Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Entity Registrant Name | Enviva Partners, LP | |
Entity Central Index Key | 1,592,057 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Common Units | ||
Entity Common Stock, Shares Outstanding | 14,445,268 | |
Subordinated Units-Sponsor | ||
Entity Common Stock, Shares Outstanding | 11,905,138 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 5,057 | $ 524 |
Accounts receivable, net of allowance for doubtful accounts of $0 as of March 31, 2018 and December 31, 2017 | 48,042 | 79,185 |
Related-party receivables | 3,613 | 5,412 |
Inventories | 34,306 | 23,536 |
Prepaid expenses and other current assets | 1,361 | 1,006 |
Total current assets | 92,379 | 109,663 |
Property, plant and equipment, net of accumulated depreciation of $125.8 million as of March 31, 2018 and $117.1 million as of December 31, 2017 | 553,093 | 562,330 |
Intangible assets, net of accumulated amortization of $10.5 million as of March 31, 2018 and $10.3 million as of December 31, 2017 | 109 | |
Goodwill | 85,615 | 85,615 |
Other long-term assets | 2,762 | 2,394 |
Total assets | 733,849 | 760,111 |
Current liabilities: | ||
Accounts payable | 4,363 | 7,554 |
Related-party payables | 19,486 | 26,398 |
Accrued and other current liabilities | 44,098 | 29,363 |
Related-party accrued liabilities | 1,211 | |
Current portion of interest payable | 12,573 | 5,029 |
Current portion of long-term debt and capital lease obligations | 7,105 | 6,186 |
Total current liabilities | 88,836 | 74,530 |
Long-term debt and capital lease obligations | 393,686 | 394,831 |
Related-party long-term payable | 74,000 | 74,000 |
Long-term interest payable | 920 | 890 |
Other long-term liabilities | 7,148 | 5,491 |
Total liabilities | 564,590 | 549,742 |
Commitments and contingencies | ||
Partners’ capital: | ||
Common unitholders—public (13,179,815 and 13,073,439 units issued and outstanding at March 31, 2018 and December 31, 2017, respectively) | 205,969 | 224,027 |
Common unitholder—sponsor (1,265,453 and 1,347,161 units issued and outstanding at March 31, 2018 and December 31, 2017, respectively) | 12,982 | 16,050 |
Subordinated unitholder—sponsor (11,905,138 units issued and outstanding at March 31, 2018 and December 31, 2017) | 85,271 | 101,901 |
General Partner (no outstanding units) | (130,596) | (128,569) |
Accumulated other comprehensive loss | (4,367) | (3,040) |
Total Enviva Partners, LP partners' capital | 169,259 | 210,369 |
Total liabilities and partners' capital | $ 733,849 | $ 760,111 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts receivable, allowance for doubtful accounts | $ 0 | $ 0 |
Property, plant and equipment, accumulated depreciation | 125,834 | 117,067 |
Intangible assets, accumulated amortization | $ 10,500 | $ 10,300 |
Common Units-Public | ||
Limited partner units issued | 13,179,815 | 13,073,439 |
Limited partner units outstanding | 13,179,815 | 13,073,439 |
Common Units-Sponsor | ||
Limited partner units issued | 1,265,453 | 1,347,161 |
Limited partner units outstanding | 1,265,453 | 1,347,161 |
Subordinated Units-Sponsor | ||
Limited partner units issued | 11,905,138 | 11,905,138 |
Limited partner units outstanding | 11,905,138 | 11,905,138 |
General Partner | ||
General partner units outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | $ 125,801 | $ 122,443 |
Cost of goods sold, excluding depreciation and amortization | 121,038 | 96,717 |
Depreciation and amortization | 9,304 | 9,358 |
Total cost of goods sold | 130,342 | 106,075 |
Gross margin | (4,541) | 16,368 |
General and administrative expenses | 6,804 | 8,763 |
(Loss) income from operations | (11,345) | 7,605 |
Other income (expense): | ||
Interest expense | (8,645) | (7,707) |
Other income | 655 | 57 |
Total other expense, net | (7,990) | (7,650) |
Net (loss) income | (19,335) | (45) |
Less net loss attributable to noncontrolling partners’ interests | 1,319 | |
Net (loss) income attributable to Enviva Partners, LP | $ (19,335) | $ 1,274 |
Net (loss) income per unit: | ||
Common - basic (in dollars per unit) | $ (0.78) | $ 0.08 |
Common - diluted (in dollars per unit) | (0.78) | 0.07 |
Subordinated - basic (in dollars per unit) | (0.78) | 0.08 |
Subordinated - diluted (in dollars per unit) | $ (0.78) | $ 0.08 |
Weighted-average number of limited partner units outstanding: | ||
Common - basic (in units) | 14,438 | 14,380 |
Common - diluted (in units) | 14,438 | 15,228 |
Subordinated - basic and diluted (in units) | 11,905 | 11,905 |
General Partner | ||
Other income (expense): | ||
Net (loss) income | $ 1,130 | |
Net (loss) income attributable to Enviva Partners, LP | 1,264 | $ 537 |
Limited Partners | ||
Other income (expense): | ||
Net (loss) income attributable to Enviva Partners, LP | (19,335) | 2,535 |
Product sales | ||
Revenues | 122,799 | 119,047 |
Other revenue | ||
Revenues | 3,002 | 3,396 |
Enviva Port of Wilmington, LLC Drop-Down | ||
Other income (expense): | ||
Net (loss) income attributable to Enviva Partners, LP | (1,261) | |
Wilmington, LLC Drop-Down | ||
Other income (expense): | ||
Net (loss) income | (1,300) | |
Enviva Partners LP excluding Enviva Port of Wilmington, LLC Drop-Down | ||
Other income (expense): | ||
Net (loss) income attributable to Enviva Partners, LP | $ (19,335) | $ 2,535 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net loss | $ (19,335) | $ (45) |
Other comprehensive loss: | ||
Net unrealized losses on cash flow hedges | (1,328) | (797) |
Reclassification of net losses realized into net (loss) income | 1 | |
Total other comprehensive loss | (1,327) | (797) |
Total comprehensive (loss) income | (20,662) | (842) |
Wilmington, LLC Drop-Down | ||
Net loss | (1,300) | |
General Partner | ||
Net loss | 1,130 | |
General Partner | Enviva Port of Wilmington, LLC Drop-Down | ||
Other comprehensive loss: | ||
Total comprehensive (loss) income | (1,261) | |
Enviva Partners LP excluding Enviva Port of Wilmington, LLC Drop-Down | ||
Other comprehensive loss: | ||
Total comprehensive (loss) income | (20,662) | 419 |
Comprehensive loss attributable to noncontrolling partners' interests | (1,319) | |
Comprehensive (loss) income attributable to Enviva Partners, LP partners | $ (20,662) | $ 1,738 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Changes in Partners Capital - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands | General Partner | Common Units-Public | Common Units-Sponsor | Subordinated Units-Sponsor | Accumulated Other Comprehensive (Loss) Income | Total |
Balance at the beginning of the period at Dec. 31, 2017 | $ (128,569) | $ 224,027 | $ 16,050 | $ 101,901 | $ (3,040) | $ 210,369 |
Balance at the beginning of the period (in units) at Dec. 31, 2017 | 13,073,439 | 1,347,161 | 11,905,138 | |||
Changes in Partners’ Capital | ||||||
Distributions to unitholders, distribution equivalent and incentive distribution rights | (1,130) | $ (8,833) | $ (784) | $ (7,381) | (18,128) | |
Issuance of units through Long-Term Incentive Plan | (2,129) | $ (164) | $ (1,301) | (3,594) | ||
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 expense | 102 | $ 931 | 1,033 | |||
Other comprehensive loss | (1,327) | (1,327) | ||||
Net income (loss) | 1,130 | (10,233) | $ (983) | (9,249) | (19,335) | |
Balance at the end of the period at Mar. 31, 2018 | $ (130,596) | $ 205,969 | $ 12,982 | $ 85,271 | $ (4,367) | $ 169,259 |
Balance at the end of the period (in units) at Mar. 31, 2018 | 13,179,815 | 1,265,453 | 11,905,138 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (19,335) | $ (45) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 9,408 | 9,362 |
Amortization of debt issuance costs, debt premium and original issue discounts | 272 | 381 |
Impairment of inventory | 10,383 | |
Insurance recoveries | (4,891) | |
General and administrative expense incurred by the First Hancock JV prior to Enviva Port of Wilmington, LLC Drop-Down | 438 | |
Loss on disposal of assets | 1,130 | 24 |
Unit-based compensation | 1,343 | 1,714 |
Fair value changes in derivatives | 525 | (759) |
Unrealized loss on foreign currency transactions | (69) | |
Change in operating assets and liabilities: | ||
Accounts receivable, net | 36,123 | 28,192 |
Related-party receivables | 1,800 | (386) |
Prepaid expenses and other assets | (50) | (682) |
Assets held for sale | (345) | |
Inventories | (16,509) | (1,254) |
Other long-term assets | 21 | |
Derivatives | (601) | |
Accounts payable, accrued liabilities and other current liabilities | 8,677 | (3,383) |
Related-party payables | (6,501) | (2,580) |
Accrued interest | 7,574 | 6,421 |
Deferred revenue | 143 | |
Other long-term liabilities | 37 | 382 |
Net cash provided by operating activities | 29,316 | 37,644 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (1,999) | (9,344) |
Net cash used in investing activities | (1,999) | (9,344) |
Cash flows from financing activities: | ||
Principal payments on debt and capital lease obligations | (1,172) | (17,158) |
Cash paid related to debt issuance costs | (209) | |
Proceeds from common unit issuance under the At-the-Market Offering Program, net | 241 | 1,715 |
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder | (17,847) | (14,829) |
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting | (2,341) | |
Payment to Provider for tax-withholding associated with Long-Term Incentive Plan vesting | (1,665) | |
Proceeds from debt issuance | 10,000 | |
Contributions from sponsor related to Enviva Pellets Sampson, LLC Drop-Down | 1,651 | |
Proceeds from contributions from the First Hancock JV prior to Enviva Port of Wilmington, LLC Drop-Down | 2,915 | |
Net cash used in financing activities | (22,784) | (15,915) |
net increase in cash, cash equivalents and restricted cash | 4,533 | 12,385 |
Cash, cash equivalents and restricted cash, beginning of period | 524 | 466 |
Cash, cash equivalents and restricted cash, end of period | 5,057 | 12,851 |
Non-cash investing and financing activities: | ||
Property, plant and equipment acquired included in accounts payable and accrued liabilities | 1,587 | 13,917 |
Property, plant and equipment acquired under capital leases | 674 | 1,124 |
Property, plant and equipment transferred from inventories | 2 | 260 |
Distributions included in liabilities | 1,352 | 509 |
Depreciation capitalized to inventories | 1,037 | 86 |
Supplemental information: | ||
Interest paid | $ 795 | $ 854 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Description of Business and Basis of Presentation | |
Description of Business and Basis of Presentation | (1) Description of Business and Basis of Presentation Description of Business Enviva Partners, LP (the “Partnership”) supplies utility-grade wood pellets primarily to major power generators under long-term, take-or-pay off-take contracts. The Partnership procures wood fiber and processes it into utility-grade wood pellets and loads the finished wood pellets into railcars, trucks and barges that are transported to deep-water marine terminals, where they are received, stored and ultimately loaded onto oceangoing vessels for transport to the Partnership’s principally European customers. The Partnership owns and operates six industrial-scale wood pellet production plants located in the Mid-Atlantic and Gulf Coast regions of the United States. Wood pellets are exported from the Partnership’s 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 accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments and accruals that are necessary for a fair presentation of the results of all periods presented herein and are of a normal recurring nature. The results reported in these statements are not necessarily indicative of the results that may be reported for the entire year. These statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC. Enviva Port of Wilmington, LLC On October 2, 2017, pursuant to the terms of a contribution agreement (the “Wilmington Contribution Agreement”) between the Partnership and Enviva Wilmington Holdings, LLC, a joint venture between Enviva Development Holdings, LLC, a wholly owned subsidiary of Enviva Holdings, LP (the “sponsor”), Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life Insurance Company (U.S.A.) (the “First Hancock JV”), the Partnership acquired from the First Hancock 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 purchase price, which was $130.0 million, included an initial payment of $54.6 million, net of an approximate purchase price adjustment of $1.4 million. The initial payment was funded with borrowings from revolving credit commitments (see Note 10, Long-Term Debt and Capital Lease Obligations ) and cash on hand. The acquisition (the “Wilmington Drop-Down”) included the Wilmington terminal and a long-term terminal services agreement with the Partnership’s sponsor (the “Holdings TSA”) to handle throughput volumes sourced by the sponsor from the wood pellet production plant in Greenwood, South Carolina (the “Greenwood plant”). On February 16, 2018, Enviva Pellets Greenwood, LLC (“Greenwood”), a wholly owned subsidiary of Enviva JV Development Company, LLC, a joint venture between Enviva Development Holdings, LLC, a wholly owned subsidiary of the sponsor, Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life Insurance Company (U.S.A.), acquired the Greenwood plant (the “Greenwood Acquisition”). In connection with the Greenwood Acquisition, the Holdings TSA, which provides for deficiency payments to Wilmington if quarterly minimum throughput requirements are not met, was amended and assigned by the sponsor to Greenwood (see Note 11, Related-Party Transactions ). In addition, the Wilmington Contribution Agreement contemplates that Wilmington will enter into a long-term terminal services agreement (the “Wilmington Hamlet TSA”) with the First Hancock JV and Enviva Pellets Hamlet, LLC (“Hamlet”) to receive, store and load wood pellets from the First Hancock JV’s proposed production plant in Hamlet, North Carolina (the “Hamlet plant”) when the First Hancock JV completes construction of the Hamlet plant. The Wilmington Hamlet TSA also provides for deficiency payments to Wilmington if minimum throughput requirements are not met. Pursuant to the Wilmington Contribution Agreement, following notice of the anticipated first delivery of wood pellets to the Wilmington terminal from the Hamlet plant, Wilmington, Hamlet, and the First Hancock JV will enter into the Wilmington Hamlet TSA and the Partnership will make a final payment of $74.0 million in cash or common units to the First Hancock JV, subject to certain conditions, as deferred consideration for the Wilmington Drop-Down. At March 31, 2018 and December 31, 2017, the $74.0 million is included in related-party long-term payable on the condensed consolidated balance sheets. Wilmington also entered into a throughput option agreement with the sponsor granting the sponsor, subject to certain conditions, the option to obtain terminal services at the Wilmington terminal at marginal cost throughput rates for wood pellets produced by one of the sponsor’s potential future wood pellet production plants. The Partnership accounted for the Wilmington Drop-Down as a combination of entities under common control at historical cost in a manner similar to a pooling of interests. Accordingly, the unaudited interim condensed consolidated financial statements for the periods prior to the three months ended March 31, 2018 were retrospectively recast to reflect the acquisition of the First Hancock JV’s interests in Wilmington as if it had occurred on May 15, 2013, the date Wilmington was originally organized (see Note 3, Transactions Between Entities Under Common Control ). |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies | |
Significant Accounting Policies | (2) Significant Accounting Policies During interim periods, the Partnership follows the accounting policies disclosed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2017 except for the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 606 , Revenue from Contracts with Customers (“ASC 606”) . The adoption changed the Partnership’s accounting policies for revenue recognition and cost of goods sold. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the Partnership’s unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Revenue Recognition The Partnership primarily earns revenue by supplying wood pellets to its customers under off-take contracts, the majority of the commitments under which are long-term in nature. The Partnership refers to the structure of its off-take contracts as “take-or-pay” because they include a firm obligation of the customer to take a fixed quantity of product at a stated price and provisions that ensure the Partnership will be compensated in the case of a customer’s failure to accept all or a part of the contracted volumes or termination of a contract by a customer. The Partnership’s long-term off-take contracts define the annual volume of wood pellets that a customer is required to purchase and the Partnership is required to sell, the fixed price per metric ton for product satisfying a base net calorific value and other technical specifications. These prices are fixed for the entire term, subject to annual inflation-based adjustments and price escalators, as well as, in some instances, price adjustments for product specifications and changes in underlying indicies. In addition to sales of the Partnership’s product under these long-term off-take contracts, the Partnership routinely sells wood pellets under shorter-term contracts, which range in volume and tenor and, in some cases, may include only one specific shipment. Because each of the Partnership’s off-take contracts is a bilaterally negotiated agreement, the Partnership’s revenue over the duration of such contracts does not generally follow observable current market pricing trends. The Partnership’s performance obligation under these contracts include the delivery of wood pellets, and are aggregated into metric tons. The Partnership accounts for each metric ton as a single performance obligation. The Partnership’s revenue from the sales of wood pellets it produces is recognized as “Product sales” upon satisfaction of the Partnership’s performance obligation when control transfers to the customer at the time of loading wood pellets onto a ship. Depending on the specific off‑take contract, shipping terms are either Cost, Insurance and Freight (“CIF”) or Cost and Freight (“CFR”) or Free on Board (“FOB”). Under a CIF contract, the Partnership procures and pays for shipping costs, which include insurance and all other charges, up to the port of destination for the customer. Under a CFR contract, the Partnership procures and pays for shipping costs, which include insurance (excluding marine cargo insurance) and all other charges, up to the port of destination for the customer. Shipping under CIF and CFR contracts after control has passed to the customer is considered a fulfillment activity rather than a performance obligation and associated expenses are included in the price to the customer. Under FOB contracts, the customer is directly responsible for shipping costs. In some cases, the Partnership may purchase shipments of product from third-party suppliers and resell them in back-to-back transactions (“purchase and sale transactions”). The Partnership has determined that it is the principal in these transactions because it controls the pellets prior to transferring them to the customer and therefore recognizes related revenue on a gross basis in “Product sales.” In instances in which a customer requests the cancellation, deferral or acceleration of a shipment, the customer may pay a fee, which is included in “Other revenue.” The Partnership recognizes third- and related-party terminal services revenue ratably over the contract term at its ports, which is included in “Other revenue.” Terminal services are performance obligations that are satisfied over time, as customers simultaneously receive and consume the benefits of the terminal services performed by the Partnership. The consideration is generally fixed for minimum quantities and above the minimum are generally billed based on a per-ton rate. The Partnership expects to recognize approximately $5.9 billion in revenue from its remaining performance obligations related to “Product sales” and “Other revenue” with fixed consideration. Most of the Partnership’s off-take contracts expire by 2027, and two contracts expire in 2034. The Partnership’s terminal services contracts extend to 2026. Remaining performance obligations are as follows: Period from April 1, 2018 to December 31, 2018 2019 Thereafter Total Product sales $ 505,344 $ 600,003 $ 4,836,670 $ 5,942,017 Other revenue 531 708 1,180 2,419 Total revenue $ 505,875 $ 600,711 $ 4,837,850 $ 5,944,436 Variable consideration for off-take contracts arises from several pricing features outlined in the Partnership’s 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 arises from price increases based on agreed inflation indices and from above-minimum throughput quantities or services, which were not material for the three months ended March 31, 2018. The Partnership allocates variable consideration under its 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 recovered. For the three months ended March 31, 2018, the Partnership recognized an insignificant amount of revenue related to performance obligations satisfied during fiscal year ended December 31, 2017. Under the Partnership’s off-take contracts, customers are obligated to pay the majority of the purchase price prior to the arrival of the ship at the customers’ discharge port. The remaining portion is paid after the wood pellets are unloaded at the discharge port. The Partnership generally recognizes revenue prior to the issuance of an invoice to the customer. Accounts receivable related to “Product sales” as of March 31, 2018 and December 31, 2017 was $42.5 million and $78.0 million, respectively. Cost of Goods Sold Cost of goods sold includes the cost to produce and deliver wood pellets to customers, reimbursable shipping related costs associated with specific off-take contracts with CIF and CFR shipping terms, and costs associated with purchase and sale transactions. Raw material, production and distribution costs associated with delivering wood pellets to our owned and leased marine terminals and third‑ and related-party wood pellet purchase costs are capitalized as a component of inventory. Fixed production overhead, including the related depreciation expense, is allocated to inventory based on the normal capacity of the production plants. These costs are reflected in cost of goods sold when inventory is sold. Distribution costs associated with shipping wood pellets to customers and amortization of favorable acquired customer contracts are expensed as incurred. Inventory is recorded using the first-in, first-out method (“FIFO”), which requires the use of judgment and estimates. Given the nature of the inventory, the calculation of cost of goods sold is based on estimates used in the valuation of the FIFO inventory and in determining the specific composition of inventory that is sold to each customer. Recently Adopted Accounting Standards In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers . ASU 2014-09 and subsequent amendments were codified as ASC 606. ASC 606 supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Partnership recognizes revenue under ASC 606 and all related amendments, which it adopted on January 1, 2018, using the modified retrospective transition method. The Partnership determined that, upon adoption of the ASC 606, its off-take contracts will continue to be classified as “Product sales.” Revenue is recognized at the point in time at which control of the wood pellets passes to the customer as the wood pellets are loaded onto shipping vessels, which is consistent with the timing of revenue recognition under the Partnership’s legacy accounting policy. However, the adoption of ASC 606 impacted the basis of presentation for purchase and sale transactions. Prior to the adoption of ASC 606, the Partnership reported revenue from purchase and sale transactions net of costs paid to third-party suppliers, which was classified as “Other revenue.” Subsequent to the adoption of ASC 606, the Partnership recognizes revenue on a gross basis in “Products sales” when it determines that it acts as a principal and controls the wood pellets before they are transferred to the customer. The decision as to whether to recognize revenue on a gross or net basis requires significant judgment. Recoveries from customers for certain costs incurred at the discharge port under the Partnership’s off-take contracts were reported in “Product sales” prior to the adoption of ASC 606. Under ASC 606, these recoveries are not considered a part of the transaction price, and therefore are excluded from “Product sales” and included as an offset to “Cost of goods sold.” The Partnership disaggregates its revenue into two categories: “Product sales” and “Other revenue”. These categories best reflect the nature, amount, timing and uncertainty of the Partnership’s revenue and cash flows. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, whereas prior comparative reporting periods have not been adjusted and continue to be reported under the accounting standards in effect for such periods. The Partnership did not have a transition adjustment as a result of adopting ASC 606. The table below indicates the impact of the adoption of ASC 606 on revenue and cost of goods sold for the three months ended March 31, 2018: As Reported Adoption of ASC 606 Without Adoption of ASC 606 Product sales $ 122,799 $ (6,221) $ 116,578 Other revenue 3,002 (53) 2,949 Cost of goods sold 130,342 (6,274) 124,068 Gross margin $ (4,541) $ — $ (4,541) In January 2017, the FASB issued ASU 2017‑01, Business Combinations (Topic 805): Clarifying the Definition of a Business , to provide guidance to evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the assets acquired (or disposed of) are not considered a business. The Partnership adopted ASU 2017-01 as of January 1, 2018 which may have an impact on the accounting for future acquisitions. In November 2016, the FASB issued ASU 2016‑18, Statement of Cash Flows (Topic 230)—Restricted Cash: A Consensus of the FASB Emerging Issues Task Force , which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The guidance addresses the presentation of changes in restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. Entities will also have to disclose the nature of their restricted cash and restricted cash equivalent balances. The Partnership adopted ASU 2016-18 as of January 1, 2018, which resulted in an increase of $0.9 million in “Net cash provided by operating activities” and an increase of $0.9 million in “Cash, cash equivalents and restricted cash, end of period” in the Partnership’s condensed consolidated statements of cash flows for the three months ended March 31, 2017. As of March 31, 2017, $0.9 million was designated as restricted cash due to restrictions on its withdrawal and use pursuant to a security agreement. In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230)—Classification of Certain Cash Receipts and Cash Payments , which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows with the objective of reducing the existing diversity in practice. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. An entity will first apply any relevant guidance. If there is no guidance that addresses those cash receipts and cash payments, an entity will determine each separately identifiable source or use and classify the receipt or payment based on the nature of the cash flow. If a receipt or payment has aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source of use. The Partnership adopted ASU 2016-18 as of January 1, 2018 and there was no material effect on how cash receipts and cash payments are presented and classified in the condensed consolidated statement of cash flows occurred. Recently Issued Accounting Standards not yet Adopted In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (Topic 815)-Targeted Improvements to Accounting for Hedging Activities . ASU 2017-12 expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. ASU 2017-12 requires a modified retrospective transition 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 financial position as of the date of adoption. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Partnership is in the process of evaluating the impact of the adoption of ASU 2017-12 on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other . ASU 2017-04 simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the new standard, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance should be adopted for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This standard will be implemented prospectively in 2020 for all future goodwill impairment tests and will simplify such evaluations. In February 2016, the FASB issued ASU 2016-02, Leases . Under the new pronouncement, an entity is required to recognize right-of-use (“ROU”) assets and lease liabilities arising from a lease for all non-cancellable leases. The Partnership is expected to apply this guidance to all non-cancellable leases with a term of more than 12 months. The new guidance is effective for public entities for fiscal year and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. Upon adoption, a lessee and a lessor would recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Partnership is in the process of preparing the implementation plan and is evaluating the impact of adoption on its business processes and accounting and information systems. A multi-discipline implementation team has gained an understanding of the standard’s accounting and disclosure provisions and is working to evaluate the impact of adoption on the Partnership’s consolidated financial statements. The Partnership currently expects changes related to the recognition of new ROU assets and lease liabilities on its balance sheet for its real estate and machinery and equipment operating leases. The Partnership is currently evaluating whether its long-term wood pellet supply arrangements, throughput agreements to receive terminal services, and certain fixed-price long-term logistics arrangements contain leases. The Partnership does not expect a significant change in its leasing activity prior to adoption of the ASU. The Partnership is in the process of evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements. |
Transactions Between Entities U
Transactions Between Entities Under Common Control | 3 Months Ended |
Mar. 31, 2018 | |
Transactions Between Entities Under Common Control | |
Transactions Between Entities Under Common Control | (3) Transactions Between Entities Under Common Control Recast of Historical Financial Statements The financial statements for the three months ended March 31, 2017 have been recast to reflect the Wilmington Drop-Down as if it had occurred on May 15, 2013, the date Wilmington was originally organized. The historical net equity amounts of Wilmington prior to the date of the Wilmington Drop-Down were attributed to Enviva Partners GP, LLC, the general partner of the Partnership (the “General Partner”) and any non-controlling interest. The following table presents the changes to previously reported amounts in the unaudited condensed consolidated balance sheet as of March 31, 2017 included in the Partnership’s quarterly report on Form 10-Q for the quarter ended March 31, 2017: As of March 31, 2017 As Enviva Port of Reported Wilmington, LLC Total (Recast) Cash and cash equivalents $ 11,913 $ — $ 11,913 Restricted cash 938 — 938 Accounts receivable, net 49,676 — 49,676 Related-party receivables 6,902 (111) 6,791 Inventories 30,780 64 30,844 Prepaid expenses and other current assets 5,969 (115) 5,854 Total current assets 106,178 (162) 106,016 Property, plant and equipment, net of accumulated depreciation 511,907 75,773 587,680 Goodwill 85,615 — 85,615 Other long-term assets 3,795 69 3,864 Total assets $ 707,495 $ 75,680 $ 783,175 Accounts payable $ 3,009 $ 370 $ 3,379 Related-party payables 7,893 899 8,792 Accrued and other current liabilities 54,417 4,653 59,070 Long-term debt and capital lease obligations 340,402 223 340,625 Other long-term liabilities 2,081 1,384 3,465 Total liabilities 407,802 7,529 415,331 Total partners’ capital 299,693 68,151 367,844 Total liabilities and partners’ capital $ 707,495 $ 75,680 $ 783,175 The following table presents the changes to previously reported amounts in the unaudited condensed consolidated statements of income for the three months ended March 31, 2017 included in the Partnership’s quarterly report on Form 10-Q for the quarter ended March 31, 2017: Three Months Ended March 31, 2017 As Enviva Port of Total Reported Wilmington (Recast) Net revenue $ 122,123 $ 320 $ 122,443 Total cost of goods sold 103,647 2,428 106,075 Gross margin 18,476 (2,108) 16,368 Net income (loss) 2,502 (2,547) (45) Less net loss attributable to noncontrolling partners’ interests 33 1,286 1,319 Net income (loss) attributable to Enviva Partners, LP 2,535 (1,261) 1,274 Net loss attributable to general partner — (1,261) (1,261) Net income attributable to Enviva Partners, LP limited partners’ interest in net income 2,535 — 2,535 The following table presents the changes to previously reported amounts in the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2017 included in the Partnership’s quarterly report on Form 10-Q for the quarter ended March 31, 2017: Three Months Ended March 31, 2017 As Enviva Port of Total Reported Wilmington (Recast) Net cash provided by operating activities (1) $ 36,866 $ 778 $ 37,644 Net cash used in investing activities (5,656) (3,688) (9,344) Net cash (used in) provided by financing activities (18,825) 2,910 Net increase in cash, cash equivalents and restricted cash (1) $ 12,385 $ — $ 12,385 (1) Adjusted for the adoption of ASU 2016-18, see Note 2, Significant Accounting Policies |
Significant Risks and Uncertain
Significant Risks and Uncertainties Including Business and Credit Concentrations | 3 Months Ended |
Mar. 31, 2018 | |
Significant Risks and Uncertainties Including Business and Credit Concentrations | |
Significant Risks and Uncertainties Including Business and Credit Concentrations | (4) Significant Risks and Uncertainties Including Business and Credit Concentrations The Partnership’s business is significantly impacted by greenhouse gas emission and renewable energy legislation and regulations in the European Union as well as its member states. If the European Union or its member states significantly modify such legislation or regulations, then the Partnership’s ability to enter into new contracts as the current contracts expire may be materially affected. The Partnership’s primary industrial customers are located in the United Kingdom, Denmark and Belgium. Three customers accounted for 79% of the Partnership’s product sales during the three months ended March 31, 2018. Three customers accounted for 97% of the Partnership’s product sales during the three months ended March 31, 2017. The following table shows product sales to third-party customers that accounted for 10% or a greater share of consolidated product sales for each of the three months ended: Three Months Ended March 31, 2018 2017 (Recast) Customer A 38 % 62 % Customer B 7 % 19 % Customer C 34 % 16 % The Partnership’s cash and cash equivalents are placed in or with various financial institutions. The Partnership has not experienced any losses on such accounts. |
Inventory Impairment and Asset
Inventory Impairment and Asset Disposal | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Impairment and Assets Disposal | |
Inventory Impairment and Asset Disposal | (5) Inventory Impairment and Asset Disposal On February 27, 2018, a fire occurred at the Chesapeake terminal, causing damage to equipment and approximately 43,000 metric tons (“MT”) of wood pellets (the “Chesapeake Terminal Event”). As part of its risk management process, the Partnership maintains certain insurance policies, which are subject to deductibles and sublimits for each covered event. The Partnership believes that substantially all of the costs resulting from the Chesapeake Terminal Event are recoverable through its insurance policies and other contractual rights. The Partnership has commissioned temporary storage and shiploading operations at various locations, including a nearby terminal in Norfolk, Virginia, and is utilizing its Wilmington terminal to ship product from its wood pellet production plants in the Mid-Atlantic region. The Partnership believes that all of its contractual obligations to its off-take customers will be met during 2018 and expects the Chesapeake terminal to return to full operation by June 30, 2018. During the three months ended March 31, 2018, the Partnership recorded a $1.1 million impairment of terminal assets and a $10.7 million write-off of product, inclusive of disposal costs, which are included in cost of goods sold. Additionally, costs included in cost of goods sold of $16.6 million were incurred during the three months ended March 31, 2018 and consist primarily of costs related to emergency response and temporary storage, handling and shiploading operations. As of March 31, 2018, the Partnership has received $4.0 million of insurance recoveries and has recorded $4.9 million of additional insurance recoveries in accounts receivable reflecting the insurance proceeds that are probable of receipt up to the amount of the loss recorded. The Partnership recorded $7.8 million of insurance recoveries in cost of goods sold and recognized $1.1 million of insurance recoveries in other income related to lost profit on the sale of the damaged product during the three months ended March 31, 2018. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | (6) Property, Plant and Equipment Property, plant and equipment consisted of the following at: March 31, December 31, 2018 2017 Land $ 13,492 $ 13,492 Land improvements 42,962 42,962 Buildings 196,155 196,153 Machinery and equipment 412,652 413,349 Vehicles 635 635 Furniture and office equipment 6,023 5,970 Leasehold improvements 987 987 672,906 673,548 Less accumulated depreciation (125,834) (117,067) 547,072 556,481 Construction in progress 6,021 5,849 Total property, plant and equipment, net $ 553,093 $ 562,330 Total depreciation expense was $9.3 million for the three months ended March 31, 2018 and 2017. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Inventories | (7) Inventories Inventories consisted of the following at: March 31, December 31, 2018 2017 Raw materials and work-in-process $ 6,598 $ 4,516 Consumable tooling 15,407 14,447 Finished goods 12,301 4,573 Total inventories $ 34,306 $ 23,536 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments | |
Derivative Instruments | (8) Derivative Instruments The Partnership uses derivative instruments to partially offset its business exposure to foreign currency exchange and interest rate risk. The Partnership may enter into foreign currency forward and option contracts to offset some of the foreign currency exchange risk on expected future cash flows and interest rate swaps to offset some of the interest rate risk on expected future cash flows on certain borrowings. The Partnership’s derivative instruments expose it to credit risk to the extent that hedge counterparties may be unable to meet the terms of the applicable derivative instrument. The Partnership seeks to mitigate such risks by limiting its counterparties to major financial institutions. In addition, the Partnership monitors 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. The Partnership uses derivative instruments to manage cash flow and does not enter into derivative instruments for speculative or trading purposes. Cash Flow Hedges Foreign Currency Exchange Risk The Partnership is 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”). The Partnership has and may continue to enter into foreign currency forward contracts, purchased option contracts or other instruments to partially manage this risk and has designated and may continue to designate these instruments as cash flow hedges. For qualifying cash flow hedges, the effective 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. The ineffective portion of the gain or loss, if any, is reported in earnings in the current period. The Partnership considers its cash flow hedges to be highly effective at inception and as of March 31, 2018. The Partnership’s outstanding cash flow hedges at March 31, 2018 expire on dates between 2018 and 2022. Interest Rate Risk The Partnership is exposed to fluctuations in interest rates on borrowings under its Senior Secured Credit Facilities. The Partnership entered into a pay-fixed, receive-variable interest rate swap in September 2016 to hedge the interest rate risk associated with its variable rate borrowings under its Senior Secured Credit Facilities. The Partnership’s interest rate swap expires concurrently with the maturity of the Senior Secured Credit Facilities in April 2020. The counterparty to the Partnership’s interest rate swap is a major financial institution. The fair values of cash flow hedging instruments included in the unaudited condensed consolidated balance sheet as of March 31, 2018 were as follows: Asset Liability Balance Sheet Location Derivatives Derivatives Derivatives designated as hedging instruments: Forward contracts: Foreign currency exchange forward contracts Other long-term liabilities $ — $ 3,446 Purchased options: Foreign currency purchased option contracts Other long-term assets 1,230 — Interest rate swap: Interest rate swap Other current assets 423 — Interest rate swap Other long-term assets 484 — Total derivatives designated as hedging instruments $ 2,137 $ 3,446 Derivatives not designated as hedging instruments: Forward contracts: Foreign currency exchange forward contracts Prepaid and other current assets $ 209 $ — Foreign currency exchange forward contracts Other long-term assets 94 Foreign currency exchange forward contracts Accrued and other current liabilities — 1,238 Foreign currency exchange forward contracts Other long-term liabilities — 693 Purchased options: Foreign currency purchased option contracts Prepaid and other current assets 5 — Foreign currency purchased option contracts Other long-term assets 52 — Total derivatives not designated as hedging instruments $ 360 $ 1,931 The fair values of cash flow hedging instruments included in the condensed consolidated balance sheet as of December 31, 2017 were as follows: Asset Liability Balance Sheet Location Derivatives Derivatives Derivatives designated as hedging instruments: Forward contracts: Foreign currency exchange forward contracts Other long-term liabilities $ — $ 2,118 Purchased options: Foreign currency purchased option contracts Prepaid and other current assets 1,024 — Interest rate swap: Interest rate swap Prepaid and other current assets 220 — Interest rate swap Other long-term assets 407 — Total derivatives designated as hedging instruments $ 1,651 $ 2,118 Derivatives not designated as hedging instruments: Forward contracts: Foreign currency exchange forward contracts Prepaid and other current assets $ 124 $ — Foreign currency exchange forward contracts Accrued and other current liabilities — 806 Foreign currency exchange forward contracts Other long-term liabilities — 528 Purchased options: Foreign currency purchased option contracts Prepaid and other current assets 3 — Foreign currency purchased option contracts Other long-term assets 45 — Total derivatives not designated as hedging instruments $ 172 $ 1,334 The effects of instruments designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in loss for the three months ended March 31, 2018 were as follows: Amount of Location of Gain (Loss) Location of Gain Amount of Gain Amount of Gain Gain (Loss) Reclassified from (Loss) Recognized in (Loss) Recognized in (Loss) in Other Reclassified from Accumulated Other Income on Derivative Income on Derivative Comprehensive Accumulated Other Comprehensive (Ineffective Portion (Ineffective Portion (Loss) income on Comprehensive (Loss) Income and Amount and Amount Derivative (Loss) Income into (Loss) Income Excluded from Excluded from (Effective Portion) (Effective Portion) (Effective Portion) Effectiveness Testing) Effectiveness Testing) Foreign currency exchange forward contracts $ (1,325) Product sales $ — Product sales $ (1) Foreign currency exchange purchased option contracts (323) Product sales — Product sales — Interest rate swap 320 Other income (expense) (1) Other income (expense) 1 The effects of instruments designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses in income for the three months ended March 31, 2017 were as follows: Amount of Location of Gain (Loss) Location of Gain Location of Gain Amount of Gain Gain (Loss) Reclassified from (Loss) Recognized in (Loss) Recognized in (Loss) in Other Reclassified from Accumulated Other Income on Derivative Income on Derivative Comprehensive Accumulated Other Comprehensive (Ineffective Portion (Ineffective Portion Income on Comprehensive Income and Amount and Amount Derivative Income into Income Excluded from Excluded from (Effective Portion) (Effective Portion) (Effective Portion) Effectiveness Testing) Effectiveness Testing) Foreign currency exchange forward contracts $ (230) Product sales $ — Product sales $ (2) Foreign currency exchange forward contracts 19 Other revenue — Other revenue — Foreign currency exchange purchased option contracts (511) Product sales — Product sales — Interest rate swap 60 Other income (expense) (57) Other income (expense) 11 As of March 31, 2018, the estimated net amounts of existing gains and losses in accumulated other comprehensive (loss) income associated with derivative instruments expected to be transferred to the unaudited condensed consolidated statements of operations is a gain of $0.3 million during the next twelve months. The Partnership enters into master netting arrangements, which are designed to permit net settlement of derivative transactions among the respective counterparties. If the Partnership had settled all transactions with its respective counterparties at March 31, 2018, the Partnership would have made a net settlement termination payment of $3.0 million, which differs insignificantly from the recorded fair value of the derivatives. The Partnership presents its 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 March 31, 2018 were as follows: Foreign exchange forward contracts in GBP £ 60,665 Foreign exchange purchased option contracts in GBP £ 37,140 Foreign exchange forward contracts in EUR € 20,476 Foreign exchange purchased option contracts in EUR € 2,650 Interest rate swap $ 43,935 The notional amounts of outstanding derivative instruments associated with outstanding or unsettled derivative instruments as of December 31, 2017 were as follows: Foreign exchange forward contracts in GBP £ 46,465 Foreign exchange purchased option contracts in GBP £ 34,050 Foreign exchange forward contracts in EUR € 5,350 Interest rate swap $ 44,756 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | (9) Fair Value Measurements The amounts reported in the unaudited condensed consolidated balance sheets as cash and cash equivalents, accounts receivable, related-party receivables, prepaid expenses and other current assets, accounts payable, related-party payables, accrued and other current liabilities and related-party accrued liabilities approximate fair value because of the short-term nature of these instruments. Derivative instruments and long-term debt and capital lease obligations, including the current portion, are classified as Level 2 instruments. The fair value of the Senior Notes (see Note 10, Long-Term Debt and Capital Lease Obligations – Senior Notes ) 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 capital lease obligations classified as Level 2 was determined based on market prices not quoted on active markets and other observable market data. The carrying amount and estimated fair value of long-term debt and capital lease obligations as of March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 December 31, 2017 Carrying Fair Carrying Fair Amount Value Amount Value Senior Notes $ 352,372 $ 372,110 $ 352,224 $ 374,624 Other long-term debt and capital lease obligations 48,419 48,419 48,793 48,793 Total long-term debt and capital lease obligations $ 400,791 $ 420,529 $ 401,017 $ 423,417 |
Long-Term Debt and Capital Leas
Long-Term Debt and Capital Lease Obligations | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt and Capital Lease Obligations | |
Long–Term Debt and Capital Lease Obligations | (10) Long-Term Debt and Capital Lease Obligations Long-term debt and capital lease obligations at carrying value are composed of the following: March 31, December 31, 2018 2017 Senior Notes, net of unamortized discount, premium and debt issuance of $2.6 million as of March 31, 2018 and $2.8 million as of December 31, 2017 $ 352,372 $ 352,224 Senior Secured Credit Facilities, Tranche A-1 Advances, net of unamortized discount and debt issuance costs of $0.9 million as of March 31, 2018 and $1.0 million as of December 31, 2017 38,629 39,263 Senior Secured Credit Facilities, Tranche A-3 Advances, net of unamortized discount and debt issuance costs of $0.1 million as of March 31, 2018 and December 31, 2017 4,309 4,372 Other loans 2,022 2,023 Capital leases 3,459 3,135 Total long-term debt and capital lease obligations 400,791 401,017 Less current portion of long-term debt and capital lease obligations (7,105) (6,186) Long-term debt and capital lease obligations, excluding current installments $ 393,686 $ 394,831 Senior Notes Due 2021 On November 1, 2016, the Partnership and Enviva Partners Finance Corp. (together with the Partnership, the “Issuers”), Wilmington Trust, National Association, as trustee, and the guarantors party thereto entered into an indenture, as amended or supplemented (the “Indenture”), pursuant to which the Issuers issued $300.0 million in aggregate principal amount of 8.5% senior unsecured notes due November 1, 2021 (the “Senior Notes”) to eligible purchasers (the “Senior Notes Offering”) in a private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the “Securities Act”). Interest payments, which commenced on May 1, 2017, are due semi-annually in arrears on May 1 and November 1. In August 2017, holders of 100% of the Senior Notes tendered such notes in exchange for newly issued registered notes with terms substantially identical in all material respects to the Senior Notes (except that the registered notes are not subject to restrictions on transfer). The Partnership recorded $6.4 million in original issue discounts and costs associated with the issuance of the Senior Notes, which have been recorded as a deduction to long-term debt and capital lease obligations. The Partnership used $139.6 million of the net proceeds from the Senior Notes, together with cash on hand, to pay a portion of the purchase price for Enviva Pellets Sampson, LLC (“Sampson”) in December 2016 and $159.8 million to repay borrowings, including accrued interest, under the Senior Secured Credit Facilities. On October 10, 2017, pursuant to the Indenture, the Issuers issued and sold an additional $55.0 million in aggregate principal amount of Senior Notes to a purchaser (the “Additional Notes Purchaser”) at 106.25% of par value plus accrued interest from May 1, 2017. The additional Senior Notes have the same terms as the Senior Notes. The sale of the additional Senior Notes resulted in gross proceeds to the Issuers of approximately $60.0 million. The proceeds were used to repay borrowings under the Partnership’s revolving credit commitments under the Senior Secured Credit Facilities, which were used to fund the Wilmington Drop-Down, and for general partnership purposes. In December 2017, the Additional Notes Purchaser tendered such notes in exchange for newly issued registered notes with terms substantially identical in all material respects to the Senior Notes (except that the registered notes are not subject to restrictions on transfer). The additional Senior Notes will be treated together with the Senior Notes as a single class for all purposes under the Indenture. The Partnership recorded $0.9 million in debt issuance costs and $3.4 million in premiums associated with the issuance of the additional Senior Notes, which have been recorded as a net addition to long-term debt and capital lease obligations. At any time prior to November 1, 2018, the Issuers may redeem up to 35% of the aggregate principal amount of the Senior Notes (including any additional notes) issued under the Indenture at a redemption price of 108.5% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, in an amount not greater than the net cash proceeds of one or more equity offerings by the Partnership, provided that: · at least 65% of the aggregate principal amount of the Senior Notes issued under the Indenture on November 1, 2016, remains outstanding immediately after the occurrence of such redemption (excluding notes held by the Partnership and its subsidiaries); and · the redemption occurs within 120 days of the date of the closing of such equity offering(s). On and after November 1, 2018, the Issuers may redeem all or a portion of the Senior Notes at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, on the Senior Notes redeemed to the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date), if redeemed during the twelve-month period beginning November 1 on the years indicated below: Year: Percentages 2018 104.250 % 2019 102.125 % 2020 and thereafter 100.000 % The Senior Notes contain certain non-financial covenants applicable to the Partnership including, but not limited to (1) restricted payments, (2) incurrence of indebtedness and issuance of preferred securities, (3) liens, (4) dividend and other payment restrictions affecting subsidiaries, (5) merger, consolidation or sale of assets, (6) transactions with affiliates, (7) designation of restricted and unrestricted subsidiaries, (8) additional subsidiary guarantees, (9) business activities and (10) reporting obligations. As of March 31, 2018 and December 31, 2017 the Partnership was in compliance with all covenants and restrictions associated with, and no events of default existed under, the Indenture. The Partnership’s obligations under the Indenture are guaranteed by certain of the Partnership’s subsidiaries and secured by liens on substantially all of the Partnership’s assets. Senior Secured Credit Facilities The Partnership entered into a credit agreement (the “Senior Secured Credit Facilities”) which includes $100.0 million revolving credit facility commitments. The Senior Secured Credit Facilities mature in April 2020. Borrowings under the Senior Secured Credit Facilities bear interest, at the Partnership’s option, at either a base rate plus an applicable margin or at a Eurodollar rate (with a 1.00% floor for term loan borrowings) plus an applicable margin. Principal and interest are payable quarterly. The Senior Secured Credit Facilities include a commitment fee payable on undrawn revolving credit facility commitments of 0.50% per annum (subject to a stepdown of 0.375% per annum if the Total Leverage Ratio is less than or equal to 2.00:1.00). Letters of credit issued under the revolving credit facility are subject to a fee calculated at the applicable margin for revolving credit facility Eurodollar rate borrowings. The Partnership had no amount outstanding under the revolving credit commitments as of March 31, 2018 and December 31, 2017. The Partnership had a $4.0 million letter of credit outstanding under the letters of credit facility as of December 31, 2017. The letter of credit was issued in connection with a contract between the Partnership and a third party in the ordinary course of business. On January 11, 2018, the letter of credit was cancelled as it was no longer contractually required. As of March 31, 2018, the Partnership has no letters of credit outstanding under the letters of credit facility. The Senior Secured Credit Facilities contains certain covenants, restrictions and events of default including, but not limited to, a change of control restriction and limitations on the Partnership’s ability to (1) incur indebtedness, (2) pay dividends or make other distributions, (3) prepay, redeem or repurchase certain debt, (4) make loans and investments, (5) sell assets, (6) incur liens, (7) enter into transactions with affiliates, (8) consolidate or merge and (9) assign certain material contracts to third parties or unrestricted subsidiaries. The Partnership will be restricted from making distributions if an event of default exists under the Senior Secured Credit Facilities or if the interest coverage ratio (determined as the ratio of consolidated EBITDA, as defined in the Senior Secured Credit Facilities, to consolidated interest expense), which is determined quarterly, is less than 2.25:1.00 at such time. The Partnership is required to maintain, as of the last day of each fiscal quarter, a ratio of total debt to consolidated EBITDA (“Total Leverage Ratio”) of not more than a maximum ratio, initially set at 4.25:1.00 and stepping down to 3.75:1.00, during the term of the Senior Secured Credit Facilities; provided that the maximum permitted Total Leverage Ratio will be increased by 0.50:1.00 for the period from the consummation of certain qualifying acquisitions through the end of the second full fiscal quarter thereafter. As of March 31, 2018 and December 31, 2017, the Partnership was in compliance with all covenants and restrictions associated with, and no events of default existed under, the Senior Secured Credit Facilities. The Partnership’s obligations under the Senior Secured Credit Facilities are guaranteed by certain of the Partnership’s subsidiaries and secured by liens on substantially all of its assets. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related-Party Transactions | |
Related Party Transactions | (11) Related-Party Transactions Related-party amounts included on the unaudited condensed consolidated statements of operations were as follows for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2018 2017 (Recast) Other revenue $ 1,232 $ 320 Cost of goods sold 15,139 13,981 General and administrative expenses 3,964 3,013 Management Services Agreement On April 9, 2015, the Partnership, the General Partner, Enviva, LP, Enviva GP, LLC and certain subsidiaries of Enviva, LP (collectively, the “Service Recipients”) entered into a five-year Management Services Agreement (the “MSA”) with Enviva Management Company, LLC (the “Provider”), a wholly owned subsidiary of the sponsor, pursuant to which the Provider provides the Service Recipients with operations, general administrative, management and other services (the “Services”). Under the terms of the MSA, the Service Recipients are required to reimburse the Provider the amount of all direct or indirect internal or third-party expenses incurred by the Provider in connection with the provision of the Services, including, without limitation: (1) the portion of the salary and benefits of the employees engaged in providing the Services reasonably allocable to the Service Recipients; (2) the charges and expenses of any third party retained to provide any portion of the Services; (3) office rent and expenses and other overhead costs incurred in connection with, or reasonably allocable to, providing the Services; (4) amounts related to the payment of taxes related to the business of the Service Recipients; and (5) costs and expenses incurred in connection with the formation, capitalization, business or other activities of the Provider pursuant to the MSA. Direct or indirect internal or third-party expenses incurred are either directly identifiable or allocated to the Partnership by the Provider. The Provider estimates the percentage of salary, benefits, third-party costs, office rent and expenses and any other overhead costs incurred by the Provider associated with the Services to be provided to the Partnership. Each month, the Provider allocates the actual costs accumulated in the financial accounting system using these estimates. The Provider also charges the Partnership for any directly identifiable costs such as goods or services provided at the Partnership’s request. During the three months ended March 31, 2018, the Partnership incurred $14.7 million related to the MSA. Of this amount, during the three months ended March 31, 2018, $8.7 million is included in cost of goods sold and $4.0 million is included in general and administrative expenses on the unaudited condensed consolidated statements of operations. At March 31, 2018, $2.0 million incurred under the MSA is included in finished goods inventory. During the three months ended March 31, 2017, the Partnership incurred $14.7 million related to the MSA. Of this amount, $10.6 million is included in cost of goods sold and $3.0 million is included in general and administrative expenses on the unaudited condensed consolidated statements of operations. At March 31, 2017, $1.1 million incurred under the MSA was included in finished goods inventory. As of March 31, 2018 and December 31, 2017, the Partnership had $14.7 million and $19.6 million, respectively, included in related-party payables primarily related to the MSA. Common Control Transactions On October 2, 2017, the First Hancock JV contributed to Enviva, LP all of the issued and outstanding limited liability company interests in Wilmington for total consideration of $130.0 million (see Note 1, Description of Business and Basis of Presentation ). Related-Party Indemnification In connection with the acquisition of Sampson in December 2016 (“Sampson Drop-Down”), the First Hancock JV agreed to indemnify the Partnership, its affiliates, and its respective officers, directors, managers, counsel, agents and representatives from all costs and losses arising from certain vendor liabilities and claims related to the construction of the Sampson plant that were included in the net assets acquired. The Partnership recorded a corresponding related-party receivable from the First Hancock JV of $6.4 million for reimbursement of such indemnifiable amounts. At March 31, 2018 and December 31, 2017, the related-party receivable associated with such amounts was $1.8 million and $3.0 million, respectively. In connection with the Wilmington Drop-Down, the First Hancock JV agreed to indemnify the Partnership, its affiliates, and its respective officers, directors, managers, counsel, agents and representatives from all costs and losses arising from certain vendor liabilities and claims related to the construction of the Wilmington terminal that were included in the net assets acquired. The Partnership recorded a corresponding related-party receivable from the First Hancock JV of $1.8 million for reimbursement of such indemnifiable amounts. At March 31, 2018 and December 31, 2017, the related-party receivable associated with such amounts was $1.4 million and $1.3 million, respectively. Sampson Construction Payments Pursuant to three payment agreements between the Partnership and the First Hancock JV dated effective as of July 27, 2017, September 30, 2017 and December 31, 2017, respectively (together, the “Payment Agreements”), the First Hancock JV agreed to pay an aggregate amount of $1.4 million to the Partnership in consideration for costs incurred by the Partnership to repair or replace certain equipment at the Sampson plant following the consummation of the Sampson Drop-Down. As of March 31, 2018, the $1.4 million has been received in full and no further amounts are outstanding. Terminal Services Agreement In 2017, Wilmington and the sponsor entered into the Holdings TSA providing for wood pellet receipt, storage, handling and loading services by the Wilmington terminal for the sponsor. Pursuant to the Holdings TSA, which remains in effect until September 1, 2026, the sponsor agreed to deliver a minimum of 125,000 MT per quarter and pay a fixed fee on a per-ton basis for the terminal services. During the three months ended March 31, 2018 and 2017, the Partnership recorded $0.8 million and $0.3 million, respectively, as terminal services revenue, which is included in “Other revenue.” On February 16, 2018, Greenwood acquired the Greenwood plant and the Holdings TSA was amended and assigned to Greenwood. The terminal services agreement provides for deficiency payments to Wilmington if quarterly minimum throughput requirements are not met. During the three months ended March 31, 2018, the Partnership recorded $0.4 million of deficiency fees under the Holdings TSA, which is included in “Other revenue.” Enviva FiberCo, LLC The Partnership purchases raw materials from Enviva FiberCo. Raw material purchases during the three months ended March 31, 2018 and 2017 from FiberCo were $1.7 million and $1.8 million, respectively. Biomass Option Agreement – Enviva Holdings, LP On February 3, 2017, Enviva, LP entered into a master biomass purchase and sale agreement and a confirmation thereunder, which confirmation was amended on April 1, 2017, each with the sponsor (together, the “Option Contract”), pursuant to which Enviva, LP had the option to purchase certain volumes of wood pellets from the sponsor, from time to time at a price per metric ton determined by reference to a market index. The sponsor has a corresponding right to re-purchase volumes purchased by Enviva, LP pursuant to the Option Contract at a price per metric ton determined by reference to such market index at then-prevailing rates in the event that Enviva, LP purchases more than 45,000 MT of wood pellets pursuant to the Option Contract. During the three months ended March 31, 2018 and 2017, pursuant to the Option Contract, Enviva, LP purchased $1.7 million and $1.6 million, respectively, of wood pellets from the sponsor, which amounts are included in cost of goods sold in the Partnership’s unaudited condensed consolidated statements of income. The Option Contract terminated in accordance with its terms on March 2, 2018. EVA-MGT Contracts In January 2016 the Partnership entered into a contract with the First Hancock JV to supply 375,000 MTPY of wood pellets (the “EVA‑MGT Contract”) to MGT Teesside Limited’s Tees Renewable Energy Plant (the “Tees REP”), which is under development. The EVA‑MGT Contract commences in 2019, ramps to full supply in 2021 and continues through 2034. The EVA-MGT Contract is denominated in U.S. Dollars for commissioning volumes in 2019 and in GBP thereafter. The Partnership entered into a second supply agreement with the First Hancock JV in connection with the Sampson Drop-Down to supply an additional 95,000 MTPY of the contracted volume to the Tees REP. The contract, which is denominated in GBP, commences in 2020 and continues through 2034. Greenwood Contract In connection with the Greenwood Acquisition on February 16, 2018, the Partnership entered into a contract with Greenwood to purchase wood pellets produced by the Greenwood plant (the “Greenwood Contract”). Pursuant to the Greenwood Contract, the Partnership has agreed, subject to certain conditions, to purchase production from the Greenwood plant from February 16, 2018 through March 2022 and has a take-or-pay obligation with respect to 550,000 MTPY of wood pellets (prorated for partial contract years) beginning in mid-2019. During the three months ended March 31, 2018, the Partnership purchased $3.7 million of wood pellets from Greenwood, of which $3.1 million is included in cost of goods sold. As of March 31, 2018, $0.6 million is included in finished goods inventory and $3.5 million is included in related-party payables for the wood pellet purchases under the Greenwood Contract. Long-Term Incentive Plan Vesting During the three months ended March 31, 2018, the Partnership paid $4.0 million to the General Partner and the Provider in connection with the settlement of 139,810 performance-based phantom unit awards under the Enviva Partners, LP Long-Term Incentive Plan (“LTIP”). (See Note 15, Equity Based Awards ). |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes | |
Income Taxes | (12) Income Taxes The Partnership’s operations are organized as limited partnerships and entities that are disregarded entities for federal and state income tax purposes. As a result, the Partnership is not subject to U.S. federal and most state income taxes. The partners and unitholders of the Partnership are liable for these income taxes on their share of the Partnership’s taxable income. Some states impose franchise and capital taxes on the Partnership. Such taxes are not material to the consolidated financial statements and have been included in other income (expense) as incurred. As of March 31, 2018, the only periods subject to examination for federal and state income tax returns are 2015 through 2017. The Partnership believes its income tax filing positions, including its status as a pass-through entity, would be sustained on audit and does not anticipate any adjustments that would result in a material change to its consolidated balance sheet. Therefore, no reserves for uncertain tax positions or interest and penalties have been recorded. For the three months ended March 31, 2018 and 2017, no provision for federal or state income taxes has been recorded in the consolidated financial statements. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | (13) Commitments and Contingencies During the fourth quarter of 2016, the Partnership re-purchased a shipment of wood pellets from one customer and subsequently sold it to another customer in a purchase and sale transaction. Smoldering was observed onboard the vessel carrying the shipment, which resulted in damage to a portion of the shipment and one of the vessel’s five cargo holds (the “Shipping Event”). The disponent owner of the vessel (the “Shipowner”) had directly or indirectly chartered the vessel from certain other parties (collectively, the “Head Owners”) and in turn contracted with the Partnership’s indirectly wholly owned subsidiary, Enviva Pellets Cottondale, LLC (“Cottondale”), as the charterer of the vessel. Following the mutual appointment of arbitrators in connection with the Shipping Event, on June 8, 2017, the Shipowner submitted claims against Cottondale (the “Claims”) alleging damages of approximately $12.7 million (calculated using exchange rates as of March 31, 2018), together with other unquantified losses and damages. The Claims provide that the Shipowner would seek indemnification and other damages from Cottondale to the extent that the Shipowner is unsuccessful in its defense of claims raised by the Head Owners against it for damages arising in connection with the Shipping Event. Although it is reasonably possible that the Shipping Event may result in additional costs for the Partnership’s account, responsibility for such costs and liabilities incurred in connection with the Shipping Event is disputed among the various parties involved. If any such costs and liabilities ultimately are allocated to the Partnership, a portion may be recovered under insurance. The Partnership believes it has meritorious defenses to the Claims, but is generally unable to predict the timing or outcome of any claims or proceedings, including the Claims, associated with the Shipping Event, or any insurance recoveries in respect thereof. Consequently, the Partnership is unable to provide an estimate of the amount or range of possible loss. |
Partners' Capital
Partners' Capital | 3 Months Ended |
Mar. 31, 2018 | |
Partners' Capital | |
Partners' Capital | (14) Partners’ Capital Subordinated Units The Partnership expects that all of its outstanding subordinated units will convert into common units on a one‑for‑one basis on May 30, 2018. The common units the sponsor currently holds and will receive upon conversion of the subordinated units are registered. Allocations of Net Income The First Amended and Restated Agreement of Limited Partnership of the Partnership (the “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. The General Partner currently holds the IDRs, but may transfer these rights at any time. At-the-Market Offering Program On August 8, 2016, the Partnership filed a prospectus supplement to the shelf registration filed with the SEC on June 24, 2016, for the registration of the continuous offering of up to $100.0 million of common units, in amounts, at prices and on terms to be determined by market conditions and other factors at the time of the offerings. In August 2016, the Partnership entered into an equity distribution agreement (the “Equity Distribution Agreement”) with certain managers pursuant to which the Partnership may offer and sell common units from time to time through or to one or more of the managers, subject to the terms and conditions set forth in the Equity Distribution Agreement, of up to an aggregate sales amount of $100.0 million (the “ATM Program”). During the three months ended March 31, 2018, the Partnership sold 8,408 common units under the Equity Distribution Agreement for net proceeds of $0.2 million, net of an insignificant amount of commissions. During the three months ended March 31, 2017, the Partnership sold 63,577 common units under the Equity Distribution Agreement for net proceeds of $1.7 million, net of an insignificant amount of commissions. Net proceeds from sales under the ATM Program were used for general partnership purposes. Cash Distributions to Unitholders The partnership agreement sets forth the calculation to be used to determine the amount of cash distributions that the common and subordinated unitholders and sponsor will receive. 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): Total Payment to General Partner for Incentive Declaration Record Payment Distribution Total Cash Distribution Quarter Ended Date Date Date Per Unit Distribution Rights March 31, 2017 May 3, 2017 May 18, 2017 May 30, 2017 $ 0.5550 $ 14.6 $ June 30, 2017 August 2, 2017 August 15, 2017 August 29, 2017 $ 0.5700 $ 15.0 $ September 30, 2017 November 2, 2017 November 15, 2017 November 29, 2017 $ 0.6150 $ 16.2 $ December 31, 2017 January 31, 2018 February 15, 2018 February 28, 2018 $ 0.6200 $ 16.3 $ March 31, 2018 May 3, 2018 May 15, 2018 May 29, 2018 $ 0.6250 $ 16.5 $ For purposes of calculating the Partnership’s earnings per unit under the two-class method, common units are treated as participating preferred units, and the subordinated units are treated as the residual equity interest, or common equity. IDRs are treated as participating securities. Distributions made in future periods based on the current period calculation of cash available for distribution are allocated to each class of equity that will receive the distribution. Any unpaid cumulative distributions are allocated to the appropriate class of equity. The Partnership determines the amount of cash available for distribution for each quarter in accordance with the Partnership Agreement. The amount to be distributed to common unitholders, subordinated unitholders and IDR holders is based on the distribution waterfall set forth in the Partnership Agreement. Net earnings for the quarter are allocated to each class of partnership interest based on the distributions to be made. Additionally, if, during the subordination period, the Partnership does not have enough cash available to make the required minimum distribution to the common unitholders, the Partnership will allocate net earnings to the common unitholders based on the amount of distributions in arrears. When actual cash distributions are made based on distributions in arrears, those cash distributions will not be allocated to the common unitholders, as such earnings were allocated in previous quarters. Accumulated Other Comprehensive (Loss) Income Comprehensive (loss) income consists of two components: net (loss) income and other comprehensive (loss) income. Other comprehensive (loss) income refers to revenue, expenses and gains and losses that pursuant to GAAP are included in comprehensive (loss) income but excluded from net (loss) income. The Partnership’s other comprehensive (loss) income for three months ended March 31, 2018 and 2017 consists of unrealized gains and losses related to derivative instruments accounted for as cash flow hedges. The following table presents the changes in accumulated other comprehensive loss for the three months ended March 31, 2018: Unrealized Losses on Derivative Instruments Balance at December 31, 2017 $ (3,040) Net unrealized losses (1,328) Reclassification of net losses realized into net loss 1 Accumulated other comprehensive loss at March 31, 2018 $ (4,367) The following table presents the changes in accumulated other comprehensive (loss) income for the three months ended March 31, 2017: Unrealized Losses on Derivative Instruments Balance at December 31, 2016 $ 595 Net unrealized losses (740) Reclassification of net losses realized into net loss (57) Accumulated other comprehensive loss at March 31, 2017 $ (202) Non-controlling Interests—Enviva Pellets Wiggins, LLC Prior to December 28, 2017, the Partnership had a 67% controlling interest in Enviva Pellets Wiggins, LLC (“Wiggins”). On December 28, 2017, Wiggins was dissolved along with associated non-controlling interests. Upon dissolution, no amounts were distributed to the non-controlling interest holders and all intercompany balances were forgiven. Non-controlling Interests—First Hancock JV Wilmington was a wholly owned subsidiary of the First Hancock JV prior to the consummation of the Wilmington Drop-Down. The Partnership’s financial statements have been recast to include the financial results of Wilmington as if the consummation of the Wilmington Drop-Down had occurred on May 15, 2013, the date Wilmington was originally organized. The interests of the First Hancock JV’s third-party investors in Wilmington for periods prior to the related drop-down transactions have been reflected as a non-controlling interest in the Partnership’s financial statements. The Partnership’s unaudited condensed consolidated statements of operations for the three months ended March 31, 2017 include net losses of $1.3 million attributable to the non-controlling interests in Wilmington. |
Equity-Based Awards
Equity-Based Awards | 3 Months Ended |
Mar. 31, 2018 | |
Equity-Based Awards | |
Equity-Based Awards | (15) Equity-Based Awards The following table summarizes information regarding phantom unit awards (the “Affiliate Grants”) to employees of the Provider who provide services to the Partnership under the LTIP: Time-Based Performance-Based Total Affiliate Grant Phantom Units Phantom Units Phantom Units Weighted- Weighted- Weighted- Average Average Average Grant Date Grant Date Grant Date Fair Value Fair Value Fair Value Units (per unit)(1) Units (per unit)(1) Units (per unit)(1) Nonvested December 31, 2017 595,866 $ 22.32 111,104 $ 25.52 706,970 $ 22.82 Granted 243,442 $ 28.65 116,401 $ 28.65 359,843 $ 28.65 Forfeitures (16,123) $ 23.76 — $ — (16,123) $ 23.76 Vested — $ — — $ — — $ — Nonvested March 31, 2018 823,185 $ 24.16 227,505 $ 27.12 1,050,690 $ 24.80 (1) Determined by dividing the aggregate grant date fair value of awards by the number of awards issued. 139,810 of performance-based phantom unit awards under the LTIP vested on December 31, 2017. Upon settlement of the associated units on January 31, 2018, the Partnership paid $2.3 million to the General Partner who then acquired 81,708 common units at a market price of $28.65 per unit from a wholly owned subsidiary of the sponsor to satisfy its obligations under the LTIP. The Partnership also paid $1.7 million to the Provider to satisfy the tax-withholding requirements associated with such units. The Provider recognized an additional $0.1 million in expense for the change in fair value of these awards between the vesting and settlement dates of such awards, which was allocated to the Partnership in the same manner as other corporate expenses. 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 Performance-Based Total Director Grant Phantom Units Phantom Units Phantom Units Weighted- Weighted- Weighted- Average Average Average Grant Date Grant Date Grant Date Fair Value Fair Value Fair Value Units (per unit)(1) Units (per unit)(1) Units (per unit)(1) Nonvested December 31, 2017 15,840 $ 25.25 — $ — 15,840 $ 25.25 Granted 13,964 $ 28.65 — $ — 13,964 $ 28.65 Forfeitures — $ — — $ — — $ — Vested (15,840) $ 25.25 — $ — (15,840) $ 25.25 Nonvested March 31, 2018 13,964 $ 28.65 — $ — 13,964 $ 28.65 (1) Determined by dividing the aggregate grant date fair value of awards by the number of awards issued. In February 2018, Director Grants valued at $0.4 million were granted and vest on the first anniversary of the grant date. In February 2018, the Director Grants that were nonvested at December 31, 2017 vested and common units were issued. The distribution equivalent rights (“DERs”) associated with the Affiliate Grants and the Director Grants subject to time-based vesting entitle the recipients to receive payments equal to any distributions made by the Partnership to the holders of common units within 60 days following the record date for such distributions. The DERs associated with the Affiliate Grants subject to performance-based vesting will remain outstanding and unpaid from the grant date until the earlier of the settlement or forfeiture of the related performance-based phantom units. Unpaid DER amounts related to the performance-based Affiliate Grants at March 31, 2018 were $1.1 million, of which $0.7 million are included in related-party accrued liabilities and $0.4 million are included in other long-term liabilities on the consolidated balance sheets. Unpaid DER amounts related to the performance-based Affiliate Grants at December 31, 2017 were $0.9 million, of which $0.7 million are included in accrued liabilities and $0.2 million are included in other long-term liabilities. DER distributions related to the time-based Affiliate Grants were $0.5 million for the three months ended March 31, 2018 and are included in related-party accrued liabilities. DER distributions were insignificant for the three months ended March 31, 2017. |
Net Income per Limited Partner
Net Income per Limited Partner Unit | 3 Months Ended |
Mar. 31, 2018 | |
Net Income per Limited Partner Unit | |
Net Income per Limited Partner Unit | (16) Net (loss) Income per Limited Partner Unit Net (loss) income per unit applicable to limited partners (including subordinated unitholders) is computed by dividing limited partners’ interest in net (loss) income, after deducting any incentive distributions, by the weighted-average number of outstanding common and subordinated units. The Partnership’s net (loss) income is allocated to the limited partners in accordance with their respective ownership percentages, after giving effect to priority income allocations for incentive distributions, if any, to the holder of the IDRs, pursuant to the Partnership Agreement, which are declared and paid following the close of each quarter. Earnings in excess of distributions are allocated to the limited partners based on their respective ownership interests. Payments made to the Partnership’s unitholders are determined in relation to actual distributions declared and are not based on the net (loss) income allocations used in the calculation of earnings per unit. In addition to the common and subordinated units, the Partnership has also identified the IDRs and phantom units as participating securities and uses the two-class method when calculating the net (loss) income 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 the Partnership’s common units. Basic and diluted earnings per unit applicable to subordinated limited partners are the same because there are no potentially dilutive subordinated units outstanding. The following computation of net (loss) income per limited partner unit is as follows for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 Common Subordinated General Units Units Partner Weighted-average common units outstanding—basic 14,438 11,905 — Effect of nonvested phantom units — — — Weighted-average common units outstanding—diluted 14,438 11,905 — Three Months Ended March 31, 2018 Common Subordinated General Units Units Partner Total Distributions declared $ 9,066 $ 7,441 $ 1,264 $ 17,771 Earnings less than distributions (20,380) (16,726) — (37,106) Net (loss) income attributable to partners $ (11,314) $ (9,285) $ 1,264 $ (19,335) Weighted-average units outstanding—basic 14,438 11,905 Weighted-average units outstanding—diluted 14,438 11,905 Net loss per limited partner unit—basic $ (0.78) $ (0.78) Net loss per limited partner unit—diluted $ (0.78) $ (0.78) Three Months Ended March 31, 2017 Common Subordinated General Units Units Partner Weighted-average common units outstanding—basic 14,380 11,905 — Effect of nonvested phantom units 848 — — Weighted-average common units outstanding—diluted 15,228 11,905 — Three Months Ended March 31, 2017 Common Subordinated General Units Units Partner Total Distributions declared $ 7,999 $ 6,607 $ 537 $ 15,143 Earnings less than distributions (6,905) (5,703) — (12,608) Net income attributable to partners $ 1,094 $ 904 $ 537 $ 2,535 Weighted-average units outstanding—basic 14,380 11,905 Weighted-average units outstanding—diluted 15,228 11,905 Net income per limited partner unit—basic $ 0.08 $ 0.08 Net income per limited partner unit—diluted $ 0.07 $ 0.08 |
Supplemental Guarantor Informat
Supplemental Guarantor Information | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Guarantor Information | |
Supplemental Guarantor Information | (17) Supplemental Guarantor Information The Partnership and its wholly owned finance subsidiary, Enviva Partners Finance Corp., are the co-issuers of the Notes on a joint and several basis. The Partnership has no material independent assets or operations. 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 Credit Facilities and the Indenture (see Note 10 , Long-Term Debt and Capital 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 Borrowings to the Partnership or any of its restricted subsidiaries. |
Significant Accounting Polici25
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the Partnership’s unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. |
Revenue Recognition | Revenue Recognition The Partnership primarily earns revenue by supplying wood pellets to its customers under off-take contracts, the majority of the commitments under which are long-term in nature. The Partnership refers to the structure of its off-take contracts as “take-or-pay” because they include a firm obligation of the customer to take a fixed quantity of product at a stated price and provisions that ensure the Partnership will be compensated in the case of a customer’s failure to accept all or a part of the contracted volumes or termination of a contract by a customer. The Partnership’s long-term off-take contracts define the annual volume of wood pellets that a customer is required to purchase and the Partnership is required to sell, the fixed price per metric ton for product satisfying a base net calorific value and other technical specifications. These prices are fixed for the entire term, subject to annual inflation-based adjustments and price escalators, as well as, in some instances, price adjustments for product specifications and changes in underlying indicies. In addition to sales of the Partnership’s product under these long-term off-take contracts, the Partnership routinely sells wood pellets under shorter-term contracts, which range in volume and tenor and, in some cases, may include only one specific shipment. Because each of the Partnership’s off-take contracts is a bilaterally negotiated agreement, the Partnership’s revenue over the duration of such contracts does not generally follow observable current market pricing trends. The Partnership’s performance obligation under these contracts include the delivery of wood pellets, and are aggregated into metric tons. The Partnership accounts for each metric ton as a single performance obligation. The Partnership’s revenue from the sales of wood pellets it produces is recognized as “Product sales” upon satisfaction of the Partnership’s performance obligation when control transfers to the customer at the time of loading wood pellets onto a ship. Depending on the specific off‑take contract, shipping terms are either Cost, Insurance and Freight (“CIF”) or Cost and Freight (“CFR”) or Free on Board (“FOB”). Under a CIF contract, the Partnership procures and pays for shipping costs, which include insurance and all other charges, up to the port of destination for the customer. Under a CFR contract, the Partnership procures and pays for shipping costs, which include insurance (excluding marine cargo insurance) and all other charges, up to the port of destination for the customer. Shipping under CIF and CFR contracts after control has passed to the customer is considered a fulfillment activity rather than a performance obligation and associated expenses are included in the price to the customer. Under FOB contracts, the customer is directly responsible for shipping costs. In some cases, the Partnership may purchase shipments of product from third-party suppliers and resell them in back-to-back transactions (“purchase and sale transactions”). The Partnership has determined that it is the principal in these transactions because it controls the pellets prior to transferring them to the customer and therefore recognizes related revenue on a gross basis in “Product sales.” In instances in which a customer requests the cancellation, deferral or acceleration of a shipment, the customer may pay a fee, which is included in “Other revenue.” The Partnership recognizes third- and related-party terminal services revenue ratably over the contract term at its ports, which is included in “Other revenue.” Terminal services are performance obligations that are satisfied over time, as customers simultaneously receive and consume the benefits of the terminal services performed by the Partnership. The consideration is generally fixed for minimum quantities and above the minimum are generally billed based on a per-ton rate. The Partnership expects to recognize approximately $5.9 billion in revenue from its remaining performance obligations related to “Product sales” and “Other revenue” with fixed consideration. Most of the Partnership’s off-take contracts expire by 2027, and two contracts expire in 2034. The Partnership’s terminal services contracts extend to 2026. Remaining performance obligations are as follows: Period from April 1, 2018 to December 31, 2018 2019 Thereafter Total Product sales $ 505,344 $ 600,003 $ 4,836,670 $ 5,942,017 Other revenue 531 708 1,180 2,419 Total revenue $ 505,875 $ 600,711 $ 4,837,850 $ 5,944,436 Variable consideration for off-take contracts arises from several pricing features outlined in the Partnership’s 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 arises from price increases based on agreed inflation indices and from above-minimum throughput quantities or services, which were not material for the three months ended March 31, 2018. The Partnership allocates variable consideration under its 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 recovered. For the three months ended March 31, 2018, the Partnership recognized an insignificant amount of revenue related to performance obligations satisfied during fiscal year ended December 31, 2017. Under the Partnership’s off-take contracts, customers are obligated to pay the majority of the purchase price prior to the arrival of the ship at the customers’ discharge port. The remaining portion is paid after the wood pellets are unloaded at the discharge port. The Partnership generally recognizes revenue prior to the issuance of an invoice to the customer. Accounts receivable related to “Product sales” as of March 31, 2018 and December 31, 2017 was $42.5 million and $78.0 million, respectively. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes the cost to produce and deliver wood pellets to customers, reimbursable shipping related costs associated with specific off-take contracts with CIF and CFR shipping terms, and costs associated with purchase and sale transactions. Raw material, production and distribution costs associated with delivering wood pellets to our owned and leased marine terminals and third‑ and related-party wood pellet purchase costs are capitalized as a component of inventory. Fixed production overhead, including the related depreciation expense, is allocated to inventory based on the normal capacity of the production plants. These costs are reflected in cost of goods sold when inventory is sold. Distribution costs associated with shipping wood pellets to customers and amortization of favorable acquired customer contracts are expensed as incurred. Inventory is recorded using the first-in, first-out method (“FIFO”), which requires the use of judgment and estimates. Given the nature of the inventory, the calculation of cost of goods sold is based on estimates used in the valuation of the FIFO inventory and in determining the specific composition of inventory that is sold to each customer. |
Recent and Pending Accounting Pronouncements | Recently Adopted Accounting Standards In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers . ASU 2014-09 and subsequent amendments were codified as ASC 606. ASC 606 supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Partnership recognizes revenue under ASC 606 and all related amendments, which it adopted on January 1, 2018, using the modified retrospective transition method. The Partnership determined that, upon adoption of the ASC 606, its off-take contracts will continue to be classified as “Product sales.” Revenue is recognized at the point in time at which control of the wood pellets passes to the customer as the wood pellets are loaded onto shipping vessels, which is consistent with the timing of revenue recognition under the Partnership’s legacy accounting policy. However, the adoption of ASC 606 impacted the basis of presentation for purchase and sale transactions. Prior to the adoption of ASC 606, the Partnership reported revenue from purchase and sale transactions net of costs paid to third-party suppliers, which was classified as “Other revenue.” Subsequent to the adoption of ASC 606, the Partnership recognizes revenue on a gross basis in “Products sales” when it determines that it acts as a principal and controls the wood pellets before they are transferred to the customer. The decision as to whether to recognize revenue on a gross or net basis requires significant judgment. Recoveries from customers for certain costs incurred at the discharge port under the Partnership’s off-take contracts were reported in “Product sales” prior to the adoption of ASC 606. Under ASC 606, these recoveries are not considered a part of the transaction price, and therefore are excluded from “Product sales” and included as an offset to “Cost of goods sold.” The Partnership disaggregates its revenue into two categories: “Product sales” and “Other revenue”. These categories best reflect the nature, amount, timing and uncertainty of the Partnership’s revenue and cash flows. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, whereas prior comparative reporting periods have not been adjusted and continue to be reported under the accounting standards in effect for such periods. The Partnership did not have a transition adjustment as a result of adopting ASC 606. The table below indicates the impact of the adoption of ASC 606 on revenue and cost of goods sold for the three months ended March 31, 2018: As Reported Adoption of ASC 606 Without Adoption of ASC 606 Product sales $ 122,799 $ (6,221) $ 116,578 Other revenue 3,002 (53) 2,949 Cost of goods sold 130,342 (6,274) 124,068 Gross margin $ (4,541) $ — $ (4,541) In January 2017, the FASB issued ASU 2017‑01, Business Combinations (Topic 805): Clarifying the Definition of a Business , to provide guidance to evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the assets acquired (or disposed of) are not considered a business. The Partnership adopted ASU 2017-01 as of January 1, 2018 which may have an impact on the accounting for future acquisitions. In November 2016, the FASB issued ASU 2016‑18, Statement of Cash Flows (Topic 230)—Restricted Cash: A Consensus of the FASB Emerging Issues Task Force , which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The guidance addresses the presentation of changes in restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. Entities will also have to disclose the nature of their restricted cash and restricted cash equivalent balances. The Partnership adopted ASU 2016-18 as of January 1, 2018, which resulted in an increase of $0.9 million in “Net cash provided by operating activities” and an increase of $0.9 million in “Cash, cash equivalents and restricted cash, end of period” in the Partnership’s condensed consolidated statements of cash flows for the three months ended March 31, 2017. As of March 31, 2017, $0.9 million was designated as restricted cash due to restrictions on its withdrawal and use pursuant to a security agreement. In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230)—Classification of Certain Cash Receipts and Cash Payments , which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows with the objective of reducing the existing diversity in practice. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. An entity will first apply any relevant guidance. If there is no guidance that addresses those cash receipts and cash payments, an entity will determine each separately identifiable source or use and classify the receipt or payment based on the nature of the cash flow. If a receipt or payment has aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source of use. The Partnership adopted ASU 2016-18 as of January 1, 2018 and there was no material effect on how cash receipts and cash payments are presented and classified in the condensed consolidated statement of cash flows occurred. Recently Issued Accounting Standards not yet Adopted In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (Topic 815)-Targeted Improvements to Accounting for Hedging Activities . ASU 2017-12 expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. ASU 2017-12 requires a modified retrospective transition 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 financial position as of the date of adoption. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Partnership is in the process of evaluating the impact of the adoption of ASU 2017-12 on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other . ASU 2017-04 simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the new standard, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance should be adopted for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This standard will be implemented prospectively in 2020 for all future goodwill impairment tests and will simplify such evaluations. In February 2016, the FASB issued ASU 2016-02, Leases . Under the new pronouncement, an entity is required to recognize right-of-use (“ROU”) assets and lease liabilities arising from a lease for all non-cancellable leases. The Partnership is expected to apply this guidance to all non-cancellable leases with a term of more than 12 months. The new guidance is effective for public entities for fiscal year and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. Upon adoption, a lessee and a lessor would recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Partnership is in the process of preparing the implementation plan and is evaluating the impact of adoption on its business processes and accounting and information systems. A multi-discipline implementation team has gained an understanding of the standard’s accounting and disclosure provisions and is working to evaluate the impact of adoption on the Partnership’s consolidated financial statements. The Partnership currently expects changes related to the recognition of new ROU assets and lease liabilities on its balance sheet for its real estate and machinery and equipment operating leases. The Partnership is currently evaluating whether its long-term wood pellet supply arrangements, throughput agreements to receive terminal services, and certain fixed-price long-term logistics arrangements contain leases. The Partnership does not expect a significant change in its leasing activity prior to adoption of the ASU. The Partnership is in the process of evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements. |
Significant Accounting Polici26
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Recently Adopted Accounting Standards | |
Schedule of remaining performance obligations | Period from April 1, 2018 to December 31, 2018 2019 Thereafter Total Product sales $ 505,344 $ 600,003 $ 4,836,670 $ 5,942,017 Other revenue 531 708 1,180 2,419 Total revenue $ 505,875 $ 600,711 $ 4,837,850 $ 5,944,436 |
Accounting Standards Update 2014-09 | |
Recently Adopted Accounting Standards | |
Schedule of impact of adoption of ASC 606 | As Reported Adoption of ASC 606 Without Adoption of ASC 606 Product sales $ 122,799 $ (6,221) $ 116,578 Other revenue 3,002 (53) 2,949 Cost of goods sold 130,342 (6,274) 124,068 Gross margin $ (4,541) $ — $ (4,541) |
Transactions Between Entities27
Transactions Between Entities Under Common Control (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Transactions Between Entities Under Common Control | |
Schedule of changes to previously reported amounts of the Entity's condensed consolidated balance sheets | As of March 31, 2017 As Enviva Port of Reported Wilmington, LLC Total (Recast) Cash and cash equivalents $ 11,913 $ — $ 11,913 Restricted cash 938 — 938 Accounts receivable, net 49,676 — 49,676 Related-party receivables 6,902 (111) 6,791 Inventories 30,780 64 30,844 Prepaid expenses and other current assets 5,969 (115) 5,854 Total current assets 106,178 (162) 106,016 Property, plant and equipment, net of accumulated depreciation 511,907 75,773 587,680 Goodwill 85,615 — 85,615 Other long-term assets 3,795 69 3,864 Total assets $ 707,495 $ 75,680 $ 783,175 Accounts payable $ 3,009 $ 370 $ 3,379 Related-party payables 7,893 899 8,792 Accrued and other current liabilities 54,417 4,653 59,070 Long-term debt and capital lease obligations 340,402 223 340,625 Other long-term liabilities 2,081 1,384 3,465 Total liabilities 407,802 7,529 415,331 Total partners’ capital 299,693 68,151 367,844 Total liabilities and partners’ capital $ 707,495 $ 75,680 $ 783,175 |
Schedule of changes to previously reported amounts of the Entity's condensed consolidated statements of income | Three Months Ended March 31, 2017 As Enviva Port of Total Reported Wilmington (Recast) Net revenue $ 122,123 $ 320 $ 122,443 Total cost of goods sold 103,647 2,428 106,075 Gross margin 18,476 (2,108) 16,368 Net income (loss) 2,502 (2,547) (45) Less net loss attributable to noncontrolling partners’ interests 33 1,286 1,319 Net income (loss) attributable to Enviva Partners, LP 2,535 (1,261) 1,274 Net loss attributable to general partner — (1,261) (1,261) Net income attributable to Enviva Partners, LP limited partners’ interest in net income 2,535 — 2,535 |
Significant Risks and Uncerta28
Significant Risks and Uncertainties Including Business and Credit Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Significant Risks and Uncertainties Including Business and Credit Concentrations | |
Schedule of revenue from major customers | Three Months Ended March 31, 2018 2017 (Recast) Customer A 38 % 62 % Customer B 7 % 19 % Customer C 34 % 16 % |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment | |
Schedule of property, plant and equipment | March 31, December 31, 2018 2017 Land $ 13,492 $ 13,492 Land improvements 42,962 42,962 Buildings 196,155 196,153 Machinery and equipment 412,652 413,349 Vehicles 635 635 Furniture and office equipment 6,023 5,970 Leasehold improvements 987 987 672,906 673,548 Less accumulated depreciation (125,834) (117,067) 547,072 556,481 Construction in progress 6,021 5,849 Total property, plant and equipment, net $ 553,093 $ 562,330 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Schedule of inventories | March 31, December 31, 2018 2017 Raw materials and work-in-process $ 6,598 $ 4,516 Consumable tooling 15,407 14,447 Finished goods 12,301 4,573 Total inventories $ 34,306 $ 23,536 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments | |
Schedule of fair values of the derivative financial instruments included in the consolidated balance sheets | The fair values of cash flow hedging instruments included in the unaudited condensed consolidated balance sheet as of March 31, 2018 were as follows: Asset Liability Balance Sheet Location Derivatives Derivatives Derivatives designated as hedging instruments: Forward contracts: Foreign currency exchange forward contracts Other long-term liabilities $ — $ 3,446 Purchased options: Foreign currency purchased option contracts Other long-term assets 1,230 — Interest rate swap: Interest rate swap Other current assets 423 — Interest rate swap Other long-term assets 484 — Total derivatives designated as hedging instruments $ 2,137 $ 3,446 Derivatives not designated as hedging instruments: Forward contracts: Foreign currency exchange forward contracts Prepaid and other current assets $ 209 $ — Foreign currency exchange forward contracts Other long-term assets 94 Foreign currency exchange forward contracts Accrued and other current liabilities — 1,238 Foreign currency exchange forward contracts Other long-term liabilities — 693 Purchased options: Foreign currency purchased option contracts Prepaid and other current assets 5 — Foreign currency purchased option contracts Other long-term assets 52 — Total derivatives not designated as hedging instruments $ 360 $ 1,931 The fair values of cash flow hedging instruments included in the condensed consolidated balance sheet as of December 31, 2017 were as follows: Asset Liability Balance Sheet Location Derivatives Derivatives Derivatives designated as hedging instruments: Forward contracts: Foreign currency exchange forward contracts Other long-term liabilities $ — $ 2,118 Purchased options: Foreign currency purchased option contracts Prepaid and other current assets 1,024 — Interest rate swap: Interest rate swap Prepaid and other current assets 220 — Interest rate swap Other long-term assets 407 — Total derivatives designated as hedging instruments $ 1,651 $ 2,118 Derivatives not designated as hedging instruments: Forward contracts: Foreign currency exchange forward contracts Prepaid and other current assets $ 124 $ — Foreign currency exchange forward contracts Accrued and other current liabilities — 806 Foreign currency exchange forward contracts Other long-term liabilities — 528 Purchased options: Foreign currency purchased option contracts Prepaid and other current assets 3 — Foreign currency purchased option contracts Other long-term assets 45 — Total derivatives not designated as hedging instruments $ 172 $ 1,334 |
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 designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses recognized in loss for the three months ended March 31, 2018 were as follows: Amount of Location of Gain (Loss) Location of Gain Amount of Gain Amount of Gain Gain (Loss) Reclassified from (Loss) Recognized in (Loss) Recognized in (Loss) in Other Reclassified from Accumulated Other Income on Derivative Income on Derivative Comprehensive Accumulated Other Comprehensive (Ineffective Portion (Ineffective Portion (Loss) income on Comprehensive (Loss) Income and Amount and Amount Derivative (Loss) Income into (Loss) Income Excluded from Excluded from (Effective Portion) (Effective Portion) (Effective Portion) Effectiveness Testing) Effectiveness Testing) Foreign currency exchange forward contracts $ (1,325) Product sales $ — Product sales $ (1) Foreign currency exchange purchased option contracts (323) Product sales — Product sales — Interest rate swap 320 Other income (expense) (1) Other income (expense) 1 The effects of instruments designated as cash flow hedges and the related changes in accumulated other comprehensive loss and the gains and losses in income for the three months ended March 31, 2017 were as follows: Amount of Location of Gain (Loss) Location of Gain Location of Gain Amount of Gain Gain (Loss) Reclassified from (Loss) Recognized in (Loss) Recognized in (Loss) in Other Reclassified from Accumulated Other Income on Derivative Income on Derivative Comprehensive Accumulated Other Comprehensive (Ineffective Portion (Ineffective Portion Income on Comprehensive Income and Amount and Amount Derivative Income into Income Excluded from Excluded from (Effective Portion) (Effective Portion) (Effective Portion) Effectiveness Testing) Effectiveness Testing) Foreign currency exchange forward contracts $ (230) Product sales $ — Product sales $ (2) Foreign currency exchange forward contracts 19 Other revenue — Other revenue — Foreign currency exchange purchased option contracts (511) Product sales — Product sales — Interest rate swap 60 Other income (expense) (57) Other income (expense) 11 |
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 March 31, 2018 were as follows: Foreign exchange forward contracts in GBP £ 60,665 Foreign exchange purchased option contracts in GBP £ 37,140 Foreign exchange forward contracts in EUR € 20,476 Foreign exchange purchased option contracts in EUR € 2,650 Interest rate swap $ 43,935 The notional amounts of outstanding derivative instruments associated with outstanding or unsettled derivative instruments as of December 31, 2017 were as follows: Foreign exchange forward contracts in GBP £ 46,465 Foreign exchange purchased option contracts in GBP £ 34,050 Foreign exchange forward contracts in EUR € 5,350 Interest rate swap $ 44,756 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements | |
Schedule of carrying amount and estimated fair value of long-term debt and capital lease obligations | March 31, 2018 December 31, 2017 Carrying Fair Carrying Fair Amount Value Amount Value Senior Notes $ 352,372 $ 372,110 $ 352,224 $ 374,624 Other long-term debt and capital lease obligations 48,419 48,419 48,793 48,793 Total long-term debt and capital lease obligations $ 400,791 $ 420,529 $ 401,017 $ 423,417 |
Long-Term Debt and Capital Le33
Long-Term Debt and Capital Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt and Capital Lease Obligations | |
Schedule of long-term debt and capital lease obligations | March 31, December 31, 2018 2017 Senior Notes, net of unamortized discount, premium and debt issuance of $2.6 million as of March 31, 2018 and $2.8 million as of December 31, 2017 $ 352,372 $ 352,224 Senior Secured Credit Facilities, Tranche A-1 Advances, net of unamortized discount and debt issuance costs of $0.9 million as of March 31, 2018 and $1.0 million as of December 31, 2017 38,629 39,263 Senior Secured Credit Facilities, Tranche A-3 Advances, net of unamortized discount and debt issuance costs of $0.1 million as of March 31, 2018 and December 31, 2017 4,309 4,372 Other loans 2,022 2,023 Capital leases 3,459 3,135 Total long-term debt and capital lease obligations 400,791 401,017 Less current portion of long-term debt and capital lease obligations (7,105) (6,186) Long-term debt and capital lease obligations, excluding current installments $ 393,686 $ 394,831 |
Schedule of senior note redemption prices as a percentage of principle amount | Year: Percentages 2018 104.250 % 2019 102.125 % 2020 and thereafter 100.000 % |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related-Party Transactions | |
Schedule of related party amounts included on the consolidated statements of income | Three Months Ended March 31, 2018 2018 2017 (Recast) Other revenue $ 1,232 $ 320 Cost of goods sold 15,139 13,981 General and administrative expenses 3,964 3,013 |
Partners' Capital (Tables)
Partners' Capital (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Partners' Capital | |
Schedule of cash distributions paid or declared | The following table details the cash distribution paid or declared (in millions, except per unit amounts): Total Payment to General Partner for Incentive Declaration Record Payment Distribution Total Cash Distribution Quarter Ended Date Date Date Per Unit Distribution Rights March 31, 2017 May 3, 2017 May 18, 2017 May 30, 2017 $ 0.5550 $ 14.6 $ June 30, 2017 August 2, 2017 August 15, 2017 August 29, 2017 $ 0.5700 $ 15.0 $ September 30, 2017 November 2, 2017 November 15, 2017 November 29, 2017 $ 0.6150 $ 16.2 $ December 31, 2017 January 31, 2018 February 15, 2018 February 28, 2018 $ 0.6200 $ 16.3 $ March 31, 2018 May 3, 2018 May 15, 2018 May 29, 2018 $ 0.6250 $ 16.5 $ |
Schedule of changes in accumulated other comprehensive income | The following table presents the changes in accumulated other comprehensive loss for the three months ended March 31, 2018: Unrealized Losses on Derivative Instruments Balance at December 31, 2017 $ (3,040) Net unrealized losses (1,328) Reclassification of net losses realized into net loss 1 Accumulated other comprehensive loss at March 31, 2018 $ (4,367) The following table presents the changes in accumulated other comprehensive (loss) income for the three months ended March 31, 2017: Unrealized Losses on Derivative Instruments Balance at December 31, 2016 $ 595 Net unrealized losses (740) Reclassification of net losses realized into net loss (57) Accumulated other comprehensive loss at March 31, 2017 $ (202) |
Equity-Based Awards (Tables)
Equity-Based Awards (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Affiliate Grants | |
Equity-Based Awards | |
Schedule of phantom unit awards | Time-Based Performance-Based Total Affiliate Grant Phantom Units Phantom Units Phantom Units Weighted- Weighted- Weighted- Average Average Average Grant Date Grant Date Grant Date Fair Value Fair Value Fair Value Units (per unit)(1) Units (per unit)(1) Units (per unit)(1) Nonvested December 31, 2017 595,866 $ 22.32 111,104 $ 25.52 706,970 $ 22.82 Granted 243,442 $ 28.65 116,401 $ 28.65 359,843 $ 28.65 Forfeitures (16,123) $ 23.76 — $ — (16,123) $ 23.76 Vested — $ — — $ — — $ — Nonvested March 31, 2018 823,185 $ 24.16 227,505 $ 27.12 1,050,690 $ 24.80 (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 | Time-Based Performance-Based Total Director Grant Phantom Units Phantom Units Phantom Units Weighted- Weighted- Weighted- Average Average Average Grant Date Grant Date Grant Date Fair Value Fair Value Fair Value Units (per unit)(1) Units (per unit)(1) Units (per unit)(1) Nonvested December 31, 2017 15,840 $ 25.25 — $ — 15,840 $ 25.25 Granted 13,964 $ 28.65 — $ — 13,964 $ 28.65 Forfeitures — $ — — $ — — $ — Vested (15,840) $ 25.25 — $ — (15,840) $ 25.25 Nonvested March 31, 2018 13,964 $ 28.65 — $ — 13,964 $ 28.65 (1) Determined by dividing the aggregate grant date fair value of awards by the number of awards issued. |
Net Income per Limited Partne37
Net Income per Limited Partner Unit (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Net Income per Limited Partner Unit | |
Schedule of weighted average common units outstanding | Three Months Ended March 31, 2018 Common Subordinated General Units Units Partner Weighted-average common units outstanding—basic 14,438 11,905 — Effect of nonvested phantom units — — — Weighted-average common units outstanding—diluted 14,438 11,905 — Three Months Ended March 31, 2017 Common Subordinated General Units Units Partner Weighted-average common units outstanding—basic 14,380 11,905 — Effect of nonvested phantom units 848 — — Weighted-average common units outstanding—diluted 15,228 11,905 — |
Schedule of basic earnings (loss) per common, subordinated and general partner units | Three Months Ended March 31, 2018 Common Subordinated General Units Units Partner Total Distributions declared $ 9,066 $ 7,441 $ 1,264 $ 17,771 Earnings less than distributions (20,380) (16,726) — (37,106) Net (loss) income attributable to partners $ (11,314) $ (9,285) $ 1,264 $ (19,335) Weighted-average units outstanding—basic 14,438 11,905 Weighted-average units outstanding—diluted 14,438 11,905 Net loss per limited partner unit—basic $ (0.78) $ (0.78) Net loss per limited partner unit—diluted $ (0.78) $ (0.78) Three Months Ended March 31, 2017 Common Subordinated General Units Units Partner Total Distributions declared $ 7,999 $ 6,607 $ 537 $ 15,143 Earnings less than distributions (6,905) (5,703) — (12,608) Net income attributable to partners $ 1,094 $ 904 $ 537 $ 2,535 Weighted-average units outstanding—basic 14,380 11,905 Weighted-average units outstanding—diluted 15,228 11,905 Net income per limited partner unit—basic $ 0.08 $ 0.08 Net income per limited partner unit—diluted $ 0.07 $ 0.08 |
Description of Business and B38
Description of Business and Basis of Presentation - (Details) $ in Millions | Oct. 02, 2017USD ($) | Mar. 31, 2018USD ($)item | Dec. 31, 2017USD ($) |
Number of industrial-scale production wood pellet production plants in operation | item | 6 | ||
Wilmington, LLC Drop-Down | First Hancock JV | |||
Total consideration | $ 130 | ||
Total cash consideration | 54.6 | ||
Purchase price adjustment | 1.4 | ||
Final payment amount | $ 74 | ||
Deferred consideration payable | $ 74 | $ 74 |
Significant Accounting Polici39
Significant Accounting Policies - Revenue Performance Obligations (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)contract | |
Significant Accounting Policies | |
Remaining performance obligations | $ 5,944,436 |
Performance Obligations | |
The number of performance obligation contracts that expire in 2034 | contract | 2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Significant Accounting Policies | |
Remaining performance obligations | $ 505,875 |
Performance Obligations | |
Expecting timing of performance obligation | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Significant Accounting Policies | |
Remaining performance obligations | $ 600,711 |
Performance Obligations | |
Expecting timing of performance obligation | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Significant Accounting Policies | |
Remaining performance obligations | $ 4,837,850 |
Performance Obligations | |
Expecting timing of performance obligation | 180 months |
Product sales | |
Significant Accounting Policies | |
Remaining performance obligations | $ 5,942,017 |
Product sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Significant Accounting Policies | |
Remaining performance obligations | 505,344 |
Product sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Significant Accounting Policies | |
Remaining performance obligations | 600,003 |
Product sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Significant Accounting Policies | |
Remaining performance obligations | 4,836,670 |
Other revenue | |
Significant Accounting Policies | |
Remaining performance obligations | 2,419 |
Other revenue | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Significant Accounting Policies | |
Remaining performance obligations | 531 |
Other revenue | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Significant Accounting Policies | |
Remaining performance obligations | 708 |
Other revenue | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Significant Accounting Policies | |
Remaining performance obligations | $ 1,180 |
Significant Accounting Polici40
Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Significant Accounting Policies | ||
Accounts receivable primarily related to product sales | $ 42.5 | $ 78 |
Significant Accounting Polici41
Significant Accounting Policies - Impact of Adoption of ASC 606 (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)item | Mar. 31, 2017USD ($) | |
Recently Adopted Accounting Standards | ||
Cost of goods sold | $ 130,342 | $ 106,075 |
Gross margin | $ (4,541) | $ 16,368 |
Accounting Standards Update 2014-09 | ||
Recently Adopted Accounting Standards | ||
Number of revenue categories | item | 2 | |
Accounting Standards Update 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Recently Adopted Accounting Standards | ||
Cost of goods sold | $ 124,068 | |
Gross margin | (4,541) | |
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||
Recently Adopted Accounting Standards | ||
Cost of goods sold | (6,274) | |
Product sales | ||
Recently Adopted Accounting Standards | ||
Revenue | 122,799 | |
Product sales | Accounting Standards Update 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Recently Adopted Accounting Standards | ||
Revenue | 116,578 | |
Product sales | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||
Recently Adopted Accounting Standards | ||
Revenue | (6,221) | |
Other revenue | ||
Recently Adopted Accounting Standards | ||
Revenue | 3,002 | |
Other revenue | Accounting Standards Update 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Recently Adopted Accounting Standards | ||
Revenue | 2,949 | |
Other revenue | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||
Recently Adopted Accounting Standards | ||
Revenue | $ (53) |
Significant Accounting Polici42
Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Thousands | Jan. 02, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle | |||||
Net cash provided by operating activities | $ 29,316 | $ 37,644 | |||
Cash, cash equivalents and restricted cash | 5,057 | $ 12,851 | $ 524 | $ 466 | |
Amount of restricted cash | $ 900 | ||||
Accounting Standards Update No. 2016-18 | Scenario, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Net cash provided by operating activities | $ 900 | ||||
Cash, cash equivalents and restricted cash | $ 900 |
Transactions Between Entities43
Transactions Between Entities Under Common Control (Details) - USD ($) $ in Thousands | Oct. 02, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Transactions Between Entities Under Common Control | ||||
Cash and cash equivalents | $ 11,913 | |||
Restricted cash | 938 | |||
Accounts receivable, net | $ 48,042 | 49,676 | $ 79,185 | |
Related-party receivables | 3,613 | 6,791 | 5,412 | |
Inventories | 34,306 | 30,844 | 23,536 | |
Prepaid expenses and other current assets | 1,361 | 5,854 | 1,006 | |
Total current assets | 92,379 | 106,016 | 109,663 | |
Property, plant and equipment, net of accumulated depreciation | 553,093 | 587,680 | 562,330 | |
Goodwill | 85,615 | 85,615 | 85,615 | |
Other long-term assets | 2,762 | 3,864 | 2,394 | |
Total assets | 733,849 | 783,175 | 760,111 | |
Accounts payable | 4,363 | 3,379 | 7,554 | |
Related-party payables | 19,486 | 8,792 | 26,398 | |
Accrued and other current liabilities | 44,098 | 59,070 | 29,363 | |
Long-term debt and capital lease obligations | 393,686 | 340,625 | 394,831 | |
Other long-term liabilities | 7,148 | 3,465 | 5,491 | |
Total liabilities | 564,590 | 415,331 | 549,742 | |
Total partners' capital | 169,259 | 367,844 | 210,369 | |
Total liabilities and partners' capital | 733,849 | 783,175 | 760,111 | |
Revenues | 125,801 | 122,443 | ||
Total cost of goods sold | 130,342 | 106,075 | ||
Gross margin | (4,541) | 16,368 | ||
Net loss | (19,335) | (45) | ||
Less net loss attributable to noncontrolling partners’ interests | 1,319 | |||
Net (loss) income attributable to Enviva Partners, LP | (19,335) | 1,274 | ||
Net cash provided by operating activities | 29,316 | 37,644 | ||
Net cash used in investing activities | (1,999) | (9,344) | ||
Net cash used in financing activities | (22,784) | (15,915) | ||
Net increase in cash, cash equivalents and restricted cash | 4,533 | 12,385 | ||
General Partner | ||||
Transactions Between Entities Under Common Control | ||||
Total partners' capital | (130,596) | (128,569) | ||
Net loss | 1,130 | |||
Net (loss) income attributable to Enviva Partners, LP | 1,264 | 537 | ||
General Partner | Enviva Port of Wilmington, LLC Drop-Down | ||||
Transactions Between Entities Under Common Control | ||||
Net (loss) income attributable to Enviva Partners, LP | (1,261) | |||
Limited Partners | ||||
Transactions Between Entities Under Common Control | ||||
Net (loss) income attributable to Enviva Partners, LP | (19,335) | 2,535 | ||
As Previously Reported | ||||
Transactions Between Entities Under Common Control | ||||
Cash and cash equivalents | 11,913 | |||
Restricted cash | 938 | |||
Accounts receivable, net | 49,676 | |||
Related-party receivables | 6,902 | |||
Inventories | 30,780 | |||
Prepaid expenses and other current assets | 5,969 | |||
Total current assets | 106,178 | |||
Property, plant and equipment, net of accumulated depreciation | 511,907 | |||
Goodwill | 85,615 | |||
Other long-term assets | 3,795 | |||
Total assets | 707,495 | |||
Accounts payable | 3,009 | |||
Related-party payables | 7,893 | |||
Accrued and other current liabilities | 54,417 | |||
Long-term debt and capital lease obligations | 340,402 | |||
Other long-term liabilities | 2,081 | |||
Total liabilities | 407,802 | |||
Total partners' capital | 299,693 | |||
Total liabilities and partners' capital | 707,495 | |||
Revenues | 122,123 | |||
Total cost of goods sold | 103,647 | |||
Gross margin | 18,476 | |||
Net loss | 2,502 | |||
Less net loss attributable to noncontrolling partners’ interests | 33 | |||
Net (loss) income attributable to Enviva Partners, LP | 2,535 | |||
Net cash provided by operating activities | 36,866 | |||
Net cash used in investing activities | (5,656) | |||
Net cash used in financing activities | (18,825) | |||
Net increase in cash, cash equivalents and restricted cash | 12,385 | |||
As Previously Reported | Limited Partners | ||||
Transactions Between Entities Under Common Control | ||||
Net (loss) income attributable to Enviva Partners, LP | 2,535 | |||
Recast Adjustment | Enviva Port of Wilmington, LLC Drop-Down | ||||
Transactions Between Entities Under Common Control | ||||
Related-party receivables | (111) | |||
Inventories | 64 | |||
Prepaid expenses and other current assets | (115) | |||
Total current assets | (162) | |||
Property, plant and equipment, net of accumulated depreciation | 75,773 | |||
Other long-term assets | 69 | |||
Total assets | 75,680 | |||
Accounts payable | 370 | |||
Related-party payables | 899 | |||
Accrued and other current liabilities | 4,653 | |||
Long-term debt and capital lease obligations | 223 | |||
Other long-term liabilities | 1,384 | |||
Total liabilities | 7,529 | |||
Total partners' capital | 68,151 | |||
Total liabilities and partners' capital | 75,680 | |||
Revenues | 320 | |||
Total cost of goods sold | 2,428 | |||
Gross margin | (2,108) | |||
Net loss | (2,547) | |||
Less net loss attributable to noncontrolling partners’ interests | 1,286 | |||
Net (loss) income attributable to Enviva Partners, LP | (1,261) | |||
Net cash provided by operating activities | 778 | |||
Net cash used in investing activities | (3,688) | |||
Net cash used in financing activities | 2,910 | |||
Recast Adjustment | General Partner | Enviva Port of Wilmington, LLC Drop-Down | ||||
Transactions Between Entities Under Common Control | ||||
Net (loss) income attributable to Enviva Partners, LP | (1,261) | |||
Wilmington, LLC Drop-Down | ||||
Transactions Between Entities Under Common Control | ||||
Net loss | $ (1,300) | |||
Wilmington, LLC Drop-Down | First Hancock JV | ||||
Transactions Between Entities Under Common Control | ||||
Total consideration | $ 130,000 | |||
Total cash consideration | 54,600 | |||
Purchase price adjustment | $ 1,400 | |||
Deferred consideration paid to Hancock JV | $ 74,000 | $ 74,000 |
Significant Risks and Uncerta44
Significant Risks and Uncertainties Including Business and Credit Concentrations (Details) - customer | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Customer A | ||
Concentration Risk | ||
Concentration risk (as a percent) | 38.00% | 62.00% |
Customer B | ||
Concentration Risk | ||
Concentration risk (as a percent) | 7.00% | 19.00% |
Customer C | ||
Concentration Risk | ||
Concentration risk (as a percent) | 34.00% | 16.00% |
Product Sales | Percentage of sales | Three major customers | ||
Concentration Risk | ||
Number of customers | 3 | 3 |
Concentration risk (as a percent) | 79.00% | 97.00% |
Inventory Impairment and Asse45
Inventory Impairment and Asset Disposal - (Details) $ in Millions | Feb. 27, 2018MT | Mar. 31, 2018USD ($) |
Assets held for sale | ||
Volume of inventory damaged in fire | MT | 43,000 | |
Impairment of terminal assets | $ 1.1 | |
Inventory write-off, inclusive of disposal costs | 10.7 | |
Proceeds received from insurance recoveries | 4 | |
Insurance recoveries in account receivable | 4.9 | |
Cost of goods sold. | ||
Assets held for sale | ||
Additional emergency response and temporary storage, handling and shiploading operations caused by the fire | 16.6 | |
Insurance recoveries | 7.8 | |
Other income | ||
Assets held for sale | ||
Insurance recoveries | $ 1.1 |
Property, Plant and Equipment46
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | $ 672,906 | $ 673,548 | |
Less accumulated depreciation | (125,834) | (117,067) | |
Property, plant and equipment excluding construction in progress | 547,072 | 556,481 | |
Construction in progress | 6,021 | 5,849 | |
Total property, plant and equipment, net | 553,093 | $ 587,680 | 562,330 |
Total depreciation expense | 9,300 | $ 9,300 | |
Land | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 13,492 | 13,492 | |
Land improvements | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 42,962 | 42,962 | |
Buildings | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 196,155 | 196,153 | |
Machinery and equipment | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 412,652 | 413,349 | |
Vehicles | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 635 | 635 | |
Furniture and office equipment | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 6,023 | 5,970 | |
Leasehold improvements. | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | $ 987 | $ 987 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Inventories | |||
Raw materials and work-in-progress | $ 6,598 | $ 4,516 | |
Consumable tooling | 15,407 | 14,447 | |
Finished goods | 12,301 | 4,573 | |
Total inventories | $ 34,306 | $ 23,536 | $ 30,844 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Values (Details) - Cash flow hedges - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives designated as hedging instruments | ||
Fair value of cash flow hedges | ||
Total asset derivative | $ 2,137 | $ 1,651 |
Total liability derivative | 3,446 | 2,118 |
Derivatives designated as hedging instruments | Prepaid and other current assets | Foreign currency exchange purchased option contracts | ||
Fair value of cash flow hedges | ||
Total asset derivative | 1,024 | |
Derivatives designated as hedging instruments | Prepaid and other current assets | Interest rate swap contracts | ||
Fair value of cash flow hedges | ||
Total asset derivative | 220 | |
Derivatives designated as hedging instruments | Other current assets | Interest rate swap contracts | ||
Fair value of cash flow hedges | ||
Total asset derivative | 423 | |
Derivatives designated as hedging instruments | Other long-term assets | Foreign currency exchange purchased option contracts | ||
Fair value of cash flow hedges | ||
Total asset derivative | 1,230 | |
Derivatives designated as hedging instruments | Other long-term assets | Interest rate swap contracts | ||
Fair value of cash flow hedges | ||
Total asset derivative | 484 | 407 |
Derivatives designated as hedging instruments | Other long-term liabilities | Foreign currency exchange forward contracts | ||
Fair value of cash flow hedges | ||
Total liability derivative | 3,446 | 2,118 |
Derivatives not designated as hedging instruments | ||
Fair value of cash flow hedges | ||
Total asset derivative | 360 | 172 |
Total liability derivative | 1,931 | 1,334 |
Derivatives not designated as hedging instruments | Prepaid and other current assets | Foreign currency exchange forward contracts | ||
Fair value of cash flow hedges | ||
Total asset derivative | 209 | 124 |
Derivatives not designated as hedging instruments | Prepaid and other current assets | Foreign currency exchange purchased option contracts | ||
Fair value of cash flow hedges | ||
Total asset derivative | 5 | 3 |
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 | 1,238 | 806 |
Derivatives not designated as hedging instruments | Other long-term assets | Foreign currency exchange forward contracts | ||
Fair value of cash flow hedges | ||
Total asset derivative | 94 | |
Derivatives not designated as hedging instruments | Other long-term assets | Foreign currency exchange purchased option contracts | ||
Fair value of cash flow hedges | ||
Total asset derivative | 52 | 45 |
Derivatives not designated as hedging instruments | Other long-term liabilities | Foreign currency exchange forward contracts | ||
Fair value of cash flow hedges | ||
Total liability derivative | $ 693 | $ 528 |
Derivative Instruments - Change
Derivative Instruments - Changes In Accumulated Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Gains (losses) of derivative instruments designated as cash flow hedges in other comprehensive income | ||
Gain to be transferred to the statement of operations in the next twelve months | $ 300 | |
Net derivative settlement termination payment amount | 3,000 | |
Cash flow hedges | Derivatives designated as hedging instruments | Foreign currency exchange forward contracts | Product sales. | ||
Gains (losses) of derivative instruments designated as cash flow hedges in other comprehensive income | ||
Amount of Gain (Loss) in Other Comprehensive Income on Derivative (Effective Portion) | (1,325) | $ (230) |
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | (1) | (2) |
Cash flow hedges | Derivatives designated as hedging instruments | Foreign currency exchange forward contracts | Other revenue | ||
Gains (losses) of derivative instruments designated as cash flow hedges in other comprehensive income | ||
Amount of Gain (Loss) in Other Comprehensive Income on Derivative (Effective Portion) | 19 | |
Cash flow hedges | Derivatives designated as hedging instruments | Foreign currency exchange purchased option contracts | Product sales. | ||
Gains (losses) of derivative instruments designated as cash flow hedges in other comprehensive income | ||
Amount of Gain (Loss) in Other Comprehensive Income on Derivative (Effective Portion) | (323) | (511) |
Cash flow hedges | Derivatives designated as hedging instruments | Interest rate swap contracts | Other income | ||
Gains (losses) of derivative instruments designated as cash flow hedges in other comprehensive income | ||
Amount of Gain (Loss) in Other Comprehensive Income on Derivative (Effective Portion) | 320 | 60 |
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 1 | 11 |
Cash flow hedges | Derivatives designated as hedging instruments | Interest rate swap contracts | Other expense | ||
Gains (losses) of derivative instruments designated as cash flow hedges in other comprehensive income | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | $ (1) | $ (57) |
Derivative Instruments - Notion
Derivative Instruments - Notional Amounts (Details) - Derivatives designated as hedging instruments - Cash flow hedges € in Thousands, £ in Thousands, $ in Thousands | Mar. 31, 2018GBP (£) | Mar. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) |
Foreign currency exchange forward contracts | ||||||
Notional amounts of outstanding derivatives instruments designated as cash flow hedges | ||||||
Notional amount | £ 60,665 | € 20,476 | £ 46,465 | € 5,350 | ||
Foreign currency exchange purchased option contracts | ||||||
Notional amounts of outstanding derivatives instruments designated as cash flow hedges | ||||||
Notional amount | £ 37,140 | € 2,650 | £ 34,050 | |||
Interest rate swap contracts | ||||||
Notional amounts of outstanding derivatives instruments designated as cash flow hedges | ||||||
Notional amount | $ 43,935 | $ 44,756 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - Level 2 - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Carrying Amount | ||
Long-term Debt | $ 352,372 | $ 352,224 |
Other long-term debt and capital lease obligation | 48,419 | 48,793 |
Total long-term debit and capital obligations | 400,791 | 401,017 |
Fair Value | ||
Long-term Debt | 372,110 | 374,624 |
Other long-term debt and capital lease obligation | 48,419 | 48,793 |
Total long-term debit and capital obligations | $ 420,529 | $ 423,417 |
Long-Term Debt and Capital Le52
Long-Term Debt and Capital Lease Obligations - Capital Lease Obligation Table (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Long term debt | ||
Total long-term debt and capital lease obligations | $ 400,791 | $ 401,017 |
less current portion of long-term debt and capital lease obligations | (7,105) | (6,186) |
Long-term debt and capital lease obligations, excluding current installments | 393,686 | 394,831 |
Other loans | ||
Long term debt | ||
Long-term debt | 2,022 | 2,023 |
Capital Lease Obligations. | ||
Long term debt | ||
Capital leases | 3,459 | 3,135 |
Senior Notes | ||
Long term debt | ||
Long-term debt | 352,372 | 352,224 |
Unamortized discount and debt issuance costs | 2,600 | 2,800 |
Senior Secured Credit Facilities | Tranche A-1 advances | ||
Long term debt | ||
Long-term debt | 38,629 | 39,263 |
Unamortized discount and debt issuance costs | 900 | 1,000 |
Senior Secured Credit Facilities | Tranche A-3 advances | ||
Long term debt | ||
Long-term debt | 4,309 | 4,372 |
Unamortized discount and debt issuance costs | $ 100 | $ 100 |
Long-Term Debt and Capital Le53
Long-Term Debt and Capital Lease Obligations - Note Disclosure (Details) | Oct. 10, 2017USD ($) | Nov. 01, 2016USD ($) | Apr. 09, 2016 | Aug. 31, 2017 | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Oct. 17, 2016USD ($) | Apr. 09, 2015 |
Senior Secured Credit Facilities | |||||||||
Interest expense | $ 8,645,000 | $ 7,707,000 | |||||||
Sampson, LLC Drop-Down | |||||||||
Senior Notes Due 2021 | |||||||||
Debt proceeds used to finance acquisition | $ 139,600,000 | ||||||||
$55.0 Million senior unsecured notes Due 2021 | |||||||||
Long term debt and capital lease obligations | |||||||||
Face amount | $ 55,000,000 | ||||||||
Proceeds from issuance of debt | $ 60,000,000 | ||||||||
Senior Notes Due 2021 | |||||||||
Debt instrument redemption price percentage | 106.25% | ||||||||
Senior Secured Credit Facilities | |||||||||
Unamortized discount | $ 900,000 | ||||||||
Unamortized premium | 3,400,000 | ||||||||
Other loans | |||||||||
Long term debt and capital lease obligations | |||||||||
Long-term debt | 2,022,000 | 2,023,000 | |||||||
Senior Notes | |||||||||
Long term debt and capital lease obligations | |||||||||
Long-term debt | 352,372,000 | 352,224,000 | |||||||
Senior Secured Credit Facilities | |||||||||
Senior Notes Due 2021 | |||||||||
Repayment of debt | 159,800,000 | ||||||||
Senior Secured Credit Facilities | |||||||||
Letters of credit outstanding | 0 | 4,000,000 | |||||||
Line of credit amount outstanding | 0 | 0 | |||||||
Commitment fee payable subject to a step down | 375.00% | ||||||||
Senior Secured Credit Facilities | Tranche A-1 advances | |||||||||
Long term debt and capital lease obligations | |||||||||
Long-term debt | 38,629,000 | 39,263,000 | |||||||
Senior Secured Credit Facilities | Tranche A-3 advances | |||||||||
Long term debt and capital lease obligations | |||||||||
Long-term debt | $ 4,309,000 | $ 4,372,000 | |||||||
Senior Secured Credit Facilities | Revolving credit commitments | |||||||||
Senior Secured Credit Facilities | |||||||||
Aggregate principal amount | $ 100,000,000 | ||||||||
Floor rate for Eurodollar term loan borrowings | 1.00% | ||||||||
Commitment fee payable on undrawn commitments (as a percent) | 0.50% | ||||||||
Commitment fee payable subject to a step down | 0.375% | ||||||||
Senior Secured Credit Facilities | Minimum | |||||||||
Senior Secured Credit Facilities | |||||||||
Total interest coverage ratio | 2.25% | ||||||||
Senior Secured Credit Facilities | Maximum | |||||||||
Senior Secured Credit Facilities | |||||||||
Initial Leverage Ratio | 425 | ||||||||
Senior Secured Credit Facilities | Maximum | Revolving credit commitments | |||||||||
Senior Secured Credit Facilities | |||||||||
Total Leverage ratio | 200.00% | ||||||||
Senior Notes Due 2021 | |||||||||
Long term debt and capital lease obligations | |||||||||
Face amount | $ 300,000,000 | ||||||||
Interest rate (as a percent) | 8.50% | ||||||||
Senior Notes Due 2021 | |||||||||
Percentage of ownership of notes that were tendered | 100 | ||||||||
Debt issuance costs | $ 6,400,000 | ||||||||
Senior Notes Due 2021 | Prior to November 1, 2018 | Senior Notes Due 2021 | |||||||||
Senior Notes Due 2021 | |||||||||
Debt instrument redemption price percentage | 108.50% | ||||||||
Senior Notes Due 2021 | During the twelve-month period beginning November 1, 2018 | Senior Notes Due 2021 | |||||||||
Senior Notes Due 2021 | |||||||||
Debt instrument redemption price percentage | 104.25% | ||||||||
Senior Notes Due 2021 | During the twelve-month period beginning November 1, 2019 | Senior Notes Due 2021 | |||||||||
Senior Notes Due 2021 | |||||||||
Debt instrument redemption price percentage | 102.125% | ||||||||
Senior Notes Due 2021 | Beginning November 1, 2020 and thereafter | Senior Notes Due 2021 | |||||||||
Senior Notes Due 2021 | |||||||||
Debt instrument redemption price percentage | 100.00% | ||||||||
Senior Notes Due 2021 | Minimum | Prior to November 1, 2018 | Senior Notes Due 2021 | |||||||||
Senior Notes redemption provision | |||||||||
Percentage of principle required to be outstanding after redemption | 65.00% | ||||||||
Senior Notes Due 2021 | Maximum | Prior to November 1, 2018 | Senior Notes Due 2021 | |||||||||
Senior Notes Due 2021 | |||||||||
Percentage of principle amount to be redeemed | 35.00% | ||||||||
Senior Notes redemption provision | |||||||||
Number of days in redemption period after the closing of the equity offering | 120 days |
Related-Party Transactions (Det
Related-Party Transactions (Details) $ in Thousands | Feb. 16, 2018MT | Oct. 02, 2017USD ($) | Apr. 01, 2017MT | Dec. 14, 2016MT | Apr. 09, 2015 | Jan. 31, 2016MT | Mar. 31, 2018USD ($)itemshares | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)MT | Dec. 31, 2016USD ($) |
Related-Party Transaction | ||||||||||
Amount due to related-party | $ 19,486 | $ 8,792 | $ 26,398 | |||||||
Cash paid to general partner for settlement of performance based phantom unit awards | $ 4,000 | |||||||||
Phantom units settlement in cash (in units) | shares | 139,810 | |||||||||
First Hancock JV | ||||||||||
Related-Party Transaction | ||||||||||
Annual volume of wood pellets to be sold | MT | 375,000 | |||||||||
Other revenue | ||||||||||
Related-Party Transaction | ||||||||||
Related party revenue | $ 1,232 | 320 | ||||||||
Cost of goods sold. | ||||||||||
Related-Party Transaction | ||||||||||
Related party expenses | 15,139 | 13,981 | ||||||||
General and administrative expenses | ||||||||||
Related-Party Transaction | ||||||||||
Related party expenses | 3,964 | 3,013 | ||||||||
Enviva FiberCo. LLC | ||||||||||
Related-Party Transaction | ||||||||||
Purchase of raw materials | $ 1,700 | 1,800 | ||||||||
First Hancock JV | ||||||||||
Related-Party Transaction | ||||||||||
Number of payment agreements | item | 3 | |||||||||
New MSA | ||||||||||
Related-Party Transaction | ||||||||||
MSA related expenses incurred | $ 14,700 | 14,700 | ||||||||
New MSA | Inventory finished goods | ||||||||||
Related-Party Transaction | ||||||||||
MSA related costs included in finished goods inventory | 2,000 | 1,100 | ||||||||
New MSA | Related-party payable | ||||||||||
Related-Party Transaction | ||||||||||
Amount due to related-party | 14,700 | 19,600 | ||||||||
New MSA | Cost of goods sold. | ||||||||||
Related-Party Transaction | ||||||||||
MSA related expenses incurred | 8,700 | 10,600 | ||||||||
New MSA | General and administrative expenses | ||||||||||
Related-Party Transaction | ||||||||||
MSA related expenses incurred | 4,000 | 3,000 | ||||||||
New MSA | Enviva Management Company, LLC | ||||||||||
Related-Party Transaction | ||||||||||
Term of agreement | 5 years | |||||||||
Secondary Supply Agreement | First Hancock JV | ||||||||||
Related-Party Transaction | ||||||||||
Annual volume of wood pellets to be sold | MT | 95,000 | |||||||||
Biomass Option Agreement | Enviva Holdings, LP. | ||||||||||
Related-Party Transaction | ||||||||||
Amount of wood pellets that may be repurchased | MT | 45,000 | |||||||||
Biomass Option Agreement | Enviva Holdings, LP. | Cost of goods sold. | ||||||||||
Related-Party Transaction | ||||||||||
Wood pellets purchased | 1,700 | 1,600 | ||||||||
Greenwood Contract | ||||||||||
Related-Party Transaction | ||||||||||
Amount due to related-party | 3,500 | |||||||||
Annual volume of wood pellets to be purchased | MT | 550,000 | |||||||||
Wood pellets purchased | 3,700 | |||||||||
Greenwood Contract | Inventory finished goods | ||||||||||
Related-Party Transaction | ||||||||||
Wood pellets purchased | 600 | |||||||||
Greenwood Contract | Cost of goods sold. | ||||||||||
Related-Party Transaction | ||||||||||
Wood pellets purchased | 3,100 | |||||||||
Payment Agreements | First Hancock JV | ||||||||||
Related-Party Transaction | ||||||||||
Reimbursable expenses incurred | 1,400 | |||||||||
Sampson, LLC Drop-Down | First Hancock JV | ||||||||||
Related-Party Transaction | ||||||||||
Amount due to related-party | 1,800 | 3,000 | ||||||||
Related-party receivable | $ 6,400 | |||||||||
Wilmington, LLC Drop-Down | First Hancock JV | ||||||||||
Related-Party Transaction | ||||||||||
Total consideration | $ 130,000 | |||||||||
Wilmington, LLC Drop-Down | First Hancock JV | ||||||||||
Related-Party Transaction | ||||||||||
Reimbursable expenses incurred | 1,800 | |||||||||
Amount due to related-party | 1,400 | $ 1,300 | ||||||||
Wilmington, LLC Drop-Down | Terminal Services Agreement | Other revenue | ||||||||||
Related-Party Transaction | ||||||||||
Terminal service fees | 800 | $ 300 | ||||||||
Deficiency fees | $ 400 | |||||||||
Wilmington, LLC Drop-Down | Terminal Services Agreement | First Hancock JV | Minimum | ||||||||||
Related-Party Transaction | ||||||||||
Quarterly amounts of pellets to be delivered | MT | 125,000 | |||||||||
Enviva Port of Wilmington, LLC | First Hancock JV | ||||||||||
Related-Party Transaction | ||||||||||
Total consideration | $ 130,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Taxes | |||
Reserves for uncertain tax position | $ 0 | $ 0 | |
Reserves for interest and penalties | 0 | $ 0 | |
Provision for income tax | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Pending litigation $ in Millions | Jun. 08, 2017USD ($) | Dec. 31, 2016item |
Commitments and Contingencies | ||
Number of cargo holds of vessel damaged | 1 | |
Total number of cargo holds of vessel | 5 | |
Value of claims submitted against Cottondale | $ | $ 12.7 |
Partners' Capital - Ownership a
Partners' Capital - Ownership and Shares (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Partners' Capital | |
Allocations to partners (as a percent) | 100.00% |
Partners' Capital - Incentive D
Partners' Capital - Incentive Distribution Rights (Details) - General Partner | 3 Months Ended |
Mar. 31, 2018 | |
Minimum | |
Incentive Distribution Rights | |
Quarterly distribution of operating surplus (as a percent) | 15.00% |
Maximum | |
Incentive Distribution Rights | |
Quarterly distribution of operating surplus (as a percent) | 50.00% |
Partners' Capital - At-the-Mark
Partners' Capital - At-the-Market Offering Program and Sampson Drop-Down (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Aug. 31, 2016 | Aug. 08, 2016 | |
At-the-Market Offering Program | ||||
Proceeds from sale of common units, net of commissions | $ 241 | $ 1,715 | ||
Common Units | ||||
At-the-Market Offering Program | ||||
Issuance of common units, net (in units) | 8,408 | 63,577 | ||
Proceeds from sale of common units, net of commissions | $ 200 | $ 1,700 | ||
Common Units | Maximum | ||||
At-the-Market Offering Program | ||||
Stated value of common units authorized for sale | $ 100,000 | |||
Stated value of common units covered in the Equity Distribution Agreement | $ 100,000 |
Partners' Capital - Cash Distri
Partners' Capital - Cash Distributions to Unitholders (Details) - USD ($) $ / shares in Units, $ in Millions | May 03, 2018 | Jan. 31, 2018 | Nov. 02, 2017 | Aug. 02, 2017 | May 03, 2017 |
Partners' Capital | |||||
Cash distribution declared | $ 16.5 | $ 16.3 | $ 16.2 | $ 15 | $ 14.6 |
Cash distribution declared (in dollars per unit) | $ 0.6250 | $ 0.6200 | $ 0.6150 | $ 0.5700 | $ 0.5550 |
Incentive distribution paid | $ 1.3 | $ 1.1 | $ 1.1 | $ 0.7 | $ 0.5 |
Partners' Capital - Accumulated
Partners' Capital - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) | ||
Other comprehensive income | $ (1,327) | $ (797) |
Changes in accumulated other comprehensive income | ||
Net unrealized losses | (1,328) | (797) |
Accumulated Other Comprehensive Income. | ||
Changes in accumulated other comprehensive income | ||
Beginning of period | (3,040) | 595 |
Net unrealized losses | (1,328) | (740) |
Reclassification of net losses realized into net income | 1 | (57) |
End of period | $ (4,367) | $ (202) |
Partners' Capital - Noncontroll
Partners' Capital - Noncontrolling Interest (Details) - USD ($) $ in Thousands | Dec. 27, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Noncontrolling Interest | |||
Net loss | $ 19,335 | $ 45 | |
Enviva Holdings, LP | Enviva Pellets Wiggins, LLC | Series B | |||
Noncontrolling Interest | |||
Percentage of interest in subsidiaries | 67.00% | ||
Wilmington, LLC Drop-Down | |||
Noncontrolling Interest | |||
Net loss | $ 1,300 |
Equity-Based Awards (Details)
Equity-Based Awards (Details) - USD ($) | Jan. 31, 2018 | Dec. 31, 2017 | Feb. 28, 2018 | Jan. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Weighted Average Grant Date Fair Value per Unit | ||||||
General and administrative expenses | $ 6,804,000 | $ 8,763,000 | ||||
Distribution Equivalent Rights | Related party accrued liabilities | ||||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Distributions paid related to DERs | $ 500,000 | |||||
LTIP | ||||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Additional expense from change in fair value of unit awards | $ 100,000 | |||||
LTIP | General Partner | ||||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Cash payments for tax-withholding requirements on unit awards | $ 1,700,000 | |||||
Units issued by the Company | 81,708 | |||||
Grant date fair value | $ 28.65 | |||||
LTIP | Performance Based Phantom units | ||||||
Number of Units | ||||||
Vested (in units) | (139,810) | |||||
LTIP | Performance Based Phantom units | General Partner | ||||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Cash distributions paid | $ 2,300,000 | |||||
Affiliate Grants | ||||||
Number of Units | ||||||
Nonvested at the beginning of the period (in units) | 706,970 | 706,970 | ||||
Granted (in units) | 359,843 | |||||
Forfeitures (in units) | (16,123) | |||||
Nonvested at the end of the period (in units) | 706,970 | 1,050,690 | ||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Nonvested at the beginning of the period (in dollars per unit) | $ 22.82 | $ 22.82 | ||||
Granted (in dollars per unit) | 28.65 | |||||
Forfeitures (in dollar per unit) | 23.76 | |||||
Nonvested at the end of the period (in dollars per unit) | $ 22.82 | $ 24.80 | ||||
Affiliate Grants | Phantom units | ||||||
Number of Units | ||||||
Nonvested at the beginning of the period (in units) | 595,866 | 595,866 | ||||
Granted (in units) | 243,442 | |||||
Forfeitures (in units) | (16,123) | |||||
Nonvested at the end of the period (in units) | 595,866 | 823,185 | ||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Nonvested at the beginning of the period (in dollars per unit) | $ 22.32 | $ 22.32 | ||||
Granted (in dollars per unit) | 28.65 | |||||
Forfeitures (in dollar per unit) | 23.76 | |||||
Nonvested at the end of the period (in dollars per unit) | $ 22.32 | $ 24.16 | ||||
Affiliate Grants | Performance Based Phantom units | ||||||
Number of Units | ||||||
Nonvested at the beginning of the period (in units) | 111,104 | 111,104 | ||||
Granted (in units) | 116,401 | |||||
Nonvested at the end of the period (in units) | 111,104 | 227,505 | ||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Nonvested at the beginning of the period (in dollars per unit) | $ 25.52 | $ 25.52 | ||||
Granted (in dollars per unit) | 28.65 | |||||
Nonvested at the end of the period (in dollars per unit) | $ 25.52 | $ 27.12 | ||||
Unpaid DER amounts | $ 900,000 | $ 1,100,000 | ||||
Affiliate Grants | Performance Based Phantom units | Accrued liabilities | ||||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Unpaid DER amounts | $ 700,000 | 700,000 | ||||
Affiliate Grants | Performance Based Phantom units | Other long-term liabilities | ||||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Unpaid DER amounts | $ 400,000 | $ 200,000 | ||||
Affiliate Grants | Distribution Equivalent Rights | ||||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Period in which distribution related to DERs are required to be paid | 60 days | |||||
Director Grants | ||||||
Number of Units | ||||||
Nonvested at the beginning of the period (in units) | 15,840 | 15,840 | ||||
Granted (in units) | 13,964 | |||||
Vested (in units) | (15,840) | |||||
Nonvested at the end of the period (in units) | 15,840 | 13,964 | ||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Nonvested at the beginning of the period (in dollars per unit) | $ 25.25 | $ 25.25 | ||||
Granted (in dollars per unit) | 28.65 | |||||
Vested (in dollars per unit) | 25.25 | |||||
Nonvested at the end of the period (in dollars per unit) | $ 25.25 | $ 28.65 | ||||
Director Grants | Phantom units | ||||||
Number of Units | ||||||
Nonvested at the beginning of the period (in units) | 15,840 | 15,840 | ||||
Granted (in units) | 13,964 | |||||
Vested (in units) | (15,840) | |||||
Nonvested at the end of the period (in units) | 15,840 | 13,964 | ||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Nonvested at the beginning of the period (in dollars per unit) | $ 25.25 | $ 25.25 | ||||
Granted (in dollars per unit) | 28.65 | |||||
Vested (in dollars per unit) | 25.25 | |||||
Nonvested at the end of the period (in dollars per unit) | $ 25.25 | $ 28.65 | ||||
Fair value of units granted | $ 400,000 | |||||
Director Grants | Distribution Equivalent Rights | ||||||
Weighted Average Grant Date Fair Value per Unit | ||||||
Period in which distribution related to DERs are required to be paid | 60 days |
Net Income per Limited Partne64
Net Income per Limited Partner Unit - Dilutive Units (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Subordinated Units | |
Potentially dilutive subordinated units outstanding | 0 |
Net Income per Limited Partne65
Net Income per Limited Partner Unit - Basic and Diluted Table (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Common Units | ||
Weighted average number of units outstanding | ||
Weighted-average common units outstanding - basic | 14,438 | 14,380 |
Effect of nonvested phantom units | 848 | |
Weighted-average common units outstanding —diluted | 14,438 | 15,228 |
Subordinated Units-Sponsor | ||
Weighted average number of units outstanding | ||
Weighted-average common units outstanding - basic | 11,905 | 11,905 |
Weighted-average common units outstanding —diluted | 11,905 | 11,905 |
Net Income per Limited Partne66
Net Income per Limited Partner Unit - Net Income Per Unit Table (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net (Loss) Income per Limited Partner Unit | ||
Net (loss) income attributable to partners | $ (19,335) | $ 1,274 |
Common Units | ||
Net (Loss) Income per Limited Partner Unit | ||
Distributions declared | 9,066 | 7,999 |
Earnings less than distributions | (20,380) | (6,905) |
Net (loss) income attributable to partners | $ (11,314) | $ 1,094 |
Weighted-average units outstanding - basic | 14,438 | 14,380 |
Weighted-average units outstanding - diluted | 14,438 | 15,228 |
Net (loss) income per limited partner unit - basic | $ (0.78) | $ 0.08 |
Net (loss) income per limited partner unit - diluted | $ (0.78) | $ 0.07 |
Subordinated Units-Sponsor | ||
Net (Loss) Income per Limited Partner Unit | ||
Distributions declared | $ 7,441 | $ 6,607 |
Earnings less than distributions | (16,726) | (5,703) |
Net (loss) income attributable to partners | $ (9,285) | $ 904 |
Weighted-average units outstanding - basic | 11,905 | 11,905 |
Weighted-average units outstanding - diluted | 11,905 | 11,905 |
Net (loss) income per limited partner unit - basic | $ (0.78) | $ 0.08 |
Net (loss) income per limited partner unit - diluted | $ (0.78) | $ 0.08 |
General Partner | ||
Net (Loss) Income per Limited Partner Unit | ||
Distributions declared | $ 1,264 | $ 537 |
Net (loss) income attributable to partners | 1,264 | 537 |
Limited Partners | ||
Net (Loss) Income per Limited Partner Unit | ||
Distributions declared | 17,771 | 15,143 |
Earnings less than distributions | (37,106) | (12,608) |
Net (loss) income attributable to partners | $ (19,335) | $ 2,535 |
Supplemental Guarantor Inform67
Supplemental Guarantor Information (Details) | Mar. 31, 2018USD ($) |
Supplemental Guarantor Information | |
Independent assets | $ 0 |
Independent operations | $ 0 |
Ownership interest in each of the subsidiary guarantors (as a percent) | 100.00% |