UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


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

For the quarterly period ended ~~June~~September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____

Commission file number 001-37363


Enviva Inc.
(Exact name of registrant as specified in its charter)


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


7272 Wisconsin Ave.	Suite 1800
Bethesda,	MD	20814
(Address of principal executive offices)		(Zip code)


(301)			657-5560
(Registrant’s telephone number, including area code)


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

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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

As of ~~July 29,~~October 28, 2022, ~~66,671,994~~66,804,428 shares of common stock were outstanding.

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ENVIVA INC.

QUARTERLY REPORT ON FORM 10‑Q

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CAUTIONARY STATEMENT REGARDING FORWARD‑LOOKING STATEMENTS

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

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

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

•failure of our customers, vendors, and shipping partners to pay or perform their contractual obligations to us;

•our inability to successfully execute our project development, capacity expansion, and new facility construction activities on time and within budget;

•the creditworthiness of our contract counterparties;

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

•our ability to successfully negotiate, complete, and integrate third-party acquisitions, or to realize the anticipated benefits of such acquisitions;

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

•changes in prevailing domestic and global economic, political, and market conditions, including the imposition of tariffs or trade or other economic sanctions, political instability or armed conflict, rising inflation levels and government efforts to reduce inflation, or a prolonged recession;

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

•fires, explosions, or other accidents;

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

•changes in domestic and foreign tax laws and regulations affecting the taxation of our business, and investors;

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

•our inability to acquire or maintain necessary permits or rights for our production, transportation, or terminaling operations;

•changes in the price and availability of transportation;

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

•risks related to our indebtedness, including the levels, and maturity date of such indebtedness;

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

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

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•labor disputes, unionization, or similar collective actions;

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

•the possibility of cyber and malware attacks;

•our inability to borrow funds and access capital markets; and

•viral contagions or pandemic diseases, such as COVID-19.

Please read the risks described in our Annual Report on Form 10-K for the year ended December 31, 2021 and the risk factors included herein in Item 1A. Risk Factors. All forward-looking statements in this Quarterly Report are expressly qualified in their entirety by the foregoing cautionary statements.

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

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GLOSSARY OF TERMS

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

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

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

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

nameplate: the intended full-load sustained maximum rated output of production.

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

ramp: the process by which a plant increases production following startup for a period of time until full nameplate production capacity is demonstrated.

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

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

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

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

ENVIVA INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except par value and number of shares)


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	12,700	$	16,801	Cash and cash equivalents	$	8,479	$	16,801
Restricted cash	Restricted cash	156		1,717		Restricted cash	—		1,717
Accounts receivable, net	Accounts receivable, net	124,429		97,439		Accounts receivable, net	118,886		97,439
Other accounts receivable	Other accounts receivable	4,466		17,826		Other accounts receivable	6,190		17,826
Inventories	Inventories	74,347		57,717		Inventories	86,059		57,717
Prepaid expenses and other current assets	Prepaid expenses and other current assets	10,763		7,230		Prepaid expenses and other current assets	14,107		7,230
Total current assets	Total current assets	226,861		198,730		Total current assets	233,721		198,730
Property, plant, and equipment, net	Property, plant, and equipment, net	1,551,762		1,498,197		Property, plant, and equipment, net	1,566,698		1,498,197
Operating lease right-of-use assets	Operating lease right-of-use assets	105,028		108,846		Operating lease right-of-use assets	103,616		108,846
Goodwill	Goodwill	103,928		103,928		Goodwill	103,928		103,928
Long-term restricted cash	Long-term restricted cash	35,600		—		Long-term restricted cash	221,226		—
Other long-term assets	Other long-term assets	32,953		14,446		Other long-term assets	38,206		14,446
Total assets	Total assets	$	2,056,132	$	1,924,147	Total assets	$	2,267,395	$	1,924,147
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	20,463	$	29,535	Accounts payable	$	30,522	$	29,535
Accrued and other current liabilities	Accrued and other current liabilities	153,630		163,306		Accrued and other current liabilities	139,094		163,306
Current portion of interest payable	Current portion of interest payable	23,936		25,060		Current portion of interest payable	16,015		25,060
Current portion of long-term debt and finance lease obligations	Current portion of long-term debt and finance lease obligations	37,284		39,105		Current portion of long-term debt and finance lease obligations	29,294		39,105

Total current liabilities	Total current liabilities	235,313		257,006		Total current liabilities	214,925		257,006
Long-term debt and finance lease obligations	Long-term debt and finance lease obligations	1,219,721		1,232,441		Long-term debt and finance lease obligations	1,505,224		1,232,441
Long-term operating lease liabilities	Long-term operating lease liabilities	118,622		122,252		Long-term operating lease liabilities	117,012		122,252
Deferred tax liabilities, net	Deferred tax liabilities, net	32		36		Deferred tax liabilities, net	30		36
Other long-term liabilities	Other long-term liabilities	48,674		41,748		Other long-term liabilities	48,713		41,748
Total liabilities	Total liabilities	1,622,362		1,653,483		Total liabilities	1,885,904		1,653,483
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies
Equity:	Equity:					Equity:
Preferred stock, $0.001 par value, 100,000,000 shares authorized, none issued and outstanding at June 30, 2022 and December 31, 2021		—		—
Common stock, $0.001 par value, 600,000,000 shares authorized, 66,671,944 and 61,137,744 issued and outstanding at June 30, 2022 and December 31, 2021, respectively		67		61
Preferred stock, $0.001 par value, 100,000,000 shares authorized, none issued and outstanding at September 30, 2022 and December 31, 2021						Preferred stock, $0.001 par value, 100,000,000 shares authorized, none issued and outstanding at September 30, 2022 and December 31, 2021	—		—
Common stock, $0.001 par value, 600,000,000 shares authorized, 66,804,428 and 61,137,744 issued and outstanding at September 30, 2022 and December 31, 2021, respectively						Common stock, $0.001 par value, 600,000,000 shares authorized, 66,804,428 and 61,137,744 issued and outstanding at September 30, 2022 and December 31, 2021, respectively	67		61
Additional paid-in capital	Additional paid-in capital	553,852		317,998		Additional paid-in capital	519,968		317,998
Accumulated deficit	Accumulated deficit	(72,644)		—		Accumulated deficit	(90,900)		—
Accumulated other comprehensive income	Accumulated other comprehensive income	194		299		Accumulated other comprehensive income	98		299
Total Enviva Inc.'s equity	Total Enviva Inc.'s equity	481,469		318,358		Total Enviva Inc.'s equity	429,233		318,358
Noncontrolling interests	Noncontrolling interests	(47,699)		(47,694)		Noncontrolling interests	(47,742)		(47,694)
Total equity	Total equity	433,770		270,664		Total equity	381,491		270,664
Total liabilities and equity	Total liabilities and equity	$	2,056,132	$	1,924,147	Total liabilities and equity	$	2,267,395	$	1,924,147

See accompanying notes to condensed consolidated financial statements.

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ENVIVA INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except shares or units, per share or per unit amounts)

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021 (Recast)		2022		2021 (Recast)			2022		2021 (Recast)		2022		2021 (Recast)
Product sales	Product sales	$	293,615	$	271,242	$	524,527	$	495,772	Product sales	$	322,978	$	229,698	$	847,505	$	725,470
Other revenue	Other revenue	2,706		14,721		4,776		31,812		Other revenue	2,682		8,128		7,458		39,940
Net revenue	Net revenue	296,321		285,963		529,303		527,584		Net revenue	325,660		237,826		854,963		765,410
Operating costs and expenses:	Operating costs and expenses:									Operating costs and expenses:
Cost of goods sold, excluding items below	Cost of goods sold, excluding items below	250,276		234,564		461,312		432,266		Cost of goods sold, excluding items below	257,542		199,943		718,854		632,209
Loss on disposal of assets	Loss on disposal of assets	2,282		1,701		3,183		3,345		Loss on disposal of assets	4,035		3,916		7,218		7,261
Selling, general, administrative, and development expenses	Selling, general, administrative, and development expenses	27,704		34,548		61,395		65,890		Selling, general, administrative, and development expenses	30,407		33,898		91,802		99,788
Depreciation and amortization	Depreciation and amortization	28,833		23,179		51,392		44,700		Depreciation and amortization	34,930		23,285		86,322		67,985
Total operating costs and expenses	Total operating costs and expenses	309,095		293,992		577,282		546,201		Total operating costs and expenses	326,914		261,042		904,196		807,243
Loss from operations	Loss from operations	(12,774)		(8,029)		(47,979)		(18,617)		Loss from operations	(1,254)		(23,216)		(49,233)		(41,833)
Other (expense) income:	Other (expense) income:									Other (expense) income:
Interest expense	Interest expense	(13,959)		(17,481)		(23,929)		(30,858)		Interest expense	(18,704)		(15,463)		(42,633)		(46,321)
Other (expense) income, net		(611)		399		(727)		508
Other income (expense), net										Other income (expense), net	1,671		(37)		944		471
Total other expense, net	Total other expense, net	(14,570)		(17,082)		(24,656)		(30,350)		Total other expense, net	(17,033)		(15,500)		(41,689)		(45,850)
Net loss before income tax (benefit) expense		(27,344)		(25,111)		(72,635)		(48,967)
Income tax (benefit) expense		(2)		(260)		14		(941)
Net loss before income tax expense (benefit)										Net loss before income tax expense (benefit)	(18,287)		(38,716)		(90,922)		(87,683)
Income tax expense (benefit)										Income tax expense (benefit)	12		(2,893)		26		(3,834)
Net loss	Net loss	(27,342)		(24,851)		(72,649)		(48,026)		Net loss	(18,299)		(35,823)		(90,948)		(83,849)
Less net loss attributable to noncontrolling interests	Less net loss attributable to noncontrolling interests	5		3,519		5		10,823		Less net loss attributable to noncontrolling interests	43		7,799		48		18,622
Net loss attributable to Enviva Inc.	Net loss attributable to Enviva Inc.	$	(27,337)	$	(21,332)	$	(72,644)	$	(37,203)	Net loss attributable to Enviva Inc.	$	(18,256)	$	(28,024)	$	(90,900)	$	(65,227)
Net loss per Enviva Inc. common share or unit:(1)	Net loss per Enviva Inc. common share or unit:(1)									Net loss per Enviva Inc. common share or unit:(1)
Basic and diluted	Basic and diluted	$	(0.42)	$	(1.33)	$	(1.13)	$	(2.33)	Basic and diluted	$	(0.29)	$	(1.75)	$	(1.41)	$	(4.08)

Weighted-average number of shares or units outstanding:	Weighted-average number of shares or units outstanding:									Weighted-average number of shares or units outstanding:
Basic and diluted	Basic and diluted	66,604		16,000		65,820		16,000		Basic and diluted	66,724		16,000		66,125		16,000

(1) Effective December 31, 2021, units were converted into shares due to the Company’s conversion from a partnership to a corporation.

See accompanying notes to condensed consolidated financial statements.

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ENVIVA INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021 (Recast)		2022		2021 (Recast)			2022		2021 (Recast)		2022		2021 (Recast)
Net loss	Net loss	$	(27,342)	$	(24,851)	$	(72,649)	$	(48,026)	Net loss	$	(18,299)	$	(35,823)	$	(90,948)	$	(83,849)
Other comprehensive loss, net of tax of $0:
Other comprehensive loss, net of tax of $0										Other comprehensive loss, net of tax of $0
Currency translation adjustment	Currency translation adjustment	(73)		1		(105)		16		Currency translation adjustment	(96)		8		(201)		24
Total comprehensive loss	Total comprehensive loss	(27,415)		(24,850)		(72,754)		(48,010)		Total comprehensive loss	(18,395)		(35,815)		(91,149)		(83,825)
Less comprehensive loss attributable to noncontrolling interests	Less comprehensive loss attributable to noncontrolling interests	5		3,519		5		10,823		Less comprehensive loss attributable to noncontrolling interests	43		7,799		48		18,622
Comprehensive loss attributable to Enviva Inc.	Comprehensive loss attributable to Enviva Inc.	$	(27,410)	$	(21,331)	$	(72,749)	$	(37,187)	Comprehensive loss attributable to Enviva Inc.	$	(18,352)	$	(28,016)	$	(91,101)	$	(65,203)

See accompanying notes to condensed consolidated financial statements.

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ENVIVA INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Equity

(In thousands, except per share amounts and Series B Units)

(Unaudited)


		Common Shares			Additional Paid-In Capital				Accumulated Deficit		Accumulated Other Comprehensive Income					Equity Attributable to Enviva Inc.				Noncontrolling Interests			Total Equity			Common Shares								Additional Paid-In Capital					Accumulated Deficit			Accumulated Other Comprehensive Income			Equity Attributable to Enviva Inc.			Noncontrolling Interests			Total Equity

		Shares	Amount												Shares			Amount
Equity, December 31, 2021	Equity, December 31, 2021	61,138	$	61			$	317,998					$	—						$	299		$	318,358			$	(47,694)				$	270,664		Equity, December 31, 2021		61,138		$	61		$	317,998		$	—		$	299		$	318,358		$	(47,694)		$	270,664
Issuance of common shares, net	Issuance of common shares, net	4,945	5				333,186						—						—			333,191				—					333,191			Issuance of common shares, net		4,945		5			333,186			—			—			333,191			—			333,191
Dividends declared ($0.860 per share)	Dividends declared ($0.860 per share)	—	—		(58,957)				—		—					(58,957)				—			(58,957)		Dividends declared ($0.860 per share)	—			—					(58,957)					—			—			(58,957)			—			(58,957)
Common shares issued in lieu of dividends	Common shares issued in lieu of dividends	110	—		7,839				—		—					7,839				—			7,839		Common shares issued in lieu of dividends	110			—					7,839					—			—			7,839			—			7,839
Payments for withholding tax and number of units issued associated with Long-Term Incentive Plan vesting		366	1		(16,365)				—		—					(16,364)				—			(16,364)
Payments for withholding tax and number of shares issued associated with Long-Term Incentive Plan vesting																									Payments for withholding tax and number of shares issued associated with Long-Term Incentive Plan vesting	366			1					(16,365)					—			—			(16,364)			—			(16,364)
Non-cash equity-based compensation and other expense	Non-cash equity-based compensation and other expense	—	—		10,235				—		—					10,235				—			10,235		Non-cash equity-based compensation and other expense	—			—					10,235					—			—			10,235			—			10,235

Other comprehensive loss	Other comprehensive loss	—	—		—				—		(32)					(32)				—			(32)		Other comprehensive loss	—			—					—					—			(32)			(32)			—			(32)
Net loss	Net loss	—	—		—				(45,307)		—					(45,307)				—			(45,307)		Net loss	—			—					—					(45,307)			—			(45,307)			—			(45,307)

Equity, March 31, 2022	Equity, March 31, 2022	66,559	$	67	$	593,936			$	(45,307)	$	267				$	548,963			$	(47,694)		$	501,269	Equity, March 31, 2022	66,559			$	67				$	593,936				$	(45,307)		$	267		$	548,963		$	(47,694)		$	501,269
Dividends declared ($0.905 per share)	Dividends declared ($0.905 per share)	—	—		(61,837)				—		—					(61,837)				—			(61,837)		Dividends declared ($0.905 per share)	—			—					(61,837)					—			—			(61,837)			—			(61,837)
Issuance of common shares, net	Issuance of common shares, net	—	—		(428)				—		—					(428)				—			(428)		Issuance of common shares, net	—			—					(428)					—			—			(428)			—			(428)
Common shares issued in lieu of dividends	Common shares issued in lieu of dividends	105	—		8,349				—		—					8,349				—			8,349		Common shares issued in lieu of dividends	105			—					8,349					—			—			8,349			—			8,349
Payments for withholding tax and number of units issued associated with Long-Term Incentive Plan vesting		8	—		(213)				—		—					(213)				—			(213)
Payments for withholding tax and number of shares issued associated with Long-Term Incentive Plan vesting																									Payments for withholding tax and number of shares issued associated with Long-Term Incentive Plan vesting	8			—					(213)					—			—			(213)			—			(213)
Non-cash equity-based compensation and other expense	Non-cash equity-based compensation and other expense	—	—		9,848				—		—					9,848				—			9,848		Non-cash equity-based compensation and other expense	—			—					9,848					—			—			9,848			—			9,848
Support Payments	Support Payments	—	—		4,197				—		—					4,197				—			4,197		Support Payments	—			—					4,197					—			—			4,197			—			4,197
Other comprehensive loss	Other comprehensive loss	—	—		—				—		(73)					(73)				—			(73)		Other comprehensive loss	—			—					—					—			(73)			(73)			—			(73)
Net loss	Net loss	—	—		—				(27,337)		—					(27,337)				(5)			(27,342)		Net loss	—			—					—					(27,337)			—			(27,337)			(5)			(27,342)
Equity, June 30, 2022	Equity, June 30, 2022	66,672	$	67	$	553,852			$	(72,644)	$	194				$	481,469			$	(47,699)		$	433,770	Equity, June 30, 2022	66,672			$	67				$	553,852				$	(72,644)		$	194		$	481,469		$	(47,699)		$	433,770
Dividends declared ($0.905 per share)																									Dividends declared ($0.905 per share)	—			—					(62,044)					—			—			(62,044)			—			(62,044)
Issuance of common shares, net																									Issuance of common shares, net	—			—					(38)					—			—			(38)			—			(38)
Common shares issued in lieu of dividends																									Common shares issued in lieu of dividends	124			—					8,443					—			—			8,443			—			8,443
Payments for withholding tax and number of shares issued associated with Long-Term Incentive Plan vesting																									Payments for withholding tax and number of shares issued associated with Long-Term Incentive Plan vesting	8			—					(235)					—			—			(235)			—			(235)
Non-cash equity-based compensation and other expense																									Non-cash equity-based compensation and other expense	—			—					10,169					—			—			10,169			—			10,169
Support Payments																									Support Payments	—			—					9,821					—			—			9,821			—			9,821
Other comprehensive loss																									Other comprehensive loss	—			—					—					—			(96)			(96)			—			(96)
Net loss																									Net loss	—			—					—					(18,256)			—			(18,256)			(43)			(18,299)
Equity, September 30, 2022																									Equity, September 30, 2022	66,804			$	67				$	519,968				$	(90,900)		$	98		$	429,233		$	(47,742)		$	381,491

See accompanying notes to condensed consolidated financial statements.

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ENVIVA INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Equity (Continued)

(In thousands, except ~~per share amounts and~~ Series B Units)

(Unaudited)


		Series A			Series B										Series A			Series B
		Units	Amount		Units	Amount		Equity Attributable to Enviva Inc.		Noncontrolling Interests		Total Equity			Units	Amount		Units	Amount		Equity Attributable to Enviva Inc.		Noncontrolling Interests		Total Equity
Equity, December 31, 2020	Equity, December 31, 2020	784,980	$	(92,703)	2,500	$	13,865	$	(78,838)	$	488,498	$	409,660	Equity, December 31, 2020	784,980	$	(92,703)	2,500	$	13,865	$	(78,838)	$	488,498	$	409,660
Acquisition of noncontrolling interest	Acquisition of noncontrolling interest	—	(45,317)		—	—		(45,317)		(108,031)		(153,348)		Acquisition of noncontrolling interest	—	(45,317)		—	—		(45,317)		(108,031)		(153,348)
Cash distributions	Cash distributions	—	—		—	—		—		(22,238)		(22,238)		Cash distributions	—	—		—	—		—		(22,238)		(22,238)
Non-cash equity-based compensation and other expense, net of payments for withholding tax associated with Long-Term Incentive Plan vesting	Non-cash equity-based compensation and other expense, net of payments for withholding tax associated with Long-Term Incentive Plan vesting	—	—		—	2,404		2,404		(3,294)		(890)		Non-cash equity-based compensation and other expense, net of payments for withholding tax associated with Long-Term Incentive Plan vesting	—	—		—	2,404		2,404		(3,294)		(890)
Contribution of assets	Contribution of assets	—	—		—	—		—		389		389		Contribution of assets	—	—		—	—		—		389		389
Other comprehensive income	Other comprehensive income	—	8		—	—		8		7		15		Other comprehensive income	—	8		—	—		8		7		15
Net loss	Net loss	—	(15,871)		—	—		(15,871)		(7,304)		(23,175)		Net loss	—	(15,871)		—	—		(15,871)		(7,304)		(23,175)
Equity, March 31, 2021	Equity, March 31, 2021	784,980	$	(153,883)	2,500	$	16,269	$	(137,614)	$	348,027	$	210,413	Equity, March 31, 2021	784,980	$	(153,883)	2,500	$	16,269	$	(137,614)	$	348,027	$	210,413
Acquisition of noncontrolling interest	Acquisition of noncontrolling interest	—	(107)		—	—		(107)		107		—		Acquisition of noncontrolling interest	—	(107)		—	—		(107)		107		—
Issuance of Enviva Partners, LP common units, net	Issuance of Enviva Partners, LP common units, net	—	—		—	—		—		214,534		214,534		Issuance of Enviva Partners, LP common units, net	—	—		—	—		—		214,534		214,534
Cash distributions	Cash distributions	—	—		—	—		—		(22,229)		(22,229)		Cash distributions	—	—		—	—		—		(22,229)		(22,229)
Non-cash equity-based compensation and other expense, net of payments for withholding tax associated with Long-Term Incentive Plan vesting	Non-cash equity-based compensation and other expense, net of payments for withholding tax associated with Long-Term Incentive Plan vesting	—	—		—	2,404		2,404		2,408		4,812		Non-cash equity-based compensation and other expense, net of payments for withholding tax associated with Long-Term Incentive Plan vesting	—	—		—	2,404		2,404		2,408		4,812

Other comprehensive income	Other comprehensive income	—	—		—	—		—		1		1		Other comprehensive income	—	—		—	—		—		1		1
Net loss	Net loss	—	(21,332)		—	—		(21,332)		(3,519)		(24,851)		Net loss	—	(21,332)		—	—		(21,332)		(3,519)		(24,851)
Equity, June 30, 2021	Equity, June 30, 2021	784,980	$	(175,322)	2,500	$	18,673	$	(156,649)	$	539,329	$	382,680	Equity, June 30, 2021	784,980	$	(175,322)	2,500	$	18,673	$	(156,649)	$	539,329	$	382,680
Issuance of Enviva Partners, LP common units, net														Issuance of Enviva Partners, LP common units, net	—	—		—	—		—		(21)		(21)
Cash distributions														Cash distributions	—	—		—	—		—		(27,005)		(27,005)
Non-cash equity-based compensation and other expense, net of payments for withholding tax associated with Long-Term Incentive Plan vesting														Non-cash equity-based compensation and other expense, net of payments for withholding tax associated with Long-Term Incentive Plan vesting	—	—		2,500	2,404		2,404		4,504		6,908
Other comprehensive income														Other comprehensive income	—	4		—	—		4		4		8
Net loss														Net loss	—	(28,024)		—	—		(28,024)		(7,799)		(35,823)
Equity, September 30, 2021														Equity, September 30, 2021	784,980	$	(203,342)	5,000	$	21,077	$	(182,265)	$	509,012	$	326,747

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ENVIVA INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021 (Recast)			2022		2021 (Recast)
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net loss	Net loss	$	(72,649)	$	(48,026)	Net loss	$	(90,948)	$	(83,849)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:						Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	Depreciation and amortization	51,392		45,031		Depreciation and amortization	86,322		67,985
Amortization of debt issuance costs, debt premium, and original issue discounts	Amortization of debt issuance costs, debt premium, and original issue discounts	1,260		1,704		Amortization of debt issuance costs, debt premium, and original issue discounts	2,055		2,713
Loss on disposal of assets	Loss on disposal of assets	3,183		3,348		Loss on disposal of assets	7,218		7,261
Deferred taxes	Deferred taxes	—		(964)		Deferred taxes	—		(3,873)
Non-cash equity-based compensation and other expense	Non-cash equity-based compensation and other expense	20,023		15,192		Non-cash equity-based compensation and other expense	30,222		22,459
Other						Other	958		—
Fair value changes in derivatives	Fair value changes in derivatives	4,519		2,797		Fair value changes in derivatives	4,673		3,968
Unrealized (gain) loss on foreign currency transactions, net	Unrealized (gain) loss on foreign currency transactions, net	(95)		27		Unrealized (gain) loss on foreign currency transactions, net	(208)		16
Change in operating assets and liabilities:	Change in operating assets and liabilities:					Change in operating assets and liabilities:
Accounts and other receivables	Accounts and other receivables	(13,573)		52,608		Accounts and other receivables	(9,654)		37,808
Prepaid expenses and other current and long-term assets	Prepaid expenses and other current and long-term assets	(21,687)		1,111		Prepaid expenses and other current and long-term assets	(32,564)		1,854
Inventories	Inventories	(14,399)		(9,496)		Inventories	(24,609)		(13,438)
Derivatives	Derivatives	(3,983)		(2,072)		Derivatives	(3,983)		(7,649)
Accounts payable, accrued liabilities, and other current liabilities	Accounts payable, accrued liabilities, and other current liabilities	(10,852)		(1,778)		Accounts payable, accrued liabilities, and other current liabilities	4,144		14,453
Related-party payables	Related-party payables	—		114		Related-party payables	—		414
Deferred revenue	Deferred revenue	(178)		(3,916)		Deferred revenue	(180)		(4,172)
Accrued interest	Accrued interest	(1,123)		1,722		Accrued interest	(9,045)		(15,824)
Operating lease liabilities	Operating lease liabilities	(7,205)		(3,413)		Operating lease liabilities	(11,345)		(4,951)
Other long-term liabilities	Other long-term liabilities	(3,524)		8,182		Other long-term liabilities	(4,608)		7,182
Net cash (used in) provided by operating activities	Net cash (used in) provided by operating activities	(68,891)		62,171		Net cash (used in) provided by operating activities	(51,552)		32,357
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property, plant, and equipment	Purchases of property, plant, and equipment	(97,405)		(153,983)		Purchases of property, plant, and equipment	(162,449)		(245,173)
Payment for acquisition of a business	Payment for acquisition of a business	(5,000)		—		Payment for acquisition of a business	(5,000)		—

Net cash used in investing activities	Net cash used in investing activities	(102,405)		(153,983)		Net cash used in investing activities	(167,449)		(245,173)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds (principal payments) from (on) senior secured revolving credit facility, net		(36,000)		(120,000)

Proceeds from senior secured revolving credit facility, net						Proceeds from senior secured revolving credit facility, net	1,000		224,500
Principal payments on related-party note payable						Principal payments on related-party note payable	—		(20,000)
Proceeds from debt issuance	Proceeds from debt issuance	31,270		321,750		Proceeds from debt issuance	278,571		321,750
Proceeds from capital contribution of New Market Tax Credit financing	Proceeds from capital contribution of New Market Tax Credit financing	12,763		—		Proceeds from capital contribution of New Market Tax Credit financing	12,307		—
Support payments	Support payments	4,197		—		Support payments	14,018		—
Principal payments on other long-term debt and finance lease obligations	Principal payments on other long-term debt and finance lease obligations	(16,474)		(12,685)		Principal payments on other long-term debt and finance lease obligations	(28,134)		(15,842)
Cash paid related to debt issuance costs and deferred offering costs	Cash paid related to debt issuance costs and deferred offering costs	(5,308)		(7,854)		Cash paid related to debt issuance costs and deferred offering costs	(5,376)		(8,551)
Proceeds from issuance of Enviva Inc. common shares, net	Proceeds from issuance of Enviva Inc. common shares, net	333,009		214,865		Proceeds from issuance of Enviva Inc. common shares, net	332,970		214,831
Payments for acquisition of noncontrolling interest in Development JV		—		(130,143)
Payments for acquisition of noncontrolling interest						Payments for acquisition of noncontrolling interest	—		(153,348)

Principal payments on related-party note payable		—		(20,000)

Cash dividends or distributions and equivalent rights	Cash dividends or distributions and equivalent rights	(105,646)		(44,980)		Cash dividends or distributions and equivalent rights	(158,356)		(71,415)
Payment for withholding tax associated with Long-Term Incentive Plan vesting	Payment for withholding tax associated with Long-Term Incentive Plan vesting	(16,577)		(10,554)		Payment for withholding tax associated with Long-Term Incentive Plan vesting	(16,812)		(10,756)

Net cash provided by financing activities	Net cash provided by financing activities	201,234		190,399		Net cash provided by financing activities	430,188		481,169
Net increase in cash, cash equivalents, and restricted cash	Net increase in cash, cash equivalents, and restricted cash	29,938		98,587		Net increase in cash, cash equivalents, and restricted cash	211,187		268,353
Cash, cash equivalents, and restricted cash, beginning of period	Cash, cash equivalents, and restricted cash, beginning of period	18,518		67,675		Cash, cash equivalents, and restricted cash, beginning of period	18,518		67,675
Cash, cash equivalents, and restricted cash, end of period	Cash, cash equivalents, and restricted cash, end of period	$	48,456	$	166,262	Cash, cash equivalents, and restricted cash, end of period	$	229,705	$	336,028

See accompanying notes to condensed consolidated financial statements.

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ENVIVA INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Continued)

(In thousands)

(Unaudited)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021 (Recast)			2022		2021 (Recast)
Non-cash investing and financing activities:	Non-cash investing and financing activities:					Non-cash investing and financing activities:
Property, plant, and equipment acquired included in accounts payable and accrued liabilities	Property, plant, and equipment acquired included in accounts payable and accrued liabilities	$	12,843	$	24,962	Property, plant, and equipment acquired included in accounts payable and accrued liabilities	$	852	$	26,484
Supplemental information:	Supplemental information:					Supplemental information:
Interest paid, net of capitalized interest	Interest paid, net of capitalized interest	$	23,432	$	31,483	Interest paid, net of capitalized interest	$	48,689	$	29,362

See accompanying notes to condensed consolidated financial statements.

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ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

(1) Description of Business and Basis of Presentation

Enviva Inc. supplies utility-grade wood pellets primarily to major power generators under long-term, take-or-pay off-take contracts. We procure wood fiber and process it into utility-grade wood pellets and load the finished wood pellets into railcars, trucks, and barges for transportation to deep-water marine terminals, where they are received, stored, and ultimately loaded onto oceangoing vessels for delivery under long-term, take-or-pay off-take contracts to our customers principally in the United Kingdom (the “U.K.”), the European Union (the “EU”), and Japan.

We own and operate 10ten industrial-scale wood pellet production plants located in the Southeastern United States. In addition to the volumes from our plants, we also procure wood pellets from third parties. Wood pellets are exported from our wholly owned deep-water marine terminal at the Port of Chesapeake, Virginia, terminal assets at the Port of Wilmington, North Carolina and at the Port of Pascagoula, Mississippi, and from third-party deep-water marine terminals in Mobile, Alabama, Panama City, Florida, and Savannah, Georgia under a short-term contract, a long-term contract, and a lease and associated terminal services agreement, respectively.

Basis of Presentation

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

In the opinion of management, all adjustments and accruals necessary for a fair presentation have been included. All such adjustments and accruals are of a normal and recurring nature unless disclosed otherwise. Our consolidated financial statements include the accounts of Enviva and its wholly owned subsidiaries and controlled subsidiaries, including variable interest entities in which we are the primary beneficiary as we have the sole power to direct the activities that most impact the economics of the variable interest entities. All intercompany balances and transactions have been eliminated in consolidation. The results reported in the financial statements are not necessarily indicative of the results that may be reported for the entire year.

The unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2021, which include the names of legal entities that are our subsidiaries and which also include defined terms used in the unaudited financial statements.

C-Corporation Conversion

Effective December 31, 2021, Enviva Partners, LP (the “Partnership”) converted from a Delaware limited partnership to a Delaware corporation (the “Conversion”) named “Enviva Inc.” The Partnership was a subsidiary of Enviva Holdings, LP (our “former sponsor” or “Holdings”). Enviva Partners GP, LLC, a wholly owned subsidiary of our former sponsor, was our former general partner (the “former GP”). References to “Enviva,” the “Company,” “we,” “us,” or “our” refer to (i) Enviva Inc. and its subsidiaries for the periods following the Conversion and (ii) the Partnership and its subsidiaries for periods prior to the Conversion, except where the context otherwise requires.

As a result of the Conversion, periods prior to December 31, 2021 reflect Enviva as a limited partnership, not a corporation. References to common units for periods prior to the Conversion refer to common units of the Partnership, and references to common stock for periods following the Conversion refer to shares of common stock of Enviva Inc. The primary financial impacts of the Conversion to the consolidated financial statements were (i) reclassification of partnership capital accounts to equity accounts reflective of a corporation and (ii) income tax effects. On the date of the Conversion, each common unit representing a limited partner interest in the Partnership issued and outstanding immediately prior to the Conversion was exchanged for one share of common stock of the Company, par value $0.001 per share.

Simplification Transaction

On October 14, 2021, the Partnership acquired our former sponsor and the former GP, and the incentive distribution rights held by our former sponsor were cancelled and eliminated (collectively, the “Simplification Transaction”) in exchange for 16.0 million common units, which were distributed to the owners of our former sponsor. The owners of our former sponsor agreed to reinvest in our common stock all dividends from 9.0 million of the 16.0 million common units issued in connection with the Simplification Transaction during the period beginning with dividends paid for the third quarter of 2021 through the fourth quarter of 2024.

Table of Contents

ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

(2) Significant Accounting Policies

During interim periods, we follow the accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, except as follows due to new facts and circumstances applicable to 2022.

Non-Cash Equity-Based Compensation Expense

During the three and ~~six~~nine months ended ~~June~~September 30, 2022, the performance-based restricted stock awards granted vest dependent on the total shareholder return for Enviva Inc. relative to the constituents of the S&P 500 index over their respective performance periods. Their grant date fair values were determined using a Monte Carlo multivariate pricing model following standard assumptions.

Net Loss per Enviva Inc. Common Share

For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the net loss per Enviva Inc. common share was computed by dividing the net loss attributable to Enviva Inc., after reducing it by the amounts paid for dividend equivalent rights on outstanding time-based restricted stock awards, by the weighted-average number of outstanding Enviva Inc. common shares.

Use of Estimates

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

Recently Issued Accounting Standards not yet Adopted

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

(3) Transactions Between Entities Under Common Control

Recast of Historical Financial Statements

The Simplification Transaction was a business combination of entities under common control and net assets acquired were combined at their historical costs with a change in reporting entity. Accordingly, the condensed consolidated financial statements have been retroactively recast to reflect the Simplification Transaction as if the Simplification Transaction had occurred on March 18, 2010, the date Holdings was originally organized. While the Partnership was the surviving entity for legal purposes, Holdings is the surviving entity for accounting purposes. As a result, the historical financial results prior to the Simplification Transaction are those of Holdings. Prior to the Simplification Transaction, Holdings controlled the Partnership so the financial statements of the Partnership were consolidated into the financial statements of Holdings and the common units of the Partnership held by the public are reflected as a noncontrolling interest.

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ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

The following table presents changes as a result of the Simplification Transaction for the common control entities acquired to previously reported amounts in the unaudited condensed consolidated balance sheet as of ~~June~~September 30, 2021 included in Enviva’s quarterly report on Form 10-Q for the quarter ended ~~June~~September 30, 2021:


		As of June 30, 2021							As of September 30, 2021
		As Reported		Common Control Entities Acquired		Total (Recast)			As Reported		Common Control Entities Acquired		Total (Recast)
Assets	Assets							Assets
Current assets:	Current assets:							Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	42,901	$	121,800	$	164,701	Cash and cash equivalents	$	11,792	$	322,519	$	334,311
Restricted cash		—		1,561		1,561
Accounts receivable	Accounts receivable	74,398		—		74,398		Accounts receivable	86,889		—		86,889
Other accounts receivable	Other accounts receivable	—		12,296		12,296		Other accounts receivable	—		14,657		14,657

Related-party receivables, net								Related-party receivables, net	6,909		(6,909)		—
Inventories	Inventories	47,662		4,056		51,718		Inventories	53,814		4,724		58,538
Prepaid expenses and other current assets	Prepaid expenses and other current assets	13,501		(6,782)		6,719		Prepaid expenses and other current assets	16,055		(9,453)		6,602
Total current assets	Total current assets	178,462		132,931		311,393		Total current assets	175,459		325,538		500,997
Property, plant, and equipment, net	Property, plant, and equipment, net	1,114,521		260,779		1,375,300		Property, plant, and equipment, net	1,395,506		46,501		1,442,007
Operating lease right-of-use assets	Operating lease right-of-use assets	49,539		60,176		109,715		Operating lease right-of-use assets	58,421		49,208		107,629
Goodwill	Goodwill	99,660		—		99,660		Goodwill	99,660		—		99,660
Long-term restricted cash								Long-term restricted cash	—		1,717		1,717
Other long-term assets	Other long-term assets	10,526		2,232		12,758		Other long-term assets	10,645		1,652		12,297
Total assets	Total assets	$	1,452,708	$	456,118	$	1,908,826	Total assets	$	1,739,691	$	424,616	$	2,164,307
Liabilities and Equity	Liabilities and Equity							Liabilities and Equity
Current liabilities:	Current liabilities:							Current liabilities:
Accounts payable	Accounts payable	$	28,041	$	12,185	$	40,226	Accounts payable	$	24,698	$	1,818	$	26,516
Related-party payables, net		4,581		(4,581)		—
Related-party payables								Related-party payables	—		900		900
Accrued and other current liabilities	Accrued and other current liabilities	99,342		47,682		147,024		Accrued and other current liabilities	130,543		29,320		159,863
Current portion of interest payable	Current portion of interest payable	23,966		827		24,793		Current portion of interest payable	12,486		1,078		13,564
Current portion of long-term debt and finance lease obligations	Current portion of long-term debt and finance lease obligations	12,056		1,349		13,405		Current portion of long-term debt and finance lease obligations	11,906		1,049		12,955
Related-party note and interest payable		—		23,731		23,731
Total current liabilities	Total current liabilities	167,986		81,193		249,179		Total current liabilities	179,633		34,165		213,798
Long-term debt and finance lease obligations	Long-term debt and finance lease obligations	789,451		310,061		1,099,512		Long-term debt and finance lease obligations	1,134,706		309,253		1,443,959
Long-term operating lease liabilities	Long-term operating lease liabilities	48,368		66,468		114,836		Long-term operating lease liabilities	58,566		62,831		121,397
Deferred tax liabilities, net	Deferred tax liabilities, net	13,224		11,030		24,254		Deferred tax liabilities, net	13,157		8,187		21,344
Other long-term liabilities	Other long-term liabilities	13,154		25,211		38,365		Other long-term liabilities	26,105		10,957		37,062
Total liabilities	Total liabilities	1,032,183		493,963		1,526,146		Total liabilities	1,412,167		425,393		1,837,560
Commitments and contingencies	Commitments and contingencies							Commitments and contingencies
Total equity	Total equity	420,525		(37,845)		382,680		Total equity	327,524		(777)		326,747
Total liabilities and equity	Total liabilities and equity	$	1,452,708	$	456,118	$	1,908,826	Total liabilities and equity	$	1,739,691	$	424,616	$	2,164,307

The recast unaudited interim condensed consolidated balance sheet resulting from the Simplification Transaction separately presents “Other accounts receivable,” which included some amounts that had been previously reported as “Prepaid expenses and other current assets.”

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ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

The following tables present the changes as a result of the Simplification Transaction to previously reported amounts in the unaudited interim condensed consolidated statements of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2021 included in Enviva’s quarterly report on Form 10-Q for the quarter ended ~~June~~September 30, 2021:


		Three Months Ended June 30, 2021							Three Months Ended September 30, 2021
		As Reported		Common Control Entities Acquired		Total (Recast)			As Reported		Common Control Entities Acquired		Total (Recast)
Net revenue	Net revenue	$	285,042	$	921	$	285,963	Net revenue	$	237,398	$	428	$	237,826
Income (loss) from operations	Income (loss) from operations	15,481		(23,510)		(8,029)		Income (loss) from operations	10,518		(33,734)		(23,216)
Net income (loss)		2,645		(27,496)		(24,851)
Net loss								Net loss	(71)		(35,752)		(35,823)
Less net (income) loss attributable to noncontrolling interests	Less net (income) loss attributable to noncontrolling interests	(57)		3,576		3,519		Less net (income) loss attributable to noncontrolling interests	(27)		7,826		7,799
Net income (loss) attributable to Enviva Inc.		2,588		(23,920)		(21,332)
Net loss attributable to Enviva Inc.								Net loss attributable to Enviva Inc.	(98)		(27,926)		(28,024)


		Six Months Ended June 30, 2021							Nine Months Ended September 30, 2021
		As Reported		Common Control Entities Acquired		Total (Recast)			As Reported		Common Control Entities Acquired		Total (Recast)
Net revenue	Net revenue	$	526,086	$	1,498	$	527,584	Net revenue	$	763,484	$	1,926	$	765,410
Income (loss) from operations	Income (loss) from operations	26,520		(45,137)		(18,617)		Income (loss) from operations	37,038		(78,871)		(41,833)
Net income (loss)	Net income (loss)	1,180		(49,206)		(48,026)		Net income (loss)	1,109		(84,958)		(83,849)
Less net (income) loss attributable to noncontrolling interests	Less net (income) loss attributable to noncontrolling interests	(82)		10,905		10,823		Less net (income) loss attributable to noncontrolling interests	(109)		18,731		18,622
Net income (loss) attributable to Enviva Inc.	Net income (loss) attributable to Enviva Inc.	1,098		(38,301)		(37,203)		Net income (loss) attributable to Enviva Inc.	1,000		(66,227)		(65,227)

The following tables present the changes as a result of the Simplification Transaction to previously reported amounts in the unaudited interim condensed consolidated statements of cash flows for the ~~six~~nine months ended ~~June~~September 30, 2021 included in Enviva’s quarterly report on Form 10-Q for the quarter ended ~~June~~September 30, 2021:


		Six Months Ended June 30, 2021							Nine Months Ended September 30, 2021
		As Reported		Common Control Entities Acquired		Total (Recast)			As Reported		Common Control Entities Acquired		Total (Recast)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	$	111,438	$	(49,267)	$	62,171	Net cash provided by (used in) operating activities	$	110,700	$	(78,343)	$	32,357
Net cash used in investing activities		(72,872)		(81,111)		(153,983)
Net cash (used in) provided by financing activities		(5,669)		196,068		190,399
Net cash (used in) provided by investing activities								Net cash (used in) provided by investing activities	(396,675)		151,502		(245,173)
Net cash provided by financing activities								Net cash provided by financing activities	287,763		193,406		481,169
Net increase in cash, cash equivalents, and restricted cash	Net increase in cash, cash equivalents, and restricted cash	$	32,897	$	65,690	$	98,587	Net increase in cash, cash equivalents, and restricted cash	$	1,788	$	266,565	$	268,353

(4) Revenue

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

Performance Obligations

As of ~~June~~September 30, 2022, the aggregate amount of consideration from contracts with customers allocated to the performance obligations that were unsatisfied or partially satisfied was approximately ~~$19.5~~$19.3 billion. This amount excludes forward prices related to variable consideration including inflation, foreign currency, and commodity prices. Also, this amount excludes the effects of the related foreign currency derivative contracts as they do not represent contracts with customers. We expect to recognize approximately ~~4.0%~~3.0% of our remaining performance obligations during the remainder of 2022, an additional ~~7.0%~~8.0% in 2023, and the balance thereafter. Our off-take contracts expire at various times through 2045 and our terminal services contract expires in 2023.

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ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

Variable Consideration

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

Variable consideration from our terminal services contract arises from price increases based on agreed inflation indices and from above-minimum throughput quantities or services. There was no variable consideration from our terminal services contract for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021.

For the three ~~and six~~ months ended ~~June~~September 30, 2022, product sales revenue was reduced by $0.7 million related to performance obligations satisfied in previous periods. For the nine months ended September 30, 2022, we recognized $0.3 million ~~respectively,~~ of product sales revenue related to performance obligations satisfied in previous periods. For the three and ~~six~~nine months ended ~~June~~September 30, 2021, we recognized ~~$0.2~~$0.1 million and $0.4 million, respectively, of product sales revenue related to performance obligations satisfied in previous periods.

Contract Balances

Accounts receivable related to product sales as of ~~June~~September 30, 2022 and December 31, 2021 were ~~$116.2~~$111.6 million and $91.3 million, respectively. Of these amounts, ~~$82.1~~$97.2 million and $61.3 million, as of ~~June~~September 30, 2022 and December 31, 2021 respectively, related to amounts that were not yet billable under our contracts with customers pending finalization of prerequisite billing documentation. The amounts that had not been billed are billed upon receipt of prerequisite billing documentation, where substantially all is typically billed one to two weeks after full loading of the vessel, and where the remaining balance is typically billed one to two weeks after discharge of the vessel. Accounts receivable also include ~~$8.2~~$7.3 million and $6.1 million, as of ~~June~~September 30, 2022 and December 31, 2021 respectively, related to distribution costs recoverable from the customer through the cost pass-through mechanism where the costs and their recovery are included in cost of goods sold.

As of ~~June~~September 30, 2022, we had ~~$17.6~~$17.5 million of contract assets from and $0.4 million of deferred revenue for future performance obligations under contracts associated with off-take contracts. We did not have contract assets from or deferred revenue for future performance obligations under contracts associated with off-take contracts as of December 31, 2021.

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

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

One rail service provider transports wood pellet production for four of our ten production plants to the applicable terminal.

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


		Three Months Ended June 30,				Six Months Ended June 30,						Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021 (Recast)		2022		(Recast)	2021 (Recast)			2022		2021 (Recast)		2022		2021 (Recast)
Customer A	Customer A	18	%	45	%	20	%		38	%	Customer A	14	%	25	%	18	%	34	%
Customer B	Customer B	11	%	3	%	8	%		5	%	Customer B	11	%	3	%	9	%	5	%
Customer C	Customer C	9	%	20	%	13	%		18	%	Customer C	3	%	21	%	9	%	19	%
Customer D	Customer D	14	%	1	%	14	%		9	%	Customer D	16	%	7	%	15	%	9	%
Customer E	Customer E	17	%	18	%	18	%		17	%	Customer E	17	%	19	%	17	%	18	%
Customer F	Customer F	14	%	6	%	11	%		4	%	Customer F	10	%	5	%	10	%	5	%

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ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

(6) Inventories

Inventories consisted of the following as of:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Raw materials and work-in-process	Raw materials and work-in-process	$	23,798	$	21,995	Raw materials and work-in-process	$	24,563	$	21,995
Consumable tooling	Consumable tooling	25,772		22,952		Consumable tooling	28,546		22,952
Finished goods	Finished goods	24,777		12,770		Finished goods	32,950		12,770
Total inventories	Total inventories	$	74,347	$	57,717	Total inventories	$	86,059	$	57,717

(7) Property, Plant, and Equipment, net

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


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Land	Land	$	27,342	$	26,414	Land	$	26,318	$	26,414
Land improvements	Land improvements	92,214		61,850		Land improvements	65,674		61,850
Buildings	Buildings	415,324		321,577		Buildings	415,099		321,577
Machinery and equipment	Machinery and equipment	1,190,907		859,115		Machinery and equipment	1,336,447		859,115
Vehicles		8,981		8,318
Furniture and office equipment	Furniture and office equipment	27,122		24,840		Furniture and office equipment	29,329		24,840
Leasehold improvements	Leasehold improvements	23,403		22,101		Leasehold improvements	23,362		22,101
Vehicles and others						Vehicles and others	9,277		8,318
Property, plant, and equipment	Property, plant, and equipment	1,785,293		1,324,215		Property, plant, and equipment	1,905,506		1,324,215
Less accumulated depreciation	Less accumulated depreciation	(449,118)		(395,618)		Less accumulated depreciation	(483,717)		(395,618)
Property, plant, and equipment, net	Property, plant, and equipment, net	1,336,175		928,597		Property, plant, and equipment, net	1,421,789		928,597
Construction in progress	Construction in progress	215,587		569,600		Construction in progress	144,909		569,600
Total property, plant, and equipment, net	Total property, plant, and equipment, net	$	1,551,762	$	1,498,197	Total property, plant, and equipment, net	$	1,566,698	$	1,498,197

Total depreciation expense and capitalized interest related to construction in progress were as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021 (Recast)		2022		2021 (Recast)			2022		2021 (Recast)		2022		2021 (Recast)
Depreciation expense	Depreciation expense	$	29,107	$	23,345	$	51,832	$	45,032	Depreciation expense	$	35,215	$	23,450	$	87,047	$	68,482
Capitalized interest related to construction in progress	Capitalized interest related to construction in progress	3,087		3,911		8,937		8,001		Capitalized interest related to construction in progress	5,161		5,612		14,098		13,613

(8) Derivative Instruments

We use derivative instruments to partially offset our business exposure to foreign currency exchange risk from expected future cash flows and interest rate risk resulting from certain borrowings. Although the preponderance of our off-take contracts and shipping contracts are U.S. Dollar-denominated, we are exposed to fluctuations in foreign currency exchange rates related to a minority of our off-take contracts that require future deliveries of wood pellets to be settled in British Pound Sterling (“GBP”) and Euro (“EUR”) and a minority of our shipping contracts that require freight rates to be settled in GBP.

On March 31, 2022, we entered into a bunker fuel oil swap to offset our business exposure to bunker fuel oil prices.

We seek to mitigate the credit risk associated with derivative instruments by limiting our counterparties to major financial institutions. Although we monitor the potential risk of loss due to credit risk, we do not expect material losses as a result of defaults by counterparties. We use derivative instruments to manage cash flow and do not enter into derivative instruments for speculative or trading purposes.

~~Table of Contents~~

~~ENVIVA INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

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

We have entered and may continue to enter into foreign currency forward contracts, purchased option contracts, or other instruments to partially manage this risk. We record the changes in the fair value of foreign currency derivatives as product sales or cost of goods sold depending on the nature of the item being hedged.

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ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

We entered into pay-fixed, receive-variable interest rate swaps to hedge interest rate risk associated with our variable rate borrowings under our senior secured revolving credit facility that were not designated and accounted for as cash flow hedges. The interest rate swaps expired in September 2021.

Our derivative instruments are classified as Level 2 assets or liabilities based on inputs such as forward foreign exchange rates. The fair value of derivative instruments was as follows as of:


			Asset (Liability)						Asset (Liability)
		Balance Sheet Classification	June 30, 2022		December 31, 2021			Balance Sheet Classification	September 30, 2022		December 31, 2021
Not designated as hedging instruments:
Derivatives not designated as hedging instruments:							Derivatives not designated as hedging instruments:
Foreign currency exchange contracts:	Foreign currency exchange contracts:						Foreign currency exchange contracts:
		Prepaid expenses and other current assets	$	—	$	321		Prepaid expenses and other current assets	$	—	$	321
		Other long-term assets	—		309			Other long-term assets	—		309
		Accrued and other current liabilities	(1,024)		(1,456)			Accrued and other current liabilities	(1,974)		(1,456)
		Other long-term liabilities	(1,046)		(1,001)			Other long-term liabilities	(1,945)		(1,001)
			(2,070)		(1,827)				(3,919)		(1,827)
Bunker fuel swap:	Bunker fuel swap:						Bunker fuel swap:
		Other long-term assets	21		—			Prepaid expenses and other current assets	362		—
		Accrued and other current liabilities	(221)		—			Other long-term assets	484		—
		Other long-term liabilities	(93)		—
			(293)		—
									846		—
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments		$	(2,363)	$	(1,827)	Total derivatives not designated as hedging instruments		$	(3,073)	$	(1,827)

Net unrealized and net realized gains and (losses) recorded to earnings were as follows:


				Three Months Ended June 30,				Six Months Ended June 30,								Three Months Ended September 30,				Nine Months Ended September 30,
Classification	Classification	Derivative Instrument		2022		2021 (Recast)		2022		(Recast)	2021 (Recast)		Classification	Derivative Instrument		2022		2021 (Recast)		2022		2021 (Recast)
Product sales	Product sales	Foreign currency derivatives	Unrealized	$	(1,852)	$	362	$	(242)		$	(798)	Product sales	Foreign currency derivatives	Unrealized	$	(1,850)	$	4,364	$	(2,092)	$	3,566
Product sales	Product sales	Foreign currency derivatives	Realized	3,942		(1,522)		4,067			(2,517)		Product sales	Foreign currency derivatives	Realized	(524)		(1,141)		3,543		(3,658)
Cost of goods sold	Cost of goods sold	Bunker fuel swap	Unrealized	(293)		—		(293)			—		Cost of goods sold	Bunker fuel swap	Unrealized	1,139		—		846		—
Cost of goods sold	Cost of goods sold	Bunker fuel swap	Realized	(84)		—		(84)			—		Cost of goods sold	Bunker fuel swap	Realized	(31)		—		(115)		—
Interest expense	Interest expense	Interest rate swap	Unrealized	—		36		—			72		Interest expense	Interest rate swap	Unrealized	—		42		—		114

We enter into master netting arrangements designed to permit net settlement of derivative transactions among the respective counterparties. If we had settled all transactions with our respective counterparties at ~~June~~September 30, 2022, we would have paid a net settlement termination payment of ~~$2.1~~$4.0 million, which differs ~~insignificantly~~by $0.1 million from the recorded fair value of the derivatives. We present our derivative assets and liabilities at their gross fair values.

The notional amounts of outstanding derivative instruments associated with outstanding or unsettled derivative instruments were as follows as of:


	September 30, 2022		December 31, 2021
Foreign exchange forward contracts in GBP	£	17,191	£	57,500
Foreign exchange purchased option contracts in GBP	£	—	£	7,275
Foreign exchange forward contracts in EUR	€	3,200	€	11,000
Bunker fuel oil swap in MT (not in thousands)	9,800		—

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ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

~~The notional amounts of outstanding derivative instruments associated with outstanding or unsettled derivative instruments were as follows as of:~~

June 30, 2022 December 31, 2021
Foreign exchange forward contracts in GBP £ 19,102 £ 57,500
Foreign exchange purchased option contracts in GBP £ — £ 7,275
Foreign exchange forward contracts in EUR € 4,050 € 11,000
Bunker fuel oil swap in MT 10,500 —

(9) Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following as of:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Accrued expenses - compensation and benefits	Accrued expenses - compensation and benefits	$	18,859	$	22,758	Accrued expenses - compensation and benefits	$	22,325	$	22,758
Accrued expenses - wood pellet purchases and distribution costs	Accrued expenses - wood pellet purchases and distribution costs	41,182		34,819		Accrued expenses - wood pellet purchases and distribution costs	28,833		34,819
Accrued expenses - operating costs and expenses	Accrued expenses - operating costs and expenses	44,793		55,463		Accrued expenses - operating costs and expenses	44,094		55,463
Accrued capital expenditures	Accrued capital expenditures	22,079		21,791		Accrued capital expenditures	13,548		21,791
Other accrued expenses and other current liabilities	Other accrued expenses and other current liabilities	26,717		28,475		Other accrued expenses and other current liabilities	30,294		28,475
Accrued and other current liabilities	Accrued and other current liabilities	$	153,630	$	163,306	Accrued and other current liabilities	$	139,094	$	163,306

(10) Long-Term Debt and Finance Lease Obligations

Long-term debt and finance lease obligations at carrying value consisted of the following as of:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
2026 Notes, net of unamortized discount, premium, and debt issuance costs of $2.3 million and $2.6 million as of June 30, 2022 and December 31, 2021, respectively		$	747,698	$	747,399
2026 Notes, net of unamortized discount, premium, and debt issuance costs of $2.2 million and $2.6 million as of September 30, 2022 and December 31, 2021, respectively						2026 Notes, net of unamortized discount, premium, and debt issuance costs of $2.2 million and $2.6 million as of September 30, 2022 and December 31, 2021, respectively	$	747,842	$	747,399
Senior secured revolving credit facility	Senior secured revolving credit facility	430,000		466,000		Senior secured revolving credit facility	467,000		466,000
New Markets Tax Credit loans, net of unamortized discount and debt issuance costs of $2.7 million and $0.0 million as of June 30, 2022 and December 31, 2021, respectively		28,719		—
Seller Note, net of unamortized discount of $0.4 million and $1.1 million as of June 30, 2022 and December 31, 2021, respectively		25,835		36,442
Epes Tax-Exempt Green Bond, net of unamortized discount and debt issuance costs of $4.1 million and $0.0 as of September 30, 2022 and December 31, 2021, respectively						Epes Tax-Exempt Green Bond, net of unamortized discount and debt issuance costs of $4.1 million and $0.0 as of September 30, 2022 and December 31, 2021, respectively	245,881		—
New Markets Tax Credit loans, net of unamortized discount and debt issuance costs of $2.5 million and $0.0 as of September 30, 2022 and December 31, 2021, respectively						New Markets Tax Credit loans, net of unamortized discount and debt issuance costs of $2.5 million and $0.0 as of September 30, 2022 and December 31, 2021, respectively	28,920		—
Seller Note, net of unamortized discount of $0.2 million and $1.1 million as of September 30, 2022 and December 31, 2021, respectively						Seller Note, net of unamortized discount of $0.2 million and $1.1 million as of September 30, 2022 and December 31, 2021, respectively	17,316		36,442
Other loans	Other loans	4,193		3,273		Other loans	4,086		3,273
Finance leases	Finance leases	20,560		18,432		Finance leases	23,473		18,432
Total long-term debt and finance lease obligations	Total long-term debt and finance lease obligations	1,257,005		1,271,546		Total long-term debt and finance lease obligations	1,534,518		1,271,546
Less current portion of long-term debt and finance lease obligations	Less current portion of long-term debt and finance lease obligations	(37,284)		(39,105)		Less current portion of long-term debt and finance lease obligations	(29,294)		(39,105)
Long-term debt and finance lease obligations, excluding current installments	Long-term debt and finance lease obligations, excluding current installments	$	1,219,721	$	1,232,441	Long-term debt and finance lease obligations, excluding current installments	$	1,505,224	$	1,232,441

The estimated fair value of debt materially approximated the carrying amount at ~~June~~September 30, 2022 and December 31, 2021.

2026 Notes

As of ~~June~~September 30, 2022 and December 31, 2021, we were in compliance with the covenants and restrictions associated with, and no events of default existed under, the indenture governing the 2026 Notes. The 2026 Notes are guaranteed jointly and severally on a senior unsecured basis by most of our existing subsidiaries and may be guaranteed by certain future restricted subsidiaries.

Senior Secured Revolving Credit Facility

In June 2022, we amended our senior secured revolving credit facility to extend the maturity date from April 2026 to June 2027, and to increase the maximum Total Leverage Ratio (as defined in the credit agreement) from 5.00:1.00 to 5.50:1.00 (and from 5.25:1.00 to 5.75:1.00 during a Material Transaction Period (as defined in the credit agreement)).

~~Table of Contents~~

~~ENVIVA INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

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

As of ~~June~~September 30, 2022 and December 31, 2021, we were in compliance with all covenants and restrictions associated with, and no events of default existed under, our senior secured revolving credit facility. Our obligations under the senior secured revolving credit facility are guaranteed by certain of our subsidiaries and secured by liens on substantially all of our assets; however, the senior secured revolving credit facility is not guaranteed by Enviva Wilmington Holdings, LLC or Enviva Pellets Epes, LLC, or secured by liens on their assets.

As of ~~June~~September 30, 2022 and December 31, 2021, we had ~~$135.6~~$97.9 million and $99.8 million, respectively, available under our senior secured revolving credit facility, net of ~~$4.4~~$5.1 million and $4.2 million, respectively, of letters of credit outstanding.

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ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

New Markets Tax Credit (“NMTC”) Loans

In June 2022, we closed on a qualified NMTC financing transaction. The NMTC program is intended to induce capital investment in qualifying communities by permitting taxpayers to claim credits against their federal income taxes for up to 39% of qualified investments in the equity of community development entities (“CDEs”).

In this transaction, we borrowed $31.4 million from a bank (“Bank A”) then made a $31.4 million loan to an investment fund, into which another bank (“Bank B”) made a capital contribution of $12.8 million. The investment fund then contributed $42.0 million to four CDEs, which, in turn, loaned it to us. The $42.0 million accrues interest at a weighted average rate of 2.9% per annum, of which $34.1 million matures in its entirety in June 2029, while $7.9 million could be prepaid starting in 2029 and through 2052. The net proceeds we received are generally restricted to funding a portion of the costs of the acquisition, construction, equipping, and financing of our wood pellet production plant to be located in Epes, Alabama (the “Epes plant”).

By virtue of the capital contribution, Bank B is entitled to substantially all of the tax benefits derived from the NMTC, while we effectively received net loan proceeds equal to the capital contribution of $12.8 million. This transaction includes a put/call provision whereby we may be obligated or entitled to repurchase the interest of Bank B in the investment fund, which we believe they will exercise in June 2029. The value attributed to the put/call is de minimis. We determined that the investment fund and CDEs constitute variable interest entities where we are the primary beneficiary, and, as a result, we consolidate those entities. The $31.4 million loan is presented on our condensed consolidated balance sheet within long-term debt and finance lease obligations, while the $12.8 million contribution is presented within other long-term liabilities as we expect the put/call will be exercised for a de minimis value, both net of their proportionate share of direct and incremental transaction costs.

As of ~~June~~September 30, 2022, we were in compliance with the covenants and restrictions associated with, and no events of default existed under, the NMTC loans.

Epes Tax-Exempt Green Bonds

In July 2022, the Industrial Development Authority of Sumter County, Alabama (the “Issuer”) issued its Exempt Facilities Revenue Bonds (the “Epes Tax-Exempt Green Bonds”) in the aggregate principal amount of $250.0 million. The proceeds of the offering were loaned to us pursuant to a Loan and Guaranty Agreement (the “Loan and Guaranty Agreement”) by and among us, the Issuer, and certain of our subsidiaries as guarantors (the “Loan”). The Loan is our senior unsecured obligation and matures in full on July 15, 2052. The Bonds are subject to mandatory tender for purchase by the Company in July 2032 at a purchase price equal to 100% of the principal amount of the Bonds, plus accrued interest. Such prepayment may be required prior to maturity. Borrowings under the Loan and Guaranty Agreement bear interest at a rate equal to 6.00%. Interest is payable in arrears on January 15 and July 15 of each year, commencing on January 15, 2023. The Company’s obligations under the Loan and Guaranty Agreement are guaranteed by most of the Company’s existing subsidiaries and may be guaranteed by certain future restricted subsidiaries. We received net proceeds of $245.9 million after deducting underwriters’ discount, commissions, and expenses. The net proceeds received are generally restricted to funding a portion of the costs of the acquisition, construction, equipping, and financing of the Epes plant.

As of September 30, 2022, we were in compliance with the covenants and restrictions associated with, and no events of default existed under, the Epes Tax-Exempt Green Bonds.

(11) Income Taxes

The Company’s provision for income taxes is based on the estimated annual effective tax rate, plus discrete items. The effective tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2022 was 0.0% and 0.0%, respectively. The effective tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2021 was ~~1.0%~~7.5% and ~~1.9%~~4.4%, respectively. The effective tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2022 was primarily due to the full valuation allowance against the net deferred tax asset. The effective tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2021 was driven by the income taxes recorded for the corporate subsidiaries under the partnership structure.

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ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

(12) Equity

Issuance of Common Shares

In January 2022, we issued 4,945,000 shares of common stock at a price of $70.00 per share for total net proceeds of $332.8 million, after deducting $13.4 million of issuance costs. We intend to use the net proceeds of $332.8 million to fund a portion of our capital expenditures related to ongoing development projects.

Dividend Reinvestment

Pursuant to the dividend reinvestment plan established in connection with the Simplification Transaction, we issued ~~104,765~~124,418 shares of common stock in lieu of cash dividends of ~~$8.3~~$8.4 million during the three months ended ~~June~~September 30, 2022 and issued ~~215,152~~339,570 shares of common stock in lieu of cash dividends of ~~$16.2~~$24.6 million during the ~~six~~nine months ended ~~June~~September 30, 2022 to the owners of our former sponsor.

~~Table of Contents~~

~~ENVIVA INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

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

Cash Dividends and Distributions

The following table details cash dividends and distributions paid or declared:

Quarter Ended

Declaration Date

Record Date

Payment Date

Per Share or Unit(1)

~~June 30, 2021~~

~~July 27, 2021~~

~~August 13, 2021~~

~~August 27, 2021~~

~~0.815~~

September 30, 2021

November 3, 2021

November 15, 2021

November 26, 2021

0.840

December 31, 2021

February 2, 2022

February 14, 2022

February 25, 2022

0.860

March 31, 2022

May 4, 2022

May 16, 2022

May 27, 2022

0.905

June 30, 2022

August 3, 2022

August 15, 2022

August 26, 2022

0.905

September 30, 2022

November 2, 2022

November 14, 2022

November 25, 2022

0.905

(1)Prior to December 31, 2021, distributions were paid by the Partnership.

(13) Equity-Based Awards

Enviva Inc. Long-Term Incentive Plan (“LTIP”)

~~Affiliate Grants~~Employee Awards

The following table summarizes information regarding restricted stock unit awards (the ~~“Affiliate Grants”~~“Employee Awards”) under the LTIP:


		Time-Based Restricted Stock Units			Performance-Based Restricted Stock Units			Total Affiliate Grant Restricted Stock Units				Time-Based Restricted Stock Units			Performance-Based Restricted Stock Units			Total Employee Awards Restricted Stock Units
		Units	Weighted-Average Grant Date Fair Value (per unit)(1)		Units	Weighted-Average Grant Date Fair Value (per unit)(1)		Units	Weighted-Average Grant Date Fair Value (per unit)(1)			Units	Weighted-Average Grant Date Fair Value (per unit)(1)		Units	Weighted-Average Grant Date Fair Value (per unit)(1)		Units	Weighted-Average Grant Date Fair Value (per unit)(1)
Nonvested December 31, 2021	Nonvested December 31, 2021	1,002,061	$	40.82	608,117	$	38.56	1,610,178	$	39.97	Nonvested December 31, 2021	1,002,061	$	40.82	608,117	$	38.56	1,610,178	$	39.97
Granted	Granted	217,939	$	72.20	116,224	$	93.05	334,163	$	79.45	Granted	243,957	$	71.83	118,389	$	92.61	362,346	$	78.62
Forfeitures	Forfeitures	(61,768)	$	50.15	(21,871)	$	48.88	(83,639)	$	49.82	Forfeitures	(78,043)	$	51.01	(24,064)	$	49.02	(102,107)	$	50.54
Vested	Vested	(244,721)	$	30.25	(158,637)	$	30.24	(403,358)	$	30.24	Vested	(255,260)	$	30.25	(158,637)	$	30.24	(413,897)	$	30.24
Nonvested June 30, 2022		913,511	$	50.48	543,833	$	52.25	1,457,344	$	51.14
Nonvested September 30, 2022											Nonvested September 30, 2022	912,715	$	51.16	543,805	$	47.93	1,456,520	$	49.96

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

The unrecognized estimated non-cash equity-based compensation expense relating to outstanding ~~Affiliate Grants~~Employee Awards as of ~~June~~September 30, 2022 was ~~$51.6~~$46.2 million, which will be recognized over the remaining vesting period.

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ENVIVA INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

Director ~~Grants~~Awards

The following table summarizes information regarding restricted stock unit awards to independent directors of the Company under the LTIP:


		Time-Based Restricted Stock Units				Time-Based Restricted Stock Units
		Units	Weighted-Average Grant Date Fair Value (per unit)(1)			Units	Weighted-Average Grant Date Fair Value (per unit)(1)
Nonvested December 31, 2021	Nonvested December 31, 2021	14,234	$	48.48	Nonvested December 31, 2021	14,234	$	48.48
Granted	Granted	18,732	$	72.07	Granted	18,732	$	72.07
Vested	Vested	(14,219)	$	48.54	Vested	(14,219)	$	48.54
Nonvested June 30, 2022		18,747	$	72.07
Nonvested September 30, 2022					Nonvested September 30, 2022	18,747	$	72.07

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

Restricted Shares

Certain employees previously received Series B units of our former sponsor that were intended to constitute “profits interests” as defined by the Internal Revenue Service that, due to the Simplification Transaction, converted into common units of the ~~Partnership.~~Partnership which were then converted into common shares. The common shares subject to restriction will have their restrictions released as follows: one-third on each of December 31, 2022, 2023, and 2024. The unrecognized estimated non-cash equity-based compensation and other expense

~~Table of Contents~~

~~ENVIVA INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

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

relating to outstanding common shares subject to restriction as of ~~June~~September 30, 2022 was ~~$39.4~~$35.4 million, which will be recognized over the remaining vesting period.

(14) Net Loss per Enviva Inc. Common Share

Net loss per basic and diluted Enviva Inc. common share were computed as follows:


		Three Months Ended		Six Months Ended
		June 30, 2022		June 30, 2022			Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Net loss attributable to Enviva Inc.	Net loss attributable to Enviva Inc.	$	(27,337)	$	(72,644)	Net loss attributable to Enviva Inc.	$	(18,256)	$	(90,900)
Dividend equivalent rights paid on time-based restricted stock units	Dividend equivalent rights paid on time-based restricted stock units	(837)		(1,799)		Dividend equivalent rights paid on time-based restricted stock units	(840)		(2,639)
Net loss attributable to Enviva Inc. common stockholders	Net loss attributable to Enviva Inc. common stockholders	$	(28,174)	$	(74,443)	Net loss attributable to Enviva Inc. common stockholders	$	(19,096)	$	(93,539)
Weighted average shares outstanding - basic and diluted	Weighted average shares outstanding - basic and diluted	66,604		65,820		Weighted average shares outstanding - basic and diluted	66,724		66,125
Net loss per common share - basic and diluted	Net loss per common share - basic and diluted	$	(0.42)	$	(1.13)	Net loss per common share - basic and diluted	$	(0.29)	$	(1.41)

As Holdings was the surviving entity for accounting purposes, the historical financial results prior to the Simplification Transaction are those of Holdings. Given that and the recapitalization, the number of outstanding units for the portion of 2021 prior to the Simplification Transaction constitutes the 16.0 million units issued to the owners of the former sponsor.

~~(15) Subsequent Event~~

~~Tax-Exempt Green Bond Offering~~

In July 2022, the Industrial Development Authority of Sumter County, Alabama issued its Exempt Facilities Revenue Bonds (the “Tax-Exempt Green Bonds”) in the aggregate principal amount of $250.0 million. The proceeds of the offering were loaned to us pursuant to a Loan and Guaranty Agreement constituting a senior unsecured obligation to fund all or a portion of the costs of the acquisition, construction, equipping, and financing of the Epes plant and to pay costs of the offering. The Tax-Exempt Green Bonds, which were issued at par, bear interest at an annual rate of 6%, and mature in 2052, with the option for holders to redeem at par in 2032.

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

On December 31, 2021, Enviva Partners, LP (the “Partnership”) converted from a Delaware limited partnership to a Delaware corporation (the “Conversion”) named “Enviva Inc.” References to “Enviva,” the “Company,” “we,” “us,” or “our” refer to (i) Enviva Inc. and its subsidiaries for the periods following the Conversion and (ii) the Partnership and its subsidiaries for periods prior to the Conversion, except where the context otherwise requires. References to common units for periods prior to the Conversion refer to common units of the Partnership, and references to common stock for periods following the Conversion refer to shares of common stock of Enviva Inc. As a result of the Conversion, the primary financial impact to the consolidated financial statements contained herein consisted of (i) reclassification of partnership capital accounts to equity accounts reflective of a corporation and (ii) income tax effects.

References to “our former sponsor” or “Holdings” refer to Enviva Holdings, LP, and, where applicable, its formerly wholly owned subsidiaries Enviva MLP Holdco, LLC and Enviva Development Holdings, LLC. References to “our former GP” refer to Enviva Partners GP, LLC, formerly a wholly owned subsidiary of Holdings.

The following discussion and analysis should be read in conjunction with Management’s Discussion and Analysis ~~(“MD&A”)~~ in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”) as filed with the U.S. Securities and Exchange Commission (the “SEC”). Our 2021 Form 10-K contains a discussion of other matters not included herein, such as disclosures regarding critical accounting policies and estimates. You should also read the following discussion and analysis together with the risk factors set forth in the 2021 Form 10-K, Item 1A. “Risk Factors” and the factors described under “Cautionary Statement Regarding Forward-Looking Information” and Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q for information regarding certain risks inherent in our business.

Basis of Presentation

The following discussion about matters affecting the financial condition and results of operations of the Company should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this report and the audited consolidated financial statements and related notes that are included in the 2021 Form 10-K. Among other things, those financial statements and the related notes include more detailed information regarding the basis of presentation for the following information.

C-Corporation Conversion

We converted from a Delaware limited partnership to a Delaware corporation effective December 31, 2021; consequently, results for periods prior to December 31, 2021 reflect Enviva as a limited partnership, not a corporation. The primary financial impacts of the Conversion to the consolidated financial statements were (i) reclassification of partnership capital accounts to equity accounts reflective of a corporation and (ii) income tax effects. On the date of the Conversion, each common unit representing a limited partner interest in the Partnership issued and outstanding immediately prior to the Conversion was exchanged for one share of common stock of the Company, par value $0.001 per share.

Simplification Transaction

On October 14, 2021, the Partnership acquired our former sponsor and ~~the~~our former GP, and the incentive distribution rights held by our former sponsor were cancelled and eliminated (collectively, the “Simplification Transaction”) in exchange for 16.0 million common units, which were distributed to the owners of our former sponsor. In connection with the Simplification Transaction, we acquired certain assets under development, as well as off-take contracts in varying stages of negotiation. Additionally, our existing management services fee waivers (the “MSA Fee Waivers”) and other support agreements with our former sponsor were consolidated, fixed, and novated to certain owners of our former sponsor. Under the consolidated support agreement, we are entitled to receive quarterly payments (the “Support Payments”) in an aggregate amount of $55.5 million with respect to periods from the fourth quarter of 2021 through the first quarter of 2024. The consolidated financial statements have been retroactively recast to reflect the Simplification Transaction as if the Simplification Transaction occurred on March 18, 2010, the date on which Holdings was originally organized, instead of October 14, 2021, the closing date of the Simplification Transaction.

Business Overview

We develop, construct, acquire, and own and operate, fully contracted wood pellet production plants where we aggregate a natural resource, wood fiber, and process it into dry, densified, uniform pellets that can be effectively stored and transported around the world. We primarily sell our wood pellets through long-term, take-or-pay off-take contracts with creditworthy customers in the United Kingdom, the European Union, and Japan, who use our pellets to displace coal and other fossil fuels ~~to generate renewable~~in their power and heat generation as part of their efforts to ~~accelerate the energy~~ transition from those conventional energy sources. Increasingly, our

~~generation to renewable energy generation. Increasingly, our~~ customers are also using our pellets as ~~renewable~~ raw material inputs ~~to decarbonize~~in hard-to-abate sectors like steel, cement, lime, chemicals, and aviation fuels. Collectively, the wood pellets we produce are viewed by our customers as a critical component of their efforts to reduce life-cycle greenhouse gas emissions in their core energy generation or industrial manufacturing ~~processes, and mitigate the impact of climate change.~~processes.

We own and operate ten plants (collectively, “our plants”) with a combined production capacity of approximately 6.2 million metric tons (“MT”) of wood pellets per year (“MTPY”) in Virginia, North Carolina, South Carolina, Georgia, Florida, and Mississippi, the production of which is fully contracted, with many of our contracts extending well into the 2040s. We export our wood pellets to global markets through our deep-water marine terminal at the Port of Chesapeake, Virginia, terminal assets at the Port of Wilmington, North Carolina and the Port of Pascagoula, Mississippi, and from third-party deep-water marine terminals in Savannah, Georgia, Mobile, Alabama, and Panama City, Florida. In July 2022, we commenced construction of our fully contracted wood pellet production plant in Epes, Alabama (the “Epes plant”). All of our facilities are located in geographic regions with low input costs and favorable transportation logistics. Owning these cost-advantaged assets in a rapidly expanding industry provides us with a platform to generate stable and growing cash flows. Our plants are sited in robust fiber baskets providing stable pricing for the low-grade fiber used to produce wood pellets. Our raw materials are byproducts of traditional timber harvesting, principally low-value wood materials, such as trees generally not suited for sawmilling or other manufactured forest products, and tree tops and limbs, understory, brush, and slash that are generated in a harvest.

Our sales strategy is to fully contract the wood pellet production from our plants under long-term, take-or-pay off-take contracts with a diversified and creditworthy customer base. Our long-term off-take contracts typically provide for fixed-price deliveries that often include provisions that escalate the price over time and provide for other margin protection. For 2022, our production capacity from our wood pellet production plants is contracted under our existing long-term, take-or-pay off-take contracts.

Our largest customers use our wood pellets as a substitute fuel for coal in dedicated biomass or co-fired coal power plants. Wood pellets serve as a suitable “drop-in” alternative to coal because of their comparable heat content, density, and form. Due to the uninterruptible nature of our customers’ fuel consumption, our customers require a reliable supply of wood pellets that meet stringent product specifications. We have built our operations and assets to deliver and certify the highest levels of product quality and our proven track record of reliable deliveries enables us to charge premium prices for this certainty. In addition to our customers’ focus on the reliability of supply, they are concerned about the combustion efficiency of the wood pellets and their safe handling. Because combustion efficiency is a function of energy density, particle size distribution, ash/inert content, and moisture, our customers require that we supply wood pellets meeting minimum criteria for a variety of specifications and, in some cases, provide incentives for exceeding our contract specifications.

Recent Developments

Product Sales Contracted Backlog

Our volumes under our firm and contingent long-term, take-or-pay off-take contracts provide for a product sales backlog of ~~$21.7~~$21.1 billion and have a total weighted-average remaining term of ~~14.2~~14.1 years from ~~July~~October 1, 2022. This amount includes forward prices related to variable consideration including inflation, foreign currency, and commodity prices. Also, this amount includes the effects of the related foreign currency derivative contracts.

Epes Tax-Exempt Green Bonds

In July 2022, the Industrial Development Authority of Sumter County, Alabama issued its Epes Tax-Exempt Green Bonds in the aggregate principal amount of $250.0 million. The proceeds of the offering were loaned to us pursuant to a Loan and Guaranty Agreement constituting a senior unsecured obligation to fund a portion of the costs of the acquisition, construction, equipping, and financing of the Epes plant and to pay costs of the offering. The Epes Tax-Exempt Green Bonds, which were issued at par, bear interest at an annual rate of 6.00%, and mature in 2052, with the option for holders to redeem at par in 2032.

Financing Activities

In June 2022, we amended our senior secured revolving credit facility to extend the maturity date from April 2026 to June 2027, and to increase the maximum Total Leverage Ratio ~~(as defined in the credit agreement)~~ from 5.00:1.00 to 5.50:1.00 (and from 5.25:1.00 to 5.75:1.00 during a Material Transaction ~~Period (as defined in the credit agreement))~~Period).

New Markets Tax Credit (“NMTC”) Loans

In June 2022, we borrowed $42.0 million where the net proceeds are generally restricted to funding a portion of the costs of the acquisition, construction, equipping, and financing of the Epes plant. The NMTC financing accrues interest at a weighted

average rate of 2.9% per annum. Of the $42.0 million, $34.1 million matures in its entirety in June 2029, while $7.9 million could be prepaid quarterly starting in 2029 and through 2052.

Issuance of Common Shares

~~Tax-Exempt Green Bond Offering~~Hurricane Ian

In ~~July~~September and October 2022, Hurricane Ian made landfall on the Industrial Development Authority of Sumter County, Alabama issued its Exempt Facilities Revenue Bonds (the “Tax-Exempt Green Bonds”) in the aggregate principal amount of $250.0 million. The proceedseast coast of the ~~offering were loaned~~United States, affecting a number of Enviva’s storage and terminaling operations. Enviva prepared in advance of Hurricane Ian to ~~us pursuant to~~keep employees safe and minimize disruption, most notably at Enviva’s storage and terminaling operations located at the ports of Savannah, Georgia, Wilmington, North Carolina, and Chesapeake, Virginia. As a ~~Loan~~precaution, the Georgia Ports Authority and ~~Guaranty Agreement constituting a senior unsecured obligation to fund a portion~~the North Carolina State Ports Authority ordered the temporary closure of the ~~costs~~Port of Savannah and Port of Wilmington, respectively, which suspended operations at our deep-water marine terminals in those locations. The ports have re-opened and Enviva has resumed normal operations. No production facilities were adversely affected by the ~~acquisition, construction, equipping,~~storm. Impact to operations was minimal and ~~financing of the Epes plant and to pay costs of the offering. The Tax-Exempt Green Bonds, which~~all employees were ~~issued at par, bear interest at an annual rate of 6%, and mature in 2052, with the option for holders to redeem at par in 2032.~~confirmed safe.

Factors Impacting Comparability of Our Financial Results

Omicron Variant of Novel Coronavirus

During the three months ended March 31, 2022, the Omicron variant of COVID-19 significantly impacted our operations and resulted in $15.2 million of incremental costs. Our contractors and supply chain partners experienced labor-related and other challenges associated with COVID-19 that had a more pronounced than anticipated impact on our operations and project execution schedule. In addition, the prevalence of the Omicron variant of COVID-19 and increased rates of infection across areas in which we operate affected the availability of healthy workers from time to time at our facilities and we experienced increased rates of absence in our hourly workforce as workers who contracted COVID-19 quarantined at home. These absences contributed to reduced facility availability and, in some cases, reduced aggregate production levels. For more information about the effects of COVID-19 on the ~~six~~nine months ended ~~June~~September 30, 2022, please see below under “Results of Operations.”

How We Evaluate Our Operations

Adjusted Net Income (Loss)

We define adjusted net income (loss) as net income (loss) excluding acquisition and integration costs and other, early retirement of debt obligation, effects of COVID-19 and the war in Ukraine, and Support Payments. We believe that adjusted net income (loss) enhances investors’ ability to compare the past financial performance of our underlying operations with our current performance separate from certain items of gain or loss that we characterize as unrepresentative of our ongoing operations.

Adjusted Gross Margin and Adjusted Gross Margin per Metric Ton

We define adjusted gross margin as gross margin excluding loss on disposal of assets, equity-based compensation and other expense, depreciation and amortization, changes in unrealized derivative instruments related to hedged items, acquisition and integration costs and other, effects of COVID-19 and the war in Ukraine, and Support Payments. We define adjusted gross margin per metric ton as adjusted gross margin per metric ton of wood pellets sold. We believe adjusted gross margin and adjusted gross margin per metric ton are meaningful measures because they compare our revenue-generating activities to our cost of goods sold for a view of profitability and performance on a total-dollar and a per-metric ton basis. Adjusted gross margin and adjusted gross margin per metric ton primarily will be affected by our ability to meet targeted production volumes and to control direct and indirect costs associated with procurement and delivery of wood fiber to our wood pellet production plants and our production and distribution of wood pellets.

Adjusted EBITDA

We define adjusted EBITDA as net income (loss) excluding depreciation and amortization, interest expense, income tax expense (benefit), early retirement of debt obligation, equity-based compensation and other expense, loss on disposal of assets, changes in unrealized derivative instruments related to hedged items, acquisition and integration costs and other, effects of COVID-19 and the war in Ukraine, and MSA Fee Waivers and Support Payments. Adjusted EBITDA is a supplemental

measure used by our management and other users of our financial statements, such as investors, commercial banks, and research analysts, to assess the financial performance of our assets without regard to financing methods or capital structure.

Distributable Cash Flow

We define distributable cash flow as adjusted EBITDA less cash income tax expenses, interest expense net of amortization of debt issuance costs, debt premium, and original issue discounts, and maintenance capital expenditures. We use distributable cash flow as a performance metric to compare our cash-generating performance from period to period and to compare the cash-generating performance for specific periods to the cash dividends (if any) that are expected to be paid to our shareholders. We do not rely on distributable cash flow as a liquidity measure.

2021 Non-Recast Presentation

The three and ~~six~~nine months ended ~~June~~September 30, 2021 were calculated on a recast basis in accordance with accounting principles generally accepted in the United States (“GAAP”) to reflect the consolidated performance of Enviva and our former sponsor as if Enviva had bought the former sponsor at inception instead of October 14, 2021, the closing date of the Simplification Transaction. In addition, we are also presenting results for the three and ~~six~~nine months ended ~~June~~September 30, 2021, calculated on a non-GAAP basis that combines (i) the actual performance of Enviva for the three and ~~six~~nine months ended ~~June~~September 30, 2021 on a non-recast basis, and (ii) our consolidated performance, calculated on a recast basis in accordance with GAAP, inclusive of the assets and operations acquired as part of the Simplification Transaction, for the three and ~~six~~nine months ended ~~June~~September 30, 2021 (the “Non-Recast Presentation”). We believe the Non-Recast Presentation provides investors with relevant information to evaluate our financial and operating performance because it reflects Enviva’s actual and historically reported performance on a stand-alone basis and on a consolidated basis for the three and ~~six~~nine months ended ~~June~~September 30, 2021.

The Non-Recast Presentation does not reflect the recast of our historical results required under GAAP due to the Simplification Transaction and accordingly contains non-GAAP measures. Unless expressly stated otherwise, all results are presented on a recast basis.

Limitations of Non-GAAP Financial Measures

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

Our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. Please see above for a reconciliation of the Non-Recast Presentation to the Recast Presentation and below for a reconciliation of each of adjusted net income (loss), adjusted gross margin and adjusted gross margin per metric ton, adjusted EBITDA, and distributable cash flow to the most directly comparable GAAP financial measure.

Results of Operations

Three Months Ended ~~June~~September 30, 2022 Compared to Three Months Ended ~~June~~September 30, 2021

Three Months Ended June 30, Change
2022 2021 (Recast)
(in thousands)
Product sales $ 293,615 $ 271,242 $ 22,373
Other revenue 2,706 14,721 (12,015)
Net revenue 296,321 285,963 10,358
Cost of goods sold, excluding items below 250,276 234,564 15,712
Loss on disposal of assets 2,282 1,701 581
Selling, general, administrative, and development expenses 27,704 34,548 (6,844)
Depreciation and amortization 28,833 23,179 5,654
Total operating costs and expenses 309,095 293,992 15,103
Loss from operations (12,774) (8,029) (4,745)
Interest expense (13,959) (17,481) 3,522
Other (expense) income, net (611) 399 (1,010)
Net loss before income tax benefit (27,344) (25,111) (2,233)
Income tax benefit (2) (260) 258
Net loss $ (27,342) $ (24,851) $ (2,491)


	Three Months Ended September 30,				Change
	2022		2021 (Recast)
	(in thousands)
Product sales	$	322,978	$	229,698	$	93,280
Other revenue	2,682		8,128		(5,446)
Net revenue	325,660		237,826		87,834
Cost of goods sold, excluding items below	257,542		199,943		57,599
Loss on disposal of assets	4,035		3,916		119
Selling, general, administrative, and development expenses	30,407		33,898		(3,491)
Depreciation and amortization	34,930		23,285		11,645
Total operating costs and expenses	326,914		261,042		65,872
Loss from operations	(1,254)		(23,216)		21,962
Interest expense	(18,704)		(15,463)		(3,241)

Other income (expense), net	1,671		(37)		1,708
Net loss before income tax expense (benefit)	(18,287)		(38,716)		20,429
Income tax expense (benefit)	12		(2,893)		2,905
Net loss	$	(18,299)	$	(35,823)	$	17,524

Net revenue

Revenue related to product sales for wood pellets produced or procured by us increased to ~~$293.6~~$323.0 million in the three months ended ~~June~~September 30, 2022 from ~~$271.2~~$229.7 million in the three months ended ~~June~~September 30, 2021. The ~~$22.4~~$93.3 million, or 8%41%, increase was primarily attributable to a ~~16%~~31% increase in average sale price per MT ~~partially offset by~~and a 7% ~~decrease~~increase in product sales volumes for the three months ended ~~June~~September 30, 2022 as compared to the three months ended ~~June~~September 30, 2021.

The increase in average sales price per MT was primarily due to addressing dislocations in our customers’ and other producers’ supply chains, ~~rescheduling certain contracted deliveries into future periods, enabling prompt deliveries to other customers requiring~~which enabled incremental deliveries at elevated spot ~~pricing.~~pricing, pricing escalators and cost pass-through mechanisms inclusive of bunker fuel adjustments in our existing contracts, and repricing existing contracts and entering into new contracts at higher prices compared to historical prices. Recent biomass spot market prices, as well as the forward curve pricing of certain European indices, have exceeded ~~$300~~$400 per MT, representing a substantial premium to the current long-term contracted pricing of roughly $200 to $220 per MT across Enviva’s weighted average portfolio, and we have been able to capture some of that differential during the three months ended ~~June~~September 30, 2022.

The ~~decrease~~increase in product sales volumes was ~~primarily due to~~84 thousand MT. Product sales volumes were dampened by the timing of shipments that has resulted in an increase in finished goods inventory due to Hurricane Ian and ~~less~~decreased volumes procured from third parties to fulfill product sales during the three months ended ~~June~~September 30, 2022 ~~than during~~as compared to the three months ended ~~June~~September 30, 2021. As of September 30, 2022, due to Hurricane Ian we had three shipments with approximately 80 thousand MT that were delayed due to the temporary suspension of port operations and were sold in the subsequent quarter. The decrease in procured volumes was due to a lower availability of third-party pellets resulting from the war in Ukraine and related sanctions.

Other revenue for the three months ended ~~June~~September 30, 2022 and 2021 ~~included $1.5~~was $2.7 million and ~~$13.2~~$8.1 million, respectively, and included none and $7.2 million, respectively, in payments to us for adjusting deliveries under our take-or-pay off-take contracts, which otherwise would have been included in product sales and which was recognized under a breakage model based on when the pellets would have been loaded.

Cost of goods sold

Cost of goods sold increased to ~~$250.3~~$257.5 million for the three months ended ~~June~~September 30, 2022 from ~~$234.6~~$199.9 million for the three months ended ~~June~~September 30, 2021, an increase of ~~$15.7~~$57.6 million, or 7%29%. The increase in cost of goods sold was primarily a result of incremental fiber procurement and energy ~~costs.~~costs inclusive of bunker fuel adjustments. In addition, we incurred incremental cost of goods sold from the on-going ramp of ~~the~~our tenth plant in Lucedale, ~~plant~~Mississippi (the “Lucedale plant”) and

the commencement of operations of Enviva’s new deep-water marine terminal in Pascagoula, Mississippi (the “Pascagoula terminal”).

Adjusted gross margin and adjusted gross margin per metric ton


		Three Months Ended June 30,				Change			Three Months Ended September 30,				Change
		2022		2021 (Recast)					2022		2021 (Recast)
		(in thousands, except per metric ton)							(in thousands, except per metric ton)
Reconciliation of gross margin to adjusted gross margin and adjusted gross margin per metric ton:	Reconciliation of gross margin to adjusted gross margin and adjusted gross margin per metric ton:							Reconciliation of gross margin to adjusted gross margin and adjusted gross margin per metric ton:
Gross margin(1)	Gross margin(1)	$	16,816	$	27,824	$	(11,008)	Gross margin(1)	$	31,750	$	12,483	$	19,267
Loss on disposal of assets	Loss on disposal of assets	2,282		1,701		581		Loss on disposal of assets	3,517		3,906		(389)
Equity-based compensation and other expense	Equity-based compensation and other expense	567		568		(1)		Equity-based compensation and other expense	567		567		—
Depreciation and amortization	Depreciation and amortization	26,948		21,872		5,076		Depreciation and amortization	32,849		21,495		11,354
Changes in unrealized derivative instruments	Changes in unrealized derivative instruments	2,145		(362)		2,507		Changes in unrealized derivative instruments	710		(4,364)		5,074

Acquisition and integration costs and other	Acquisition and integration costs and other	(244)		72		(316)		Acquisition and integration costs and other	58		325		(267)

Support Payments	Support Payments	6,236		—		6,236		Support Payments	5,900		—		5,900

Adjusted gross margin	Adjusted gross margin	$	54,750	$	51,675	$	3,075	Adjusted gross margin	$	75,351	$	34,412	$	40,939
Metric tons sold	Metric tons sold	1,275		1,367		(92)		Metric tons sold	1,256		1,172		84
Adjusted gross margin per metric ton	Adjusted gross margin per metric ton	$	42.94	$	37.80	$	5.14	Adjusted gross margin per metric ton	$	59.99	$	29.36	$	30.63

(1)Gross margin is defined as net revenue less cost of goods sold (including related depreciation and amortization and loss on disposal of assets).

We earned adjusted gross margin of ~~$54.8~~$75.4 million, or ~~$42.94~~$59.99 per MT, for the three months ended ~~June~~September 30, 2022 compared to ~~$51.7~~$34.4 million, or ~~$37.80~~$29.36 per MT, for the three months ended ~~June~~September 30, 2021. The increase in adjusted gross margin was primarily due to the aforementioned increase in net revenue, as well as due to the increase in Support Payments for the three months ended ~~June~~September 30, 2022 as compared to the three months ended ~~June~~September 30, 2021, partially offset by the aforementioned increase in cost of goods sold.

Selling, general, administrative, and development expenses

Selling, general, administrative, and development expenses were ~~$27.7~~$30.4 million and ~~$34.5~~$33.9 million for the three months ended ~~June~~September 30, 2022 and 2021, respectively. Selling, general, administrative, and development expenses include costs to develop new markets, corporate and other overhead expenses, and costs of developing new plants or ports (for those that have not yet met the capitalization threshold or costs that are not eligible for capitalization). Once a significant component of the plant or port is placed in-service, the ~~expenses of a plant or port are~~associated expense component is classified as cost of goods sold. The ~~$6.8~~$3.5 million decrease in total selling, general, administrative, and development expenses is primarily associated with ~~decreased cash-based compensation~~a decrease in consulting and ~~related~~management fee expenses primarily due to the elimination of activities resulting from the Simplification Transaction.

Depreciation and amortization

Depreciation and amortization expense were ~~$28.8~~$34.9 million and ~~$23.2~~$23.3 million for the three months ended ~~June~~September 30, 2022 and 2021, respectively, primarily due to the Lucedale plant, Pascagoula terminal, and expansion assets placed in service during 2022.

Interest expense

We incurred ~~$14.0~~$18.7 million and ~~$17.5~~$15.5 million of interest expense during the three months ended ~~June~~September 30, 2022 and 2021, respectively. The ~~decrease~~increase in interest expense from the prior year was primarily attributable to a ~~lower cost of~~higher outstanding borrowing ~~due to~~amount and higher interest rate under our senior secured revolving credit facility, offset by the extinguishment of the ~~higher rate~~ senior secured green term loan facility as part of the Simplification Transaction.

Income tax

We recorded an insignificant income tax expense and ~~$0.3~~$2.9 million income tax benefit for the three months ended ~~June~~September 30, 2022 and 2021, respectively.

~~Adjusted net loss~~

Three Months Ended June 30, Change
2022 2021 (Recast)
(in thousands)
Reconciliation of net loss to adjusted net loss:
Net loss $ (27,342) $ (24,851) $ (2,491)
Acquisition and integration costs and other 3,591 1,338 2,253
Support Payments 6,236 — 6,236
Adjusted net loss $ (17,515) $ (23,513) $ 5,998

Adjusted net loss


	Three Months Ended September 30,				Change
	2022		2021 (Recast)
	(in thousands)
Reconciliation of net loss to adjusted net loss:
Net loss	$	(18,299)	$	(35,823)	$	17,524
Acquisition and integration costs and other	4,409		7,320		(2,911)
Support Payments	5,900		—		5,900
Adjusted net loss	$	(7,990)	$	(28,503)	$	20,513

Adjusted EBITDA


		Three Months Ended June 30,				Change			Three Months Ended September 30,				Change
		2022		2021 (Recast)					2022		2021 (Recast)
		(in thousands)							(in thousands)
Reconciliation of net loss to adjusted EBITDA:	Reconciliation of net loss to adjusted EBITDA:							Reconciliation of net loss to adjusted EBITDA:
Net loss	Net loss	$	(27,342)	$	(24,851)	$	(2,491)	Net loss	$	(18,299)	$	(35,823)	$	17,524
Add:	Add:							Add:
Depreciation and amortization	Depreciation and amortization	28,833		23,179		5,654		Depreciation and amortization	34,930		23,285		11,645
Interest expense	Interest expense	13,959		17,481		(3,522)		Interest expense	18,704		15,463		3,241
Income tax benefit		(2)		(260)		258

Income tax expense (benefit)								Income tax expense (benefit)	12		(2,893)		2,905
Equity-based compensation and other expense	Equity-based compensation and other expense	9,763		7,504		2,259		Equity-based compensation and other expense	10,199		7,267		2,932
Loss on disposal of assets	Loss on disposal of assets	2,282		1,701		581		Loss on disposal of assets	4,035		3,916		119
Changes in unrealized derivative instruments	Changes in unrealized derivative instruments	2,145		(362)		2,507		Changes in unrealized derivative instruments	710		(4,364)		5,074
Acquisition and integration costs and other	Acquisition and integration costs and other	3,592		1,338		2,254		Acquisition and integration costs and other	4,409		7,319		(2,910)

Support Payments	Support Payments	6,236		—		6,236		Support Payments	5,900		—		5,900

Adjusted EBITDA	Adjusted EBITDA	$	39,466	$	25,730	$	13,736	Adjusted EBITDA	$	60,600	$	14,170	$	46,430

We generated adjusted EBITDA of ~~$39.5~~$60.6 million for the three months ended ~~June~~September 30, 2022 compared to ~~$25.7~~$14.2 million for the three months ended ~~June~~September 30, 2021. The ~~$13.7~~$46.4 million increase was primarily attributable to the factors described above under the headings “Adjusted gross margin and adjusted gross margin per metric ton” and “Selling, general, administrative, and development expenses.”

Distributable cash flow

The following is a reconciliation of adjusted EBITDA to distributable cash flow:
Three Months Ended June 30, Change
2022 2021 (Recast)
(in thousands)
Reconciliation of adjusted EBITDA to distributable cash flow attributable to Enviva:
Adjusted EBITDA $ 39,466 $ 25,730 $ 13,736
Less:
Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount 13,348 16,075 (2,727)
Maintenance capital expenditures 4,787 3,940 847
Distributable cash flow attributable to Enviva Inc. 21,331 5,715 15,616
Less: Distributable cash flow attributable to incentive distribution rights — 10,708 (10,708)
Distributable cash flow attributable to Enviva Inc. or Enviva Partners, LP limited partners $ 21,331 $ (4,993) $ 26,324


	Three Months Ended September 30,				Change
	2022		2021 (Recast)
	(in thousands)
Reconciliation of adjusted EBITDA to distributable cash flow attributable to Enviva:
Adjusted EBITDA	$	60,600	$	14,170	$	46,430
Less:
Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	17,908		14,397		3,511
Maintenance capital expenditures	6,344		3,339		3,005


Distributable cash flow attributable to Enviva Inc. or Enviva Partners, LP limited partners	$	36,348	$	(3,566)	$	39,914

The following table presents a reconciliation of net ~~loss~~(loss) income to adjusted EBITDA and distributable cash flow for the three months ended ~~June~~September 30, 2021, on a recast basis and non-recast basis:


		Three Months Ended June 30, 2021							Three Months Ended September 30, 2021
		Recast		Adjustments		Non-Recast			Recast		Adjustments		Non-Recast
		(in millions)							(in millions)
Net (loss) income	Net (loss) income	$	(24.8)	$	27.5	$	2.7	Net (loss) income	$	(35.8)	$	35.7	$	(0.1)
Add:	Add:							Add:
Depreciation and amortization	Depreciation and amortization	23.2		(0.9)		22.3		Depreciation and amortization	23.3		(1.3)		22.0
Interest expense	Interest expense	17.4		(4.7)		12.7		Interest expense	15.5		(4.8)		10.7
Income tax benefit		(0.2)		0.2		—

Income tax (benefit) expense								Income tax (benefit) expense	(2.9)		2.9		—
Equity-based compensation and other expense	Equity-based compensation and other expense	7.5		(4.8)		2.7		Equity-based compensation and other expense	7.3		(4.9)		2.4
Loss on disposal of assets	Loss on disposal of assets	1.7		—		1.7		Loss on disposal of assets	3.9		—		3.9
Changes in unrealized derivative instruments	Changes in unrealized derivative instruments	(0.4)		—		(0.4)		Changes in unrealized derivative instruments	(4.4)		—		(4.4)
Acquisition and integration costs and other	Acquisition and integration costs and other	1.3		(0.4)		0.9		Acquisition and integration costs and other	7.3		—		7.3
MSA Fee Waivers	MSA Fee Waivers	—		6.3		6.3		MSA Fee Waivers	—		21.1		21.1
Adjusted EBITDA	Adjusted EBITDA	25.7		23.2		48.9		Adjusted EBITDA	14.2		48.7		62.9
Less:	Less:							Less:
Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	9.8		2.2		12.0		Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	14.4		(4.4)		10.0
Maintenance capital expenditures	Maintenance capital expenditures	3.9		—		3.9		Maintenance capital expenditures	3.4		—		3.4
Distributable cash flow	Distributable cash flow	$	12.0	$	21.0	$	33.0	Distributable cash flow	$	(3.6)	$	53.1	$	49.5

The following is a reconciliation of net ~~loss~~(loss) income to adjusted EBITDA and distributable cash flow for the three months ended ~~June~~September 30, 2022 and the three months ended ~~June~~September 30, 2021 on a non-recast basis:

Three Months Ended June 30,
2022 2021 Change
(in millions)
Net (loss) income $ (27.3) $ 2.7 $ (30.0)
Add:
Depreciation and amortization 28.8 22.3 6.5
Interest expense 14.0 12.7 1.3
Equity-based compensation and other expense 9.8 2.7 7.1
Loss on disposal of assets 2.3 1.7 0.6
Changes in unrealized derivative instruments 2.1 (0.4) 2.5
Acquisition and integration costs and other 3.6 0.9 2.7
Support Payments and MSA Fee Waivers 6.2 6.3 (0.1)
Adjusted EBITDA 39.5 48.9 (9.4)
Less:
Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount 13.3 12.0 1.3
Maintenance capital expenditures 4.8 3.9 0.9
Distributable cash flow $ 21.4 $ 33.0 $ (11.6)


	Three Months Ended September 30,
	2022		2021		Change
	(in millions)
Net (loss) income	$	(18.3)	$	(0.1)	$	(18.2)
Add:
Depreciation and amortization	34.9		22.0		12.9
Interest expense	18.7		10.7		8.0
Equity-based compensation and other expense	10.2		2.4		7.8
Loss on disposal of assets	4.1		3.9		0.2
Changes in unrealized derivative instruments	0.7		(4.4)		5.1
Acquisition and integration costs and other	4.4		7.3		(2.9)
Support Payments and MSA Fee Waivers	5.9		21.1		(15.2)

Adjusted EBITDA	60.6		62.9		(2.3)
Less:
Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	17.9		10.0		7.9
Maintenance capital expenditures	6.4		3.4		3.0
Distributable cash flow	$	36.3	$	49.5	$	(13.2)

Results of Operations

~~Six~~Nine Months Ended ~~June~~September 30, 2022 Compared to ~~Six~~Nine Months Ended ~~June~~September 30, 2021


		Six Months Ended June 30,				Change			Nine Months Ended September 30,				Change
		2022		2021 (Recast)					2022		2021 (Recast)
		(in thousands)							(in thousands)
Product sales	Product sales	$	524,527	$	495,772	$	28,755	Product sales	$	847,505	$	725,470	$	122,035
Other revenue	Other revenue	4,776		31,812		(27,036)		Other revenue	7,458		39,940		(32,482)
Net revenue	Net revenue	529,303		527,584		1,719		Net revenue	854,963		765,410		89,553
Cost of goods sold, excluding items below	Cost of goods sold, excluding items below	461,312		432,266		29,046		Cost of goods sold, excluding items below	718,854		632,209		86,645
Loss on disposal of assets	Loss on disposal of assets	3,183		3,345		(162)		Loss on disposal of assets	7,218		7,261		(43)
Selling, general, administrative, and development expenses	Selling, general, administrative, and development expenses	61,395		65,890		(4,495)		Selling, general, administrative, and development expenses	91,802		99,788		(7,986)
Depreciation and amortization	Depreciation and amortization	51,392		44,700		6,692		Depreciation and amortization	86,322		67,985		18,337
Total operating costs and expenses	Total operating costs and expenses	577,282		546,201		31,081		Total operating costs and expenses	904,196		807,243		96,953
Loss from operations	Loss from operations	(47,979)		(18,617)		(29,362)		Loss from operations	(49,233)		(41,833)		(7,400)
Interest expense	Interest expense	(23,929)		(30,858)		6,929		Interest expense	(42,633)		(46,321)		3,688

Other (expense) income, net		(727)		508		(1,235)
Other income, net								Other income, net	944		471		473
Net loss before income tax expense (benefit)	Net loss before income tax expense (benefit)	(72,635)		(48,967)		(23,668)		Net loss before income tax expense (benefit)	(90,922)		(87,683)		(3,239)
Income tax expense (benefit)	Income tax expense (benefit)	14		(941)		955		Income tax expense (benefit)	26		(3,834)		3,860
Net loss	Net loss	$	(72,649)	$	(48,026)	$	(24,623)	Net loss	$	(90,948)	$	(83,849)	$	(7,099)

Net revenue

Revenue related to product sales for wood pellets produced or procured by us increased to ~~$524.5~~$847.5 million in the ~~six~~nine months ended ~~June~~September 30, 2022 from ~~$495.8~~$725.5 million in the ~~six~~nine months ended ~~June~~September 30, 2021. The ~~$28.8~~$122.0 million, or 6%17%, increase was primarily attributable to a ~~12%~~19% increase in average sale price per MT, partially offset by a 6%2% decrease in product sales volumes for the ~~six~~nine months ended ~~June~~September 30, 2022 as compared to the ~~six~~nine months ended ~~June~~September 30, 2021.

through mechanisms inclusive of bunker fuel adjustments in our existing contracts, and repricing existing contracts and entering into new contracts at higher prices compared to historical prices. Recent biomass spot market prices, as well as the forward curve pricing of certain European indices, have exceeded ~~$300~~$400 per MT, representing a substantial premium to the current long-term contracted pricing of roughly $200 to $220 per MT across Enviva’s weighted average portfolio, and we have been able to capture some of that differential during the ~~six~~nine months ended ~~June~~September 30, 2022.

The decrease in product sales volumes was ~~primarily due to~~61 thousand MT. Product sales volumes were dampened by the timing of shipments that has resulted in an increase in finished goods inventory due to Hurricane Ian and ~~less~~decreased volumes procured from third parties to fulfill product sales during the ~~six~~nine months ended ~~June~~September 30, 2022 ~~than during~~compared to the ~~six~~nine months ended ~~June~~September 30, 2021. As of September 30, 2022, due to Hurricane Ian we had three shipments with approximately 80 thousand MT that were delayed due to the temporary suspension of port operations and were sold in the subsequent quarter. The decrease in procured volumes was due to a lower availability of third-party pellets resulting from the war in Ukraine and related sanctions. For the three months ended March 31, 2022, product sales revenue from produced volumes were dampened as a result of labor-related and other challenges associated with COVID-19 experienced by our employees, contractors, and supply chain partners that, in some cases, resulted in curtailment of our operations that had a more pronounced than anticipated impact on our operations and project execution.

Other revenue for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 included ~~$2.3~~$2.2 million and ~~$29.3~~$35.6 million, respectively, in payments to us for adjusting deliveries under our take-or-pay off-take contracts, which otherwise would have been included in product sales and which was recognized under a breakage model based on when the pellets would have been loaded.

Cost of goods sold

Cost of goods sold increased to ~~$461.3~~$718.9 million for the ~~six~~nine months ended ~~June~~September 30, 2022 from ~~$432.3~~$632.2 million for the ~~six~~nine months ended ~~June~~September 30, 2021, an increase of ~~$29.0~~$86.6 million, or 7%14%. The increase in cost of goods sold was primarily a result of incremental fiber logistics, energy, and wood pellet distribution ~~costs.~~costs inclusive of bunker fuel adjustments. In particular, during the three months ended March 31, 2022, we experienced labor-related and other challenges associated with COVID-19 with our employees, contractors and supply chain partners that had a more pronounced than anticipated impact on our operations and project execution. Furthermore, we incurred incremental cost of goods sold from the on-going ramp of the Lucedale plant and the commencement of operations of the Pascagoula terminal.

Adjusted gross margin and adjusted gross margin per metric ton


		Six Months Ended June 30,				Change			Nine Months Ended September 30,				Change
		2022		2021 (Recast)					2022		2021 (Recast)
		(in thousands, except per metric ton)							(in thousands, except per metric ton)
Reconciliation of gross margin to adjusted gross margin and adjusted gross margin per metric ton:	Reconciliation of gross margin to adjusted gross margin and adjusted gross margin per metric ton:							Reconciliation of gross margin to adjusted gross margin and adjusted gross margin per metric ton:
Gross margin(1)	Gross margin(1)	$	16,555	$	49,644	$	(33,089)	Gross margin(1)	$	48,305	$	62,127	$	(13,822)
Loss on disposal of assets	Loss on disposal of assets	3,183		3,345		(162)		Loss on disposal of assets	6,700		7,251		(551)
Equity-based compensation and other expense	Equity-based compensation and other expense	1,301		1,136		165		Equity-based compensation and other expense	1,868		1,703		165
Depreciation and amortization	Depreciation and amortization	48,254		42,328		5,926		Depreciation and amortization	81,103		63,823		17,280
Changes in unrealized derivative instruments	Changes in unrealized derivative instruments	535		798		(263)		Changes in unrealized derivative instruments	1,245		(3,566)		4,811

Acquisition and integration costs and other	Acquisition and integration costs and other	2,557		72		2,485		Acquisition and integration costs and other	2,615		397		2,218
Effects of COVID-19	Effects of COVID-19	13,942		—		13,942		Effects of COVID-19	13,942		—		13,942
Effects of the war in Ukraine	Effects of the war in Ukraine	5,051		—		5,051		Effects of the war in Ukraine	5,051		—		5,051
Support Payments	Support Payments	14,085		—		14,085		Support Payments	19,985		—		19,985

Adjusted gross margin	Adjusted gross margin	$	105,463	$	97,323	$	8,140	Adjusted gross margin	$	180,814	$	131,735	$	49,079
Metric tons sold	Metric tons sold	2,371		2,516		(145)		Metric tons sold	3,627		3,688		(61)
Adjusted gross margin per metric ton	Adjusted gross margin per metric ton	$	44.48	$	38.68	$	5.80	Adjusted gross margin per metric ton	$	49.85	$	35.72	$	14.13

(1)Gross margin is defined as net revenue less cost of goods sold (including related depreciation and amortization and loss on disposal of assets).

We earned adjusted gross margin of ~~$105.5~~$180.8 million, or ~~$44.48~~$49.85 per MT, for the ~~six~~nine months ended ~~June~~September 30, 2022 compared to ~~$97.3~~$131.7 million, or ~~$38.68~~$35.72 per MT, for the ~~six~~nine months ended ~~June~~September 30, 2021. The increase in adjusted gross

margin was primarily due to the aforementioned increase in net revenue and due to the increase in Support Payments partially offset by incremental fiber logistics, energy, and wood pellet distribution costs.

The Omicron variant of COVID-19 significantly impacted our operations and resulted in $13.9 million of incremental costs during the ~~six~~nine months ended ~~June~~September 30, 2022, all of which were incurred during the three months ended March 31, 2022.

•The impact on our supply chain logistics within our fiber supply base as well as our truck and rail service providers was more pronounced than anticipated. Our third-party service providers’ failure to perform resulted in unprecedented incremental costs to procure raw materials and produce and deliver our wood pellets to customers.

•We incurred incremental costs related to increased employee overtime and significant contract labor to partially offset plant employee absenteeism.

•We incurred incremental costs related to obtaining short-term rentals of equipment due to delayed delivery of acquired equipment to ensure continued operations.

The war in Ukraine impacted our operations and resulted in $5.1 million of incremental costs during the ~~six~~nine months ended ~~June~~September 30, 2022, all of which were incurred during the three months ended March 31, 2022.

•Severe dislocations within our third-party shipping partners’ operations resulted in incremental distribution costs related to demurrage and to loading, transporting, and unloading our wood pellets.

•The immediate spike in energy prices negatively impacted the cost of our operations including incremental costs to support continued services from our third-party fiber suppliers and trucking service providers.

Due to the increased average sales price per MT and the reduction in sales volumes as described above and after excluding the aforementioned incremental fiber logistics, energy, and wood pellet distribution costs, adjusted gross margin increased during the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the ~~six~~nine months ended ~~June~~September 30, 2021.

Selling, general, administrative, and development expenses

Selling, general, administrative, and development expenses were ~~$61.4~~$91.8 million and ~~$65.9~~$99.8 million for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. Selling, general, administrative, and development expenses include costs to develop new markets, corporate and other overhead expenses, and costs of developing new plants or ports (for those that have not yet met the capitalization threshold or costs that are not eligible for capitalization). Once a significant component of the plant or port is placed in-service, the associated expense component is classified as cost of goods sold. The ~~$4.5~~$8.0 million decrease in total selling, general, administrative, and development

expenses is primarily associated with ~~decreased cash-based compensation~~a decrease in consulting and ~~consulting~~management fee expenses ~~primarily~~and due to the elimination of activities resulting from the Simplification Transaction.

Depreciation and amortization

Depreciation and amortization expense were ~~$51.4~~$86.3 million and ~~$44.7~~$68.0 million for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively, primarily due to the Lucedale plant, Pascagoula terminal, and expansion assets placed in service.

Interest expense

We incurred ~~$23.9~~$42.6 million and ~~$30.9~~$46.3 million of interest expense during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. The decrease in interest expense from the prior year was primarily attributable to ~~a lower cost of borrowing due to~~ the extinguishment of the ~~higher rate~~ senior secured green term loan facility as part of the Simplification ~~Transaction.~~Transaction, partially offset by a higher outstanding borrowing amount and higher interest rate on our senior secured revolving credit facility.

Income tax

We recorded an insignificant income tax expense for the ~~six~~nine months ended ~~June~~September 30, 2022 and ~~$0.9~~$3.8 million of income tax benefit during the ~~six~~nine months ended ~~June~~September 30, 2021.

Adjusted net loss


		Six Months Ended June 30,				Change			Nine Months Ended September 30,				Change
		2022		2021 (Recast)					2022		2021 (Recast)
		(in thousands)							(in thousands)
Reconciliation of net loss to adjusted net loss:	Reconciliation of net loss to adjusted net loss:							Reconciliation of net loss to adjusted net loss:
Net loss	Net loss	$	(72,649)	$	(48,026)	$	(24,623)	Net loss	$	(90,948)	$	(83,849)	$	(7,099)
Acquisition and integration costs and other	Acquisition and integration costs and other	14,369		1,495		12,874		Acquisition and integration costs and other	18,778		8,815		9,963
Effects of COVID-19	Effects of COVID-19	15,189		—		15,189		Effects of COVID-19	15,189		—		15,189
Effects of the war in Ukraine	Effects of the war in Ukraine	5,051		—		5,051		Effects of the war in Ukraine	5,051		—		5,051

Support Payments	Support Payments	14,085		—		14,085		Support Payments	19,985		—		19,985

Adjusted net loss	Adjusted net loss	$	(23,955)	$	(46,531)	$	22,576	Adjusted net loss	$	(31,945)	$	(75,034)	$	43,089

Adjusted EBITDA


		Six Months Ended June 30,				Change			Nine Months Ended September 30,				Change
		2022		2021 (Recast)					2022		2021 (Recast)
		(in thousands)							(in thousands)
Reconciliation of net loss to adjusted EBITDA:	Reconciliation of net loss to adjusted EBITDA:							Reconciliation of net loss to adjusted EBITDA:
Net loss	Net loss	$	(72,649)	$	(48,026)	$	(24,623)	Net loss	$	(90,948)	$	(83,849)	$	(7,099)
Add:	Add:							Add:
Depreciation and amortization	Depreciation and amortization	51,392		44,700		6,692		Depreciation and amortization	86,322		67,985		18,337
Interest expense	Interest expense	23,929		30,858		(6,929)		Interest expense	42,633		46,321		(3,688)
Income tax expense (benefit)	Income tax expense (benefit)	14		(941)		955		Income tax expense (benefit)	26		(3,834)		3,860

Equity-based compensation and other expense	Equity-based compensation and other expense	20,917		15,192		5,725		Equity-based compensation and other expense	31,116		22,459		8,657
Loss on disposal of assets	Loss on disposal of assets	3,183		3,345		(162)		Loss on disposal of assets	7,218		7,261		(43)
Changes in unrealized derivative instruments	Changes in unrealized derivative instruments	535		798		(263)		Changes in unrealized derivative instruments	1,245		(3,566)		4,811
Acquisition and integration costs and other	Acquisition and integration costs and other	14,370		1,495		12,875		Acquisition and integration costs and other	18,778		8,814		9,964
Effects of COVID-19	Effects of COVID-19	15,189		—		15,189		Effects of COVID-19	15,189		—		15,189
Effects of the war in Ukraine	Effects of the war in Ukraine	5,051		—		5,051		Effects of the war in Ukraine	5,051		—		5,051
Support Payments	Support Payments	14,085		—		14,085		Support Payments	19,985		—		19,985

Adjusted EBITDA	Adjusted EBITDA	$	76,016	$	47,421	$	28,595	Adjusted EBITDA	$	136,615	$	61,591	$	75,024

We generated adjusted EBITDA of ~~$76.0~~$136.6 million for the ~~six~~nine months ended ~~June~~September 30, 2022 compared to ~~$47.4~~$61.6 million for the ~~six~~nine months ended ~~June~~September 30, 2021. The ~~$28.6~~$75.0 million increase was primarily attributable to the factors described above under the headings “Adjusted gross margin and adjusted gross margin per metric ton” and “Selling, general, administrative, and development expenses.”

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~~development expenses.”~~

Distributable cash flow

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


		Six Months Ended June 30,				Change			Nine Months Ended September 30,				Change
		2022		2021 (Recast)					2022		2021 (Recast)
		(in thousands)							(in thousands)
Reconciliation of adjusted EBITDA to distributable cash flow attributable to Enviva:	Reconciliation of adjusted EBITDA to distributable cash flow attributable to Enviva:							Reconciliation of adjusted EBITDA to distributable cash flow attributable to Enviva:
Adjusted EBITDA	Adjusted EBITDA	$	76,016	$	47,421	$	28,595	Adjusted EBITDA	$	136,615	$	61,591	$	75,024
Less:	Less:							Less:
Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	22,670		28,710		(6,040)		Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	40,578		43,107		(2,529)
Maintenance capital expenditures	Maintenance capital expenditures	6,682		7,844		(1,162)		Maintenance capital expenditures	13,026		11,183		1,843
Distributable cash flow attributable to Enviva Inc.	Distributable cash flow attributable to Enviva Inc.	46,664		10,867		35,797		Distributable cash flow attributable to Enviva Inc.	83,011		7,301		75,710
Less: Distributable cash flow attributable to incentive distribution rights	Less: Distributable cash flow attributable to incentive distribution rights	—		19,030		(19,030)		Less: Distributable cash flow attributable to incentive distribution rights	—		19,030		(19,030)
Distributable cash flow attributable to Enviva Inc. or Enviva Partners, LP limited partners	Distributable cash flow attributable to Enviva Inc. or Enviva Partners, LP limited partners	$	46,664	$	(8,163)	$	54,827	Distributable cash flow attributable to Enviva Inc. or Enviva Partners, LP limited partners	$	83,011	$	(11,729)	$	94,740

The following table presents a reconciliation of net ~~loss~~(loss) income to adjusted EBITDA and distributable cash flow for the ~~six~~nine months ended ~~June~~September 30, 2021, on a recast basis and non-recast basis:


		Six Months Ended June 30, 2021							Nine Months Ended September 30, 2021
		Recast		Adjustments		Non-Recast			Recast		Adjustments		Non-Recast
		(in millions)							(in millions)
Net (loss) income	Net (loss) income	$	(48.0)	$	49.2	$	1.2	Net (loss) income	$	(83.8)	$	84.9	$	1.1
Add:	Add:							Add:
Depreciation and amortization	Depreciation and amortization	44.7		(1.5)		43.2		Depreciation and amortization	68.0		(2.8)		65.2
Interest expense	Interest expense	30.9		(5.6)		25.3		Interest expense	46.3		(10.4)		35.9
Income tax benefit		(0.9)		0.9		—
Income tax (benefit) expense								Income tax (benefit) expense	(3.8)		3.7		(0.1)

Equity-based compensation and other expense	Equity-based compensation and other expense	15.2		(9.8)		5.4		Equity-based compensation and other expense	22.4		(14.6)		7.8
Loss on disposal of assets	Loss on disposal of assets	3.3		—		3.3		Loss on disposal of assets	7.3		—		7.3
Changes in unrealized derivative instruments	Changes in unrealized derivative instruments	0.8		—		0.8		Changes in unrealized derivative instruments	(3.6)		—		(3.6)
Acquisition and integration costs and other	Acquisition and integration costs and other	1.5		(0.5)		1.0		Acquisition and integration costs and other	8.8		(0.5)		8.3

MSA Fee Waivers	MSA Fee Waivers	—		15.0		15.0		MSA Fee Waivers	—		36.2		36.2
Adjusted EBITDA	Adjusted EBITDA	47.5		47.7		95.2		Adjusted EBITDA	61.6		96.5		158.1
Less:	Less:							Less:
Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	28.7		(4.7)		24.0		Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	43.1		(9.1)		34.0
Maintenance capital expenditures	Maintenance capital expenditures	7.8		—		7.8		Maintenance capital expenditures	11.2		—		11.2
Distributable cash flow	Distributable cash flow	$	11.0	$	52.4	$	63.4	Distributable cash flow	$	7.3	$	105.6	$	112.9

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The following is a reconciliation of net ~~loss~~(loss) income to adjusted EBITDA and distributable cash flow for the ~~six~~nine months ended ~~June~~September 30, 2022 and the ~~six~~nine months ended ~~June~~September 30, 2021 on a non-recast basis:


		Six Months Ended June 30,							Nine Months Ended September 30,
		2022		2021		Change			2022		2021		Change
		(in millions)							(in millions)
Net (loss) income	Net (loss) income	$	(72.6)	$	1.2	$	(73.8)	Net (loss) income	$	(90.9)	$	1.1	$	(92.0)
Add:	Add:							Add:
Depreciation and amortization	Depreciation and amortization	51.4		43.2		8.2		Depreciation and amortization	86.3		65.2		21.1
Interest expense	Interest expense	23.9		25.3		(1.4)		Interest expense	42.6		35.9		6.7

Income tax (benefit) expense								Income tax (benefit) expense	—		(0.1)		0.1
Equity-based compensation and other expense	Equity-based compensation and other expense	20.9		5.4		15.5		Equity-based compensation and other expense	31.1		7.8		23.3
Loss on disposal of assets	Loss on disposal of assets	3.2		3.3		(0.1)		Loss on disposal of assets	7.2		7.3		(0.1)
Changes in unrealized derivative instruments	Changes in unrealized derivative instruments	0.5		0.8		(0.3)		Changes in unrealized derivative instruments	1.2		(3.6)		4.8
Acquisition and integration costs and other	Acquisition and integration costs and other	14.4		1.0		13.4		Acquisition and integration costs and other	18.8		8.3		10.5
Effects of COVID-19	Effects of COVID-19	15.2		—		15.2		Effects of COVID-19	15.2		—		15.2
Effects of the war in Ukraine	Effects of the war in Ukraine	5.1		—		5.1		Effects of the war in Ukraine	5.1		—		5.1
Support Payments and MSA Fee Waivers	Support Payments and MSA Fee Waivers	14.1		15.0		(0.9)		Support Payments and MSA Fee Waivers	20.0		36.2		(16.2)
Adjusted EBITDA	Adjusted EBITDA	76.1		95.2		(19.1)		Adjusted EBITDA	136.6		158.1		(21.5)
Less:	Less:							Less:
Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	22.7		24.0		(1.3)		Interest expense, net of amortization of debt issuance costs, debt premium, and original issue discount	40.6		34.0		6.6
Maintenance capital expenditures	Maintenance capital expenditures	6.7		7.8		(1.1)		Maintenance capital expenditures	13.0		11.2		1.8
Distributable cash flow	Distributable cash flow	$	46.7	$	63.4	$	(16.7)	Distributable cash flow	$	83.0	$	112.9	$	(29.9)

Liquidity and Capital Resources

Overview

Our primary sources of liquidity include cash and cash equivalent balances, cash generated from operations, availability under our senior secured revolving credit facility and, from time to time, debt and equity offerings. Our primary liquidity needs are to fund working capital, service our debt, finance greenfield construction projects, growth initiatives, and maintenance capital expenditures, and pay dividends. We believe cash on hand, cash generated from our operations and the availability of our senior secured revolving credit facility will be sufficient to meet our primary liquidity requirements. Similar to previous years, we expect cash generated from operations for the second half of 2022 to be significantly higher than the first half of the year due to the predictable seasonality in our business as well as, in this case, the ramp of production at our newest plant in Lucedale, Mississippi. However, future capital expenditures, such as expenditures made in relation to acquisitions of plants or terminals, plant development and/or plant expansion projects, and other cash requirements could be higher than we currently expect as a result of various factors. Additionally, our ability to generate sufficient cash from our operating activities depends on our future performance, which is subject to general economic, political, financial, competitive, and other factors beyond our control.

Our liquidity as of ~~June~~September 30, 2022, which included cash on hand (including cash generally restricted to funding a portion of the costs of the acquisition, construction, equipping, and financing of our Epes plant) and availability under our $570.0 million senior secured revolving credit facility, was ~~$184.1~~$327.6 million. ~~Our liquidity as of June 30, 2022 does not include any proceeds resulting from the Tax-Exempt Green Bonds issued in July 2022.~~

Cash Dividends

We intend to pay cash dividends to holders of our common stock of $3.62 per common stock for 2022, except cash will not be paid on 9.0 million of the 16.0 million common units issued in connection with the Simplification Transaction where the former owners of our former sponsor have agreed to reinvest in our common stock all dividends paid for the period beginning with the third quarter of 2021 through the fourth quarter of 2024.

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Capital Requirements

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

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

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

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

We plan to invest $255.0 million to ~~$275.0~~$265.0 million in capital expenditures in 2022. Of that amount, we expect to invest (i) $210.0 million to ~~$220.0~~$215.0 million primarily on the ~~production~~Lucedale plant ~~in Lucedale Mississippi~~ which is in the process of ramping production, as well as the Pascagoula terminal, and the construction of the Epes plant, (ii) $30.0 million to $35.0 million primarily on the Multi-Plant Expansions, and (iii) $15.0 million ~~to $20.0 million~~ on maintenance capital expenditures.During the nine months ended September 30, 2022, we have invested $162.4 million in capital expenditures.

Our current financing strategy is to fund acquisitions and construction activities with a combination of cash from operations and debt.

Cash Flows

The following table sets forth a summary of our net cash flows from operating, investing and financing activities for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021 (Recast)			2022		2021 (Recast)
		(in thousands)					(in thousands)
Net cash (used in) provided by operating activities	Net cash (used in) provided by operating activities	$	(68,891)	$	62,171	Net cash (used in) provided by operating activities	$	(52,510)	$	32,357
Net cash used in investing activities	Net cash used in investing activities	(102,405)		(153,983)		Net cash used in investing activities	(167,449)		(245,173)
Net cash provided by financing activities	Net cash provided by financing activities	201,234		190,399		Net cash provided by financing activities	430,188		481,169
Net increase in cash, cash equivalents, and restricted cash	Net increase in cash, cash equivalents, and restricted cash	$	29,938	$	98,587	Net increase in cash, cash equivalents, and restricted cash	$	210,229	$	268,353

Cash ~~Used in~~(Used in) Provided by Operating Activities

Net cash used in operating activities was ~~$68.9~~$52.5 million and net cash provided by operating activities was ~~$62.2~~$32.4 million for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. The ~~$131.1~~$84.9 million ~~decrease~~increase in net cash used in operating activities ~~during the six months ended June 30, 2022 compared to the six months ended June 30, 2021~~ was primarily due to a decrease in cash from net loss adjusted for non-cash items of $11.5 million and a decrease in cash from changes in working capital of $119.6 million. The decrease in cash from changes in working capital was primarily attributable to a $71.1$58.6 million increase in accounts receivable and inventories due to the timing of ~~shipments, and~~shipments. This was partially offset by an ~~$11.9 million decrease~~increase in ~~accounts payable, accrued liabilities, other current liabilities, and accrued interest due to timing~~cash from net loss adjusted for non-cash items of ~~payments.~~$23.6 million.

Cash Used in Investing Activities

Net cash used in investing activities was ~~$102.4~~$167.4 million and ~~$154.0~~$245.2 million for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. The ~~$51.6~~$77.7 million decrease in cash used in investing activities during the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the ~~six~~nine months ended ~~June~~September 30, 2021 was primarily due to the timing of capital expenditures at the Lucedale plant, Pascagoula terminal, and on various expansion projects.

Cash Provided by Financing Activities

Net cash provided by financing activities was ~~$201.2~~$430.2 million and ~~$190.4~~$481.2 million for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. The ~~$10.8~~$51.0 million ~~increase~~decrease in net cash provided by financing activities during the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the ~~six~~nine months ended ~~June~~September 30, 2021 was primarily attributable to cash used to acquire a

noncontrolling interest of ~~$130.1~~$153.3 million during the ~~six~~nine months ended ~~June~~September 30, 2021, an increase in proceeds from the issuance of common shares or units of $118.1 million, $14.0 million of support payments received during the nine

months ended September 30, 2022, a $12.3 million capital contribution of a New Market Tax Credit financing transaction, partially offset by a decrease of $259.0 million in ~~net~~ proceeds from debt issuance net of ~~$174.5 million, and~~repayment of debt, an increase in cash dividends or distributions and equivalent rights of ~~$60.7 million.~~$86.9 million, a $6.0 million increase of tax withholding payments associated with the settlement of restricted stock unit awards that vested pursuant to our Long-Term Incentive Plan, and a $3.2 million increase in debt issuance costs.

Off‑Balance Sheet Arrangements

As of ~~June~~September 30, 2022, we did not have any off‑balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates, and assumptions that affect the amounts reported in our unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. We provide expanded discussion of our significant accounting policies, estimates, and judgments in our 2021 Form 10‑K. We believe these accounting policies reflect our significant estimates and assumptions used in preparation of our financial statements. There have been no significant changes to our critical accounting policies and estimates since December 31, 2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our exposure to market risk as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) under the Exchange Act) was carried out under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. Based on their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective as of ~~June~~September 30, 2022.

Changes in Internal Control over Financial Reporting

During the quarter ended ~~June~~September 30, 2022, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material changes with respect to the legal proceedings disclosed in our Annual Report on ~~form~~Form 10-K for the year ended December 31, 2021.

Item 1A. Risk Factors

There have been no material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 6. Exhibits

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

EXHIBIT INDEX


Exhibit Number	Exhibit
3.1	Certificate of Incorporation of Enviva Inc. (Exhibit 3.1, Form 8-K filed January 3, 2022, File No. 001-37363)
3.2	Bylaws of Enviva Inc. (Exhibit 3.2, Form 8-K filed January 3, 2022, File No. 001-37363)
~~10.1*†~~10.1	~~Fifth Amended and Restated Employment~~Ninth Amendment to Credit Agreement, ~~by and between Enviva Management Company, LLC and Thomas Meth,~~ dated J ~~une 4,~~as of June 30, 2022. (Exhibit 10.1, Form 8-K filed July 5, 2022, File No. 001-37363)
~~10.2*†~~10.2	~~Sixth Amended~~Loan and ~~Restated Employment~~Guaranty Agreement, dated as of July 1, 2022, by and ~~between~~among The Industrial Development Authority of Sumter County, Enviva ~~Management Company, LLC~~Inc., and ~~William H. Schmidt, Jr.,~~ ~~dated~~ Ju ne 4 ,certain subsidiaries of Enviva Inc. (Exhibit 10.1, Form 8-K filed July 19, 2022, File No. 001-37363)
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002
32.1**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002
101	The following financial information from Enviva Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~June~~September 30, 2022 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Loss, (iv) the Condensed Consolidated Statements of Changes in Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) Notes to the Condensed Consolidated Financial ~~Statements.~~	Statements
104	Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101)

____________________________________________

* Filed herewith.

** Furnished herewith.

† Management Contract or Compensatory Plan or Arrangement

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.



	ENVIVA INC.


Date: ~~August 3,~~November 2, 2022
	By:	/s/ SHAI S. EVEN
		Shai S. Even
	Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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