactions Between Entities Under Common Control [Line Items]
Payment for deferred consideration	$ 40,000

XML

Leases - Operating and Finance Lease Cash Flow Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 3,715
Operating cash flows from financing leases	179
Financing cash flows from financing leases	2,020
Assets obtained in exchange for lease obligations:
Operating leases	7,465
Financing leases	$ 5,380

XML

Derivative Instruments - Fair Values (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Derivatives not designated as hedging instruments | Other current assets | Foreign currency purchased option contracts
Fair value of cash flow hedges
Total asset derivative	$ 286	$ 22
Cash flow hedges | Derivatives designated as hedging instruments
Fair value of cash flow hedges
Total asset derivative	122	626
Cash flow hedges | Derivatives designated as hedging instruments | Other current assets | Interest rate swap
Fair value of cash flow hedges
Total asset derivative	122	508
Cash flow hedges | Derivatives designated as hedging instruments | Other long-term assets | Interest rate swap
Fair value of cash flow hedges
Total asset derivative	0	118
Cash flow hedges | Derivatives not designated as hedging instruments
Fair value of cash flow hedges
Total derivatives not designated as hedging instruments	6,592	5,727
Cash flow hedges | Derivatives not designated as hedging instruments | Other long-term assets | Foreign currency exchange forward contracts
Fair value of cash flow hedges
Total asset derivative	1,290	1,810
Cash flow hedges | Derivatives not designated as hedging instruments | Other long-term assets | Foreign currency purchased option contracts
Fair value of cash flow hedges
Total asset derivative	3,369	3,348
Cash flow hedges | Derivatives not designated as hedging instruments | Other current assets | Foreign currency exchange forward contracts
Fair value of cash flow hedges
Total asset derivative	1,647	794
Cash flow hedges | Derivatives not designated as hedging instruments | Accrued and other current liabilities | Foreign currency exchange forward contracts
Fair value of cash flow hedges
Total liability derivative	0	(68)
Cash flow hedges | Derivatives not designated as hedging instruments | Other long-term liabilities | Foreign currency exchange forward contracts
Fair value of cash flow hedges
Total liability derivative	$ 0	$ (179)

XML

Supplemental Guarantor Information - Condensed Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net income (loss)	$ 8,852	$ (3,801)	$ (8,923)	$ 13,356	$ 3,544	$ (19,335)	$ (3,872)	$ (2,435)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization							35,747	29,240
MSA Fee Waivers							18,749	0
Amortization of debt issuance costs, debt premium and original issue discounts							899	828
Loss on disposal of assets							562	900
Unit-based compensation							3,835	5,604
De-designation of foreign currency forwards and options							0	(1,947)
Fair value changes in derivatives							(2,275)	(4,465)
Unrealized loss on foreign currency transactions, net							58	32
Change in operating assets and liabilities:
Accounts and insurance receivables							9,492	30,004
Related-party receivables							1,392	(123)
Prepaid expenses and other current and long-term assets							(212)	(160)
Inventories							(10,679)	(9,735)
Derivatives							1,514	5,080
Accounts payable, accrued liabilities and other current liabilities							(2,247)	5,709
Related-party payables and accrued liabilities							(12,025)	3,317
Accrued interest							6,420	7,634
Operating lease liabilities							(3,715)
Other long-term liabilities							(164)	648
Net cash provided by operating activities							43,479	70,131
Cash flows from investing activities:
Purchases of property, plant and equipment							(81,484)	(16,034)
Payment in relation to the JV 1.0 Drop-Down							(74,700)	0
Other							1,502	1,130
Other								1,130
Net cash used in investing activities							(154,682)	(14,904)
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility							345,000	134,750
Payments on senior secured revolving credit facility							(233,000)	(123,250)
Payments on other long-term debt and finance lease obligations							(2,026)	(4,745)
Proceeds from common unit issuances, net							96,822	241
Payment of deferred consideration for Wilmington Drop-Down							(24,300)	0
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder							(69,526)	(55,163)
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting							0	(2,341)
Payment for withholding tax associated with Long-Term Incentive Plan vesting							(1,870)	(4,380)
Net cash provided by (used in) financing activities							111,100	(54,888)
Net (decrease) increase in cash, cash equivalents and restricted cash							(103)	339
Cash, cash equivalents and restricted cash, beginning of period			2,460			524	2,460	524
Cash, cash equivalents and restricted cash, end of period	2,357			863			2,357	863
Eliminations
Cash flows from operating activities:
Net income (loss)	(373)			0			(551)	0
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization							0	0
MSA Fee Waivers							0
Amortization of debt issuance costs, debt premium and original issue discounts							0	0
Loss on disposal of assets							0	0
Unit-based compensation							0	0
De-designation of foreign currency forwards and options								0
Fair value changes in derivatives							0	0
Unrealized loss on foreign currency transactions, net							0	0
Change in operating assets and liabilities:
Accounts and insurance receivables							0	0
Related-party receivables							23,088	9,431
Prepaid expenses and other current and long-term assets							551	0
Inventories							0	0
Derivatives							0	0
Accounts payable, accrued liabilities and other current liabilities							0	0
Related-party payables and accrued liabilities							(23,088)	(9,431)
Accrued interest							0	0
Operating lease liabilities							0
Other long-term liabilities							0	0
Net cash provided by operating activities							0	0
Cash flows from investing activities:
Purchases of property, plant and equipment							0	0
Payment in relation to the JV 1.0 Drop-Down							0
Other							0
Other								0
Net cash used in investing activities							0	0
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility							0	0
Payments on senior secured revolving credit facility							0	0
Payments on other long-term debt and finance lease obligations							0	0
Proceeds from common unit issuances, net							0	0
Payment of deferred consideration for Wilmington Drop-Down							0
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder							0	0
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting								0
Payment for withholding tax associated with Long-Term Incentive Plan vesting							0	0
Net cash provided by (used in) financing activities							0	0
Net (decrease) increase in cash, cash equivalents and restricted cash							0	0
Cash, cash equivalents and restricted cash, beginning of period			0			0	0	0
Cash, cash equivalents and restricted cash, end of period	0			0			0	0
Guarantor Subsidiaries
Cash flows from operating activities:
Net income (loss)	11,743			13,375			4,516	(2,302)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization							33,875	29,240
MSA Fee Waivers							13,200
Amortization of debt issuance costs, debt premium and original issue discounts							899	828
Loss on disposal of assets							562	900
Unit-based compensation							3,142	5,604
De-designation of foreign currency forwards and options								(1,947)
Fair value changes in derivatives							(2,275)	(4,465)
Unrealized loss on foreign currency transactions, net							58	31
Change in operating assets and liabilities:
Accounts and insurance receivables							9,502	30,004
Related-party receivables							(20,281)	(4,943)
Prepaid expenses and other current and long-term assets							(711)	(160)
Inventories							(6,313)	(9,735)
Derivatives							1,514	5,080
Accounts payable, accrued liabilities and other current liabilities							824	5,709
Related-party payables and accrued liabilities							13,847	7,928
Accrued interest							3,326	7,634
Operating lease liabilities							(2,800)
Other long-term liabilities							313	648
Net cash provided by operating activities							53,198	70,054
Cash flows from investing activities:
Purchases of property, plant and equipment							(47,561)	(16,034)
Payment in relation to the JV 1.0 Drop-Down							(74,700)
Other							1,502
Other								1,130
Net cash used in investing activities							(120,759)	(14,904)
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility							306,150	134,750
Payments on senior secured revolving credit facility							(233,000)	(123,250)
Payments on other long-term debt and finance lease obligations							(3,639)	(4,745)
Proceeds from common unit issuances, net							96,822	241
Payment of deferred consideration for Wilmington Drop-Down							(24,300)
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder							(69,526)	(55,163)
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting								(2,341)
Payment for withholding tax associated with Long-Term Incentive Plan vesting							(1,870)	(4,380)
Net cash provided by (used in) financing activities							70,637	(54,888)
Net (decrease) increase in cash, cash equivalents and restricted cash							3,076	262
Cash, cash equivalents and restricted cash, beginning of period			(1,030)			524	(1,030)	524
Cash, cash equivalents and restricted cash, end of period	2,046			786			2,046	786
Non-Guarantor Subsidiaries
Cash flows from operating activities:
Net income (loss)	(2,518)			(19)			(7,837)	(133)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization							1,872	0
MSA Fee Waivers							5,549
Amortization of debt issuance costs, debt premium and original issue discounts							0	0
Loss on disposal of assets							0	0
Unit-based compensation							693	0
De-designation of foreign currency forwards and options								0
Fair value changes in derivatives							0	0
Unrealized loss on foreign currency transactions, net							0	1
Change in operating assets and liabilities:
Accounts and insurance receivables							(10)	0
Related-party receivables							(1,415)	(4,611)
Prepaid expenses and other current and long-term assets							(52)	0
Inventories							(4,366)	0
Derivatives							0	0
Accounts payable, accrued liabilities and other current liabilities							(3,071)	0
Related-party payables and accrued liabilities							(2,784)	4,820
Accrued interest							3,094	0
Operating lease liabilities							(915)
Other long-term liabilities							(477)	0
Net cash provided by operating activities							(9,719)	77
Cash flows from investing activities:
Purchases of property, plant and equipment							(33,923)	0
Payment in relation to the JV 1.0 Drop-Down							0
Other							0
Other								0
Net cash used in investing activities							(33,923)	0
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility							38,850	0
Payments on senior secured revolving credit facility							0	0
Payments on other long-term debt and finance lease obligations							(1,613)	0
Proceeds from common unit issuances, net							0	0
Payment of deferred consideration for Wilmington Drop-Down							0
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder							0	0
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting								0
Payment for withholding tax associated with Long-Term Incentive Plan vesting							0	0
Net cash provided by (used in) financing activities							40,463	0
Net (decrease) increase in cash, cash equivalents and restricted cash							(3,179)	77
Cash, cash equivalents and restricted cash, beginning of period			$ 3,490			$ 0	3,490	0
Cash, cash equivalents and restricted cash, end of period	$ 311			$ 77			$ 311	$ 77

XML

Supplemental Guarantor Information (Details)	Sep. 30, 2019
Condensed Financial Information Disclosure [Abstract]
Ownership interest in each of the subsidiary guarantors	100.00%

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

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

Long-term debt and finance lease obligations, including the current portion, are classified as Level 2 instruments. The fair value of our senior notes (see Note 12, Long-Term Debt and Finance Lease Obligations – Senior Notes Due 2021) was determined based on observable market prices in a less active market and was categorized as Level 2 in the fair value hierarchy. The fair value of other long-term debt and finance lease obligations classified as Level 2 was determined based on the usage of market prices not quoted on active markets and other observable market data. The fair value of long-term debt and finance lease obligations are based upon rates currently available for debt and finance lease obligations with similar terms and remaining maturities.

The carrying amount and estimated fair value of long-term debt and finance lease obligations as of September 30, 2019 and December 31, 2018 were as follows:

	September 30, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior notes	$	353,352	$	362,227	$	352,843	$	359,943
Other long-term debt and finance lease obligations	194,727		194,727		79,812		79,812
Total long-term debt and finance lease obligations	$	548,079	$	556,954	$	432,655	$	439,755

XML

Transactions Between Entities Under Common Control

9 Months Ended

Sep. 30, 2019

Transactions Between Entities Under Common Control

Transactions Between Entities Under Common Control

Transactions Between Entities Under Common Control

The JV 1.0 Drop-Down was an asset acquisition of entities under common control and accounted for on the carryover basis of accounting. Accordingly, the consolidated financial statements for the period beginning April 2, 2019 reflect the acquisition.

The purchase price for the JV 1.0 Drop-Down consisted of $165.0 million, which included an initial cash payment of $24.7 million, net of purchase price adjustment of $0.3 million, and the issuance of 1,681,237 unregistered common units at a value of $29.74 per unit, or $50.0 million of common units, $50.0 million in cash, paid on June 28, 2019, and $40.0 million in cash, which will be paid on January 2, 2020 as the third and final payment.

The changes in net assets at carryover basis on April 2, 2019 included $121.6 million net assets of the First JV, net of the elimination of $3.7 million of net related-party receivables and payables. The following table outlines the changes in consolidated net assets resulting from the JV 1.0 Drop-Down on April 2, 2019.

Assets:
Cash and cash equivalents	$	3,426
Related-party receivables	945
Prepaid expenses and other current assets	22
Property, plant and equipment, net	140,446
Other long-term assets	8
Total assets	144,847
Liabilities:
Accounts payable	6,395
Related-party payables	1,923
Accrued and other current liabilities	14,965
Finance lease obligations	3
Total liabilities	23,286
Net assets contributed to Partnership	$	121,561

Related-Party Transactions

Related-party transaction amounts included on the unaudited condensed consolidated statements of operations were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Other revenue	$	496	$	1,042	$	1,323	$	3,346
Cost of goods sold	26,300		20,133		80,921		56,184
General and administrative expenses	6,486		4,113		19,488		11,628

Management Services Agreements

Pursuant to the MSAs, Enviva Management provides us with operations, general administrative, management and other services. We are required to reimburse Enviva Management for the amount of all direct or indirect internal or third-party expenses incurred by Enviva Management in connection with the provision of such services. The MSAs include rent-related amounts for non-cancelable operating leases for office space in Maryland and North Carolina held by the sponsor. Under the First JV MSA, to the extent allocated costs exceed the annual management fee, the additional costs are recorded with an increase to partners’ capital.

During the three and nine months ended September 30, 2019, $17.8 million and $51.5 million, respectively, related to the MSAs was included in cost of goods sold and $6.5 million and $19.5 million, respectively, was included in general and administrative expenses. As of September 30, 2019, $1.7 million incurred under the MSAs was included in finished goods inventory.

During the three and nine months ended September 30, 2018, $13.4 million and $35.9 million, respectively, related to the MSAs was included in cost of goods sold and $4.1 million and $11.6 million, respectively, was included in general and administrative expenses.

During the three and nine months ended September 30, 2019, $0.8 million and $1.7 million, respectively, of fees expensed under the First JV MSA were waived and recorded as an increase to partner’s capital.

JV 1.0 Drop-Down Agreements

The agreements we entered into on the date of acquisition of the First JV resulted in the following amounts being recorded in our financial statements since the date of acquisition. During the three and nine months ended September 30, 2019, $11.6 million and $20.5 million, respectively, were recorded as an increase to partners’ capital and $0.1 million and $0.7 million, respectively, were recorded as a net reduction in cost of goods sold. These increases to partners’ capital are comprised of expenses waived under the EVA MSA Fee Waiver and the First JV MSA Fee Waiver and reimbursement of construction cost overruns in excess of budgeted capital expenditures for the Hamlet plant. The net reduction in cost of goods sold is comprised of the cost of cover deficiency fee from the Hamlet Operator under the ISA not producing enough pellets at Hamlet, offset by the agreed-upon price due to the Hamlet Operator for the pellets from Hamlet that we have sold.

Second EVA MSA Fee Waiver

In June 2019, we entered into an additional agreement (the “Second EVA MSA Fee Waiver”) with Enviva Management pursuant to which we received a $5.0 million waiver of EVA MSA fees through September 30, 2019, as consideration for an assignment of two shipping contracts to our sponsor to rebalance our and our sponsor’s respective shipping obligations under existing off-take contracts. During the three and nine months ended September 30, 2019, $2.3 million and $5.0 million, respectively, of EVA MSA fees expensed were waived and recorded as an increase to partners’ capital pursuant to the Second EVA MSA Fee Waiver. During the three and nine months ended September 30, 2018, no EVA MSA fees were waived pursuant to the Second EVA MSA Fee Waiver.

Wilmington Drop-Down - Deferred Consideration

In October 2017, we acquired from the First JV all of the issued and outstanding limited liability company interests in Enviva Port of Wilmington, LLC (“Wilmington”), which owns the Wilmington terminal assets (the “Wilmington Drop-Down”), for total consideration of $130.0 million, subject to certain conditions. The Wilmington Drop-Down included the Wilmington terminal assets and a long-term terminal services agreement with our sponsor (the “Holdings TSA”) to handle throughput volumes sourced from Greenwood. The purchase price included $74.0 million of deferred consideration, which was paid in full in April 2019 and consisted of $24.3 million in cash, of which $22.8 million was distributed to the Hancock Member and the issuance of 1,691,627 common units, or approximately $49.7 million in common units, which were distributed to the Hancock Member. The $74.0 million of deferred consideration was reflected on the condensed consolidated balance sheets as of December 31, 2018.

Greenwood Contract

In February 2018, we entered into a contract with Greenwood to purchase wood pellets produced by the Greenwood plant through March 2022 (the “Greenwood contract”) and we have a take-or-pay obligation with respect to 550,000 MTPY of wood pellets from July 2019 through March 2022. In July 2019, we entered into an amendment whereby the commencement of the take-or-pay obligation date was deferred from July 2019 to January 2020.

During the three and nine months ended September 30, 2019, we purchased $11.3 million and $35.5 million, respectively, of wood pellets and recorded a cost of cover deficiency fee from Greenwood of approximately $1.0 million and $4.3 million, respectively, from Greenwood as Greenwood was unable to satisfy certain commitments. Of the net $8.6 million and $29.5 million, respectively, $9.7 million and $33.8 million, respectively, is included in cost of goods sold and $1.5 million is included in finished goods inventory as of September 30, 2019. During the three and nine months ended September 30, 2018, we purchased $8.5 million and $16.8 million, respectively, of wood pellets from Greenwood, which is included in cost of goods sold.

Holdings TSA

The Wilmington Drop-Down included a long-term terminal services agreement with our sponsor (the “Holdings TSA”). Pursuant to the Holdings TSA, our sponsor agreed to deliver a minimum of 125,000 MT of wood pellets per quarter for receipt, storage, handling and loading services by the Wilmington terminal and pay a fixed fee on a per-ton basis for such terminal services. The Holdings TSA remains in effect until September 1, 2026. We did not record any terminal services revenue from our sponsor during the three months ended September 30, 2018. During the nine months ended September 30, 2018, we recorded $0.8 million as terminal services revenue from our sponsor, which is included in other revenue.

In February 2018, our sponsor amended and assigned the Holdings TSA to Greenwood. Deficiency payments are due to Wilmington if quarterly minimum throughput requirements are not met. During the three and nine months ended September 30, 2019 and 2018, we recorded $0.5 million and $1.3 million, respectively, and $0.5 million and $2.0 million, respectively, of deficiency fees from Greenwood, which is included in other revenue.

In September 2018, Hurricane Florence impacted the rail line on which wood pellets are typically transported from the Greenwood plant to the Wilmington terminal. As a result, Greenwood was unable to satisfy certain commitments under the Holdings TSA and the Greenwood contract and agreed to pay $1.8 million to us as deficiency fees in consideration of these commitments. Consideration of $0.5 million related to the Holdings TSA was included in other revenue and $1.3 million related to the Greenwood contract was included as a reduction of cost of goods sold.

Biomass Option Agreement – Enviva Holdings, LP

Enviva, LP purchased none and $1.7 million of wood pellets from the sponsor during the three and nine months ended September 30, 2018, respectively, pursuant to a biomass option agreement. The wood pellet purchase amounts are included in cost of goods sold. The biomass option agreement terminated in accordance with its terms in March 2018.

Enviva FiberCo, LLC

We purchase raw materials from Enviva FiberCo, LLC (“FiberCo”), a wholly owned subsidiary of our sponsor. During the three and nine months ended September 30, 2019, purchased raw materials, net of cost of cover deficiency fees from FiberCo, were immaterial and $0.6 million, respectively. During the three and nine months ended September 30, 2018, we purchased raw materials of $1.8 million and $3.5 million, respectively, from FiberCo. No cost of cover deficiency fees from FiberCo were recognized during the three and nine months ended September 30, 2018.

Long-Term Incentive Plan Vesting

As of September 30, 2019, we had an insignificant amount included in related-party payables related to withholding tax amounts due to Enviva Management associated with the vesting of time-based phantom units under the Enviva Partners, LP Long-Term Incentive Plan (“LTIP”).

XML

Inventories

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following as of:

	September 30, 2019		December 31, 2018
Raw materials and work-in-process	$	9,883	$	4,936
Consumable tooling	19,995		17,561
Finished goods	12,471		8,993
Total inventories	$	42,349	$	31,490

XML

Net Income (Loss) per Limited Partner Unit (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Schedule of weighted average common units outstanding

	Nine Months Ended September 30, 2018
	Common Units	Subordinated Units	General Partner
Weighted-average common units outstanding—basic	19,866	6,541	—
Effect of nonvested phantom units	—	—	—
Weighted-average common units outstanding—diluted	19,866	6,541	—

	Nine Months Ended September 30, 2019
	Common Units	General Partner
Weighted-average common units outstanding—basic	31,230	—
Effect of nonvested phantom units	—	—
Weighted-average common units outstanding—diluted	31,230	—

	Three Months Ended September 30, 2018
	Common Units	Subordinated Units	General Partner
Weighted-average common units outstanding—basic	26,477	—	—
Effect of nonvested phantom units	1,001	—	—
Weighted-average common units outstanding—diluted	27,478	—	—

	Three Months Ended September 30, 2019
	Common Units	General Partner
Weighted-average common units outstanding—basic	33,457	—
Effect of nonvested phantom units	—	—
Weighted-average common units outstanding—diluted	33,457	—

Schedule of basic earnings (loss) per common, subordinated and general partner units

	Nine Months Ended September 30, 2018
	Common Units			Subordinated Units			General Partner		Total
Distributions declared	$	37,618		$	12,386		$	4,197	$	54,201
Earnings less than distributions	(42,607		)	(14,029		)	—		(56,636		)
Net (loss) income available to partners	$	(4,989	)	$	(1,643	)	$	4,197	$	(2,435	)
Weighted-average units outstanding—basic and diluted	19,866			6,541
Net loss per limited partner unit—basic and diluted	$	(0.25	)	$	(0.25	)

	Three Months Ended September 30, 2018
	Common Units			General Partner		Total
Distributions declared	$	16,814		$	1,532	$	18,346
Earnings less than distributions	(4,990		)	—		(4,990		)
Net income available to partners	$	11,824		$	1,532	$	13,356
Weighted-average units outstanding—basic	26,477
Weighted-average units outstanding—diluted	27,478
Net income per limited partner unit—basic	$	0.45
Net income per limited partner unit—diluted	$	0.43

	Nine Months Ended September 30, 2019
	Common Units			General Partner		Total
Distributions declared	$	66,077		$	8,150	$	74,227
Earnings less than distributions	(79,925		)	—		(79,925		)
Net (loss) income available to partners	$	(13,848	)	$	8,150	$	(5,698	)
Weighted-average units outstanding—basic and diluted	31,230
Net loss per limited partner unit—basic and diluted	$	(0.44	)

	Three Months Ended September 30, 2019
	Common Units			General Partner		Total
Distributions declared	$	22,416		$	3,107	$	25,523
Earnings less than distributions	(17,275		)	—		(17,275		)
Net income available to partners	$	5,141		$	3,107	$	8,248
Weighted-average units outstanding—basic and diluted	33,457
Net income per limited partner unit—basic and diluted	$	0.15

Schedule of cash distribution paid or declared

The following table details the cash distribution paid or declared (in millions, except per-unit amounts):

Quarter Ended	Declaration Date	Record Date	Payment Date	Distribution  Per Unit		Total Cash Distribution		Total Payment to General Partner for Incentive Distribution Rights
March 31, 2018	May 3, 2018	May 15, 2018	May 29, 2018	$	0.6250	$	16.5	$	1.3
June 30, 2018	August 1, 2018	August 15, 2018	August 29, 2018	$	0.6300	$	16.7	$	1.4
September 30, 2018	October 31, 2018	November 15, 2018	November 29, 2018	$	0.6350	$	16.8	$	1.5
December 31, 2018	January 29, 2019	February 15, 2019	February 28, 2019	$	0.6400	$	17.0	$	1.7
March 31, 2019	May 2, 2019	May 20, 2019	May 29, 2019	$	0.6450	$	21.6	$	2.3
June 30, 2019	July 31, 2019	August 15, 2019	August 29, 2019	$	0.6600	$	22.1	$	2.8
September 30, 2019	October 30, 2019	November 15, 2019	November 29, 2019	$	0.6700	$	22.4	$	3.1

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of carrying amount and estimated fair value of long-term debt and capital lease obligations

The carrying amount and estimated fair value of long-term debt and finance lease obligations as of September 30, 2019 and December 31, 2018 were as follows:

	September 30, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior notes	$	353,352	$	362,227	$	352,843	$	359,943
Other long-term debt and finance lease obligations	194,727		194,727		79,812		79,812
Total long-term debt and finance lease obligations	$	548,079	$	556,954	$	432,655	$	439,755

XML

Equity-Based Awards

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Equity-Based Awards

Equity-Based Awards

The following table summarizes information regarding phantom unit awards (the “Affiliate Grants”) under the LTIP to employees of Enviva Management and its affiliates who provide services to the Partnership:

	Time-Based Phantom Units				Performance-Based Phantom Units				Total Affiliate Grant Phantom Units
	Units		Weighted- Average Grant Date Fair Value (per unit)(1)		Units		Weighted- Average Grant Date Fair Value (per unit)(1)		Units		Weighted- Average Grant Date Fair Value (per unit)(1)
Nonvested December 31, 2018	723,940		$	25.91	239,512		$	27.65	963,452		$	26.34
Granted	390,909		$	30.39	216,224		$	30.25	607,133		$	30.34
Forfeitures	(81,332	)	$	28.27	(16,560	)	$	29.80	(97,892	)	$	28.53
Vested	(145,506	)	$	18.30	—		$	—	(145,506	)	$	18.30
Nonvested September 30, 2019	888,011		$	28.91	439,176		$	28.85	1,327,187		$	28.89

______________________________________________________________

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

As of September 30, 2019, an insignificant amount is included in related-party payables to Enviva Management to satisfy tax-withholding requirements associated with time-based phantom awards that vested under the LTIP during the nine months ended September 30, 2019. During the nine months ended September 30, 2018, we paid $2.3 million to the General Partner, which acquired common units from a wholly owned subsidiary of our sponsor for delivery to the recipients under the LTIP. We also paid $1.7 million during the nine months ended September 30, 2018 to Enviva Management to satisfy the tax-withholding requirements associated with such common units under the MSAs. The unrecognized estimated compensation cost relating to outstanding Affiliate Grants at September 30, 2019 was $14.2 million, which will be recognized over the remaining vesting period.

The following table summarizes information regarding phantom unit awards to certain non-employee directors of the General Partner (the “Director Grants”) under the LTIP:

	Time-Based  Phantom Units
	Units		Weighted- Average Grant Date Fair Value (per unit)(1)
Nonvested December 31, 2018	13,964		$	28.65
Granted	13,444		$	30.16
Vested	(13,964	)	$	28.65
Nonvested September 30, 2019	13,444		$	30.16

In February 2019, Director Grants valued at $0.4 million were granted and vest on the first anniversary of the grant date. In February 2019, the Director Grants that were nonvested at December 31, 2018 vested, and common units were issued in respect of such vested Director Grants. The unrecognized estimated compensation cost relating to outstanding Director Grants at September 30, 2019 was $0.1 million, which will be recognized over the remaining vesting period.

Distribution Equivalent Rights

Paid DER distributions related to time-based Affiliate Grants were $1.2 million and $2.1 million, respectively, for the three and nine months ended September 30, 2019. Paid DER distributions related to the time-based Affiliate Grants were $0.6 million and $1.8 million, respectively, for the three and nine months ended September 30, 2018. At September 30, 2019 and December 31, 2018, $0.6 million and $0.9 million, respectively, of DER distributions were included in related-party accrued liabilities.

Unpaid DER amounts related to the performance-based Affiliate Grants at September 30, 2019 were $1.6 million, of which $0.6 million are included in accrued liabilities and $1.0 million are included in other long-term liabilities on the condensed consolidated balance sheets. Unpaid DER amounts related to the performance-based Affiliate Grants at December 31, 2018 were $0.7 million, of which $0.4 million are included in accrued liabilities and $0.3 million are included in other long-term liabilities.

XML

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

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 our unaudited financial statements and accompanying notes. Actual results could differ materially from those estimates.

Accounting Standards Adopted and Recently Issued not yet Adopted

Accounting Standards Adopted

Leases

ASU 2016-02 established a right-of-use (“ROU”) model that requires lessees to recognize a ROU asset and corresponding lease liability on the balance sheet for all leases with a term of longer than 12 months and classify leases as operating or finance. Operating lease expense is recorded in a single financial statement line item on a straight-line basis over the lease term. Amortization of the ROU asset is the calculated difference between straight-line lease expense and the accretion of interest on the lease liability each period.

We adopted ASU 2016-02 on and as of January 1, 2019 using the modified retrospective transition method, which we applied to all leases existing at the date of initial application of the ASU. We elected to use the effective date as the date of initial application, as opposed to the beginning of the earliest comparative period presented in the financial statements; consequently, financial information and disclosures are not presented under the new standard for periods prior to January 1, 2019. We elected the package of three practical expedients under the transition guidance within the new standard, which permitted us to reassess our prior conclusions under the previous guidance concerning lease identification, lease classification and initial direct leasing costs. We elected the practical expedient to not evaluate existing or expired land easements that were not accounted for as leases under previous guidance. We did not, however, elect the separate practical expedient pertaining to the use of hindsight in determining the lease term for existing leases. We have a significant contract containing both lease and nonlease components, which are accounted for separately. As this contract has fixed payments, the allocation of lease and nonlease components is based on relative standalone price.

The adoption of the new standard as of January 1, 2019 resulted in the recognition of operating lease ROU assets of $27.4 million, net of $2.1 million of deferred rent liabilities existing as of December 31, 2018, and operating lease liabilities of $29.5 million for operating leases related to real estate, machinery and equipment and other operating leases with terms of longer than 12 months. The amounts recognized as of January 1, 2019 were based on the present value of the remaining minimum rental payments under previous leasing standards for existing operating leases. The classification of a lease affects the pattern and classification of expense recognition in the income statement, which is unchanged from under the previous accounting method. The adoption of the new standard did not change our accounting for finance leases (which were described as “capital leases” under the previous standard) or impact our results of operations and cash flows. See Note 9, Leases.

Derivative Instruments

We adopted ASU 2017-12 on and as of January 1, 2019 using the modified retrospective method, which requires the recognition of the cumulative effect of the change on the opening balance of each affected component of equity in the statement of changes in partner’s capital as of the date of adoption of the new standard. Upon adoption of ASU 2017-12, we no longer measure and recognize ineffectiveness related to designated and qualifying cash flow hedges in earnings; as a result, any ineffectiveness is included in accumulated other comprehensive income. On January 1, 2019, we recorded a nominal cumulative effect adjustment to accumulated other comprehensive income and common units in partners’ capital. See Note 10, Derivatives.

Recently Issued Accounting Standards not yet Adopted

Currently, there are no recently issued accounting standards not yet adopted by us that we expect to be reasonably likely to materially impact the financial position, results of operations or cash flows of the Partnership.

XML

Condensed Consolidated Balance Sheets (Parenthetical) - shares	Sep. 30, 2019	Dec. 31, 2018
Common Units— Public
Limited partner units issued	19,870,436	14,573,452
Limited partner units outstanding	19,870,436	14,573,452
Common Units— Sponsor
Limited partner units issued	13,586,375	11,905,138
Limited partner units outstanding	13,586,375	11,905,138
General Partner Interest
General partner units outstanding	0	0

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net loss	$ (3,872)	$ (2,435)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	35,747	29,240
MSA Fee Waivers	18,749	0
Amortization of debt issuance costs, debt premium and original issue discounts	899	828
Loss on disposal of assets	562	900
Unit-based compensation	3,835	5,604
De-designation of foreign currency forwards and options	0	(1,947)
Fair value changes in derivatives	(2,275)	(4,465)
Unrealized loss on foreign currency transactions, net	58	32
Change in operating assets and liabilities:
Accounts and insurance receivables	9,492	30,004
Related-party receivables	1,392	(123)
Prepaid expenses and other current and long-term assets	(212)	(160)
Inventories	(10,679)	(9,735)
Derivatives	1,514	5,080
Accounts payable, accrued liabilities and other current liabilities	(2,247)	5,709
Related-party payables and accrued liabilities	(12,025)	3,317
Accrued interest	6,420	7,634
Operating lease liabilities	(3,715)
Other long-term liabilities	(164)	648
Net cash provided by operating activities	43,479	70,131
Cash flows from investing activities:
Purchases of property, plant and equipment	(81,484)	(16,034)
Payment in relation to the JV 1.0 Drop-Down	(74,700)	0
Other	1,502	1,130
Net cash used in investing activities	(154,682)	(14,904)
Cash flows from financing activities:
Proceeds from senior secured revolving credit facility	345,000	134,750
Payments on senior secured revolving credit facility	(233,000)	(123,250)
Payments on other long-term debt and finance lease obligations	(2,026)	(4,745)
Proceeds from common unit issuances, net	96,822	241
Payment of deferred consideration for Wilmington Drop-Down	(24,300)	0
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder	(69,526)	(55,163)
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting	0	(2,341)
Payment for withholding tax associated with Long-Term Incentive Plan vesting	(1,870)	(4,380)
Net cash provided by (used in) financing activities	111,100	(54,888)
Net (decrease) increase in cash, cash equivalents and restricted cash	(103)	339
Cash, cash equivalents and restricted cash, beginning of period	2,460	524
Cash, cash equivalents and restricted cash, end of period	2,357	863
Supplemental cash flow information:
Interest paid, net of capitalized interest	19,977	18,802
Wilmington Drop-Down
Non-cash investing and financing activities:
Common unit issuance	49,700	0
Enviva Wilmington Holdings, LLC Drop-Down
Non-cash investing and financing activities:
Common unit issuance	$ 50,000	$ 0

XML

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials and work-in-process	$ 9,883	$ 4,936
Consumable tooling	19,995	17,561
Finished goods	12,471	8,993
Total inventories	$ 42,349	$ 31,490

XML

Revenue - Performance Obligations (Details) $ in Billions	Sep. 30, 2019 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Performance Obligations
Expected remaining performance obligation	3 years
Remaining performance obligations, percentage	2.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Performance Obligations
Expected remaining performance obligation
Remaining performance obligations, percentage	10.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil)
Performance Obligations
Remaining performance obligations	$ 9.3

XML

Net Income (Loss) per Limited Partner Unit - Basic and Diluted Table (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Common Units
Weighted average number of units outstanding
Weighted-average units outstanding—basic (in units)	33,457	26,477	31,230	19,866
Effect of nonvested phantom units	0	1,001	0	0
Weighted-average common units outstanding—diluted (in units)	33,457	27,478	31,230	19,866
Subordinated Units
Weighted average number of units outstanding
Weighted-average units outstanding—basic (in units)		0		6,541
Effect of nonvested phantom units		0		0
Weighted-average common units outstanding—diluted (in units)		0		6,541
General Partner
Weighted average number of units outstanding
Weighted-average units outstanding—basic (in units)	0	0	0	0
Effect of nonvested phantom units	0	0	0	0
Weighted-average common units outstanding—diluted (in units)	0	0	0	0

XML

Long-Term Debt and Finance Lease Obligations - Capital Lease Obligation Table (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract]
Finance leases	$ 7,719
Total long-term debt and finance lease obligations	548,079	$ 432,655
Less current portion of long-term debt and finance lease obligations	(4,490)	(2,722)
Long-term debt and finance lease obligations, excluding current installments	543,589	429,933
Other loans
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract]
Long-term debt	2,008	2,015
Finance leases
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract]
Finance leases	7,719
Finance leases		4,797
Senior notes
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract]
Long-term debt	353,352	352,843
Unamortized discount, premium and debt issuance	1,600	2,200
Senior secured revolving credit facility | Revolving credit commitments
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract]
Long-term debt	$ 185,000	$ 73,000
Senior Notes Due 2021
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract]
Interest rate (as a percent)	8.50%

XML

Equity-Based Awards - Schedule of Phantom Unit Awards (Details)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Affiliate Grants
Units
Nonvested at the beginning of the period (in units) | shares	963,452
Granted (in units) | shares	607,133
Forfeitures (in units) | shares	(97,892)
Vested (in units) | shares	(145,506)
Nonvested at the end of the period (in units) | shares	1,327,187
Weighted- Average Grant Date Fair Value (per unit)
Nonvested at the beginning of the period (in dollars per unit) | $ / shares	$ 26.34
Granted (in dollars per unit) | $ / shares	30.34
Forfeitures (in dollar per unit) | $ / shares	28.53
Vested (in dollars per unit) | $ / shares	18.30
Nonvested at the end of the period (in dollars per unit) | $ / shares	$ 28.89
Affiliate Grants | Time-Based Phantom Units
Units
Nonvested at the beginning of the period (in units) | shares	723,940
Granted (in units) | shares	390,909
Forfeitures (in units) | shares	(81,332)
Vested (in units) | shares	(145,506)
Nonvested at the end of the period (in units) | shares	888,011
Weighted- Average Grant Date Fair Value (per unit)
Nonvested at the beginning of the period (in dollars per unit) | $ / shares	$ 25.91
Granted (in dollars per unit) | $ / shares	30.39
Forfeitures (in dollar per unit) | $ / shares	28.27
Vested (in dollars per unit) | $ / shares	18.30
Nonvested at the end of the period (in dollars per unit) | $ / shares	$ 28.91
Affiliate Grants | Performance-Based Phantom Units
Units
Nonvested at the beginning of the period (in units) | shares	239,512
Granted (in units) | shares	216,224
Forfeitures (in units) | shares	(16,560)
Vested (in units) | shares	0
Nonvested at the end of the period (in units) | shares	439,176
Weighted- Average Grant Date Fair Value (per unit)
Nonvested at the beginning of the period (in dollars per unit) | $ / shares	$ 27.65
Granted (in dollars per unit) | $ / shares	30.25
Forfeitures (in dollar per unit) | $ / shares	29.80
Vested (in dollars per unit) | $ / shares	0.00
Nonvested at the end of the period (in dollars per unit) | $ / shares	$ 28.85
Director Grants | Time-Based Phantom Units
Units
Nonvested at the beginning of the period (in units) | shares	13,964
Granted (in units) | shares	13,444
Vested (in units) | shares	(13,964)
Nonvested at the end of the period (in units) | shares	13,444
Weighted- Average Grant Date Fair Value (per unit)
Nonvested at the beginning of the period (in dollars per unit) | $ / shares	$ 28.65
Granted (in dollars per unit) | $ / shares	30.16
Vested (in dollars per unit) | $ / shares	28.65
Nonvested at the end of the period (in dollars per unit) | $ / shares	$ 30.16

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 2,357	$ 2,460
Accounts receivable	49,643	54,794
Insurance receivables	0	5,140
Related-party receivables	0	1,392
Inventories	42,349	31,490
Prepaid expenses and other current assets	3,998	2,235
Total current assets	98,347	97,511
Property, plant and equipment - in service, net	683,524	542,635
Construction in progress	60,924	14,393
Total property, plant and equipment, net	744,448	557,028
Operating lease right-of-use assets, net	33,379	0
Goodwill	85,615	85,615
Other long-term assets	7,326	8,616
Total assets	969,115	748,770
Current liabilities:
Accounts payable	21,512	15,551
Related-party payables and accrued liabilities	9,119	28,225
Deferred consideration for drop-downs due to related party	40,000	74,000
Accrued and other current liabilities	48,318	41,400
Current portion of interest payable	13,209	5,434
Current portion of long-term debt and finance lease obligations	4,490	2,722
Total current liabilities	136,648	167,332
Long-term debt and finance lease obligations	543,589	429,933
Long-term operating lease liabilities	33,725	0
Long-term interest payable	1,100	1,010
Other long-term liabilities	2,170	3,779
Total liabilities	717,232	602,054
Commitments and contingencies
Limited partners:
Common unitholders—public (19,870,436 and 14,573,452 units issued and outstanding at September 30, 2019 and December 31, 2018, respectively)	314,258	207,612
Common unitholder—sponsor (13,586,375 and 11,905,138 units issued and outstanding at September 30, 2019 and December 31, 2018, respectively)	92,286	72,352
General partner (no outstanding units)	(106,530)	(133,687)
Accumulated other comprehensive income	61	439
Total Enviva Partners, LP partners' capital	300,075	146,716
Noncontrolling interest	(48,192)	0
Total partners’ capital	251,883	146,716
Total liabilities and partners’ capital	$ 969,115	$ 748,770

XML

Condensed Consolidated Statement of Changes in Partners’ Capital - USD ($) $ in Thousands	Total	Accumulated Other Comprehensive Income (Loss)	General Partner Interest	Common Units— Public	Common Units— Sponsor	Subordinated Units— Sponsor	Non-Controlling Interest
Balance at the beginning of the period at Dec. 31, 2017	$ 210,369	$ (3,040)	$ (128,569)	$ 224,027	$ 16,050	$ 101,901
Balance at the beginning of the period (in units) at Dec. 31, 2017				13,073,000	1,347,000	11,905,000
Changes in Partners’ Capital
Distributions to unitholders, distribution equivalent and incentive distribution rights	(18,129)		(1,130)	$ (8,833)	$ (785)	$ (7,381)
Issuance of units through Long-Term Incentive Plan	(3,594)		(2,129)	$ (164)	$ (1,301)
Issuance of units through Long-Term Incentive Plan (in units)				99,000	(82,000)
Issuance of common units, net	241			$ 241
Issuance of common units, net (in units)				8,000
Non-cash Management Services Agreement expenses	1,033		102	$ 931
Other comprehensive (loss) income	(1,327)	(1,327)
Net income (loss)	(19,335)		1,130	(10,233)	$ (983)	(9,249)
Balance at the end of the period at Mar. 31, 2018	169,258	(4,367)	(130,596)	$ 205,969	$ 12,981	$ 85,271
Balance at the end of the period (in units) at Mar. 31, 2018				13,180,000	1,265,000	11,905,000
Balance at the beginning of the period at Dec. 31, 2017	210,369	(3,040)	(128,569)	$ 224,027	$ 16,050	$ 101,901
Balance at the beginning of the period (in units) at Dec. 31, 2017				13,073,000	1,347,000	11,905,000
Changes in Partners’ Capital
Other comprehensive (loss) income	3,675
Net income (loss)	(2,435)
Balance at the end of the period at Sep. 30, 2018	155,744	635	(133,810)	$ 212,539	$ 76,380	$ 0
Balance at the end of the period (in units) at Sep. 30, 2018				14,573,000	11,905,000	0
Balance at the beginning of the period at Mar. 31, 2018	169,258	(4,367)	(130,596)	$ 205,969	$ 12,981	$ 85,271
Balance at the beginning of the period (in units) at Mar. 31, 2018				13,180,000	1,265,000	11,905,000
Changes in Partners’ Capital
Distributions to unitholders, distribution equivalent and incentive distribution rights	(18,455)		(1,264)	$ (9,750)		$ (7,441)
Issuance of units through Long-Term Incentive Plan	(2,712)		(3,435)	$ 723
Issuance of units through Long-Term Incentive Plan (in units)				122,000
Sale of common units				$ 13,335	$ (13,335)
Sale of common units (in units)				1,265,000	(1,265,000)
Conversion of subordinated units to common units					$ 78,504	$ (78,504)
Conversion of subordinated units to common units (in units)					11,905,000	(11,905,000)
Non-cash Management Services Agreement expenses	2,690		210	$ 2,480
Other comprehensive (loss) income	4,301	4,301
Net income (loss)	3,544		1,264	1,252	$ 354	$ 674
Balance at the end of the period at Jun. 30, 2018	158,626	(66)	(133,821)	$ 214,009	$ 78,504	$ 0
Balance at the end of the period (in units) at Jun. 30, 2018				14,567,000	11,905,000	0
Changes in Partners’ Capital
Distributions to unitholders, distribution equivalent and incentive distribution rights	(18,684)		(1,400)	$ (9,784)	$ (7,500)	$ 0
Issuance of units through Long-Term Incentive Plan	(159)		(111)	$ (48)
Issuance of units through Long-Term Incentive Plan (in units)				6,000
Non-cash Management Services Agreement expenses	1,904		122	$ 1,782
Other comprehensive (loss) income	701	701
Net income (loss)	13,356		1,400	6,580	5,376	0
Balance at the end of the period at Sep. 30, 2018	155,744	635	(133,810)	$ 212,539	$ 76,380	$ 0
Balance at the end of the period (in units) at Sep. 30, 2018				14,573,000	11,905,000	0
Balance at the beginning of the period at Dec. 31, 2018	146,716	439	(133,687)	$ 207,612	$ 72,352		$ 0
Balance at the beginning of the period (in units) at Dec. 31, 2018				14,573,452	11,905,138
Changes in Partners’ Capital
Distributions to unitholders, distribution equivalent and incentive distribution rights	(19,559)		(1,671)	$ (10,269)	$ (7,619)
Issuance of units through Long-Term Incentive Plan	(1,470)		(2,129)	$ 659
Issuance of units through Long-Term Incentive Plan (in units)				94,000
Issuance of common units, net	96,661			$ 96,661
Issuance of common units, net (in units)				3,509,000
Non-cash Management Services Agreement expenses	2,208		136	$ 2,072
Other comprehensive (loss) income	(162)	(162)
Net income (loss)	(8,923)		1,671	(5,880)	(4,714)
Balance at the end of the period at Mar. 31, 2019	215,471	295	(135,680)	$ 290,845	$ 60,011		0
Balance at the end of the period (in units) at Mar. 31, 2019				18,176,000	11,905,000
Balance at the beginning of the period at Dec. 31, 2018	146,716	439	(133,687)	$ 207,612	$ 72,352		0
Balance at the beginning of the period (in units) at Dec. 31, 2018				14,573,452	11,905,138
Changes in Partners’ Capital
Other comprehensive (loss) income	(396)
Net income (loss)	(3,872)
Balance at the end of the period at Sep. 30, 2019	251,883	61	(106,530)	$ 314,258	$ 92,286		(48,192)
Balance at the end of the period (in units) at Sep. 30, 2019				19,870,436	13,586,375
Balance at the beginning of the period at Mar. 31, 2019	215,471	295	(135,680)	$ 290,845	$ 60,011		0
Balance at the beginning of the period (in units) at Mar. 31, 2019				18,176,000	11,905,000
Changes in Partners’ Capital
Excess consideration over Enviva Wilmington Holdings, LLC net assets and initial recognition of its noncontrolling interest	(46,909)		1,283				(48,192)
Distributions to unitholders, distribution equivalent and incentive distribution rights	(24,754)		(2,271)	$ (13,720)	$ (8,763)
Issuance of units through Long-Term Incentive Plan	(40)		247	$ (287)
Issuance of units through Long-Term Incentive Plan (in units)				2,000
Issuance of common units, net	49,641			$ 49,641
Issuance of common units, net (in units)				1,692,000
Issuance of units associated with the JV 1.0 Drop-Down	50,000				$ 50,000
Issuance of units associated with the First JV Drop-Down (in units)					1,681,000
Non-cash Management Services Agreement expenses	12,239		11,226	$ 1,013
Reimbursable amounts under Make-Whole Agreement	1,502		1,502
Other comprehensive (loss) income	(192)	(192)
Net income (loss)	(3,801)		2,271	(3,609)	$ (2,463)
Balance at the end of the period at Jun. 30, 2019	253,157	103	(121,422)	$ 323,883	$ 98,785		(48,192)
Balance at the end of the period (in units) at Jun. 30, 2019				19,870,000	13,586,000
Changes in Partners’ Capital
Distributions to unitholders, distribution equivalent and incentive distribution rights	(25,517)		(2,772)	$ (13,776)	$ (8,969)
Issuance of units through Long-Term Incentive Plan	0		(215)	215
Costs of common unit issuances	(24)			(24)
Non-cash Management Services Agreement expenses	8,469		8,119	350
Reimbursable amounts under Make-Whole Agreement	6,988		6,988
Other comprehensive (loss) income	(42)	(42)
Net income (loss)	8,852		2,772	3,610	2,470
Balance at the end of the period at Sep. 30, 2019	$ 251,883	$ 61	$ (106,530)	$ 314,258	$ 92,286		$ (48,192)
Balance at the end of the period (in units) at Sep. 30, 2019				19,870,436	13,586,375

XML

Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our operations are organized as limited partnerships and entities that are disregarded entities for federal and state income tax purposes. As a result, we are not subject to U.S. federal and most state income taxes. The unitholders of the Partnership are liable for these income taxes on their share of our taxable income. 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.

As of September 30, 2019, the only periods subject to examination for federal and state income tax returns are 2015 through 2018. We believe our income tax filing positions, including our status as a pass-through entity, would be sustained on audit and do not anticipate any adjustments that would result in a material change to our unaudited condensed consolidated balance sheet. Therefore, no reserves for uncertain tax positions or interest and penalties have been recorded. For the three and nine months ended September 30, 2019 and 2018, no provision for federal or state income taxes has been recorded in the condensed consolidated financial statements.

XML

Transactions Between Entities Under Common Control (Tables)

9 Months Ended

Sep. 30, 2019

Transactions Between Entities Under Common Control

Schedule of changes in consolidated net assets

The following table outlines the changes in consolidated net assets resulting from the JV 1.0 Drop-Down on April 2, 2019.

Assets:
Cash and cash equivalents	$	3,426
Related-party receivables	945
Prepaid expenses and other current assets	22
Property, plant and equipment, net	140,446
Other long-term assets	8
Total assets	144,847
Liabilities:
Accounts payable	6,395
Related-party payables	1,923
Accrued and other current liabilities	14,965
Finance lease obligations	3
Total liabilities	23,286
Net assets contributed to Partnership	$	121,561

XML

Inventory Impairment and Asset Disposal (Details) MT in Thousands, $ in Thousands		1 Months Ended	3 Months Ended	9 Months Ended
	Feb. 27, 2018 MT	Feb. 28, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Inventory Disclosure [Abstract]
Wood pellets damaged, MT | MT	43
Asset impairment, inventory write-off and disposal costs, emergency response costs, asset repair costs and business continuity activities			$ 9,700	$ 58,400
Assets held for sale
Insurance recovery				48,100
Insurance receivables			$ 0	0	$ 5,140
Insurance recoveries
Assets held for sale
Insurance receivables					$ 3,800
Cost of goods sold
Assets held for sale
Insurance recoveries				$ 1,100
Other income | Insurance recoveries
Assets held for sale
Insurance recoveries received		$ 500

XML

Transactions Between Entities Under Common Control - Schedule of Changes in Consolidated Net Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Apr. 02, 2019	Dec. 31, 2018
Assets
Cash and cash equivalents	$ 2,357		$ 2,460
Related-party receivables	0		1,392
Prepaid expenses and other current assets	3,998		2,235
Property, plant and equipment, net	744,448		557,028
Other long-term assets	7,326		8,616
Total assets	969,115		748,770
Liabilities:
Accounts payable	21,512		15,551
Related-party payables and accrued liabilities	9,119		28,225
Finance lease obligations	543,589		429,933
Total liabilities	$ 717,232		$ 602,054
Hamlet Transaction | JV
Assets
Cash and cash equivalents		$ 3,426
Related-party receivables		945
Prepaid expenses and other current assets		22
Property, plant and equipment, net		140,446
Other long-term assets		8
Total assets		144,847
Liabilities:
Accounts payable		6,395
Related-party payables and accrued liabilities		1,923
Accrued and other current liabilities		14,965
Finance lease obligations		3
Total liabilities		23,286
Net assets contributed to Partnership		$ 121,561

XML

Related-Party Transactions - Schedule of Related Party Amounts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Other revenue
Related Party Transaction [Line Items]
Related party revenue	$ 496	$ 1,042	$ 1,323	$ 3,346
Cost of goods sold
Related Party Transaction [Line Items]
Related party expenses	26,300	20,133	80,921	56,184
General and administrative expenses
Related Party Transaction [Line Items]
Related party expenses	$ 6,486	$ 4,113	$ 19,488	$ 11,628

XML

Equity-Based Awards - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Feb. 28, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Equity-Based Awards
Payment for withholding tax				$ 1,870	$ 4,380
Performance-Based Phantom Units | Affiliate Grants
Equity-Based Awards
Unpaid DER		$ 1,600	$ 700	1,600	700
Performance-Based Phantom Units | Related-party accrued liabilities | Affiliate Grants
Equity-Based Awards
Unpaid DER		600		600
Performance-Based Phantom Units | Other long-term liabilities | Affiliate Grants
Equity-Based Awards
Unpaid DER		1,000	300	1,000	300
Performance-Based Phantom Units | Accrued liabilities | Affiliate Grants
Equity-Based Awards
Unpaid DER			400		400
Time-Based Phantom Units | Director Grants
Equity-Based Awards
Fair value of units granted	$ 400
Unrecognized estimated compensation cost		100		100
Time-Based Phantom Units | Affiliate Grants
Equity-Based Awards
Unrecognized estimated compensation cost		14,200		14,200
DER
Equity-Based Awards
Distributions paid related to DERs		$ 1,200	$ 600	2,100	1,800
DER | Related-party accrued liabilities
Equity-Based Awards
Distributions paid related to DERs				$ 600		$ 900
Share-based compensation | Provider
Equity-Based Awards
Payment for withholding tax					1,700
Share-based compensation | Performance-Based Phantom Units | General Partner Interest
Equity-Based Awards
Payment for withholding tax					$ 2,300

XML

Net Income (Loss) per Limited Partner Unit - Net Income Per Unit Table (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net Income (Loss) per Limited Partner Unit
Distributions declared	$ 25,523	$ 18,346	$ 74,227	$ 54,201
Earnings less than distributions	(17,275)	(4,990)	(79,925)	(56,636)
Net (loss) income available to partners	$ 8,248	$ 13,356	$ (5,698)	$ (2,435)
Net income per limited partner unit—basic (in dollars per unit)	$ 0.15	$ 0.45	$ (0.44)	$ (0.25)
Net income per limited partner unit—diluted (in dollars per unit)	$ 0.15	$ 0.43	$ (0.44)	$ (0.25)
Common Units
Net Income (Loss) per Limited Partner Unit
Distributions declared	$ 22,416	$ 16,814	$ 66,077	$ 37,618
Earnings less than distributions	(17,275)	(4,990)	(79,925)	(42,607)
Net (loss) income available to partners	$ 5,141	$ 11,824	$ (13,848)	$ (4,989)
Weighted-average common units outstanding—basic (in units)	33,457	26,477	31,230	19,866
Weighted-average units outstanding—diluted (in units)	33,457	27,478	31,230	19,866
Weighted-average common units outstanding—basic and diluted (in units)	33,457		31,230	19,866
Net income per limited partner unit—basic (in dollars per unit)		$ 0.45
Net income per limited partner unit—diluted (in dollars per unit)		$ 0.43
Net loss per limited partner unit—basic and diluted (in dollars per unit)	$ 0.15		$ (0.44)	$ (0.25)
Subordinated Units
Net Income (Loss) per Limited Partner Unit
Distributions declared				$ 12,386
Earnings less than distributions				(14,029)
Net (loss) income available to partners				$ (1,643)
Weighted-average common units outstanding—basic (in units)		0		6,541
Weighted-average units outstanding—diluted (in units)		0		6,541
Weighted-average common units outstanding—basic and diluted (in units)				6,541
Net loss per limited partner unit—basic and diluted (in dollars per unit)				$ (0.25)
General Partner
Net Income (Loss) per Limited Partner Unit
Distributions declared	$ 3,107	$ 1,532	$ 8,150	$ 4,197
Earnings less than distributions	0	0	0	0
Net (loss) income available to partners	$ 3,107	$ 1,532	$ 8,150	$ 4,197
Weighted-average common units outstanding—basic (in units)	0	0	0	0
Weighted-average units outstanding—diluted (in units)	0	0	0	0

XML

Leases - Aggregate Maturities of Operating and Finance Lease Liabilities (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Operating Leases
Remainder of 2019	$ 1,112
2020	4,140
2021	3,890
2022	3,719
2023	3,710
Thereafter	65,110
Total lease payments	81,681
Less: imputed interest	(46,379)
Total present value of lease liabilities	35,302
Finance Leases
Remainder of 2019	1,415
2020	4,358
2021	1,814
2022	279
2023	246
Thereafter	92
Total lease payments	8,204
Less: imputed interest	(485)
Total present value of lease liabilities	7,719
Total
Remainder of 2019	2,527
2020	8,498
2021	5,704
2022	3,998
2023	3,956
Thereafter	65,202
Total lease payments	89,885
Less: imputed interest	(46,864)
Total present value of lease liabilities	$ 43,021

XML

Derivative Instruments - Changes In Accumulated Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest rate swap
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain in Other Comprehensive Loss on Derivative	$ 13		$ (148)
Amount of Gain in Other Comprehensive Income on Derivative (Effective Portion)		$ 41		$ 469
Interest rate swap | Interest expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain Reclassified from Accumulated Other Comprehensive Loss into Earnings	$ 59		$ 252
Amount of Gain Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)		0		0
Amount of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)		67		131
Foreign currency exchange forward contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain in Other Comprehensive Income on Derivative (Effective Portion)		1,907		4,532
Foreign currency exchange forward contracts | Product sales
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)		0		0
Amount of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)		2,418		2,413
Foreign currency purchased option contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain in Other Comprehensive Income on Derivative (Effective Portion)		765		749
Foreign currency purchased option contracts | Product sales
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)		0		0
Amount of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)		$ (470)		$ (470)

XML

Supplemental Guarantor Information - Condensed Consolidated Statement of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Condensed Statement of Income Captions [Line Items]
Net income (loss)	$ 8,852	$ (3,801)	$ (8,923)	$ 13,356	$ 3,544	$ (19,335)	$ (3,872)	$ (2,435)
Other comprehensive (loss) income:
Net unrealized gains (losses) on cash flow hedges	13						(148)
Net unrealized gains (losses) on cash flow hedges				2,713				5,750
Reclassification of net gains realized into net income (loss)	(59)						(252)
Currency translation adjustment	4			1			4	1
Reclassification of net gains realized into net loss				(2,013)				(2,076)
Total other comprehensive (loss) income	(42)	$ (192)	$ (162)	701	$ 4,301	$ (1,327)	(396)	3,675
Total comprehensive income (loss)	8,810			14,057			(4,268)	1,240
Eliminations
Condensed Statement of Income Captions [Line Items]
Net income (loss)	(373)			0			(551)	0
Other comprehensive (loss) income:
Net unrealized gains (losses) on cash flow hedges	0						0
Net unrealized gains (losses) on cash flow hedges				0				0
Reclassification of net gains realized into net income (loss)	0						0
Currency translation adjustment	0			0			0	0
Reclassification of net gains realized into net loss				0				0
Total other comprehensive (loss) income	0			0			0	0
Total comprehensive income (loss)	(373)			0			(551)	0
Guarantor Subsidiaries
Condensed Statement of Income Captions [Line Items]
Net income (loss)	11,743			13,375			4,516	(2,302)
Other comprehensive (loss) income:
Net unrealized gains (losses) on cash flow hedges	13						(148)
Net unrealized gains (losses) on cash flow hedges				2,713				5,750
Reclassification of net gains realized into net income (loss)	(59)						(252)
Currency translation adjustment	0			0			0	0
Reclassification of net gains realized into net loss				(2,013)				(2,076)
Total other comprehensive (loss) income	(46)			700			(400)	3,674
Total comprehensive income (loss)	11,697			14,075			4,116	1,372
Non-Guarantor Subsidiaries
Condensed Statement of Income Captions [Line Items]
Net income (loss)	(2,518)			(19)			(7,837)	(133)
Other comprehensive (loss) income:
Net unrealized gains (losses) on cash flow hedges	0						0
Net unrealized gains (losses) on cash flow hedges				0				0
Reclassification of net gains realized into net income (loss)	0						0
Currency translation adjustment	4			1			4	1
Reclassification of net gains realized into net loss				0				0
Total other comprehensive (loss) income	4			1			4	1
Total comprehensive income (loss)	$ (2,514)			$ (18)			$ (7,833)	$ (132)

XML

Net Income (Loss) per Limited Partner Unit - Schedule of Cash Distribution Paid or Declared (Details) - USD ($) $ / shares in Units, $ in Millions	Oct. 31, 2019	Jul. 31, 2019	May 02, 2019	Jan. 29, 2019	Oct. 31, 2018	Aug. 01, 2018	May 03, 2018
Distribution Made to Limited Partner [Line Items]
Distribution Per Unit (in dollars per unit)		$ 0.66	$ 0.645	$ 0.64	$ 0.635	$ 0.63	$ 0.625
Total Cash Distribution		$ 22.1	$ 21.6	$ 17.0	$ 16.8	$ 16.7	$ 16.5
Total Payment to General Partner for Incentive Distribution Rights		$ 2.8	$ 2.3	$ 1.7	$ 1.5	$ 1.4	$ 1.3
Subsequent Event
Distribution Made to Limited Partner [Line Items]
Distribution Per Unit (in dollars per unit)	$ 0.67
Total Cash Distribution	$ 22.4
Total Payment to General Partner for Incentive Distribution Rights	$ 3.1

XML

Revenue

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

We disaggregate our revenue into two categories: product sales and other revenue. Other revenue includes fees associated with customer requests to cancel, defer or accelerate shipments in satisfaction of the related performance obligation and third- and related-party terminal services fees. These categories best reflect the nature, amount, timing and uncertainty of our revenue and cash flows.

Performance Obligations

As of September 30, 2019, the aggregate amount of revenues from contracts with customers allocated to performance obligations that were unsatisfied or partially satisfied was approximately $9.3 billion. This amount excludes forward prices related to variable consideration including inflation and foreign currency and commodity prices. Also, this amount excludes the effects of related foreign currency derivative contracts as they do not represent contracts with customers. As of October 1, 2019, we expect to recognize approximately 2.0% of our remaining performance obligations as revenue during the remainder of 2019, approximately 10.0% in 2020 and the balance thereafter. Our off-take contracts expire at various times through 2040 and our terminal services contracts extend into 2026.

Variable Consideration

Variable consideration from off-take contracts arises from several pricing features outlined in our off-take contracts, pursuant to which such contract pricing may be adjusted in respect of particular shipments to reflect differences between certain contractual quality specifications of the wood pellets as measured both when the wood pellets are loaded onto ships and unloaded at the discharge port as well as certain other contractual adjustments.

Variable consideration from terminal services contracts, which was not material for the three and nine months ended September 30, 2019 and 2018, arises from price increases based on agreed inflation indices and from above-minimum throughput quantities or services.

We allocate variable consideration under our off-take and terminal services contracts entirely to each performance obligation to which variable consideration relates. The estimate of variable consideration represents the amount that is not more likely than not to be reversed. For the three and nine months ended September 30, 2019, we recognized $0.1 million and $0.5 million. respectively, of revenue related to performance obligations satisfied in previous periods. For the three and nine months ended September 30, 2018, we recognized an insignificant amount of revenue related to performance obligations in previous periods.

Contract Balances

Accounts receivable related to product sales as of September 30, 2019 and December 31, 2018 were $47.8 million and $51.3 million, respectively. We had no deferred revenue as of September 30, 2019 for future performance obligations associated with off-take contracts. We had $0.3 million of deferred revenue as of December 31, 2018 for future performance obligations associated with off-take contracts.

XML

Property, Plant and Equipment

9 Months Ended

Sep. 30, 2019

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment consisted of the following as of:

	September 30, 2019			December 31, 2018
Land	$	15,226		$	13,492
Land improvements	56,637			44,990
Buildings	216,995			196,574
Machinery and equipment	576,401			434,776
Vehicles	635			635
Furniture and office equipment	6,759			6,148
Leasehold improvements	987			987
Property, plant and equipment - in service	873,640			697,602
Less accumulated depreciation	(190,116		)	(154,967		)
Property, plant and equipment - in service, net	683,524			542,635
Construction in progress	60,924			14,393
Total property, plant and equipment, net	$	744,448		$	557,028

Total depreciation expense was $13.3 million and $35.8 million, respectively, for the three and nine months ended September 30, 2019. Total depreciation expense was $9.8 million and $29.1 million, respectively, for the three and nine months ended September 30, 2018. Total interest capitalized related to construction in progress was $0.7 million and $1.4 million, respectively, for the three and nine months ended September 30, 2019. Accrued amounts for property, plant and equipment and construction in progress included in accrued and other current liabilities were $15.4 million and $6.3 million at September 30, 2019 and December 31, 2018, respectively.

XML

Long-Term Debt and Finance Lease Obligations

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Long-Term Debt and Finance Lease Obligations

Long-Term Debt and Finance Lease Obligations

Long-term debt and finance lease obligations at carrying value are composed of the following:

	September 30, 2019			December 31, 2018
Senior notes, net of unamortized discount, premium and debt issuance of $1.6 million as of September 30, 2019 and $2.2 million as of December 31, 2018	$	353,352		$	352,843
Senior secured revolving credit facility	185,000			73,000
Other loans	2,008			2,015
Finance leases	7,719			4,797
Total long-term debt and finance lease obligations	548,079			432,655
Less current portion of long-term debt and finance lease obligations	(4,490		)	(2,722		)
Long-term debt and finance lease obligations, excluding current installments	$	543,589		$	429,933

Senior Notes Due 2021

As of September 30, 2019 and December 31, 2018, we were in compliance with all covenants and restrictions associated with, and no events of default existed under, our 8.5% senior unsecured notes due 2021. Our obligations under the senior notes are guaranteed by certain of our subsidiaries.

Senior Secured Revolving Credit Facility

As of September 30, 2019 and December 31, 2018, we were in compliance with all covenants and restrictions associated with, and no events of default existed under, our senior secured revolving credit facility due October 2023. Our obligations under the senior secured revolving credit facility are guaranteed by certain of our subsidiaries and secured by liens on substantially all of our assets; however, the senior secured revolving credit facility is not guaranteed by the First JV or secured by liens on its assets.

XML

Equity-Based Awards (Tables)

9 Months Ended

Sep. 30, 2019

Affiliate Grants

Equity-Based Awards

Schedule of phantom unit awards

The following table summarizes information regarding phantom unit awards (the “Affiliate Grants”) under the LTIP to employees of Enviva Management and its affiliates who provide services to the Partnership:

	Time-Based Phantom Units				Performance-Based Phantom Units				Total Affiliate Grant Phantom Units
	Units		Weighted- Average Grant Date Fair Value (per unit)(1)		Units		Weighted- Average Grant Date Fair Value (per unit)(1)		Units		Weighted- Average Grant Date Fair Value (per unit)(1)
Nonvested December 31, 2018	723,940		$	25.91	239,512		$	27.65	963,452		$	26.34
Granted	390,909		$	30.39	216,224		$	30.25	607,133		$	30.34
Forfeitures	(81,332	)	$	28.27	(16,560	)	$	29.80	(97,892	)	$	28.53
Vested	(145,506	)	$	18.30	—		$	—	(145,506	)	$	18.30
Nonvested September 30, 2019	888,011		$	28.91	439,176		$	28.85	1,327,187		$	28.89

______________________________________________________________

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

Director Grants

Equity-Based Awards

Schedule of phantom unit awards

The following table summarizes information regarding phantom unit awards to certain non-employee directors of the General Partner (the “Director Grants”) under the LTIP:

	Time-Based  Phantom Units
	Units		Weighted- Average Grant Date Fair Value (per unit)(1)
Nonvested December 31, 2018	13,964		$	28.65
Granted	13,444		$	30.16
Vested	(13,964	)	$	28.65
Nonvested September 30, 2019	13,444		$	30.16

XML

Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2019

Derivative Instrument Detail [Abstract]

Schedule of fair values of the derivative financial instruments included in the consolidated balance sheets

The fair value of derivative instruments as of September 30, 2019 and December 31, 2018 was as follows:

		Asset (Liability)
	Balance Sheet Classification	September 30, 2019		December 31, 2018
Designated as hedging instruments:
Interest rate swap
	Other current assets	$	122	$	508
	Other long-term assets	—		118
Total derivatives designated as hedging instruments		$	122	$	626
Not designated as hedging instruments:
Foreign currency exchange forward contracts:
	Other current assets	$	1,647	$	794
	Other long-term assets	1,290		1,810
	Accrued and other current liabilities	—		(68		)
	Other long-term liabilities	—		(179		)
Foreign currency purchased option contracts:
	Other current assets	286		22
	Other long-term assets	3,369		3,348
Total derivatives not designated as hedging instruments		$	6,592	$	5,727

Schedule of instruments designated as cash flow hedges and the related changes in other accumulated comprehensive income and the gains and losses in income

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the three months ended September 30, 2019 were as follows:

	Amount of Gain in Other Comprehensive Loss on Derivative		Location of Gain Reclassified from Accumulated Other Comprehensive Loss	Amount of Gain  Reclassified from Accumulated Other Comprehensive Loss into Earnings
Interest rate swap	$	13	Interest expense	$	59

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the nine months ended September 30, 2019 were as follows:

	Amount of Loss in Other Comprehensive Loss on Derivative			Location of Gain Reclassified from Accumulated Other Comprehensive Loss	Amount of Gain  Reclassified from Accumulated Other Comprehensive Loss into Earnings
Interest rate swap	$	(148	)	Interest expense	$	252

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the three months ended September 30, 2018 were as follows:

	Amount of Gain in Other Comprehensive Income on Derivative (Effective Portion)		Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion)	Amount of Gain Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)		Location of (Loss) Gain Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency exchange forward contracts	$	1,907	Product sales	$	—	Product sales	$	2,418
Foreign currency exchange purchased option contracts	765		Product sales	—		Product sales	(470		)
Interest rate swap	41		Interest expense	—		Interest expense	67

The effects of instruments that were designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in earnings for the nine months ended September 30, 2018 were as follows:

	Amount of Gain in Other Comprehensive Income on Derivative (Effective Portion)		Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion)	Amount of Gain Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)		Location of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Earnings on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency exchange forward contracts	$	4,532	Product sales	$	—	Product sales	$	2,413
Foreign currency exchange purchased option contracts	749		Product sales	—		Product sales	(470		)
Interest rate swap	469		Interest expense	—		Interest expense	131

Schedule of notional amounts of outstanding derivative instruments designated as cash flow hedges associated with outstanding or unsettled derivative instruments

The notional amounts of outstanding derivative instruments associated with outstanding or unsettled derivative instruments as of September 30, 2019 and December 31, 2018 were as follows:

	September 30, 2019		December 31, 2018
Foreign exchange forward contracts in GBP	£	38,140	£	42,170
Foreign exchange purchased option contracts in GBP	£	43,415	£	39,365
Foreign exchange forward contracts in EUR	€	7,300	€	14,300
Foreign exchange purchased option contracts in EUR	€	1,675	€	1,675
Interest rate swap	$	35,723	$	39,829